Seven months after taking charge of the IT at consumer goods giant Reckitt Benckiser (RB), Darrell Stein is pushing ahead with a strategy to increase digital revenues to at least 10% of sales in the next five years.
According to Stein, RB’s digital revenues are “negligible”, so the aim is to create a strategy that generates significant sales and is heavily focused on data analytics.
“We are trying to make sure we've got a decent return on investment on everything we do, so we can claim that for every pound spent with IT projects we can give a return of X – and we’re really clear about that in terms of benefits,” says Stein, in his first interview since quitting as Marks & Spencer CIO last year.
“It would not be fair to say RB was totally lacking digital capability when I joined. What is fairer to say is that I have done work around making the most out of some of the winning systems that are in place and putting more money behind them to make them work harder,” he tells Computer Weekly.
“It’s all about trying to maximise the commercial value from our technology spend.”
Focus on data
Supporting Stein’s digital vision is a programme dubbed Connected Company, which is broken down into separate strands that include improvements to the tools and data used by the sales force interacting with customers and office staff, as well as RB’s consumers.
The idea is to allow the firm to tap into “high-quality data, coming not just from internal sources, but external sources as well”. To that end, Stein’s team is working on enabling systems and data sources to communicate while simplifying the IT estate.
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One of the pillars of the programme is Connected Colleagues, where RB is looking to provide “the right apps and tools for staff in the digital era”. An example is the roll-out of about 90 telepresence units in 2014. The company is also introducing Microsoft Office 365 globally over the next year.
“We want to ensure that everybody has up-to-date, consistent software and can communicate with each other, and that everybody has email boxes which are sized appropriately and so on. We also want to make lots of things like purchase orders, holiday and expense approvals available on mobile,” says Stein.
“We want to place digital right at the heart of the company. We are doing all these things right now – I would call that connected colleagues basics.”
On mobile policies, Stein says that even though Reckitt Benckiser has the facilities for people to bring their own devices to work, the approach has not been very popular.
“Even though we encourage people [to use their own devices], and we are very happy for them to do so, there has not been an enormous take up,” he says.
The Connected Consumer strand of the digital strategy is about how RB connects to its customers directly and can get insight from the engagements that it has in its various brands, which include household products as diverse as Dettol, Nurofen, Durex, Air Wick and Scholl.
We want to place digital right at the heart of the company
Darrell Stein, Reckitt Benckiser
“That happens through social media, as well as an integrated, joined-up CRM [customer relationship management] conversation, so that at any point consumers touch our organisation, we have a record of their history and their previous contacts,” says Stein.
RB is using a variety of different CRM tools at the moment, and it is an area where the company wants to consolidate all its technology and data.
“That’s something we need to consolidate, and we’re linking those efforts to our ERP [enterprise resource planning] platform so that we only store the consumer details appropriately and securely, and just in one place,” says Stein.
Salesforce.com tools are used in some areas of the organisation, but the investment in an existing SAP ERP platform means the company has chosen to focus on that product.
“The [CRM] products were very similar, and there’s not much to choose between them. But the integration costs were cheaper, because we’ve already got the investment in SAP, so it’s just leveraging what we’ve already got,” he says.
Retail technology support
The Connected Customers strand covers the technology supporting RB’s business with its retail clients. For this pillar of the project, Stein’s team will be ensuring that data supports its interactions with wholesalers or retailers.
“We want processes in areas such as the warehouse to be completely connected. That leads to a data-driven supply chain, where we’ve got real clarity about what’s going on in our processes at any one point in time,” he says.
“Being completely connected means we are making the right amount of goods that we can sell and we’re not trying to sell goods we can’t possibly make.”
On the project strand that supports the company’s sales staff, dubbed Connected Salesforce, the goal is to enable employees to provide and display product information in an improved way, as well as digitising sales-related documentation.
“We want our sales force to be able to provide all the information about a product and why that product is something the store should sell based on data, all on an iPad,” says Stein.
“And when the store wishes to place an order, it’s all available on the iPad for the salesperson to do it, or the person in the store can procure the product themselves through a portal, which we’re putting in place.”
According to Stein, providing tablets for RB’s sales team is paying back, because it gives staff the ability to place orders immediately, rather than submitting paperwork for the order to be processed at a later date.
“You know you’re making a much more informed conversation happen between the salesperson and the customer, which in our case is the wholesaler or the retailer.”
One of the management-related changes that Stein has introduced since joining RB is what he calls a two-speed IS function, which enables innovative projects to be run in parallel with the technology needed to operate the business.
