Asda, the UK's third-largest retailer, is accelerating its plans for a technology freeze during the forthcoming Christmas period due to ongoing challenges related to its separation from previous owner Walmart. This initiative is part of Asda's broader project, known as Project Future, aimed at disentangling its IT operations from the US retail giant. The tech team at Asda has been engaged in this separation since 2021, with the goal of completing the process by the end of 2024.
In a communication shared with The Register, Rob Barnes, Asda's Vice President of Digital and Technology, outlined the importance of maintaining system stability during this peak retail period, especially with Black Friday and the Christmas shopping weeks on the horizon. "We are now moving into a critical period," he stated. "It is crucial that we maintain system stability over this period to make sure there is no disruption, and that we deliver the best possible experience for our customers and colleagues." As part of this approach, Asda has instituted a change freeze on its production environment for all operational changes related to the business and Project Future.
While general changes are suspended, there remains the possibility for some exceptions, with a change team collaborating with business unit heads to evaluate specific requests. This moratorium on changes is designed to ensure that any potential disruptions are minimised, allowing Asda to focus on providing a seamless customer experience during the busy season.
Sales at Asda have experienced a decline, with a reported drop of 6.4 percent year-on-year in the three months leading to August 10, as intense competition from discount retailers like Aldi continues to pose challenges for the supermarket. In September, the tabloids highlighted Asda's urgency to implement system changes to fully sever ties with Walmart by the end of the year, coinciding with what is typically termed the "golden quarter" for retailers.
Asda was sold by Walmart for £6.8 billion in February 2021 to retail entrepreneurs Mohsin and Zuber Issa, along with private equity firm TDR Capital. Following the sale, the new owners entered into a transitional services agreement with Walmart, which included IT support for an initial three-year period. In tandem, Asda has been executing Project Future, with an original budget set at £189 million for its IT system overhaul. Recent reports indicate that the total investment in this transformation has burgeoned to £430 million as of December 31, 2023.
By January 2024, Asda had transitioned away from Walmart's SAP ERP system to a new instance of S/4HANA, hosted on the Microsoft Azure cloud platform. The retailer is prioritizing the conversion of its IT systems across approximately 850 retail locations, including smaller supermarkets and Asda Express convenience stores, throughout 2024. The conversion of larger stores is planned to commence in early January 2025, following the peak trading season.
In recent months, Asda has experienced notable changes in its executive leadership, including the exit of Chief Information Security Officer Simon Langley and the digital transformation chief Mark Simpson after nearly three decades with the company.
An Asda spokesperson acknowledged the company's intent to implement a freeze during the peak trading period, highlighting that this strategy was an integral part of their Future plans and was communicated publicly earlier in the year. "We manage change very carefully around key trading events such as Black Friday, Cyber Monday," the spokesperson remarked. Additionally, they noted that while new changes are limited during this critical period, implementation efforts continue in certain areas, including the transition of automated petrol forecourt sites. Further rollouts to smaller stores and online operations remain underway as Asda progresses with its digital transformation objectives.
Source: Noah Wire Services