Julian Burnett, CIO at House of Fraser, is a man on a mission. Not content with helping the retail giant make the most of technology systems and services, Burnett is also pushing a business-wide transformation agenda to help the organisation refine its supply chain process, increase customer satisfaction and boost the bottom line.
“We’re trying to create a level playing field across the channels we operate and the touchpoints our customers choose to interact with us,” he says. “The combination of physical space and digital technology is beginning to shift the operating model of House of Fraser quite significantly. That’s very exciting.”
“It’s a great brand and it has provided me with a great opportunity,” he says. “I was fascinated in how the organisation had been performing and how it could transform itself through technology into a next-generation department store.”
Creating a new management agenda
In addition to his role as CIO, Burnett is responsible for overall business transformation and supply chain improvement. His additional leadership duties are due to the embedded nature of technology across these functional areas. Burnett assumed the supply chain role last autumn, and says it has been interesting to stretch his accountability into engineering.
“It’s a part of our business that needed to transform quickly through technology,” he says. “We’re treating our supply chain as a machine and my accountability spans distribution, logistics and operations from supplier through to customer, whether they’re in the store or at home. It’s a fascinating role to hold because the management of goods, from factory gates to customers, requires a blend of physical and digital worlds in a real-time context.”
Although the blend of roles is novel, Burnett says other retailers are also recognising the potential benefits of blending technology and supply chain responsibilities. The plus-points of the combined role are clear. “It’s exercising my intellect,” says Burnett, who is embracing the challenge. “We’ve already made significant changes to our supply-chain operations, and we’ll be looking to take advantage of automation in the next 12 months.”
Refining supply chain processes
On joining House of Fraser, Burnett undertook a significant period of research where his team analysed risks and opportunities in the supply chain. The firm was about to commit a multimillion-pound investment to a brand new, integrated facility in Peterborough. After his period of research, Burnett took a counter-intuitive approach and worked out how the business could improve its supply chain processes using existing resources.
“We worked out we could achieve what we needed for far less in time and money by restructuring,” he says. The firm focused first on its commercial relationships, consolidating its logistics operations through XPO and reducing its reliance on as many as 13 outbound dispatch providers to just a single supplier, Yodel. “That’s given us a huge uplift in transparency for customers as well,” says Burnett.
When it comes to supply chain changes over the next 12 months, Burnett points to the introduction of a new operating model in the firm’s distribution centres. The firm is working with specialist provider Dematic to introduce various technological components, including voice-based and automated picking. In short, physical picking processes are being integrated with software systems.
The result, says Burnett, will be an end-to-end production line process. Picking and packing processes will be identical, regardless of whether an order is processed for delivery to a customer or for store replenishment. By next summer, that process will be consolidated into a primary site at Wellingborough, Northamptonshire. “That will give us some very significant economies of scale,” he says.
Building capability and developing e-commerce
Beyond work around the supply chain, Burnett says one of his key achievements since joining the retailer is the creation of a credible technology team. He inherited an old-school, back-office IT function that lacked the capability to help the business transform. Burnett has brought together a new, business-engaged team in a fresh organisational structure.
“We’ve done a good job of populating that team with talent, both from within and from outside the business, through some significant hires,” he says.
“There’s a career development framework that allows people to see the opportunities and skills requirements. That’s been based around industry standard definitions for the various roles. We’ve also created engineering capability to develop our e-commerce operations.”
“My accountability spans distribution, logistics and operations – it’s a fascinating role to hold because the management of goods, from factory gates to customers, requires a blend of physical and digital worlds in a real-time context”
Julian Burnett, House of Fraser
Burnett says the focus on online retail represents another of his key achievements since joining House of Fraser. He inherited a programme of work around the replatforming of the firm’s £600m e-commerce operations. The programme was in trouble when he joined, but Burnett has turned the initiative around and delivered a selection of packaged technologies on top of Microsoft’s Azure cloud computing platform.
