Avis Europe is latest to get stung by IT

Avis Europe has scrapped development of a new ERP system because of cost overruns and delays, and will also scale back its...

Avis Europe has scrapped development of a new ERP system because of cost overruns and delays, and will also scale back its overall IT restructuring project.

Avis dumped the system, based on software from PeopleSoft, before it was rolled out because of substantial delays and higher than expected costs due to "a number of fundamental problems with its design and implementation," the car rental company said.

"For the foreseeable future, our ERP project is over. It is now more important that all the various strands of Avis' IT systems are put in working order," an Avis Europe spokesman said.

Avis licensed the software in the first quarter of 2003, PeopleSoft said, adding that Atos Origin SA was in charge of the implementation and had contracted PeopleSoft Global Services to configure and customise PeopleSoft's Financial Management Solutions software.

A representative from PeopleSoft declined further comment, and an Atos representative would only confirm that the contract with Avis Europe had been cancelled.

The development came a few days after J Sainsbury, the U.K.'s second-largest grocery chain, said it was renegotiating its £1.8bn outsourcing contract with IT services supplier Accenture and would simplify its existing IT systems in an effort to rein in ballooning costs.

Avis said it planned to substantially reduce the scope of its IT restructuring project, including cutting back its outsourcing contracts. It asserted that its IT restructuring plan had not disrupted its underlying business operations.

Avis Europe will take an exceptional charge of between €40m (£28m) and €45m related to the IT problems and its decision to close its Centrus credit hire business. It said last month that a review of its IT systems was underway.

Avis Europe is a subsidiary of Avis Rent A Car System, which in turn is owned by Cendant.

Laura Rohde writes for IDG News Service

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