The five-minute CIO: Chris Donnelly, BWG Group

24 Feb 2017

Chris Donnelly, IT director at BWG. Image: BWG

“Every time you simplify something, you are reducing your costs,” says Chris Donnelly, IT director at BWG Group.

BWG Group is one of Ireland’s top companies and a joint venture partnership between members of the BWG management team and South African-based Spar Group.

Last year, BWG Group had retail sales of €1.75bn. It has a 12pc share of the overall grocery retail market and operates in three main business areas: retail, wholesale and food service.

‘In FMCG, time is money. It’s not a cliché, it really is a fact’

More than 90pc of Ireland’s population is within 10km of a BWG store and the vast majority are family-owned businesses.

Chris Donnelly was appointed IT director of BWG Group eight months ago. Prior to taking up the role, he was head of digital and retail technology at BWG.

He also previously served as head of IT at ADM Londis.

What is the scale of your IT challenge?

My main role is to keep the business running by keeping all of our infrastructure, availability and uptime at 100pc. This is crucial, particularly in FMCG [fast-moving consumer goods], where time really is money. It’s not a cliché, it really is a fact.

If we had a 15-minute outage, it would affect so many facets of the business; so it really is about having the appropriate infrastructure and systems architecture to support resilience and failover.

We always have to keep upgrading as our business grows, and we need to make sure that technology doesn’t just keep pace – we need to be slightly ahead.

We obviously can’t sit on lots of spare capacity because that would be completely inefficient. But we certainly need to make sure that we can’t hold the business back when we are growing, if it is not fit for purpose.

So we keep ourselves ahead of where we think the business will be.

Can you outline the breadth and scope of the technology roll-out across your organisation and what improvements it will bring to the company?

One of the really interesting things is that we have 1m consumers every single day coming through our shops. The EPOS systems, as well as the ordering system, to capture that is critical.

We have 14,000 customers right across our retail business, wholesale business and food service business.

It would be impossible to go a day or two in Ireland without consuming something that hasn’t come through the BWG supply chain and systems infrastructure at some point.

We have 1,300 staff in Ireland, 1,030 stores and 650 suppliers. Absolutely every transaction across all of those has technology involved at some point, and every one of those systems is in scope; from the mobile phones and e-commerce platform to ERP systems, supply chain systems, logistics, financial systems – it is mind-boggling.

We are moving more and more into the cloud. It would be a rule of thumb that, as we replace or upgrade or renew systems, we look to the cloud first.

The only area we have held back from the cloud would be our ERP and logistics systems. We still keep them on-premise and we invest to have a very resilient architecture and infrastructure underneath them.

But I do believe that when we are upgrading or changing those systems in the future, we will look at the cloud then.

In the next five years, we will be 50pc cloud and, in 10 years, I can’t imagine us having any infrastructure on-premise.

What are the main points of your company’s IT strategy?

Simplicity and standardisation: that is the mantra I have adopted right through my career.

Standardisation as much as is possible, but simplicity above all else.

If I see two systems doing what one can do, we’ve got to pick one or replace it with a newer one. If I see too many systems interacting or trying to do the same thing, we have to rearchitect that.

Take, for example, our Shoplink e-commerce platform. We are going to, in the next couple of years, collapse six or seven ordering interfaces into that.

After we bought the Londis business, it was an existing platform within BWG, and we are creating a new system that collapses that into one.

The mantra to keep it as simple as possible goes right throughout our EPOS systems and wherever we can simplify, we do it.

Every time you simplify something, you are reducing your costs.

Do you have a large in-house IT team, or do you look to strategically outsource where possible?

We have 30 in the team – we are aligned very closely with the business. We have a supply chain systems team, a wholesale systems team and a retail technology team, and they would be our three main business interface departments.

They are supported by our operations team and development team.

We both insource and outsource for IT development.

When it comes to the very high-end areas where it is hard to get the skills, we would obviously outsource that as needed.

We have some very good supplier partners and it is most important that we have partners who can help us scale up when we need to.

We don’t need to add to our numbers, but when we have a project that is very time-sensitive, we have good partners who know our business, understand us and give us that scale quickly.

What are some of the main responsibilities of your own role, and how much of it is spent on deep technical issues compared to the management and business side?

It is much more so on the management and business side now. It is very important that I lead the IT strategy but also get my executive colleagues, customers and suppliers to buy into that strategy.

The strategy, from a technology perspective, is that it is there to support the commercial objectives of the business.

I sit on the management team with my board colleagues to ensure that whatever we are doing, the technology is supporting, and not distracting, from our business objectives.

I am a techie and a geek at heart and drift into the detail, but I am doing it less and less.

When I do get into the tech side, I make sure I do it at a mentoring level with my team so that I am certainly transferring skills, helping them to develop their own.

What are the big trends and challenges in your sector, and how do you plan to use IT to address them?

There is no question that internet of things (IoT) is a big trend. We have a large logistics fleet and all the Fleetmatics data that comes back helps us not only from a route management point of view, but also from an efficiency perspective, a fuel consumption perspective. The data about when to replace trucks and so forth is critical, and so, that level of information, making sense out of it and making business decisions around it, is important.

Business intelligence is moving to a completely different level because of the tools for big data.

IoT is great but if you can’t analyse or make sense of the data, it won’t do a lot for you.

We have that power now. Even down to our EPOS data, the level of detail that you can analyse quickly and get relevant data out of, in a very time-efficient manner, is very different to what it was five years ago.

When we were looking at data five years ago, we had it all, but the cost of being able to process that in a quick and efficient manner was extreme. Now we can do it in a very cost-effective way, and get very quick answers and insights for the business.

It is now about insights and value add, as opposed to having raw data. It is about why something happened, as opposed to telling us what happened.

It is about getting the context around the information to help drive performance.

I also think artificial intelligence is certainly going to allow us to make more sense of information that is not connected. It will make connections between different data sources that aren’t obvious to us as humans, and that will definitely provide unique insight.

In terms of the cloud, I see our present investment in physical infrastructure as being our last.

I don’t foresee going back to the board in five or six years looking for capital spend. I see it being about operational spend in relation to the next round of investment.

What other projects do you have lined up for the year, and what will they contribute to the business?

The major one is Shoplink, which we’ve launched to our customers. It is in pilot phase and we are going live to our full retail and wholesale estate in April. This is a project that has been ongoing for 12 months and will take the entire IT team on a roadshow.

Also, over the last 12 months, we’ve come up with innovations with business intelligence tools in relation to managing margin and processes in stores better.

We are always focused on improving our KPIs and we always want to hit the five nines (99.999pc). That is the core KPI for our infrastructure.

Our mobile contract is up for tender this year and that is going to be important to make sure we have the right solution – it will be a major project.

We are also deploying a number of apps with our retailers from a B2B perspective as well as some B2C apps for consumers.

So it’s going to be a very busy year ahead.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years