Starbucks' Stephen Gillett: InformationWeek's IT Chief of The Year - InformationWeek

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12/1/2011
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Starbucks' Stephen Gillett: InformationWeek's IT Chief of The Year

Starbucks' CIO blends technology, marketing, and innovation, a winning formula in our annual recognition of IT leadership.

Problem At The Cash Register

Gillett spent his first week at Starbucks in 2008 working in a store. "I'm literally warped back into my youth," he recalls, "where I'm using a DOS shell, and the last major release of it was going from grayscale to four different color tones."

Starbucks' leaders knew the limits of the point-of-sale system, but when the company was focused on opening stores daily, IT's role was to mitigate risk and support that growth, says Curt Garner, senior VP of business technology and a Starbucks IT veteran who in 2008 was asked to take over technology used to run the stores. Of the group's roughly 160 tech projects at the time, "only one or two had anything to do with stores or customers," Garner says. "The majority were focused on how we keep the growth engine going."

Starbucks' problems in 2008 were highly public, thanks to Schultz's return as CEO and the company's decision to close 600 underperforming stores and make the first major layoffs in its history. There was no shortage of IT vendors bombarding Schultz, Gillett, and other Starbucks executives with ideas for how to use tech to transform the company. So about six months after joining Starbucks, Gillett held a "tech derby" to give the executive leaders a very visual summary of what the IT organization was thinking about and get consensus on what should be its top priorities.

At one display at the derby, a barista took an executive's order, and as she did so, the point-of-sale screen she used was simultaneously shown on a large-screen display, for the executives to see. With the existing system, baristas had to translate orders into machine-speak: size first, then drink type, then add-ons, regardless of how the customer said it. The proposed system, which IT had mocked up as a demo, would allow "conversational ordering"--if the customer said "soy latte grande with one pump vanilla," that's how a barista could punch it in.

When they showed both to Schultz, "he just turned around and said 'When? And whatever you're going to tell me, it has to be faster,'" Garner recalls. Starbucks has deployed the system in the U.S., Canada, the U.K., and Ireland and plans to roll it out internationally throughout the coming year.

Another tech derby proposal was to give laptops to store managers. Each store at the time had a single PC, but it was linked to the POS system, so it couldn't include Microsoft Office or email because of PCI rules for processing credit cards.

The derby showed ways to use those laptops for processing employee applications (then done on paper), scheduling work shifts (also on paper), and conducting training. At the time, people who applied for work at one Starbucks filled out a paper form and then filled out the same form if they applied at a store a half mile away. Starbucks equipped 10,000 stores with new laptops. It has online applications live in the U.S. and Canada and is piloting online labor scheduling. It's also giving store managers in the U.S., U.K., and Canada email and productivity apps on those laptops, via Microsoft's Office 365 cloud-based service.

Before Starbucks, Gillett had never worked on the physical scale of a Starbucks. He had a two-year stint as CIO of Corbis, which provides digital photos and video for advertisers and other media outlets. Owned by its chairman, Bill Gates, Corbis is a global e-commerce operation but has just 650 employees, compared with Starbucks' 149,000. Before Corbis, Gillett held a senior engineering management position at Yahoo, was VP of IS for CNET, and was an IT director at Sun.

While Gillett had a lot to learn about retail, he thinks it helped to look at a string of retail stores as one big computer network. "Big software, like Sun, and big Internet, like Yahoo, had solved a lot of the technical challenges that big retail had yet to solve," Gillett says. "... If you think of all your stores like nodes on a network, and all your registers as computers rather than cash registers, you can start to manage and deploy and operate that like Yahoo would a server farm, as CNET would a data center."

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jrosolan
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jrosolan,
User Rank: Apprentice
12/13/2011 | 3:59:35 AM
re: Starbucks' Stephen Gillett: InformationWeek's IT Chief of The Year
Great article. I moved to Japan over a year ago and miss my NYC Starbucks digital experience. I can't believe Starbucks Japan have not tapped into this loyalty technology the US are driving.
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