In the retail sector, CIOs control a function capable of delivering significant competitive advantage at the same time as it does efficiencies. And when times are tough, this is quite a pull.
Often among the first to feel the effects of a squeeze in consumer spending, retailers have had a torrid time of late.
As usual, though, it’s not as simple as that. While vast swathes of the retail sector are on their knees, others, such as certain specialist retailers and discount chains, are thriving.
At the same time, the big four or five supermarket chains continue to rumble on.
Data published by the British Retail Consortium (BRC) and analysed by KPMG illustrates this point, with a clear divide being seen between food and non-food retail.
“It remains a tale of two halves,” said Stephen Robertson, director general of the BRC, when the data was revealed late last year. “The food sector has proved more resilient, but non-food retail showed a marked decrease in sales year-on-year.”
Ralf Dreischmeier, senior partner and head of the IT practice, Emea, at Boston Consulting Group, says there are three major issues facing CIOs operating in this complex world.
“One is around organisation and cost, the second is around ERP and similar large IT transformations, and the third is digital,” he says.
Digital, he explains, is a technology that is beginning to creep into the corporate world, with the advent of web 2.0, social media, location-based services and the take up of mobile devices.
Those retail CIOs who don’t embrace these digital technologies will have bigger things to worry about than a few points drop in the company share price warns Dreischmeier.
“You need to innovate in order to survive,” he says. “No matter what your finances are doing, if you don’t innovate and leverage new technologies you will not survive in the market.”
As group CIO of FTSE-250 catalogue and high-street fashion retailer JD Williams, Neil McGowan is acutely aware of this and, as a consequence, has structured his working life so he can commit as much time and budget as possible to value-generating activities.
“We’ve focused on our overhead costs and kept them as tight as possible, but the more strategically important area, where I spend about 80 per cent of my time, is on ensuring new capabilities, and that our websites and mobile propositions are delivering,” he says.
Established more than 150 years ago by James David Williams, the group, which trades on the London Stock Exchange as N Brown Group, has grown into a collection of clothing brands with combined revenues approaching £700m.
“20 or 30 years ago, the systems were built up from a series of bespoke mainframe applications,” explains McGowan. “Those are still there. They run a lot of our backend, but what we’ve done recently is a lot of work to service enable those and put infrastructure layers on top.”
These layers, as McGowan calls them, make it possible for legacy systems to handle web 2.0 functionality, with one of the goals to enable a multi-channel approach to retail.
This includes the traditional in-store experience as well as online, mail order or mobile commerce and, crucially, they all have to work together, if a customer is to enjoy the full experience.
“In the future, we will use it as a way for customers to plan a trip to the store, reserving their size so they can try on [an item of clothing],” he says.