The CIO View
vice president of information services,
Lund Food Holdings, Inc.
Mary Connor: So how long has the company been in this office?
Kevin Baartman: I started in 2001. Lunds and Byerly’s came together in 1997. Prior to that, Lunds’ corporate office was over at their Lake Street store, and Byerly’s corporate office was at their Edina store, the two came together, and right around that time they moved into this office here at 50th and France.
MC: There must be a lot of moving parts to a retail operation.
KB: Yeah, very much so. I mean, it’s very immediate. There’s a lot going on from a corporate office perspective, a lot going on in the stores, and it’s very intense from the standpoint of making sure that you’re always on, you’ve got the point of sale systems, all the item management systems, category management systems — all that sort of stuff needs to be there.
MC: How many people are in your department?
KB: I’ve got a very small IT organization. We’ve got 12 people on staff, and then I do utilize vendor resources as much as possible, especially for large implementations. For example, we recently implemented Teradata data warehouse, so we worked with them very closely, brought in professional services from them to help with the initial implementation, and then a lot of knowledge transfer to turn over the support to my organization.
MC: Do you manage your own data center?
KB: Our data center we have at Qwest over at Stinson Boulevard and 35W. That’s coincidentally where I came from. I knew them very well, so we chose to move our data center from the basement across the street here to a more robust location. In the time I’ve been here, we’ve done a lot of work in the infrastructure area, you know, beefing up our network, beefing up all of kinds of our core applications, like e-mail and Office . . . on people’s desktops here at the corporate office. We’ve [also] got a lot of applications that all run through our data center from the stores. So we’re very much centrally managed as an organization, but distributed across 21 stores.
MC: How many locations are you supporting?
KB: We’ve got 21 retail locations. We’ve got a distribution center where we do all of our produce distribution out of. We have a manufacturing facility in Eden Prairie [for] our bakery and deli, and we’ve also got a manufacturing facility in Lake Mills, Iowa, which does most of our frozen food, like soups and those sort of things. And then we have the corporate office. That’s 25 locations that we need to support.
MC: And what is the scope of your work for the company?
KB: Anything to do with telecommunications, technology infrastructure, applications is all my responsibility, so I’ve got all information services. In addition to that, I’ve taken on responsibility for our online shopping. You can order online and either pick it up at our store or have it delivered to your home, so I have responsibility for that whole business unit as well as the strategic planning for the company.
MC: How long have you offered online shopping?
KB: 2006. We were just talking about that this morning. It’s been five years already. We got into it as kind of our first step into e-commerce. We have much bigger visions for where we want to go from a Web perspective. We believe that the Lunds and Byerly’s brand has a lot of legs, and we would like to be able to offer products far beyond the Twin Cities. And, you know, there’s a lot of people that shop with us six months out of the year, and then they spend six months in Florida or Arizona—all the snowbirds. It would be nice if we could make some of our products available to them via the Web as well. So we’re developing a much bigger vision for where we want to take e-commerce as a company.
MC: What are your audience demographics? Who are you trying to appeal to?
KB: We have a couple of customer segments that we really focus on. [One is] what we call the inspiration seekers—those people that love to cook, love to entertain, use food as a social event, looking for inspiration. They oftentimes will come to Lunds and Byerly’s to help with that inspiration. I’ll say they’re upper income, usually empty nesters. [We do] have a lot of families, and the demographics actually are quite different between Lunds and Byerly’s.
KB: Lunds tends to be much more of a neighborhood store. You walk into the store and there’s a relationship they have with the meat guy, the bakery people, those sorts of things. The Byerly’s tend to be more of that destination. People will drive further to go have that Byerly’s experience. From a merchandising standpoint and everything else, they’re very similar, but the shopping experience tends to be a bit different based on the demographics that we’re trying to bring in.
MC: How is your IT department organized? Do you have any applications developers?
KB: Yes, we have software development. We tend to be more buy versus build. I don’t believe there’s anything that makes us that unique —financial systems or time and attendance or those sort of things. But we do some customization, so to that extent, we will do some application development. With that small team, obviously there’s a lot of sharing of responsibility, but I have a team of network administrators, network operations to kind of oversee all the telephones and the infrastructure and everything, the help desk, that sort of thing. I’ve got responsibility around our database layer. Obviously, with the infrastructure we have on the Teradata data warehouse and then all the other databases, we have a group that focuses on that. I have an application layer . . . and there’s really three sets of applications we need to focus on. There’s retail, there’s manufacturing—we’re now in the process of implementing a manufacturing ERP system at our manufacturing facilities—and then you have your corporate systems. Lawson is our accounting and part of our HR application. Kronos is our time and attendance application.
We do more integration versus looking for one big application to do everything, so it’s more best of breed and then see how we can get those to communicate.
MC: Which applications are you using on the retail side?
KB: NCR is our point of sale system. Mettler Toledo is a large retail organization responsible for scales, so you’ll see the scales in the stores. We use Retalix for all of our item management, so tracking all the prices and UPCs and those sorts of things.
MC: What would you call the biggest challenges in your job?
KB: I think a big challenge is just day-to-day support, you know, keeping the business going, keeping the lights on. Even this weekend, for example, you have events like we had with the flooding [on June 23], and suddenly you have a store with electricity going out, and now your point of sale systems go down. Keeping the lights on in the stores is a very large task that takes a lot of time and effort. My team does a phenomenal job at it.
At the same time, you need to balance that with innovation and staying out in front of everything that’s happening from a technology standpoint, whether it’s cloud computing, it’s the mobile platforms. There’s a lot going on in the technology sector that me and my team need to stay on top of. And a challenging part today, honestly, is you have customers that are very technical, and they have high expectations of Lunds and Byerly’s. So for us to stay near the leading edge of those things is really important to a lot of our customers. It’s a really fine balance between keeping the lights on and innovation.
