By Julian Goldsmith, 27 February 2008 12:46
NEWS
Technical difficulties with a new online platform wiped £10.6m from the operating profit of high street betting chain William Hill's interactive channel for the year ended 1 January 2008.
Revenue and operating profit fell to £119m and £50.9m during the period respectively.
William Hill announced in January it was scrapping an in-house software upgrade, dubbed NextGen, because the project was delayed. It is estimated the budget for NextGen was £26m.
However, the programme also had some design limitations, which affected revenues. In a statement, the company said: "This inflexibility is most notable in respect of in-running betting [where bets are made after the event has started] where the limitations of our technology prevented us from matching the increasing number of in-running betting opportunities available from our competitors."
silicon.com Retail & Leisure
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The report said while NextGen would deliver the expected benefits in due course, the implementation would require greater investment and take longer than originally envisaged. The review last November also identified that proven technology was available which could be implemented more rapidly and at a lower comparative cost.
NextGen will be replaced by off-the-shelf systems supplied by Orbis, which is hoped will be in operation by the end of November. William Hill has taken a restructuring charge of £20.9m in 2007 and will also take a further charge of £4m in 2008 as a result of the change in online strategy.
The company said it has already taken steps to make its online offering more appealing to punters by running video streaming of events and expanding on online payments systems through which they can make bets.
William Hill has also made some changes to the online team. Finance director Simon Lane told silicon.com: "Within the last few months we have appointed a new head of ecommerce and we are anticipating strengthening the team by bringing in further talent."
Comments
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1. Steve Gedney
Sir,
It is depressing to read yet another report of a costly IT project failure (William Hill profits hit by online problems, 27th February). It’s an all too familiar story for both the private and public sectors. As is often the case, the problems here were a lack of clear planning at the outset, misalignment between the business need and IT’s interpretation and an inability to effectively manage progress and be flexible during the project lifecycle.
IT projects are only successful when processes are put in place to monitor progress, to refine the project to meet changing business requirements, and to identify potential problems early and implement change effectively. Without these processes, large-scale projects invariably end up in the kind of chaos described in the article.
This is another prime example of an IT project that has failed in adding value to the business, as well as having a major impact on operating profits. A flexible, properly planned project that incorporates continuous validation into its development would not only save money and deliver business value, but it would have a greater chance of being delivered on time and on budget.
Yours sincerely,
Steve Gedney,
MD, Borland UK