Ann Arbor-based Domino’s Pizza is restructuring its information technology operation and hiring 30 tech workers as it reconfigures its online ordering system.

The restructuring effort comes as Domino’s says its online ordering system has already leaped ahead its top competitors, Pizza Hut and Papa John’s, as the biggest Web ordering portal in the pizza industry. Online ordering now represents 20 percent of Domino’s orders, up from a nominal amount just a few years ago.

But Domino’s is now in the process of “in-sourcing” its IT operations. The company had contracted with firms in Illinois and California to develop most of its Web presence, but Domino’s is now shifting those capabilities to its Ann Arbor headquarters and hiring new employees to handle the work.

“We’re bringing this in house,” said Christopher McGlothlin, Domino’s chief information officer. “We’re offering Silicon Valley jobs in Ann Arbor.”

The move comes as the company has also completely redeveloped its core pizza recipe, part of a 2-year process that aims to attract new customers and disenfranchised ex-customers.

McGlothlin said Domino’s wants to take control of its Web presence by conducting its own software engineering and consolidating various data and Web operations within its own operation. The new Web talent would add to an existing Domino's IT staff of about 150.

“We thought the importance to our business and the criticality of the technology was too great to continue to outsource it,” McGlothlin said.

To build its software development and hardware staff, Domino’s is hiring about 15 software and 15 hardware employees. The company currently has about a dozen job openings for software engineers, including specialists like java developers.

The swarm of IT talent in the Ann Arbor region - fueled by the University of Michigan and Eastern Michigan University - will hasten the Web transition by Domino's.

Jim Vitek, Domino’s e-commerce director, has been actively networking with local technology organizations to recruit software talent. He’s among a growing number of local executives looking for talent at groups like tech entrepreneur Dug Song’s monthly Ann Arbor New Tech Meetup event.

“There’s some talent here that you don’t normally find in a corporate IT department,” Vitek said. “I’ve been reaching out to (talent in the) startup community who want that aggressive use of technology but are used to the thought of working with a bigger corporation with benefits and a stable environment.”

Domino’s is fundamentally rebuilding the technology structure underpinning its online ordering system. The new system will be rolled out in 2010. It won't look much different than the previous system, but the underlying framework will be new.

Domino’s, which has $1.37 billion in annual revenue at some 8,700 store, considers its online ordering system critical to its future.

McGlothlin said Domino’s is the fourth largest online sales company in the country with some 20 million transactions a year.

The online system allows users to customize their toppings and track their order from oven to point of delivery.

“Online customers are more loyal, they order more and more often and they order more items when they do order,” McGlothlin said. “It’s a more profitable part of our business.”

The Internet also offers one of the only avenues of potential growth for restaurant companies.
That's particularly important because of the industry's struggle to attract foot traffic in the midst of the tough economy.

Consumer spending at restaurants dipped 2 percent in the third quarter, according to market research firm NPD Group. Food traffic at quick service and fast-food chains declined 4 percent.

Online ordering represents a sliver of restaurant revenue, but many retailers are trying to expand their Web offerings.

Domino's operates about 8,886 corporate and franchised stores, and it employs about 10,500 full-time workers. In the third quarter, Domino's same-store sales were relatively flat as the company's profit rose from $10.1 million in the third quarter of 2008 to $17.8 million.

Contact AnnArbor.com’s Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter.