In today’s increasingly digital world it is easy to forget that there remain major business sectors that have not fully laid the foundations of their digital future. To call these industries clay-footed is to misunderstand the demands of their business. JJ Van Oosten, CIO at building merchants Travis Perkins Group, is setting about pioneering the sector’s move into the digital age as its customer base becomes increasingly mobile-oriented.
Travis Perkins Group is the UK’s largest building merchants and is listed on the FTSE 250. It is a complex business that includes Wickes DIY stores as well as BSS, specialist merchants for the boiler and plumbing industry, and tool rental business Toolstation.
Other than store-based retailer Wickes, Travis Perkins and all merchants to the construction trade rely on a culture of customer relationships that is bottom-up from yard worker to C-suite.
“We have a deep deep relationship with the customer and in the 900 branches we have the managers and staff that know their customers very very well. Our culture is very different from pure retail,” says the former retail CIO.
The Travis Perkins Group consists of 17 individual businesses, where MDs are empowered with their teams at the branch or store to build personal relationships with all their customers.
In a tight sector where those same tradesmen will also have relationships with rivals Jewsons and Wolseley, the freedom to make decisions is critical. That decision-making freedom is all about pricing. Van Oosten explains that a branch will have a relationship with a roofer that will see him secure good prices on roofing materials, but should he purchase decorating materials the deal may not carry the same benefits. This ecosystem has, he says, meant the internet has not had the same impact as it has had on other trades.
“We are the UK’s largest merchant and reseller of building materials. I have to make sure that all my businesses are not competing with each other,” he says.
“So the opportunity is huge too embrace multi-channel and to use that to improve our operational cost base. Our supply chain is already exceptional.
Multi-channel strategies have been major challenges for retail and financial services CIOs, but add in the complexity of the relationships and the irregular pricing structure of building merchants and you can see that Travis Perkins has a big project ahead of it.
Van Oosten describes his plan as addressing multi-channel through the channels, pricing and product ranges via supply chain, data, technology platform and digital marketing.
Travis Perkins Group, like many organisations, sees mobile as the channel that will have the greatest influence on their organisation due to the popularity of the devices amongst tradesmen, but the move is not without its difficulties in recreating the relationship and experience Travis Perkins customers are used to at the yard. Van Oosten also sees mobile devices as a way to revitalise the branches by reducing paperwork.
Old problems, new solutions
The individual pricing and product range is one area where Van Oosten believes Travis Perkins will need to evolve and develop an algorithm that will create a 21st century solution to the broad range of products and relationships.
Travis Perkins has a three-tier supply chain with two large national distribution centres, regional hubs and then the branches; taking Travis Perkins Group digital will change that setup.
“We must end up with category and stock management that is better and makes the move to multi-channel easier,” says Van Oosten.
“We need to have some leadership in the digital marketing space, as this industry has not been the most attractive in digital marketing.”
But one thing Van Oosten is clear about is that the internet is and will continue to have an impact on the building merchant sector and Travis Perkins must react to it now.
“When I wake up in the morning it is the internet that is knocking on my door. There are not many industries left where a CIO can still make a mark on the internet. It will not be simple and requires a lot of investment.
“Look at Amazon. It could take market share, and it has the skills and opportunity to take the smaller parts of what we sell, the light side. We would then be left with the heavy stuff, which is costly to manage. So we have to look at how we drive the opportunities for multi-channel right through the entire business.”
Added to the need to create a bold new future for Travis Perkins Group in the digital age, Van Oosten and his peers are facing a tough market. The BSS plumbing business has faced a rapidly declining boiler sales market in line with the well documented moves towards renewable heating sources. The slow?down in the building sector is well documented and has affected the other parts of Travis Perkins.
“Thirty per cent of the market has gone. Very different from Tesco, where everybody that is a customer has to eat and you compare like for like sales,” says Van Oosten, comparing his current and previous employers.
“But this is why business process improvement is so important to the strategy, so that we can self-help,” he adds. BSS has already become a major supplier of renewable energy parts and systems in reaction to the changing demands from customers.
“My remit is three-fold. As CIO to look after all the technology for all the businesses. The second part is business processes improvement by looking at where we can get efficiencies out of the processes so that we can reinvest in the business and continue to provide the right products in the right places at the right prices. The third area related to defining and implementing our multi-channel agenda.
“In the consumer division there is a big opportunity to get Wickes to reach its full potential, while the Toolstation business operates extremely well and is already truly multi-channel so we are venturing out of the UK with this business,” he says.
Mapping the future
With his business processes hard hat on, Van Oosten has introduced Six Sigma methodologies and heat-mapped the business processes of Travis Perkins Group to create a road map for business process efficiencies over the next five years.
The first steps towards multi-channel have been taken with the adoption of the Hybris platform that was recently acquired by SAP.
“Hybris means we can do a lot of configuration and it has led a lot of acceleration of our B2C and B2B markets,” he says.
Technology also needs people and Van Oosten has been investing in retraining his team in Java development skills.
