By Rob Garf
Modern day consumers are empowered, connected and informed, pushing retailers to explore new and different areas to stay relevant in a very competitive market. As a consequence, retail CIOs are constantly challenged to respond rapidly to evolving business needs. Not surprisingly, an increasing number of CIOs are migrating to faster and more nimble digital commerce platforms in the cloud, leaving behind rigid and inflexible on-premise alternatives.
Recently, I had the pleasure of hosting a discussion on this topic with two experts in the field of retail IT – Mr. Robert Fort and Ms. Diane Randolph. Mr. Fort has been a CIO for many years in the retail industry, most recently as interim CIO at Wet Seal and prior to that, divisional CIO and SVP at Guitar Center. Ms. Randolph has been with Reitmans, one of Canada’s leading fashion retailers and a Demandware client, since 2005 and was appointed CIO in 2008.
This is part 1 of 2 of a Q&A where they shared with me their perspectives on why contemporary CIOs find superior value with cloud platforms such as Demandware, and how the landscape of IT organizations has adopted to this relatively new model.
Rob Garf: Which areas of the business have you found cloud platforms to be particularly useful in responding to today’s rapid pace of retail?
Robert Fort: In a future where the customer is far ahead of all of us in terms of expectations for innovation, I must be able to provide IT capabilities to deliver customer satisfaction more rapidly. Traditionally, the internal IT procurement process is not something that is ongoing 365 days a year so you have to ramp up every time a major project comes along. When speed counts, it just makes sense to plug into an existing cloud infrastructure – the need to build internally is decreasing as cloud solutions and other related technologies enable us to move faster than we traditionally have.
Diane Randolph: In my case, we’ve already embraced cloud for our digital commerce platform. I would say that there is also tremendous opportunity in figuring out how to harness and drive value out of the wealth of information that’s out there today. As we look at the social space and all of the various touch points and interactions that we now have with our customers, to Robert’s point, staying ahead of the customers means you have to read subtle shifts in behavior more quickly. We previously used commercially available on-premise software, but that still didn’t give us the speed we need, so the cloud is the next evolution to harness the value of customer insights.
Rob Garf: So given these new enterprise capabilities, how would you describe the adjustments IT organizations have made to fully leverage this technology?
Robert Fort: IT has definitely tried to incorporate a business analyst layer over the years to really align with the business needs of the company. Cloud allows us to focus less on the infrastructure and more on helping the business to answer customer challenges. I also think for me one of the biggest things that’s always played into this is what is really my job? What is really the responsibility that I’ve had and in each case, it’s been to sell entertainment and fashion to people. It is not to become the world’s greatest IT shop. It’s always been difficult to justify all the headcount – the resources, the technical skills, etc. – and now cloud allows IT organizations to think retail.
Rob Garf: So to that point, are you finding that the composition of the IT organization is changing?
Robert Fort: Yes, it’s still in the early phases, but I would say that its composition is definitely shifting. You need greater emphasis on the business analyst function, and the IT department of the future will be a smaller, but more critical, extension of the business.
Diane Randolph: I would concur. It certainly creates a greater focus on business processes and optimization, requiring business analysts who have a deep subject matter expertise to help clarify what the workflow and processes should be. Making sure everything is streamlined and flows together across the retail enterprise becomes more important. Reallocating resources to focus on these valuable activities, versus trying to keep the lights on, is starting to pay dividends in our organization.
Rob Garf: A question for Diane, in the process of evaluating cloud platforms for Reitmans, what were the business and technical justifications behind your decision?
Diane Randolph: The evaluation process was different than what we’ve undertaken before. It really does change your whole analysis of the total cost of ownership and the benefits. The first time I entered into the evaluation process, it’s pretty eye-opening. I realized that to properly assess what it would cost us to operate an on-premise commerce platform, as an example, we had to include all of the costs associated with upgrades, the infrastructure capacity to support peaks and valleys of seasonal demand, and expensive servers coupled with virtualization and provisioning tools. We didn’t always have the cost data readily available for on-premise platforms to make an informed comparison.