If there is one message Target’s EVP, CIO and Chief Digital Officer, Mike McNamara, wants heard loud and clear, it’s this: Target is no longer a laggard when it comes to digital technology and the retailer, in his view, is among the best in class in providing consumers a stable and secure experience — online and offline.
And McNamara has a hefty proof point to back up his bold statements. Target’s e-commerce site suffered no downtime during even its busiest days this past holiday season — a big turnaround from 2015 when its website crumbled and stalled online sales for nearly an hour on Cyber Monday.
It’s also shored up its cyber security strategy to avoid another cyber attack — the likes of what happened in 2013 when hackers accessed credit and debit card information of 40 million customers.
On top of all that, Target’s also now savings millions of IT dollars due to improved efficiencies and new technology development strategies since McNamara stepped into his multi-faceted role 18 months ago.
Attaining cost savings and streamlining the IT workforce were a priority, and he recalled sharing his insight with Target’s board of directors just eight weeks into the job.
“We talked about the state of technology and importance of technology in retail and I told them I needed less money and fewer people,” he said during a session talk at the National Retail Federation’s ‘Retail’s Big Show’ in New York City on Jan. 16, the second day of the three-day annual event that draws over 30,000 attendees.
“We had too much people and doing lots of stuff that didn’t really matter,” he told the hundreds attending his talk at the Javits Convention Center.
Setting a focus and a groundwork
When McNamara came on board there were 800 projects, mostly driven by outsourced partners, and involving a total staff numbering near 10,000. His first quest was to reduce everything and pull software development back in house. The team member-outside contractor ratio of 30-70 then became 70-30.
“We began focusing back down to what’s important and do fewer bigger things,” he said.
McNamara quickly began laying groundwork using what he called a “ruthless prioritization” approach and pushing for greater IT agility.
An early step involved polling top corporate leadership for insight. In a meeting, he handed each executive five Post-It notes and told them to put jot down one priority on each.
“After two hours, we had set a tech agenda and it was also the first step in changing the mindset [regarding digital technology],” he recalled.
Then it was time to focus on the in-house engineering team and establishing a best in class supply chain – a critical e-commerce element, noted McNamara. Supply chain is a technology focus he knows well as he serves as the chairman of GS1 Global, a non-profit association dedicated to the development of supply chain global standards.
“Supply chain will mark out the winners in retail in the future,” he said, adding it also plays a crucial role in competing against Target’s top competitor, Amazon.
“Amazon is fantastic, phenomenal and our fiercest competition going forward,” he said, “and we’re going to have to fight hard.”
Software is the killer tech for retail
But Amazon isn’t Target’s long competitor. Wal-Mart is another formidable player given its own robust website and acquisition of newcomer online retailer Jet.com, which Wal-Mart scooped up for $3.3 billion last year.
Yet McNamara is no newcomer to such challenges having worked more than 17 years as the CIO for Tesco, a European-based retailer. In that role, he directed management of technology for Tesco Group’s portfolio of businesses and led a multi-country roll out of Tesco.com.
So far, said McNamara, his Target strategy is paying off “huge.”
“Productivity skyrocketed. We needed to change how and the way we worked,” he said. “We’re not building for perfection but a place to start and build on.”
A key benefit gained from the groundwork and new approach, he explained, was speed and flexibility to move and adjust as needed.
“We are an agile organization using agile technology,” he said. “You have to be ruthless and be deliberate.”
Going forward the focus will remain on engineering as McNamara considers it vital in both the retail industry and in the world.
“Software is eating up the world,” he said.
Photo courtesy of NRF/Flickr: https://flic.kr/p/RieRd4
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