AHOLD TO NAME GLOBAL TECH CHIEF 2004-05-31 (1)

Michael Garry / Additional reporting: Bobbie Katz

BRAINTREE, Mass. -- Ahold will be appointing a global chief information officer over the next one to three months. This CIO will oversee the company's information technology programs worldwide, while seeking synergies across operating companies, according to a high-ranking IT executive at Ahold USA.

The IT executive, Glynn Evans, chief systems architect and development officer, told SN last week that Royal Ahold, the parent organization based in the Netherlands, is seeking an individual to replace interim IT groups set up over the past 18 months in the United States by Ahold USA, and in the past month by Royal Ahold, to oversee the IT function.

"We will have a global CIO appointed. We believe we're ready for that," said Evans. "This will be a professional CIO with a retail/food industry background." The CIO will be based in Zaandam, Netherlands, or here, where Ahold USA is migrating its offices from Chantilly, Va., though Evans said he believes it will more likely be here.

Evans also talked about Ahold's evolving IT strategy at JDA Software's Focus conference in Las Vegas in late April.

The change in IT leadership is part of a broader change going on at Ahold USA, which is diminishing its role as an umbrella organization and establishing two major divisions consisting of Stop & Shop-Giant of Landover, Md., and Tops-Giant of Carlisle, Pa. (See SN, April 12, 2004.) Ahold is planning to sell two other operating companies, Bruno's and Bi-Lo. Stop & Shop, based in Quincy, Mass., near here, will play a greater role overall.

In IT, however, Ahold USA will continue to maintain a data center in Greenville, S.C., while looking to achieve more synergies among its U.S. operating companies, Evans said. Strategic IT decisions linked to the business will gravitate to the Boston area (Braintree and Quincy) rather than Greenville, where they were remote from the business, he said. "That's why I'm [in Braintree]."

Evans is part of what is called the "Office of the CIO," an unusual five-person committee that has overseen Ahold USA's IT organization for the past 18 months. The Office of the CIO effectively took over from the last official CIO at Ahold USA, Ed Gropp, who left in 2002. "We have learned a lot about how to deliver global solutions with localization," he said. However, he described the Office of the CIO as a "transient organizational mechanism," adding that "it has been modestly successful, but it definitely has a shelf life."

In the past month, a similar three-person "Global CIO Office" was established by Royal Ahold to "find synergies across the Atlantic," said Evans.

Besides Evans, the U.S. Office of the CIO consists of Gary Preston, a non-technical "business CIO" who heads the group; Pat Roberts, head of legacy support and operations who runs the Greenville data center; Bob Bersani, in charge of global standards; and Jeff Fabbri, to whom all operating company IT heads report. Evans, Bersani and Fabbri are based here; Preston is based in Chantilly and Roberts is situated in Greenville.

Evans said Ahold has no plans to discontinue the data center in Greenville, though it is considering outsourcing some IT functions that could include data center operations. The individuals in the Office of the CIO will continue in those capacities after the global CIO is appointed. Nevertheless, IT could experience some attrition, he said. "The overall pattern of consolidation and rationalization will continue."

In the past, explained Evans, Ahold USA "tended to leave the operating companies alone rather than bring them into a common system." That strategy worked in the short term. Yet in the long term, it meant the companies were "maintaining more systems and doing more things than they needed to."

Moreover, Ahold USA's centralized management was seen by the operating companies as remote and unresponsive and as having lost the connection to them, said Evans at the JDA conference.

Thus, the Office of the CIO was established to seek more harmony in IT to reduce costs and "propagate local innovation," he said. So if Stop & Shop has a clever rules-based pricing system, he observed, it could be shared with other operating companies. "We have a local go-to-market strategy, but in some areas we still want an Ahold way of doing things," Evans said. The global CIO will continue that approach, he noted.

The IT departments at individual operating companies will continue to focus on requirements analysis and implementation rollout rather than development, Evans explained. IT will tend to buy more systems and develop less than in the past.