Paul Coby has cannily guided JLP’s investments in technology. They cover not only online and mobile, but also back-office systems, click and collect, and home delivery. 2016 has seen him turn 10 outlets into the company’s most technology-advanced omni-experience stores ever. He has also implemented a new supply chain ERP that has allowed legacy applications and infrastructure to be decommissioned, speeding up, integrating and simplifying supply chain activity, significantly reducing costs of operation, and providing enough capacity to handle operational peaks.
John Lewis Partnership
How are you influencing the products, customer experience and services your organisation offers to its customers?
John Lewis and Waitrose are omnichannel organisations, and ensuring that customers have a seamless experience, whether shopping in store, at home or on the move, has been crucial to our IT strategy. We have new responsive websites for both brands, and online accounted for 40% of John Lewis’s Christmas sales, with nearly half of shoppers (47.1%) choosing to shop on their mobile phone on Christmas Day.
Highlights from our Christmas trading results for the six weeks to Saturday 31 December:
- Total sales at the John Lewis Partnership were up 4.9% versus last year to £1,913m.
- John Lewis and Waitrose traded well, with both brands gaining market share.
- Waitrose gross sales (excluding fuel) were £9m, up 4.8% versus last year and up 2.8% on a like-for-like basis.
- John Lewis gross sales were £1m, up 4.9% versus last year and up 2.7% on a like-for-like basis.
Technology underpins every aspect of the business through both online and branch channels, our integrated supply chain, and highly successful commercial operations.
Define the key business outcomes that you have delivered over the last 12 months and their impact on your organisation’s performance
Our investments in technology along with our processes and partners have had significant results on our bottom line in one of the most challenging and competitive years on record. The partnership has invested not only in online and mobile but also in back-office systems and investments which have supported market-leading click and collect propositions and home delivery for both John Lewis and Waitrose.
This year we have:
- set up an integrated cyber security programme
- turned two new stores in JL and eight in Waitrose into our most technology-advanced omni-experience stores ever
- delivered 11 major releases of JL.com and Waitrose.com to add customer and back- office capabilities and retain marketing-leading features
- fully rolled out a new handset with industry trend-setting ‘quick check’ technology for customers in Waitrose stores
- refreshed technology across our customer and IT call centre operations (new telephony platform, upgrades to helpdesk systems, and tighter integration to our operational systems to allow customer queries to be dealt with at first connect)
- introduced a new order management system – its three major system releases have allowed legacy applications to be decommissioned, speeding up, integrating and simplifying customer communication and orders, and increasing customer service and satisfaction
- implemented a new supply chain ERP, allowing legacy applications and infrastructure to be decommissioned, speeding up, integrating and simplifying supply chain activity, significantly reducing costs of operation, and providing capacity to deal with operational peaks
- refreshed HR and finance system to meet the needs of the business and provide seamless services to 90,000 partners and 4,000 suppliers, processing 10,000,000 financial transactions
- refreshed the infrastructure which underpins the partnership customer proposition including myJL and My Waitrose (partnership loyalty schemes)
- refreshed and renewed the service management process, fully adopting COBIT levels
- renewed IT organisational teams across the partnership – circa 1,250 permanent partners and 1,250 third-party resources brought into a single partnership IT operation to support our brands better and, most importantly, offer great service to our customers.
This investment has seen the continuing healthy growth of both brands. Indications are that both brands have shown that we’ve continued to increase our market share.
In the first half of the year, the partnership’s gross sales grew 3.1% to £5.27bn. Waitrose gross sales grew 2.2%, and John Lewis gross sales by 4.5%, with both brands growing market share and customer numbers. PBT before exceptionals was down by 14.7%, with lower operating profits in Waitrose and John Lewis and higher financing costs for our long leave scheme, partly offset by reduced pension operating costs.
Additionally, our investment in technology allowed the partnership to deal seamlessly with the operational peaks we have across both our brands. For example:
- On JL.com on ‘black Friday’ £52m of online sales, peaking at 1,500 digital transactions a second driving five orders a second were managed with zero issues.
- At times over the Christmas peak and black Friday our online sales nudged over 50% of all sales.
