Asda, the UK’s retail giant, has postponed its much-anticipated IT systems upgrade, initially slated for December 2024. This move impacts its smaller stores and a select number of larger ones, originally scheduled for the December 7-9 rollout. The delay follows the conclusion of Asda’s separation from Walmart and the termination of Walmart’s support for Asda’s IT systems.
Why Was the IT Systems Upgrade Delayed?
The retailer had planned to implement new systems at a handful of stores as part of its ongoing efforts to become independent from Walmart’s technology infrastructure. Asda’s transition project, known as Project Future, involves significant upgrades to critical business functions, including Enterprise Resource Planning (ERP) and Human Resources systems.
The delay was confirmed by The Register, citing internal communications that indicated a decision by the “SVP Forum” to hold off on the transition. While Asda’s smaller stores were part of the initial upgrade plan, only a fraction of these stores had been impacted by the delay.
The Transition Timeline: From Walmart to Independence
In February 2021, Walmart sold Asda to Mohsin Issa, Zuber Issa, and private equity firm TDR Capital for £6.8 billion. As part of the deal, Walmart agreed to maintain Asda’s IT systems for a three-year period, which is now nearing its end. By the close of 2023, Asda had invested £430 million in transitioning its technology infrastructure to a system fully independent from Walmart.
Asda’s transition strategy involved upgrading around 850 smaller store sites, including its PFS sites, smaller supermarkets, and Asda Express convenience stores. Initially, the retailer planned to complete these upgrades by the end of 2024. However, due to the delay, only a small portion of these sites underwent the systems upgrade, with a one-week postponement.
What Does This Delay Mean for Asda’s IT Strategy?
Asda’s spokesperson clarified that the company is focusing on ensuring “outstanding fixes are complete” before it scales the transition to larger stores. The goal is to avoid placing extra pressure on store teams during the transition while ensuring that pilot stores and those already upgraded offer valuable insights.
This careful approach suggests that Asda is being cautious as it prepares for the broader rollout of new systems in 2025. With the support of Microsoft Azure and the adoption of SAP S/4HANA, Asda aims to modernize its infrastructure while maintaining operational stability.
Impact of the IT Delay on Asda’s Operations
Despite the delay, Asda remains focused on its long-term goal of achieving complete technological independence from Walmart. The company will continue to work with Microsoft for cloud solutions and backup restoration, having selected Veeam’s Availability Suite for critical services.
The delay could slightly disrupt Asda’s ability to fully modernize its IT systems in the short term, but the company’s decision to take more time before scaling to larger sites should help mitigate risks. It also reflects Asda’s commitment to ensuring that the transition is as seamless as possible for its store teams and customers.
FAQ Section: Asda’s IT Systems Delay
1. Why did Asda delay its IT systems upgrade?
The IT upgrade was postponed to ensure that outstanding fixes were completed, and to avoid putting extra pressure on store teams. The company plans to roll out the new systems more carefully in 2025 after gathering insights from pilot stores.
2. What is Project Future?
Project Future is Asda’s initiative to separate from Walmart’s IT systems. It involves a comprehensive upgrade of Asda’s technology infrastructure, including its ERP and HR systems.
3. How much has Asda spent on the IT transition so far?
Asda has invested £430 million ($520 million) in the transition to its new technology systems, which include moving from Walmart’s SAP ERP to a new instance of SAP S/4HANA.
4. How does the delay affect Asda’s plans for larger stores?
The delay primarily impacts smaller store sites. Asda plans to begin transitioning larger stores in January 2025, ensuring the rollout is well-coordinated with additional learnings from smaller sites.
5. What role does Microsoft play in Asda’s IT transition?
Microsoft provides cloud hosting for Asda’s new SAP S/4HANA system through Microsoft Azure. Asda also uses Veeam’s Availability Suite for backup and restoration services.
