Mainfreight looks for redress over a $10.5m write-down

8 Dec, 2003 07:32 AM2 mins to read

By ADAM GIFFORD

Mainfreight intends to hold "discussions" with former PricewaterhouseCoopers consultants in a bid to recover some of the $13 million spent by Owens Group on a financial management system.

PricewaterhouseCoopers has since been bought by IBM.

Owens installed a JD Edwards management system, which is now owned by Peoplesoft.

Mainfreight's accounts for the six months to September include a $10.5 million write-down, the bulk of which was attributed to what it described as "an ineffectual capitalised administration system" at Owens Group, which it had just taken over.

Owens has switched to Mainfreight's locally-built On Account financial system.

Chief information officer Kevin Drinkwater said the way JD Edwards was implemented at Owens did not suit the transport business and was at odds with Mainfreight's philosophy of decentralising management processes.

"The implementation was more at fault than JD Edwards. It reduced the value of the business, it had a dramatic effect on the balance sheet and a lot of money was wasted," Drinkwater said.

"We have a system which works well for us. Customers like it. Mainchain [a custom-built integration engine which gives staff and customers web access to information in multiple databases] works like clockwork, and we do not have to run to make up ground for bad implementations or data not being there."

The package was less expensive to run and maintain than JD Edwards'.

Mainfreight's "build it for ourselves" approach gave it a competitive advantage with freight tracking and other systems.

"You can get products off the shelf, but they don't generally come with our culture and our desire to change rapidly," Drinkwater said. "We like to be at the forefront, and having our own product helps us do that."

There would be 20 IT staff in the merged business.

An IBM spokesman said the company did not automatically inherit those from PricewaterhouseCoopers, and any discussions would have to be with the "appropriate parties".