The five minute CIO: Chris Donnelly

7 Dec 2012

Chris Donnelly, head of IT at Londis

Londis’ head of IT describes how automation has freed up budget for strategic software development projects, while mobility is transforming the role of the store manager.

Can you briefly sketch out the organisation – how extensive is it, how many users are there?

We have approximately 250 franchise stores with a full Windows-based EPOS system – from two-lane stores up to 16-lane stores. We have a wide area network to the stores sending information about pricing and products, and they would send back sales information to us. We measure by store rather than by user.

What are the main applications you’re using for the business?

The BCP Accord solution is our ERP and that runs our warehousing and financials. It runs both of our warehouses: ambient and chilled.

We have fully live voice picking at our ambient warehouse. We have Microsoft Dynamics CRM, we use the Diver solution for our business intelligence. We would mainly be a Microsoft house: we would have Exchange and the different flavours of Office.

This year we virtualised our entire server estate, from 23 servers to two hosts on VMware.

How would you describe Londis’ IT right now – is it mature, or are you still upgrading it to get to where you want to be?

Infrastructurally, it would be mature. VMware has sorted out a lot of our infrastructure issues. We did a deployment of our EPOS systems six or seven years ago, so we consider ourselves mature there, too.

The cloud is an overused term but we would have embraced web-based applications for many years. We were one of the first corporate users of the HP iPaq, which was the early days of smartphones, and we deliver web applications over that – a version of Dynamics CRM.

What we now focus on, we see IT as a key way to generate competitive advantage and you can never do that with out-of-the-box solutions, so we’ve moved to developing our own solutions.

What implications does that have for the makeup of your IT team?

We’ve had a highly skilled and good team, and I inherited that. What we’ve been able to do with the simplification of our infrastructure is release those skills to add value to the business and we take contract people on to augment those skills as required.

We have shifted the IT department from when I arrived six or seven years ago, from 75pc support and 25pc projects, and we would have flipped that right around now to 75pc on project work and 25pc on support.

There’s a big move to try and automate or streamline a lot of IT management work – what does that mean to an organisation whose retail estate is so widely spread out?

That’s going to radically change how we support that. I’ll be honest: it’s going to take five or six years to get to where we want to be. I don’t see a requirement for as many field engineers because with a thin client virtualised EPOS system, pretty much all of the parts will be user replaceable. You’re literally typing in a URL. Anybody can do that and update the unit.

How strategic is IT to Londis, and how much support do you have from the senior levels in the business for what you’re doing?

We think of ourselves as being innovators in IT. Two things facilitate that. Because we’re in the FMCG [fast moving consumer goods] space where the product range can be from 2,500 and 15,000 items per store, there was never a way to manage that without technology. That to some extent makes it easy.

Our board understands this – they all have been in retail for more than 20 years. Retail doesn’t happen without technology. We look at EPOS systems as tills sometimes, whereas every one of them is a Windows PC. I’d also have to say our CEO is incredibly supportive. He understands the value IT can deliver. We’ve had board-level support for everything

Will your 2013 IT budget be more, less or the same as this year’s, and how will that determine your work?

It’s interesting, because we’ve obviously reduced the running costs of the IT department, but we’ve maintained the budget. We can focus that more on projects again.

We look on IT projects so that everything’s based on cost benefit. It’s not looked at as a huge budgetary issue. So, ‘why would we not do it?’ is the attitude.

Can you give an example of a recent IT project that’s delivered business value?

The big one is the chilled supply chain. It was incredibly complex and we were working on it for around 12 months. We’re the only people in the trade ever to deliver this successfully the first time.

And we have this platform running on the web: we call it iSIS – intelligent systems increase sales – and everything has to have a small ‘i’ now! [laughs]. We deployed that two years ago. Far from just being about order capture, we send back business intelligence information. We aggregate the information looking at it across all of our stores. We can identify product opportunities that a retailer might be missing in their range. We use that very powerfully.

Basically, we use the portal to enforce our business rules. The portal will show the products that are available to order on each particular day. We did that for our ambient warehouse, too – we update stock on our portal every 15 minutes. That has massively increased sales.

When we launched the iSIS portal first, the stores taking part in the pilot finished 30pc ahead of our budgeted sales for that year and the ones that didn’t were down in sales.

If you take the cost/benefit in relation to the chilled supply chain, we would receive approximately 1,100 orders per week, out of a range of 6,500 products. We have one person in order processing. If that was manual, we would have probably required 10-15 people to manually enter those orders.

What are the big IT trends in the retail sector right now?

For us, it’s primarily about loyalty schemes and information sharing. The other big area will be virtualisation, particularly at EPOS level where you would virtualise the desktop.

That hardware at this stage is starting to creak and as the application gets loaded with more and more features, if we can go to a virtualised solution we can run at thin clients at store end, it means the EPOS equipment will get more life out of it or we can replace the hardware which is maybe one-third of the price of a full unit.

Another trend would be automation. In every transaction, we’re trying to remove paper. Everywhere we can remove paper, we aggressively target that. The other is NFC [near field communications], and that’s about speeding up throughput for customers. We’ll be putting out NFC in a few stores in January.

We’ve deployed iPads in stores and the Passbook in iOS 6 is something we’ll be looking at for the stores and coupon use. The beauty is, it can let you know which consumer uses which coupon.

What is Londis doing in the mobility and BYOD area – seeing as you’ll be speaking about this next month?

Mobility for us has two areas. We’re launching, with our retail partners, an iPad app to run the EPOS system. The whole idea at the store level with the iPad is to allow retailers who are our customers to spend more time on the floor but still be able to manage the shop as efficiently as possible.

For our own remote workers, we would have 25-30 people between salespeople, food safety people, category consultants – the iPad has been an absolute godsend. Everyone now has information instantly available around the clock: our BI, CRM and email are running on the iPad and people can take orders from the store on the iPad.

With the store audits we carry out, we’re in a position now where we can instantly report on an audit. That now happens within 30 seconds and gives full trend reporting and analysis.

What about security concerns, or the technical support problem: by just using iPads, is that how you get around those issues?

We do mandate them: we would supply all of the equipment, and make sure it complies with all of our security protocols. We manage all of the devices from a security standpoint. The iPads are as secure as any laptop – and all of our laptops are fully encrypted. Where we use apps for our CRM or BI, there’s nothing stored on the iPad itself.

Being a large corporate, we would be audited every year. We have to have security as front of mind in everything we do. It’s one of the advantages and downsides of being a corporate. We have to remain sure we’re compliant with industry best practice.

With all of the customers passing through your stores it must be tempting to ‘mine’ that information for insights – does the big data trend interest a company like Londis?

It’s an interesting one. I gave a presentation at a conference earlier this year and I said: we’ve been dealing with big data for years. You’re dealing with billions of records, literally – item-level transactions at hundreds of stores. Now we’re giving the context to that information.

We can look at store performance over a group of stores. When you integrate the information from a store audit, you can compare which ones are of quite a high standard of marketing and we can start to see a formula to those stores’ success.

Is there any one moment or memory that sums up how Londis has approached technology in recent years?

If I was to say there was one moment where we put our point across, I suppose it was September 2011 at our annual conference where we gave iPads to all of our stores, at a huge expense in the height of difficult times, and I see our customers now using the iPad on the shop floor.

It’s incredible to walk into any of our shops and see our customers using them. The conference was maybe that moment where it all came together: everything we do, we think about: ‘how can we do it with technology’?

Chris Donnelly will be speaking at the inaugural Enterprise Mobility Summit on Wednesday, 23 January, at the Croke Park Conference Centre in Dublin.

Gordon Smith was a contributor to Silicon Republic