WHSmith ready for management innovations after major upgrade

Magazine and newspaper distributor WHSmith News has completed a £3.5m systems upgrade to cope with changes in patterns of newspaper distribution and demand.

Magazine and newspaper distributor WHSmith News has completed a £3.5m systems upgrade to cope with changes in patterns of newspaper distribution and demand.

The overhaul, which was managed by consultancy Capgemini, has introduced new core business systems, with hardware and software from IBM, EMC and SAP. The systems are expected to be operational this month.

WHSmith News will also now offer specialised IT services to supply chain partners, including publishers and retailers, on an application service provider basis.

Richard Webb, IS director at WHSmith News, said, "Our new systems will give us the agility to support whatever innovations our management team decides to make in any part of our business.

"They will also enable us to accommodate any amount of external change in our markets and environment."
Following the year-long upgrade process, Capgemini will support the new systems on an outsourcing contract that has been renewed until 2010 and extended to include management of third-party IT suppliers.

The success is a major turnaround for WHSmith's IT operations. In May 2004 chief executive Kate Swann told the City that problems integrating new IT systems were partly to blame for a fall in pre-tax profits.

The company also had difficulties with its SAP enterprise resource planning system imple- mentation. It began rolling out SAP to integrate IT systems in 50 news delivery depots in 2000, but the project ran into difficulties within months. The database servers were operating at 70% capacity, with only 15% of WHSmith's operations live on the system.

"Users could not carry out many operations the system was designed for. The principal reason for the deterioration in performance was insufficient processing capacity on the database server," WHSmith said.

The project, which exceeded its original £15m budget by £8m, sparked a volley of complaints from newsagents before it was put right.

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