Petco Rethinks IT to Focus on Business Agility

Susan Hall

The shifting sands of retail make aligning IT with business goals particularly tricky, Herman Nell, vice president and CIO for Petco Animal Supplies, told attendees of the recent RIS Retail Executive Summit. The pet-supplies company operates 1,000 stores in all 50 states.


He said of creating business agility:

[It's not] how good you are at executing at any one time, but how good you are at maintaining the customer experience under continuously changing demands. It's not even as simple as managing multiple channels, but multiple changing touchpoints. It's not only about aligning with the business, but about building capacity to keep up with continuously changing business opportunities.

As a result, Petco decided to rethink a lot about IT, according to RIS News. That has meant its IT staff has been reduced from about 150 people two years ago to 40 to 50 today, though the article says it's using about the same amount of vendor services. It quotes Nell saying Petco was able to "retain more people than we let go," and employed retraining in multiple ways, though it doesn't clarify the numbers any further.


Among the changes the pet-supplies company has made:


  • embedding IT pros "at the highest levels within management teams, so we could understand the strategy and prioritization of what's happening in the business."
  • largely eliminating in-house development. Said Nell: "We had been a relatively big development shop. If someone came to IT with a request we said first 'Can I develop it for you?,' secondarily we would buy it off the shelf. Now we first would want to buy it, then develop it if needed, and we would outsource the development."
  • also outsourcing its call center and IT infrastructure.
  • adding new technologies such as Oracle Retail Systems for its supply chain, with a focus on merchandising and loyalty programs.
  • building "a full career and compensation plan from the ground up." This plan does not require IT pros to become managers to advance. When I interviewed Vincent Milich, director of the IT Effectiveness Practice at Hay Group, earlier this year, he told me that creating such a career path is vitally important to IT workers. Now, Nell said, "a highly skilled technologist can earn as much as a manager or VP within the organization."
  • through this career and compensation structure, allowing job rotation.


We've heard a lot lately that the future of IT, particularly with cloud services, will be less about maintaining legacy hardware and more about helping business units find solutions to their specific issues. Said Nell about focusing on the company's core competency:

We believe our core competency lies in understanding the business and helping find solutions, and bringing innovation to bear on our problems.

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Add Comment      Leave a comment on this blog post
Mar 18, 2013 4:04 PM Richard J Richard J  says:
This company better focus on customer support. After receiving a wrong tracking number for an order, three e-mails, three phone calls nothing, just nothing. I am 78 and can honestly say this company has the worst CR I have ever experienced. No more$$$ from me, so be cautious Reply

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