Bigger, so the saying goes, is better. But for supermarket chain Iceland, it almost proved to be a terminal disaster when it became part of the Big Food Group in 2001 following its merger with Booker, the UK’s largest cash-and-carry operator.
The trouble with the Big Food Group was that the only things that didn’t get bigger were its revenues and profitability – staff numbers ballooned, sales fell and the red ink flowed.
The birth of the Big Food Group was followed by a company-wide rollout of SAP enterprise resource planning (ERP) software that would have encompassed every corner of every company in the group – not just Iceland, but Booker, Woodward Food Service and Expert Logistics, too.
That was stopped in 2005, after Iceland was acquired by now-defunct Icelandic retailer Baugur, and charismatic founder Malcolm Walker was put back in charge of the company that he had been ousted from in a boardroom coup in 2001. After the demise of Baugur, Walker took back full control, once again, in March 2012.
The shelving of the SAP rollout was one of the first decisions made on Walker’s return. Iceland had been at the back of the queue, with work scheduled to start when the Big Food Group was broken up. Mean-while, Iceland’s core systems had been neglected in anticipation of the coming of SAP.
“When Iceland became an independent business again, because we had spent so much time trying to implement SAP, we had neglected the existing systems. So they were two or three years behind, even at that point, and we had quite a task on our hands to get all of the incumbent applications upgraded or replaced,” says information systems director Mark Pearson.
One of the other major decisions saw the IT department shrink from 120 staff in 2005 down to just 40 full-time equivalents today.
That drastic staff cut was partly aided by the next big decision – outsourcing the hosting and systems management of Iceland’s central infrastructure to Getronics. “Our central infrastructure is hosted out of Runcorn, which is our primary datacentre, with the back-up datacentre in Deeside,” says Pearson. BT provides the networking infrastructure and management.
On the hardware side, Iceland is largely an IBM shop. This spring, it completed a major replacement programme intended to virtualise desktop environments in the company’s head office, as well as aiding the rollout of new applications to stores, too.
Without a SAP rollout to support, nor hardware to feed and water on a daily basis, Pearson could then focus the IT department squarely on updating and developing the busi-ness’s operational applications.
Iceland runs a trio of JDA supply-chain management software modules. These include Advanced Store Replenishment (ASR), Advanced Warehouse Replenishment (AWR) and Network Optimisation (OPT), which run on IBM Power7 iSeries servers.
“They [the JDA software packages] do a fantastic job for us. We have upgraded to the latest versions and we are now providing the best on-shelf availability to our stores that we have ever had,” says Pearson.
Indeed, Iceland is such an enthusiastic user that it runs the European customer user group and has an input into the direction of the product.
Infor’s SCM Warehouse Management 2000, meanwhile, helps to manage the company’s four major warehouses. It runs on an IBM pSeries blade server on the AIX Unix operating system, supported by an Oracle database back-end.