Collaboration Technology Aids Tesco's Worldwide Expansion
Britain's largest retailer turns to Cisco to improve its international operations with TelePresence and WebEx
by Charles Waltner
July 12, 2010
Tesco PLC is trying to make its world a bit smaller with new collaboration technologies.
Tesco is Britain's largest retailer and the world's third-largest grocery retailer with almost 500,000 employees and revenue of $77 billion. Over the past five years, Tesco has invested heavily in international markets as it seeks new ways to grow its expansive business. Now, it is quickly moving its retail stores into countries such as China, India, Turkey and the United States.
The person guiding this undertaking is Mike McNamara, Tesco's director of operations development and information technology. News@Cisco spoke with McNamara about the ways networking technologies are helping Tesco apply its formidable scale and retailing experience to its rapidly growing international operations.
What business challenges is Tesco trying to address with network collaboration?
Mike McNamara: Any retailer deals with four key business operations: stores, buying, marketing and distribution. These are used throughout our company and are crucial to every one of our markets around the world.
Retail, however, is a very local business. Each of these four aspects of operations has their own nuances in each market. But scale is a huge competitive advantage for any retailer. So there's a balancing act between the unique needs of each market with the efficiencies of replication, centralized distribution and purchasing, and other scale factors.
Our goal with using new networked collaboration tools is to tap into the experience and expertise Tesco has developed in the 80 years as a retailer in the United Kingdom. During that time we've learned a thing or two. In contrast, we've only been overseas for about 10 years, and really have stepped up our international expansion in the past five years.
"It's remarkable with telepresence how many good meetings you can have without ever traveling."
So, for example, from our experience, we know the best ways to display something like yogurts or chips, and we know how to run our delivery trucks. We know at what times and with what products it is best to do just-in-time delivery and when to hold products in inventory at the stores. There are many possibilities of how to carry out those four operational aspects of retailing, but most of the time there is really one right choice. So our goal is to transfer and embed this knowledge into any of our operations throughout the world.
How have you tried to transfer this kind of operational knowledge in the past?
Mike McNamara: We've struggled for years to find efficient and effective ways to share the insights and knowledge gained in established markets with our newer operations in other countries. In the United Kingdom, this wasn't such an issue because most of our offices were relatively close to headquarters, and it was a much easier for employees to travel to and from headquarters. But for our international operations it is a much different matter.
Traditionally, we've codified everything we do by writing it up in documents covering polices, processes, management, store designs, etc. sort of how-to guides for the Tesco way of retailing. But these documents simply can't cover all the what-if scenarios and judgment calls that are a part of any business. To address that, we send our experts out to help guide the development of new store management. This has been effective in the United Kingdom, but doing this on an international level is much more problematic. It just doesn't scale and it is extremely expensive, not to mention very taxing on our best people.
We don't have enough experts to send to all of our management offices over the globe. They are spread too thinly. But ultimately, these experts hold the key to bringing the unique Tesco way of retailing to our new operations. Documentation can't do that. There's a big difference between theory and practice, and you need coaching and teaching to bridge that gap.
How has new networking collaboration technology helped Tesco address the challenges of expanding its international operations?
Mike McNamara: During the past year we have focused intently on using networking technologies to improve how we can communicate, collaborate and share knowledge with our increasing numbers of management offices around the globe. We think new communications technology can help us improve our operations in three areas -- broadcasting information, sharing expertise and collaborating to make decisions.
To address these three areas, we have used three primary technologies: our intranet, Cisco's WebEx conferencing service and Cisco TelePresence. The intranet has done a nice job of providing repositories of information, as well as a means for community coaching, where specialized pools of experts can share knowledge through things like blogs, wikis, and other social networking tools. We have also set up team sites, which allow employees with a common interest to exchange information or make decisions in ways that are often much more effective than email or the phone.
In what ways does Cisco WebEx complement the interactions that take place through your intranet?
Mike McNamara: Literally, it is helping people be on the same page. Cisco WebEx is strongest when you want to lead people through a story, such as a presentation. I use it with my weekly run-through with staff. WebEx makes it possible for a group of people to all view the same documents, presentations or other digital media while talking on a conference call. It is a simple concept but it makes a major difference. Some things are very difficult to explain with words but are quickly understood visually. People can all be looking at the same page in a document and the discussion leader can simply point to what he or she wants to talk about. There's none of the confusion that typically happens on such conference calls. Because of this, WebEx is proving invaluable. The other day I used WebEx to run a budget meeting with managers from 12 countries. It was remarkably easier than when I could only talk to them on the phone.
How is Cisco TelePresence helping you address your international collaboration needs?
Mike McNamara: Cisco TelePresence has made a huge difference. Now I am meeting loads of people I would have never met while avoiding the exhaustion of international travel. Typically if I fly somewhere I'm so harried running from meeting to meeting I only have time to shake hands with most people and have good discussions with only a few.
It's remarkable with telepresence how many good meetings you can have without ever traveling. It is literally like being in the same room. The body language gained by telepresence makes the difference. On the phone, you don't have a clue when to interject or the ability to accurately judge the mood of a person.
Half my team is in Bangalore, India, and teleconferences never really worked because the center of gravity for the conversation always ended up in the place with the most people. The minority of people scattered in other locations were always on the periphery of the conversation and they had difficulty contributing fully. Also, especially for our international team, accents are very hard for all of us. Some of our Indian colleagues struggle especially with Irish accents like mine, while certain types of Indian accents are challenging for our British employees. But telepresence addresses both these issues beautifully.
Because of its dramatic ability to improve communications, we have experienced an extraordinary speed of adoption with Cisco TelePresence. Usually with new IT tools you need to at least coach people into using the application or service. But ever since we started deploying Cisco TelePresence, the virtual meeting rooms have been oversubscribed.
It's been quite a contrast to previous types of video conferencing equipment that we tried to use. Those just gathered cobwebs because the quality simply wasn't good enough. They were only marginally better than the phone, if that. While Cisco TelePresence is a significant investment, we made our money back in six months, just from cutting travel costs.
But the value of telepresence extends well beyond such basic number crunching. The toll that international travel takes on your personnel can't be understated. We still need to travel but not like before. Now, it is a much saner demand. Perhaps most importantly, Cisco TelePresence is greatly increasing the quality of our collaboration among key executives regarding critical business issues.
What would be your advice to other organizations that are interested in using new networking technologies to improve their collaborative capabilities?
Mike McNamara: They should start by dipping a toe in with just two telepresence units and see what it's like. Don't take my word for it. In general, it is important to take time learning but be clear about your goals and what you want to achieve. What business problem do you want to solve? Be very specific. But then be flexible and keep your eyes and mind open.
We started with a set of ideas but they shifted as we learned about the technologies and their strengths in our own company. Each organization is different, so you really can't apply another company's collaboration lessons verbatim. Once you get some experience in our own business, document those case studies that show what good looks like and start expanding from there.
Charles Waltner is a freelance writer in Piedmont, Calif.