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Hermes trailblazes Europe’s logistics scene

Hermes trailblazes Europe’s logistics scene

Case StudiesCloudSoftwareTop StoriesTrade & LogisticsUnited Kingdom

We exist in an era which demands timely services and allows very little room for mistakes when it comes to technology. Hermes’ CIO, Chris Ashworth, explains the steps that take place behind the scenes when delivering a seamless customer experience.

Hermes is one of the UK’s leading consumer delivery specialists and works with leading retailers. The parcel company provides a range of flexible and affordable delivery options to home, work, neighbours, safe place or ParcelShop that are convenient for the consumer and comply with people’s on-the-go approach to daily life.

Chris Ashworth provides an insight into how Hermes’ delivery process is so successful and how it continues to innovate and develop its service to achieve absolute customer satisfaction.

An overview of the role

My role has changed over the years. I was appointed CIO three years ago which involved upgrading and digitally transforming a legacy infrastructure. My role evolved quite quickly because in order to do that, I had to invoke a strategic change, so the kind of change management function fell under a traditional CIO role. We’ve been rolling out that three-year strategy which is now coming to an end. This is helping to digitise the business as we’re taking it into the cloud, breaking down the legacy infrastructure. We now have a more customer-focused approach into our internal systems.

As technology has evolved, so has my role. My remit now includes strategic developments, product developments and even marketing. The CIO’s office drives the strategy and product innovation of our business.

The main challenges of Ashworth’s role

Peak time demand was the initial biggest challenge I was faced with. Typically within the industry, volumes double particularly around Black Friday and Christmas. So, you can take your busiest day in summer and double it. We will deliver 2.4 million parcels on our busiest day this year through our hubs but as the volume doubles, the challenge is much harder because the volume comes to us a lot later. This is down to the fact that clients struggle to get it out of their warehouses on time due to their orders doubling, roads are more treacherous, days are darker, parcels need to get to the hub earlier because there’s an increased amount on the road. You’re therefore looking at a 10x scaling problem with regards to system. This is something that’s unique to my role and industry, and something myself and my peers struggle with each year.  

The other challenge is that everything completed within the industry has to be done at real value. Most people take delivery as a given. A lot of people don’t pay for delivery, but they expect it to be perfect. Understandably, it’s one of those emotive services – you order something and you expect it to arrive. The fact it might have to travel for miles and go through numerous pairs of hands and do all of that in a 12-hour period isn’t really considered by the end customer and we have to provide them with a seamless journey every single time. All of these things must be carried out in a way that gives the customer absolute reassurance and control around the parcel without adding unnecessary additional costs. Those are the real challenges around the industry currently.  

The current state of the technology landscape in Europe

My view is that it’s a mixed bag. When considering my industry in particular, I think the UK is at the forefront of the drive of shopping through the Internet and as such, I think we probably lead the way with Europe in regard to service offerings, customer configuration, assurance control, customer experience, that kind of thing. We don’t always get it right, but I think we are the trailblazers. When you look across Europe, a lot of our competitors are catching up but they’re not quite where we are. I think this is because our market is a lot more mature and that much more demanding. It’s all very relative across Europe; we take ideas from all over the show – some come from the continent, some comes from the states, some come from the UK.

Utilising technology to enhance the customer experience

We do this in various ways. The first is that we try and keep the customer assured – we try and provide tracking in real time. We try and simplify our tracking events, so we take the jargon away as it is unnecessary to explain every leg of the journey but being really clear is essential. Then we start to introduce more of the expectation, so time slots are being introduced now and when parcels are delivered, we use a safe place model. This means that we’ll provide a photograph of the safe place and we’ll also provide a geolocation to prove that we were there, reassuring the customer. If it’s a sign-for parcel, we’ll provide a signature which all takes place in real time. If a customer isn’t going to be home, it introduces another level of anxiety for them, so now we introduce control.

Late last year, we brought in diversions which allow the customer to choose their safe place or their preferred neighbour to leave their parcel with if they aren’t home. Soon, we’ll be expanding those diversions beyond the home so you can divert to ParcelShop or to an alternative address – we can even hold the parcel for you. Depending on how far that parcel is through our network, we can provide you with extra options. So, if the parcel is still at our hub, it can reach anywhere in the country and we can therefore allow you to divert to your chosen address. We’re simply trying to introduce as many controls as we can to give the customer ultimate choice.

We’ll also be launching a new product called Hermes Play which starts to introduce real personalisation to someone sending a parcel as a gift. It personalises a label by introducing Augmented Reality onto the label, so customers can record a video and upload it into the cloud and then we pass that video along the parcel journey and let the recipient know it’s there for them.

We’re even allowing people to choose their safe place – we have another product called MyPlace which will be launching soon. It allows people to choose their safe place, drop a pin in the map, put a photo of that safe place in the app, choose their preferred neighbour to leave the parcel with, and the offering ultimately provides customisation around safe places.

Changes companies/CIOs should be making to improve the current technology threats across the region

You don’t know what’s coming, so we are trying to make our infrastructure as cost-effective and as agile as possible. It’s not rocket science, but the digitisation of a business is absolutely fundamental. We’ve always got to keep our cost margin low and so moving onto a more modern infrastructure helps. Cloud computing compared to traditional computing is so much more cost-effective, particularly when you start to think about scaling and non-production environments. I think we’ve managed to decrease around 50% of our hosting costs.

So, I think getting onto modern technology, keeping your cost base low but also retaining that agility. There’s a lot that’s changing and markets are getting more and more competitive – if somebody comes out with something that’s a bit of a game-changer, you’ve got to catch up. You’ve got to constantly keep innovating so having an agile infrastructure gives you that flexibility to compete.

A final component is to get your data sorted. I think data’s a real differentiator, whether it’s about managing yourself better and more efficiently with exceptional-based reporting and ultimately, moving on to data-driven decisions and even using AI and decision engines to drive you forward. Data is massive for operational efficiencies and also for monetising and adding value-added services.

Advice to CIOs

From a personal perspective, I try to find a project and company that resonates with me. Everyone is different and everyone’s value increases if you find the right company, culture and project. So, I would always advise to know your strengths, know what you’re good at, what you aren’t good at and look for a project and company that fits your this. If you do that, you can only enjoy the journey, have fun and add some value and that’s all I try and do now in my career. So far, I’m really enjoying it.

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