In a 200-year-old business in a sector generally resistant to new technology, Neil Pearce is in the midst of driving through a digital revolution. Virtually every system will be replaced and almost every process redesigned. Data capacity has already been increased, more calls are being answered in branch with a mobile solution, and there are fewer lost sales. New websites for the various business arms are already generating excellent sales. And there are numerous projects delivering efficiency savings using Lean Six Sigma expertise to evaluate processes end to end and take out waste. Job titleGroup CIO Company nameTravis Perkins plc How are you influencing the products, customer experience and services your organisation offers to its customers?We are on a huge journey as an organisation into the digital age and as such have a significant transformation agenda which involves replacing nearly every system and redesigning every process. As part of the executive team at Travis Perkins I am involved in all major programmes across the group, helping to bring a different perspective and not just through the technology lens. We are starting from the view of the customer to re-imagine all aspects of how we trade from price and credit control to in branch and online. We are helping to redesign customer experience through my UX design and business process improvement teams, which seek to understand and optimise how our customers navigate our various web presences, improving service and increasing sales. The agile way we work ensures that we form close relationships with colleagues in the business to specify exactly what our business and customers need and make adjustments during the development phases if needed. Part of my role is to help influence the culture within the technology teams to become more customer-aware, and bring the right people into the organisation to improve our capability. Define the key business outcomes that you have delivered over the last 12 months and their impact on your organisation’s performanceAll our activity is set against a backdrop of demand and prioritisation with the rest of the business, and 2016 was a year of building foundations against our 2021 strategy. Much of our work was paving the way for future transformation and innovation. We are the majority of the way through improvements to our network transformation, which gives us increased data capacity, more calls answered in branch with a mobile solution, less lost sales, and free Wi-Fi for customers. We have launched new websites for Travis Perkins and City Plumbing Supplies which are already generating excellent sales. For Wickes we now offer same-day delivery at an hour of your choosing. Numerous projects delivering efficiency savings using our expertise in Lean Six Sigma to evaluate processes end to end and take out waste of over £10m of annualised savings. We have just completed the design phase of our ERP implementation. Once rolled out, it will enable our branches to spend more time with their customers rather than doing admin, and will allow us to train new people in hours rather than months. What has been your involvement with innovation at your organisation – in particular, with products, business model and technology – over the last 12 months?Product innovation is an interesting challenge in the construction industry as change is not always what is wanted over consistent delivery of building projects. However, we have been pushing on ways to bring innovation to the market whether that be through spotting new physical products such as DIY damp-proofing in a box or through digital product innovation such as click and collect for business to business customers that have not had this capability in the same way consumers have had. The conversation around business model change is an evolving one as we further understand the pressures that will be put on us by competitors and the market. In terms of technology innovation we are developing our API platform, which we expect to open to external developers and third parties. We are experimenting with machine learning technologies to help with product identification and managing workflows that would have been done by humans in the past. We have also automated much of our web-based infrastructure in the cloud to the point where every night we destroy hundreds of ‘servers’ and rebuild them at a push of a button when needed the following morning. How have you delivered cultural and behavioural change as a CIO within the IT department and/or more broadly across the organisation?For me it started with defining a clear vision for where we are headed over the next few years in a way that was simple and engaging for people both within the function and outside. Then having open, honest and transparent conversations with as many of the team as possible and incorporating their ideas into the overall plans for IT. Repeating the same messages constantly and consistently so people understand you are serious. Giving people permission to try things that they aren’t certain will work and learn from those experiences. We did this with our recent hackathon where the direction was deliberately loose so as not to constrain people, and with no expectation that what they came up with had to be viable for the business. It was first and foremost a learning experience. How have you worked with your CEO and/or board to communicate whatever ‘digital’ and IT means to your organisation/sector and improve digital literacy at the highest levels of the organisation?Travis Perkins hasn’t been an early adopter of digital and is still going through the process of understanding what digital means to the business. My role is to stimulate for conversation so we can develop a broad strategy. At the same time I am outlining an IT strategy that points to the possible future with digital. One on one meetings with all the exec members and the board have helped to develop the thinking along with specific updates on our programmes and hot topics such as cybersecurity. How have you worked with the technology and IT vendor market to achieve your business goals? How have you been able to influence IT suppliers and successfully manage your partnerships/relationships with large IT companies, SMEs and startups?We work with some excellent partners and it hasn’t been difficult to influence them as they are as excited about the ambition and scale of the challenges we have as we are. In particular AWS have been very flexible with providing solutions