About the Company
Property management company Capital & Regional has transformed its business in the last few years, sharpening its focus on the retail sector while simultaneously finding innovative ways to add value to its bulging portfolio.
As a result, the company has consistently out-performed industry rivals, providing property investors with returns of above 25%. Its active portfolio management strategy relies on increasing the value it can drive from its IT systems.
Currently, C&R has interests in properties with a combined value in excess of £6.5 billion. The company focuses on five distinct funds, invested in: shopping malls located in 23 town centres; 15 out-of-town ‘junction’ retail parks; 18 ‘Xscape’ leisure complexes; 36 ‘Fix UK’ trade parks, which provide goods and services to the building trade; and a portfolio of 44 German hypermarkets and retail parks. C&R also wholly owns ski operator SnoZone, which rents out ski slopes at three Xscape sites.
The company has built a highly centralised IT infrastructure, deploying standardised, commodity technology in most of its branches. However, SnoZone in particular requires more sophisticated IT support, as its virtual call centres and website form an integral part of its customer touch points.
The group’s CIO Richard Snooks has been tasked with delivering a service to geographically dispersed organisation, with wildly varying requirements. He has recently introduced virtualisation technology, which is intended to help the company deal with peak demands.
Information Age (IA): Property management companies are not normally associated with sophisticated IT systems. Why makes Capital & Regional so different?
Richard Snooks (RS): Just over five years ago we recognised that there was a huge opportunity for us to become more than just a traditional property management company – where you would buy a shopping centre and sit on it, milk it for the returns, but not do very much with it.
We saw the opportunity to actively manage those schemes. So we invest in marketing, manage supplier relationships, help drive up ‘footfall’, drive up transactional values. A lot of the schemes had become fairly run down, and we’ve re-invested and helped revitalise them.
It was realised that IT would play an important part in all of this, although I think it’s fair to say that, originally, the company wasn’t quite sure what IT could do for them. Over time, we’ve built that up – it’s been a fairly gentle, pragmatic approach, and we’ve spent our money carefully, showing the business what we can do.
IA: With so many business units to support, how did you go about building out the infrastructure?
RS: We’ve ended up with a highly-developed core – you’ll hear me talking to the business about the Rolls-Royce core. What that means is we’ve built a best-of-breed platform at the centre of our business, while keeping it light at the edge. We’ve taken a very commoditised view of how we provide IT to our sites and standardised our systems.
So if the business were to buy a portfolio shopping centre tomorrow, and we’re given three weeks to integrate it into our core – which has happened in the past – we can now do it.
In terms of the core, we have two main data centres: one is [located at] our headquarters and the other in a co-location centre in East London, run by Interxion. Our headquarters is primarily our application core, where we host things like Exchange, our property management system, and there’s a ‘dark fibre’ link between the two sites.
All the other sites are also linked back to East London, so we have the MPLS [multi-protocol label switching] network that connects all sites across the UK, as well as the leased line for our SnoZone businesses, all running through the [Foundry Network] ServerIron switching system.
IA: How do you maintain performance across a distributed infrastructure?
RS: We deliver our core applications, like EPOS [electronic point of sales], over Citrix to the 60 or 70 end points at the retail parks – which can have between five users and 25 users – so that the small amount of technology we deliver out to those end points is enough for them to be self contained.
Our SnoZone sites are a totally different model, they operate between 8am to 2am, and downtime is totally unacceptable. They exist in three flagship sites, at Milton Keynes, Castleford and Glasgow, and those sites run what I call real IT – mission critical stuff. The £50 million those businesses take in revenue rely entirely on the IT systems we supply: the booking system, EPOS, the call centres. The tills they use are Dell PCs running web browsers – it’s right at the edge, but connected back to an Oracle 10g database sitting in East London. Effectively it’s a web application running that business.
We also provide call centres and virtual call centres, where we can virtualise the voice traffic over our wide area network. We implemented VoIP technology at SnoZone at the end of 2002, and it’s providing real flexibility for us. If we have customers that want to make a booking, we can use it to reroute their call to an agent at another site when the system is busy. We’re also looking at integrating it with our web system, so that we can drive up web traffic: we want to get to the point where someone can make a choice of pushing a button on site and automatically connect to an agent who can see their web page and help them continue and complete the booking. It’s another example of where we’re adding value and driving away from expensive call centres.
CV
Company: Capital & Regional
Title: Chief information officer
Highlighted challenge: To develop C&R’s widely distributed IT infrastructure in such a way that it can drive revenue growth.
Background: An engineer by training, Snooks has held senior roles across the IT industry, with resellers and in direct marketing. He has also spent time running his own IT consultancy.
IA: You’ve talked about IT adding value to the business. How important is that for you as a CIO?
RS: As a business, we’ve gone through some fantastic times in the last five to eight years. But these cycles always come to an end, and it’s going to be a lot harder for us to return 30% to our funds in the future. Every pound is going to count. Finding new ways to generate revenues will be one of the ways we [in IT] are judged within the business. So we’re doing some of those innovative things on the voice side for SnoZone, but we’re also doing some major things on the retail side.
One example is letting out flexible space in shopping centres – these stalls are on turnover-based rents. It’s notoriously difficult to identify, but there’s always the suspicion with businesses dealing in cash that for every pound put in the till, two goes in the pocket. So we’re looking at ways to equip these retailers with tills, chip and PIN systems, but also reporting and analysis tools, which will help us drive much higher revenue streams.
IA: Given your reliance on your co-location partner, how concerned are you about the escalation of costs with in the data centre?
RS: If you go back to 2002, we were able to punch way above our weight in terms of the deal we got, simply because of the market. It’s totally different now. It is very much a supplier-led market right now. So while we’ve got spare capacity now in terms of space, the next five years will be challenging. The whole power, cooling and CSR [corporate social responsibility] arguments are also coming into play. For us, CSR isn’t just about paying lip service to something, it’s about being able to demonstrate what we’re doing, being able to audit what we’re doing. We’re pretty serious about it. So we’re looking at virtualisation technologies – VMware is very strategic for us – and also at the next generation of blade servers, to see where the manufacturers can help us.
IA: How large a role is virtualisation technology going to play in developing C&R’s IT infrastructure in the future?
RS: I am a complete convert to virtualisation. I see virtualisation as a saviour to
the complete waste of resources and management overhead involved in the proliferation of servers in the back end. It also gives you flexibility. One area where virtualisation works for us is with our websites. We have a number of them around the UK, some of which are static, some dynamic, some e-commerce sites. I can bring the hosting in-house, hang them off the back of our East London site, but not be forced to pick a web development platform: if some businesses want to use .Net, others Apache/PHP, they have that flexibility.
We’ve got a fairly big deal coming up for one of our businesses to sponsor an ITV family show. That’s going to drive activity to the website. Using virtualisation and having the right infrastructure services under that allows us to put up another three web servers for the eight-week period. How would you tackle that if you relied on physical servers?
A year and a half in [to deploying virtualisation] and it’s been fantastic for us. But we have found that some application vendors are actively fighting against virtualisation. For example, one of our applications, to do with modelling funds across a property portfolio, specifically detects if you are running in a virtual environment and actually stops running. I think it’s a ridiculous approach [for software vendors] to take. Yes, redevelop your licensing models; yes, have a virtualisation licensing strategy; but don’t restrict businesses in how they operate.
