Restaurant and pub operator Mitchells & Butlers (M&B) may not itself be a household name but many of the brands under its belt are – including such familiar watering holes as All Bar One, O’Neill’s and Harvester.
With some 1,600 outlets in the UK, 40,000 staff and an annual turnover of around £2bn, the company has claimed a large portion of the nation’s casual eating and drinking market. But it wants to cut itself an even bigger slice of this pie – and technology is a vital ingredient in the business’ expansion plans, says CIO Mike Sackman.
Sackman, who has been M&B’s IT chief since 2007, is based in the company’s Birmingham head offices, from where he heads up an inhouse IT team of 50.
The CIO is responsible for M&B’s business change and technology strategy, programme delivery and IT operational services. Top of his agenda is an ambitious change programme that touches all aspects of the business – from the modernisation of sales and service interactions with customers, to rolling out labour scheduling tools, to the deployment of a master data-management system, and – looming on the horizon – the implementation of a private cloud.
Deploying mobile email to staff who need access to business data as they travel between outlets has also been keeping Sackman busy. Add to that, the company has an active presence on social media sites such as Facebook, and has been playing in the mobile apps arena with its Harvester iPhone app. It’s the CIO’s job to keep all these technology strands in play – and ensure they are pulling in the right direction for the business, says Sackman.
“For me, the key part of corporate IT is that we’re integral to the organisation’s overall strategy, as opposed to responding to it,” he tells silicon.com. “I’m less about hiring a load of technologists, I’m about how do we drive profit in M&B’s pubs?”
“If you’re pure technologist then there are plenty of technology companies,” he adds. “If you want to be a corporate CIO, I think it’s about being able to influence the strategic direction of the organisation – but also being able to deliver on those promises.”
Sackman is no stranger to the proverbial CIO magic trick: reducing IT costs while also driving profits through technology-enabled innovation.
“There are two key threads [to my IT strategy],” he says. “One is to deliver the change agenda that we’re trying to deliver as an organisation – lots of which is enabled by technology – but also to minimise the overall cost base of the organisation, given that we’ve got some challenging targets in terms of overall overheads at the company level.
“Some of that is reducing the running costs of IT, but [it’s] also helping other people across the organisation reduce their running costs through automation and efficiencies and all that good stuff. I’ve got a key role to play in that area, as well as driving the sales line in the restaurants themselves – the implementation of some technology and some business process change can add some real benefits from a profits perspective.”
“The phrase we use internally to focus our minds is…
…that we are about implementing change, not about installing technology,” Sackman adds. “My role spans change and technology so the biggest challenge is not necessarily the deployment of technology, it’s deciding what order and ensuring we deliver a return on that investment – but mainly prioritising where the investment should go.”
The biggest priority on the customer-facing side of M&B’s business right now is speeding up payments, according to the CIO. The company has just completed an upgrade to its till systems but the drive for faster payments doesn’t stop there. M&B is looking to deploy contactless technology in its bar-led businesses in the near future, says Sackman.
“Our payment project will replace our current stand-alone card payment devices with an integrated system which will be enabled for contactless, particularly for bar payment,” he says. Contactless is a better fit for M&B’s bar-led businesses, rather than its restaurants, owing to the relatively small £15 transaction limit.
“On a busy evening in an O’Neill’s or one of the Nicholson’s pubs you can be queuing to order another drink and [being able to pay quickly is] obviously important for us in terms of revenue and additional sales but also from the guests’ experience so we see contactless being important to us,” he says. “Probably over the next six to 12 months we’ll start to implement that across particularly bar-led businesses, but also most of our bar/restaurant businesses where there’s a separate bar area.”
In addition to faster customer payments, the company has a project to upgrade its session management – looking at order capture, and table management and utilisation – with the aim of maximising cover turn and ensuring customers who arrive to eat can be seated quickly. Online booking is already deployed for around half of M&B’s restaurant brands, according to the CIO, but work is ongoing to integrate table management at individual sites with its online booking systems.
Next on Sackman’s menu will be integrating takeaway food into these online booking systems – “that will be key,” he says – and helping to hammer out a company-wide strategy on customer wi-fi.
“Customer wi-fi, particularly in some of our metropolitan brands, will become absolutely fundamental to the offer,” he says. “I think free wi-fi is the future and the only debate is, is it free all day or is it free for [part of the day]? That’s the discussion different retailers and different coffee shop businesses are trialling – you can see that in the high street now. We’re obviously watching that and working out what the best offer will be, but it might well be different in different brands.”
That’s another juggling act for Sackman – ensuring cost reductions and tech-enabled change don’t adversely impact the brand integrity of M&B’s different businesses. Something that flies in an urban All Bar One might fall flat in a suburban Toby Carvery, for instance.
