CIO Profile: Domino’s Colin Rees on the franchise business model
CIO Profile: Domino’s Pizza’s Colin Rees on his time at Argos and Easyjet
The culture running through Domino’s Pizza hinges on two qualities – speed of service and the quality of the product – and everyone at the company uses them as yardsticks for their own work. It is these two values that the head of IT at the Milton Keynes head office Colin Rees also uses as the drivers for his IT strategy.
There are three distinct strands to Rees’s IT strategy: focusing on core IT, store systems and the company’s website. A lot of the direction Rees has taken in these strategies has come from his previous roles at Argos and easyJet, companies with similar customer expectations.
When Rees arrived at Domino’s 12 months ago, he found the philosophy in the IT department was all about creating systems in house. He’s worked to change that so that it outsources systems which are made up of commodity components.
“Where there is a market for a product we can go to it for commodity IT and then keep in-house the areas that we consider our competitive advantage,” he explains.
Rees has signed up hosting specialist Rackspace to provide the systems for as many back-office business processes as he finds appropriate. This means systems for accounts and HR, which aren’t peculiar to Domino’s, are strong contenders to be hosted by Rackspace. The company will also host Domino’s website.
The main driver behind the move to a hosted service is not so much about cost but the assurance of reliability, flexibility and performance. Domino’s sales spike throughout the week with most of its business being done within 12 hours over Tuesday, Friday and Saturday tea-times.
To cope with these spikes, Rees can draw on extra IT resource from Rackspace, without having to pay for it when it isn’t being used at other times in the week.
“If we can scale our systems just for those periods then that is a massive advantage for us,” he says.
The business intelligence application that provides the head office with real-time sales data was developed under Rees’s predecessor Kimberline a few years ago and he is now rolling it out to the franchisees.
So far, 400 of the 700 stores are able to access the business intelligence application, which will help with proactive replenishment of stock and staffing. For the moment, Rees is concentrating on the outsourcing project but he wants to take time to develop the business intelligence application further, perhaps in 2012.
“Business intelligence is absolutely an element of competitive advantage for us so we would want to keep that development in-house,” he says.
The big push for the stores is a project called Pulse, which is a store system based around the point-of-sale (POS). The Pulse system was originally developed in house in the US, where it is in use in 6500 stores.
The new POS system will be simpler for staff to learn to operate – always an issue in an industry where front-line staff churn is high – and provides much better cash control.
More than this though, the POS system effectively becomes the store system, with tills able to provide auditing and cost-control.
“The piece we haven’t started rolling out yet is the labour-scheduling component which produces the staff rosters for the stores.
It will also track actual staffing against those rosters in real time, so within the store at any point in time managers and franchise holders can see whether they’ve got the right level of staff and be able to take the appropriate action,” Rees explains.
The POS swap-out is a fundamental shift for the stores and over 30 of them already have the new system deployed.
The full rollout will be complete in two years. It’s an example of the awareness of technology that Rees’s business-line colleagues seem to possess which is evident in other areas of the business too.
While the company’s website is being hosted by a third party, the development is being moved in house. The website is becoming an increasingly important revenue channel and customer touch-point for the company and Rees predicts it will continue to grow its share of Domino’s revenues in the UK.
Much of that growth will come from mobile internet transactions, over phones and tablets. The company’s iPad app, launched in September 2010, has been downloaded half a million times and accounts for one in 20 online orders.
Rees thinks this will rise to one in eight by 2015. It’s an inevitable reaction to the way Domino’s customers have embraced technology.
“The take-up of mobile technology is an inevitable effect of the new generation of consumers and IT professionals that are growing up today. You can see that if you try and part a 14-year-old from their mobile,” says Rees.
“I think that’s ideal for a company like Domino’s because pizza is quite a social activity and the ability to sit on the sofa with the iPad or iPhone and pass it round and choose your pizza really encompasses how people like to order.
Now, everybody gets the menu out and they all take what they want. I think, with the iPad application that’s a really good parallel.”
The website is also a marketing touchpoint for the company and as a reflection of this, the website development team sits with the marketing department, not in an IT silo.
The benefit of this is a marked reduction in the time it takes to make improvements to the site. Customers are pretty unforgiving if something goes wrong, so the reduced response times correlate to reduced customer churn.
Sitting IT staff among business-line colleagues is a growing trend in commercial organisations, but it’s still a pioneering move for Domino’s. It’s something Rees has driven after considering it at easyJet.
“Here, we had a great opportunity to push the boundaries and do something different. The marketing director is seeing it having an impact on how IT is perceived and on what it is delivering. He feels that they are now at the heart of his organisation and not just an expensive afterthought,” he says.
Rees recognises that there is an imperative for his IT team to become more embedded in the general business and the integration with the marketing team is an indication of how their roles will change as utility IT is outsourced.
“What we are going to need to upskill on is supplier management and capacity planning. It will be much more about management skills than technical skills. We have a mixture of skills at the moment, but we will need to bring in new talent and we will also look to train people,” he says.