Andersen wins supermarket sweep with outsourcing deal

Supermarket chain J Sainsbury is planning to outsource the bulk of its IT functions to Andersen Consulting.

The two companies are currently finalising details of the arrangement.

The contract will encompass the designing, building, implementing and running of all IT systems and networks for Sainsbury's Supermarkets. Around 800 employees will transfer to Andersen Consulting, which will also take over responsibility for, or manage, all Sainsbury's current IT contracts with third party suppliers.

Sir Peter Davis, Sainsbury's group chief executive, said in a statement: "The age and complexity of our current IT systems are hampering our ability to perform and develop and our required rate of change is made even more crucial with our ambitions for e-commerce.

John Adshead, Sainsbury's group board director for IT, added: "Sainsbury's has some excellent IT talent and expertise but our current systems have evolved over many years and are costly and complex to run."

The precise value of the deal is not yet known, although Sainsbury currently spends over £200m on its supermarket IT systems.

The contract should be finalised at the end of September.

Sainsbury's is also completing discussions with Rebus Human Resource to outsource its current payroll operation for Sainsbury's Supermarkets, group departments and its pensioners. Around 45 employees will transfer to the specialist payroll provider later in the year.