by Mark Chillingworth

Paul Smith IT chief Lee Bingham ahead of insourcing trend

Apr 23, 201312 mins
IT Strategy

Pre- and post-London Olympics the world has been covered in British design. Union Jacks, the original Alec Issigonis Minis and the Rolling Stones seem to appear on T-shirts, bags, posters and other accessories no matter where in the world you are. But this is no new Cool Britannia boom – British company Paul Smith has been championing home-grown design and has become a world leader in fashion, design and retail since its iconic founder formed his company in Nottingham in the late 1960s and opened his first shop in 1970.

Lee Bingham heads IT at Paul Smith and if we hadn’t met him before our interview at the company’s London base he would have been difficult to pick out. Dressed immaculately in the timeless style of his employers, Bingham aligns sartorially with his colleagues in the trendy office just outside Covent Garden.

Just days before we meet Bingham The Economist reported that shopping centres are “well suited to the digital age” and wrote this insight with the new Trinity Leeds shopping centre as the article’s backdrop. It seems British retail has not been out of the headlines and daily online chatter for a second in 2013, whether it’s because of horsemeat being sold as beef, John Lewis remaining the darling of the sector or the predicted demise of the High Street.

Paul Smith is predominantly a wholesale fashion business to the tune of 70% of its turnover, with its distinctive shops in the retail arm – including a forthcoming branch at Trinity Leeds – accounting for 30%. The global power of the Paul Smith brand means over 1200 worldwide employees.

Bingham explains that the company is responsible for every part of the process except the manufacturing: design, pattern cutting, printing, fabric procurement and distribution are managed in-house by the Paul Smith business. The majority of the manufacturing takes place in Italy or in one of a small number of selected factories in the Far East.

“The top and bottom ends of the market has been protected. If you are brand-centric and have a loyal base of customers you are protected,” Bingham responds to a question on the building of the new shopping centre. The Economist’s sentiment that these shopping centres are well suited to today’s digital age is also something Bingham and Paul Smith agree with and have seen the results of.

“It’s about focal points of interest, so it’s about picking the right locations. It is very much around the Paul Smith experience,” he says of the importance of traditional stores.

“There is a changing face around how people shop. As a brand we are focused on the experience and the business is very well known for that.

“E-commerce is our primary route to market and that has been a significant change for Paul Smith. And recently the balanced tipped to e-commerce away from our best shops.

“We were resistant to e-commerce at first as there was concern as to whether a luxury brand would work online, for example selling a £1,000 suit. But e-commerce has very quickly become our biggest point of investment and sales, and now we have a strategy to in-source our web development.

“For IT, the importance of the customer data means it’s all about CRM and trying to consolidate it all,” he says of his team’s role in the changing retail world. Bingham doesn’t for a minute pretend that the internet and e-commerce is the silver bullet for his business or the sector, but it is clear that Paul Smith is now reaping the benefits of five years of investment in e-commerce and a constant strategy to align its online shopping and in-store experiences.

Assessing the state of today’s retail market, Bingham recognises that retail is a long-standing business that is now shifting according to the change in consumer habits, but emphasises that certain aspects of the Paul Smith business must remain constant despite the change in customer behaviour.

“Paul Smith has always said the customer is number one, so the in-store and online experience are very aligned and I think we have always been good at that,” he says.

Unlike a lot of market watchers, Bingham is direct and honest about the true cost of doing business online.

“Retailing in any form is expensive and I don’t know if that has always been known. We had a number of years where the e-commerce numbers seemed really good, but today when you compare e-commerce to the right shop the cost difference between both is there or thereabouts.” Search engine optimisation (SEO) and pay per-click (PPC) advertising, as well as the ongoing operating technology costs, have levelled the difference for a business the size of Paul Smith.

Bingham indicates the biggest difference has not only been the growth of e-commerce, but the behaviour change for the company.

“As a business the traditional consideration of our intellectual property has changed. We used to have collections that would be literally locked down, but now we broadcast the fashion show live on YouTube and Paul does commentaries of fashion shows and has his own blog. So it has become a very public process rather than private.

“Social media has been a huge shift and from my perspective it’s been a fabulous journey because IT is no longer a necessary cost, it’s become a very profitable route to market and in the business we have a very public face.”

Important as the e-commerce shop clearly is to the Paul Smith business, Bingham is also operating IT platforms that streamline the full process of design, fabric procurement, commissioning of manufacturing and distribution. To simplify these he has recently gone through an exercise to rid the company of silos.

Bingham, like the company and Paul Smith himself, is a Nottingham boy and operates the global IT operation from the East Midlands city. Paul Smith has two head offices in Nottingham and London with around 250 people on each site.

Three tiers of demand

Bingham describes the business as having three tiers of IT demand, tier one being the two head offices, branch offices in the “fashion capitals” with showrooms and creative sales spaces constitute the second tier, and the third tier is the Paul Smith shops themselves.

Bingham’s team has grown from 16 people to 26 as he has recruited and brought the web development and design sides of the business in-house.

“We are very agile and we like to work towards latest and greatest,” Bingham says, not of the suits and fashions Paul Smith creates, but of the attitude and appetite it has towards technology. As fashion leaders Paul Smith and Bingham pride themselves on being trend-setters in business technology adoption.

