BHS is heading for administration after failing to find a buyer or emergency funding, which will make the once-loved retailer previously known as British Home Stores the biggest high street name to fold since Woolworths failed in 2008. BHS CIO Tony Perks spoke about trying to help save the company in an article first published at the start of April 2016.
An Englishman’s home is his castle and you could append to this oft-used statement that department stores are where English folk furnish their castles. The UK has a number of chains and despite changing consumer behaviour, many of us still hold them dear to our heart. British Home Stores is one of the best-known, and after splitting from fellow retailers Arcadia Group in March 2015, it now has to stand on its own British feet. We met up with CIO Tony Perks to discuss how he was building a new home for BHS.
“It’s a turnaround of a piece of British retail heritage,” he says of his role. “BHS is a household name, so for the leadership team it is about how do we get it back to where it was and on its own feet outside of Arcadia.
“There’s a really different feel and it is about doing something new, yet we cannot afford to over-invest, so the keyword is affordability, but there is a huge opportunity. Retail Acquisitions [the VC backed buyers of BHS] are in it to add value and we have a detailed 200-page turnaround plan. This is about bringing BHS back. There is potential for rebranded stores, there is a big store modernisation plan and the name is back in the logo,” Perks says.
When the CIO and I meet, he is midway through cutting BHS away from Arcadia. “It is separate, then transform. There is a physical side to that as we have to cut away in flight,” he says of a process that had to take place during Christmas 2015. If all went to plan, when you read this the separation will be completed. Cut aways are an opportunity for a reboot of IT in the organisation and that is very much the case for BHS.
“We have got to be sensible with the investment in applications and operational platforms, as they are the building blocks for the next steps of the business,” he explains. “This is not a free ride, whatsoever. We can’t stop the world and get off, but it can be affordable, and we are not going to be quick and dirty.
“There has been a huge investment to make sure that the platform is for the long term, so we don’t have to do catch up again. So there are investments in people, technology, support and infrastructure and stress testing, so we can see how we hold up.
“For me, I think I’ve got one of the best jobs in retail, as we are looking at everything: the supply chain, logistics, online and in-store. So I have a blank sheet of paper to put in place an architecture and business management team for that. The owners recognise that technology has a big part to play, and it is about making sure we do some of what our rivals do and some of it differently,” he explains.
The technology team at BHS is divided in two: in-house, Perks has a team that is focused on projects and business intelligence, while operational IT is managed by CSC, which has had a 20-year relationship with BHS. Perks says the retained knowledge is excellent and that both teams have been restricted during the Arcadia years.
“CSC is keen to work with us on this partnership. There is a value that has not been unleashed yet,” he reveals. As with many of his peers, Perks is bringing in business relationship managers (BRM) to support his strategy and the ‘engine room’ at CSC.
A new shop floor
“We’ve got an Oracle legacy environment and a stores system that is end of life but not at the end of support, so it is safe. But you cannot do what you need to do to put the customer at the centre of everything you do as a retailer,” he says of his need to replatform the business.
“So the opportunity is fantastic, but we have to be sensible. We are not betting the shop on anything,” he alludes. As a result Perks is, of course, pushing a cloud first technology strategy, and at the time of our meeting at the North London BHS headquarters, he was already solidifying this.
“Build not buy and everything-as-a-service, because retail is incredibly spiky. We are not going to be bleeding edge,” he explains. BHS has a cloud and digital partnership with IBM because as Perks says, it is well proven, while financial and operations are on an SAP platform.
“It is one of the least risky moves as it mitigates risk for the customer. Our appetite for risk is not enormous as we cannot risk the business, but at the same time, we don’t want to preclude ourselves from future development. The reality is, we have to be safe,” he argues.
Perks plans to combine the digital and point of sale (POS) elements of his BHS renewal, so that the POS and digital provide the same experience. “Our timing is right as that technology has matured, and there are good options out there that will hook back into our core and build how we transact at whatever point of sale. We want to invest in the foundations and we have to replatform for the web, but we only want to do that once.”
“Data is the thing that will be really disruptive and the ways we can mash up data. The most important letter in my job title is the I,” the CIO says. “We have masses of data, we have some knowledge, but we have even less intelligence. So it is about extracting the data to a level that is useful on an hourly, daily, weekly monthly and quarterly basis.
“We have to have an information architecture that really defines our information, which is not as grand as it sounds. It is about showing the value of an IT investment. There is a proliferation of data, making money is about data. What supports the business is the nuance in the information,” Perks says.
BHS is, as the CIO admits in his office, lagging online. “The web is a big deal and we are working with IBM on that. We have just been through an exercise for developing the digital platform. Digital plays a key role in our turnaround as we look to increase sales online – we have ambitions to grow that significantly. It is entirely doable and I wouldn’t be here if it wasn’t, and we will have a really solid base from which to do it,” he says.
This is Perks’ first time in retail. “The business is full of people who are retail experts, I have an army of people to answer any questions. The important thing is the business processes,” he says.
The CIO has had a varied career in manufacturing, financial services and energy, beginning his working life at British Leyland.