Tesco’s CIO Mike McNamara on supporting a global business

See also: Tesco’s Mike McNamara on supplier relationships

Tesco CIO Mike McNamara is already a prolific user of online collaboration tools so that he can communicate and carry out reviews with IT staff and users across the globe while reducing the amount he has to travel.

The collaboration is becoming increasingly important as the non-UK divisions of Tesco increase in size and influence within the company.

“The UK, from a business point of view, pushes the boundaries. But the US is now 100 per cent self-service checkout, so there will be a lot of self-service innovation to come out of the US. The transport management systems and shopfloor planning technology developed for our businesses in Asia and Europe are now being implemented in the UK.”

With the UK economy struggling to recover from the credit-crisis and hit this year by rising oil prices and an increase in VAT by the coalition government, Tesco results have benefited from its overseas operations.

“The UK is a challenged market and we are doing well. Tesco is exposed in non-foods in a way our rivals may not be,” McNamara says of the current economic environment.

Retail analysts have focused on the growth of premium retailers such as the John Lewis Partnership’s Waitrose arm and how these have seen growth and expanded their store footprints, while Tesco has, they say, stagnated in the UK.

“There is a polarisation in the market, but I do not think there is a real structural change and Tesco is insulated as we are broad globally.”

The global footprint extends to McNamara’s IT operation, which includes an in-house offshore operation in Bangalore, India. Tesco set the offshore base up seven years ago and it now employs between two and three thousand people.

“It started off as finance, administration and IT. We kept it in house as there are some very sophisticated services coming out of our Bangalore operation such as our architectural services and transport scheduling. So we are building up our capabilities there. They are Tesco people and they have the same judgement and decision-making skills as anywhere else in Tesco,” he says.

On the IT front Bangalore provides McNamara’s IT operation with architecture, search engine optimisation, online marketing and mobile technology expertise as well as the traditional IT operational activities you’d expect to see managed offshore.

“We spend no time at all talking contracts, they are part of the existing team,” McNamara says of the real benefits from having the Bangalore operation on the Tesco payroll.

“Our technology is very smart and I don’t want it with third parties. They are part of our team and those behavioural aspects are very important: the staff there have a career path with Tesco.”

McNamara and Tesco employ 400 IT staff across all four of its regional sectors and in the services-based banking and telecoms operations. Here in the UK McNamara also has a team of business analysts focused on how the business makes use of technology.

Hungry for more McNamara joined Tesco in 1999 and retains an enthusiasm for the company rarely seen in someone with over a decade of service behind them.

“Tesco.com was brilliant fun, when I joined it had just left the M25 it is now a £2bn business,” he says of his first Tesco role, as CTO of the company’s then fledgling online store.

“It’s been fantastic, Tesco is always looking forwards, you always feel you at the start and there are more opportunities than in the past.

“I bet most people in Tesco have had really interesting careers in Tesco. I still look forward, there is so much more to do and it helps keep you invigorated.”