“The biggest challenge we have is…
…effecting change across 1,600 units which aren’t all the same,” he says. “We have a multiformat business… so my role is about ensuring that we maximise the scale of M&B without diluting [what] we are trying to offer in each of our different brands.”
On the infrastructure side, M&B has just signed a deal with Fujitsu – transferring the running of its datacentre and WAN from IBM. “It’s a huge deal for us because it provides the platform and the connectivity to all of the sites – all 1,600 businesses and our 10 or so corporate offices,” says Sackman. It will also be implementing a private cloud to “make the best use of virtualisation technology and servers”.
The attractions of cloud for M&B were twofold: cost and flexibility. “[It] will massively decrease our cost base but also enable us to be agile in terms of the plans we have to grow the business,” he says. The company plans to achieve this growth by expanding the number of outlets, so IT costs must be scalable and flexible, according to the CIO.
“What I need to do is put in a cost base so I can flexibly grow,” he says, “and grow in line with the growth of the business – so I’m trying to make my cost base as variable as I can so it can track the scale of the business, rather than me having a huge fixed cost base that is not flexible.”
Deploying a private cloud is a stepping stone on the way to adopting a much broader set of cloud services, reckons Sackman. “If we were having this conversation in five years’ time after the current deal – and it might be in less time – I’ve no dogma around sharing of power. The reality of most outsourcing arrangements is that most people share storage area networks anyway,” he says.
“The key [to cloud] is security but I think the reality is you describe your requirement in terms of an outcome and you find a partner who’s able to deliver that outcome and demonstrate it, rather than pretend you have all the answers yourself. So, in the future, other than real sensitive stuff or things we really need to run locally, then absolutely I think we will be sharing power and storage and the rest of it. I see that as a commodity.”
“In the same way that we don’t all run our own electricity power-generation systems, we’ll be moving to the cloud in terms of infrastructure and computing power,” he adds.
Other projects on Sackman’s plate include the deployment of a labour scheduling system to set staffing levels in M&B’s outlets based on forecasted sales throughout the day – currently 80 per cent deployed, it’s due to be completed this year – and the implementation of a central master data-management system for product, pricing and promotions.
The latter system will enable the company to exploit its new till systems, says the CIO, and “vary the offer” – either at a brand level or site level “depending on how we want to manage our different businesses going forward”. Pricing and promotion variations will also be able to be more easily tied in to M&B’s social media activities, such as its Facebook fan pages, says Sackman.
“We have one of the biggest…
…Facebook fan bases for Toby Carvery and Harvester in the country and we’re using that a lot for customer feedback, and that drives the thinking on future range development and so on,” he says. “Facebook being used for online marketing and online direct offers to customers is quite big for us.”
Ensuring the business’ mobile workforce has access to the data they need was the driver for mobilising email, analytical tools and other alerts by deploying Windows Mobile-based smartphones to relevant staff. Sackman says the company has rolled out HTC handsets to some 300 employees who spend a lot of time away from their desks travelling between sites.
“We’ve got a huge mobile workforce of operations people, property people, marketing people, [to whom] we started to deliver reportage that can help them make decisions and effect change in the organisation while they’re on site as opposed to when they’re back at the office,” he says. “It’s really important that they’ve got information to hand so the use of smartphones to act as the platform for the delivery of that information has meant a massive increase in effectiveness – both for us as a business but also efficiency for people.
“They don’t need to spend all weekend, necessarily, managing email inboxes any longer – they can do that while on the move.”
Another people-friendly tech-enabled change on M&B’s menu is to move from having a “relatively static” information-only staff portal that is currently used to deliver training to a more dynamic social-networking-style intranet that will include interactive apps such as staff rostering, says Sackman.
“At the moment, we’ll produce a staff roster in every pub – or the manager will – every day and pin it on the notice board. We’d like to get to the point where that’s online, can be seen anywhere by anybody who’s working in the pub or the restaurant and they can request shift swaps and the rest of it,” he says. “So we’ll move beyond pure information and access to training… and start to use it much, much more for interacting directly with individual people across the country.”
People management is a key theme for Sackman. Such so-called ‘soft skills’ are more and more important to the CIO role, he says. Being able to nose out talent and communicate with colleagues across the business are the key skills an IT leader needs – much more important than “deep technology knowledge”.
“Communication skills are fundamental. The ability to translate both ways – from what we are trying to deliver strategically as a business, all the way down to the technology guys that are actually deploying that technology requires quite broad communications skills and knowledge, and less and less in-depth technical skills,” he says.
“There’s still an expectation that myself and my leadership team understand the capability of our existing technology, the technology on the marketplace and also where technology is going so we can bring that to the party – but there’s a much greater expectation and desire for that to be in play in the strategic discussions.”