Co-op IT overhaul to spur on growth plans
Customer rewards scheme at the forefront of changes, writes Lara Williams
The Co-operative Group is implementing a number of technology-driven initiatives to enhance existing sales channels and improve customer service.
One of the principal changes is a barcode-based membership rewards scheme that allows customers to accumulate points when they purchase goods in Co-op retail outlets and to register online for banking and insurance services.
The firm has so far issued two million membership cards, managed using an Oracle customer data hub, the core software component of the project.
‘It will take a year or two before the scheme takes off fully but we hope it will provide customers with the incentive to do more business with us,’ said Gerry Pennell, group chief information officer (CIO).
The membership scheme is part of a wider move initiated by Pennell to transform the firm’s IT infrastructure and create consistency across all its businesses.
‘When I joined we had separate IT functions for our insurance and bank businesses which we have now merged,’ said Pennell. ‘Earlier this year we began to take onboard the infrastructure services for the businesses with the aim of getting economies of scale by cutting better deals with suppliers.’
The group’s travel and insurance businesses applied this technique to their newly-launched web sites, which have different branding but identical technology underpinning them, according to Pennell.
‘This underlying convergence of IT infrastructure for all the firm’s businesses means a better customer view,’ he said.
Pennell joined the company in 2002 after the financial and insurance businesses merged. He has seen the pace of transformation increase ever since.
‘The Co-operative Group IT could have been viewed as something of a sleepy hollow a few years ago,’ said Pennell.
‘It is certainly not that now and the scale of change that we have embarked upon is close to the largest transformation I have seen in the IT industry.’
Pennell was director of IT development in 2003 before becoming IT director of the financial services business in 2004. In 2005 he was made group CIO, which includes the non-financial businesses such as grocery, pharmacy, travel and funerals.
Pennell led a full transformation of the group’s IT infrastructure for the insurance business.
‘The insurance company needed to change its cost base and the way it serviced customers,’ he said.
‘The house-to-house agents was not a sustainable model so although we still needed a sales force we set up call centre and web capability to quote and close on insurance products.’
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