Avis takes £30m hit on failed IT systems

Avis Europe has taken a hit of more than £30m after deciding to scrap its failed IT systems.

The car hire firm said, yesterday, that it would 'terminate development' of its enterprise resource planning (ERP) system, after encountering substantial delays and high costs from a number of 'fundamental problems with its design and implementation.'

Avis faces charges of between £28m and £31m after abandoning rhe planned ERP system, which was meant to be a key part of the company's restructuring project aimed at bringing savings by joining up disparate back-office functions.

'We are very disappointed that major IT parts of the project have incurred significant exceptional costs and will not deliver the anticipated benefits,' said Murray Hennessy, chief executive of Avis Europe plc.

'We have moved with urgency to review our back office and IT restructuring project. We felt it was right to take decisive action on the results of the review.'

Avis said it plans to pull the plug on the new project as soon as possible to avoid further costs.

Associated IT restructuring projects, including outsourcing, will also be significantly scaled down as a result, the company said.

But Avis assured customers business operations would not be disrupted by the decision, as the ERP systems have yet to be rolled out.

'Our existing systems continue to function as normal and there will be no impact on the Group's underlying operations.'

And the car rental firm will continue implement successful parts of the overall IT programme, focused on centralising back-office and administrative processes to Central Europe, he said.

'But we will halt immediately the parts of the project that are not going well or will no longer deliver a satisfactory return on investment,' said Hennessy.

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