There are two old adages in IT that Rick Coenen reckons are very dangerous: “We don’t have the internal capabilities to do this, so we’ll outsource it” and “Nobody ever got fired for hiring (insert massive global tech company here).”
A few years ago, Sussan Group was the victim of a substantial incident that had the potential to have a devastating effect on the business.
Coenen’s response was a defining moment in his career.
He spent many late nights explaining the situation to senior executives, writing letters to relevant regulatory authorities, working with stakeholders from many internal teams and external organisations, to restore order, rectify the situation, and explain to affected parties what had happened.
“As a CIO, it was the most devastating experience that I’ve ever had in my 28-year IT career. I felt like my pants had been pulled down in the middle of Bourke Street Mall. But as they say, what doesn’t kill you, makes you stronger and I lived to fight another day,” Coenen says.
During the post-incident review, the retailer found that one of the root causes of the incident was the vast number of stakeholders involved in building, managing and securing the retailer’s affected systems.
“One of the key lessons I learned was that you cannot outsource a function and set and forget it,” says Coenen. “You are still responsible for it. In my case, the Privacy Act says that as an officer of the company, I am personally liable for the privacy of information that we hold. As CIOs, we all need to realise that we can’t outsource our responsibilities,” says Coenen.
It’s stern advice from the retail tech veteran who over the past 12 months has driven the completion of systems replacement at more than 500 Sussan Group stores. This includes a new POS application with integrated CRM, scheduling, time and attendance, email, intranet and access to other key internal systems.
These systems are the foundation and platform from which Sussan Group will leap forward and become an omni-channel retailer, he says.
“As an example, implementing a payment system such as Afterpay in-store was near impossible with our previous green screen, Linux-based POS system. Now we have a modern Windows-based platform, systems such as this are easier to implement,” he says.
Beacon technology drives efficiency
Retail stores are historically built and driven by two things: sales history/budgets and the intuition of store managers.
“We have now added the additional factor of actual customer foot traffic by using beacons to track movement of people in and around the streets,” says Coenen.
“What we have found, surprisingly to many, is that sales and/or budgets are not always closely aligned to the number of customers moving through or near our stores. As a result of these findings, we have been able to adjust store rosters both up and down during certain days and times of the week to ensure optimum staff levels. Given that store wages are one of our largest expenses, this has had an extremely positive impact.”
According to Coenen, tracking customer foot traffic has enabled the retailer to bring the long used e-commerce concept of ‘conversion rate’ to its bricks and mortar stores – that is of the number of visitors to the store, what percentage converted to sales transactions?
“Having a good understanding of a store’s conversion rates over different days and times of the week can lead to important insights into customer and staff behaviour. This leads to important changes that have a profound effect on customer satisfaction, and hence, sales,” he says.
Coenen adds that there’s a fine balance between innovation and the drive required to implement this technology and ‘good sense and governance’ required to ensure that it integrates with existing systems and fits within the group’s technology framework.
“Having this balance also ensures that these types of projects don’t became shadow IT projects. In this case, organisationally, this balance has been struck well,” he says.
The more things changehellip;
The CIO role cannot sit idol, says Coenen.
“Although in some ways, everything is different, on the other hand, everything is the same,” he says. “Everything is different in that we now live in a digital-first culture, and technology is no front-of-house and part of our customer solutions. This requires a different focus.
“On the other hand, with a change of focus, it [the CIO role] is treated exactly the same way as it always has been. The same management and leadership principles apply and the same technology-related idiosyncrasies are there. We just call it ‘digital’ now instead of IT.”