Interview: Rob Fraser Sainsbury's CIO and BCS/Computing CIO of the Year 2011

By driving harder bargains with its technology suppliers and reducing costs through virtualisation, Sainsbury's has been able to boost IT investment and deliver better deals for its customers

Rob Fraser is not only CIO at one of the largest retailers in Europe, Sainsbury’s, he also won the CIO of the Year award at Computing’s 2011 UK IT Industry Awards.
Fraser says winning the award has given him a “great platform” to talk about his IT department’s success, adding that he was humbled to win against what was a “great shortlist with some great achievements”.

Sainsbury’s is one of Britain’s oldest retailers. Founded in the 1860s, it now generates nearly £20bn in annual revenue, has 1,000 stores and handles around 22 million customer transactions a week.

Working at the supermarket giant isn’t Fraser’s first experience in retail. In the past he has worked for high-street chemist Boots and Marks & Spencer, which he describes as two of the UK’s great “heritage” retail companies.

Since joining Sainsbury’s in 2009, Fraser has seen capital investment in IT more than double.

“We have a new capital investment plan, a measure of how much capital we plan to invest in new systems going forward, which has increased by 2.5 times since I started,” explained Fraser.

Fraser says the increased investment in IT followed discussions with the board exploring how technology could be better used in retail.

“When I first joined we held a board session on technology. I asked one of our partners to come in and run a meeting with our operating board to discuss what was happening both within our industry and other sectors to assess how we should be investing in technologies for the future,” he says.

“These talks led to us seting up the Sainsbury’s Digital Board, a team of people who think about our future technology investments. The 2.5 times increase in capital that we have seen is a result of their belief in the importance of technology in how people shop.”

Some of this investment was made possible by creating efficiencies and making savings through renegotiating supplier contracts.

“We work very hard to try to drive efficiency year on year. Over the past two years we have saved in excess of 15 per cent on our operating costs, mostly through negotiating better deals with partners,” says Fraser.

“At Sainsbury’s, two-thirds of our spend is externally partnered. We look to that two-thirds to drive the efficiency savings when contracts come up for renegotiation,” he added.

“We have been rigorous in IT when we have come to reset relationships with some of our partners. It’s a great opportunity to say to them we not only want you to deliver more to us, but we want you to do it at an even sharper price point.”

An example of Fraser striking good deals for Sainsbury’s is the recent partnership with IBM, which he describes as “very compelling” and “competitive”.

IBM will provide all future hardware and storage for the retailer, gradually replacing kit from Sun and HP.

“With hardware, you name it, we have got it. When you have been in IT as long as we have you end up with quite a lot of different vendors. IBM will now be our chosen partner for this. What we will do is progressively move all our work onto IBM kit,” says Fraser.

“This isn’t a services contract, so we haven’t given them a firm commitment for a set number of years; they are simply our preferred partner. As long as the deal stays competitive, it is open ended. We reserve the right to market test it at any point.”

Interview: Rob Fraser Sainsbury's CIO and BCS/Computing CIO of the Year 2011

By driving harder bargains with its technology suppliers and reducing costs through virtualisation, Sainsbury's has been able to boost IT investment and deliver better deals for its customers

Fraser has overseen a number of technology initiatives, including Brand Match, a real-time branded goods price comparison tool. He says that unlike Asda, where customers retrospectively input data online to compare the price of a shop with other retailers, the Sainsbury’s system tells customers at the till whether or not their branded goods could have been bought cheaper at a either Asda or Tesco. If a customer’s shop would have been cheaper at Tesco or Asda, he or she is instantly given the difference as a voucher at the till.

More customers were given vouchers in the first 40 days after the Brand Match implementation than have ever been rewarded on the Asda scheme, which has been running for more than two years, according to Fraser. Fraser puts this down to the system’s real-time capabilities, something he says is essential in making it far simpler for the customer.

Sainsbury’s partners with a firm called Catalina to provide the till solution for Brand Match, and with a company called Brand View, which provides data for the real-time price comparison.

Fraser had the idea for Brand Match in April, and it went live across 600 stores in October.

“The interesting thing about Brand Match is that all the elements to make it work existed already, which is why we were able to launch it so quickly,” explains Fraser.

“It’s clever because it’s simple. Our competitor’s web sites are up all the time, so we always have access to their pricing. If you capture that data, it’s a relatively simple exercise to keep a running total of what that shop would be costing at that point in a transaction at Asda or Tesco,” he adds.

“We are applying for some patents around the Brand Match technology, so I can’t go into too much detail, but essentially it involves capturing all the prices at a given point in time, holding those, and then comparing the running total with the customer’s.”

While a relatively simple principle, the roll out was to a challenging deadline. Fraser says the most challenging part of the project was the actual rollout, which involved engineers going out to 60 stores a week to install the new systems.

This kind of leg-work should soon be a thing of the past, though. As part of the Brand Match rollout, Sainsbury’s is implementing a new virtualised environment in each of its 600 major stores. Fraser is planning to install two servers at the back of each store that will be fully virtualised, allowing new systems and applications to be distributed centrally from Sainsbury’s datacentres, negating the need for engineers to visit stores. All the old systems will also be ripped out and stored virtually on the new servers, reducing the amount of hardware in each store.

“This is one of the main reasons we are putting in a virtualised environment, which will be completed over the next year, so we don’t have to keep visiting a store to do a rollout,” says Fraser.

“Historically what we would do is every time we thought of a new system we would put a new server in the back of the shop. Before long you have got an awful lot of servers. What we have now realised is that we will always be putting new systems in shops, so we needed to think about the back of shops as virtualised datacentres,” he adds.

“What we are doing is putting in a pair of much bigger physical servers into each shop, the first of which has been rolled out as part of Brand Match, and then over time we will take the smaller ones out, but virtualise what they do onto the new pair.”

Although virtualisation and private clouds are core to Sainsbury’s IT plan over the coming year, it has less interest in public cloud services.

Public cloud services are traditionally offered as separate layers, where different providers will deliver software-, platform- or infrastructure-as-a-service.

Sainsbury’s, however, prefers to deal with providers that can incorporate all of these different layers into one “business capability”.

“Where cloud is most interesting for us is taking a whole shrink-wrapped service from one of our partners, rather than taking it too low down into our operations at the infrastructure level,” says Fraser.

“For example, we use companies like Groupe Aeroplane to provide us with full business analytics, and our rewards scheme, which is provided as a service by Nectar, which comes with sets of dashboards and work benches to conduct analysis,” he adds.

“We see IT as being as much about building a partnership with companies that can provide us with a full business capability, as it is about building our own IT.

“From my perspective, I am less interested in chopping up the whole solution into parts just so that we can tick the box and say we are doing cloud. Especially if this gets in the way of delivering a good service.”