As technology creeps into every aspect of modern retailing, the role of the IT team has grown. Alison Clements considers how IT management should be structured in order to get the best results.

The structure of IT teams is changing as technology extends into every part of the business

Technology is the beating heart of modern retailing, powering every department and underpinning rapidly-evolving sales and marketing channels. Integration has never been so important, and having a single view of the customer is deemed vital for long-term commercial success. So now that its remit is so wide, who manages technology and how should changes to IT management be handled?

Firstly, many believe the role of chief information officer has changed irrevocably. Multichannel has created a need for those overseeing IT to be visionary leaders, with a deep understanding of the new ways of doing business, full engagement with the company’s long-term goals, and the ability to ensure IT is viewed by the board as business-critical. In the future, it’s likely there will be less of an imperative for senior IT managers to be technical in the traditional sense, and a growing emphasis on business understanding, and people and project management skills. Comet director of information systems Kevin O’Brien says: “The IT director of today must ensure he and his team can speak in business terms, understand the key priorities, challenge the business and deliver far more with far less than ever before. If you have this mindset and are up for the challenge, I don’t think there is a more rewarding role in retail right now.”

This new breed of chief information officer will probably come from an IT background, but will be overseeing IT operationally and strategically as it shapes the wider business. New job titles such as multichannel director are emerging, and those with both technology and retail marketing skills are rising up the executive ranks.

At fashion group Aurora, for instance, the former multichannel director Hash Ladha has become deputy managing director, while Ish Patel is now group omnichannel director, taking on responsibility for Aurora’s IT distribution, business development and multichannel teams.

The modern technology leader must also be a good communicator, sensitive to the needs of employees in all departments and adept at change management. Andrew Lambert, a partner at retail technology consultancy MCL, says it’s vital for IT project managers to appreciate how the end user – a buyer, merchandiser or store assistant, for instance – will react to new systems. Will these users have time to learn a complex new data management system, or additional in-store processes? “By all means tell the buyers that they have to use new software but unless it and the whole project have been designed with them – and their roles – in mind, don’t expect them to be able to do that and keep returning good results in their buying,” says Lambert.

Change has to be managed properly from the outset to ensure genuine productivity benefits. “That means involving key people from the start of a project to its successful delivery and including them in major decisions about the solution that’s being implemented,” says Lambert. It also means looking at real business benefits rather than generic ones often quoted by software companies, Lambert adds. Down-time while users are learning new techniques or new software needs to be taken into account, as well as the inevitably longer-than-anticipated bedding-in period of most new systems.

IT leaders who have not yet adapted could already be too late, O’Brien says. “The relationship with areas such as marketing and direct channels is now critical, with the IT director being challenged to deliver solutions in technologies that wouldn’t have been thought possible even a couple of years ago – social media and mobile are good examples.” But there are benefits as well as challenges – IT staff often feel more empowered and engaged because they know their work is so important to the business, O’Brien adds.

Fran Riseley, deputy managing director of consultancy Martec International, regularly speaks to retail IT directors to monitor views and IT investment plans, and says the chief information officer community in UK retail is becoming increasingly commercially aware.

She reports that about 80% of IT directors are aware of the business’s needs today, compared with 50% nine years ago. “It’s become clear that IT directors are starting to know the whole business rather than just consider themselves the technical experts managing back office and support systems,” says Riseley. Martec International’s Multichannel Retailing Report 2010/11 shows that for retailers aiming to become truly multichannel, IT budgets will inevitably rise, and the role of the chief information officer will get wider. Investment in multichannel platforms and integration of systems will require robust IT management and far greater inter-departmental collaboration.

O’Brien says it’s crucial to work in close conjunction with the business strategy – IT plans need to dovetail with the business plan and the operational requirements. He says the absolute objective of the IT leader is “to ensure that retailers meet the short-term and long-term needs of their customers, especially in the current climate”.

Having a business solutions team that works alongside the IT team is something he has found works well at Comet. The business solutions team works alongside different departments, and it helps IT staff stay up to date with what different teams need. “This team works with each of the business functions to ensure we understand their short-term and long-term requirements based on their own three-year plan and current financial year targets,” he says. The aim is to spot where costs can be cut, but also to understand when higher investment is vital for competitive advantage – for example, where a new multichannel platform is needed. Once the business solutions team has built trust by delivering good results for users, it becomes possible for it to challenge them sometimes – suggesting a process change could be made instead of a major investment in a new IT system, for instance. “This is about having the confidence and established relationship with the key business stakeholders, so that long- established attitudes of ‘we’ve always done it this way’ can be changed,” says O’Brien.

In the new multichannel landscape, it helps to think of technology as the enabler of brand experiences, says Nathan Williams, digital strategist at brand consultancy Wolff Olins.

This requires far more integration between IT and departments such as marketing, merchandising, supply chain and store ops. “IT should see its role as an enabler, but also as a champion, letting others know what’s possible,” says Williams. “Likewise, other teams need to be clear to IT about what they need.

In so many businesses, a lack of communication is endemic.” What’s needed is a clear process that allows everyone to talk to each other, making sure IT staff know what people want and ensuring users know what IT teams are doing.

As ecommerce grows in importance and  departments such as marketing becoming more reliant on technology, the IT department is no longer an island and it can no longer be staffed by purely technical people. For those up to the challenge, it’s an exciting time – but with technology moving so quickly, the pressure is on IT bosses to ensure they keep up and evolve with the business.