MC: What are some the projects you’ve been working on recently?
KB: We’re spending a lot of time right now on mobile platforms. We believe that part of the whole sensational shopping experience is interacting with our customers, and that’s the platform of choice as of right now, and we . . . hope to have some new stuff coming out here pretty quickly.
Two key constituents for me are the customers and the employees, so [we’re] spending a lot of time with employee engagement. How do we keep our employees engaged at store level, you know? We have almost 3,000 employees working out in our stores—a very diverse work force. Diverse from an age perspective, from a sex perspective, all different perspectives. So making sure that I provide alternatives to communicate with those folks is one thing we’re spending a lot of time on right now. The part-time cashier, the bagger, those sorts of people don’t have computers. The platform of choice is that cell phone, so developing cell phone and mobile applications so that we can start pushing information out to our employees to their cell phones [is a priority].
There’s also customer engagement, and I talked a little bit about that. We refer to it as customer intimacy, making sure we understand our customers, what’s important to them, what are they looking for from Lunds and Byerly’s, how would they like us to communicate with them? I think there are opportunities where technology can enhance that shopping experience as well, like smartphone applications, instore signage, kiosks, those sorts of things where we can have direct interaction from a technical perspective with that customer.
So, really, employee communication, customer communication, employee engagement, customer engagement, very similar from the standpoint of technology, but very different from the standpoint of how they may want their information.
MC: Are you responsible for making sure employees are trained on the technology?
KB: Yes, we have to support them as the whole onboarding process, getting them all set up in the systems, getting them trained. I personally think there’s a direct correlation between the employees’ working experience and the customers’ shopping experience. If our employees have a good working experience, I think it’s going to reflect directly on the shopping experience of our customers. We need to make sure that the employees have all the tools and resources they need to do their jobs, because if they’re struggling to do their job because the computer’s not working, the point of sales aren’t working, the scales aren’t working, they can’t place their order, it creates frustration, and that frustration’s going to go right over into that shopping experience and the interaction that they have with that customer.
MC: What are some of the customer-facing technologies you are working on?
KB: [As I mentioned], we’re choosing to invest right now in the handheld platform. Another technology that we’re rolling out to most of our stores is self-checkouts. We have it in, I think, three or four stores now, and we’re going to aggressively get those into all of our stores as well. It’s not about labor savings, it’s not about technology. It’s about providing our customers an alternative. A lot of customers have come to really like self-checkout. It’s become a part of a lot of shopping experiences, and I think we just want to provide our customers with that alternative. We’re still going to have full-service lanes, express lanes, but you can also have that self-checkout lane as well.
MC: Giving people what they want, the way they want it.
KB: Yeah. There’s times where I walk in and I’d love to have an interaction with the cashier, and there’s times that I come in and . . . it’s a beeline, you know? I grab that gallon of milk, that loaf of bread, and I’m out the door. So I think customers want the options.
MC: Is cloud computing part of your strategy for the company or the stores?
KB: I distinguish [the services we provide] between what I call commodities and strategic advantages, differentiators. So for those things that are commodity services, I will look to partner with, many times, local companies. If I believe that a technology or a service is going to provide a strategic advantage to the company or aligns with a really critical area of our organization, I’m going to invest in my resources to do that. That’s something we’re working on really hard right now, is to really make sure we understand what are those things that are commodity services, what are those strategic differentiators.
MC: What projects are on tap for the next year or so?
KB: A big project . . . for the next six to nine months is our manufacturing ERP system. We’re moving from a homegrown, relatively archaic platform to a highly automated platform. We’re spending a lot of time testing and training and getting that application up and running, which should be fully live by the first of the year.
We’re spending a lot of time over the last two to three years to really look at all of our business processes, becoming a much more efficient organization, a much more disciplined organization, so I think there’s going to be opportunities for technology to play a role in a lot of this business re-engineering as well, whether it’s our finance application, our HR application; we’ll be looking at those as well.
We’re going to be implementing a new pharmacy application at the end of this year, and we’re going to use some cloud computing technology for that . . . our first real dive into it.
MC: What are your preferred venues for getting ideas or interacting with other technology professionals?
KB: We’re very involved in FMI, which is the Food Marketing Institute, so that’s the primary industry organization. I try and stay very involved with my vendor partners, Teradata, Kronos, Lawson, all those. They have their user conferences, both local and global. And then within the Twin Cities, you have your Minnesota High Tech Association, the CIO organization. So I try and stay involved from an industry perspective, a technical perspective, and an IT industry perspective.
MC: What do you like most about your job?
KB: I can honestly say that this has been my best job. I think it’s a great company. The organization is very well known in the Twin Cities, but as important is it’s very well known in the industry. It’s a lot of fun going to industry events and being able to tell people you work for Lunds and Byerly’s and see their face light up, like, ‘You work for Lunds and Byerly’s?’ So it gives you a lot of pride..
I’d been in IT for 27, just about 28 years. I worked for Sperry Univac back in the ‘80s, and then I worked for American Express and Ameriprise. Medtronic, I worked for them for a few years, and then I worked for Qwest in their Internet division, and then I came to Lunds and Byerly’s in 2001.
I’ve had a lot of great opportunities, a lot of different industries, a lot of great companies, a lot of very good companies, so it’s been a lot of fun, but this is my first foray into retail, so it’s been really interesting.
We’ve got a lot of great people in this organization and a lot of people that take a lot of pride in what they do. I live up in Andover, and I get the question frequently, ‘When do we get a Lunds or a Byerly’s up in Andover?’ Everybody wants one in their neighborhood, right? So that feels good to know that you work for an organization that people respect and desire.