paas and iaas
Project which included new SAP system saw delays and costs rise from an £800m estimate while causing financial disruptions
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 retailer to “a standalone, IT infrastructure using software as a service from best-in-class digital partners”. 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.”
During the 2025 financial year, which ended on 31 December, Asda said it completed the conversion of all stores and all distribution centers from “legacy Walmart systems” to the new standalone systems. “Cumulative cash outflow to 31 December 2025 for the project was £1,224 million,” the annual report said.
The report [PDF] raises questions over the extent of budget over-runs and delays to the project, as well as disruption caused by its implementation. In February 2021, Bellis Finco plc bought Asda Group from Walmart. As part of the deal, the new owners agreed a Transitional Services Agreement (TSA) with Walmart for an initial period of three years so the US retailer could continue to support the software and IT infrastructure Asda relies on, including a US-run SAP ERP system.Asda embarked on a program called Project Future, designed to separate its IT systems from those of Walmart and to create a new ERP system based on SAP’s latest in-memory technology, S/4HANA, which runs in the cloud. According to annual reports, Asda spent £24 million in 2021 and £189 million ($244 million) in 2022 on the project. In January 2024, The Register reported that Asda had extended its back-office support arrangements with Walmart, which included support for SAP, beyond the initial three years, with insiders telling media outlets "there was never an expectation" to complete the transition from Walmart's systems to Asda's own before 2024 and that the transition would be complete by the end of the year.The annual report for 2023 revealed the exceptional costs of Project Future for the year were £241 million. According to Asda, it moved off Walmart's SAP ERP system to a new instance of S/4HANA hosted in Microsoft's Azure cloud in January 2024. The project involved the separation of more than 2,500 legacy systems and moving every aspect of Asda's operations to its own IT platforms. In June 2024, about 135 IT staff were transferred to outsourcer TCS, while a month later digital transformation chief Mark Simpson left the business after 28 years of service.
