Revolutionising retail

John Keeling, Head of IT at the retail group John Lewis Partnership, on the pressures of managing technology in the modern enterprise.

Working in IT has changed a lot over the last few years. It’s no longer just a matter of making sure the technology functions; you also need to be aware of any number of other factors. In particular, the requirement that business be aware of its environmental impact is more pressing than ever. Our Chairman Charlie Mayfield has spoken at length about the need for business to be part of the solution to the climate change issue rather than part of the problem.

Thankfully, sound environmental practice has always been important to us internally – it’s in our DNA. Our company has a unique structure in that our 68,000 employees, or ‘Partners’ as we call them, are the shareholders of the business. If we’re wasteful we lose out directly as a result, in a lower Partnership Bonus at the end of the trading year.

We take our community responsibilities very seriously and are justifiably proud of our CSR capability and achievements. This year we’ve shared more information with other companies about what the Partnership has done and is doing to tackle green issues.

All of this applies within the IT organisation. One example of a successful project I’d cite is our selection and rollout of a software solution for automatically powering down desktop PCs overnight. But Green IT is not just about infrastructure initiatives – it’s also about enabling the Partnership to tackle key objectives such as transport optimisation, reducing the number of miles our lorries travel per million pounds of sales. And it matters across the whole lifecycle of IT – design, procurement, use and disposal.

The Green IT projects we’ve progressed so far have made sound commercial sense too. The challenge now is to keep up the momentum, continually assess ourselves against best practice, and identify further opportunities to lead.

With exponentially increasing amounts of information that needs to be stored, the data centre is a major front in the environmental battle. The demand for power is an issue we have had to tackle. It was a concern to us in 2006 in particular when our server growth predictions showed that we would need additional data centre space this year if we took no action. We addressed it by an Intel server virtualisation project, undertaking a four week “size of the prize?” exercise with VMware, and identifying that a 10 to one ratio of virtual to physical servers was possible.

At every governance step the project team were "pushing at an open door" and the initiative has been massively successful. Just on the pilot alone, we saved a floor loading of IT kit roughly equal in weight to a large estate car – 1.4 metric tonnes – and avoided about €140,000 of hardware purchases. Our project manager likes to illustrate the power savings we’re achieving using a map centred on his home, with an expanding red line perimeter showing the equivalent number of households’ electricity usage.

We’re now turning our attention to some of the other ways in which we can reduce consumed power – some of these can be as simple as raising the temperature we cool the data centres to by a few degrees Celsius and saving the air conditioning power needed for that cooling.

A range of challenges
But the environmental responsibilities are only one part of the picture. There’s also the task of managing IT services across the different sections of our business. We always need to make sure we’re striking the right balance between shared services, with the bottom line benefits they bring a company like ours, and the specific requirements of our individual trading divisions (John Lewis department stores, Waitrose supermarkets, and let’s not forget Greenbee, our direct services company). What we always aim to do is find cost effective ways to deliver the services which are common across the Partnership, without constraining the individual businesses’ ability to innovate and differentiate from their competition. The key to success here is open communication and a collaborative approach across the IT function about the challenges on the horizon.

As well as our traditional physical stores our online portals are growing in significance. Though managing technology for these online stores requires some different approaches, there remain a great many similar elements. In particular, many of the underlying technology requirements themselves are common these days anyway.

For example, traditional concepts like security, robustness and fit-for-purpose are relevant whatever the delivery model. Availability of our systems, whether in store or online, has become increasingly important because our customers expect it – they’ll shop elsewhere otherwise. We emphasise agility of approach more than ever nowadays but that applies whatever business project we’re engaged with. Technology isn’t just there for technology’s sake. So in all that we do, we continually need to demonstrate that we’re business savvy and not just “geeks bearing gifts”

We were one of the first major companies in the UK to deploy Linux-based systems on the mainframe environment to underpin some of our critical trading systems. It suits our requirements, both technically and commercially, and fits our technology base and skill set. We wanted a solution that would play to our strengths of a mature reliable and scalable mainframe operation which could provide the flexibility for future growth, but at the same time be portable enough to give us platform choice if we need it. It was an ambitious move but has proved to be very successful for us.

We have recently experienced massive growth in revenue from our online portals. Despite this growth and the general buzz around e-commerce we see our physical and virtual channels as complementary. We see them driving business both ways.
We get customers using the website and then shopping in our stores, and some of those will be new to the Partnership. Conversely, we have existing customers making increasing use of our online services because they know and trust our brands.

As we go forward IT will play a part in nearly all that the John Lewis Partnership does. A key challenge, as always, is to provide reliable and fit-for-purpose IT systems and computing facilities to match our business current needs and future ambition. We are a business with growth plans and looking ahead we need to be able to match the demand in new systems and computing capacity. We trade longer hours nowadays, and our websites trade 24/7, so availability needs to be very high. A key challenge is to cater for this as we change and grow our technology to match business demand. At the John Lewis Partnership, technology to us is not just about making our business productive, it’s also about making a difference in our customers' experience and service in all our trading channels. As technology continues to advance we will be constantly considering how it can make a difference.

The virtual high street
John Lewis recently announced that sales from its online portal had risen by 40 percent in the past year. This figure has contributed to an overall 5.2 percent increase in sales worth €133 million by the first week of December 2007. But John Lewis is far from being alone in experiencing major gains in their online business.

According to Forrester Research, by 2011 online retail sales in Europe will have more than doubled from their 2006 levels. An estimated 174 million shoppers will be spending €263 billion annually, that’s an average of €1500 per consumer. According to Andrew McClelland, Director of Public Policy for the Interactive Media in Retail Group, the arrival of well known high street names in the online space is one of the main drivers of this surge: “Many high-street retailers are getting behind their online channels and tempting people online,” he says. “The brand recognition offered by high-street stores helps to give consumers the confidence to shop online.” With ever increasing broadband penetration, this trend is set to continue. The Internet could soon resemble the main street in your hometown.

John Keeling graduated from London University in 1979 with a degree in computer science. He has spent the last 15 years at John Lewis Partnership, initially for Waitrose Systems and then for Computer Services. After being Head of Technical Support for two years he became Director of Computer Services in 2002. His responsibilities cover shared IT infrastructure (including the John Lewis Partnership's Data Centre), shared systems (Finance and Personnel), and shared IT services for both the John Lewis Partnership's major divisions of Waitrose and John Lewis.