Australian SAP project drags down quarterly Ingram Micro result

Another quarter is affected by implementation issues

Ingram Micro's profits were dragged down for the second quarter in a row due to problems with an SAP implementation in Australia, the technology distributor said on Thursday.

Net income in the second quarter ended July 2 was US$59.7 million, down from $67.7 million in the same period last year. The drop "is primarily related to business disruptions associated with transitioning to the new [SAP] system in Australia," but the issues have now been largely resolved, Ingram Micro said in a statement.

The distributor's first quarter results were also affected by issues with the SAP implementation.

Ingram Micro has been rolling out SAP in various regions for some time. A number of conversions in Europe went quite smoothly, CEO Gregory Spierkel said during a conference call on Thursday. But the company is going to delay implementing SAP in Brazil in order to "accommodate continued focus on the country's operational improvement program currently under way," he said.

Overall, Ingram Micro will receive long-term benefits from the SAP project that exceed any challenges it faced during the implementation, Spierkel said. "We will have a unified global system that will be the backbone for the company for decades."

An SAP spokesman largely echoed the sentiment.

"Businesses around the world recognise the value and strategic importance of a consistent core operating platform from SAP," company spokesman James Dever said in a statement. "The market updates we see are snapshots in time on projects that are central to our customers' strategic ambitions and will pay off in long-term growth and efficiency."

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