The Co-operative Group has signed a £21m deal with BT to network 3,500 retail sites across the UK, including food stores, pharmacies and funeral parlours.

BT is implementing a high-speed wide area network (Wan) to link Co-op stores, offices and data centres.

The core of the network is already in place, and full implementation is expected to take another 12 to 18 months.Ian Stringfellow, the Co-op's head of infrastructure, says the move will bring significant cost savings and improved efficiencies.

'Speedier delivery of information is key. We're putting in high-bandwidth connections at many locations,' he said.

'This will improve ease of management, which means we can deliver a better service to the business, with improved performance.'

Stringfellow says the organisation made the decision to implement a new Wan following a consultants' review in 2003.

'Back then we had three separate retail business areas - retail, specialist retail and Associated Co-operative Creameries - each of which had separate infrastructure teams and networks,' he said.

'Following the creation of a combined group IS team in May 2003, we identified a number of areas for cost savings and improved efficiencies. The Wan was a top priority.'

The consultants also advised the Co-op to consolidate its data centres and bring disaster recovery (DR) in-house.

'We are following these recommendations by cutting data centres down to just two closely coupled sites where we can house all of our servers and also run DR operations,' said Stringfellow.

The Co-operative Group is also carrying out a major programme to transform its retail operations, with the Wan set to play a key role here as well.

'We will be revamping our logistics, distribution and supply chain. The business is also looking at whether and how to restructure its distribution centres,' said Stringfellow.

He says that the Wan could be used to allow the Co-op to make better use of datawarehousing and data analysis tools, but says the business has no intention of moving away from its ethical, co-operative principles.