Thresher Outsourcing IT Support at Thresher Group

The Thresher Group has historically adopted a strategy to outsource all business applications, hardware and related support services. Finding an appropriate partner to provide support for MMS™ and E3™ led Thresher to Astech Consultants.

In October 2002 Astech Consultants completed the implementation of the Thresher Group’s central merchandising management system, MMS®, and their advanced warehouse replenishment system, E3™, both developed by retail specialist JDA. MMS encompasses inventory control and procurement, vendor, price and promotion management, financial control and merchandise receiving, allocation and replenishment whilst E3 integrates everyday replenishment requirements with logistical distribution and promotional management.

Our experience of working with Astech over a number of years has demonstrated that their knowledge of our systems cannot be equalled

Peter Baxter, IT Services Manager at the Thresher Group

The issue as to who should support these applications followed within the context of a corporate policy to adopt an outsourcing business model for the whole of the Group’s IT department. Peter Baxter, IT Services Manager at the Thresher Group explains:

“Our commitment to outsourcing reflects a determination that everyone at Thresher should be focused on achieving our core objectives as a retailer rather than tied up with back office and overhead administration. For the IT department this means that our role is to manage the delivery of IT services rather than deliver those services ourselves. We can achieve this by leveraging the skills, expertise and resources of external suppliers who can also provide us with a more flexible service delivery environment than would be possible internally. Implementing a policy like this is not without its challenges however. Finding the ideal partner can prove elusive.”

For a combination of reasons including a significant business change program and major IT re-platform, support was brought in-house in 2003 by appointing a team of eight or nine contractors supporting the applications. This worked extremely well and Peter Baxter recognises he was fortunate to be able to recruit and retain contractors with good MMS skills and knowledge.

“We were very lucky but ultimately this proved too expensive both in terms of contractor costs and more importantly the management overhead that accompanies the effective provision of in-house support. We found the department was spending three quarters of its time serving an application that accounted for only one eighth of the IT department’s budget.”

A further review at the beginning of 2004 resulted in the decision to seek an outsource partner rather than the alternative of building a permanent in-house team. Thresher went to the market reviewing a wide range of prospective Tier 1 to Tier 3 suppliers but were unable to find anyone with an ideal match to the company’s requirements:

“Tier 1 players had plenty of pedigree in providing support services but could not provide the reassurance needed with regard to experience with JDA applications. Tier 1 quality also comes with Tier 1 costs and we had to deliver support within committed costs. We need to invest money at the retail end of the business not on centralised overheads. Smaller suppliers had the application experience perhaps but a company of Thresher’s stature and size needed more confidence in their commercial robustness.”

Aware that this process was ongoing, Astech Consultants, an existing aplication development partner at Thresher, convinced Peter Baxter that Astech could develop a business model for the provision of support services that would meet Thresher’s cost expectations and build on Astech’s very extensive and detailed knowledge of the business and its core applications. Chris Webb, Head of IT Services at Astech was central to the development of the support model:

"A detailed specification was drawn up by Thresher in partnership with Astech defining response times and service delivery levels and Astech made some specific recommendations on how the applications should be streamlined in order to make the provision of support more effective. An important aspect of the agreement is that support is provided offsite."

The result is a five year contract for the provision of IT support for MMS and E3 that came into effect on 1 March 2005. This followed the successful completion of a five-month transition period during which Astech brought in a Transition Program Manager to oversee the migration. 

Peter Baxter views Astech as a manageable risk for Thresher despite being a small company because of Astech’s extensive experience of the business:

“Our experience of working with Astech over a number of years – and in particular their involvement as our implementation partner for MMS - has demonstrated to us that Astech’s knowledge of our systems cannot be equalled. This provided us with the confidence to consider Astech for the support contract despite the company being relatively small and support being a new area of business for them.”

Cultural fit is an important aspect of all successful outsourcing contracts and this is further reinforced by Thresher and Astech’s shared commitment to implementing ITIL best practice, training and certification.

Astech’s Managing Director, Danny Turner, is very confident that the contract will proceed well:

“The Thresher Group is a typical MMS user in the UK with a highly modified system that requires detailed knowledge of MMS’s inner workings in order to achieve optimum performance. With, we believe, more MMS experience in the UK, and possibly in Europe, than any other company providing either support or application development services we are confident this contract will work extremely well.” 

“Danny Turner was pivotal in bringing this contract to fruition, “ explains Peter Baxter. “It makes a change when the MD of the supplier is an enthusiast for your own applications, is not scared to be candid when providing advice on how best to utilise them, and clearly wants the agreement to work well financially for both parties.”

The Thresher Group is the UK's leading independent specialist drinks retailer and includes the Threshers, the Local, Wine Rack, Victoria Wine, Bottoms Up, Haddows, Huttons and Drinks Cabin brands. More than half the UK's population lives within 10 minutes walk of one of the Thresher Group’s 2050 stores.