“When digital transformation is done right, it’s like a caterpillar turning into a butterfly, but when done wrong, all you have is a really fast caterpillar.” – George Westerman, MIT Sloan Initiative on Digital Economy
For years, retailers have been trying to keep pace with ever-evolving consumer demand for a personalized experience that blends the physical and virtual worlds.
That demand has only intensified during the global pandemic, which 65% of consumers say has changed their online buying behaviors.
As a result, retail finds itself amid an exciting revolution in which the power has shifted from the retailer to the consumer. Consumers expect relevant content in relation to what they’re doing anytime, anywhere, in a format appropriate for the device they’re currently using. It’s their journey that dictates the retailer’s strategy. They are influencing product trends through reviews and social media, doing extensive product research online, and expecting a seamless omnichannel experience.
To stay competitive, retailers face tremendous pressure to deliver new business capabilities faster. Businesses’ demands for tech-enabled capabilities are compelling technology executives to advance and accelerate their technology-adoption schedules. An increasing number of leaders have come to recognize the critical role of the cloud in facilitating their technological reinvention. Although most agree migrating to the cloud is both necessary and valuable, they are often burdened by their multiple, disjointed, and hard-to-abandon legacy systems.
Now that there is consensus on the transformation being necessary, the question becomes how an organization—such as a retailer with many disparate legacy systems—can prioritize their investments in cloud migration. The following is designed to provide guidance in alignment with retail best practices.
An often-used phrase, “While it may seem difficult, it really isn’t,” by its pure definition doesn’t apply in this situation. Although the transformation isn’t necessarily difficult, it takes some serious thought and planning given the disparate systems. To do otherwise may result in chaos and create something other than the desired impact. Rather than migrating applications and processes en masse, retailers should employ the following criteria for prioritizing which applications to migrate first:
Although plenty of retailers still think of cloud as a cost takeout, the mindset and momentum of the industry is shifting towards innovating with data.
In the following section we will review some common applications that many retailers consider a priority, including a brief synopsis of how a cloud solution can help.
A view of real-time inventory is one of the foundational capabilities for successful omnichannel retail. Often the current POS and inventory systems are not capable of updating inventory in real-time.
Pricing and margin management:
Hard as this may be to believe, pricing and margin management largely remain a manual process. Data are frequently distributed across multiple channels (in-store, mobile, web, and even social media) with no single source of truth, making insight generation extremely cumbersome and time consuming.
Website and recommendation-engine personalization:
Retailers are still struggling to get a 360-degree view of the customer, as this requires data reconciliation, attribution across multiple channels, and integrating with partner data sources.
Loyalty programs have been a traditional tool for customer retention, but they come with challenges of their own. Customer identification across channels is difficult, and CIOs also face two significant technological hurdles: data is often siloed at the store level and is not always processed in real time.
Selecting from one of the above use cases—or one more suited to your organization’s immediate needs—is the first step in developing your organization’s strategy. The prioritized list of applications is foundational in the development of the strategy.
Cloud implementation within your organization begins with a blend of strategy and governance. Leveraging both the Informatica Data Strategy and Data Governance frameworks as contextual models will ensure data intelligence is part of the organization’s digital transformation plan.
These frameworks provide a pragmatic approach to defining data strategy and data governance enablers within an organization to support your cloud-first, cloud-native strategy. Utilizing these frameworks as guideposts, the transition to the cloud, one application at a time, can be distilled into these four (relatively) simple steps.
Step 1: Collaborate across business and technology
Ideally, this collaboration should occur during the prioritization discussions ensuring the technology meets the needs of the business. Utilizing the criteria referenced above, together the business and technology teams will need to develop a value-driven roadmap.
Step 2: Define Your Migration Strategy
There are many ways to move to the cloud, with each option offering different capabilities, timeframes, and benefits. In general, there are five main strategies organizations will adopt. Some may use a single migration strategy, but often different strategies can be used to migrate different systems based on your available resources and system requirements. Here are some of the more common strategies:
Step 3: Define the data governance model
A good starting point is defining the core data governance capabilities needed to support both on-premises and cloud-based data. Organizations leveraging a hybrid cloud architecture, which most likely will be the situation in retail for the foreseeable future, may have data stored in on-premises data centers and cloud-based solutions. Effective cloud data governance starts with centralizing data governance and establishing control over all datasets regardless of where they are hosted.
Step 4: Define your change management strategy
When an enterprise decides to migrate to a cloud-based data warehouse platform, it’s easy to get excited about the foreseen advantages (lower overall cost, improved speed and performance, etc.) and to become wrapped up in the technical side of the transition. While technical due diligence is a vital part of planning, it’s equally important to tend to the corresponding human factors—user education, adoption, and understanding—through a well-thought-out and well-executed change management strategy.
All too often, organizations leave change management as an afterthought to be addressed once the technical transition to the new platform is complete. However, if users don’t understand what the change is, why it’s a good thing, and how it affects their work on Day One, the benefits of the transition will be delayed—if they are realized at all. Following are three key components to ensuring a successful change management strategy to migrating to the cloud:
To be successful, any digital transformation effort needs to be led by the senior leaders of the organization. Change can be difficult but can be made less painful with the right strategy and the appropriate level of support. Wherever you are on your transformation journey, Informatica can assist.
The Informatica Advisory Services Team can assist through our Cloud Business Transformation Workshop, where one of our team members will help develop and execute the building and execution of the strategy. For additional information, visit our Services Catalog.
And don’t miss the opportunity to hear from industry experts and innovators at our virtual Digital Commerce and Supply Chain Summit.