For sustained growth and profitability, organizations are looking to scale globally but also recognize the need to remain responsive and customize experience locally i.e. globalization. How can technology enable this?

Contributor

• • Sahal Lahar, Executive Vice President and Chief Information Officer, Brooks Brothers

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Transcript 

Sanjog Aul [00:00:00]:
Welcome listeners, this Sanjog Aul, your host, and the topic for conversation is Achieving Global Scale and Glocalization, and I have with me Sahal Lahar, who is the Executive Vice President and Chief Information Officer with Brooks Brothers. Hello Sahal, how are you? Thank you for joining us.

Sahal Lahar [00:00:16]:
Doing very well. How about yourself?

Sanjog Aul [00:00:18]:
Very good, sir. Thank you. So Sahal, whether it is me at Brooks Brothers store, which I definitely plan to visit shortly, here in Chicago or someone in Japan, for example, both of us would expect predictable quality of experience being a global company, and that is in terms of products and services, and at the same time would like to experience similar responsiveness and customization that, I could get as if it was a local store. So as part of digital transformation, we know that organizations are trying to develop such capabilities to achieve both the global scale and localization. What are some of the top challenges?

Sahal Lahar [00:00:55]:
I think the top challenges really stem from the fact that you need to have a strong digital core and the digital core, there was a period of time where everyone honed in on 360 degree view of the customer. That is obviously a very important piece of it, but it really goes beyond that, and to me, the digital core needs to be a global single instance view of your customer. Product, inventory, and financials, and if you can get to that, then you are well on your way to being a truly elite global company. The challenge with getting to that obviously is that it’s extremely complex and costly to achieve that because traditionally all customers have systems that are spread across many different infrastructures, many different vendors, and there is no global standard for a lot of these processes. So even if you do invest in a global platform, there’s significant work to do to kind of get that global blueprint, which I would classify as the lowest common denominator of processes. Which you can use on a global scale, and then augment that with that 15 to 20% of local flavor, which would include obviously all of the local regulatory requirements, financial requirements, statutory reporting, etcetera,

Sahal Lahar [00:02:29]:
but these are complex journeys. We they’re multi-year projects, and I think a lot of times the issue really is that If you have systems that are operating and supporting the individual region, it’s very hard to justify from an ROI standpoint, the need to go to a single instance with what I would call that global core.

Sanjog Aul [00:02:55]:
So for example, when Walmart went to India or Disneyland opened in Hong Kong, they must have had to customize their workflow management, sourcing, staffing, supply chain, and many other things that you already mentioned in order to be locally responsive and effective. Now on this front, this would have required them to have the internal technical teams to customize the experience while also complying to the global standards, which are essentially opposing goals. So how do you think organizations can realistically balance global efficiencies on one hand and effective local presence on the other, and actually have and achieve a desired state in both areas?

Sahal Lahar [00:03:34]:
Absolutely. So I think it really starts with significant investment in business process transformation, because you really need to look at your business processes on a global basis and break them down to the level where you can get to that lowest common denominator and really have that serve as the foundation of the global footprint, and what that refers to obviously is the basic facets for do it for closing books from a financial standpoint or fulfilling a customer order. Those are the same whether you’re in Japan or you’re in the US, and so you have to standardize on those things and focus on that and kind of that lowest common denominator, and then it’s really important from a organizational standpoint and a cultural standpoint to really engage with the individual region that you’re talking about to understand the specifics of the go to market strategy for that particular country or region, as well as the specific requirements that might emerge from a financial standpoint or the statutory reporting standpoint, etcetera, but I think the biggest kind of lesson learned is that even though you want to get the global efficiencies here, the most important thing is that you really do invest in face to face, on-site period of time in that region, because you really need to understand firsthand how the customer wants to interact with the brand there. That might be slightly different to how they expect the level of service in another region or your other regions,

Sahal Lahar [00:05:25]:
and I think the other thing to never lose track of is that the user experience, and let’s use the term users in a very broad term to include not just the customers, but also the employees and the associates. The user experience really that all of that work has to be done in region because it has to have obviously consistent overall corporate branding and so on. That’s easy to do. That’s fine. You can do that anywhere, but ultimately it has to really take place sitting face to face with the users in that region who can guide that design to be successful.