“In one part of the organisation we’re using waterfall and all the traditional methods in change management and so on. In the other part, we’re asking people to work with small suppliers, take a few risks, be innovative and get stuff done really quickly,” says Stein.
Because we’ve come to the party a little bit later than some other organisations, that gives us a chance to do a leapfrog in terms of technology
Darrell Stein, Reckitt Benckiser
“That’s what we’re calling the two-speed IS function. And to achieve that vision, we’re trying to set up an in-house digital factory, which is going to help us support that vision across the globe.”
Alongside the Connected Company project, RB is rolling out improvements and new modules of its global SAP ERP platform in a multi-year project, focusing initially on modules that deliver the highest value, such as procurement. However, Stein stresses that the ERP project is not stopping his team from carrying out the innovations in the digital strategy.
“We are not waiting to finish our ERP project before we start delivering some of this data-related stuff. Our ERP ‘plumbing’ project goes on in parallel, while trying to do some of the more modern, consumer-facing projects,” he says.
“We’re now trying to put in place more modern technologies and ways of collecting data so that we can extrapolate the complexity from those existing systems and then present data insight in a very simple way. But we will be doing that without needing to build big massive, brand new data warehouses, or stripping away existing systems and spending big fortunes on that.”
Stein is a proponent of cloud and open-source tools. At RB, he is making extensive use of Amazon Web Services (AWS) for hosting “to do things faster and more cheaply”, as well as technologies such as Hadoop for data analytics.
“Because we’ve come to the party a little bit later than some other organisations, that gives us a chance to do a leapfrog in terms of technology. Some of the open-source technologies are now quite a lot more mature than they were two years ago,” he says.
It’s all about making sure IT is delivering growth and additional revenue for our business, rather than being a back-office services function
Darrell Stein, Reckitt Benckiser
“Some of the hosting solutions are also more mature than they were a couple of years ago, so we can go straight to using some of those things, whereas perhaps others haven’t. And that will allow us not to waste big sums of money.”
One of the new technologies Stein’s team is using for data analytics is Birst, a product that allows the company to process large amounts of data as quickly as possible and create datasets for predictive marketing.
“We can provide our marketing teams with information about the likelihood of sunshine, for example, so we can market our [hair removal] product Veet. Or when it’s likely to be a cold and flu season, market some of our healthcare products at that time,” he says.
“That’s so we can work out when the right time would be for us to spend our marketing dollars – and that allows us to get a great return on our investment versus what we’d have spent before.”
According to Stein, the analytics capability is still being developed, but his team is “already starting to deliver real growth” to the business: “It’s all about making sure IT is delivering growth and additional revenue for our business, rather than being a back-office services function.”
Despite the fact there are more IT projects going on at RB, tech spending has not gone up.
“It’s more about a shift of what we’re spending money on. I’ve tried to shift as much as we can from 'run' into 'change'. So we’re spending as much as we can on giving new and transformative technology to the company,” says Stein.
“And even within change, I’ve tried to shift as much as I can from back-office stuff to real front office, which is all the initiatives around Connected Company, all of which are designed to raise the commercial value and increase revenue for RB.”
Building digital capability
RB is in the process of hiring more professionals to support its data efforts and boost its in-house capability. According to Stein, the company will be hiring at least 50 engineers in 2015.
“We want people with more modern engineering skills to help us drive additional revenue for the organisation – and do it ourselves. That is so we can be quicker and don’t have to pay a margin every time we want to change something,” he says.
RB’s main IT supplier is SAP, but other technology companies it works with include IBM, HP, Wipro, Infosys and Accenture.
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Stein is going through a process of “making supplier relationships simpler”. The idea is to align suppliers to some of the company’s digital objectives and ensure relationships are “clear and easy to digest”.
“There is no point in having a front part of the organisation which operates really quickly, and a back part of it which operates really slowly, because you won’t be able to move as fast as you would like,” he says.
The IT function has changed in recent years, says Stein. It’s no longer a back-office function and it’s been given the opportunity to drive revenue.
“We are called information services at the moment, but probably should be called something else – not the information revenue department, because it sounds too close to IRS – but we want to deliver based on data. It’s all about revenue and return on investment and we are going to move the focus from the back office to the front office,” he says.
Stein hopes that in the next 12 months, the perception of the IT department at RB will have shifted from a back-office provider to a function that has real business impact.
“We also want people to say that we deliver on our commitments and that they can see a real difference in their working lives. If we can get those things in a year’s time, I’ll be a happy man,” he says.
“My job is to make sure this happens, and the way we’ll do it is by delivering revenue. So if we’re delivering loads of revenue based on our IT investments, that will convince people. It’s about letting the numbers talk for themselves.”