Throughout my career in retail, I have had the pleasure of working with some of the greatest brands as a CIO, COO, VP of E-commerce and consultant. I have recently come to a critical conclusion: The IT organization has STOLEN THE CUSTOMER from the rest of the retail organization. Here are a few examples to illustrate my point:
- A Blind Devotion to Governance – A store associate can help a customer with a purchasing decision and even capture their phone number or email. However, if the store team wants to now capture the customer’s birthday or preferred size, there is a business case to fill out, an IT governance meeting to attend to prioritize resources, plus a security review to approve the project. If all goes well, six months later, a project team will have mapped how to accomplish this.
- Requirements Paralysis – The e-commerce team can send targeted customer emails, however, if they want to direct a customer to a personalized landing page based on her purchase history and geographic location, the team will need to engage with the IT director of e-commerce and technical and business analysts to initiate a project. There will be many meetings to define requirements and use cases. Everything will then need to be documented before the development starts and it will take three months for the company that provides development resources to find and secure the proper developers. By the time the project is close to being completed, the marketing manager has left the company and the solution no longer has a sponsor – so the project is cancelled.
- Complex Resource Prioritization – The pricing and planning teams can build weekly promotions to drive store and site traffic through discounts, however, after looking at last year’s Black Friday results, the team decides they want to offer a personalized shopper program for a fee to reduce the impact of markdowns during the holiday season. To accomplish this, they try to gather technical resources but they were already committed to projects that were approved a year ago. After trying to convince other executives of the opportunity, the president of retail works with the CIO to carve out resources across the e-commerce, POS and ERP teams. Unfortunately, this process takes several months and by the time the program is approved across all the different decision makers, there is not enough time to implement before the holiday season. Resigned to last year’s fate, the president of retail goes back to offering a low margin door buster, just like last year, and behind the scenes blames the CIO for poor business results.
As you read this, I am sure you can think of your own examples of how IT is standing between you and your customers.
How did we get here?
There are three common fallacies that get in our way:
- Application development is not a core competency – I have spent much of my consulting career assisting retailers with their IT strategies. Ten years ago, the standard IT strategy was that technology in general – and application development specifically – was non-core (see Geoffrey Moore interview on core vs context) to retailers. This is WRONG! Given today’s environment and consumer expectations, technology couldn’t be more important. Do you think Amazon considers application development non-core?
- Technology people need to report to technology people – In a standard retail IT department there are usually several layers of people that separate the customer from the team responsible for the customer experience. This is WRONG! Technology resources and engineers need to report to managers who can help make decisions, solve problems and provide feedback and advice on career development. There is no reason this must be a manager in the IT department. In fact, managers spend 80% of their time on relationships and people issues. However, this bias seems to stop us from putting application development teams directly in a customer-facing organization. Nothing drives me crazier than hearing a developer say they are not customer-facing or that the “business” needs to tell them what to do.
- Being agile will make us move faster – This is WRONG! Most retailers have rushed into agile methodologies, but few have seen positive results. The objective of agile development is to manage a consistent flow throughout the development process performing small chunks of work at each stop along the development process. Unfortunately, if you do not address the funding and deployment processes, you can have the best scrum master and deliver on each sprint flawlessly and still not release features faster. I have seen too many retailers that have fallen into this trap. Sprints are delayed because they are still trying to fund each requirement separately and they wait for a governance meeting, or deployments are delayed because it takes too long to manually test an entire system even though only a small change is made. For retailers to successfully improve their speed to deployment, they must fundamentally change the way they think about funding development and invest in automated testing and deployment. We must stop treating investments in customer-facing technology as projects and treat them as a continual improvement process.
What can we do to succeed?
We need your support to give the customer back to the organization. I suggest you go back to your organization with this assignment:
- Ask the organization who owns the customer experience. Find the specific person, not a group or a title and don’t accept having separate ones for stores vs. online. If you can’t find one person, ask why and what it would take to establish one?
- Calculate how much time you have spent maintaining and enhancing your customer-facing technologies. Add to this the number of hours the entire organization has spent documenting requirements, in meetings, governance, etc. and multiply this by a blended labor rate – this is the total amount the organization has spent enhancing customer-facing technologies.
- Budget this amount next year for an internal development team and have them report to the resource identified in task 1.
We can give the customer back to our companies but we need your help. For today’s retailers to survive, they must have a deep understanding of customer needs, be able to move quickly to deliver these needs and have an organization that rethinks the value of the brand they support. I believe that taking the steps outlined above is a good place to start.
Thank you for your commitment and let’s keep the dialogue open – let me know what you find out.
I welcome your feedback on this topic. Please share your thoughts and opinions below.