Sanjog Aul [00:06:04]:
Now, what do you, what all you just mentioned is definitely important as what you have to do at the business process level or strategy level, and we’ve some say at least that execution eats strategy for breakfast. So when it comes to execution and you’ve been invited in to say, well, we have this great strategy which we want to execute, how can IT help? And when you try to get your technical teams on one hand to help with standardization, on the other hand, you want to have even create some ways to create that local or globalization effect, if you will. What does it mean for your team?

Sahal Lahar [00:06:35]:
So it really requires a fundamental shift in culture and mindset from an IT organization. Because you have to operate in a true shared services environment, and what I mean by that is to break down the barriers and the silos which traditionally exist where each region has their own point of view and their own resources and their own approach around how they go about using technology to meet business requirements. So that piece obviously requires significant upfront alignment and buy in from each of the, in our case, each of the regional CIOs and the country head IT in the smaller regions to really adopt that model and to work in an environment where they are not going to have full ownership and full accountability of all of the resources that are required to support that particular region, and that there may be a shared service center, or there might be several shared service centers that operate globally and support the global business, and in addition to that, we have to be very disciplined in driving standards, and that alignment is as important as the people and kind of mindset alignment, because if we adopt a particular platform, let’s say for our HR system globally, we have to make sure that if any biases that exist in the smaller regions with a local vendor or a legacy vendor, we overcome those upfront because otherwise there will never be true adoption of this global process and this global core. So I think it’s an extremely complex process that requires significant collaboration not just upfront, but really on an ongoing basis to make sure that the regions, that their needs are still being met, their unique needs, because they need to know it’s not, we’re not just going to push a one size fits all, but also they need to understand that 75-80% standardization is very important,

Sahal Lahar [00:08:49]:
and especially now when we talk more about cloud solutions, the cloud solutions if you have a cloud platform for, let’s say, if you go back to the HR global system, that is not going to be something where you can have drastically different configurations by country. You really need that core 75-80% functionality to be expanded, and then there will be obviously unique workflows and there’ll be unique payroll considerations and benefit considerations and so on, and those can all be configured, but the basic process for how you do talent management and performance management and succession planning and all of those, and again, what I’m emphasizing here is the process versus the package.

Sanjog Aul [00:09:34]:
So you took a great example of HR. Now, there are many other processes, whether it is supply chain, the sourcing, workflow management, and since you mentioned shared services, and in order for them to be predictable, I’m assuming you would essentially get into a very heavy automation mode that whatever that common denominator you need to maintain, you would want to automate the processes related to it and the workflow flows and the infrastructure. Now, all that you do to achieve that global scale that we are talking about. At the same time, when you’re trying to customize, we say that we want to be able to give that responsiveness and the local efficiency and effectiveness. We want to be able to do that, but then what is the level of customization attainable at a local level so that on one hand we are trying to standardize. So what is that balancing point, if you will? Where we do not see the customization starting to cannibalize on the shared services you took so much time and effort to automate and put in place?

Sahal Lahar [00:10:31]:
Absolutely. So I think, again, you really need that global alignment and sign off in terms of what are our core processes, what is that 75-80% lowest common denominator, and after that, we equally, we need the same level of alignment to say, and by the way, here’s the 5 things that don’t fit into that bucket. That could include obviously the experience, data privacy, because obviously different regions will have different data privacy regulations and requirements, and then the financial statutory, etcetera. So I think if you can get people to understand that, well, that core piece is there’s really no trade off in adopting a global standard because again, those profits are enough, but then showing that there are pieces here, and I think I really come back to, from a user standpoint, it really to me is about user experience,

