As this year’s CIO special report went to press, the UK’s top two co-operatives were in the midst of agreeing a merger that will form the world’s largest consumer co-operative group. The July merger of Rochdale-based United Co-operatives, which has 930,000 members, and the Manchester based Co-operative Group, with 3.5 million members, makes it responsible for more than 80 per cent of the UK’s co-operative retail trade.

The integration of IT operations will be a major project. In 2005 the IT functions for the Co-operative Group and Co-operative Financial Services (CFS) were merged and the integration of the two organisation’s IT operations and infrastructure was successfully completed last year. The Co-operative Group includes Food Retail, which operates 1,713 stores, Co-operative Pharmacy with 372 outlets, Travel Care, the UK’s largest independent travel services provider with both 358 stores and online offerings, and Co-operative Funeral Care with over 600 funeral homes. The CFS includes the Co-operative Bank; Smile online bank and Co-operative Insurance (CIS).

Since the merger of the Co-operative Group and CFS operations the IT team has been supporting a marketing led card-based membership scheme, which now has two million members, while in the financial services arena it has been getting its delivery channel architecture into a good place, according to CIO Gerry Pennell. “With the Group and CFS merger work completed and the card scheme in place we have been looking to get our Financial Services, Smile and General Insurance, with identical supporting systems so that as and when the business wants to, it can move quickly to change things,” he says.

At the moment Pennell is going through the process of changing the sourcing model the company uses and is looking to move its CIS Co-operative Insurance development function to partner Xansa. This will have a big impact on the IT function itself, with a third of Pennell’s IT team moving to the outsourcer. Currently most of the group’s development is designed and managed in-house with the coding handled by Xansa. The merger with United Co-operatives means a further integration programme will be on the agenda, as well as the planned initiatives the team are already working on.