- On Christmas Eve, Waitrose processed 150,209 baskets through 5,757 tills between 12 noon and 1pm.
What has been your involvement with innovation at your organisation – in particular, with products, business model and technology – over the last 12 months?
Through JLab, the John Lewis technology incubator, startup businesses can receive up to £100,000 of funding, together with mentoring and support from John Lewis and its innovation partner, L Marks. The purpose of JLab is to develop ideas and technology that will ‘really excite John Lewis shoppers’. We have made investment in six startups over the last three years, which have included:
- Wedding Planner combines technology, industry expertise and creativity to help brides and grooms to-be plan their wedding from their phone and online. Wedding Planner successfully executed a John Lewis co-branded website within the first five weeks of the programme. Since then, relationships have gone from strength to strength, leading to secured investment.
- DigitalBridge solves the problem of the imagination gap by allowing customers to visualise new home furnishings using computer vision and machine learning technology. During JLab, DigitalBridge was given the opportunity to trial its product within a John Lewis store, which was its first chance to see how customers would react to the product in real life. JLab was a huge success for DigitalBridge, securing investment as well as long-lasting relationships.
In addition Waitrose has established the Green Room, which develops and demonstrates new concepts in grocery and the partnership.
Finally, through our new ventures team, digital technology team are supporting the future offering we will provide to our customers. While these are commercially sensitive initiatives and so I cannot elaborate further, what I can say is that we intend to ‘connect’ with our customers in ways that make their lives easier and that have groundbreaking technology at their heart.
How have you delivered cultural and behavioural change as a CIO within the IT department and/or more broadly across the organisation?
My appointment as the first partnership-wide CIO in July 2016 is designed to join up the four different parts of IT in the partnership. Over the last six months I have appointed a complete new leadership team, and we are introducing a new operating model for IT which is designed to balance the principles of:
- agility: allowing us to deliver solutions to customers more quickly, more frequently to ensure we release value
- proximity: embedded teams will ensure that we remain close to the customer and the businesses requirements while pulling together teams into ‘disciplines’ to increase our ability to share and learn from each other
- productivity: to increase value and reduce cost – we need to reduce the duplication of work and effort, and share best practice, innovation and insights more freely.
This is a significant cultural change for IT for the 2,500 people (partners and third parties) who work in the team. Through me and my new leadership team we have a ‘programme’ of activity across the cultural paradigm (what we say, what we do and how we do it) to embed this restless culture in the CIO organisation over the future years.
We have also recently signed an agreement with Google to roll out Google collaboration across the partnership. It will support new ways of working for all partners, and in particular the unique democratic function in the JLP.
How have you worked with your CEO and/or board to communicate whatever ‘digital’ and IT means to your organisation/sector and improve digital literacy at the highest levels of the organisation?
I attend all executive committee meetings to allow clear and constant lines of communication with the team guiding the partnership. This has allowed a deeper understanding of the technology agenda with the committee, greater long-term and sustainable engagement and quicker decision-making.
In addition our partners publish Technology News Network on a weekly basis on Google communities.
How have you worked with the technology and IT vendor market to achieve your business goals? How have you been able to influence IT suppliers and successfully manage your partnerships/relationships with large IT companies, SMEs and startups?
As part of the new partnership IT function, we have established a unified IT procurement unit responsible for strategic supplier management of our Top 10 suppliers.
In October 2016 we held a strategic supplier day where we gave our suppliers an insight into our business priorities and challenges, and asked for feedback on how we can work together to achieve these.
In addition I personally hold quarterly review meetings and annual business account planning sessions with our top five suppliers to review progress and align strategic goals (Oracle, IBM, JDA, Cognizant and Salesforce).
How have you tried to develop the diversity of your team?
We actively support Women in IT, which is aiming to address the imbalance in senior levels and in the industry. We hosted a stall at the Tomorrow’s Tech Leaders Today careers fair to encourage female students and graduates to consider a career in IT.
Across the partnership we provide a variety of diversity training and awareness activities, and in IT we specifically focus on celebrating other cultures. This year we held Diwali celebrations across two of our campuses.
We have clear policies to ensure we accommodate cultural and religious holidays and flexible working. Across the partnership we have a number of networks including Pride in the Partnership, the Faith and Belief Network, Working Parents Network, TEN Think Evolve Network, and a number of others.
