The firm plans to become a digital-first retailer ©Marks & Spencer
The firm plans to become a digital-first retailer ©Marks & Spencer

M&S outsources tech supply chain to help save £30m

10 January 2018

Marks & Spencer has said it is outsourcing the management of its technology supply chain as part of a five-year tech overhaul.

The retailer announced the appointment of Tata Consultancy Services (TCS) as its principle technology partner. Core supplier services will be transferred directly to TCS, and the contractor will also take control of the day-to-day relationships and project management of specialist suppliers.

The move will also see around 250 in-house technology jobs being transferred to TCS. 

The appointment is part of a five-year technology transformation programme that aims to drive annual savings of £30m by 2021-22, and comes at an initial one-off cost of £25m. 

Steve Rowe, M&S CEO, said the firm was committed to “delivering digital-first retailing” across its stores and offices. “Technology plays a huge role in this transformation and having the right partners and model will enable us to be more agile, flexible and responsive,” he said. 

M&S’s technology transformation programme is part of a wider programme, announced last November, to breath new life into the business. The firm has recently sold its retail business in Hong Kong and is slowing down the expansion of its food-only stores.

Like for like UK sales dropped 1.4% over the Christmas period, with clothing and homeware falling by 2.8% and food sales falling by 0.4%.

The firm saw a 5.3% drop in profits in its half yearly results released last November. The business still had “many structural issues”, Rowe said at the time, “in the context of a very challenging retail and consumer environment”.

In its 2017 annual report the retailer said online revenue had increased 5.6% to £836.3m, part of a total group revenue of £10.6bn.

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