CIO Interview, Domino’s Pizza constantly needs fresh IT ingredients

Last time CIO spoke to Colin Rees, CIO for the Domino’s Pizza chain, he made it very clear that he and his organisation were in the retail business. Since that 2011 interview Rees and his team have, like many of his peers in the retail space, been concentrating on a multi-channel approach and the increasing influence of mobile devices.

Domino’s Pizza Group is described as a master franchisee operation; listed on the London Stock Exchange, it remains part of the US Domino’s business. From the UK base it manages the Domino’s presence in UK, Ireland, Germany, Austria and Luxembourg.

“There are 850 stores across our network that are managed by 110 franchise owners. The largest franchise owner operates 120 stores; most franchise owners operate between 25- and 40 stores,” Rees explains.

“We are a profit centre. We sell IT and services to the franchises. For example, we supply an app that provides the franchise manager with real-time information on the activities in their stores. This means they can track the order from reception to the oven, leaving the premise and delivery,” Rees explains. This enables a franchise operator to ensure they are able to meet Domino’s 35-minute delivery promise.

“Every franchise takes the POS system, and most take our BI options. It depends on the size of the franchise, but we hope that every initiative is adopted by at least 50 per cent of franchises.

“Our goal is to help our franchisee. Yes, we make revenue from them, but we sell below the market rate. We have a shared goal of selling pizza,” says Rees.

That rapid turnaround feeds the culture of fun at Domino’s. Rees shows me YouTube videos of Domino’s annual global pizza-making competition, held in Las Vegas. It’s Jamie’s Fast Food meets It’s a Knockout, and has that brashness only Vegas can offer – but there is a serious element, too. Speed is not the only factor, Rees explains; the quality of the pizza matters a great deal.

From Rees’ office window there is a steady stream of HGV deliveries to the manufacturing- and distribution plant behind the HQ. Domino’s has plants in Milton Keynes, Scotland and Ireland for the local market.

This profit-centre operation has changed the relationship Rees’ team has with the other areas of the business. IT shares a floor with the CEO and CFO.

“IT has gone from being a side thought to an integral part of the business,” Rees says.

Right ingredients

Delivering service quality was a key ingredient in Rees’ and his team becoming central to the business.

“When I joined there were reliability challenges with the website. But as we have made it more reliable it has put the pressure on the stores,” he says.

“We are dealing with the transition from a bricks-and-mortar retailer to online retailer, and the disruption of that change is very much operational.

“We have one store near a large university, and once a week when a certain lecture finishes we receive 200 online orders for pizza. When it was a telephone-based service there was a natural throttle to the process due to the delayed order time. With online all the orders hit the store at the same time, so the inherent capacity of online is driving a manufacturing challenge to the business. “The internet also means customer satisfaction expectation goes up. Last year we had a lot of complaints as the snow caused delivery delays,” he says.

Domino’s sees 55 per cent of its sales come via the internet, and “mobile sales are going through the roof”. Rees says the growth of mobile is at twice the rate of the PC-bound internet.

“Some of our stores are receiving 90 per cent of their business online. It is no wonder: people can navigate better online than in a store and our data shows they spend more. The franchise owners love this trend as it costs them less in labour,” he says.

Domino’s has worked on making its online experience more personal with the ability to create your own pizza, save it for future orders and share it via social media so others can try your creation.

To keep pace with aggregator sites such as Just Eat Domino’s has released its second generation of apps for iOS and Android. “We saw a doubling in mobile sales on the day of its launch,” he says.

Web development and app testing has been brought in-house, with 10 developers plus service desks in the UK, Germany and Switzerland. Rees also has infrastructure deals with Rackspace for hosting and KCom to deliver the network to all the franchise outlets, and will soon implement Microsoft Dynamics ERP.

“I am responsible for the corporate dashboard and all corporate project management. CIO skills are so useful, as planning is second-nature to an IT person,” Rees says of his expanded remit.

“Going out and wandering around is the best thing you can do: you learn so much about the business and its problems and how IT can help solve them. I spend at least one day a week wandering around,” Rees says.

Rees has been with Domino’s Pizza for over three years. Prior to this he was at easyJet alongside his CIO 100 peers Mike Sturrock (DX Group), Andy Caddy (Virgin Active) and Trevor Didcock.