M&S rules out full outsourcing of IT in £320m cost-cutting scheme

Marks & Spencer has ruled out full-scale outsourcing of its IT systems as it begins a "back to basics" restructuring programme...

Marks & Spencer has ruled out full-scale outsourcing of its IT systems as it begins a "back to basics" restructuring programme that will cut £320m in costs over the next three years.

The retailer, which last week shrugged-off entrepreneur Philip Green’s £9.1bn takeover bid, said its immediate priority was not to outsource but to make better use of its existing IT systems.

"If it ain’t broke don’t fix it. There are a lot of components in the existing infrastructure that can make IT more effective," said chief executive Stuart Rose.

The retailer plans a major re-evaluation of its IT over the next three to six months.

In an interview with Computer Weekly, Charles Wilson, executive director for property, IT and the supply chain at Marks & Spencer, said the experience of other large retailers has shown that full-scale outsourcing is not always the best course.

"There is a lot of good kit in M&S and we think we can sweat more out of it," he said. "There will be no big bang where we take the whole thing out and then over five years work out how to get value out of it."

Wilson is a retail IT veteran who has previously overseen an IT outsourcing programme at Arcadia Group and took the decision to bring IT in-house at Booker Cash and Carry. He said he would not rule out outsourcing individual Marks & Spencer systems if there was a business case for doing so. "It’s horses for courses," he said.

Marks & Spencer’s priority, said Wilson, would be to simplify processes and to ensure efficient use of the company’s existing IT systems before investing in new hardware.

"There are some very nice technologies here. But the difference is that some departments are good at using them and others are a bit variable," he said.

The company is expected to focus on using IT to improve the management of the supply chain, which has been criticised as being less efficient than rivals’ systems, and building on its innovative work with RFID tags.

"There is a lot you can do here. We are looking at everything. I have been to the distribution centres and seen a lot of low-hanging fruit - how we pick products or how we use our infrastructure," said Wilson.

Read more on IT for small and medium-sized enterprises (SME)