Mobile connectivity will be bigger than the internet for Tesco

Even though retailer Tesco is one of the few to actually make a profit from its online sales, mobile technology will have a bigger impact to the business, says CIO Mike McNamara

IT is no longer backroom stuff, but be a key touchpoint with customers, he said.

CIO UK caught up with him at the CA World conference in Las Vegas. McNamara was in the US on a regular twice-yearly tour of his US suppliers and was meeting with CA executives before flying home.

Tescohas recently signed a deal with CA for a systems management suite and Mike outlined how this and another significant global deal with Microsoft fitted in with his agenda for business transformation.

Tescois rolling out a strategy to ramp up its support of mobile devices in-store. There are up to 300,000 staff devices connected to the retailer’s network world-wide, let alone customer access.

Since he joined Tesco 15 years ago a great deal has been invested in IT to enhance productivity, he said.

“Now technology is increasingly becoming part of the sales channel. Online sales has made a big impact, but I think mobile is going to make an even bigger one. We are facing a bigger disruption now than we did ten years ago.”

McNamara cited campaigns to redeem mobile discount coupons and to distribute marketing videos through the use of QR codes on posters in the Seoul subway.

He said: “As smart-phone become more pervasive around the world, I think we’ll be doing a lot more of that sort of thing.”

To take full advantage of this trend, Tesco has to step up its IT capability by maintaining close relationships with just a few lead suppliers.

The CA deal is back-office focused, but McNamara is certain that business transformation projects would be more difficult if he hadn’t focused on deals like this during the economic downturn.

“One of the smartest things I did was keep investing in infrastructure,” he said. “Because of that, coming out of the recession we are going to be in a much better place than anyone else.”

Customers are going to be using mobile devices in Tesco stores, to check prices and look at peer reviews. To offer that service, the retailer has to have the infrastructure to support it.

“You can’t link systems management to an increase in sales, but I know having it in place gives me a competitive advantage over retailers that don’t have it,” he said.