Lookers CIO Attiq Qureshi interview – Changing lanes

Advertisements for mobile devices bear a striking resemblance to those used for years by the automotive sector. Until now though, the purchase, ownership, usage and replacement transaction model for phones and cars were very different. But today’s consumer, brought up on a continual cycle of upgrades and improvements as part of a utility payment service, expect the same experience of car usage as they do from the connected device in their pocket or bag. As a result, the automotive retail sector is changing its business model.

Traditionally car dealers were focused on a sale, with the organisation judged by the number of units it shifted off the forecourt every quarter. However, as with every sector, automotive retailing is moving to a service model that sees its products as a utility, while the business differentiator is the value added to the customer experience added to the utility.

Attiq Qureshi joined FTSE-listed automotive dealers Lookers in September 2014 to enable one of the UK’s largest car retailers embrace the change in customer behaviour.

Record profits

“Lookers has been very successful, and this is the seventh year of record profits,” he enthuses in his Manchester office next to one of its major dealerships. The company sells 150,000 cars in the UK, carries out 500,000 services and has an annual turnover of £4 billion.

Founded in 1908, the business was an early adopter of the emerging motoring trade. It’s been highly acquisitive in recent years, buying Dutton Foreshaw in 2007, Shields in 2013, Colborne Group in 2014 and the Benfield Motor Group in 2015 to expand its grip on the market.

Qureshi was brought into Lookers because he had no previous automotive experience; most of his career had been in mobile telecoms. Executive Director Richard Walker, himself a veteran of mobile telecoms asked Qureshi “if I’d take a look at the IT and online strategies,” he says.

“It was very technical, focusing on virtualisation and IP telephony, all good stuff, but not what a plc board should be talking about. So I told the board they have answers to questions they hadn’t asked. I asked the board to tell me what it would be like to be a Lookers customer in five years time and the board answered that really well. Their answer was strong on multichannel retail and the customer.

“Then I told them all of that is really hard and the current IT ambition will struggle to meet that plan. So I joined to do a business transformation, so that our online and retail journeys join up,” he says of the career lane change.

“The entire future landscape will be fought on experience,” Qureshi says of why an omnichannel plan is essential. “So we have the challenge of IT going from not being very important to very important.

“Automotive is cyclical as a business, especially with staff levels, so that creates a dependence on manual processes. A lot of our problems are sorted by throwing people at them, but that creates opportunities for defects. There are 23 documents to buy a car. We are a heavily?regulated sector and have to comply with the FCA, for example, and we sell a lot of extra products, but you can be a compliant business and a business that is easy to operate,” he explains of his role to streamline the customer’s journey into a new car.

“We can’t send the same message to a 20-year-old Audi A3 buyer and to a 70-year-old A7 buyer. Campaign management is very important,” he argues of the need to mine and understand their information and customer base, and to create systems that benefit the frontline workforce and therefore the customer.

“Some 70- to 90% of cars are sold on finance, so it is like a mobile phone contract, there is a payment and need for retention, and there is a similar culture to mobile phones,” he reveals of the fashion accessory nature that has taken over the car industry, replacing old ideas of brand loyalty. Qureshi describes this realisation as a ‘light bulb’ moment for leading car retailers and it is creating a highly competitive landscape to corner the automotive market.

“I’ve been at organisations that have a complex customer transaction, such as Tesco Mobile, which allowed me to run the marketing department,” he says of his three years with the retail behemoth. What Qureshi is clear about is how Tesco taught him to look at the customer and their journey with your organisation, and then for the CIO to look at the business processes and make them simple for the customer.

Customer service

“You can face your customer or you can face your boss. As a CIO, it’s about facing the customer. Will a change be simpler and faster for the frontline workers and therefore the customer?” he asks. Just as Nissan Europe CIO Stephen Kneebone told CIO UK in his February 2014 CIO profile, the customer is now empowered by the internet, and their need and experience of the dealership has changed dramatically.

