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Retailer Tesco is considered to be a bit of a darling in the CIO world; after all there are not too many global corporations from this, or any, shore that have a former CIO as their CEO.
McNamara’s boss Philip Clarke formerly held McNamara’s position until March 2011 when Sir Terry Leahy stood down as CEO. Under Leahy Tesco undertook significant expansion in the UK and overseas as well moves into banking, telecoms and the internet.
McNamara sits on the Tesco executive committee alongside the chief executives of the four regional Tesco businesses and the services business that includes the new banking and telecommunications arms.
CIO met McNamara as the company announced an eight-year extension of its relationship with Microsoft.
“It is a long contract. It is about as long as we would sign,” he says. McNamara describes the deal as an “enterprise subscription agreement”.
“So we have unlimited licensing over the duration of the contract. It is important not to count them [licences] all the time when you are a large distributed organisation like us,” he adds.
Microsoft will provide its Windows, Office, SharePoint, Exchange, Lync, System Center, BizTalk and SQL Server technologies across the 14 countries that Tesco operates in, as well as to the rapidly growing Tesco banking, online and telecommunications businesses. The Microsoft Services Enterprise Strategy consulting programme is also in the deal.
Motorola, NCR, Oracle and Retalix sit alongside Microsoft as the core technology providers to Tesco, supplying in-store mobile, self-service tills, till software and checkouts respectively.
“With the UK retail market at saturation the only place Tesco and McNamara can innovate is overseas,” observed Tony Westbrook of the challenges facing McNamara.
“What has Tesco innovated lately?” Asked Jerry Fishenden; and Microsoft have been with Tesco for a long time,” he remarked on the new deal and questioned whether it continues to be a part of the innovation plans.
“Tesco had a fantastic innovation agenda. There was a lot of talk when former CEO Sir Terry Leahy stepped down about where all the good business people from Tesco have gone, but what about where have all the really good IT guys gone, because they are all now entrenched in the vendor side. Now Tesco are struggling.
Richard Sykes adds, “The great Microsoft challenge is that it is having to move itself to be a service provider to Tesco.
“The customer facing bit with the introduction of Wifi in the stores and he’s putting a lot more into the globalisation framework,” he said in response to Westbrook’s analysis.
“Tesco was a big challenge for Microsoft and the ramifications will be felt through the industry,” says Mike Altendorf. “Philip Clarke, their CEO and former CIO, was always destined to be CEO, he is a born and bred Tesco man and as part of his career development he was put into an operational role to which was added IT. The good news is that they gave him the experience of IT as part of his development.
Although the panel agreed that Tesco has lost its former strength as an IT innovator, all agreed it remains an important and significant organisation in the UK business technology community and all expect McNamara to challenge the top 10 in forthcoming years.