David Llamas, IT director at Harrods, has spent the past three years refreshing the luxury retailer’s IT infrastructure.

‘It has been a huge challenge,’ he says. ‘But my view is that we now have the most proficient IT department of any company I have worked for.’

Such progress means the business can now start reaping the benefits of consolidation and standardisation – and Llamas, meanwhile, can start innovating, rather than renovating.

‘We had a very old IT infrastructure that had become unreliable,’ says Llamas, who joined Harrods in 2003 after 12 years working as a consultant and ERP manager. ‘It meant we would have a critical systems failure on an almost weekly basis.’

Change at Harrods was inevitable. And Llamas’ first step was to reduce staff numbers, with the IT team more than halved from 165 to 80 during the past four years.

‘It is not because we run fewer projects – we actually run more,’ he says. ‘It is because the profile of the IT department has changed.’

Llamas says the key to success is a top-class team, with virtually all Harrods' technology managed by the in-house IT department.

‘Technology is not about numbers,’he says. ‘It is about the quality of people you have.’

When Llamas joined, many of the IT workers came from a retail background. Llamas says such recruitment processes provided a solid understanding of the demands of the sector, but not the broader requirements of the business – such as human resources, finance and distribution.

‘We started to hire people from a professional IT background instead,’ he says.

‘Technology evolved towards a competency centre in many areas, instead of just being an IT department for retail. And the profiles of the people that work here now are very senior and professional.’

Many of the firm’s SAP experts, forexample, are drawn from the big five con sultancies.

‘As I said, the number of projects we are running is still huge – it is about the quality of our people,’ says Llamas. ‘We are very pleased and proud to see how things have evolved.’

The 2006 figures are impressive. Total cost of ownership was the lowest since 1999. Running cost as a percentage of sales was 0.7 per cent, with the industry average between two and three per cent.

Going forward, Llamas says his key focus is on business growth because the opportunity for cost savings is reduced.

‘After putting in place lots of infrastructural projects during the past three-or-so years, we have reached a lot of our maximum operational efficiencies,’ he says.

Key areas of concentration will include business intelligence and attempts to improve efficiency through analytics. Llamas says revenue generation projects could cover a range of areas, including online purchasing, smarter planning and consumer shopping behaviour.

‘We are now looking for the business to come up with models about how they want to save money and this decision-making process is the real focus for Harrods,’ he says. ‘It is about how we can become smarter with regards to our pricing strategy and replenishment models.’

In an attempt to provide increased intelligence, the firm will roll out an integrated online infrastructure next month. Till-based retail sales have already been converted to an electronic point of sale (Epos) platform – and the e-commerce system will deal with direct purchases from the company’s web site and call centre.

As part of the retailer’s service-oriented architecture – and regardless of which channel the customer decides to purchase from, such as store, airport, web site or phone – information from the online and Epos system will be fed into an SAP enterprise resource planning database. Llamas says the approach will make data management more straightforward.