Shoppers Drug Mart hands over applications for five years

Shoppers Drug Mart Tuesday announced it has turned over the maintenance of its applications in a five-year outsourcing agreement with Keane Canada Inc.

Keane will handle

all of the retailer’s enterprise applications — accounting, HR, inventory management, supply chain and order management — as well as support for the software that drives its loyalty card program, Optimum, which was built in-house.

All of Shoppers’ other IT applications, including desktop and server support, will remain in the hands of the retailer.

As a result of the deal, some Shoppers employees will be moving over to Keane. The exact number of workers and the financial terms of the deal were not released.

The applications that Keane Canada will take over were all put in place in the early 1990s, according to Shoppers CIO Don Parker. Keane Canada will “”fix the stuff that goes bump in the night,”” he said, including changes necessary to comply with legislation, as well as any enhancements and minor upgrades.

Offloading support will allow Shoppers to consider how best to perform a more comprehensive upgrade of its operations applications, added Parker.

“”One of our objectives was to get ourselves in a position where we could focus our energy more on future applications and free up resources to work on the next generation,”” he said.

This transition will probably be accomplished in the next three to five years, he said. He doesn’t know how that would be handled but said that “”Keane would certainly be a candidate.””

Keane opened an office in Toronto last May in order meet the requirements of its deal with Shoppers. Keane’s main office is in Halifax and deals with a mostly American client base in finance, insurance, health care and automotive.

The new Toronto office is “”part of our growth plans across the country,”” said Keane Canada managing director Alaisdar Graham. “”We’ve already as a result of this acquired two other customers in Toronto and we’re now over the 100-person mark. (Shoppers) was a great flagship account to start with.””

Graham would not identify those two customers by name, but said that one is a large investment bank and the other is a pharmaceutical company.

“”Shoppers Drug Mart is certainly a lighthouse client, a marquee name,”” said Jason Bremner, outsourcing analyst with IDC Canada Ltd. “”They do have some Canadian clients, but Canada does not represent a big market for them, per se. (But) they see it as a growth opportunity, so we see this as a good win for Keane.””

Expansion into Toronto was necessary for Keane, said Graham. “”(Some) clients demand particular experience and expertise that’s not available in Halifax. We’ve been asked that a number of times and had great difficulty finding those resources, so that’s why we’re heading into the big city.””

Most of the applications support and management for Shoppers will be achieved from the Toronto office, but a portion may be turned over to Halifax. There will be a cadre of workers onsite at Shoppers to oversee any changes, said Graham, including a client executive responsible for overseeing the relationship between the companies.

Shoppers Drug Mart operates 878 stores across Canada in every province and two territories.

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