The Co-operative Group has three trading operations: food, banking, and specialist retails that includes its travel, pharmacy, funeral care and car dealership arms.
Andy Haywood moved from being IT director at Boots the chemist to begin a new role as the first group CIO of the Co-operative Group in January 2012. Both for the man himself and for his diverse organisation, it has been a busy first year.
“The good news is that there have been no surprises! The big challenge is to reposition IT within the Co-operative business,” he says. “Because of the organisation’s diversity and uniqueness IT has evolved over many years. The size and scale has evolved and it’s doubled in size and performance in the last five years,” he explains of the mutual business that benefits its customers and employees rather than any shareholders
“This divergence has resulted in not only the desired diverse Co-operative business, but also a diverse IT environment.
“Now we are trying to bring that together and use the size and scale in the markets we serve. The other challenge is how much is going on in the Co-operative. The ambition is astounding. We are the fifth biggest food business in the UK and we would be in the top 25 of the FTSE if listed. So there is not a lot of time to hang about.”
Project Unity is Haywood’s plan to end the federated IT environment at the Co-operative and he explains that it was CEO Peter Marks that saw the opportunity for simplification and sought out the former Boots CIO to create the unifying technology strategy.
“Peter needed someone to advise him and take a holistic view across IT, and that’s where I come in. The group is of a size and scale that warrants this approach. As with any business, it cannot do what it wants to do without IT.
The Co-operative’s home in Manchester is being totally redeveloped in what is more than just an office move but a complete community regeneration. The new ecologically friendly office began to be populated by “colleagues” as Haywood describes them, in October 2012 and the North Manchester Regeneration Programme – a partnership between the Co-operative and the local authority – is one of the largest regeneration programmes in the UK, creating residential, retail and commercial spaces around the Co-operative HQ. Haywood describes it as “hugely important and exciting for Manchester”.
It says a lot about the history of the Co-operative that as it sets out on its own business modernisation strategy, it takes its local community with it.
“We are modernising the Co-operative and making it more relevant for its members and customers without losing the heritage, trust and brand. It’s been Peter’s strategy and a very successful one over the last five years and is one of the key reasons why I took the job,” says Haywood.
“We are very commercial as an organisation. We do have to be profitable to invest in the future of the business. It is a very commercial business and the benefit of that is that we can do even more. The Co-operative is full of talented and very nice people doing business the right way and that is refreshing,” he says.
At the time of the CIO 100 judging the issues around the Verde deal with Lloyds had not sufaced so were not a factor. The panel felt that the scale of transformation, the management structure, positive attitude towards apprentice schemes all merited a top 10 position for Haywood.
IT leader: Andy Haywood, Group CIO.
In role since: January 2012.
Reporting line: CEO.
How often does the CIO meet with the CEO: I meet with the CEO every week, including chairing some Group Business committees. But more importantly than this, he often just rings me for a chat, for an update or to get my view on something. It's so empowering and really makes me feel part of the Executive team.
Board level seat: Yes.
IT budget: IT function has a budget of in excess of half a billion pounds weighted towards capex.
IT estate and or number of log on accounts under the control of the IT leader: 123,000.
IT staff currently employed: 2200 people.
Split between in-house/outsourced staff: 400 of the 2200 are contractors.
IT management team and reporting structure: Haywood’s new group technology function has CIOs in the business lines of food, banking, specialist retail and the corporate business that report to the COOs of those business lines and sit on their operating boards so that IT is at the top table of each area. He has also introduced a group CTO role to concentrate on the strategy, architecture and innovation, and a COO role has also been created to drive a new sourcing strategy with the Co-operative’s wide range of suppliers. Then he has a group technology director for the infrastructure, networks, telephony, storage and desktop environment.
Primary technology platforms at the organisation: There is the Core banking platforms, through food supply chain, our own Epos systems, distribution, ecommerce, mobile banking, funeral care, pharmacy.
Primary technology suppliers: Steria, IBM, HP, Fujistu, SCC, Oracle, CA, BT, 02, Microsoft, Accenture, CSC
Significant strategic technology deals struck in the last 12 months:
Co-operative Bank has renewed an IT services contract with Steria, as it continues on a £700 million transformation programme.
Percentage of your applications/infrastructure run from the cloud: 10%.
Major technology or transformation project recently completed and how did it transform operations, customer experience or the organisation: Project Unity is Haywood’s plan to end the federated IT environment at the Co-operative.
Did the above project reach its cost, timing and transformation objective: Yes.
Business transformation programme – beyond technology – that the CIO owns or is a major contributor to: The Co-operative’s home in Manchester is being totally redeveloped in what is more than just an office move but a complete community regeneration. The new ecologically friendly office began to be populated by “colleagues” as Haywood describes them, in October 2012 and the North Manchester Regeneration Programme – a partnership between the Co-operative and the local authority – is one of the largest regeneration programmes in the UK, creating residential, retail and commercial spaces around the Co-operative HQ. Haywood describes it as “hugely important and exciting for Manchester”.
We are modernising the Co-operative and making it more relevant for its members and customers without losing the heritage, trust and brand.
Strategic aim of the CIO and IT operation for the next financial year: Modernising the technology strategy and capability our IT people have with a blend of internal promotions and external recruits.
One of the big opportunities for the Co-operative is in the digital space with our spread of services. Joining them up is crying out for a digital solution.
This strategy ensures that each business line has an IT leader shaping and delivering the IT strategy, but the group level provides the scale.
Strategy in the use by employees of their own technology, use of mobiles and how social networking is impacting operations, customer experiences or the organisation: Over the last 12 months we have moved strongly to enabling mobile, flexible working and encouraging our colleagues to be more adaptive. This is a cultural shift enabled by technology, rather than IT "policing" the colleague technology experience. We are pushing the boundaries of what colleagues can choose to use with our new device, o/s and security policies. Early days yet but early signs are encouraging.
Strategy for dealing with shadow IT and BYOD including influence and engagement with executives, to place the right controls around employee choice: I think it is incumbent upon the internal IT function to "catch up" with what's happening in the world, not slow it down. We all work in tough competitive environments, so again rather than trying to control and own technology I should be giving my business the tools and services they need when they need them at a price they can afford. In other words they come to me because we are the best, not because they have to.
Technologies being considered to enable transformation: I am very excited about our digital plans and strategy particularly, we are making great progress in this area, albeit from a low base. Thinking and shaping is going well as part of our overall group wide Digital Strategy review which I commissioned at the beginning of the year. Wherever you look across the Group though there is some form of transformation going on. It's a fantastically exiting time to be at the Co-Operative right now!
Transformational inspiration sources: For me it really interesting time to be in IT right now, you see the big established businesses across all industries fighting for survival where the business cycles are getting shorter and faster, where Digital is becoming a way of life and we are all trying to figure out how to put the two things together, delight customers and drive service and revenue. In this context ALL organisations and leaders right now are doing some brilliant things, but also doing some things that are maybe best avoided too. The trick is to figure which is which!!!