ASOS CIO talks about the 'nightmare' of aligning technology with business

Profile picture for user ddpreez By Derek du Preez May 7, 2014
Summary:
Peter Marsden urges CIOs to sit with the business and understand what their future needs are

ASOS
Given that the UK has fully embraced e-commerce and internet shoppers now contribute more to the nation's GDP than other country in the G20, it is perhaps unsurprising that it spawned one of the world's leading online retailers – ASOS. When launched in 2000, the website was aimed at providing consumers a tool to buy clothes and accessories that had been worn by celebrities, or otherwise items As Seen On Screen, but has since grown to a global online fashion store that has over 65,000 products that are targeted at the 20-somethings market. ASOS now has eight local language websites (UK, US, France, Germany, Spain, Italy, Australia, China and Russia) but also provides free shipping to 234 countries in total. It's website attracts 29.5 million unique visitors a month (excluding mobile) and has 14.8 million registered users. With the Group's chief executive recently claiming that £1 billion in annual sales are firmly in the company's sights, ASOS is truly an online giant.

However, this poses a serious challenge for the person in charge of the company's technology – in this case, Peter Marsden. Speaking at SDL's Innovate conference in London this week, he said that online fashion shopping is more difficult when compared to other retail categories because ASOS still has to compete with the high street, where when it comes to clothing, consumers often like to try before they buy. This means that if online fashion retailers are going to compete with the physical outlets, they have to make the customer experience as seamless as possible – this doesn't just mean a fancy website and mobile app, but also unrivalled delivery and next generation payment options.  Marsden said:

“We have got to offer a much better experience, as consumers are not going to be able to see it and touch it until its their hands. They have got to be able to return it as seamlessly and quickly as possible. Payment options, delivery options – every customer experience has got to be right. Not just customer touch points like the website and the app. We have got a long way to go until we get there.”

Marsden was speaking at SDL's conference because ASOS is using the company's Fredhopper platform to help customise and personalise the consumer experience for shoppers, depending on which location they are based in and which device they are using. For example, a shopper in Germany is likely to want a higher quality product than a shopper in the UK, according to Marsden, and being able to deliver results based on specific user information should help to drive sales. A lot of this comes down to search, where ASOS found that consumers that search for goods are 30 percent more likely to buy than those using the site's navigation functions.

ASOS CIO Peter Marsden

SDL's Fredhopper is being used to improve this search function, where if a shopper has been to the site before and made purchases, they will be delivered personalised results that hopefully best reflect the buyer's needs. Previously ASOS had only been able to deliver up to 1,000 results, even if there were 30,000 available, and they wouldn't necessarily be the best available option. Marsden said:

“Search is hugely important to us – we are starting to use personalisation and recommendation engines so that once you log into our site, we will remember your size, what brands you're buying, what people similar to you are buying. This isn't to push stuff onto you, but to give you a helping hand.”

Although Marsden's insights into the company's technology developments were interesting, I thought his comments about how he operates as a CIO in a fast paced, online environment were more pertinent.

You don't have ten years anymore...

Shortly after Marsden's presentation began he didn't waste time to tell the audience that his job is a “bloomin' nightmare” because of the challenges that come with aligning a technology build and investment with the strategy of the business, which in this day and age can iterate every couple of years. He said that a lack of time causes him endless problems, and this is largely because of how businesses now plan for the future.

“Think about business strategies twenty years ago, I remember writing a business plan for a bank I helped launch called Egg in the early 90s, and it was a ten year business plan. At that point the common logic was you write your business plan, you write your business strategy, and every other functional strategy is subservient to that. So you write your business plan and then you do your technology strategy. 

“The problem is that the world has now changed; how many companies now have a business strategy that lasts more than two to three years? Certainly if you are an e-commerce business, the business strategy changes really quickly. Technology on the other hand still takes a long time to build, so if a business strategy is lasting two to three years, can you imagine if I went to my CEO and said I've got an IT strategy that lasts two to three years? Then we will throw away that stuff and build some more stuff?”

Marsden said that no matter what anybody says, this short term view for IT just isn't realistic and technology investments are still looking at a life-span of at least five years. He said that this gap between business strategy and IT investment is widening because of the rapid changes in the consumer's expectation of how they experience and interact with online products.

“The customer expectation of their experience with our products is regularly changing – all the time we are raising the bar of customer experience. So even if we have something that looks great today, we know it has to change, so I have to make sure that the technology platform that has been put in place is flexible enough to change on a regular basis. 

“That is really, really hard. Speed of change is the hardest possible thing. Technology has to be designed now, thinking about customer experience and how that experience might change - that's a huge headache for me.”

This 'headache', according to Marsden (and I have to agree), is even worse for companies that have a long history and are dealing with legacy applications and systems that are so deeply embedded into a company's processes that incorporating agile changes is near impossible. As each year goes by, he said, it becomes harder and harder to maintain flexibility. Marsden believes that overcoming this challenge is largely down to how the technology function is structured within the business – where IT must sit with departments, such as marketing – as well as hiring people that 'get' business strategy.

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“So what do we have to do now? We have to hire IT folk that can talk about business. That can think about what is next, not just ones that can be told what to do. They have to be engaged with where the business is going and what it might change to. Technology isn't just a cost, it isn't hidden - in our business it is the shop front. I have to be the heartbeat of our organisation. 

“And it's not about outsourcing, if any of you guys have a great experience of outsourcing technology – great, but that's rare. To me having great technology people that are part of your business makes a huge difference."

And to all you CIOs that like to hide away from other departments and be locked away near the servers? Marsden has some advice for you...

“From my perspective I have to be out there trying to understand where each department is trying to get to, where the business is trying to get to, because every decision I make could be hindering where they are trying to go in the future. If I don't have that crystal ball I could really be constraining my organisation. 

“We have to be truly agile and collaborative, I have to work right alongside my colleagues – not in a separate department or a separate building. My team sits right with our marketing team, which we have a great relationship with. They understand our constraints and we understand where they are trying to get to.”