At Inforum this year, I got the chance to sit down with Travis Perkins’ group strategy director, Norman Bell, to find out how the project is progressing and to get some greater insight into some of the challenges that the company was facing prior to making the big decision to replace its core technology.
Bell explained that Travis Perkins was facing threats in the market from smaller, digital competitors - including the likes of Screwfix and Toolstation. The initial response from the business was to acquire one of these smaller players, and so in 2012 Travis Perkins bought out Toolstation.
However, this wasn’t enough to become a digital company, understandably, and more needed to be done. Bell explained that Travis Perkins learnt from these smaller competitors the importance of digital capability. He said:
That model is disrupting our sector category by category. And one of its key basis to do that with is digital accuracy. So that was a lesson around applying and deploying digital capability to improve the customer experience.
Another threat, or should I say missed opportunity, was that Travis Perkins wasn’t incorporating digital into its engagement opportunities with customers. Bell said:
The other example is that whilst our business is based on relationships, digital wasn’t used to really underpin the relationship. So we were developing initiatives to build the relationships, but without a strong digital backbone we weren’t able to execute on those things. We had point solutions that worked up to a level, but we didn’t have the richness that you get when you renew the backbone.
Out with the old
Bell explained that in order to fix this digital capability gap, it needed to address its core technology systems - many of which have been built in house and have been developed over the past 30 years. It has three core platforms in place - one is based on an old JDA platform, the other is a 30+ year old green system, and it also has a 35 year old white on black system - which pretty much run the entire Travis Perkins business. They run the branches, the supply chain and the ledgers. Bell said:
I term it an evolved ERP - it was never designed as an ERP, but it acts as one. Not documented, no process map behind them, lots of add ons and adjustments that have been made over the years that nobody really understands. But it works. We are the biggest player in the market, so they do work, but the issue is trying to change them.
Travis Perkins will be replacing all of these systems with Infor CloudSuite, which will include new ledger, supply chain, branch and front-end engagement systems. Bell said that this is going to be “difficult” and it was a “brave decision” on the part of the business. He added:
We have been able to develop lots of new functionality within those old systems over the years, but it can only go so far because the data architecture isn’t strong enough, the technical architecture isn’t strong enough, so we had to make the decision to change the core. That’s why the backbone is critical.
Travis Perkins may end up adding additional Infor modules further down the line, but it wants to fix the core before it starts looking at additional opportunities. As a result its HCM and transport systems will remain in place for the time being. Bell added:
That move to omni-channel that we’ve been able to make a level of progress on, is still held back by the lack of accuracy in terms of the supply chain. That digital backbone gives us accuracy around where the stock is, where it’s coming from, all of those features. We’ve got a handle on it, but it’s not as accurate as a new system will give us.
As noted previously, the key reason that Travis Perkins is undertaking this huge project is in order to be able to deliver new digital experiences to the customer. This in turn, hopefully, will equate to Travis Perkins factoring into more of its customers’ buying decisions. Bell said:
The key things are around the customer experience being sharper, the branch effectiveness being higher, and therefore ultimately the business we are doing per customer goes up. Most of our trade customers trade with more than one merchant, that’s just a fact of life. But the key has always been to get more share of that customer’s wallet.
Matching the service set, matching the solutions that we sell to those customers’ current projects gives you a better opportunity to win more of that business. We firmly believe that by making that experience sharper and more relevant at the coalface - and making our colleagues more effective using an end-to-end core platform - will open up those opportunities.
Bell provided an example of how the business is rethinking how it will work with customers, once the new systems are in place. At the moment Travis Perkins has little engagement with the customer on its project needs, instead focusing on the final transaction. Bell hopes that this will change. He said:
The big example is that one of the first experiences that a customer might get at a counter is, is it cash or account? As opposed to, what is your project today and what products might actually make up that project? For either non-committed customers, or less committed customers, that barrier of being told whether they’re in or out is a challenge.
So changing that journey, which says ‘how can we help you today in the first instance’, and get a solution in place, before we ask them how they want to pay for it, is an example of something that will make a significant difference to the less committed customer group.
Bell identified two key challenges with the project (which is still in the design phase) - data and change management. Neither should be underestimated, particularly when shifting from systems that have been in use for over 30 years. On the one hand the data requirements are completely different now to what they were in the 1980s. And on the other hand, users that have been using the same systems since the 1980s (no matter how difficult they are to use) will be reluctant to change.
On the data side, Bell explained:
It depends on where you start from. If you start from a 30 year old system, the design principles for data are totally different from a system today. In those days, the key design principles were around minimising. So only create and store the minimum that you can get away with. You use the minimum level of compute power, because that was your cost point. And you as an IT function were a cost centre, not a business enabler. So the systems of that time work on that basis.
The new digital transformation platform says that data is an asset. Your handling of that data is a critical asset, second probably only to your people. And therefore love your data, don’t be scared of having lots of it, keep it clean, but don’t be scared of volume. That transition we’ve got to go through is that there isn’t enough data in the core from the history and therefore we now have to work out how we build enough of a base to get the ball rolling when we cut over. That’s a challenge that we’re actively grappling with.
Bell said that Travis Perkins is tackling this by instead of discarding data from within the old systems once its been used, it is now finding new ways to capture it for a period of time to generate the base that it needs for the new system. Once the new Infor system is live, the platform will obviously take care of itself from that point onwards.
On the change management piece, Travis Perkins has called in Deloitte to help and has set up a ‘change network’. Bell explained:
We’ve had volunteers from within the businesses and proposed players who are well respected individuals, trusted individuals, who will put their time in to understand what the new world is about and help us to assist those guys that are going to be reticent to make the step.
We’ve got a programme that we’ve already built, which grows over time, links to the testing strategy and timetable, so as soon as content becomes available people experience it, we get feedback from that, we understand how the change is going to look from the product point of view and we plan for that. So it’s an incremental approach over many months, but it’s also linked to the cutover in the end.