Wolseley slow SAP and business change projects

Building and plumbing supply company Wolseley has put its Business Change Programme, which includes the group wide introduction of SAP, on a “slow down” so that the British company can conserve cash in a “difficult market”.

Wolseley, the largest supplier of building materials in the world, said capital expenditure across the group was down to £157 million for the year ending July 31, 2009, for 2008 capital expenditure had been £317m. It said “all non-essential projects, such as branch openings, refurbishments and other infrastructure projects, were postponed.” This includes the Business Change Programme, which began in 2007 and was expected to run until 2011 and require investment of £100 million per year. Wolseley said the programme was put into a low gear to “conserve cash and to avoid business disruption in difficult markets.”

Wolseley began its Business Change Programme and SAP integration in 2007 with the Austrian division completing the project by August 2008. This year was meant to be the year Wolseley UK put in its SAP foundations with the project across 28 markets being completed by 2011. In today’s results Wolseley said it was pulling out of some of those markets. The Wolseley CIO said standardising onto an SAP platform was “critical” in an interview with CIO UK sister title Computerworld UK. Wolseley has grown through acquisitions so is supporting a wide number of legacy systems. SAP was envisioned as way of increasing productivity, improving business change and delivering customer intelligence.

Despite the drastic cuts, the programme will continue in the US. Ferguson, the Wolseley brand in America, will do initial pilot testing later this year and begin a roll out to be completed by year end 2010.

Wolseley has madesavings of £431m through a business improvement programme and drastic cuts to its staffing levels. In the last year 9,848 people have lost their jobs and 653 branches have closed during 2009.

Wolseley today reported a pre-tax loss of £766m ($1.2 billion) in the year ending 31 July 2009. For the same period in 2008 it made a profit of £399. It did make a trading profit of £477m this year.