M&S earmarks £450m for three-year IT spend

Marks & Spencer is...

Marks & Spencer is to spend up to £450m on IT in three years to support its push into international market and online sales.

The investment forms part of a three year company-wide IT plan, revealed in the company's annual report.

The three-year roadmap "sets out how our systems will deliver on every aspect of our business plan, both within the UK and internationally," said M&S. "This means, for example, that our IT strategy for China, where we are only just establishing a foothold, is already in place."

The strategy had helped M&S to develop faster and more efficient IT systems throughout the business. M&S has made "vital behind the scenes improvements" with the introduction of new financial and back-office systems. These have improved operational efficiency and also helped cut like-for-like IT running costs by 13.5%. he said.

M&S is a year into the modernisation of its 16,000-till electronic point-of-sale system supplied by IBM. It is now adding more than 2,000 tills and 258 handheld terminals in-store to make stock-checking easier and more efficient.

Some 97% of its tills are fully operational, up from 90% two years ago, M&S revealed.

The retailer's IT programme is part of an integrated plan to develop a world class infrastructure, said M&S. "We're planning to take more control of our logistics from source to store, allowing us to monitor our stock more efficiently and improve margins."

The firm plans to develop "a modern and streamlined logistics network with new overseas warehouses, as well as offshore stockholding and consolidation facilities" to replace warehousing and distribution centres almost unchanged since the 1970s.

Although Rose expects the UK market to remain weak for up to two years, M&S needs the new systems to support fast-growing international and online sales.

International sales were up more than 16% last year to £713m, almost 8% of the group's £9bn turnover. M&S Direct, its online sales operation, which is hosted by Amazon, contributed sales of around £300m, M&S Direct is growing at 70% a year, he said.

M&S uses Sap Financial Accounting and Controlling (SAP FICO), and the Beanstore point of sale application from IBM business partner PCMS. The retailer is currently recruiting staff familiar with one or more of IBM Websphere Message Broker/Process Server/ICS, BizTalk, Weblogic, and Netweaver XI.

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