In a recent Radio 4 interview Mark Bolland the Chief Executive of Marks & Spencers was being quizzed on the performance of their clothing business. Their food business is a steady performer but their clothes business is not. The interviewer challenged Mark on why their clothes business was underperforming. His reply was less about fashion and more about IT. He spoke about technology as a strategic asset to the business and went on to say that they were bringing their online ‘platform’ in- house and that would underpin the future of their online sales. M & S want to to ‘control’ the platform that will be the origin of its online sales.
In many ways an unremarkable story but ten years or even five years ago would a CEO have made such a statement about IT?
So it seems they do care about IT and the language is interesting: platform, control, strategic. He did not use the word ‘cloud’.
The About Us section of their web site makes this statement under the heading Finance.
‘Now that our period of significant investment is over, our capex will fall over the coming years. We will continue to manage the company prudently and will look to reduce costs where we can. We are working to deliver a progressive improvement in margin over the coming years and we are committed to improving our free cash flow position.’
If that is the situation and language how do you as an IT vendor enter the conversation?
My own view is all the clues are in a book title ‘The Challenger Sale‘.
If you are a subscriber to IDC they have conducted valuable research on ‘what customers expect of their service providers’. IT is a service to the business and their research (copyright) reveals the importance that customers place on their suppliers understanding their business.
So, if you were selling IT to M&S today how would you choose to lead that conversation? There is a clue in the statement about free cash flow and that capex will fall in coming years. New capital spending will doubtless come under harsh scrutiny so is there another way that M&S can invest in IT without capex? Oh, maybe the options that cloud offers with subscription and consumption based pricing allocated to opex?
Times are changing.