Marks & Spencer Goes from Internal Restructuring to Outsourcing IT

Ann All

In late 2007, I wrote about Marks & Spencer's restructuring of its IT department. Marks & Spencer decentralized IT, placing tech staff in different business units throughout the British retail chain. The aim, said the IT director, was to "evolve (IT) into a service function, not a separate entity." I hailed this as a good move. I also mentioned the company's intent to hire more IT staff, albeit folks with business chops. The director's quote:


As an employer, you no longer need people to build systems, you need people who know how to apply (technology) packages to the company and get the best out of them.


Yet now Marks & Spencer is cutting IT staff, reports Twenty IT staffers were "made redundant" and another 56 transferred to offshore service provider Cognizant, which was hired as part of a project to consolidate its infrastructure and application support providers. The article quotes a company spokesperson:


Cognizant is going to provide technical support for M&S staff. This was a project to consolidate our supplier base for infrastructure and application support. We did it to improve IT service quality and make it more efficient for the business.


So what happened? Did the project to locate IT staff throughout the company not pan out? Or is the company simply outsourcing more commoditized aspects of IT while retaining more strategic functions in-house? Do the spokesperson's comments imply that IT wasn't efficient or service-oriented enough?


It's not clear from the article, and some online digging failed to turn up many more details. Like many retailers, M&S sales have declined right along with the economy. Earlier this year, M&S shed 1,230 jobs from a workforce of 70,000 -- 780 from its stores and 450 from its head office. According to the Telegraph, the company's finance and operations officer, Ian Dyson, is leading a program called 2020, Doing the Right Thing. Among its objectives: expanding international business and online sales, delivering a new marketing campaign based around the slogan "Quality worth every penny" and improving operating efficiency. It plans to cut 252 million in capital spending in 2009.


Is working with Cognizant part of the move to improve operational efficiency?

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