The UK's third-largest grocery retailer is set to finish its "three-year" tech divorce project from Walmart in the third quarter of 2025, while most project staff have been moved on.
Four years after the US retail giant sold Asda, the UK retailer still depends on some of Walmart's technology at the back end.
Communications seen by The Register show systems critical to the joint operations of both retailers will not be retired until the second half of the year.
"There is no immediate urgency to decommission the SysProxy, as the Divestiture is not likely to complete until Q3," the communication said.
Meanwhile, Asda, which has been struggling to retain market share against the competition, is cutting 200 staff, most of whom relate to the Project Future program set up to create new back end technology after it moves away from Walmart's systems.
In February 2021, Walmart sold Asda for £6.8 billion ($8.8 billion) to retail entrepreneurs Mohsin and Zuber Issa and private equity firm TDR Capital, after which they struck a "transitional services agreement" with Walmart to guarantee support for Asda's IT systems for an initial period of three years. Asda then kicked off Project Future to provide everything from ERP and HR systems to security and store operations, with an initial budget of £189 million ($245 million).
Asda later extended its support arrangement with Walmart and said it was on track to complete the separation project by the end of 2024. Also in 2024, about 135 IT staff were transferred to outsourcer TCS, while digital transformation chief Mark Simpson left the business after 28 years of service.
According to Asda, it moved off Walmart's SAP ERP system to a new instance of S/4HANA hosted in the Microsoft Azure cloud in January 2024. In July, an annual report revealed that the total cost of Project Future had climbed to £430 million ($558 million) for the period ending December 31, 2023.
However, by last September, Asda realized the risks in trying to convert so many stores to new systems by the end of the year, during the busy Christmas period. It said it was "prioritizing the conversion" of IT at around 850 retail sites, including smaller supermarkets and Asda Express convenience stores, during the remainder of 2024. "The conversion of our larger superstores and complex depots will accelerate from early January onwards following the peak trading period," it said.
It seems that "acceleration" has been given a generous runway.
An Asda spokesperson said: "The majority of our operations have successfully transitioned to new systems as part of Project Future. For many teams, the work is done and so it is natural that colleagues leave the project as the specific workstreams they are working on are completed or as their contracts finish."
Media reports suggest Walmart has agreed to extend its support agreement with Asda.
The Asda spokesperson said: "Most parts of the Asda business have now migrated to new systems, including all 799 convenience locations, 85 main stores, 20 depots, HR, payroll, finance, CRM and the George.com clothing brand. Asda is on course to complete the rest of the program this year." ®