As New Look plans its HQ move, a cultural shift is already afoot. Group business change director Adrian Thompson tells Joanna Perry why IT underpins this and of the changes involved.
It’s obvious that New Look is a business that isn’t afraid to make big changes. After all, it announced earlier this year that it would be relocating its head office to London from its present base in Weymouth. Behind the scenes many more subtle changes to the way the retailer operates are taking place, which are no less important to its top or bottom lines.
New Look group business change director Adrian Thompson is at the heart of this steady transformation. With his remit also covering IT, he is a firm believer in leveraging technology for the benefit of the business.
Thompson’s mantra is threefold: customers, world-class benchmarking and people. To focus on all three, New Look took the decision to invest in something called SOA back in 2007. If you are a non-technical reader, then don’t turn the page here, because New Look’s SOA story is really one of business change.
Standing for service-oriented architecture, the term refers to a way of developing and integrating systems so that they are aligned with business processes, and packaged in such a way that discrete services can be connected and re-used across the business.
Thompson says that for the constantly evolving New Look, SOA has enabled the company to bridge the gap between its processes and its business model.
New Look is working with Oracle, using its SOA Suite, and has so far delivered a four-phase programme that has already improved both markdown and purchase order processes. But to get buy-in for this, Thompson has talked to his fellow directors in their own language, while not shying away from explaining the top-level view of why the IT change was necessary.
“The first thing to do was to relate SOA to three things: customer benefit, brand benefit and people benefit,” he explains. “That brings SOA to life in a way that supports business strategy.”
“Conventional wisdom would be to not mention SOA at all,” he admits. However, Thompson and the IT department have successfully created an understanding of SOA within the business; it stands for different things from the Oracle Retek systems already in place, and is something that is helping the IT department to successfully deliver business change in a way that should benefit all stakeholders.
His decision to tackle this difficult technology subject head-on with staff means that even chief executive Carl McPhail is comfortable with the three-letter acronym. As Thompson says: “He will talk about SOA in general terms. He recognises that for the business to be successful we have to have world-class processes in place. He could talk about SOA investment being about allowing the business to perform to its optimum.”
And this goes for other users in the business too. “When anyone is impacted by a change to how they perform, it is important that they understand what’s driving this.” However, he adds: “I don’t expect that they would enjoy a two-hour conversation on the relative IT merits of SOA.” And they would probably not be in the right job if they did.
When it comes to turning IT strategy into real live business projects, Thompson is similarly pragmatic. “You start with the people and then processes, and then the systems tend to be a bit easier,” he says. Projects are 80 per cent about people and processes, and 20 per cent about systems, he adds.
A global platform
International expansion is one area that the retailer is focusing on at the moment. Thompson admits that in continuing to work towards being an international business, he and his colleagues are going to be challenged to work in different ways and at different speeds to that which they are used to.
However, he is keen not to start implementing different processes or systems for the business in different countries. He says: “It is one business that happens to work internationally, one group that operates in the best way possible. That’s why SOA is very important as core processes need to work in a way that will support the UK, France and Belgium.”
Similarly, the culture, as much as the technical flexibility, that SOA is creating will ease the move to London. Thompson says: “Changing how the business sits, with commercial teams in London and support teams in Weymouth, will change how we operate. But it is nothing more than process changes that we deal with day in and day out.”
New Look is now working on a number of projects and there will be continual improvements made in the areas of the business where work has already taken place. Thompson says that the retailer will continue to review the purchase order process, and might also look at improvements to its merchandise planning and other planning activity.
The culture within the business is to make it clear where business processes are succeeding or failing, with the use of measurement and at-a-glance reporting. This is easier to achieve in some areas of the business than others. Thompson wants to create a sound view of the business, but says it won’t quite get to the point that New Look manages by exception (where systems alert the business only when things are wrong).
A staggered approach
It has been a deliberate choice to tackle SOA project by project, rather than doing everything at once. It was important for the change to happen at a pace that the business could cope with.
Enabling the retailer to perform better is the goal. This means changes not just for the commercial teams, but the IT department itself. He says: “We are challenging the IT function to be more business-astute, and adding to the focus on delivery with a focus on design.”
In practice this has meant, for instance, that commercial teams have been asked to prioritise business projects that can generate the biggest return.
This has also required a change to what Thompson describes as the “old-school mentality to IT”. New Look’s IT department now helps the company to design how it does business. So any changes made are at a pace that the business can cope with and have been risk-managed.
There are also no hard and fast rules on the technology New Look will create itself or buy in. “When we look at a business opportunity, or an opportunity to support the business, we say: ‘Can we use SOA to build and support a solution?’ On occasion it is better to purchase a best-of-breed solution and integrate it using SOA.”
Thompson is clear that he has no crystal ball, but envisages that the whole of the technology platform supporting the business could be SOA-enabled within four to five years.
He says that he does not have good enough visibility of other retailers’ businesses to say for certain that this puts New Look ahead of the adoption curve, but does say: “I’m very pleased with the investment that we took. At the time very few people had done it.”
However, there is no room for complacency. Thompson talks of a need for world-class processes and says that it is always possible to find other companies – retailers or otherwise – that do things better or faster. The retailer tries to learn from their experiences.
This desire to retain business focus through change no doubt means that New Look will also be a company that others follow.
Service-oriented architecture in retail
You don’t need to understand how SOA works to see what it can do for a retail business…
New Look has improved business processes within its buying and merchandising department, greatly improving the accuracy and process using a markdown application that updates 40 million SKU store records.
Carphone Warehouse began an SOA project three and a half years ago to build software that can be reused across its business units. For instance, credit checking is a business service that must be performed in many places throughout the business, so it made sense to come up with a best practice process for this and use it everywhere.
Home Depot has used SAP NetWeaver to build a web-based front end to an application it created to help customers find stock at multiple stores. The application prints directions to each store and details how much stock each has. It also provides contact details for the department supervisor so that customers can ring ahead and make sure the stock is reserved for them.
Harrods has used an SAP-based service-oriented architecture to create a customer database that covers its multiple sales channels. The insight that this has provided has allowed it to develop a tiered customer loyalty scheme.