Sainsbury Signs IT Management Contract with Accenture

LONDON, December 8, 2000 -- J Sainsbury plc and Accenture announced the recent signing of a seven-year contract that calls for the leading global management and technology consultancy to manage the U.K. supermarket’s information technology (IT) infrastructure. The agreement aims to radically improve Sainsbury’s business efficiency and effectiveness by modernising its IT systems, thereby achieving significant cost savings.

Under the agreement, which became effective November 12, 2000, Accenture will take responsibility for all aspects of Sainsbury’s IT services, including operating existing systems and networks, developing and installing new systems and managing third-party contracts. Additionally, the arrangement includes a transfer of approximately 800 Sainsbury IT employees to Accenture. Sainsbury originally announced its decision to team with Accenture and negotiate a final contract on August 22, 2000.

"Driving change in our IT capabilities is a fundamental part of our business transformation plans," said Peter Davis, Sainsbury’s group chief executive "Many of the changes we need to make are IT-dependent, and Accenture’s excellent IT skills and retail industry experience will help us achieve real competitive advantage and efficiencies quickly and cost- effectively."

Sainsbury currently spends in excess of £200 million a year on its supermarket IT systems and operations. Over the seven years of the contract, the company’s IT costs will be approximately £35 million per year less than if Sainsbury continued to manage and operate its own IT function.

"This agreement is consistent with our strategy of teaming with clients to create innovative arrangements that deliver value far beyond traditional outsourcing," said Robert Willett, global managing partner, Accenture Retail practice. "We are committed to helping Sainsbury achieve repeatable, ongoing value that will transform customers’ shopping experiences and differentiate Sainsbury from its competition."

"Over the next two and a half years, Accenture will renew all our key systems, replacing legacy systems with best practice retail packages," added John Adshead, Sainsbury’s group board director for IT. "Early implementation of new office systems and improvements to our eCommerce and HR systems are planned for April 2001. Within the next year we will have replaced our point-of-sales systems and substantially upgraded our category and customer relationship management systems. By the end of the programme, all major systems, including depot and store replenishment, will have been renewed."