On entering Paul Smith’s London office I was expecting to be surrounded by iPads and other glitzy Apple products, so was surprised to learn that Microsoft is the preferred technology for stitching Paul Smith’s operations together.

“We have a good Microsoft partner, Risual. I thought it would be a short-lived relationship, but as we take a broad part of the Microsoft product set, so they have continually sponsored projects at Paul Smith and we receive higher levels of support because we sit closely to the Microsoft release schedule,” he says.

Cloud computing, thin clients and the integration of Exchange have all been introduced in partnership with Risual and Microsoft.

“There was very much a view of technology as a vertical stack,” Bingham says, admitting that the board were initially concerned about being a Microsoft shop. But in fact the relationship with Microsoft helped move IT up in the organisation, and he explains how significant levels of service from Microsoft during the data centre virtualisation project gave the company peace of mind.

Bingham says Paul Smith was one of the first organisations in the UK to adopt VoIP, which it introduced in partnership with BT and Cisco. The company is now working with the same partners on a move to global video conferencing.

“My focus has always been to concentrate on tier-one vendors and choose them wisely and to standardise with them,” he says of his key suppliers.

“We tend not to step outside of these key relationships. We don’t do that to the cost of the market – it is always about which solution is the best fit,” he says.

“The big ticket moves have been around Microsoft and all built on an initial engagement. It works really well for me with our partner and to have a direct relationship with Microsoft,” Bingham explains.

Long-term projects

The IT leader is proud of the strong relationship his team has as part of the business and its ability to be a part of business projects.

“Technology and project alignment is in a very good position and as result my budget is predominantly capex. Our capex is high due to the number of projects we run, for example last year there was a headquarters relocation in Nottingham and a move to two new data centres, both of which were the culmination of a long-term five-year project.”

The new data centres, like the move to bring the web development team in?house, are strong seams in a strategy to in-source at Paul Smith.

“We like to retain the ownership and we have had challenges such as data loss with the cloud and off-premise systems in the past, and we really see the value of in-sourcing IT,” says Bingham. He isn’t belligerent about in-sourcing, which he sees as fitting Paul Smith perfectly. The CFO that he reports to agrees, and Bingham describes their strategy as a “shared mentality”.

“We have served the business well. The cost of ownership has always been seen as an element of value. I do appreciate it’s a luxury, but it has to demonstrate value,” he explains.

Bingham agrees that intellectual property ownership is a value that runs deep across Paul Smith and that culture is mirrored by the business’s IT function. As a result sponsorship from business leaders is generally strong.

Next on Bingham’s agenda is a new point of sale (POS) solution that will tie into the company’s CRM solution and, he says, that will push the infrastructure Paul Smith uses as it interconnects customer accounts, RFID, mobile POS, in-store Wi-Fi, use location services, videos and even IP-CCTV.

“We are doing this with an eye on the future,” Bingham says.

Core consumers

Despite the heavy investment in Microsoft solutions Apple Macs do have an inevitable place within Paul Smith’s graphic design teams, but Bingham and the organisation were considering removing Apple devices from the business a number of years ago as the US giant was almost outside of the business in terms of support.

“Apple then caused a change in significance and it was a fight we couldn’t win,” he says of the launch of the iPad. Paul Smith himself is a personal friend of Apple’s design chief Sir Jonathan Ive and receives Apple gifts, so Apple has been accepted over the last two years as part of the general consumerisation trend affecting IT.

“We have seen the general consumerisation filter through and it is having an effect on the business,” Bingham says.

Bingham has been with Paul Smith for 13 years after starting his career at Northern Foods where he went from development to a business analyst role, into management and departmental head before joining Paul Smith in 1990.

“Paul Smith is a great business to work for as fashion is really exciting to be in,” he says. Bingham visits the fashion shows in his own time to keep himself as in tune with the sector as the designers and distributors he provides technology for and as we photograph him in a studio area of the office he talks of fashion with as much enthusiasm as he does technology.

“The autonomy I have been given has made me loyal and I have been given a chance to take a set of IT ideas in their infancy and shape them for Paul Smith,” he says of his long tenure. If there is a challenge it’s the occasional need to be a straight edge in a curved environment.

“It has not always been easy to take a structured role into a very creative business, but it is something I really do enjoy. These change elements get broader as my remit does. We have really valued the identity and personality as a business, so if you are comfortable with the business, then it will be the right fit.”

As we take one last picture of Bingham, Paul Smith – the man himself – breezes effortlessly through the business that bears his name. Smith says hello to everyone, including Bingham by name and still wears that athletic physique of a cyclist despite a long career in fashion. So what is this global fashion icon like as a boss?

Bingham describes him as supportive and very hands on, but that is an asset to the business and in particular for Bingham at present.

“From a sponsorship point of view he sees the business value of technology and he’s a supporter of the business,” he says.

Smith is proud of his Nottinghamshire routes and remains involved with the city’s university which helps the organisation with recruitment. But as his company takes over its own online destiny it needs experience and that is a challenge they are designing for next.