Executive Insights – Phil Scully, CIO at Costa Coffee

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Executive Insights are a series of discussions with c-suite executives from a range of industries, to learn about their roles and the part that digital transformation plays within their large organisations.

As the Chief Information Officer of one of the most recognisable brands in the world, it’s no surprise that Phil Scully is a very busy man. Costa Coffee is a brand synonymous with great coffee in dark red cups, and in most large UK cities you can’t go far without seeing another branch. In fact, there are 2,500 stores in the UK and 4,000 globally, which demands substantial technology to enable and support such an international service. This is Phil’s main responsibility, the technology for Costa across the globe and all that comes with it, including the delivery of systems and then running them, maintaining them, securing them, updating them, licencing them and so on. As a result, it was fascinating to chat with Phil about Costa’s digital transformation agenda and the importance of digital culture.

What role does digital transformation play at Costa Coffee?

It’s a critical enabler. For the customer coming in to buy great coffee, at any time of the day. We’ve transformed the consumer experience so that it’s more convenient, whether that’s through drive-through, delivery or click and collect. Across Costa’s entire ecosystem, technology underpins the transformation; our Barista’s have access to new technology in stores, working with our partners is more automated. We can then run our business more efficiently, effectively, and accurately, and gain insights from the data to understand how our business is running. All of that is enabled by technology. So it’s a fundamental part of doing business, whether you’re a global coffee company or any organisation nowadays.

And what do you know to be the most crucial aspects for a large consumer-facing organisation like Costa Coffee to be successful in implementing the digital transformation strategy?

For me, it’s what you are doing as a business: what is your brand, product and promise? Digital transformation has to support and enable all three, and from that point of view, you cannot look at digital transformation as just a website or a mobile app. The technology enables these to hang together. You have to look at it as an end-to-end process that supports and enables the promise to the consumer. Looking at the sale, at the finance, at the supply chain, at the third party, and making sure that every piece is moving in concert to do that. Where I think organisations have had gaps in the last year with lockdown, whether that might be a manual process or the kind of swivel chair integration that some of the legacy systems rely on, those processes can really start to struggle when an organisation implements a digital transformation agenda.

How do you believe the people and the culture of an organisation impact transformation efforts?

Both are hugely important. There’s the old adage that culture eats strategy for breakfast, and my role is delivering technology and enabling a business with it. This can, in itself, be relatively easy. It’s materially a lot more complicated and takes a lot longer to change technology and culture. Digital culture won’t necessarily land at the same time as a new digital system. But until you get the culture and the system together, you don’t genuinely manage to digitally transform, which in my opinion, is part of the challenge.

Look at 2020: Cloud technology is not new, video conferencing technology is not new. But what 2020 did was make everybody aware of how to use it more efficiently, and make it more of a critical component of doing business. People are adaptable. Over the last 12 months at Costa, we’ve been pushing out updates and organically letting people learn how to use them and adjust to the changes. People have inherited skills from smartphones and the services they use such as Amazon, Netflix or eBay, and all these big cloud organisations that regularly update their software have been used by companies and employees throughout the past year to adjust and adapt to company software in the same way.

In enabling Costa’s digital transformation agenda, what role does data play and having a data strategy?

Data is hugely important from every touch point, from everything you do. And it comes back to that brand, product and promise. At every point of the customer process there is an information flow that is critical to running the business. First of all, making sure your data can be trusted when in transit, trusted when stored or stationary, and trusted when displayed, is all hugely important. It must be convenient to access and use in a trusted way, whether that’s by internal teams or by consumers. The frustrations that consumers have, such as entering their details multiple times or having their own personal data compromised, are hugely impactful to a consumer experience and brand.

So at every point, it’s not just the data, it’s making sure that the operational integrity of that data is maintained across the business and then making it useful. There’s this phrase, “data is the new oil”, which I don’t believe is strictly the same analogy, because oil’s value doesn’t increase with volume. It’s still the same price per litre. Data’s value increases the more you have, the variety of different lenses of data you can put together, the more insight you get, so the more valuable it becomes. So at every point of the digital agenda, collecting, maintaining and using that data is hugely important for the business.

What is your perspective on engaging with scaleup technology to help implement Costa’s digital transformation agenda?

For me, it’s always the case of looking at how to apply technology for the best interests of the business and the consumer, so brand, product, promise, and consumer. Not technology for technology’s sake. The challenge with scaleups and startups is that testing a solution on a single machine or a single store, is relatively straightforward. But with over 2000 stores in the UK, and over 10,000 machines, maintaining it 365 days a year at this scale to deliver our promise that we will serve coffee when a consumer wants it, the scaleup has to work at that enterprise scale. So can they be rolled out internationally? Can they work in other international markets, given that Costa Coffee is a global brand? Can that scaleup grow and scale at the same pace, at the same size? Because ultimately, if that scaleup is not able to keep up with the scope of the corporate, we will only have limited collaboration with them.

I’d be interested to hear your perspective on what you think the future of your industry in particular looks like and how you think Costa will be evolving over the next three to five years.

I think the future of any industry fundamentally involves a requirement for more technology, which must be both robust and automated. If you look at the significant ramp up in online business, whether food or non-food, the metrics in terms of growth are phenomenal for last year, and I don’t think that’s going to slow down. So I think there’ll be a lot more online, a lot more convenience, including delivery and collect capabilities. After this year, I think cashless services are to become more habit-forming as people won’t necessarily want to go back to cash. This will bring fundamental shifts in shopping behaviour and patterns. But people will still want to meet, they will still want to travel. So I think for Costa, making that store experience inviting and a fantastic meeting place, and to continue serving great coffee, is going to continue to be hugely important when we get back to whatever the future normal might look like.

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