Exclusive Asda is transferring more than 100 internal IT staff to Indian outsourcing company TCS as it works hard to meet deadlines and move away from IT systems supported by its previous owner by the end of the year. Walmart.
According to documents seen by The registerToday (June 17) a collective consultation for a staff transfer begins under TUPE – a scheme under which employment rights are protected under UK law.
Britain’s third-largest supermarket expects affected staff to meet with line managers from June 24, with the handover date set for September 16. Contractors will be laid off at the end of their current contracts.
Asda employs around 5,000 staff across its UK offices. Between 130 and 135 members of the IT team have signed up for the collective consultation to move to TCS.
This is what an Asda spokesperson said The Reg: “We’re building world-class systems in a one-off IT transformation – Project Future – to separate Asda from Walmart’s legacy systems. Project Future will deliver a step-change in our data capabilities, customer experience and competitive advantage. Simply put, it’s a important building block of our strategy that will set Asda up for long-term success.
“As part of this process, we have made the difficult decision to propose some changes to our technology function to ensure we have the necessary skills and capabilities to support these new systems. We have launched a collective consultation with colleagues who will be affected by this proposed change and will do all we can to support them through this process which they may find distressing. We are fully on track to complete the three-year Project Future program by the end of this year. “
It is up to the staff concerned whether they accept the job offer from TCS or opt for a redundancy package from Asda.
The move came when private equity firm TDR Capital acquired a majority stake in the supermarket group. It was acquired from Walmart in February 2021 by brothers Mohsin and Zuber Issa and TDR Capital for a value of £6.8 billion. The American retail giant retained ‘an equity investment’.
Project Future is a huge shift in the retailer’s IT function. It is upgrading an existing ERP system from SAP ECC – managed on-premises by Walmart – to the latest SAP S/4HANA in the Microsoft Azure cloud, simultaneously changing the application software, infrastructure and business processes . Other applications will also move to Azure, including e-commerce and retail systems, while Asda is setting up an IT security team for the first time – the work was previously carried out by its US owner.
Asda signed up to SAP’s ‘RISE’ program in December 2021 in a deal to lift, shift and expand its ERP system – a key part of the German supplier’s strategy to get customers to the cloud transform. But the project is already beset by delays.
The British retailer had signed a three-year deal with Walmart in February 2021 to continue supporting its existing system, but was forced to renegotiate to extend the agreement and said it planned to move away from the legacy systems before the end of 2024 .
Although an insider told it El Reg That deadline was “completely unattainable”. The Walmart deal runs until September 2025, giving the British retailer room to deal with further delays without renegotiating the contract.
An email seen by The register suggests a somber mood within the IT team, with some managers expressing disappointment and saying the team did not deserve its fate. It suggested that Asda management did not yet understand the scale of the task it has taken on in IT transformation.
Asda has yet to migrate one store to the new infrastructure. The first – Yorkshire’s Otley – will go live at the end of June.
An insider pointed out that project managers were trying to book resources from the infrastructure team for later this year and next year, but when they were about to move to TCS, the infrastructure team didn’t know who would do the work or what. resources would be available.
“They have to migrate a thousand stores and they’re going to do that with an infrastructure team that has their eyes on the door. They will be very professional, but they won’t go to the extreme and do on-call services. They don’t have to do that,” the insider said. ®