Co-operative Group and United Co-operatives will be able to share planning applications, but they face several key integration decisions across other operations should the member-owned retailers agree to a merger on 23 May.
The combined group would have annual sales of £9bn, more than 87,500 employees, 4.5 million members and two sets of overlapping enterprise-wide IT systems.
Chris Digby, a partner at consultancy Deloitte, said, "There are four options during a merger: the new company can run parallel systems if the business wants volume it can look at each system and take the best of each it can take the IT systems of one or the other underlying businesses or, if neither company has particularly modern systems, the new entity takes the opportunity to upgrade across the enterprise on a new purpose-built IT platform."
The retailers use some of the same systems, including space planning applications from JDA Software, which create planograms that show how products should be displayed on stores' shelves.
Mike Brown, strategic space planning manager at Co-operative Group, said detailed IT merger plans would not be formulated until the deal had been approved.
"Having said that, the planograms are compatible and we already share them with United because we run the Co-operative Retail Trading Group joint buying function, which is used by all 35 UK co-operative societies," he said.
Elsewhere, the integration challenge will be greater, with United Co-operatives using a different enterprise resource planning system to Co-operative Group, which runs its JDA applications on top of an Oracle ordering system and uses Oracle for HR and payroll.
The retailers also have different warehouse management and till systems. Co-operative Group installed Manhattan Associates' Warehouse Management for Open Systems application at its first site earlier this year, and United uses an application called Triceps and Biceps from Retailix.
Co-operative Group has a proprietary point of sale system, whereas United has migrated 157 of its 590 stores to Fujitsu terminals.
A spokesman for Co-operative Group said, "Until the merger actually happens, it is far from clear what systems will be operating in the merged entity."
Co-Op targets in-store display planning savings
Co-operative Group expects to cut the time its space planning team spends on routine administration by more than 100 hours a week after implementing JDA Space Planning at the end of April.
The team migrated 3,800 diagrams of in-store product displays, known as planograms, to the application, which will automate most processes.
Co-op managers estimate that the application could increase the number of planograms to about 6,000 within 12 months as staff use the extra time to develop new displays.
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