Tech divorce from Walmart cost Brit retail giant Asda £1.22B

The UK’s third-largest supermarket, Asda, has reported that the cost of its tech divorce from Walmart — which included building a new SAP ERP system — reached £1.22 billion, four years after it first separated from the US retail giant. Results published last month said that one-off separation program would transfer the UK …

[Valeyard]

not bad, got off pretty lightly, better than I expected compared to pretty much EVERY OTHER TIME ANYONE TRIES THIS

[Anonymous Coward]

They took back control?

Always a winning decision

[Roland6]

Not sure if I would call hosting on Azure etc. taking back control…

[Anonymous Coward]

I can’t make out from the article…. Are Asda now running SAP S/4HANA Cloud Private Edition - albeit in Azure - and have dodged RISE with SAP (though this a damning indictment if it)….. or do they still have that hill to climb as the very next challenge?

<Could be worse … they could have decided to go for Fujitsu Marketplace PoS aligned to Oracle Merchandising and ReSA and had a worse time like Primark.>

[Tron]

I wouldn't call it 'standalone'.

SaaS, cloud etc. Loads of dependencies. I doubt those bills will go down.

[Mickey Porkpies]

money in the bank

for consultants change ERP kerching believe me it is easy no prob ohh yeah here is another bill ohh we need more integration elements kerching..why do you think these large migration houses are so profitable?

[Yet Another Anonymous coward]

I'm just a humble engineer

But why not just stick with a copy of the existing system and just delete American stores, as Walmart presumably just deleted UK stores from its system?

[Anonymous Coward]

Re: I'm just a humble engineer

The WallyWorld thing probably had a lot of very WallyWorld code in it making that impossible due to secrecy issues. Either that or the licensing costs were prohibitive.

What looks so simple at first glance can get horribly complicated when the corporate lawyers get involved.

{I pretended to be a humble engineer for most of my working life. Then I retired and now I am a proper humble engineer working on big bits of kit called Steam Locos.

[Fruit and Nutcase]

Re: I'm just a humble engineer

Then I retired and now I am a proper humble engineer working on big bits of kit called Steam Locos.

You've just swapped a PHB for a Fat Controller

[Yet Another Anonymous coward]

Re: I'm just a humble engineer

>The WallyWorld thing probably had a lot of very WallyWorld code in it

good point

> Either that or the licensing costs were prohibitive.

You would think, "we can stick with you or throw you out and go with a competitor" would concentrate the Oracle salesdroid's mind wonderfully

[Anonymous Coward]

Re: I'm just a humble engineer

Due to nature of the point will post anon, but going through the detangle from a US owner to VC.

Can tell you mostly it's the hideous costs and laughing positions your left in and who owned what. Most kids of parents in this enterprises own bugger all and lent access via parent and volume and presence in the market pricing.

Once out most have to find alt access and bits they did have like VM. Legacy license just cannot upgrade, fart or itch your nose without hideous cost

[Roland6]

Re: I'm just a humble engineer

Some years back I oversaw the demerger of a UK business from its multi-national “owner”.

The client was so small, SAP weren’t interested and could offer no tools to help move from SAP’s large enterprise offering to its SME,offering, so we moved off SAP to a third-party ERP who did have the tools and experience of moving people off SAP… we achieved full independence with only a few days left on the interim former parent’s IT systems usage agreement.

>” Most kids of parents in this enterprises own bugger all”

From what I experienced, the new child organisation typically only owned the physical IT equipment, physically located in their premises, which wasn’t subject to lease arrangements. Even seemingly simple things like MS volume licensing was problematic. (From memory, the client could continue to use existing licences, but add new systems or re-image a system…).

[Valeyard]

Re: I'm just a humble engineer

{I pretended to be a humble engineer for most of my working life. Then I retired and now I am a proper humble engineer working on big bits of kit called Steam Locos.

Do tell, I'm not a train guy but I've walked past the big sheds in darlo train museum and been curious how just what the projects in there building these things involves

[Anonymous Coward]

Re: I'm just a humble engineer

"licensing costs were prohibitive"

More prohibitive than £1.22bn?

[Anonymous Coward]

Re: I'm just a humble engineer

Having been through something similar, there would be too much shared data and apps to do it that simply. Basically, some stuff will belong to Walmart, some to Asda, and some to both and untangling it isn't fun...

