Big interview: Halfords IT director Anna Barsby

Automotive, leisure and cycle products retailer Halfords has reported encouraging sales for the first half of its financial year, with its 'Getting into Gear' transformation programme continuing to put the business in a position for future growth.

Retail sales for the 26 weeks to 26 September 2014 totalled £451.9 million, representing a 6.6% increase year on year. Revenue was up 6.8% on a like-for-like basis, indicating that the organisation is getting more out of its existing store portfolio – with the UK's cycling obsession continuing to help drive sales, too.

At the heart of the business's turnaround strategy, which was put into place following a period of falling sales coinciding with the early part of the recent recession in the UK, has been major investment in company infrastructure.

Through virtualisation and a shift to the cloud, Halfords has removed 4.5 tonnes of server hardware from its support centre and completed what was deemed an essential SAP core systems upgrade, which has facilitated the launch of Car Parts Direct – a directory of 130,000 SKUs – as well as increasing deliveries to store from one per week to five.

More-frequent delivery to store allows the retailer to improve stock availability for its customers and it gives the company an opportunity, over time, to reduce recent incremental stock investments. CEO Matt Davies brought in IT director Anna Barsby 18 months ago to oversee this period of significant tech change, which the board hopes will provide a more flexible operating platform for the business in the years ahead.

"From a technology point of view Halfords hadn't been looked after or received investment in for a number of years," Barsby told Essential Retail.

"We had a big year of back to basics and were very much focused on network infrastructure, data centres and upgrades. From an IT standpoint, we're on track with the transformation programme. There has been big change, but the major milestone this year was the SAP upgrade which we worked on with HP."

The CIO described the change as "a fantastic enabler", adding that she no longer has to say 'no' to her peers – "I can actually say yes to things now," she explained.

Davies took the Halfords hot-seat in October 2012 and quickly started implementing a change programme that would help reverse falling profit and sales, and reinforce the speciality retailer's service offering. Underpinning all of that was the SAP investment, which was viewed as a way of improving the company's supply chain and providing a backbone for online and in-store integration and better stock management.

"Because we have a lot of our systems interfaced with SAP – there was a general acknowledgment that it was best to do the upgrade in year one of our transformation," Barsby commented.

"It was the right timing, and we made the announcement to the City that dividends were being held for a while. All the winds were in direction for me to start delivering the necessary change, and we ended up selecting HP."

She added: "We felt HP was a good-sized company but didn't feel we'd have to go through huge amounts of red tape and bureaucracy to get decisions made or get deals done. The virtual private cloud offering was also an attraction for us as we had many components to upgrade."

So why had Halfords neglected tech investment to the point that it was impacting top- and bottom-line performance? It was perhaps indicative of the wider traditional retail industry at the turn of the last decade, where the power of technology to drive sales and profit had not truly been recognised.

According to Barsby, it was difficult for IT directors to develop a business case for a new network or an infrastructure upgrade, when any available money could be spent on reformatting shops or providing new products for the customer. This mentality has now changed completely.

"Halfords wasn't that different to other retailers – there were different priorities and I don't think technology was as sexy as it is now," she explained.

"With the internet and the digital revolution coming, it's blindingly obvious how technology can move your business forward, but I don't think it was back then. It was very much a commodity item that ran tills and collected data.

"People have now grasped that you can't succeed in business without technology at the forefront of it."

As well as SAP and HP, Halfords is working with companies such as Fujitsu, IBM and Javelin Group to ensure its internal IT team has the support it requires to service the needs of the business.

Barsby said she prefers working with a small number of strategic suppliers and partners, and was keen to whittle this number down when she arrived at Halfords to "a handful of larger partners who can do each other's jobs, can overlap slightly and have a breadth in their portfolio". She also noted that, with HP in particular, it has been important to tap into an "innovation agenda" and make the most of the vendor's research and development into future use of tech.

"Suppliers have come a long way in the last year from an innovation point of view," the IT director explained.

"If you asked me a year ago, I would have said all the big players were behind the curve and that makes my life difficult because I have to shop around to try and find companies that can help us on our digital transformation journey. Now we're in a different place."

Barsby has held IT roles at the likes of Sainsbury's and Whitbread, and she was working at TUI Travel prior to her arrival at Halfords in 2013. For a number of years she was a consultant helping various businesses with their tech programmes.

It was clear when she joined Halfords that the business needed to radically overhaul its systems, and there was company-wide acknowledgment that it would be best served by addressing some of the technological shortfalls from day one.

Although the SAP integration was completed in the first half of the financial year, there is an understanding that there is still plenty of infrastructure work to do to ensure Halfords can provide the "seamless multichannel journey" for customers that all retailers are aiming to achieve. For the future, though, Barsby said there is significant potential for her team to lead the agenda in many of the wearable technologies set to enter the market over the coming year – especially as a bikes retailer, where this equipment is expected to play a prominent role.

From an eCommerce perspective, the CIO has also promised some "exciting" developments in the new year, as the retailer continues to invest in online tools to ensure there are clear separate shopping journeys mapped out for its automotive and cycling customers.

In-store technology such as QR codes that link to videos of Halfords' products in action are also being trialled, but there is a feeling that the nuts and bolts of the retail business need to be tightened further before the more mobile, customer-facing tech is truly rolled out.

"This is my first CIO role; I now have my own train set and I love it," she said.

"My career has been about change and project management and, more recently, about IT turnarounds and transformations. Rather than transforming someone else's IT department I'm actually transforming my own, which is fantastic.

"You get very technical IT directors and you get the change management type – I am very much at the change end of the spectrum."

When former Pets at Home boss Davies joined Halfords as CEO at the end of 2012, he took on a business that City analysts said was crying out for said change. It had just announced another profit warning and sales were on a downward spiral, but this week's figures show group EBITDA for the half-year at £63.6 million – an increase of 6.7% when compared to the same period in 2013.

Halfway through its transformation programme and after a number of core investments, the indications are that the retailer is now looking to the future with a greater level of confidence.

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