Automation at Carpetright Netherlands ended in financial disaster, the bankruptcy report revealed. The cause: hefty accounting errors following the implementation of a new IT system, causing the top financial brass to lose control.
Now LS Retail is responding to questions from Wonen360. The company is the developer and licensee of the implemented system, but rejects any responsibility. It claims that the financial problems stemmed from an entirely different IT environment managed by a third party. 
© Carpetright
Following reports of IT's fatal role in Carpetright's bankruptcy, Wonen360 asked for a response from LS Retail, the supplier of retail software LS Central (based on Microsoft Dynamics 365 Business Central), which was implemented by partner TCOG.
Giada Pezzini, VP of marketing at LS Retail, stressed in a statement that LS Retail's role was limited to providing the software licence, while the implementation was carried out independently by partner TCOG. "LS Retail is the developer and licensee of LS Central, which was distributed and independently implemented at Carpetright by one of our certified partners, TCOG," Pezzini said. "The project was completed successfully, and no problems were reported during or after the implementation, either to TCOG or directly to LS Retail."
LS Retail points to external Power BI environment
The bankruptcy report stated that large discrepancies arose between recorded and invoiced sales, resulting in double counting. However, LS Retail argues that these financial irregularities cannot be traced back to their supplied system. "Based on publicly available information, including statements from Carpetright's own Head of ICT, such irregularities appear to be related to a separate Power BI and data warehouse environment that was implemented and managed by an external supplier, completely independent of LS Retail and our partner," Pezzini said.
According to the VP Marketing, LS Retail's software operates directly from Microsoft's core administration system: "LS Central operates within the Microsoft Dynamics 365 Business Central environment and displays information directly from that verified data source." She argues that the software does not create its own financial information: "The data displayed in LS Central therefore reflects the same figures available in Business Central itself, and it does not modify, transform, or create financial information independently."
Software functioned 'as intended'
LS Retail cites statements from Carpetright's own IT director and the findings of implementation partner TCOG to validate its position. "According to statements by Carpetright's Head of ICT, the problem did not originate from Business Central," Pezzini quotes. "TCOG further confirmed that within Business Central, both recorded and invoiced sales were consistent and correct, reflecting accurate operational data."
LS Retail's conclusion is therefore clear: "Therefore, LS Retail's software functioned as intended and in accordance with its description, and there is no indication that it played any role in Carpetright's financial situation."
Underlining the reliability of their product, Pezzini concludes, "LS Retail's software solutions have been successfully implemented at thousands of companies in over 150 countries, demonstrating the software's comprehensive reliability and robustness."
This shifts the focus in the wake of Carpetright's bankruptcy from the POS and ERP software (LS Central/Business Central) to the reporting and analytics environment (Power BI and data warehouse) that was managed by an independent party. The question remains as to who was responsible for the failure or delay in identifying the disastrous errors in the financial reports.
Respond? [email protected]
More information:
LS Retail
www.lsretail.com
