Delays in IT outsourcing costly for Morrisons
By Cloud Direct • 13 Mar 2014
Supermarket retailer Morrisons has reported a loss of £176 million in its latest annual trading statement for the year to February 2014 - with delays in outsourcing a major IT initiative being part of the problem.
The firm only launched its online shopping service - provided by Ocado - in January this year, whereas the biggest supermarkets have been selling their goods in that fashion for years. However, it now has a £200 million deal in place for this service covering the next 25 years.
It has also lagged behind in the recognition of the need to shift its stores from large out-of-town centres to smaller premises located nearer where customers live.
Discussing the results in the management statement, chairman Sir Ian Gibson acknowledged the failures, but also claimed the company is now making the necessary adjustments.
“In trading terms this has been a disappointing year for Morrisons, with consumer confidence and market conditions continuing to be challenging. It has however been a period of significant strategic progress as we lay the foundations for a stronger future.”
While Morrisons has suffered from being slow to take advantage of the kind of outsourced IT services the other supermarkets have long established, companies of many shapes and sizes might also find they they, too, will fall behind the competition if they are unable to sell goods and services online in the same way as their rivals.
Indeed, a strong online presence may be even more important for smaller firms as by definition they will not have well-known names the public is familiar with.
The Morrisons.com service has yet to be rolled out nationwide, initially only serving the Midlands. It plans to offer the service to half the UK by 2015.
Many companies are currently taking up IT outsourcing for the first time, including some retailers, commercial technology partner at law firm Kemp Little Paul Hinton told Computer Weekly earlier this month.
Fashion stores have been joined in this by businesses ranging from pharmaceutical companies to financial services providers.
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