Digital Transformation Innovation

Taking advantage of digital in our companies

Taking advantage of digital in our companies

March 2020. A retailer’s worst nightmare: from day to night, almost all of our stores and sales points (around 5,000 among dozens of countries, mostly in the EMEA) were closed. The new coronavirus pandemic started a year ago and it has revealed itself as the biggest challenge for most sectors, from retail to tourism, from medicine to aviation. Suddenly, all businesses were standing before an unexpected new enemy that was changing the business paradigm and the ways to relate with customers.

As the stores were closed, we had to find answers and solutions to many different questions:

    • How to handle the spring/summer collection that was fully purchased and stored in distribution centers and stores?
    • How to reduce impact on P&L?
    • How to manage teams and ensure safe working conditions?
    • How to communicate with customers? How to sell? How to deliver?

Digital was probably the word most present in the answers: digital content, social media, digital sales, home delivery, digital customer service, as well as remote working, remote team management, digital collaboration, and video-conferencing tools.

As a matter of fact, all the needed technologies and methodologies have been on the market for years, available to all of us, especially to large corporations. But they were often being kept aside, stubbornly, because companies were not realizing the imperative need to change their current mindset and status quo. Then, as quickly as the pandemic came, everyone was adopting these technologies, learning by doing and trying to keep pace while still facing all the organizational limits that were around for years. This made it hard to compete against new digital players that were acting differently and getting more and more customers.

It is clear that the formula that brought success to companies over the years is different than the one that was born after the Internet, supported by technology, with a different mindset and tools. These include:

    1. These new players are based on elastic technical architectures, supported by newer technologies, orchestrated and automatized, allowing the release of new features multiple times per day.
    2. They invest strongly in technology, continuously testing and early adopting capabilities in areas as IOT, analytics and artificial intelligence, mobile, and cloud, which give them incredible competitive advantages.
    3. They adopt agile methodologies, working in sprints with fast and incremental deliveries, focused on adding value to the customer and increasing efficiency, instead of focusing on large and complex projects requiring time-consuming requirement definitions and specifications and that take many months or years before delivering.
    4. They are organized in multi-disciplinary teams, oriented to product roadmap, capable of autonomously designing, developing, validating, and implementing new features.
    5. Their companies are fully oriented to this way of working (it is their way of working…), starting with (and heavily sponsored by) the CEO and the executive team, through a flatter and less siloed structure.

We all have been living the (r)evolution achieved by these players throughout more and more sectors: it started with flights, hotels, retail, transport, delivery; extended to industry, finance, and cars; and is getting faster and faster to agriculture, education, and healthcare.

What we have also been seeing, both as consumers and as workers, is that becoming digital is much different (and harder) than being born digital. As I said previously, processes, structure, culture, and mindset among pure-players are different than in traditional corporations. This makes it inevitable that digital transformation, more than anything else, requires such strong change in the mindset and operations of companies that their DNA needs to change. And changing the DNA of a company that has been successful over years requires a huge joint effort and is something very difficult to achieve.

After working on start-ups both as CIO and CTO – one of them having become a unicorn and one of the most important players in luxury fashion, born digital and now listed on the NYSE – and at large corporations, both privately owned or publicly listed, my experience has been proving how difficult this challenge is.

In order to succeed, the transformation must be unshakable. It must follow a clear direction, sure and persistent, embracing multiple axes of action and involving as many people as possible. It must focus on changing the mindset on how to perform business processes and relate to consumers, employees, and business partners, as well as putting in place the technology that will support and enable all the new business requirements.

Start by putting together a strategy that clearly defines direction, axes of action, and main goals, and then be resilient in pursuing delivery. Don’t forget: the more people you involve, the higher the chance to succeed.

Here are some examples of what we have been doing to achieve this:

    1. Design of a new technological digital architecture, oriented to business needs and supported on 12 technical guidelines, such as “Zero User Effort Solutions,” “Run in realtime,” “APIfy the Business,” and “Apply actionable intelligence.”
    2. Implement that architecture as fast as possible, still ensuring that the business is able to fully operate and identify new needs (such as the ones enforced by the pandemic) during the change.
    3. Adopt agile methodologies; create and empower multi-disciplinary teams, oriented to the delivery of MVPs.
    4. For everything that is not a main differentiator on the customer value-proposition, adopt instead of adapting. By this I mean adopt solutions and best practices instead of designing business processes from scratch and adapting a solution that might match the requirements, that extends the project timeline, wrenches the solution, makes it difficult (or impossible) to upgrade in the future, and reduces ROI.
    5. Creation of Tribe Excom, made up of 10 employees below 30 years old, selected from different departments and brands, looking at strategic subjects such as how to retain talent and recognize people, identify products to create, and design new store concepts oriented to millennials.
    6. Train executives, heads, and managers in coding, design thinking, kamban, scrum, and rapid application development, so that they challenge their teams on the adoption of agile and digital methodologies.
    7. Incubate and launch new pure digital native brands, having a limited budget and clear goals, and shut them down if they fail to deliver.

2020 was pivotal for digital, but in a cluttered way. 2021 will be key for companies to review and consolidate their approaches in order to become more mature in their analytical and predictive capabilities. This includes offering more digital capabilities to their customers, integrating with suppliers, managing the supply chain in a more intelligent manner, and managing and empowering their teams.

In my next blogs I will share some of the tech initiatives we are doing to leverage this. Now, having in mind that this is critical for the future of your business – even after the pandemic is gone – it is the time to do it. Get to work and good luck!

Contributors

Nuno Miller

Nuno Miller, Chief Information Officer, Sonae Fashion

Nuno is graduated on Computer Science and Information Systems Engineering and has a MBA on Management. Over 25 years, he worked on professional services, retailers and pure players, at Deloitte, Parfois, Farfetch, Videdressing and Sonae, mo... More   View all posts

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