{"id":653232,"date":"2026-06-10T13:00:52","date_gmt":"2026-06-10T11:00:52","guid":{"rendered":"https:\/\/mybroadband.co.za\/news\/?p=653232"},"modified":"2026-06-10T13:05:09","modified_gmt":"2026-06-10T11:05:09","slug":"spars-r35-8-million-software-flop","status":"publish","type":"post","link":"https:\/\/mybroadband.co.za\/news\/business\/653232-spars-r35-8-million-software-flop.html","title":{"rendered":"Spar’s R35.8-million software flop"},"content":{"rendered":"\n

Recent major software rollouts at South African retail giant Spar Group have been financially severe, with the company highlighting direct losses of R35.8 million.<\/p>\n\n\n\n

In its latest interim financial results for the 26 weeks ended 27 March 2026, the retailer detailed the negative consequences of two significantly troubled software projects.<\/p>\n\n\n\n

It said that its Southern African business recognised an impairment of R30.7 million relating to a software module it planned to install from GiCom, which was still under development.<\/p>\n\n\n\n

An assessment performed by the technology team, together with the National Merchandising Executive, found that the software would not be deployed due to limited expected utilisation.<\/p>\n\n\n\n

That meant Spar spent millions developing the software but did not expect its rollout to affect its business in a meaningful way, so it held back. This was set aside as money wasted.<\/p>\n\n\n\n

\u201cAccordingly, the software development costs were fully impaired,\u201d the retailer said in its interim results.<\/p>\n\n\n\n

GiCom is a licensed supplier of software for the SAP ecosystem, a multinational enterprise resource planning (ERP) platform that Spar Group uses across its business.<\/p>\n\n\n\n

While the results do not indicate exactly what the module was for, one of GiCom\u2018s services is providing agreement management cloud solutions for SAP.<\/p>\n\n\n\n

\u201cThis unparalleled cloud solution based on SAP Business Technology Platform is at hand to digitise all your agreements, contracts, and conditions from purchasing to sales,\u201d GiCom said on the SAP website<\/a>.<\/p>\n\n\n\n

The platform supports condition contract settlement and settlement management functionality, which becomes available in SAP.<\/p>\n\n\n\n

MyBroadband contacted GiCom for comment, but the company did not respond before publication. This article will be updated with their feedback if received.<\/p>\n\n\n\n

Aside from the impairment from the abandonment of the GiCom software module rollout, Spar also continued taking pain from a failed SAP ERP migration in 2023.<\/p>\n\n\n\n

In January, the company confirmed that it was hit by a R168 million lawsuit from one of its franchisees, the Giannacopoulos Group, over alleged damage claims related to the software.<\/p>\n\n\n\n

R5.1-million settlement<\/h2>\n\n\n\n
\"\"<\/figure>\n\n\n\n

Spar\u2019s SAP rollout in 2023 allegedly led to delays in its distribution business, which impacted supply chains and led to empty shelves at Spar stores.<\/p>\n\n\n\n

\u201cSummons was served on the company by the Giannacopoulos Group in respect of an additional claim for alleged damages of R168 million arising from the implementation of SAP ERP software,\u201d it said.<\/p>\n\n\n\n

\u201cThrough the approved SAP compensation process at the time, the Giannacopoulos Group was \u2018entitled\u2019 to R1.55 million.\u201d<\/p>\n\n\n\n

It said that this calculation was agreed to and signed off by the company and the KwaZulu-Natal regional guild, as the distribution centre affected by the bungled software rollout was in that province.<\/p>\n\n\n\n

The company has now set aside R5.1 million for a settlement provision that it believes could be paid to the Giannacopoulos Group to avoid a more damaging lawsuit.<\/p>\n\n\n\n

Despite losses attributed to IT-related issues, the group was successfully executing its turnaround strategy<\/a> amid greater challenges. It reported a rise in revenue and a return to profit in the period.<\/p>\n\n\n\n

Group revenue rose by 3.56% to R67.48 billion, and after-tax profit rose to R147.3 million, a marked improvement over the R4.26 billion loss it reported in its first half of 2025.<\/p>\n\n\n\n

Basic earnings also returned for the group, reaching 76.5 cents per share, compared to a basic loss of 2,221.1 cents per share in the previous reporting period.<\/p>\n\n\n\n

The company recovered its financial performance by shuttering some of its international businesses, most recently exiting the Polish and Swiss markets.<\/p>\n\n\n\n

Only its Southern African and Irish businesses continue to operate, but these segments remain in a constrained environment.<\/p>\n\n\n\n

The Southern African arm posted a pre-tax loss of R50.9 million, a sharp decline from the R602.9 million in pre-tax profit it reported in 2025. Operating profit fell 72.6% compared to the same time last year.<\/p>\n","protected":false},"excerpt":{"rendered":"

Troubled software projects at Spar have resulted in direct losses of R35.8 million according to its latest financial results.<\/p>\n","protected":false},"author":341213,"featured_media":639985,"comment_status":"open","ping_status":"closed","sticky":true,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[105815,97996,105814,3042,105813,95409],"class_list":["post-653232","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","tag-giannacopoulos-group","tag-gicom","tag-retailer","tag-sap","tag-sap-business-technology-platform","tag-spar-group"],"_links":{"self":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/653232"}],"collection":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/users\/341213"}],"replies":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/comments?post=653232"}],"version-history":[{"count":7,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/653232\/revisions"}],"predecessor-version":[{"id":653300,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/posts\/653232\/revisions\/653300"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media\/639985"}],"wp:attachment":[{"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/media?parent=653232"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/categories?post=653232"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mybroadband.co.za\/news\/wp-json\/wp\/v2\/tags?post=653232"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}