“80% of customers start their journey online and only visit a dealership 1.7 times,” Qureshi says, echoing Kneebone. “So we rolled out Wi-Fi across the dealerships, designing it for 200 devices per dealership,” he says of accepting and improving an existing customer behaviour. The CIO reflected the customer behaviour back too, ridding dealerships of desks and desktop devices, and giving showroom staff iPads. He’s also redeveloping the systems, which until now have provided masses of information on the car to showroom staff, but little about the customer. With the customer having already done their car research online, they don’t want a repeat of the process. It’s of more value if showroom staff know about their needs; for example, that the customer does low mileage and always favours vehicles that have plenty of space for sporting goods and children, or that a customer lives on a high rural road that can get icy and has a bona fide reason for buying a vehicle with four-wheel drive.

Qureshi refuses to get embroiled in debates about whether digital means replacing one channel with another. He instead sees how important it is for organisations and their CIOs to support the customer through the channel the customer chooses.

“I listen to and read our complaints and they are broken promises on annoying little things such as a new set of spare keys. Our systems don’t help, just creating job queues. It’s relatively small conversion for the turnover,” he says of the opportunity to secure the slim margins available to their sector.

“We have huge fixed costs, so if you can increase the margin that is really important as everybody is a potential buyer today, so I am aiming for a zero default culture,” he explains. Despite clogging the headline highways, Qureshi says that the digital challenge to Lookers is not Uber and other sharing economy entrants, at present it is challenger online car leasing businesses and the car supermarket brands.

“People are incredibly forgiving of challenger brands, just look at Aldi and Lidl,” he says, returning to his favoured retail analogies. “Zipcar and Uber are not major trends yet, but we’ve got to be careful of not doing stuff and we must make sure we are on the right tyres,” he says of how Lookers must be ready for the next change in consumer behaviour. Qureshi thinks about customer behaviour a great deal, he sees showrooms as key and he’s very attuned to the fact that 50% of Lookers customers are women.

“Showrooms are the showcase for the product and I would say they are more important, not less so as there are less of them now and statistically people are more likely to buy at a showroom.

“It is important to change the experience though, and we have introduced videos to demonstrate the difference between PPC and HPC buying options, and the manufacturers are driving this change in the showroom as well.” He’s confident, but not complacent about the future, and again looks at traditional retail for inspiration. “Look at the online grocery market, it is dominated by the traditional big players. For us, we don’t have to do the things that we are doing today, we can do things in a different way.”

New drivetrain

“We had a lot of challenges with run IT, it was no-one’s fault; we grew very quickly. Now we have three large programmes driving through the business. The first is fixing the support, infrastructure and networks; the second is the showroom systems and the third is the transformation of the business.

Qureshi introduced a project management office (PMO) to manage the portfolio of change going through the organisation. These range from rolling out video communications to customers to property projects.

Automotive retail has traditionally relied on niche vendors specialising in their vertical market, a Dealer Management System is the equivalent to an Enterprise Resource Planning (ERP) system, but this CIO wants to take this handbrake off his organisation and use the common technology platforms his peers in other sectors are using. His reason being that the niche tools suffer from being too focused on the product – the car – and not flexible enough to help an organisation such as Lookers be customer focused.

“I always say, we are retailers. My role is to put in the tools that allow us to deliver the customer experience. So we are putting Microsoft Dynamics into our contact teams. You need a lot of information on a used car, for example, and we need to know what happens to a customer down the stream,” he explains of using information tools, rather than industry products.

“The growth of the future is the business intelligence and architecture technologies and skills. So I want to attract people to our business that come from outside of the business. We recently hired an information security officer from Boots.

“The harder it gets, the more I enjoy it. Trying to do the IT fix and the business transformation in parallel is challenging,” he reveals. Qureshi reports to the CEO of the group as “he really understands customer experience and is hugely supportive,” and talks enthusiastically of the leadership team that are all driving the change programme.

“The CFO and the MD of the motor division are equally convinced of the need for change. They have to fund it, so as you’d expect their questions are more about the detail. The business transformation are big and it is my role to take the business through that journey,” he says.

He runs an IT team of 100, with 50% of them focused on development, the rest of the team is focused on PMO, analytics and support.