Toll dumps IT outsourcing project

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Toll dumps IT outsourcing project

Benefits not big enough.

Recently-acquired logistics giant Toll has decided to dump an IT outsourcing plan after an internal review found the benefits would be lower than expected.

Toll yesterday sent an internal email, sighted by iTnews, advising that its global technology transformation project would cease.

The project is understood to have started last year and was expected to run for 18 months.

It was to involve the outsourcing of some of Toll's IT infrastructure as well as applications development and support.

The company had expected the project to drive "significant efficiences" company-wide while reducing IT operating costs.

CEO Brian Kruger had indicated the project could reduce the company's $300 million IT spend by as much as 20 percent by moving from a fixed to a variable cost model.

But yesterday Toll group director of corporate affairs Andrew Ethell revealed the logistics company had decided to shut down the project following a review of the last six weeks of its operation.

He said the review found the net benefits to the business of the outsourcing initiative would be "lower than expected".

The project has therefore been cancelled "effective immediately". 

Ethell said Toll was committed to its technology principles - calling them an "important plank" in the company's strategy.

He cited a "best in class, streamlined and cost efficient IT environment", "industry-leading technology capability" and the ability to rapidly deploy new business solutions globally as among the key IT principles.

Toll CIO John Ansley said the decision to scrap the outsourcing project was a sign of the "strength of governance processes in place for all of our projects".

"We will be having face to face communications; as scheduled, with our impacted employees to communicate this change and our priority remains to support our customers and employees," he wrote in the email.

"Toll remains committed to its technology principles which includes making Toll the industry leader in technology capability.”

The company declined to comment.

Toll was acquired by Japan Post on May 28 this year.

Earlier this year the company revealed it would embark on a company-wide shift to Google for Work, replacing 20,000 Microsoft Office accounts in the 40,000-seat Google rollout.

In recent years Toll has been working to consolidate and streamline myriad systems amassed through 15 years of acquisitions.

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