To print: Click here or Select File and then Print from your browser's menu

This story was printed from silicon.com, located at http://www.silicon.com/

Story URL: http://comment.silicon.com/andymccue/0,3800002580,39117895,00.htm

The McCue Interview: Safeway CIO Ric Francis
Morrisons merger talk, 'new breed' of CIOs, baseball and thief-proof trolleys...

By Andy McCue

Published: Tuesday 18 May 2004

High-flier Ric Francis has been CIO of three major organisations and is still only 41. In his current role at Safeway he's currently balancing an aggressive and innovative technology strategy with the small matter of the imminent £3bn merger with rival Morrisons. And when he's not there he can be found at Upton Park "crying into his beer" over the plight of his beloved West Ham United. Andy McCue gets an insight into what spurs him on...

The first thing that strikes you when you walk into the office of Safeway CIO Ric Francis is not the drab Hayes factory skyline or the various charts and store location maps pinned to the walls but a huge framed New York Yankees baseball shirt signed by the team's batting great, Paul O'Neill.

The shirt, which takes pride of place in the office, was a leaving present from colleagues at his last-but-one job as New York-based international CIO of PepsiCo. It was flown out to Seattle to get the player to sign it. Francis says he 'adopted' the Yankees as his sports team during his time in the US as he was unable to get his West Ham United fix. Signed photos of Joe Cole and Paulo Di Canio adorn one of the other walls – "I'm found there far too often crying into my beer," he jokes.

It is an indication of how far Francis has come that at the age of just 41 he is CIO of a major supermarket chain in the process of a £3bn merger, has been CIO and member of the executive board at TI Group/Smiths Group, international CIO of drinks giant Pepsi, and business systems director at Mars, as well as learning the ropes at IBM and in the freelance consulting world. It's hard to imagine where someone goes from here.

"Given I've done the CIO role for three pretty large organisations there's always the question of do you do another one or do you try and do something subtly different," says Francis. "The role of CIO now allows people to move into broader directions. It allows people to take broader business roles. I think you will see CIOs becoming COOs of organisations. Not necessarily CEOs – those are still going to be few and far between."

And just to keep himself busy Francis is involved with a couple of technology start-ups – including a hosted email service called Virtual Email - which could provide other interesting options for the future.

But for the time being there's the small matter of Safeway's £3bn merger with Morrisons to contend with. It will make the combined group the third largest supermarket chain in the UK. That has been approved by the government and the offer has been formally accepted, with the deal expected to be completed in early March.

Francis is fairly tight-lipped about the details, largely due to the fact he says he has not even yet sat down with his opposite number at Morrisons to discuss how the two IT operations will be integrated. He says that from the day the offer first came in last January, his focus has remained on the three-year IT strategy he designed when he joined Safeway in 2001.

"There's no communication at this point in time. We'll do our work, understand our capability. We've got a long-term strategy that we've been operating for a period of time so we'll understand how that works and try to assess how that will fit into the new organisation. But until we can actually sit down and have live conversations that will be pretty much it," he explains.

There haven't even been – or at least he won't admit to – internal discussions about which parts of the IT operation and which supplier deals are likely to remain, be ditched or consolidated.

"I think it would be too arrogant of us to make a call on that, not having pure visibility into where they currently sit as an organisation and what they currently run. I'm sure they've got a very effective solution for the environment they are running today," he says. "We've got the main suppliers – the regular players IBM, BT, NCR. I fully expect to find that most of those names exist on the other side of the fence as well."

The merger discussions have been going on for over a year now and Morrisons has warned that up to 1,200 non-store jobs will go as part of plans to save over £200m a year but Francis says this uncertainty has not affected the motivation of his 400 IT staff.

"I've lost 23 people since 9 January last year. That's significantly less turnover than you would expect in a normal year from a 400-plus organisation," he explains. "I always believe that - putting money to one side because every individual is motivated by that conversation at one point or another - the thing that keeps IT people more interested than anything else is interesting work. If you give people interesting work, if you are using new technologies, if you are putting new solutions together, people stay with it because they want to do that and I think that's an environment we have created here."

That means the focus has been, and remains - for the time being at least - the supermarket's three-year IT strategy. Francis says that when he first arrived in 2001, the IT division was driven by the need for quick, short-term decisions, a strategy which had to change.

"That was working fine but there comes a point in time where it won't work forever and you have to stand back. Certainly in the world of IT, short-term decisions will get you a certain amount of the way but you eventually have to stand back and say I need a strategy to be able to do this. Getting the re-engagement with the business is the biggest achievement."

IT, he says, is critical to the retail business and Safeway's current technology focus is very much on improving in-store performance.

"If I can save 30 seconds at every checkout for every customer that goes through in each of our 9,500 lanes with every one of those transactions, think of the amount of time that saves in store hours, and the labour cost savings. It is immense," he says.

The focus on the store was one of the reasons Safeway ditched its online shopping venture in 2001 – a decision Francis maintains was the right call for the company.

"Clearly there are successful online operations around but they're all still very small parts of any one of the retailers' businesses at this point in time. I don't think you can point to many of them and say they are actually making money," he says. "And at that point in time when we're changing the way we wanted to look and feel to the consumer the last thing we wanted to do was encourage them to stay at home."

Francis says his CEO, Carlos Criado-Perez, understands the importance of technology and is prepared to invest to gain a competitive edge over rivals.

"The CEO sees information as being critical and we drive that information through to our stores through our online reporting stuff with Business Objects. He sees anything that improves store operations as being important. But he's wise enough to understand that that stuff comes at a price and you have to invest your way to it," says Francis.

Francis rattles off an impressive list of major IT projects over the last year, some ongoing, that demonstrate the commitment to innovation and investment. These include an enterprise application integration hub based on the IBM WebSphere platform; PeopleSoft financials and HR packages; the rollout of the anti-card-fraud Chip and PIN technology across the whole Safeway estate; trials with RFID tracking tags; merchandising space planning tools; voice-based and scan-based picking systems in depots; and unusual innovative technologies such as anti-theft trolleys whose wheels lock at the exit if the goods haven't been paid for.

The IT operations drafted in around 100 extra people over the year to help with some of those projects, as well as using an offshore application development firm in Malta that Safeway has worked with for six years. But Francis says that is about as far down the outsourcing route as he is likely to go.

"I'm not a huge fan of outsourcing because of the loss of control," he says. "Would I lock, stock and barrel outsource this to EDS or IBM? I can't see it."

It's probably fair to say that Francis one of the 'new breed' of CIOs who are happy to hand over the day-to-day running of the IT operations to a CTO and instead concentrate on the broader business strategy. It is a trend Francis sees continuing.

"We're truly starting to see real CIOs now. Too many organisations still confuse what it is they want. They'll go to recruit a CIO but they really want an IT director," he says. "Over a period of time I think we'll see less and less CIOs coming from a technology background. You'll see more and more people with a mixed upbringing as far as their career history is concerned because I think that enables people to play on both sides of the fence."

In the meantime Francis says it will be a relief to finally sit down and get started on the integration of Safeway and Morrisons' IT operations.

"In reality within Safeway, as I'm sure within Morrison, we're understanding what our current capability is, understanding where the organisation's strengths are and looking forward to the day when the two organisations can start talking to each other and say 'Where are the best pieces of the jigsaw?'"