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After 21 years as part of Walmart, UK supermarket chain Asda was sold to the Issa Brothers and TDR Capital in 2020 for more than £6bn.
As it moves away from the US retailer, a large amount of technology spread across Asda’s 29 distribution centres and 650 supermarkets – as well as its online remit – needs to be renewed over the next two years.
“[This means a] brand new e-commerce platform for all of our grocery shopping, all of our supply chain forecasting, buying and merchandising, and a brand new data platform. The real opportunity here is we can choose all the latest applications, and we can build them all in the cloud,” says Carl Dawson, Asda’s CIO.
“The position we should be in within two years’ time is that we’ll have no legacy technology, we’ll be the only business of any scale that’s got absolutely no legacy technology anymore, because we’ll replace it all.”
All new, cloud-based tech
Dawson has held several CIO positions in sectors such as retail and travel, making the jump from Marks and Spencer to Asda in summer of 2021.
While tech is “all [he’s] ever done”, it is also the thing Dawson loves and that interests him the most – his move to Asda was specifically to handle the retailer’s digital transformation as it moves from Walmart to its new owners.
With the ambition to build all of the supermarket’s new applications in the cloud, Dawson admits: “For a techie like me, it’s almost like [being] a kid in a chocolate shop.”
Asda has already chosen Workday for its people management, which will allow Asda to consolidate employee management onto a single platform, as well as give employees access to personalised training content for skills development throughout the employee’s time at the firm, such as content relevant to onboarding, goal setting or role changes.
Saying the brand was previously using “people systems that you would expect of a 100-year-old business”, Dawson admits getting used to the new applications will be “quite a change”. It will allow employees and their managers to book and track time off, and will use data imported from other systems – such as point of sale – to monitor the efficiency of certain organisational processes and highlight where there could be improvements.
The retailer recently selected Rise with SAP S/4 Hana on Microsoft Azure as its core enterprise resource planning (ERP) system, as well as SAP Business Technology Platform and SAP Ariba for procurement. It also has plans to use Microsoft’s Office 365 and other collaboration tools, as well as Blue Yonder for order management.
However, some of Asda’s systems are built in-house, either because solutions aren’t available on the market or because they are “specific to” Asda as a retailer – such as some of the supermarket’s e-commerce real estate, its internal grocery picking system for order fulfilment, and its scan-and-go platform.
In the case of the scan-and-go platform, Asda will continue to use the system and will integrate it with its new store inventory systems.
There are also other projects underway alongside the tech overhaul. Dawson says that Asda’s new owners have a different attitude towards business than Walmart, and have challenged Asda to work on moving forward as a business rather than just making the changes necessary to move on to new platforms.
“If we spent two years doing all of that, [making] new systems different [but] didn’t do anything else, then we’d be two years behind [the competition],” Dawson adds.
In line with this, Dawson says the retailer has just launched a new loyalty programme, which is currently being trialled in 16 stores. “The challenge is going to be around how we scale that nationally to all 650 stores, while at the same time we’re going to be replacing point of sale,” he adds.
Asda’s systems for customer loyalty were previously built in-house, so the brand has plans to re-build these systems working in line with its customer team to ensure there can be the best utilisation of data possible. “We’ve got this one-time opportunity to build it all new, [the new owners] want it to be best in class,” Dawson says.
Making the switch
Now having the luxury of being able to choose how to implement technology, Dawson says Asda has selected the newest version of particular systems offered by its selected technology vendors for a lot of the supermarket’s core technology platforms, with around 70-80% of those platforms being based in the cloud.
The transition, even with all new cloud-based systems, won’t be instantaneous – Dawson points out that some elements of the business will be riskier to switch over than others.
For example, people-based systems are “not something that’s going to stop us trading” if there are problems, so these are being introduced in a “big bang” fashion, whereas new point-of-sale systems will be rolled out a store at a time.
“We’ve got to keep this huge business running. We can’t take a risk of stopping it,” Dawson adds.
Carl Dawson, Asda
Having worked in many large businesses, Dawson says it’s not unusual for businesses the age and size of Asda to have more than 100 systems of different sizes, some of which are duplicated, that grow in complexity over time.
A large part of the transformation will be data optimisation when transferring data from old systems into new. Part of this is already underway as Asda moves data from its several existing people systems into the Workday platform.
Dawson says the aim is for the business to consolidate its data from its various data warehouses, systems and visualisation tools into one “data lake” built in an Azure data stack, which can then be accessed by the firm’s new cloud-based systems once they are put in place.
“We’re going to have to suck a load of data out of our systems from that Walmart world, go through cleansing of historic data, then restructuring to get it into that one standard data lake that we’re building.”
While these systems are being implemented, there will be an “interim state” – new systems are relatively quick and easy to set up, but the difficulty then lies in systems that have to span the old and the new while new infrastructure is built and slowly replaces the legacy.
The need for skills
A delivery team has been put together to work alongside Asda’s new tech partners to implement the systems. The supermarket also needs to ensure staff internally have the appropriate skills needed to use the new systems, as well as to “define, build and run all of these new platforms” – part of this will be achieved through recruiting people who will be able to help with this challenge.
However, Dawson points out that many other businesses also undergoing digital transformation are fishing from the same talent pool – luckily, for Asda, flexible working is proving to be a draw.
“One of our soft tools in recruiting the right skills is we can be really flexible about how people work,” he adds.
In some cases, the brand needs very specific skills, such as experience using specific tools, but in others, the skillsets needed are more general such as developers and project management.
Dawson says this has given Asda the opportunity to expand its apprenticeship and intake programmes, growing skills at different levels, as well as develop tech skills internally.
“We are adding hundreds of people to the tech team, and we’re only a third of the way through that to be able to deliver all these new systems,” Dawson says.
“The exciting thing about that is it’s all in very new technology skills – it’s all in data, data science, cloud, cloud management, cloud infrastructure skills. So, because it’s all new systems that we’re implementing, it’s all the new tech skills that we’re looking for. That’s exciting for my team.”