Metcash, Seek: A tale of two transformational IT projects, one a failure, one a success

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The learnings should be of interest to the broader economy, because badly handled IT projects – and there are too many to name – are a heavy drag on productivity.

On the one hand, the retail, hardware and liquor group Metcash has struggled with a three-year tech upgrade that was forecast to cost $80 million and be completed by December last year.The cost is now sitting at $280 million. The Microsoft Dynamic 365 project that was meant to create one operating system for Metcash’s three main businesses has been scaled back and slowed down to reduce risk.

It should be of interest to the broader economy because badly handled IT projects – and there are too many to name – are a heavy drag on productivity. and hardware businesses Bianco and Alpine. But it does not intend to integrate the Superior Foods back office with its existing food business systems, which prompted Goldman Sachs analyst Lisa Deng to question how it will achieve $14 million in synergies.

Last year, Metcash got rid of its consultants and brought the management of its tech upgrade in-house. Well-run IT projects must have strong governance by the board, including the involvement of non-executive directors with experience in technology transformations. This deep-seated scepticism about the benefits of specialist tech committees is backed up by analysis of the technology governance approach of the 14 public companies appearing on panels at the ninth annualOf the following companies at the summit, Orica is the only one that has a technology committee: BHP, Blackrock, Blackstone, Canva, CBA, Coles, FMG, Goldman Sachs, Google, JPMorgan Chase, Macquarie, Nine, Orica, Wisetech Global and Woodside.

 

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Metcash, Seek: A tale of two transformational IT projects, one a failure, one a successThe learnings should be of interest to the broader economy, because badly handled IT projects – and there are too many to name – are a heavy drag on productivity.
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