Virgin Trains will not upgrade an existing SAP implementation because cost and unwanted functionality have made it unviable.

The firm has ditched the previous system in favour of a cheaper alternative to manage its financial data and improve integration with its procurement contracts.

From September, the new platform will replace the software inherited from the British Rail IT infrastructure, in use for the past 10 years since the train operator was awarded the rail franchise by the Department for Transport in the late 1990s.

Virgin is paying £750,000 for a three-year contract including consultancy, support services and software. The package covers accounting software, a web-based procurement system, a collaborative planning tool for budgeting and forecasting and an electronic document storage solution.

“There was the option of upgrading the SAP system, but it would mean having a whole lot of functionalities that we did not require and paying a higher price,” said Virgin Trains business support director Andy Cross.

“Paying suppliers on time takes a lot of manual intervention, so we hope to speed up processes and become more efficient with the new system,” he said.

Until the live implementation date, the business will carry out tests to ensure the system, provided by COA Solutions, is fit for purpose. It will also carry out an extensive re-skilling programme with 250 staff across the UK.

“Moving to automated workflow from a paper-based system which is a time-consuming ‘black hole’ is great, but we will need a lot of training to support the migration process,” said Cross.

Upgrading processes is not just about the cost of software and support, said Angela Eager, senior software analyst at Butler Group. “Companies often consider factors such as availability of skills in-house, as well as the ability of vendors to tailor systems to business processes,” she said.

“Consequently, vendors will try to build momentum by offering standard middleware that does not need specialised know-how.”