Interview: M&S CIO aims to make his mark

Darrell Stein hopes his IT strategy can boost sales and cut costs

Retail giant Marks & Spencer (M&S) has recently announced a seven per cent drop in sales of certain product ranges, partly due to the persistent rain that has been keeping shoppers away from the high street.

While most CIOs target reduced operating costs, or increased productivity, the chief aim for M&S’s Darrell Stein is to increase sales through technology.

“My main target is to increase sales, so it’s more about sales generation than cost saving. I’m supporting Marks & Spencer’s ambitions to become the leading multi-channel international retailer,” he tells Computing, but admits that his second priority is to ensure that costs are as low as possible.

His third target is to evolve the IT department, which has previously focused on the delivery of large programmes, into a team charged with delivering smaller, more innovative projects.

However, that is not to say that big IT programmes are finished at the retailer. Stein has overseen the implementation of new enterprise resource planning (ERP) and point-of-sale (PoS) systems in recent years, while a new bespoke HR labour-scheduling system from payroll management software provider Ceridian is currently being delivered. On top of that, he is also implementing supply-chain management software from JDA in his buying department for general merchandise, in an attempt to improve availability of certain products in store.

“We want to get more of what the customers want, when they want it,” he says.

In line with Stein’s principal objective, improving availability is expected to drive targets of a five per cent uplift in food sales and seven per cent in “general merchandise”.

Bringing online in-house

One of Stein’s more interesting projects is to migrate M&S’s entire online platform from its current host, Amazon, to an in-house solution, which is slated to go live in the first quarter of 2014.

And it is more than just the website at stake - it is also the order-management systems and in-store applications.

Stein explains that the decision to move was down to several strategic drivers, including the fact that Amazon, as a competitor, should not be such a key business partner.

“We went live with Amazon in 2007,” says Stein. “The M&S site is a veneer on top of the Amazon code. The site has helped to grow our business from $200-300m per year to close to $1bn per year, but it’s not great for innovation.”

He adds that when new online products – or even small coding changes – are required on the site, the process is sometimes delayed because Amazon might not want to make the change, or might be slower to implement the request than the business would like.

“Amazon is a competitor,” says Stein. “So when all the technology you’re basing your business on is owned by the competition, you’re not in a very sound position strategically.”

Interview: M&S CIO aims to make his mark

Darrell Stein hopes his IT strategy can boost sales and cut costs

Another issue is the fact that Amazon charges per transaction – and when you perform as many transactions as M&S, this amounts to a hefty overhead.

“As a growing business with increasing sales, we expect to see economies of scale – but you don’t necessarily get that when you outsource,” says Stein.

“We’re going to spend more than £100m on the new platform. How much we will save depends on how much we sell.”

Exploiting data

The in-house platform will also make it far easier to analyse customer data.

“We have store data generated from PoS and and online data generated by Amazon’s systems,” says Stein. “We need to bring that data together to compare and analyse it, and that will become much easier with our own platform. It’s hard to manage at the moment, because we have two different systems across two different firms.”

The company hopes this analysis will ensure that it sends the right marketing data out to the right customers.

“The more you transact through an online environment, the more you can use data in a richer way,” says Stein, who hopes that the move in-house will benefit the Information Management (IM) sub-department, which is tasked with exploiting the company’s data and improving data quality and accuracy across the business.

Stein has already derived great benefits from the data coming out of recent system implementations, such as that of the SAP backbone about two years ago to handle the firm’s data and analysis needs.

Stein says that the relationship with SAP is likely to last for about 10 years, explaining that once you manage an implementation of that magnitude, you tend to stick with it. He adds that Oracle was considered as an alternative, and there was little to separate the business intelligence software leaders.

“The real reason we chose SAP was about the relationship,” admits Stein. “We already had a financial deal with them, so had the relationship in place.”

Olympics

Current projects have been planned around the Olympics.

“August is a busy time for us,” says Stein. “We need projects finished before the peak shopping window starts [in Autumn], and we want our systems to be nice and settled for Christmas, so we havea freeze from September on IT changes.”

Since he cannot afford to stop projects during the Games, Stein has introduced a “bring your own device” (BYOD) policy to make remote working easier for staff, so that progress does not grind to a halt in the event of transport disruption.

Many companies cite security as their biggest concern when implementing BYOD policies, with staff potentially bringing malware into the corporate network via their personal devices, or storing sensitive information on them.

Stein uses an encryption solution from mobile-security vendor Good Technology to help with some of these issues.

“When you’re trying to be innovative, you have to look at security policies to ensure that they’re fit for purpose in the digital world,” he says. “BYOD is one area in which we’ve had to relax some policies.

“All CIOs have had to relax policies due to consumerisation; you just wait to see if you’ve gone too far. Once someone experiences a major security incident, everyone will tighten up.”

This encryption runs on phones and laptops, but not staff-owned iPads – although the company can remote-wipe lost iPads.

Stein explains that he’s device-agnostic when it comes to supporting endpoints, stating that the form will often be dictated by the role.

“The iPad is great, but you can’t edit an Excel spreadsheet on it. If you’re working in the store you need something different from someone sitting in the accounts department all day.”