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Target CIO: Prioritizing Stores, Digital, Supply Chain and Hiring Engineers

Last summer, Mike McNamara moved from London to Minneapolis to join Target as Chief Information Officer. Here Mike reflects on highlights of the last year, and shares his path forward.

You’ve been with Target just over a year, tell us about your initial impressions and what you tackled as Job One?
I spent a good deal of time initially listening and learning about Target’s business. I spent time in stores talking with guests and the store teams. I spent time talking with the technology team—from senior leaders to newly hired engineers—as well as our vendor-partners and our colleagues throughout Target. I got to better understand why Target is such a great brand with a passionate, dedicated and talented team.

One of the first big things that struck me was that we had more than 800 IT projects underway. That’s a staggering number. Even for a company Target’s size.

So one of my first orders of business was to cull that “to-do” list way back, and to make prioritizing a priority. At a meeting late last year, the company’s leadership team rolled up our sleeves and used Post-it Notes to shuffle around potential projects and programs. We weighed each proposal vs. priorities and the realities of time and resources. After about two hours, we reached consensus on how to allocate the majority of our technology resources for the upcoming year. Just two hours!

Ultimately, we got the list of projects down to less than 100. And what remained was more reflective of Target’s most important, strategic business objectives—things like enhancing Target’s digital and in-store shopping experience, supporting small-format stores, modernizing our supply chain and improving in-stocks.

What’s the significance of being so focused, and what were the results?
That focus—which stemmed directly from our strategic priorities—has been good for Target’s business and great for my team of engineers. It provides them with more clarity and certainty, making it easier for them to do what they love: writing great code, working with leading edge technologies and solving meaningful problems.

For the business, the results have been nothing short of sensational. We’re seeing far greater stability and performance of our key retail systems—things that power our stores’ cash registers, Target.com and the hand-held devices that store team members use. And we’ve also reduced our reliance on contractors and saved hundreds of millions of dollars that Target’s been able to invest in other areas of the business.

Tell us more about this shift from out-sourcing to in-sourcing and why that matters?
It was clear to me early on that Target had a strong engineering core. But, like many other large companies, we had outsourced a lot of that work. Too much, I thought. About 70% of our engineering staff was third-party contractors vs. 30% Target team members. We had far more contractors than we needed—especially once we pared back our roster of projects to focus on key priorities.

In just a year’s time, we’ve completely flipped that ratio—so that now about 70% of our engineering staff is team members while 30% is made up of contractors. And going forward I’d like to see that ratio get up to 80:20. I firmly believe that to win in retail today and into the future you’ve got to own and build your own technology.

In addition to fewer contractors, have you also been hiring new tech talent?
We’ve been hiring like mad—and we still are! Since I joined we’ve hired about 700 engineers in the Twin Cities and Bangalore, India. And we’ll hire hundreds more and will continue our emphasis on attracting a broad diversity of backgrounds and gender.

I’m really proud that about one-third of our engineer hires from college campuses this year have been women, while 25% of our experienced hires have been women. This is a major focus for my team and me, and I’m encouraged by the results. But I think we can do even better.

I must acknowledge here that our recruiting team has been doing a phenomenal job. Recruiting tech talent is ultra-competitive, as any CIO will tell you. That’s why landing great talent and creating an environment where they can thrive has been a major bright spot for me in my first year with Target.

I’ve been absolutely blown away by the brainpower we’ve brought in, from recent grads to seasoned vets. And what’s great is we’re adding this new talent to our existing strong core—we’ve already got great engineers. They all see in Target the opportunity to solve big problems that result in real changes for the business—and, most importantly, impact millions of guests’ daily lives. And they also recognize, as I do, that this is a great time to be in technology at Target.

What can you tell us about your plans and focus going forward?
First and foremost, we’re going to stay focused on Target’s key priorities and we’re going to keep adding technology talent. Over the last year we’ve made some behind-the-scenes changes like shifting to a DevOps product model of working—which is how startups and tech companies operate—and using more open-source technologies. This will make our technology teams increasingly agile and nimble and, I believe, will also help the entire organization move more quickly and decisively.

We’ll continue to focus on technologies that enhance the store experience for guests and our store team members. We’ll focus on digital efforts including Target.com, offline-online experiences such as order pickup as well as digital marketing to guests. We’ll also continue to focus on supply chain efforts such as store replenishment and merchandising systems that help keep our stores well-stocked and that get the right products to the right guests at the right time.

To me, there’s no question that technology and supply chain are the new battlegrounds for retail. The retailers with the strongest technology and supply chain will have the best chance of winning. And with the team Target is building, I’m excited about our prospects.

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