Morrisons rings up savings with £300m IT revamp

Oracle E-Business Suite and new Epos rollout among the plans...

Supermarket giant Morrisons is working on a £300m-plus, six-year programme to revamp its IT infrastructure and systems - an undertaking described as a "heart and lung transplant" by the project director.

The technology used at every one of Morrisons' 425 stores, its warehouses, packing plants and throughout its supply chain is being overhauled as part of the Evolve project, which kicked off in 2008.

Speaking at the Gartner Outsourcing and IT Services summit in London last week Evolve project director Phil Goodwin said that in spite of the project's high price-tag, the programme would pay for itself in efficiency savings and increased sales within four years of the new systems being rolled out.

As part of the project Morrisons has already introduced a new electronic point of sale system in 100 of its stores, and is introducing a new package of Oracle software across the company, which includes Oracle Retail suite for merchandising, planning and in-store applications, the Oracle E-Business Suite for financials, HR/payroll and manufacturing, Oracle's Siebel CRM, Oracle Fusion middleware and an Oracle database.

Morrisons' supply chain systems are being upgraded as part of its Evolve IT transformation programme
(Photo credit: digbygraham via Flickr under the following Creative Commons licence)

To support the new systems, Goodwin said, Morrisons is making "a massive investment in completely new IT infrastructure", as well as putting in a new business intelligence system.

When the project got started its aim was to replace the supermarket chain's aging IT infrastructure and software applications, which had suffered from years of low investment, and to reshape the way that the business worked, Goodwin said.

"Morrisons traditionally was quite a siloed organisation - so what we needed to do was... design by business process rather than those business silos that we operated in," he said.

"We didn't just want to create and implement the technology, we wanted to change the business processes. We wanted to remove those legacy constraints so we could expand and grow."

A guiding principle for the project is that it does not disrupt the day-to-day running of Morrisons' stores - something Goodwin said has been achieved by piloting new computer systems in a small part of the organisation and then "ironing out any problems", before rolling out the new system as quickly as possible across the organisation.

"That really plays into the strength of the organisation: coming from up north there really is an attitude of 'Let's roll our sleeves up and get started'," said Goodwin.

"Those early implementations anchor the programme into what is happening in the business, it stops the business from moving off in a new direction while you're stuck in a design phase - retail moves very, very quickly."

Morrisons is working with a variety of suppliers to deliver the Evolve programme, with Indian outsourcer Wipro serving as the main systems integrator.

Goodwin said the key to successfully managing the project's suppliers has been establishing an internal management team, with board level support, to oversee the programme.