Sahal Lahar [00:11:30]:
and then there’s going to be, there might be some data elements that are specific to that region. There might be some different identifiers. There might be a different type of loyalty program you’re running, etcetera. So you can then enrich the core with those elements as opposed to reinvent the core for that region. I think that’s the main differentiator, but I think it’s very complex now. Again, when we talk about cloud and cloud hosting, in a lot of ways is virtual, and that creates obviously challenges from the standpoint of data privacy and data protection regulations, legacy Safe Harbor regulations in Europe that are now evolving into kind of a new standard for or data protection of EU citizens, personally identifiable information. All of that in some cases has very specific requirements, such as that data cannot be stored outside of the EU,

Sahal Lahar [00:12:25]:
and so you’re really going to have to look at your overall strategy, and it’s going to be beyond just the business process level, but you also have to look at from an execution standpoint and an operational standpoint, What does it mean and how are we going to achieve that? Are we going to have some specific servers that are resident in the EU that support those needs for the, let’s say, the clienteling information for our European customers versus the product master and product master and all of that, the supply chain purchase orders, all of that is those really can be more agnostic.

Sanjog Aul [00:13:04]:
Let’s take a quick break, Lister. We’ll be back, and so when we come back, let’s talk about the technology solutions which may be currently available and the way they’re evolving. Are they enough to enable smart automation? The reason I use the word smart automation is on one hand, you want to build those shared services in the manner you mentioned to be most predictable and so that it gives you a predictable outcome. At the same time, can we even automate what is the customization that’s expected in a given region so that less of a human intervention comes in, which also based on it gives you the predictability and perhaps even data security that we are talking about. So, or because if you’re making changes to a system, if even those changes to the system or infrastructure or processes are, if you have a possibility of doing automation on them, then frankly what you’re doing is you’re reducing the risk while achieving that goal of becoming globally scalable and also achieve localization. So what are the challenges? What are, where are the technology solutions? What is left to be desired? Let’s explore that when we come back. Please stay tuned, listeners, and let’s talk more.

Sahal Lahar [00:14:07]:
Today, enterprise technology is both strategic and global. Each week on CTN, CIO Talk Network, IT thought leaders from around the world share their experience with listeners as they discuss with Sanjog Aul how they are trimming costs and partnering with business to innovate and help IT become more competitive. Better care for customers, and improve the corporate bottom line. If you want to keep up with IT thought leadership, listen to CTN, CIO Talk Network with Sanjog Aul at Ciotalknetwork.com. ThisCTN Viewpoint on CIO Talk Network.

Sanjog Aul [00:14:46]:
Welcome back. So, Sahal, as I was saying, we want to have technology solutions help us in achieving what we are trying to say here, which is global scale and localization. So if we are trying to, on one hand, create shared services, which require predictability, which means we have to do automation to the nth degree in order to achieve that. On the other hand, we would love to have ways by which we become intelligent or have those solutions that are available to be intelligent, that they allow us to do smart automation so that even if there is localization to be done or some local effectiveness and responsiveness to be achieved, then there are ways by which you can make that happen without having a human intervention, if you will. Is that even available as a technology solutions? Have they evolved to a level? And if not, what’s left to be desired.

Sahal Lahar [00:15:32]:
I think there certainly are a host of solutions that fall into this bucket that have come a long way in the last 18 months or so, and I think are really now at the point where they are giving us a significant competitive advantage when implemented correctly. So let’s start with one which is really around machine learning. So machine learning is in its so-called form, a computer intelligence that doesn’t have to be explicitly programmed, and so what that means is that these platforms will look at mass quantities of data and really identify proactively for you the trend and the exceptions and the anomalies in that data. So you can then take, you can translate that into actionable insights from a business standpoint. Traditionally, everyone has had a lot of data. If we take just even one region, that’s a lot of data,

Sahal Lahar [00:16:31]:
but once you aggregate that across all of your global regions, it’s a significant amount of data, and we cannot achieve what machine learning offers us even if we hired 100 people in every region because there just honestly aren’t enough hours in the day for people to sit there and comb through the volumes of data that we have accumulated over time, and now you obviously have to also take into account external data. We have to take into account external data such as social media information, weather patterns, because weather patterns are going to obviously drive our merchandise planning, assortment planning, our replenishment. Obviously you don’t want to send replenish if weather’s to Florida in february when it’s already 85 degrees. So all of that data I think requires machine learning to be adopted, and that can really, I think, give a very big strategic advantage for any business in any industry when used correctly, because everyone says we do big data, but the reality of it is that all they’re doing is traditional data warehousing and no one is able to provide those proactive insights. So I think that one is a very compelling one and has again, widespread applications,

