NEW YORK — In 2015, Target's website crashed on Cyber Monday because it couldn't handle the traffic. It was the first ever Cyber Monday for the retailer's new CIO Mike McNamara.
Originally from Europe, McNamara never had a Cyber Monday to prepare him for the hoards of customers "waiting in a line outside the door electronically all day long," he said, while speaking at the National Retail Federation (NRF) conference on Monday.
The Target McNamara joined "had lost its confidence … it wasn't in the greatest of health," he said. The IT team "was a bit bloated and a bit broken," still recovering from 2013's data breach.
At the time Target had roughly 10,000 IT staff, comprised of mostly contractors, who were fixated on IT basics. Given Target's size — comprised of approximately 350,000 employees and nearly 1,900 U.S. stores — 10,000 IT workers "was a bit ridiculous; it's way too many," he said.
Now, more than four years into his Target tenure, McNamara reduced the team to between 3,000 and 4,000 engineers and developing his team internally to build technologies in-house.
As for 2019's Cyber Monday, Target reported no hiccups. It was "really quite dull," he said.
Insourcing talent was an easy sell for McNamara. Any decrease in personnel has the potential to save hundreds of millions of dollars, which "buys you at least two friends: the CEO and the CFO," McNamara said. From there, he earned "brownie points" to spend later.
Fruits of their labor
Target merged the digital and physical store experience, without waiting for a vendor to do it for them. When companies reach Target's scale there aren't tech vendors who can easily offer what is needed.
"You can't go anywhere and buy Target.com off the shelf," said McNamara. "We can do that because we are creating software ourselves."
Except for generic retail technologies, such as payroll systems, under McNamara's leadership, Target builds core systems in house, including fulfillment systems and supply chain management software. Because technology has become such a core component of business, "you've got to be able to build that stuff yourself," said McNamara. If a retailer does wait for a monetized offering, they've already "lost the advantage."
But McNamara warns, if a business doesn't have a bandwidth comparable to Target, only insource the tools that can offer a competitive advantage and buy the rest, he said. Target bought payroll and accounting because they won't affect the business' place in the market, whereas allocation or assortment planning could.
"I wouldn't spend too much time thinking about [cloud infrastructure]; I would probably hop into a partnership with any of the big players," he said.
What talent wants
Target wants engineers and technologists who can innovate at scale — Target's scale.
Headquarted in Minneapolis, Target can struggle to attract talent. It's less about the company and more about talent's willingness to relocate, he said.
Retaining the talent cultivated in-house depends on a culture that will nourish it. When McNamara joined, his first group of graduates to join Target's tech division was "predictably, disappointingly very non-diverse," he said.
Target's guest is American and leans more toward women, said McNamara. "There is no way in the whole wide world" to design an organization and build technology for multiple demographics with only "white men … you just would not design it that way."
Currently, one-quarter of Target's engineers are women and its C-suite is comprised of five women and seven men.
When Target decided to bring its technological capabilities in-house, it had to readdress the way it worked, and weave in methodologies including agile and DevOps. When the change was implemented, "nobody knew what they were meant to do because no one knew what the difference between product and project," he said.
In three locations, Target has an open concept space called the Dojo with long tables and white boards to collaborate. The space promotes an "intensive culture," which leads to faster innovation.
Speed, McNamara argues, is valued head and shoulders above other solutions in retail technology. "You want to pump [features and functions] out as quickly as possible because that's what makes you money at the end of the day."
"To do two to three releases on point of sale used to be very difficult, we now release point of sale on a weekly basis, and we could do it on a daily basis if we so chose," according to McNamara.