Target's tech chief exits amid breach investigations

Star TribuneMarch 6, 2014 

The chief information officer of Target Corp. is resigning as the retail giant overhauls its information security and compliance operations amid investigations into a damaging network break-in late last year.

The resignation of Beth M. Jacob is immediate, the Minneapolis-based company said Wednesday, and Target is searching for an interim CIO to serve in what it described as a long-term, temporary position to guide it through the technology restructuring.

In a statement Wednesday, Target CEO Gregg Steinhafel described the search for an interim CIO as a "first step."

"While we are still in the process of an ongoing investigation, we recognize that the information security environment is evolving rapidly," Steinhafel said.

Steinhafel outlined other changes to Target's information security management. It has created the position of chief information security officer and is recruiting outside the company for that position. It has also started an external search for a chief compliance officer.

"We are also working with an external adviser, Promontory Financial Group, to help us evaluate our technology, structure, processes and talent as part of this transformation," Steinhafel said.

Target declined requests for interviews.

Promontory, headquartered in Washington, D.C., advises governments and companies, primarily financial institutions around the world, on complex risk and regulatory challenges. Bloomberg, for instance, hired Promontory to help it assess its client data issues following last year's revelation that Bloomberg reporters were monitoring how clients use their Bloomberg terminals. A company spokesman said

Promontory doesn't discuss client matters.

The chief information security officer position is a new one for Target. Brenda Bjerke, Target's senior director, information protection who held some of the responsibilities of a chief information security officer, will remain with the company, a spokeswoman said. She said she couldn't say what Bjerke's role would be.

The company provided a copy of Jacob's resignation letter, dated March 5, in which Jacob wrote "this is a good time for a change."

"This is a difficult decision after 12 rewarding years with the company I love," Jacob wrote. "This is a time of significant transformation for the retail industry and for Target."

Jacob, who holds an MBA from the University of Minnesota, first joined the company in 1984 as a department store assistant buyer when it was known as Dayton's, then left and returned in 2002 to Target as director of guest contact centers. She was promoted to CIO and executive vice president of Target Technology Services in 2008, and reported to Steinhafel.

Jacob ran Target's technology infrastructure during a period of rapid change, including the relocation of some of its technology operations to India. Critics have noted that she has deep operations experience but lacked the information technology background that many see as increasingly important for a CIO at a major corporation.

Jacob's ouster was anticipated by many industry analysts, and welcomed.

"Target has not been keeping up in terms of keeping pace with the way they need to move forward with technology," said Amy Koo, a senior analyst at Kantar Retail in Boston, Mass. "There was not enough oversight, clearly, or enough controls."

The most public technology issues have been with Target's struggle to fortify its website, which at one time was run by Amazon.com. The company spent two years re-engineering the website only to have it crash in 2011 less than a month after its debut, during the launch of highly anticipated Missoni merchandise.

Brian Yarbrough, consumer analyst at Edward Jones & Co., said Target is making a statement that it needs to take its technology game "to the next level."

"I'm sure for somebody this will be a great role," Yarbrough said. "You can come in and look like a hero."

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