Avis takes £28m hit to cancel ERP project as costs escalate

Avis has cancelled a major enterprise resource planning project because of delays and higher than expected implementation costs.

Avis has cancelled a major enterprise resource planning project because of delays and higher than expected implementation costs.

The car hire firm is writing off £28m because of the project's cancellation. "We are very disappointedÉ [the project] incurred significant exceptional costs and will not deliver the anticipated benefits," said Avis chief executive Murray Hennessy. "We felt it was time to take decisive action."

The PeopleSoft system was being implemented by Atos Origin. PeoplesSoft said it retained a licensing relationship with Avis. Atos Origin said it had nothing to add to the Avis statements.

The ERP system had been expected to link core business processes and lift operating profit margins by 1%, Avis said. It had to be abandoned because of a "number of fundamental problems with its design and implementation", the company said.

"The new ERP system has encountered substantial delays and consequently higher cost due to a number of fundamental problems with its design and implementation. A decision has therefore been taken to terminate the development of the new system as quickly as practicable to avoid further cost."

"The associated IT restructuring project, including outsourcing of elements of the function, will also be substantially reduced in scope."

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