Office Depot CIO: Tim Toews

Dan Farber: Tim, thanks for joining me.

Tim Toews: happy to be here Dan.

Dan Farber: Office Depot is a 15 billion dollar company, 50 thousand employees in every country, practically every country in the world and a lot of different channels. As CIO of the company, how do you think about managing such a global and diverse organization?

Tim Toews: Well, I think the first thing about our multi-channel business, first of all you're correct, and we have a wide variety of ways for customers to buy products from office depot, we have a very vibrant e-commerce business, we have 1200 stores in North America, and we have a professional sales force that sells to larger companies. I think from a customer facing perspective, the thing that we have always thought about, and this is really before the internet is something that people talked about everyday, we've always thought about an order transaction no matter what channel it comes from as an order transaction, so we've tried very hard not to differentiate in our systems between the different methods of order capture for example.

Dan Farber: How do you manage that in terms of having an enterprise wide strategy that can cross retail stores, the web, catalogs, and even franchisees?

Tim Toews: Right, so what we try to do is we try to make sure we can aggregate customer data in one place and we try to do that globally when it's practical; we try to make sure that when a customer shops us across our channels for example, a large business that shops us on the web, if they were to go into one of our retail stores to buy our product we try to give them the same pricing that they would normally get. And what that requires us to do is to not only have a philosophy that a customer transaction is the same independent of how we capture it, but also to build a system so we aren't doing lots of interfacing, spending lots of money on lots of products to make things look the same, we try to start out that way.

Dan Farber: Having a website obviously is critical to the company, what are you doing to differentiate it, to make it the place that people would prefer to go compared to competitors?

Tim Toews: We spend a lot of time watching the performance of our website and if you look at some of the independent assessments of e-commerce performance, you'll see that we're consistently ranked in terms of time it takes to complete an order transaction, we're consistently ranked very high in uptime. We've spent a lot of time over the last year and a half on our search technology so we can provide customers with products that they're looking for without engaging in lots of specialized searches or lots of frustration.

Dan Farber: To anticipate what people are looking for, whatever accessories

Tim Toews: Exactly, and when you go onto our website and purchase a product, we'll make sure that we'll remind you to think about some other things that go with that product. Customers can set up a shopping list of regularly purchased items so they don't have to re-enter that. Of course we do all that and get it to the customer the next day.

Dan Farber: I look at a site like Amazon.com, which has a similar kind of function that you do, and I see the kinds of experiences that uses have, is that something that you're thinking about bringing over more to Office Depot?

Tim Toews: Absolutely, and what we want to do is, where it is appropriate for our product mix. We want to be able to deploy those type of technologies or that type of functionality, for example user reviews of products.

Dan Farber: What are some examples of where you've had a breakthrough with technologies that has delivered some definable ROI?

Tim Toews: I think we have a few examples; first one that comes to mind would be our efforts over the past year and a half, two years in terms of virtualizing our environment. And we've made great progress with server virtualization we've made pretty good progress in terms of virtualizing our desktops, in other words giving us the ability to deploy our desktops on thin clients in various places around the world. We've also made some good progress in our supply chain in terms of our technology helping our business and I can think of an example where we've improved the way we route our trucks, not only can we give our customers information about where their stuff is, but we are able to spend less money on for example gasoline. I think a couple of those examples would be how we've innovated in IT to help our customers and the business.

Dan Farber: Wireless and RFID, Radio Frequency Identification Technologies, are they an important part of your existing footprint or your plan moving forward?

Tim Toews: Certainly wireless is a big part of our footprint and we look at emerging technologies like WiMAX and think about how can use those across our enterprise. RFID is a technology that we have piloted in a couple of instances but it's not something that we think is ready for our business to deploy across the supply chain yet.

Dan Farber: What are some of those pilots? In what areas have you been using that technology?

Tim Toews: We've used them in our stores to help with product placement and understanding how product moves around our stores. We've tried it in a couple of our distribution centers to see if it is something that would be compelling for us to roll out across the chain.

Dan Farber: In terms of efficiency, you have this notion where you have all these stores and you have your supply chain. How are you maximizing the efficiency in terms of the products that get into the store so you're not doing things like selling snow shovels to people in Florida?

Tim Toews: Right, well we have a robust set of supply chain systems and that not only includes things like routing software and software that drives all our material handling equipment but it's replenishment software for example that makes sure that we have the right product at the right place at the right time when a customer wants it. There are also business policies and business processes that we can engage in and one of the things we tell customers in our retail stores that we will guarantee for example that an ink toner is available, and if it isn't available, which happens rarely, we will order it for them using other parts of our supply chain and have it delivered to the customer the next day. One of the things that people don't realize about our particular business is that most of our hundreds of thousands of global line items are delivered next day to customers.

Dan Farber: Now as you look out over the next 12 to 18 months, what do you see as your top technology priorities?

Tim Toews: I think what my top priorities are, is that we need to maintain a secure, stable environment for our business. We need to make sure that our costs are tolerable and within that framework of tolerable cost that we use innovation as the way to control cost. That we aren't just cutting cost for the sake of cutting cost. We need stable systems, that's sort of the price of admission and we need to pay attention to it. Finally what I'd say is there's a lot of complexity, you know Office Depot is only 20 years old but we have a complex set of systems and we'd like to simplify those as much as possible because it's going to make our jobs easier and make our the costs more tolerable and have systems that are better performing for our users and our customers.

Dan Farber: Well, Tim thanks very much for speaking with me.

Tim Toews: My pleasure.

Dan Farber: I've been speaking with Tim Towes who is the CIO of Office Depot, for CIO Sessions I'm Dan Farber thanks for watching