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CIO interview: Neil Holden, IT director, Halfords Group

Motoring and bicycles retailer is growing its use of cloud, expanding on data analytics and exploring new technologies such as artificial intelligence

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Halfords Group is pressing ahead with a business-wide IT modernisation that includes evolving its use of cloud computing to support a new data analytics strategy.

The 127-year-old retailer of car parts and service, bikes and outdoor equipment is undergoing something of a technology renaissance, led by IT director Neil Holden, who joined the company in November 2017. New CEO Graham Stapleton arrived in January 2018 and introduced a strategy with a mission “to inspire and support a lifetime of motoring and cycling”.

The new business plan has prompted Holden to devise a new plan for IT. The goal, he says, is to be present in clients’ lives, from the moment a child’s first bike is purchased through to when that individual buys their first car and becomes a regular customer for their annual MoT.

“From a technology standpoint, the lifetime aspect of the overall strategy feeds really nicely into [determining] what data we have, how we use it for the benefit of customers, how and where it is hosted, as well as what can be done around predictive analytics and artificial intelligence,” Holden tells Computer Weekly.

In addition to the data-related projects, Halfords’ other priorities for the next 12 months include the introduction of a new replenishment system and the roll-out of tablets across retail locations to facilitate functionality such as mobile payments.

Evolving analytics

Halfords has what Holden describes as a “very mature single customer view”. The company handles 22 million customer records, of which 75% are attributed to purchases. It also has a large database of vehicle registration numbers, which are correlated to clients.

The company is looking to evolve from what he says is a “very structured and retrospective” dataset into “predictive and intelligent” aspects of information by combining insight from stock and merchandising with weather forecasts and other internal and external sources.

“We are building up a very detailed picture of our customers and how we can facilitate and enable their life choices to our products and services,” says Holden. “That’s all driven through data.

“We can use data-driven insights for the benefit of customers in terms of what they might want to buy, and then orchestrate products and services for them, either through the website or through digital technology in stores.

“But we can also use that for our own ‘what if'’scenarios from an operational point of view – how much stock we need to buy and how much needs to be ranged, how stores are graded. We can essentially make more intelligent decisions and more outcome-based decisions using the data we’ve got.”

“If you don’t identify your data strategy and the data models that underpin that and what’s right for your organisation, you can get lost in the technology and the platform aspect”

Neil Holden, IT director, Halfords

The main challenge in that analytics evolution, says Holden, is to deal with the overwhelming rate of change to pick and choose which technologies are appropriate to use. This becomes particularly complex with artificial intelligence (AI) and robotics, which are technologies Halfords wants to embrace.

“It’s a tricky quandary,” he says. “Predictive analytics, AI and machine learning absolutely have a place in retail, but it’s about deciding where and how much we want to do through the next year, and that’s where we are the moment.”

Halfords is already working with more advanced tools, such as the in-built learning capabilities in Microsoft’s Azure platform, as well as Einstein capabilities provided by Salesforce, which is being used at the company’s contact centre along with other tools from the cloud software provider.

Holden expects that by next year, the company will have built “quite a wide data lake” using technologies such as Azure. The plan is to do some “heavy analytics” on that to obtain in-depth business insight, he says.

Ramping up cloud

Intentions to do more with data feed into the company’s plans for cloud computing and that’s another area that is under review. The idea is to start a careful departure from the company’s predominantly on-premise model. 

“If we want to operate as a truly multichannel organisation, we need to decide who we partner with [for cloud provision] and that’s what we’re deciding at the moment,” says Holden.

“All of this kind of wraps around in terms of the operating model and the speed and agility that we need to show. As an internal IT organisation, you can often be too internally focused, not embrace these emerging technologies and being quick to work with them.”

The intention is to increase cloud use, but that doesn’t mean Halfords is planning a full-on migration, says Holden. “We have not said that we will not have physical datacentres. Clearly, I think there will be far fewer physical datacentres in the future than there are now, but we’ve not decided exactly how quickly we’re going to do that.”

Whereas a new business would have on-demand cloud services from its inception, that becomes more complex for a traditional organisation with multiple businesses like Halfords. According to Holden, it is also not cost-effective to move certain legacy systems to the cloud.

“Many people think everything has to go to the cloud, and they plough ahead with a plan to do that without really looking through the pros and cons and the timeliness of it,” he says.

However, anything that Halfords buys now is digital, mobile and cloud-first. An example is the firm’s website, which has been replatformed on Salesforce Commerce Cloud. Halfords has also been working with Microsoft around cloud and integration, with an ongoing Office 365 implementation across its four businesses, covering hundreds of staff at 452 retail shops, 316 garages and a number of performance cycling shops.

According to Holden, strong competition among cloud providers is beneficial for a retailer like Halfords, and having an agnostic platform in future is also a consideration as the company reviews its strategy. Just as with data analytics, choosing what to go for in cloud, considering the pace of technological change, is constantly on his mind.

Data skills

Holden says he has relied a lot on his team’s expertise and has hired specific data skills in areas such as data architecture to boost the firm’s internal capability. Working with third parties that are technology-agnostic also helps Halfords make better decisions.

“Working with some very small, but niche, data science organisations has given us some real insight that I don’t think we’d have got from the bigger consultancies,” he says.

“The platform, to an extent, is a commodity, and if you don’t identify your data strategy and the data models that underpin that and what’s right for your organisation, you can get lost in the technology and the platform aspect.

“Technology decisions need to come after the data strategy is clear – what data you need to store and where, how that needs to be ingested and for what purpose. Be really clear on that and have that design first, and then you can find the technology that supports it in the best way.”

This detachment from specific technologies is also one of the key points around Holden’s vision of the primary function for IT at a business like Halfords. He says it’s all about enablement and productivity, rather than technology stacks.

“You’re trying to achieve these outcomes, realising there are technologies already out there that support them,” he says. “That is quite a challenge, but we are headed in the right direction.”

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