Somerfield consolidates its IT with three-year strategy

Supermarket chain Somerfield plans to create single systems for the warehouse management, stock reference and replenishment...

Supermarket chain Somerfield plans to create single systems for the warehouse management, stock reference and replenishment aspects of its business within three years.

Somerfield is the UK's fifth largest retailer, with more than 1,300 stores. The company said the aim of the three-year strategy is to consolidate its existing IT nfrastructure and better exploit the systems it already has.

"The idea of the three-year IT strategy is to get to the stage where we have one warehouse management system, one product reference database, one store replenishment system and one depot replenishment system," explained Roger Hughes, IT executive at Somerfield. "It is all about robustness, resilience and simplicity."

After purchasing discount supermarket Kwik Save three years ago for £1.25bn, Somerfield, which at the time was suffering falling profits, invested more than £8m to integrate the two chains' IT.

The integration took 20 months to complete because the systems were so different - Somerfield's core systems were built for IBM mainframes while Kwik Save's ran on AS/400 servers. In addition, Somerfield's systems were a great deal more advanced than Kwik Save's.

Martin Atherton, lead analyst at research group Datamonitor, said this level of investment would have influenced Somerfield's inward-looking strategy.

"Most retailers have a large set of disparate systems, and the purchase of Kwik Save would have doubled the amount," he said. "Consolidation is a sensible strategy. It removes the risk of investing on a whim and simply piling up more and more technology."

Atherton said the supermarket's move to consolidate its IT is indicative of the uncertain economic climate. He believes more companies are likely to follow suit.

To measure the success of such a strategy, IT departments need to set out a definable, quantifiable set of steps to reach the final goal, said Atherton.

"To create a sustainable plan, IT departments need to show the cost savings from each step, with the benefits mapped out," he explained. "As long as the company can keep reaping some sort of benefit, it will consider the strategy successful."

Hughes said broad consultation should ensure the project's success. "We are confident that this strategy will work because everybody throughout the company has bought into this," he said.

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