For Kmart Australia, Stability and Low Cost Are Key
A Q&A With David Keil, IT GM, Kmart Australia
Since opening its first discount department store in Australia in 1969, Kmart has become one of the country's most recognizable retailers, growing to more than 190 stores across Australia and New Zealand. Kmart recently recognized CSC as IT Supplier of the Year for being "Brilliant at the Basics" — an honor CSC also received two years ago. In this interview, IT GM David Keil provides insights on how he manages Kmart's IT business.
The Kmart brand promise is "irresistibly low prices." How does this translate for your IT department and CSC as a supplier?
Our position in the marketplace is all about lowest price, so in IT we have to help reduce the cost of doing business, deliver faster and bring value to Kmart. We are a development shop — with a great team of developers — and we utilize a mix of in-house and best-of-breed packages. We don't tend to use external consultants or rely heavily on third parties; we lead business projects and initiatives and engage partners to support us.
We see CSC as providing fantastic infrastructure services to us. It also provides us with application support for our SAP financial system. We engage CSC and discuss options, and we rely on it as an infrastructure expert.
So Kmart clearly has a focus on reducing the cost of doing business; what benefits do as-a-service offerings bring to Kmart compared with traditional services?
Anything that provides us with potential cost reduction is very attractive. However, we do also have to weigh volatility vs. stability. The amount of change we expect does have an impact on the options we would consider. If I look at our SAP financial system, for example, we were just looking for a stable, cost-effective way to manage our financial systems, so moving to a fully outsourced model made sense. For some things that are evolving and need a heavy amount of innovation, we see advantages in keeping them within Kmart.
We're starting to see a trend toward providing end user tools (software and applications) tailored to roles or 'work styles.' Are you looking at this approach or segment for your end user computing in each business function?
I have the view of 'try and keep it simple' — 80 percent standardized; tweak the other 20 percent. Too much segmentation prevents you from being agile. We've got a team of designers using Apple devices. I wouldn't force a Windows environment into that department because they need appropriate tools to perform their jobs.
You've already embarked on the bring-your-own-device (BYOD) journey. What can you tell us about your experience?
We went into it with the mindset of 'providing a service,' not as a cost-reduction project. We started small: email available via mobile phones, for example. If BYOD means I can provide a cost-effective service, then of course I'm keen to do that. There are a number of BYOD PCs, tablets and phones, and this will naturally evolve with the refresh cycles. I know that picture will change over the next two to three years. The environment will definitely look different.
How do you approach security in this BYOD environment?
Security is obviously one of the most talked-about challenges for CIOs. We run an MDM [mobile device management] process on all mobile phones, but what I'm trying to encourage and drive is an environment that, as well as policy driven, is also people driven. We can try and put all the controls in the world in place but we are not a bank, so we need to be realistic about our requirements.
For us, it's about how we can provide a safe place for our data to be stored and have a very strong policy view about selfawareness. I'm putting a lot of weight on that. We are currently working on an education program for employees and their families to reinforce the importance of cybersecurity, both at home and in the office.
Shadow IT is becoming a concern for some CIOs with the increasing pressure from tech-savvy departments such as marketing. Is this a concern for you and Kmart?
I believe that if you have this problem then you're not closely engaged with your internal customers. If CIOs think they have the right to own innovation and technology for the company, then they will make life difficult for themselves, and business units may work around the IT department. Our marketing department has the need to do heavy customer analytics, and it needs the technology to enable that. We assisted marketing with the recruitment of the right skill set and support for its requirements. If you are up front and at the table with your customers and partners, then this situation is made easier.
How is Kmart using cloud computing?
We have segmented our apps into core and noncore. In regard to noncore, I think about the most appropriate and costeffective way to support these, and [whether] we would really want the skills internally to manage them. We have a lot of systems in our HR space and CRM that we have outsourced to cloud providers, but we've done some cost analysis on some of the offerings out there and found they are no cheaper than hosting the systems ourselves. However, it's an evolving story. I have the privilege of being the privacy officer for Kmart, and where data is hosted is probably going to become more important for us. You could call it a hybrid model as we've been outsourcing for years, so I don't look at it any differently.
What are your priorities for Kmart IT over the next few years?
Everything we do is driven by Kmart's business strategy. I've translated that into three main priorities that I'm accountable for: How do we make life simpler for our customers and team members; how do we help Kmart grow as a business, be more productive and be more efficient; and how can we help drive process improvement with mobility, information provisioning and emerging technologies to ensure we have operational excellence?
So I'm not going after a particular technology, but it's more about how we are aligned with the business and where the business is going. I focus on how best IT can help Kmart get there in a cost-effective manner.
Finally, what in your view is the secret to a successful partnership?
It gets down to people sharing a common goal, understanding that goal and then making it work. Alignment is important, and understanding the principles of how the business works. We've taken CSC out to our stores and warehouses so they can really see how the business works, understand the scale of what we do and appreciate the impact if services are not working. Unless you see the operation and the hundreds of people affected, then how can you support our business? We are privileged to have Frank Arrigo, our service executive, working with us. He knows Kmart and he 'lives' here, and we consider him as one of the team.
Samantha Sinclair is a digital marketing principal for CSC in Australia.