While the long months of the pandemic were tough for everyone, Jasper McIntosh must feel like he’s been on a treadmill for the last five years. As chief information officer of high-growth, low-cost fitness company The Gym Group, he’s been an integral member of the business since joining in 2014, working alongside the executive team to deliver an IPO in 2015, and to commence a multi-year digital transformation roadmap, with cloud computing at its core.
But then the global pandemic forced over 179 site closures, a move to virtual fitness and a focus on the welfare and retention of employees and customers. For McIntosh, that has meant rethinking his digital transformation strategy, streamlining HR and finance systems, improving customer experience and scaling IT and data architectures in the cloud.
Low-cost gym targets high growth
Founded in 2008 by former England squash player John Treharne, the Gym Group quickly emerged as a low-cost gym with huge appeal.
Offering affordable, contract-free subscriptions and easy, controlled access to gyms and facilities which were open 24/7, the group would go onto become the first European gym operator to float on the stock market in over a decade.
For McIntosh, who has a background in application development and software engineering, the mission was to build an enterprise-grade infrastructure for further growth. In 2018, the company commenced a multi-year transformation roadmap, through which it established relationships with cloud service providers such as Microsoft’s Azure, Google Cloud Platform and Workday.
Yet three government lockdowns over a 15-month period have wreaked havoc on The Gym Group’s operating model, its financial status and its relationships with staff and customers.
The company used its listed status to go to equity markets and arrange financing last March, and would go on to announce, in July, that revenue fell from £153.1 million in 2019 to £80.5 million in 2020, having lost 45% of trading days due to government restrictions and gym closures. Membership fell from 794,000 to 578,000 over the same timeframe.
A focus on customer experience
During the first lockdown, McIntosh’s teams were in the full throes of change as they sought to improve customer experience.
The digital transformation strategy remained largely unaffected, but investments had to be carefully considered, while gymnasiums were adapted for social distancing. IT and line-of-business teams collaborated to cater for rising demand for digital content.
“It was about flexibility in those early stages,” says McIntosh, of changing customer demand in light of the COVID-19 crisis. “How can we use tech to give them something they can work with, to keep that engagement with them?”
As part of these efforts, McIntosh says non-members and members could connect to some of the group’s 1,600 personal trainers for free on social media platforms, while The Gym Group accelerated its partnership with digital fitness provider Fiit to offer training sessions at a discounted rate. The technology and commercial and marketing teams, having worked together on the project pre-COVID, accelerated the workstream to get the product out to members within six days of all gyms closing.
There was also a pledge to members that they wouldn’t have to pay while the gyms were closed, an initiative which meant analysing and stopping payments in financial systems, and staying close to members as the lockdown situation changed.
McIntosh explains that his teams worked with the business on health and safety measures, such as buying electrostatic guns to clean equipment, building communication plans for employee training, and ensuring automatic capacity limitation on access control systems to limit the number of people allowed inside gymnasiums.
Pivoting the digital transformation strategy
The Gym Group’s digital transformation strategy may have remained largely unaffected, but some pivoting was still required.
“What really changed for us was a reprioritisation of where we wanted to put the resource, and the bringing in of our timelines. We needed to focus more on the near-term, on the problem that was sat right in front of us,” McIntosh says.
Some of this was reviewing internal systems and processes, as well as member and prospect systems and low-level infrastructure.
And this was underpinned by the organisation’s data capabilities and analytics, which helped The Gym Group understand everything from pricing and gym capacity management to customer profiling and revenue forecasting, while adhering to data protection regulations like GDPR.
Workday apps aid employee training, furlough
Since 2018, The Gym Group has leveraged Workday’s Human Capital Management (HCM) and Workday Financial Management to consolidate systems, to offer employee training and assistance, get real-time information on financial performance, and unify its data architecture.
During the onset of lockdown, McIntosh says, Workday helped support furloughed staff, making changes to pay at scale, communicating workplace changes through Workday ‘letters’, and ensuring that staff had read and understood their furlough requirements. The platform supported payroll automation and helped HR manage end-to-end employee lifecycle through one system. Interactive dashboards gave managers visibility on onboarding, mandatory learning, recruitment and team status.
Workday’s platform was also used to deliver training to personal trainers on Covid-19 protocols, and helped the medium-size business bring on hundreds of personal trainers, who had previously been sub-contractors, as full-time employees. In addition, The Gym Group could connect to third-party payment providers and collate data in the group’s primary data warehouse.
“We really need to have a unified data architecture that allows us to look at this from many different angles, and Workday is a critical enabler of that,” McIntosh says.
Selecting Azure, moving to MACH architectures
If simplifying IT and unifying data is on McIntosh’s agenda, so too is making the business faster and more flexible. And it’s here that he’s working with cloud hyperscalers like Microsoft Azure, as part of a longer-term plan to build MACH architectures driven by microservices, APIs, cloud-native technologies and headless systems, where the front-end presentation layer is decoupled from back-end applications, allowing for flexibility in customizing the user interface for different devices.
The fitness group is a Microsoft house, but uses Azure and Google Cloud Platform for different workloads, and sees MACH as being able to deliver applications in bite-size chunks, breaking code into microservices and containers, especially for mobile applications.
The group is now looking to predictive analytics within Azure to derive new insights about financial forecasting, employee welfare and customer demand.
“We really see, one layer up from the infrastructure providers, around things like MACH architectures, that potential to accelerate growth,” McIntosh says. “[It’s] essential, the breaking up of monolithic platforms and services, to increase flexibility and reduce development risk and overhead. It’s enabling businesses of our size to be quite progressive in terms of how we think about delivering services, and how we think about using the data.
“We have to deliver things that affect the bottom line.”
CIO to-do: Improve customer experience
McIntosh says the on-off site closures have pushed some to question the long-term health of the gym industry, but now says that ‘actual rates of gym visits are higher than they’ve ever been’. In fact, it’s the growing intersection between digital and physical fitness, which is seeing technology increasingly being bought into fitness, has added to his lengthy CIO to-do list.
“It’s quite a long list,” he says. “What we’re focused on as a team is understanding how that landscape is unfolding. And understanding how we can bring elements of that into our business model.
“But keeping all of that aligned with our core objective, which is this idea of enabling as many people as possible to engage with some kind of fitness experience, and to get something of value from that.”