MINNEAPOLIS _ It was an unexpected moment _ and one of the first signs Target's tech department was in line for a major shake-up.
Not long after taking over as Target's chief information officer, Mike McNamara told his boss, CEO Brian Cornell, that his budget was too big.
"For the first time perhaps in my career, I had someone walk into my office and say, 'Brian, I've got too much capital to spend,'" Cornell recounted incredulously to Wall Street analysts at a meeting in New York earlier this year. "'I want to give you some dollars back.'"
As in hundreds of millions of dollars back.
McNamara, 52, arrived last June from British-based grocer Tesco as one of the key outside appointments to Cornell's executive team. He immediately stood out, in part because of his passion for opera, his Irish accent and penchant for using superlatives such as "bloody" and "brilliant."
He quickly ushered in a completely new direction for Target's IT department. He identified three main weaknesses: Target had outsourced too much of its tech talent. Its systems were too unstable. And it was working on too many projects.
"We were just doing too many things," he said in an interview at his downtown Minneapolis office. "I mean we had over 800 projects. Even a company as big as Target doesn't have 800 priorities."
The list has now been pared back to 80.
And in an abrupt shift following thousands of headquarters layoffs last year, McNamara has taken Target on a hiring spree aimed at making the company into an engineering powerhouse instead of relying on contractors. In the past year, Target has hired about 700 engineers, many of them based out of the company's Minneapolis-area offices. About one-quarter of the new recruits work at its offices in Bangalore, India.
Target currently has about 800 more open tech positions.
"I could easily fill another thousand positions," McNamara said. "We need to have a much stronger engineering capability than we had, and we need to own it. We need to own our technology."
McNamara's efforts, as well as the clout he holds within Target's C-suite, is yet another sign of a new era in retailing.
For years, it was the flashy marketers and product designers who ran the show at Target, while tech folks were more of an afterthought. But as online shopping has disrupted the entire industry, technology and supply chain, which are the key ingredients in Amazon's meteoric rise, have become more central to the company's mission.
"They will be the new battlegrounds for retail over the next decade," McNamara said. "Whoever has got the best technology and the best supply chain has the best chance of winning."
Those are also the areas where Target needs the most work.
