CIO Jury: Is IT to blame for £290m Sainsbury's loss?

The Sainsbury's write-off of £290m-worth of IT equipment and related losses this week was a combination of IT failures and management incompetence, according to UK IT bosses.

The struggling supermarket chain this week unveiled a new 'back to basics' business plan after the roll-out of a £3bn automated depot and supply chain system failed to get stock onto the shelves, leading to some processes reverting back to manual.

Sainsbury's is also renegotiating its £1.8bn outsourcing deal with Accenture after the supermarket's CEO Justin King said Accenture had to shoulder its share of the blame – although Accenture stresses it had nothing to do with the supply chain system.

Sainsbury's follows a recent trend of companies, such as Avis and MFI, blaming poor results on IT problems, so we asked the silicon.com CIO Jury of IT bosses if the supermarket was unfairly putting the blame for its current plight at the door of the IT department and the outsourcer.

The question split the CIO Jury down the middle with six saying 'yes' and six saying 'no'.

Those in the 'no' camp clearly felt the blame lies at the door of previous CEO Peter Davis, who initiated the ambitious project.

Pete Smith, director of IT and telecoms at Inmarsat, said: "I believe the saying goes that there are no IT projects only business projects."

The management at Sainsbury's bought too heavily into what the consultants were selling them, according to Derek Gannon, IT director at The Guardian.

"The problem is that consultants invariably oversell and set expectations that can not be met. The business has to manage the consultant, but they can only do this if they have a function within their business which knows IT/IS and can see the woods for the trees," he said.

Others cited "management incompetence" and the failure of Sainsbury's to manage the organisational change, while Rob Neil, head of ICT services at Ashford Borough Council, said: "If they've had to switch back to manual processes, the supporting IT clearly wasn't correctly specified or implemented to underpin business process."

The failure highlights a disconnect between the board and the IT department, according to others who said both sides have to take their share of the blame.

"Sainsbury's had a problem, which they computerised - they then had two problems," said Ted Woodhouse, IT director at Leeds Teaching Hospitals NHS Trust. "This feels to me more like a failing of the CEO for not understanding enough about what IT will and will not do, and maybe a failing of the CIO... for simply not delivering."

Steve Anderson, IT partner at construction and property consultancy Davis Langdon, said: "It sounds like there are some major disconnects between the outsourcing supplier and the internal IT team, particularly with Accenture now involved in renegotiations surrounding the existing outsourcing deal (probably to broaden its scope), and these problems must be laid at the door of the existing CIO."

But Gavin Whatrup, IT director at advertising agency Delaney, Lund, Knox, Warren & Partners said the episode points more to the failure of 'big bang' IT projects rather than IT itself.

"Any single large investment is going to be risky. Sainsbury's, along with past government under-achieving IT projects, points to the failure of large IT projects, not IT. It is likely the design, not the tool, that is at fault. Time for a rethink?"

Today's CIO Jury was...

Jeremy Acklam, IT director, Virgin Trains
Stuart Aitken, CIO, Medical Research Council
Steve Anderson, IT partner, Davis Langdon
Dr Stuart Brough, director of IT services, University of Strathclyde
Mark Foulsham, head of IT, eSure
Derek Gannon, IT director, The Guardian
David Jemitus, head of IT, Government Planning Portal
Phillip Jones, CTO, easyGroup
Rob Neil, head of ICT services, Ashford Borough Council
Pete Smith, director of IT and telecoms, Inmarsat
Gavin Whatrup, IT director, Delaney, Lund, Knox, Warren & Partners
Ted Woodhouse, IT director, Leeds Teaching Hospitals NHS Trust

If you are a CIO, IT director or equivalent at a large or small company in the private or public sector and want to be part of silicon.com's CIO Jury pool, or you know an IT chief who should be, then drop us a line at editorial@silicon.com