CEO Fletcher and CIO Mahler: Two Takes on Coles IT

CIO magazine's Beverly Head asked Coles CEO John Fletcher and CIO Peter Mahler about the company's IT and the controversy that arose during the takeover. Here are their answers:

How would you describe your information systems at present?

Coles CEO John Fletcher: When I came to Coles we were dealing with a maze of disparate systems, which was mostly a legacy of the way the company had grown over time through mergers and acquisitions. Since then we've massively re-engineered our IT platforms and are ready to reap substantial business benefits as a result.

I took this role for the challenge, and was not disappointed amp;mdash; Peter Mahler , CIO, Coles

Coles CIO Peter Mahler: I took this role for the challenge, and was not disappointed. As John has said, the systems were a legacy of the company's growth via acquisition. Most of the technology was developed in-house too, which created a lot of problems for the business when it needed new functionality to compete successfully.

The systems today are significantly different; we don't develop in-house any more, we buy best practice and refine to suit out needs. We have a strong focus on strategic architecture, so our systems are largely integrated. Systems are modular, [which means] we are flexible in responding to market needs and we don't have to spend a month trawling through indecipherable code that was written by 50 different people over decades. Less focus on the minutiae of the code means we can focus on engagement with the business.

To what extent does IT influence Coles' business strategy mdash; to what extent is IT an enabler of change?

Fletcher: IT enables the business strategy. We are fortunate to have a team that is focused on how to support the business in achieving the strategy. This is possible because IT has a seat at the table mdash; Peter is on the executive team and reports directly to me.

Mahler: I believe that IT should be intimately involved in the business; we need to understand the business, otherwise how can we ensure that our work enables the business to meet its objectives? The days of getting isolated requests for programming then throwing the code back over the fence for the business to deal with are long gone.

The relationship is much more sophisticated these days, throughout the corporate world. In Coles, technology requirements are defined by the business and IT working together, based on the business's strategic objectives. On major technology changes, IT is in a unique position to use our inherent process and analysis skills to guide the business in their thinking about managing change. We can help them understand the implications of changes because our experience reaches into all parts of the business. We can see the interactions between elements of the business because we have to understand them in order to implement systems.

How does a fast-moving enterprise cope with the nexus that exists between developing new applications for current strategy, while maintaining sufficient agility to be able to cope with any changes that are required by rapidly shifting business conditions?

Fletcher: There's no denying that we embarked on a massive transformation program, and I think such programs are always tweaked and refined as the business requires. Over the course of our transformation program, we have brought some initiatives forward, and pushed other initiatives back where it made business sense to do so. This does require a degree of flexible thinking by a management team, and I think it's been a feature of our team that we've been able to focus on what's best for the business when these sort of calls are made.

Mahler: I anticipated in 2002 that things would change over the course of the five-year strategy. It would have been foolish to think otherwise. So we designed the IT strategy very consciously to cover both the long-term strategic requirements and the shorter-term operational requirements. As well as some flex for any surprises, which did come mdash; retailing is a very dynamic environment. And we did all of this within a pressured cost environment.

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It also comes down to constant engagement with the business. Being partners with the business, not just service providers. Our IT people are represented in management teams at all levels. We are there when changes are first raised and discussed, so we have input. We do have to respond to a changing environment, but we have not put ourselves in the position of being the last to know.

There have been press reports that Coles' IT systems upgrades are behind schedule and over budget. Can you comment?

Fletcher: I think those reports have been a bit mischievous. We've made no secret of the fact that we have brought forward some of our transformation initiatives and pushed back others. These have been conscious business decisions based on what was best for Coles Group. It wasn't because some transformation initiatives weren't ready to roll, or because we were struggling with implementation. And it certainly wasn't because of any failure of IT to deliver their part of transformation mdash; far from it.

Mahler: That coverage [The Australian Financial Review, "Investors shudder at Coles IT bungles" June 7] was unfortunate, and disappointing for an IT team that has done a great job delivering projects to time and budget. As John said, the business has made decisions along the way to amend some timelines according to business needs, but we have always been able to accommodate that. As a leader, I think the key thing to when such reports come out is to reassure your team that the business still has faith in their work and direction, and do what you can to keep everyone focused on the main game.

The letter to the editor in response suggested a very close link between IT and the business. There appears to be no culture of blame at Coles mdash; rather a tightly integrated team approach to developing information systems. How has this been arrived at?

Fletcher: Coles is an iconic Australian company and one that's always under scrutiny, so media commentary, positive or otherwise, comes with the territory. However, with the specific story you mention [The Australian Financial Review, "Investors shudder at Coles IT bungles" June 7] I did feel it was important to correct on the record what I felt was inaccurate and unfair reporting about our IT team's performance.

Mahler: I think that's been a strength of the Coles team, in that we've had a clear business strategy and everyone's worked together to deliver it. At different times, different areas of the business will be the top priority, but the key to success is that the management team all agrees on the priorities and how their area can best support them. I think the IT team we have here at Coles has been exceptional for its ability to be real business partners and to be flexible as they help deliver the strategy.

Related stories:

quot;Beneath the Coles Kimono: The Spotlight on IT Transformationquot;
quot;Coles CEO Defends CIO and IT Teamquot;
quot;Coles CIO: The Greatest Challenges Aren't Technicalquot;

Copyright © 2007 IDG Communications, Inc.

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