Target CIO Transforms Retailer With In-house Talent, Agile

How much should your organization spend on information security? What’s the potential cost of a ma

Target hired Tesco veteran Mike McNamara 18 months ago as CIO and Chief Digital Officer to transform the company’s IT and software development organization. Here’s what he did.

Retailer Target may be a poster child for a traditional physical store retailer who knew how to leverage analytics. A New York Times magazine story from 2012 famously recounts how the company used analytics to figure out that certain customers were pregnant, even when those customers hadn’t told anyone.

But that trailblazing technology reputation took a hit in 2013 when Target experienced a major data breach in which attackers stole 40 million credit and debit card numbers. The event caused a major embarrassment for the company, led to the resignation of its CIO in March 2014, and then its CEO, too in May 2014, and ultimately led to a 2015 $39.4 million settlement with banks over the breach.

Retail and technology veteran Mike McNamara joined Target as executive VP, CIO and Chief Digital Officer after the executive exodus, about 18 months ago, with the goal of streamlining and focusing the technology operation within Target. He recounted his work so far during the National Retail Federation (NRF) 2017 Convention and Expo in New York this month.

McNamara said that it was only five years ago that Target brought its web site operations in-house. Before that Target’s web site was “being run on the platform of one of our fiercest competitors who also happened to have a web services business. It begins with an A,” he said. “And only three years ago we became the poster children for data card breaches.”

Today Target is “best-in-class for cybersecurity and running a digital storefront,” McNamara said. So how did Target get from there to here?

“I’ve always taken the approach that I wanted to do fewer things and just do them better,” McNamara said. Yet when he arrived at Target the company was working on more than 800 technology projects, and 10,000 people working on them. About 70% of those were third party contractors. McNamara believed he had too many people and too big of a budget at “hundreds of millions of dollars.”

“The problem with having too many people and too much money is you end up doing a whole load of stuff that doesn’t really matter,” he said. “And then the things that do matter get lost in a kind of fog of inconsequence.” So McNamara took the following three-point approach to take Target’s technology operation where it needed to go:

At the beginning of his time at Target, McNamara sought input from his peers on the senior leadership team to prioritize technology goals, giving each of them five Post-It notes and asking them to list their priorities for technology in the coming year.

“After a few hours of horse trading we set the technology agenda for the entire year,” he said.

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