Describe how you organise and operate IT and how this aligns effectively with business strategy and operations
In October 2016 we moved to a new way of organising and operating IT for the partnership.
We have two central directorates:
- Strategy and architecture facilitates the technology strategy across the partnership and has brought together all our architects into a single team. A new business process management team owns the strategic vision for process in the partnership.
- IT Infrastructure and Operations has brought together all our IT operations, application operations, and infrastructure and security operations teams.
Our architecture and IT operations teams are embedded within the divisional (brands) IT teams, ensuring we remain close to the divisional IT strategy and get the benefit of sharing skills, best practice and technology.
The divisional IT teams, John Lewis IT and Waitrose IT, have full responsibility for business engagement and IT planning, and for technical delivery, which needs to be close to the commercial business.
What strategic technology deals have you made in the last year and who are your main suppliers and IT partners?
Strategically renewed our relationships with Google, IBM, Cisco, Salesforce and Oracle. Specific details are:
- Enterprise Google G Suite across the partnership
- IBM SSSO – three-year strategic deal
- Cisco security operations centre.
In addition we work closely with Computer Centre, TSC, JDA, Zensar and CapGemini.
Overall spend across these suppliers is £100m plus.
What are your key strategic aims for next year?
- To provide secure and relevant customer-facing applications to support and delight our customers and thereby increase our market share and profits.
- To deliver another operationally excellent peak.
- To continue to innovate and be leading edge to deliver a sustainable digital technology roadmap for the partnership.
- To invest in our core infrastructure to make this fit and secure for the future.
- To ensure that IT has the right operating model to respond to anything which the external environment might create and provide meaningful and rewarding careers for our partners.
How are you preparing for any impacts Brexit might have on your organisation?
This activity is undertaken at a partnership level.
When did you start your current role?
Within the partnership – 2010
What is your reporting line?
Group finance director – board-level member.
Are you a member of the executive leadership?
Are you a member of the board of directors?
What other emerging roles does your organisation have and what is their relationship to you?
Strategy and architecture director – direct report.
How often do you meet with your organisation’s CEO or equivalent?
How many people at your organisation does your function supply services to?
Internally 90,000 partners, plus circa 10,000 third parties, and 4,000 suppliers. Also around 10,000,000 customers through store or online.
What is your annual IT budget, or your spend as a proportion of the organisation’s revenue?
Capital £200m, revenue £150m.
What percentage of your budget is operational spend (ie keeping the lights on) and how much new development (ie innovation, R&D, exploratory IT)?
40% spent on operations, 6% on strategy and architecture (including R&D, innovation, etc) with the remainder on new developments.
Rank the following sources of advice/information in order of importance:
- Analyst houses
- Industry bodies
- CIO peers
Has your organisation detected a cyber intrusion in the last 12 months?
Are you expecting an increase in budget specific to security in order to tackle the cyber threat?
Does your organisation have a designated security professional – CISO or otherwise – and what is their relationship to you?
Yes, we have a cybersecurity Director; they report direct to me.
Are you finding it difficult to recruit the talent you need to drive transformation?
Has recruitment and retention risen up your agenda as a CIO?
Does your IT organisation operate an apprenticeship scheme?
How many employees are there in your IT team?
1,250 permanent partners, with 1,250 additional third parties supporting the team.
Are you increasing your headcount or planning to bring skills and the ability to react to needs in-house?
Which technologies or areas are you expecting to be investing in over the next year?
- data analytics/business intelligence
- enterprise applications
- machine learning/artificial intelligence
- devices (mobile)
- devices (desktop)
Which technologies or areas are you expecting to be investing in over the next one to three years?
- data analytics/business intelligence
- enterprise applications
- machine learning/artificial intelligence
- devices (mobile)
- devices (desktop)
What emerging technologies are you investigating or expect to have a big impact on your sector or organisation?
Automation and robotics at the infrastructure layer. Cloud, collaboration, network and integration at the application layer.
Does your organisation do a significant amount of trade with the EU?
Does your department include technology staff from the EU?
Are you or have you been looking to the EU to recruit key skills?