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Best Buy rebuilding IT capability it outsourced, starts hiring

A broader IT hiring trend among retailers is emerging as e-commerce grows

October 11, 2011 05:49 AM ET

Computerworld - E-commerce, mobile computing, tablets and other emerging channels have become so important to Best Buy that the company is rebuilding internal IT resources it outsourced seven years ago.

Best Buy is hiring some 200 IT professionals as part of this effort, and expects its IT department to increase to as many as 350 employees once this round of hiring is completed.

The electronics retailer, which saw its online revenues grow 13% in the last quarter, is putting IT at the heart of a strategy to respond to the expanding e-commerce market.

"IT is becoming a focal point for Best Buy to compete in the marketplace," said Scott Heise, vice president of application maintenance and development at Best Buy. "A key component of that is us retaking control of IT."

The strategy is illustrated by the people the company intends to hire.

Specifically, the IT skills Best Buy wants internally are what it calls "top of pyramid," or people with leadership qualities who can translate business strategies to IT needs, have strong technical expertise, take ownership of the technology and interact with business leaders strategically. The company will still use outsourcers to provide more direct technical needs, such as coding.

Seven years ago, Best Buy, which is no. 47 on the Fortune 500 list, outsourced most of its technology operations, in a deal it announced with Accenture. The agreement was an eye-opener for its scope. Best Buy had 820 people in its IT department prior to the agreement, and said, at that time, that it planned to reduce its IT staff to about 40 people, with most of the jobs shifting over to Accenture.

Heise said the move doesn't mean Best Buy is doing a broad brush in-sourcing of all of its IT.

"We're still going to leverage strategic partnerships, but it is an acknowledgement that we feel passionate about having critical key leadership resources, from an IT perspective, back within Best Buy," said Heise.

Having direct control over the company's strategic direction and its road maps, said Heise, "is a critical differentiator that we believe at this point [we should] maintain ownership of."

By bringing certain roles back in-house, the company will be able to eliminate steps in the process that come "when you work in a highly outsourced model," he said.

Heise said the change will allow the company to bring new services to market faster, with tighter alignments in the organization.

Best Buy's decision to expand its IT department may be part of a broader trend among retailers, others of which are also hiring. In May, Lowe's Companies Inc. said it planned to create 150 new IT positions to prepare for future platforms. Macy's is expanding its e-commerce technology staff.

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