Sainsbury's has scrapped its 10-year outsourcing deal with Accenture.
The supermarket chain will take up to a year to bring its systems back in-house. Accenture's contract with Sainsbury's was valued at £1.7bn over seven years when it was signed in 2000. The deal was subsequently extended by three years.
Sainsbury's said, “Accenture has been instrumental in improving the IT capability of Sainsbury’s business and delivered considerable improvements in system stability and operational cost reductions through the re-platforming of the vast majority of Sainsbury’s IT systems.”
Sainsbury's will in-source the IT services that have been provided by Accenture rather than find a different supplier.
The retailer’s decision follows the publication of an operational review of its IT systems that recommended key systems be brought back in-house.
Ovum’s senior analyst, Douglas Hayward, said Sainsbury’s decision “is a warning that business benefits don’t necessarily follow from IT infrastructure renewal unless the business itself is well run and the two sides are properly connected. New IT infrastructure can’t compensate for poor business management. In that sense, Sainsbury's shows us the limits of transformational outsourcing.”