Anticipating and Architecting the Future of Retail

Anticipating and Architecting the Future of Retail

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March 13, 2014
CIO Anticipating and Architecting the Future of Retail

 
Submitted by Peter Buonora
 
At BJ’s Wholesale Club, one of my primary roles as Enterprise Architect is to organize and prioritize our overall application landscape and infrastructure and align that to our business goals. Is a particular technology category or initiative going to transform our business – or is it just going to help us in terms of back office capabilities that can run our business? That occupies a lot of my thinking and planning.

I like to organize technology-driven initiatives into three categories:

  1. Transformative initiatives would include new business models, ways to change or disrupt the retail industry, or even alter the structure of the company. These transformational efforts  impact our business. They also require the greatest level of experimentation and flexibility.
  2. Growth initiatives tend to be focused on growing our topline revenue, building new clubs, growing same store sales performance and EBITDA. ROI is usually expected fairly quickly.
  3. Run the business initiatives focus on more traditional back office capabilities, keeping the lights on, all those things IT has been doing forever. Of course we always strive to “do more with less” on these.

Within these categories, I map each goal to the strategy for delivery. Look at some examples like IT Service Management (ITSM) or Human Resource Management Systems (HRMS). Those types of functions are really the back office operations that keep the business running. But do we really want to continue to take up time, effort, and resources managing those things? How does that fit into our future direction? If we’re a retail company that thinks about how we can innovate, how we can really connect with our members, why would we focus on running ITSM or HRMS?

Using Technology to Keep the Customer Closer
On the other hand, if we define a business initiative where we really want to provide a competitive advantage and deliver a highly personalized experience, we want to put that into a private cloud deployment model that gives us much more flexibility in how we build it, secure it, scale it and deploy it.

Like any retail enterprise today, we want to have a unique way to deliver offers to our members. We want to be able to understand them better and target relevant promotions to them. That means figuring out how we will deliver on those goals. These ideas aren’t necessarily all going to come to fruition right away, but they are all inputs into how we plan for our entire future IT systems and infrastructure. We have to create more flexibility and agility now, so we can account for things that are going to come in the next three or five years. We need a very adaptable infrastructure and overall environment to be able to handle the different requests. Omni-channel, for instance, is definitely a hot topic in retail circles right now. That can be as specific as how to best deliver the experience members want for mobile online ordering and returning those items to the store. There are very few retailers that are hitting the mark right now on Omni-channel, though. Everyone is trying to catch up.

To keep up with all the new technologies on the horizon, I look at different vendors, attend conferences, speak with analysts and scour online resources constantly. So should any Enterprise Architect. That’s the external view. We also have the internal view. We try to get an understanding of what those business goals are going to be for the next couple years at a minimum. Beyond that I try to understand what the priorities are and plan for those. I try to determine how can we deliver the major initiatives in the transform and grow categories differently. In the grow category, how can we execute on initiatives in a special way that will bring us to market much faster? Time to market is much more critical for growth initiatives. That’s why I believe that cloud computing will give us the biggest time to market advantage in that category.

Within this space I see that there’s a tremendous opportunity for open source initiatives like OpenStack and Eucalyptus to play a bigger part in the enterprise. If those standards and initiatives can simplify things it would pave the way for enterprises to adopt and build private cloud capabilities and would enable us to move more quickly to where we want to go.

Advice for the Nascent Architect
If I were starting from scratch today I would start off by building a consensus on the framework for technology delivery and the decision model at your company. Working through that process is one of the biggest initial wins. You want to put together a small but cross-functional team to work through those assets. Come to an agreement on that, because then it can be communicated out to the organization, so everybody’s on the same page. Otherwise there will be a lot of different competing interests and opinions on how the technology should be implemented and what the best solution is, and decisions will be driven purely on a per-project or departmental basis without regard for the overall business and IT goals.    

You need to look at application of technology such as cloud computing with an enterprise view. You are the IT organization’s “wide angle lens.” When you’re picking one cloud service, don’t just think of it in terms of that service, but in terms of where all of the interconnections and dependencies are between that service and the other services in-house and some of the other services and data you could potentially put in the cloud. If you look across the run-the-business categories and say, “It’s very likely that this particular function might go to a SaaS model and this one might also” remember to ask, “What are the potential interdependencies and connections between those two things and how are we going to deal with those”? At least mapping that out to a degree up front makes sense so you have an idea of what the integrations are going to be, rather than just having ad hoc movement towards different services without thinking about how they are going to fit together in the grand scheme.

Who sits on this cross-functional team? The business sponsor for sure, along with staff from Enterprise Architecture, Security, Infrastructure, IT risk management, and from Application teams. That’s really the core. We also have established a technology governance board that’s used to approve decisions that are made around these technologies or any standards. They get brought over to that board for review and approval. Any new technology decisions are run through that board.

Whatever we do, at the end of the day we’re really just focused on trying to deliver the goals of business and doing anything we can do to make our members love shopping with us. As we can make ourselves more efficient and service oriented, which we know we can continue to do, hopefully that translates to our clubs and makes them love us even more.

Peter is a change agent driving alignment of business IT functions while evolving IT organizations from operational cost centers to a catalyst for competitive advantage. Peter’s extensive experience includes global technology strategy, architecture, cloud computing, and information security.  Peter currently works as Enterprise Architect at BJ’s Wholesale Club, was formerly Senior Global Enterprise Architect at Ahold Corporation, and has held positions at Supervalu, John Hancock and other companies.

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Peter is a change agent driving alignment of business IT functions while evolving IT organizations from operational cost centers to a catalyst for competitive advantage. Peter’s extensive experience includes global technology strategy, architecture, cloud computing, and information security.  Peter previously worked as an Enterprise Architect at BJ’s Wholesale Club, was formerly Senior Global Enterprise Architect at Ahold Corporation, and has held positions at Supervalu, John Hancock and other companies.

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