Sahal Lahar [00:17:49]:
but then I think the other piece here is really around the Internet of things and smart sensors, beacons, devices. So there’s, I think, significant advantages from an operational efficiency standpoint, and to your point around just take care of the automation in a truly global fashion, it could, from an RFID, if we’re using RFID tags for inventory management in a factory, it doesn’t matter whether the factory is in Massachusetts or the factory in China, that ultimately we have to keep track of the same thing, and so I think thiswhere now you can add this level of automation that is going to give you even more efficiency and get your business to the point where some of these things that are table stakes, such as how many finished products do I have in my factory, which In the old days, required a lot of effort to look around in different parts of the factory floor and at different stations and so on. Now you really literally can look at that real time in a dashboard. So I think IoT is going to play an increasingly larger role. RFID has been around for a little while, but now we’re getting more and more sophisticated with other sensors and beacons that can enhance the customer experience. It was traditionally in retail, we’ve always had traffic counters, which in a separate form was something that was at the door and it was a sensor that as soon as you walk through it, that one person walked through,

Sahal Lahar [00:19:22]:
and if you went in and out 5 times, it, according to that traffic sensor, that 5 people came to the store. There was no way of knowing who came in, who, if you came in with your kids, then it said 5 people came in together, but the reality is that maybe there’s only one buyer or 2 buyers in that group of 5. So now there’s a lot more sophistication when we when we take from what the smart camera is and translate that into more sophisticated traffic management and who patterns of your store. Where are people going when they come in? Are they all going the left or the majority of them going left? And what does that mean for how the store is fed up? What does that mean for how we can get more traffic to a particular item that we’re promoting, a particular display for fall sweaters now, for example. So I think those, all of those pieces have huge potential again, and they’re still pretty much in there in the early stages. They’re not, they haven’t been widely implemented. We are from a Brooks Brothers standpoint piloting some of these in a handful of stores, but they have not yet gone mainstream,

Sahal Lahar [00:20:31]:
and then I think final piece that I would just highlight is bots. So bots, it really can again drive an additional level of automation, and standardization globally because they can engage with customers, they can engage with employees, and honestly, when you combine the three that we’ve talked about in some fashion, and that would be the bot, the machine learning, and some kind of sensor, then now we have an extremely compelling value proposition.

Sanjog Aul [00:21:01]:
Now, is there any specific gap that’s left, would you say, in that kind of smart automation solution? So you mentioned about IoT and big data that of course are a means to an end, but when you’re trying to execute and the technology solutions which actually would allow you to do that smart automation? Would you see there are any gaps left?

Sahal Lahar [00:21:18]:
I do think that there’s always room for improvement because we live in such a competitive market and world now where customer demands and customer expectations continue to change. We continue to have higher and higher expectations around level of service and engagement and collaboration from our customers and employees, our partners, our distributors, etcetera. So there’s definitely, I think, still gaps because a lot of the for two reasons. First of all, everyone hasn’t adopted these, but second of all is adoption hurdle, and what I mean by that is that we take customer engagement as an example and we take backend in the store that really when implemented correctly, can drive a significantly differentiated level of customer engagement, but the challenge is that they usually require something on the smartphone of the customer, and usually that’s your branded app, which is great for your existing customers, but how do we provide that same level of engagement and that same level of automation for someone that has just walked in off the street and has never shopped at Brooks Brothers and does not have the Brooks Brothers mobile app? So I think there’s still some gaps in terms of a lot of these are, I think very good ideas, but there’s still significant hurdles that need to be overcome before they can go truly mainstream and provide you with the end to end type of solutions that you’re looking for.

Sanjog Aul [00:22:49]:
Let’s talk people and culture. So what type of issues do you think we need to be managing in order for us to achieve this global scale and localization? And let’s also include the type of employees’ related motivation or vision that we need to offer them so that they are following this path of global scale and localization?

