Sainsbury's reveals Accenture IT deal 'migration'

Sainsbury’s has announced that the ‘migration’ of its £1bn IT systems
contract with Accenture is expected to take place in April 2006.

Announcing its first interim figures under international financial reporting
standards with an underlying operating profit of £168m – up 13.5% on 2004 – the
supermarket said that its plan to take IT systems back in-house would take place
in about six months’ time.

In a statement it said that it had developed, and would manage, the
transition plans and ‘work closely’ with Accenture to implement the migration,
that is expected to take place by the end of April 2006.

‘The IT cost savings will start to come through in 2006/07, with the full
benefit of the change impacting the second half of next year,’ the statement
said.

Sainsbury’s said that it’s IT focus had ‘changed since the contract was
initially signed’ and that the company concluded it was the ‘right time to
rebuild expertise back in-house’.

‘All termination and/or transition costs will be treated as an exceptional
item this financial year, and details will be provided in due course. It is
expected that future cost savings will payback any exit costs within two years’,
the statement added.

Philip Hampton, Sainsbury’s chairman said it was still in the ‘early days’ of
its recovery programme.