The core of the Travis Perkins business runs on a bespoke centrally managed ERP from Rocket Software that Van Oosten and his team have redeveloped to operate in a continuous integration mode through greater automation. He describes the ERP as “very very old”, but it is designed to cope with the “millions of price files at the till for each colleague”. Replacing this system in a ‘big bang’ is not the chosen path as it is unlikely to achieve any real business benefits would be a costly and massive undertaking.
Where Van Oosten is rebuilding the IT at Travis Perkins Group is in the end-user devices he supports and provides.
“Project Fabric is a process to move away from Microsoft to Google. This will send a signal that we are embracing mobile and tablets and it forces me to modernise the infrastructure networks and incumbent operator.
“Microsoft build for a thick client, they do not understand the internet. I hope they will catch up, but I cannot wait,” he says, repeating what a number of CIOs believe.
“Google understand mobile inside-out, so we are adopting browser-led models like hell on any device. Customers have two or three devices – the idea of a single device is a fallacy.
“Bring your own device (BYOD) is something I am fully behind. When I joined my desk had a printer and every desk had a printer, I got rid of that policy and it has saved money.”
“It all starts for me with the team,” he says of the transformation journey he is taking the Travis Perkins Group on. Former colleagues Paul Bratsher of Kingfisher business Screwfix and Dave Morris from Tesco have joined Van Oosten at Travis Perkins, and with the in-sourcing of technology build and development, Matthew Greaves has stepped up to become Service and Operations Director.
To direct the business process improvements Van Oosten has brought in Tony Wilson from Accenture, who the CIO describes as a world leader in lean and Six Sigma. “He does it in a way that allows members of the organisation to come with us,” a theme Van Oosten mentions several times throughout the interview at Travis Perkins Group’s Northampton headquarters. “My PA is a real star too,” Van Oosten says.
Everyone in IT has been trained on Agile project methods so that now the IT operation focuses on technology debt and strategic vision. All members of IT are now focused on working with product owners, knowing user stories, prioritisation and governance processes.
“This is the best team I have ever built,” he says of the 300 people reporting to Van Oosten.
“Retail is pretty good at landing large projects and fast. It is also good at knowing customer details and as a CIO I want to know all the details from the till to the software code,” Van Oosten says of his retail experience at Kingfisher, which owns the B&Q DIY retail chain, and supermarket giants Tesco.
“At Tesco we had to re-write the grocery platform and make it available on mobile. That was done in 14 months with a team that was inside of Tesco and was the largest online project in the UK between 2008 and 2009.”
When Tesco rebuilt its non-grocery online platform it went a different route to its grocery strategy, opting for a major waterfall project with outside partners and packages that Van Oosten describes as “stuck together”.
“There is a relentless seeking for continuous improvements in retail, as there are thin margins,” he says. One major difference Van Oosten notes between retail and the building merchants sector is that in his retail experience the need to become multi?channel was imperative. Although he has already cited the potential impact online retailers like Amazon could have on his current organisation, at present he doesn’t feel the threat is significant. But as every CIO and business leader knows, waiting for the threat is a very dangerous business strategy.
It is rocket science
From his Twitter handle image, to the walls of his office, images of rockets – more specifically the rockets featured in the Tintin stories – surround Van Oosten. As a Belgian he says the love affair with the cartoon character is prerequisite.
But the story runs deeper than that with Van Oosten, as throughout the interview he talks about moon shots. He describes how a moon shot requires a 10 per cent jump in innovation and effort, not a one per cent jump and to this quietly ambitious CIO, moon shots are exactly what he should be aiming for.
“Google are very good at moon-shot thinking and I spend a lot of time with them for that reason,” he says.
To give Travis Perkins a chance of a moon shot, Van Oosten sits on the executive committee.
“We are best placed to see the entire business, to influence a lot of people, so our natural place is on the board. We have views and opinions that are important. In the old days the property manager would have been on the board, but the new property is the technology, and that matters.”
His career started out in something a whole lot softer than breezeblocks and four-by-twos, as a molecular geneticist. Van Oosten entered the business world with Anglo-Dutch consumer goods giant Unilever before making an internal move to their strategic department to help with M&As, which led to an involvement in IT.
“Science gave me the ability to think on three levels – the environment, physicality and genetic. In business you are also thinking at three levels – the economic environment, the cultural and your processes and systems. The systems are your business DNA.”
Combine all of these and you have the internet, which Van Oosten “adores”.
When Van Oosten can unhook himself from the net, he really does disconnect, walking in the Peak District around his home with his gun dog or his five kids. His home too is another example of moon-shot thinking, a totally environmentally sustainable abode he designed himself, with computers at the heart reducing every impact the property has on our planet.
CV: JJ Van Oosten
April 2012-present: Group CIO and member of Executive Committee, Travis Perkins Group
January 2011-present: Owner, JJ Van Oosten Consulting Limited
2008-2011: Board member, CIO and Non-Food Change Director Tesco.com, Tesco
2005-2008: Group IT Director, Kingfisher IT Services
2002-2005: Client executive Outsourcing and Director of Consulting services, EDS Group
2000-2002: Senior Manager, Roland Berger Strategy Consultants
1999-2000: Director Project Foresight, Unilever
1996-1999: Project Leader Innovation Centres, Unilever