Sahal Lahar [00:23:11]:
Absolutely. So I think it has to start at the top and you need to have the executive level sponsorship and you need those translation and change management champions that are driving your agenda forward and evangelizing these ideas in the, from the standpoint of what’s in it for the associate, what’s in it for the customer, etcetera, and really having a good elevator pitch in terms of how you, as you pick the constituent, if it’s a store associate or a corporate associate, whoever it is, factory worker need to have a very compelling elevator pitch in terms of what is the value proposition for you and how is this going to make your job better? Now, obviously, this a very delicate area because when we talk about automation and we talk about some of these capabilities such as machine learning, there’s a high degree of resistance off the bat because people will equate automation to replacement of human labor and replacing jobs. So you need to be very clear around what is your why are you introducing a particular technology? And in the case of machine learning, like I said, there’s no threat to existing jobs in most cases because no one has a 500 data analysts, statisticians, or data scientists sitting around combing data. People don’t have that capability. People may have a small organization of a handful of data scientists, but I think the value proposition has to be stated, and in that case, you talk about the fact that we can achieve the scale that we just can’t even come close to today with people.

Sahal Lahar [00:24:44]:
In other cases, it is a little bit more complex and harder because, there might be a small segment of what is now human labor that is going to be automated, and I think it’s important to be very upfront with that and be very candid about what is that, what are those one or two areas? What does that mean? And how are we going to address that? Are we going to add some additional new responsibility to someone’s job title so that we don’t have to cut heads? Or in some cases, the reality of that is that there may be the total headcount that might be going down. When we talk about bots and when we think about virtual personal assistants and things like that, it is absolutely a very tough organizational question around how do we adopt that and not have a big impact on our associates. So I would say the transparency and collaboration are key as with any other change management ecovital activity that we do this and we engage people early in the process rather than publicizing it when we’ve already figured out the solution. I think if you can bring people on the journey from the beginning or as close to the beginning as possible, it’s always going to be a much better outcome.

Sanjog Aul [00:26:04]:
So one final question is what kind of new skills and shift in mindset we would need in order for us to have the business and technology leadership embrace them, and then in that, using that and leveraging it to successfully carry out such transformations?

Sahal Lahar [00:26:20]:
Absolutely. I think that one to me really comes down to the type of people that are willing to take risks, the type of people that are not just creatures of habit that have anxiety when introduced to a new solution or a new platform, but there’s someone who is really very open-minded and can challenge the status quo and really have that level of innovation in their DNA where they want to continuously find new ways of doing things that are better and more efficient and faster, cheaper, etcetera. So I think one of the things that we’ve done is we’ve created an innovation group, an innovation lab. Where we have a cross functional team with representatives from every part of the organization, and then some people that are dedicated to this function as well, that really will look at the, some of these new technologies and look at how can they be applied for our brand. Is there a business case or value in us adopting them? And if there is, then how do we test that in a lab type of environment and then once it’s successful there, how do we kind of graduate and roll that out to the whole chain? So I think that innovation is key, but let’s not reduce the role or minimize the importance of the traditional associate skill set of people that are focused on operational excellence and keeping the lights on. Because again, you have the digital core, which is very important that needs to be running regardless, and that a table stakes thing, and so you’re always going to need to have that piece, but this other piece is important, and I think in some environments, it’s good to kind of have the bimodal IT type of application where you, where you have a separate group and there’s people that are very good at kind of the traditional pieces and keeping the lights on and you let them focus on that,

Sahal Lahar [00:28:18]:
and then there are others that are maybe the group that you, you’re building in terms of these other folks that have more of that innovation, continuous improvement mindset.

Sanjog Aul [00:28:28]:
Once again, thank you so much, Sahal, for sharing your thoughts and insight about how organizations can leverage IT and automation and other changes in business and processes to achieve global scale while becoming locally responsive, which is to achieve globalization.

Sahal Lahar [00:28:44]:
Thank you.

Sanjog Aul [00:28:45]:
And listeners, I invite you to find related conversations on our website at CIOtalknetwork.com.