Simon Mouncer’s job at BrightHouse is to help ease the retailer’s growing pains as it continues with its ambitious expansion plans. He talks
to Joanna Perry about what this involves
Adolescence is often a difficult time, even for retailers. At rent-to-buy specialist BrightHouse, now a teenager after opening its first store in 1994, the pace of growth it is experiencing as it capitalises on the consumer credit crunch brings challenges.
BrightHouse head of business change and IT Simon Mouncer says that almost every decision in the business is influenced by its overriding growth goal. “We are looking for a 25 per cent increase in the store estate year on year, which would mean doubling the store estate in the next four to five years,” he says.
“In some respects we have a simple strategy to grow the business by opening new stores and grow the customer base in our existing stores. That’s the first box that change has to tick.”
Mouncer, who joined BrightHouse as head of commercial finance about 18 months ago, took on his new role before Christmas to nurture the business change necessary for the growth programme to succeed. He says the business change aspect of his role includes co-ordinating the change, and the degree of growth will require much more change than people in the business have been used to.
He explains: “In the head office team, the vast majority of staff have been at BrightHouse for between two and four years. They may well have done change in previous roles, but we must recognise that the vast majority of [non-head office] staff at BrightHouse have not done change before.”
Mouncer joined BrightHouse from Marks & Spencer, where he worked in “myriad commercial finance roles”. One of these roles had him embedded in the IT division, looking after finance for 400 staff and a £150m budget. He has also worked on IT development projects, and moved into change programmes while at M&S, including an 18-month project to replace its retail systems, which has given him a real feel for retail technology.
Technology will be important to BrightHouse as its expansion continues, but Mouncer’s remit runs much wider than IT when it comes to planning for, and managing the impact of, a growing business. For instance, he says: “The supply chain team are conscious that the business will grow, and they are constantly evaluating the supplier base for whether suppliers can be relied upon.
“On the HR side it is about a pipeline of staff coming through at store management level. We see that continuing, but the scale of growth means that we will have to have a mix of external people too.”
At store level, this could mean a rethink of the tasks that are carried out locally. Staff in stores manage both sales and debt at the moment, but Mouncer says that this model will need to be rethought, because it may make sense to centralise some activities as the store portfolio continues to grow.
He explains that while centralisation might just sound like a way to save money, it is also about increasing control. “If we can take some activities out of stores, that has to be the right thing to do if it doesn’t undermine the local relationship with the customer base,” he says.
Another issue to be managed is the scaling of the retailer’s service organisation – which works out of eight customer service centres to deliver and collect products, and also deals with repairs – to match the store growth.
As well as all of this, Mouncer will of course oversee some major IT changes that have been instigated to back the planned growth. When he came into the role in November, the first thing he had to do was look at what was already happening in the business in terms of IT and business priorities, and make sure that they were all aligned.
The retailer was planning two major developments – one was an ERP project to introduce new functionality for the business’s core systems; the other was to either upgrade or replace its EPoS system. But Mouncer got BrightHouse’s board to redefine the business’s priorities and that led to a rethink of the technology projects.
BrightHouse has decided to develop a replacement for its existing EPoS system internally. This has made development of a new ERP system less of a priority, and allowed BrightHouse to focus on one IT development project rather than two. The primary reason for investment in ERP had been to introduce new stock management modules – BrightHouse wants every store to be able to see every piece of stock across the whole estate. But the retailer realised that it could get the visibility it wanted by incorporating the functionality into the new EPoS system.
“We want every location involved with stock to have complete visibility of stock and the status it has. We want to optimise our stock turn and limit the amount of money tied up in stock. Also, from a customer’s point of view, they want confidence that whoever they talk to in BrightHouse will be able to tell them about their order,” Mouncer explains.
The roll-out of the new system is likely to begin in January next year, following a pilot this year. The team creating the system includes staff from a specialist Indian software development firm. BrightHouse is using an agile development methodology to create the new system. This means that it will be delivered in increments, with each piece of functionality tested along the way, rather than developing the whole system and then discovering that things aren’t working correctly.
The retailer is also looking at how it can use a service oriented architecture approach to IT development, to make improvements to its business. “We don’t want to have to do this all again in two years’ time, so we need to put plenty of hooks in,” Mouncer says.
Around 50 people, including contractors, are working within the IT team, and the group of software developers working offshore is up to about 30. Of the 50 in the IT team, just over half are working on the development of the new EPoS system.
Working with a software supplier based halfway around the world has meant the retailer faced another learning curve. “Like others doing offshore for the first time, it is easy to underestimate how much time you must take to develop the relationship,” Mouncer admits, adding that although BrightHouse invested heavily in this, it could have done more.
He explains that when the retailer was initially communicating its requirements, which is done on an ongoing basis due to the agile development process, it had some communication issues and eventually sent someone out to India to make sure that they were talked through properly.
Meanwhile, Mouncer says that changes to the ERP system are still a possibility, since it has had its present system for some time, but this is now a lower priority. He adds that investment in this area would have to provide additional benefit for the retailer.
“We still have to decide what we want to do,” he says.
However, one area where BrightHouse is much less keen to innovate than other high street players is the web. The retailer’s customers make weekly payments either in cash or on a debit card. Customers must take cash to a store, but debit card transactions can also be processed over the phone. Although BrightHouse does have a website, it is non-transactional, and is used to provide basic company information and to generate sales leads that are used by a telesales team based in Scotland.
Mouncer says: “I can see a time where we would offer internet payment, but it is not where we want to be at the moment.”
The retailer opened 25 stores in 2008, and plans to open around 20 more this year, so even in the short term Mouncer will be kept busy supporting the business as it matures beyond its teenage years.