WHSmith

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WHSmith Outsources IT Operations to Fujitsu

The Challenge

WHSmith is the UK's number one family retailer, holding a leading market share in books, stationery, news, magazines and entertainment. The company also owns substantial interests overseas as well as newspaper distribution and the UK consumer publisher Hodder Headline. In its drive to understand its customers, create unique and innovative products and deliver outstanding customer service WHSmith is constantly evaluating new technologies and methods of working. Following a comprehensive review of its IT systems in 1999, which highlighted a number of initiatives that would improve the efficiency of its operations, including the standardisation of its desktop platform and e-mail systems, WHSmith decided to outsource the management of its IT infrastructure, so that it could concentrate its resources on developing its core business areas, rather than the technology and processes used to support them.

The Solution

Having conducted an extensive evaluation, WHSmith awarded the multi-year outsourcing contract, worth over £50 million, to Fujitsu in 2000.

Under the contract Fujitsu provides the 'mission-critical' IT infrastructure and operational support 24 hours a day, seven days a week for WHSmith's retail headquarters and high street stores across the UK. This IT infrastructure includes the company's mainframes, all point of sale equipment, 1200 desktops and laptops, office servers and 22 network servers.

As part of the arrangement, 45 members of WHSmith's IT staff transferred to Fujitsu under TUPE terms to form the core team that provides the IT services for WHSmith's business. WHSmith principally retained key project personnel and the IT staff needed to work on developing in-house applications.

Fujitsu has also amalgamated WHSmith's five help desks into a single service desk, for store and head office based staff, to handle service requests electronically as well as by traditional methods such as phone and fax. This has improved service response times and productivity for WHSmith. As part of this initiative, Fujitsu has introduced Computer Associate's Unicenter TNG Enterprise Management software, which alerts service desk staff to potential system problems before they arise, enabling better and faster identification and resolution of faults. For IT asset management, Peregrine software will be used to manage WHSmith's IT inventory more effectively, and at a greater level of detail.

In addition, to improve the efficiency of WHSmith's information sharing, communication and knowledge management, Fujitsu has developed and implemented a UK-wide intranet system and managed service for its 530 High Street stores and headquarter offices. This project alone generates savings on paper usage and distribution costs of some £200,000 a year.

Fujitsu has also begun to refresh and standardize WHSmith's infrastructure through a comprehensive programme of server rebuilds and PC upgrades, and the complete migration to a managed Microsoft Exchange email environment.

The Benefits

The outsourcing of its IT operations to Fujitsu has enabled WHSmith to realise significant business benefits:

• The ability to focus on its core business activities and the achievement of business targets
• Standardised office systems enables greater productivity and easier communication
• Reduced 'down time' due to proactive fault diagnosis and centralised system management
• Increased customer service, with less store staff time taken up on IT problems
• More accurate budgeting with predictable base costs
• Reduced training costs, with no requirement to train and maintain IT infrastructure staff skills
• Rapid access to a comprehensive set of technical and business skills if required
• Strategic input of new ideas and the latest technology through Fujitsu's relationships with other leading IT companies.

Through the outsourcing agreement, Fujitsu has enabled WHSmith to move forward from the previous complex infrastructure to a simpler, more standardised set of systems. The availability of Fujitsu's skills and personnel was crucial in de-risking the change programme for WHSmith

The Implementation

To ensure the success of the outsourcing contract WHSmith and Fujitsu recognised the importance of building good working relationships between their respective managers so that priorities and responsibilities were clear.In such a significant change programme and infrastructure management agreement, there are inevitably some setbacks. Both parties worked to resolve issues at all levels and have built closer management relationships and a deeper engagement between the two companies.

As part of the outsource, key business systems were moved to a Fujitsu Data Centre. To minimise any disruption to WHSmith's business Fujitsu arranged to transfer the entire workload of the company's IBM mainframes and a range of mid-range systems to the Fujitsu Data Centre over the course of a weekend.

The Expertise

The outsourcing contract extends and deepens Fujitsu's long-term relationship with WHSmith, which already included significant involvement with the company's Loyalty Card and EPOS systems.