by Elizabeth M. Ferrarini

With annual sales approaching $14 billion, and 47,000 employees worldwide, Office Depot, incorporated in 1986, has emerged as an office products and services leader in every distribution channel -- from retail stores and contract delivery to catalogs and e-commerce. (The Company operates under the Office Depot Products, Viking Direct, Guilbert, and Tech Depot brand names.) Office Depot 's $3.1 billion in online sales in 2004 made it the third largest online retailer in the world, behind amazon.com and Dell.

Office Depot's IT department supports United States operations at 1,000 retail stores, 22 delivery centers, and 60 sales offices. Internationally, the IT department supports 220 stores and 76 distribution centers.

Enterpriseleadership.org recently sat down with Tim Toews, senior vice president and chief information officer for Office Depot, to discuss some of the highlights about how a global retailer manages IT. Toews, who joined the company as an applications developer in 1994, was appointed CIO in April 2005. Here is what he had to say:

EL: Office Depot isn't as visible in the press as other companies  your size. Why?

TT: We don't have a rock start culture where we're vying for opportunities to boast about ourselves. Instead, we look for chances to talk about what we've learned from our successes.

EL: Can you give me an overview of some of your key  applications?

TT: We have all the normal applications you'd expect to find at a multi-channel company. Our order management system supports multiple front-ends such as Web sites and EDI. We have moved IT to sort of a shared services model.

For the past several years, our stores have provided wireless access for things such as receiving and product lookup, and we use wireless in our warehouses for some of the same functions. Our extensive corporate wireless infrastructure enables our employees to be mobile in the confines of the campus. Any employee who travels for business -- either in the U.S. or abroad -- has a wireless-enabled laptop that can access any public wireless network.

EL: What is your vision for IT?

TT: IT professionals need to be global leaders who embrace a culture of thrift. They also need to simplify the environment while maintaining service levels and a high-performance culture that is fast, flexible, and responsive.

EL: What innovative technologies are you considering?

TT: We're taking a serious look at RFID and VoIP, but haven't deployed either one yet. We're also looking at outsourcing in a variety of new areas. It's something we do under the banner of selective intelligence. The cost savings have to be compelling and the service metrics must be as good, if not better, than what we have right now.

EL: What application helps you to drive revenue or to have a better  customer relationship?

TT: Our data warehouse system, called TCRM, supports our catalog sales marketing efforts, a very important part of our business in the U.S. and Europe. The intelligence we get by segmenting customers allows us to understand what types of offers to provide, what type of catalogues to send out, and what type of products would be useful for our customers and would ultimately entice them to purchase from us.

Our TCRM system provides our call center with a well established workflow for handling repetitive calls from the same customers. Each call center representative always has access to the same context about each customer.

EL: In what other ways has IT helped the business innovate or drive  revenues?

TT: A large-scale merchandising system that we installed in 2005 has been significant in driving down our supply chain costs. You can't have an industry-leading e-commerce presence without some sophisticated IT technology.

EL: Have you gone through any cost-cutting measures?

TT: In 2005, we focused on creating a new management organization and a framework that would allow us to control costs; we need to support key operating priorities, as well as the basic block-and-tackle moves. This entire effort should better position us to continue to reduce the cost of IT, while providing the company with a nimble and responsive IT organization.

EL: What kind of governance do you have in place for your IT  organization?

TT: IT has several governance bodies. The IT leadership team, which consists of my direct reports with dotted lines to finance and human resources, provides overall governance for the department and for all of our compliance areas, such as security, Sarbanes-Oxley, and Visa. A project management team oversees governance of IT projects that will cost more than a certain amount. In 2005, we introduced a single source for all IT status reporting, which is linked to our timekeeping systems and our project tracking systems. Our executive committee oversees governance for IT, as well as other operational areas.

EL: What best practices or quality programs do you use?

TT: We don't have a formal Six Sigma program, although we've  had some ad hoc efforts in this area. We've also dabbled with the IT infrastructure library, but haven't deployed it to handle a specific task such as the Service Desk.

EL: Are you managing IT more conservatively today versus 10 years  ago?

TT: We've never been "wild eyed." For example, even though we considered e-commerce a compelling business opportunity, during the dot.com frenzy, we didn't hire developers on the West Coast to build our e-commerce systems, nor did we want to create a separate organization to deal with e-commerce. Instead, we did a great job of building our systems in-house within the overall corporate framework. From Day One, our systems were integrated with all of our customer-facing systems. On January 18, 1998, when we took our first order, it appeared in the cost center. If the customer placed an order through our call center, he or she could've verified that order on the Web.

EL: Are you familiar with Nicholas Carr's Harvard Business School  Press book, Does IT Matter?

TT: I read his Harvard Business Review article, "IT Doesn't Matter." The article had a rather stark premise, which I presume was intended to bring about some good conversation. It's heavy handed to say that IT doesn't matter, but there's a lot of truth in what he says. You need to look at some parts of IT as a utility and not go overboard emphasizing its importance to the overall business. I'd probably tip toward the "IT doesn't matter" side of the scale, but, of course, I think IT is important. If you were without electricity for two weeks, then you'd come to appreciate the important of having it. The article helps you to think about how you spend money, what you prioritize, and how you do projects.

EL: What was the biggest risk you've taken as an IT  executive?

TT: My biggest risk has to be committing to large cost savings with the help of a new management team. When I became CIO in April 2005, the company had begun its major transformation effort. As a result, the company's future looks amazing. We were asked to take a hard look at our cost framework and see what we could do to reduce the cost of IT for the corporation. During my first month, my team and I had to commit to some pretty aggressive goals, which weren't fiats from management. We really believed in these goals, and had signed up to carry them out. We committed to some very aggressive things, and we made and exceeded our numbers.

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Elizabeth M.  Ferrarini is a free-lance technology writer from Boston,  Massachusetts.