High street chemist Boots is to cut spending on its
supply chain and IT infrastructure by £60m a year as it prepares
for its merger with Alliance UniChem.
One of the ways the company plans to save money on its IT
infrastructure is by renegotiating an outsourcing contract with
IBM.
Boots said, "A review of ongoing IT requirements has identified
additional opportunities to restructure the IT contractual
arrangements to reflect better these requirements and realise
further benefits."
Boots renegotiated its other major IT outsourcing contract with
Xansa last year.
A spokesman said, "We do not think we need a contract around
transformation."
The savings in the supply chain will come from the replacement
of 17 regional warehouses with a single central warehouse costing
£70m.
A new Epos system, including chip and Pin, has been implemented
throughout Boots' stores over the past few years.
The company's IT suppliers have also deployed a SAP system
covering its finance, merchandising, procurement and property
functions.
Some £120m will be spent on capital investment, including £50m
in 2006-07.
Boots expects to merge with Alliance UniChem in June. The £7bn
combined company, which will trade as Alliance Boots, will have
about 2,400 stores in the UK.