(I had the "privilege" of trying to do this when all the apps and data were in two very similar, but very foreign to English languages)

[John Miles]

That sounds a lot

Then saw SAP - so they probably got off lightly

[Snowy]

Re: That sounds a lot

Except they are still using SAP, so they have no escaped.

[Missing Semicolon]

Maximally lousy

For the staff. TUPEd out to an outsoucer who will zero the pay rises and fire everyone as soon as contractually possible.

[Korev]

Re: Maximally lousy

I struggle to think of an example of when doing this went well, but doing it mid-migration seems like a good way to make it end even more badly than it needed to

[Anonymous Coward]

A mere tin of beans

Which reminds us, groceries are going up again.

We’ve got to pay for this loss somehow.

[Korev]

Re: A mere tin of beans

He Asda be certain about that

[Anonymous Coward]

Umm...

Asda said the program would “improve operating efficiencies, make better use of data, improve experience for customers and colleagues, and enable the business to be more agile in responding to customers' needs.”

They also said they're using SAP...so which is it?

[Anonymous Coward]

Private Equity Modus Operandi

You're all missing the point entirely. You're blind. Even El Reg keep reporting this without seeing the wider angle. This is EXACTLY what all private equity buyouts do. It's called "buy strip flip" (search the term - this is established strategy). Here's how it works:

Buyout successful but distressed company (often "positionally" struggling but serviceable debt) with a strong brand.

Load on a ton of management and service fees paid for by new obligated debt (to adjacent companies)

Blame "tough market conditions", "previous management", etc.

Saleback leases/sell offs/strip services/cuts/raise prices/sack as many people as possible.

Dividend recapitalisation (more debt - again, owed to adjacent companies)

Flip company to private equity company #2 (or 3, or...) or flip onto people's pension pots by floating it as an IPO.

In 2013 private equity acquired Heinz and loaded it with $28 billion of debt. Ever wondered why a bottle of Heinz ketchup costs £5 and a bottle of M&S ketchup costs £1? You're all being taken for mugs by (mostly) US billionaires.

Wise up! Go research RIGHT NOW - never shop in a private equity owned business. Never buy products from private equity owned businesses. And stop covering for them. Educate people. Because next week it's Tesco. The week after it's M&S. And so on, and so on.

I would suggest you particularly researching hotel chains, chain restaurants, and breakdown recovery (where only one company survives that isn't PE owned).

[Anonymous Coward]

Re: Private Equity Modus Operandi

The two ASDA stores near me are always busy and well stocked with a wide range of products. I believe at one point they were supposed to be cheap but they definitely aren't any more!

[Anonymous Coward]

Re: Private Equity Modus Operandi

Interesting, thanks, will take that on board.

Tell me, does Octopus Energy fall into that category too?

[steviebuk]

Also their shit treatment of staff

doesn't help with their debt. Nephew is stuck working at one of their garages where they've now down graded the store managers, want all the stuff to do the managers work but not pay extra.

I dislike inspirational speakers so when I say this guy is actually good or at least interesting, then he must be and I'm REALLY cynical. Steve Head. The point? He did a talk for us and mentioned his friend that owned a restaurant chain. Made it successful by treating the staff properly, eventually selling it for a few million. Who bought it? The group that owns ASDA. What did they do with it? Fucked it all up by treating the staff like shit, eventually taking something that was worth a few million to being 10 million in debt (rough numbers as I can't quite remember). The previous owner, the friend of Steve bought it back off them.

[Richard Hewitt]

Re: Also their shit treatment of staff

Was his friend's name Leon?

[steviebuk]

Re: Also their shit treatment of staff

No, the restaurant was. It was John Vincent.

[Anonymous Coward]

Oof

TCS and SAP..

There's a winning combination if ever there was one.

[[e-mail]]

Financial year <> Calendar year?

"During the 2025 financial year, which ended on 31 December, "

I'm glad I never got involved in all this high-finance stuff - I thought it was the Calendar year that ran January to December and the Financial year is April-March.

I guess you really do learn something new every day...

[MachDiamond]

Not that small

Asda isn't a mom & pop operation. They should be running their own data back end to the extent they can. One of the big benefits is that if anything goes wrong, money can be thrown at the problem to get it solved. With an outside vendor, that's often not possible.