Managing Change: Three Phases of an IT Organization Transformation
The CIO of London-based home improvement retailer Kingfisher had to optimize operations and give business leaders a strong voice in governance before he could innovate with technology.
Thu, January 31, 2008
CIO — Our change journey at Kingfisher, the world's third-largest home improvement retail organization, began three years ago, when we started to transform distributed line-of-business IT functions into a centralized, global organization. Like any journey, there are stages. This one had three. First, we had to optimize operational efficiency, then revamp our IT governance process. Then, finally, we were able to begin using technology to drive business innovation.
As with most CIOs coming into a new company, my initial challenge was to optimize operational efficiency. I started by listening to everybody. I heard from business leaders and IT staff, of course, but I also went out to help run stores, sit on the trucks, stand behind the cash register and face the customers at the service desk. The front line is where we need to earn our respect as new CIOs, especially if we're going to instigate major enterprise change.
I saw what our IT expenses were across our 11 markets, and made sure our spending became more transparent to company leaders. We had significant diversity in our IT infrastructure and in our applications, which needed to be better leveraged and made ready for changes in how our customers were shopping—especially regarding their use of multiple channels.
It took us a whole year to get all the basics right, earn the hearts and minds of key business leaders and get the right people on the bus. We changed a large part of the existing IT leadership. We gained trust among end users by fixing some basic operational issues, such as the stability of our point-of-sale system. And we saved money: Among our cost-cutting initiatives, we delivered a 25 percent savings by getting our vendors to standardize pricing across geographies based on the lowest price we were being charged.
The next part of the journey was to align IT with the business. In retail, alignment means using IT to leverage our capabilities across different channels—increasing sales and providing new opportunities for the Kingfisher store brands while at the same time using less capital. For six months we built, reviewed, challenged, debated and enhanced our target enterprise architecture.
These exercises culminated in the creation of one IT entity—singular in architecture, operating model and staff—to serve Kingfisher's brands in Europe and Asia. We transferred several hundred IT staff members, who were assigned to the local businesses and geographies, into a groupwide function called Kingfisher IT Services (KITS).
