Aimia – the company behind one of the world’s largest retail loyalty programmes, Nectar – is undergoing significant IT improvements to make the most out of customer information.
As well as Nectar in the UK, Italy and Chile, Aimia operates loyalty schemes such as Air Miles and Club Premier. The company is now investing in its IT function and has hired former GlaxoSmithKline IT strategy chief John Harris to the newly created role of vice-president of global enterprise architecture.
Harris, who joined Aimia in November 2012, says his appointment is part of a renewed push to optimise the technology that drives the business.
“We have a very clear high-level IT roadmap and will be making a number of global investments, so I will be driving and enabling that programme over the next couple of years,” says Harris.
“The challenge overall is going to be a classic architectural one, which is making sure we are set up properly to drive change."
Focus on analytics
A key area of focus for Harris is data analytics. Aimia recently signed IBM to supply its Unica software for marketing campaigns.
The IBM tool is a building block of Aimia’s overall technology strategy, says Harris. While it will serve Nectar’s specific aims of increasing customer loyalty in the UK, the software will also be used by several of its businesses globally.
“This is a powerful engine which enables the right offer to be identified for the right customer at a time – and communicated via a channel – that suits them. It also measures whether the offer was actually taken up and learns from that data to optimise decision-making next time round,” Harris says.
“This is a critical aspect of adding value to loyalty programmes and very valuable for Aimia to stay at the leading edge of loyalty. This tool is a big building block of our overall strategy and some of our businesses will leverage that globally."
Historically, to enable 4,000 people around the world to communicate required major investments around datacentres and so on, but now the challenge is leapfrogging the traditional thinking and going into the realms of cloud, using tools consumers are familiar with
John Harris, Aimia
The IBM deal follows an analytical reporting joint venture between Aimia and Sainsbury’s, which will provide suppliers with multichannel products offering insight into the retailers' customers based on Nectar data. The analytics-based offering of this new organisation, Insight 2 Communication (I2C), will provide an advertisement outlet with channels including till coupons, direct mail, media in and around stores, email, mobile and the Sainsburys.co.uk website.
The numbers projected for I2C are ambitious: its campaigns are expected to reach over 22 million customers a week in stores and more than 165,000 shoppers every week through Sainsburys.co.uk.
For the future, Harris cites open software frameworks such as Hadoop as one of the most exciting and relevant technologies for the company, although no additional decisions on new data analytics products have been made.
“We already have a level of capability in analytics, but we are watching that closely and in-memory technology is very relevant to us. It is early stages now, but soon we will be making some decisions relating to data analytics - it is inevitable, as the technology in that space is moving at a phenomenal pace,” he says.
Consumer-facing technology is another priority when it comes to Nectar in particular. Harris says Aimia wants to make the digital offering a lot more relevant and targeted than it is at present.
“Digital is exciting, but we have to get it right. We have an app for Nectar, which gives some insight and a different way of interacting with the end customer, but we want the app to give the right deal, at the right time and context,” he says.
“For example, if I walked past Sainsbury’s on my way to work in the morning and received an offer, I am probably not interested as I am on my way to work – it might even be intrusive. Finding a way to do things at a time when the consumer welcomes them and wants them is the tricky bit.
“The barrier is not technical, but the innovation we need is around the model - you could give people a lot of attributes they can choose from, such as times and days of the week people are interested in getting deals, but then you are introducing a lot of complexity. The key is making it as easy as possible to the user but also very relevant to them.”
Change to the core
Aimia runs around 30 systems that power its various loyalty schemes, including Nectar. The big change here is around an imminent, large investment in a single global enterprise resource management (ERP) platform that can be used across the group.
The set-up today is a mix of systems that have been heavily customised over the years. Unusually though, Aimia will be replacing that vast array of software by a new internally built system rather than buying off-the-shelf.
“The engines we use to run our loyalty businesses are all different but have some core similarities, so the idea is to get to a point where we have a single and simple way of doing things,” Harris says.
“Historically, we have grown up with several solutions – and that is a classic ERP problem. My experience of governing and running ERP in the corporate world is, of course, very relevant here – especially around ensuring that something works globally but also from a service perspective, while we make changes along the product lifecycle to increase efficiency."
Reviewing the legacy
Dealing with legacy while driving modernisation is a common issue for IT leaders across all sectors and that is true of Aimia, comprising one of Harris’s challenges.
“When you are growing fast from separate components, you see lots of legacy and think of how can you get up to date, but there are also some pieces that just aren't there - for example, we have never made a major global investment in internal collaboration and communication tech, but we will do that now,” he says.
“We can do that in a traditional way or go to where some companies are right now, with cloud enterprise offerings - if we don’t have to build our own infrastructure for internal use, why would we? We will build systems and run them when we can see a major competitive advantage or major risk."
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Harris says that decisions around adopting cloud and service-oriented platforms still have to be finalised, but he anticipates that, similar to the data analytics example, these models will soon become a reality at Aimia.
“Historically, to enable 4,000 people around the world to communicate required major investments around datacentres and so on, but now the challenge is leapfrogging the traditional thinking and going into the realms of cloud, using tools consumers are familiar with. I do think we will be able to do some exciting things around consumerisation - and not just build everything on the inside,” Harris says.
“So the big discussion will be around whether we should just buy services off-the-shelf or do we build our own capability - that will be a major piece for us."
Harris says that running global IT architecture at a company that, from an IT standpoint, is going through a lot of growing pains means you have to "look not just at the end goal, but also a bit more at the journey.”
“That means establishing which roles we need globally, such as architects, product and strategy leaders, as well as deciding whether we want business functions to leverage those systems globally or make it all regional,” he says.
Another major aspect of Harris’s work is global governance. This requires Harris to get enough detail about what is being done from an architecture standpoint and the decisions business functions will have to make during the transformation.
“This information [for stakeholders] doesn’t just appear by magic, you need to have a global picture of all the technology to be able to do those things. There are things that mature companies grew up with that just work, which are sometimes taken for granted. Over here we need to do those things too – it is simple but important,” he says.
In order to do that, Harris will be drawing on his previous IT leadership experience of 18 years at GlaxoSmithKline (GSK), where he left as a global architecture and IT strategy chief, to help Aimia improve the way it runs its technology.
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“My experience in GSK is huge, there are lots of things I have seen working – or not. The decision-making process, when do we make savings, when do we drive efficiency. I spent a lot of time working with emerging markets that aren’t the same and don’t have the same infrastructure capabilities as the US, UK or Canada and that is relevant here,” says Harris.
“My external networking also helps - I know where to get information and insight about the things I am involved in here. When the business is successful, you tend to be inward facing and head down, so you really miss that outside perspective, whether it is from vendors, partners or IT professionals. I bring that contribution, which is going to be extremely valuable.”