analysis

Consumer-facing firms need two CIOs and multi-speed development

Karl Flinders
Ezine

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Businesses that sell goods and services to consumers need at least two CIOs and multi-speed IT departments if they are to keep up with the competition.

Long-established businesses based on traditional bricks and mortar customer service will need more than one IT leader when they move to multi-channel models.

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You do not need to be a huge bank these days to justify more than one CIO. In sectors such as retail, where digitisation is transforming how businesses interact and serve customers, the person that drives customer-facing developments would struggle to manage the traditional corporate IT infrastructure at the same time.

Travel company Thomas Cook is a good example. Its business is being transformed by online consumer habits. As a result of the explosion in the number of consumers who research and buy holidays online, the company has had to turn IT into an agile software development house, which can quickly develop and launch online services. These services are being developed in reaction to what customers are asking for and can translate directly into sales. If Thomas Cook doesn’t do it a competitor will, so speed is of the essence.

Mariano Albera, CIO at Thomas Cook, is one of two CIOs at the company. He concentrates on the customer-facing IT while a colleague is the CIO in charge of the traditional IT infrastructure. 

Albera said he is a software developer at heart and has always worked in the travel industry, mostly for online-only companies, and used agile software development techniques to get apps up and running quickly. Working for a large legacy supplier such as Thomas Cook is different and it would be impossible for one CIO to do the front-end development and the back-end IT infrastructure at the same time.

Albera said plans can change quickly in online retail: “The customer is your steering committee not a group of senior executives.” To this end the CIO responsible for the customer facing technology must be plugged into what customers are saying and be ready to react to it.

With IT maintenance taking up to 80% of the budget, the CIO responsible for the IT infrastructure is also fully utilised.

Sarah Venning, head of IT relationships at John Lewis, said the changing demand from consumers is also forcing large retailers to have IT departments that can work at multiple speeds.

There are the developments that have to be perfect first time that take time, such as major IT infrastructure upgrades, and then there is the fast development of customer facing apps that has to be at least as quick as the competition. The final speed is superfast and is around innovation when the IT department crowdsources or runs hackathons.

She said the IT department must be able to develop customer-facing systems quickly using agile development techniques, and ensure the IT underpinning these systems receives the necessary investment. “We have put a lot of effort in agile software development and delivery. But we also need to continue to invest in major systems of record underpinning core business, such as financial reconciliation, supply chain, and customer data systems.” These are the slower developments that IT does.

Customers are demanding online and mobile services

“We need to be flexible to do IT developments at multiple speeds.”

Banks are also changing how they work in IT. Like in retail bank, customers are demanding online and mobile services. Barclays is a good example of a conservative organisation publishing apps and updates at a rapid rate. The bank’s Pingit app is a case in point. The app has transformed in a short time since its launch in February 2012, from a system to enable consumers to pay each other using a mobile phone to a service being used by merchants as an online checkout or to link to customers’ mobiles via adverts featuring Quick Response (QR) codes.

Like in retail bank IT developments are being driven by consumers. The bank recently outlined the success of its roll-out of Wi-Fi in its branches nationwide and revealed that it is about to embark on a project to introduce multifunction touchscreen devices, with the capabilities of the behind-counter systems, to serve customers in branches. 

Speaking to Computer Weekly earlier this year, Barnaby Davis, managing director of UK branches at Barclays, said the business justification is the need to ensure the bank was seen by consumers as digitally advanced. “We did not have a traditional business case, but we had a strategic intent to demonstrate our digital credentials,” he said.

 

 

 


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