Burberry said today that strong sales have prompted it to push back some of its Project Atlas IT infrastructure project plans into October and beyond.
The fashion house, which recorded a 19% increase in revenues in the six months to 30 September, said the caution around its five-year IT overhaul that kicked off in 2005 was justified in order to “mitigate the risk of implementation at a time when Burberry is growing so strongly.”
It said this “re-phasing” of its Atlas deployments, which centre on a major SAP implementation, had led to some additional spend, both in operating costs within the business and in IT resources.
The new timeframe means the project is now expected to cost Burberry £19m this year, against an earlier estimate of £15m.
“This still brings the total project cost to just over £50m in the three-year period [to 31 March 2008,” said the firm. “The programme remains on track to deliver the targeted £20m tangible benefits to profit in 2007/8.”
The £50m figure quoted by Burberry is in line with its original cost estimate for the first three years on the project.
Burberry said it had also increased its investment in improving business processes around the group, including strengthening its global supply chain team.
It said earlier this year that Atlas is “the cornerstone of Burberry’s efforts to improve operational efficiency.”
Completed SAP deployments in the UK include financial and non-stock procurement, production planning, manufacturing and procurement systems.
This year was always expected to be the most intensive phase of the project. Burberry has not said which parts of the programme have been put back.
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