and support for our cloud migration plans. At the other end of the scale we have a real need to build a significant integration capability to enable our major programmes and give us a platform to innovate on. We selected an open source product WSO2 for the task, and have been working with a growing startup, Wheeve, which specialises in integration. When we first started working with them there were only three employees. They have scaled massively over the last 12 months and now have offshore delivery capabilities. How have you tried to develop the diversity of your team?It has started with the hiring process and ensuring that diversity is a criterion we look for in the people we ask to join us. This is not just about the more obvious physical characteristics of gender and ethnicity, but also diversity of thought, ensuring we look at people from non-traditional backgrounds outside of technical specialisms including the humanities. That said, there is more I need to do in terms of gender balance in my senior leadership team during 2017. Describe how you organise and operate IT and how this aligns effectively with business strategy and operationsWe are in the process of changing our operating model so that we align our service teams more effectively with the business teams. We are developing a service orientation, ensuring that accountability for a particular business capability resides within a single team, including architects, business analysts, engineers and operations people. Our business partners work with the divisional boards, understanding their needs from technology, but also helping them to shape their strategy. What strategic technology deals have you made in the last year and who are your main suppliers and IT partners?Travis Perkins is a 200-year-old company that has mainly been run on applications developed in-house. In the last year we have signed one of the biggest deals in our history with Infor to deliver a significant step-change in business capability by replacing all our ERP and sales ordering systems across the group with a software as a service solution. This will give us a modern platform to trade on and allow us to build a 21st-century digital experience for our colleagues and customers. We are also working heavily with AWS to migrate all our services to the cloud, with a view of turning off our datacentres in a couple of years. Other main partners include SAP (Hybris), Vodafone, IBM, Adobe, Google, JDA and EPAM. What are your key strategic aims for next year?Delivering our big programmes of change. We have a massive agenda in 2017 and we need to do the basics of delivery. Developing our talent pipeline both internally and through good hiring is essential. Mapping out the changing shape of our business and the role technology plays is a vital strategic aim, along with experimentation and innovation. Getting closer to our customers – their wants, desires and unmet needs. Creating a great culture within the technology teams. How are you preparing for any impacts Brexit might have on your organisation?The impact of Brexit on our business has been quite significant as we are predominantly a UK-based company and have therefore been exposed to the currency fluctuations and the pressure that has put on the prices of many products we source from overseas. There has also been a short-term impact on our customer base while people readjusted to a different economic climate. The consequence has been that we have had to look hard at our cost base across the board and work through any impacts that might be passed on to us from suppliers that principally trade in a currency other than sterling. Most of this readjustment was done last year and we are set up well for 2017. YOUR ROLE When did you start your current role?December 2015 What is your reporting line?CEO and CDO Are you a member of the executive leadership?Yes Are you a member of the board of directors?No What other emerging roles does your organisation have and what is their relationship to you?The CDO and I work together on developing both the business and technology roadmaps needed for digital transformation across the group. How often do you meet with your organisation’s CEO or equivalent?Weekly How many people at your organisation does your function supply services to?28,000 BUDGETS What is your annual IT budget, or your spend as a proportion of the organisation’s revenue?£100m What percentage of your budget is operational spend (ie keeping the lights on) and how much new development (ie innovation, R&D, exploratory IT)?60% operational (including depreciation), 40% new developments. CIO INFLUENCES Rank the following sources of advice/information in order of importance: CIO peers Analyst houses Media Consultants Industry bodies IT SECURITY Has your organisation detected a cyber intrusion in the last 12 months?No Are you expecting an increase in budget specific to security in order to tackle the cyber threat?Yes Does your organisation have a designated security professional – CISO or otherwise – and what is their relationship to you?Head of IT security within my organisation. RECRUITMENT Are you finding it difficult to recruit the talent you need to drive transformation?Yes Has recruitment and retention risen up your agenda as a CIO?Yes Does your IT organisation operate an apprenticeship scheme?No How many employees are there in your IT team?550 Are you increasing your headcount or planning to bring skills and the ability to react to needs in-house?No TECHNOLOGY Which technologies or areas are you expecting to be investing in over the next year? cloud data analytics/business intelligence ERP security AR/VR enterprise applications machine learning/artificial intelligence devices (mobile) devices (desktop) networking/communications. Which technologies or areas are you expecting to be investing in over the next one to three years? cloud data analytics/business intelligence ERP CRM IoT security AR/VR enterprise applications machine learning/artificial intelligence social devices (mobile) devices (desktop) wearables networking/communications. What emerging technologies are you investigating or expect to have a big impact on your sector or organisation?Artificial intelligence and mixed reality devices with have the biggest impact in our sector. THE EU Does your organisation do a significant amount of trade with the EU?No Does your department include technology staff from the EU?Yes Are you or have you been looking to the EU to recruit key skills?Yes