WH Smith looks to IT consolidation

Technology revamp is helping retailer to cut costs

Retail giant WH Smith is working with consultants to identify areas of its IT infrastructure that can be rationalised and shared across its businesses to cut costs.

The company reported its financial results last week (Computing, 20 October), and said successful outsourcing projects contributed to cost savings of £18m in its latest financial year.

WH Smith IT director Peter Swann says he is now looking at the company’s IT resources to see where technology can be simplified and used to make more operational savings next year.

‘The next phase is to bring our operating costs right down,’ he said. ‘We have hired Capgemini, for example, to independently evaluate our network infrastructure and see if we can rationalise our three existing wide area networks (Wans) into one.

‘We’re likely to take a holistic view across the group at IT usage. We have too many computer centres, external disaster recovery capabilities and Wans.’

WH Smith is concluding its implementation of Retek enterprise resource planning (ERP) software, consolidating its physical infrastructure and repositioning its service agreements.

‘We have also looked at the way we host and manage our core systems,’ said Swann. ‘We are doing that so we can get the business to a position where we are able to exploit the new systems and services properly.’

A project to migrate the WH Smith IT systems from an ageing and costly-to-maintain mainframe platform is due to be completed this week. The company is also implementing a new finance system.

‘In terms of consolidation, we are migrating our old legacy systems from our mainframe onto the same Unix platform on which we run all our Retek systems. That saves us about £3m a year on operating and maintenance costs,’ said Swann.

‘IT has made an important contribution to savings as a whole,’ he said.

‘The challenge for us now is to assess the risk of where we can simplify this infrastructure further.’