Inside Billabong's IT strategy

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Inside Billabong's IT strategy

How CIO Jason Millett is helping turn the surf icon around.

Billabong International will centralise and transform its worldwide IT capability and systems to underpin a major business turnaround strategy announced by CEO Launa Inman in August last year.

Driving the technology change is Jason Millett, a former Westpac, CBA and Telstra IT executive who joined Inman's global leadership team in the newly-created role of "Global Head of Technology, e-Commerce & Transformation" at the ASX-listed surf icon in January this year.

"The opportunity to potentially be a part of a turnaround for an iconic Australian company like Billabong — with its global presence and its extraordinary influence on the surfing industry and surfing culture and sport apparel over the last 40 years — was too good to say no to," Millett told iTnews.

"It's a great Australian company that owes a lot back to its shareholders and back to the Australian people.

"It has a global presence that needs to be leveraged more effectively, which is what we're working really hard to do, and we've got fabulous assets in this company from a design perspective, from a brand perspective, and as I've discovered in the last six or seven months, from a technology perspective."

Billabong unveiled its turnaround strategy in August of last year (pdf). The strategy is broadly divided among three pillars — stabilise, build and leverage — with project works extending into FY16. The company is firmly in the stabilisation phase.

IT is one of four "organisational enablers" in the turnaround (the other three being people, management and innovation).

Billabong initiated an internal IT review in the latter part of 2012, engaging Millett as a consultant to run the process.

"That's where the recommendation around forming a global technology group in order to support, underpin and enable the business transformation that had been called out in August of 2012 [came from]," he said.

During the tail end of his consultancy work, Billabong approached Millett to oversee the global technology effort. He accepted the offer, and now runs a global IT team of 80, spread across the company's three regions — North America, Europe and Australasia.

Regional focus

In some ways, the regions are both a blessing and curse: they fostered pockets of IT skills and knowledge that are now being leveraged more broadly across the group, but they also led to a piecemeal environment that complicated even simple tasks like email.

"The technology ecosystem of the Billabong group is ... quite disparate and regionally-based, right down to having three different ERP systems, different warehousing systems, different application stacks, different commerce platforms -- even different email systems, to the point where one of the frustrations for the CEO was an inability to send broadcast emails across the group," Millett said.

"Largely the [Billabong] business was run as three businesses, albeit with a global CEO and a global CFO.

"The regions have been allowed to just get on and do their business in the regions and continue to grow their business in their regions."

This is changing.

Millett is driving a 'think global, act local' mindset across the global IT organisation, with team structure, procurement and licensing caught up in the first wave of change.

"Starting to get the organisation to think globally, act locally, to think about what IT assets and what IT relationships could be leveraged more completely, was really the main focus of the early stages of this calendar year," he said.

"We've signed agreements on a global basis which have given us much better value as a result of that because we're able to present a scale proposition as opposed to a less consequential sub scale regional proposition."

Technology and "innovation ideas" are also being shared across the three regions.

"There's only about 80 people globally working in IT. It's much better to have a team that acts singly as a team of 80 than it is to have 3 teams of 30," he says.

"Also you can draw from the strengths and support the possible weaknesses that exist across that workforce as well.

"I've got very good infrastructure management happening in Australasia, and as a result we're hosting some services out of Australia.

"I've got really first-rate e-commerce capabilities out of North America, and as a result my front end systems, shops etc. in Australia and Europe are developed out of North America.

"And I've got a very good interface development group in Europe which has helped in simplifying systems and processes."

Read on for Billabong's big data and email consolidation plans, as well as the future of retail.

Data insights

As Billabong transitions to single systems, it is concurrently rolling out a business intelligence platform underpinned by SAP's Business Objects and experimenting with Big Data analytics.

The company already has BI in place, using Oracle's Hyperion, which "periodically" draws from the three current ERP systems "in order to get insights around daily sales, weekly sales and general performance" in its wholesale, retail and online operations.

But the structure and task remains "challenging" and ripe for transformation, according to Millett.

"One of the challenges we've had around running a global company that's been very regionally based is getting insight and cut through on financial and customer information that's produced in the regions," he said.

"We're certainly not short of data. We've probably got so many different data sources [that] it's just about how to bring it together and provide that coherent fact-based information view that can allow a global management team to actually drive the business forward with purpose."

Billabong is currently in the process of implementing an SAP Business Objects system that will ultimately sit atop a consolidated environment, acting as a presentation layer for globally-driven KPI dashboards that cut across wholesale, retail and online operations.

"That can really provide the necessary insight that makes running a global business so much easier than it probably is at the moment," Millett said.

Data marts have been established in each region over the past six months in preparation.

Millett said he was also experimenting with "Hadoop-style" Big Data technologies to drive further insights out of Billabong's global data stores.

"I'm actually running an experiment ... looking at how we can take a number of pots of structured data that sit in our point-of-sale systems, our online systems, our wholesale and warehouse management systems, and drive those into an unstructured data bucket to then start to drive either business insights or customer insights, as we work through what the questions are that we need to have answered as a result of effectively getting this into one place," he said.

"Our environment is largely digitised from a data perspective but not all the tracks are connected, because they're in different formats, different systems, different processes."

Unwinding email

Billabong is also driving towards a single email system across its three regions. All options are still on the table, according to Millett, as the company charts a path to consolidation.

"With some email systems their ability to become integrated into the business is much higher than you would hope, so it's not just a simple matter of lift and [shift]," he said.

"You've got to unwind some embedded databases that have been workflow-enabled through the legacy email system."

North America and Europe run Microsoft Outlook, while Australasia uses Lotus Notes. No decision has been made with respect to a future system, whether on-premise or cloud-based.

"I'm open to anything that drives business value at this stage," Millett said.

Read on for Millett's vision for retail systems at Billabong.

The future of e-tail

E-commerce is one of Millett's three functional areas of responsibility and a key plank in Billabong's turnaround strategy.

The surf giant is working towards an endgame where its "bricks-and-mortar" retail and e-commerce capabilities are tightly integrated.

"With e-commerce it's really about looking at how we get the convergence in the channels," Millett said.

"A good example of that is in North America we've got the queue-busting technology on iPad minis, where customers can be served in the store on the iPad device.

"Alternatively, a customer can come in and look at the breadth and range of the product and say, 'Well actually I like that one in blue', and our iPad mini device then gives the associate in the store the opportunity to either fulfil the customer on the spot with something that's available in our e-commerce warehouse, or alternatively have it delivered to the store for the customer to return."

The opportunity to start a transaction in-store and finish it online is but one way Billabong hopes to improve the traditional retail experience.

"How the customer chooses to interact needs to be up to them but it needs to be as equally easy for them to walk into a store and be fulfilled as it is to go online, and they need to have the options around how they experience the Billabong brands and the products that we have," Millett said.

"In the next three-to-five years we'll build the capability. You'll see the e-commerce group merge very tightly with the retail group and continue to get that real advantage that a pure play doesn't have, in that we can give someone an experience in-store and online that drives advocacy around the brand."

Billabong is also continuing to develop its vertical e-commerce capabilities via the fully-owned in North America.

The company is aiming to harness the "richness" of its online properties to drive product sales. For example, describing what one of the company's sponsored athletes is wearing, "and one click and you can be wearing it in your size delivered to either in-store or to your home".

"There's so much upside in that space," Millett said.

"Obviously it's a much more profitable business model when you're not encumbered by bricks per se and you're just doing a pure e-commerce play, but we're quite excited about the potential that has for us."

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