“We think we’re one of the largest [retailers] globally to have built our e-commerce operations on Azure,” he says. “That new setup is supporting us well in peak events, like Black Friday and Christmas. What we’ve discovered is that it’s completely fine to run key business services on the cloud.”
Using business intelligence wisely
Burnett also points to the transformative work his team has undertaken regarding big data. Like other retailers, House of Fraser collects huge amounts of information. However, Burnett discovered on joining the firm that employees were struggling to turn this information into actionable insight. Rather than using data to boost performance, workers were producing hundreds of reports, many of which Burnett believes added little value.
The firm’s approach to analytics was restricted to large grid reports that were often printed and physically brought to meetings. This approach frequently resulted in wasted time and conflicting data. The business intelligence (BI) team, meanwhile, would expend considerable effort validating data and gathering business requirements to build a single dashboard.
Burnett has taken a fresh approach to big data. He recently led the introduction of nGenBI, the retailer’s analytics initiative. As part of that strategy, he has rolled out the first in a series of interactive dashboards through BI tool MicroStrategy 10. The implementation is aimed at transforming the way employees use and consume data.
The nGenBI initiative has allowed the BI team to eliminate data processing bottlenecks and instead focus on higher-value reports. Self-service data discovery enables House of Fraser’s business users to create interactive dashboards in as little as 20 minutes. This allows employees to visualise data in their attempts to improve stock management, reduce returns and improve customer service.
“There are many benefits,” says Burnett, referring to the implementation. “We’ve put out dozens of visual tools in support of our business activities. We’ve collaborated across functions to look at stock availability and reconciliation of differences in the organisation. The tools allow us to identify much more quickly historical patterns and future trends.”
Assessing transformational success
Burnett says House of Fraser recently established its three-year business strategy. The firm’s 17,000 employees, and key partner organisations, have been shown the aims of this strategy. The organisation is continuing its focus on transformation. The initiatives Burnett has already mentioned, such as supply chain automation and big data exploitation, will be key going forwards.
“It’s about giving people permission to change and a role in that transformation process,” he says, suggesting there will be five distinct achievements the retailer will look to fulfil in the next three years.
These five key aims will be supported by more than 180 project initiatives that focus on the following areas: products and services, customer partnerships, local community engagement, roles and skills, and technological streamlining.
“I’ve got accountability in the executive team to look for every opportunity to streamline systems and processes,” says Burnett. “The aim is to use data to support those efforts across a wide range of business areas, including merchandising, warehousing and logistics.”
Julian Burnett, House of Fraser
Burnett says the ability to rely on strong business indicators and measures will be crucial to assessing the success of transformation. He says his business intelligence team is currently using MicroStrategy to create an organisation-wide dashboard that will demonstrate connections, actions and improvements throughout the programme.
“We want people to understand the role they can play within the transformation programme,” he says. “We want improve their access to information and we want to create a strong, central BI capability to provide coaching and guidance to everyone in the business.”
Overcoming potential challenges
The successful adoption of new technology, therefore, will play a key part in organisational change at House of Fraser. Burnett points to the important role played by internal communications platforms. The firm is currently implementing a new engagement system based around the unified communications technology offered through Microsoft Office 365.
Yet the introduction of technology, and its adoption by staff, is not the only potential barrier to business transformation. Burnett says executives across UK retail face similar challenges, such as a tough economic climate and the uncertainty surrounding Brexit.
“Some of the actions we’re taking regarding our supply chain are to help mitigate some of the labour risks we’re seeing increasing in and around the areas where we operate,” he says. “Scarcity of seasonal labour is becoming more problematic, so automation is on the agenda for most retailers to help increase, or at least hold, productivity with lower labour forces.”
Internally, the firm is implementing structures to help smooth anticipated bumps along the transformation journey. “We want people to become involved in change and to absorb the positive effects of change,” he says, before suggesting the transformation project has a simple aim: “We want to create a much more profitable business.”