By Andy McCue, 9 July 2007 09:15
INTERVIEW
Property management isn't a sector that has traditionally relied on the exploitation of technology, with most of the profits coming from astute land and real estate investments by pinstriped City types.
However that picture of the sector is slowly changing at London-based Capital & Regional, which focuses on property asset management in the retail and leisure sectors.
It all began five years ago when CIO Richard Snooks joined the company - and in doing so doubled the size of the IT team to two. It's fair to say technology wasn't viewed as particularly important.
"The business didn't understand what technology was about. It saw it as a cost base," he says. "That's entirely changed but I had to do it through a very 'softly softly' pragmatic approach. I had to gradually do things, often introducing a technology with no risks, often having to do things as a stepping stone."
The first phase of his IT strategy was about improving efficiency and building up trust across the business. Now in benchmark reviews Capital & Regional compares favourably against others in the sector on the cost of IT ownership.
Changing market conditions in the retail and leisure property sector mean the business these days is looking for more from IT than just low costs. Property returns over the last eight years have been good but as interest rates rise and macroeconomic conditions change those yields will start to be squeezed.
Capital & Regional invests its own money in joint venture partnerships with other businesses - typically City institutions and pension funds. It makes money from rises in property value and from management and performance fees for developing the portfolio, which includes The Mall chain of shopping centres, The Junction out-of-town retail parks, and X-leisure and the Xscape Sno!Zone in Milton Keynes.
Snooks explains: "We are in the second phase of our IT strategy, which is far more exciting in many ways. Anyone can build an infrastructure and do good value IT. Far more exciting is how can we find technological solutions that will help us directly generate revenue and profit."
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Examples of this include driving more Sno!Zone revenue to the web and a new booking system for The Mall shopping centres. The system will increase the yield on mobile retail units which pay rent based on turnover, by helping those tenants operate more professionally and successfully.
As part of this the IT department is also set to be rebranded as a 'business solutions' unit. "I don't want us to be seen in the old way of a service team that just provides good reliable technology," says Snooks. "It is measured by the pounds, shilling and pence we are going to contribute and we're at the start of that next tranche of our strategy."
That next phase includes a newly created IT strategy board chaired by PY Gerbeau - of Euro Disney and Millennium Dome fame who is now head of the Xscape leisure business - which includes both IT and business executives. Snooks admits Gerbeau is on that IT board for his business rather than technology acumen.
When recruiting for his 16-strong in-house IT team, Snooks looks for talented generalists rather than dyed-in-the-wool techies. He's also critical of the quality of graduates from university IT courses.
He says: "We are increasing the number of staff and upping the salary levels. I am looking for business managers. I have never employed geeks. I don't think generally universities do a good job. I need intelligent people with good personalities who can get on with people."
Snooks himself landed in IT "by accident" after studying engineering at university, working his way through the ranks in the reseller business and running his own consultancy. He then worked for direct marketing agency WWAV Rapp Collins before joining Capital & Regional in 2002. He was promoted to the newly-created CIO role earlier this year.
Capital & Regional has 600 to 700 PC users over 80 sites, ranging from small business to head-office size. Some of the key technologies in the infrastructure include applications delivered remotely over a Citrix thin-client set-up, a Dell and EMC storage area network, two data centres using ServerIron switching technology from Foundry Networks to handle routing and traffic, clustered Oracle 10g databases, an SDSL-based MPLS network, voice over IP capability, bespoke booking and ticketing systems, and Epos systems.
Capital & Regional leases its IT kit through Dell Financial Services, something which Snooks says gives him more flexibility. "I don't want to own technology or be stuck with having to recycle it. We have a three-year programme of replacement."
Although the company is currently running Microsoft Windows XP Pro and Office XP Pro, Snooks doesn't much like what he sees coming with Vista in terms of costs and benefits. He is actively looking at alternatives, including a trial of a SuSe Linux desktop inside the IT department.
"We are feeling the pinch of the aggressive revenue targets of Microsoft. We are asking ourselves, 'Are they [Microsoft] fit for our business?'"
Snooks says he sees no reason why, for example, the browser-based tills at the leisure outlets couldn't run on SuSe Linux with a Firefox browser or whether Apple Macs may be a better alternative to Windows PCs.
"If I am being driven down the Vista route then an Apple Mac is smarter money and cheaper. All of this is up for grabs. If Microsoft doesn't wake up then I could see in five to eight years a potential IBM situation and it being outmanoeuvred."
While the focus on cost and efficiency is still a core responsibility for Capital & Regional, the future is very much about how IT can add real value to the business.
Snooks says: "Having good technology implemented to actually drive profit to the bottom line is where things are heading."
Comments
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1. Will Higdon
Ok, my opinion on this guy's opinion. He is submitting a grandstanding opinion on the street like he has the experience to speak to it. . In his 9 July interview with Andy Mcue, Snooks says:
When recruiting for his 16-strong in-house IT team, Snooks looks for talented generalists rather than dyed-in-the-wool techies. He's also critical of the quality of graduates from university IT courses.
He says: "We are increasing the number of staff and upping the salary levels. I am looking for business managers. I have never employed geeks. I don't think generally universities do a good job. I need intelligent people with good personalities who can get on with people."
Snooks himself landed in IT "by accident" after studying engineering at university, working his way through the ranks in the reseller business and running his own consultancy. He then worked for direct marketing agency WWAV Rapp Collins before joining Capital & Regional in 2002. He was promoted to the newly-created CIO role earlier this year.
In other words, he has NEVER worked in the operational environment where he had to support a Mac or *Nix enterprise. Does he know what a driver is; e.g. has he ever tried to install a multi-monitor ATI card in a Linux box, has he ever tried to set up the Mac as a VTC server, or multimedia center? No, of course not, and in fact, If he ever tried to switch to Mac or *Nix, he would more than double his total of 16 talented generalists IT workers, and believe me they would not be business types, they would be geeks!
I like to tinker with the Mac and love all of *Nix, but would NEVER deploy them en masse through a large enterprise. We don't all use Microsoft because of the hype; we use it because everybody else uses it, and because it works very well in a distributed environment. The Mac is just a gimmick and always will be. The product has been around forever and they STILL aren't as deployed as the (relatively speaking) newcomer Linux. As Mac evangelists put it, 'everybody steals our ideas." Well then I say, take an idea and compete. It appears to me that the only concern Microsoft should have is from the Novell/Redhat/IBM community. Microsoft products are the most externally challenged products in the world. More people/teams/organizations attack the Microsoft product than even the Army Humvee, and Microsoft does the best that can be done without running other companies out of business. For those of you who cried "Microsoft is not secure enough", well now you suffer the consequences with User Access Control. For those antivirus and firewall companies who said Microsoft was too vulnerable, well now you can go out of business as Microsoft deploys a better product than you sell. I rant because this is ridiculous. Our business world is a grown-up world, and we just don't have time for the kid's toys on the enterprise. We don't have time to listen to whining. All we have time for is a better product that can compete with Microsoft and drive down these high prices. Where is that product?