Halfords cuts costs with IT revamp

Car accessories to bikes retailer Halfords has slashed £1m from its IT costs by replacing outdated IT systems.

When the company was acquired by CVC Venture Capital Partners from Boots, the race was on to move the company's systems off the ageing mainframe which couldn't support its growing online business, or multi-buy promotions.

The company decided to implement the SAP for a retail enterprise resource planning (ERP) package to replace a host of systems running on the mainframe, with a consortium led by integrator CIBER Novasoft. A team was formed of business and IT staff who worked with the consultants to deliver the project.

Halfords implemented SAP in its HR department first - a lower risk project to start with. It then moved onto finance, followed by category management and replenishment to the stores and then distribution centre replenishment.

Halfords said as a result it has saved over £1m on its IT costs to date, as well as providing a much more efficient system.

"The SAP implementation was the most complex part because that replaced 193 separate systems that had grown up over the years on the mainframe," explained Brian Scott, head of business systems at Halfords.

"We've gone from a development shop writing bespoke code on a mainframe to running packaged software with a smaller, more business focused team. What we've achieved is more consistent service levels in store," he added.

Scott said the key was to get the system in, rather than re-model the business at the same time.

"We didn't set out to re-engineer the business. Our approach was to get this in place in a reasonable time frame and then start to exploit what we'd got. It was much more important to get the project in rather than add risk by squeezing the last ounce of benefit out of it."

Implementing SAP is just part of a wholesale IT revamp going on at the retailer, Scott revealed.

"We are four years into a four-phase, five-year project," he said.

The company is also refreshing its in-store technology in a five-year, £5m deal with BT Expedite.

Over the next year BT will roll out and manage new in-store systems, which will reduce the time it takes to process orders through an integrated in-store and web ordering system.