Comment: Building the perfect platform for ‘crossover businesses’
General Electric (GE) ha...
Reinvention, evolution and diversification are all words that can be used to describe many of the world’s largest companies.
General Electric (GE) has grown from Edison’s literal ‘lightbulb moment’ and a heritage formed in the earliest days of the electric companies into a multinational conglomerate working across industries such as diverse as aviation and healthcare. Meanwhile, Nintendo started life selling playing cards and is now synonymous with the evolution and revolution of the video gaming industry.
As the examples of GE and Nintendo show, the ability to adapt to changing consumer behaviours, or to embrace new trends and opportunities in order to grow as a business is often what distinguishes brands that have stood the test of time. As Charles Darwin wrote: “It is not the strongest species that survive, nor the most intelligent but the ones most responsive to change.”
But the speed at which successful ‘crossover businesses’ of all sizes are now required to adapt is increasing, driven at an ever greater rate by digital transformation. However, the crossover doesn’t always mean changing or modernising products, or jumping to whole new sectors. It can also mean making a change to how products and services are sold, crossing over from being a manufacturer, to being an online retailer, for example, selling products directly to customers.
Manufacturers of great products are starting to see the potential in highly cost effective ecommerce and setting up a retail offering. If they can deliver on consumer expectations and own the end-to-end customer experience, there are clear benefits for brand building and profit. However, there are some key considerations when building the platform to support any crossover ambitions.
Unification is key
To support a truly integrated crossover business, a single core system needs to be able to manage critical retail, wholesale, service-provision and manufacturing processes and ensure they are aligned from front to back end. This is essential both for managing cost and delivering a great customer experience, as well as collating sales, order and supply chain data and other key performance and financial data that can provide a ‘single view of the truth’ for the business. In order for businesses to make major changes, or diversify, they need the clearest, most reliable view possible of their starting point and the processes that need to be managed to effect the change as efficiently and profitably possible.
Diversity demands flexibility
As a company’s mix of products, services, delivery and payment models becomes more diverse, it requires a more flexible and unified financial system. A single invoicing system and revenue recognition across all goods, services and subscriptions offered is essential. As a company diversifies, it needs to be able to service customers in a consistent, joined up way.
A unified platform for financials, demand planning, inventory management, work orders and assemblies, warehouse management, CRM, HR does away with silos that otherwise could make diversification a source of complexity and rigidity and leave companies unable to move at the speed reinvention often requires.
Leveling the playing field
For start-ups, scale-ups and established businesses alike, automating back-end processes on a unified platform will increase efficiency and allow these companies to deliver a level of superior customer experience in a way that was once prohibitive and limited only to the biggest companies. In today’s world, even small companies need many of the same systems and operational capabilities of larger competitors and need the control and flexibility to reinvent and diversify quickly and decisively. When selecting a system, companies should look for one that provides a full breadth of capabilities that can start small and scale up as the company grows.
A unified platform can empower companies with the functionality and agility to become successful crossover businesses. And, with a platform that can scale, these companies don’t need to worry about replacing aging systems built for smaller companies. They just need to worry about managing growth and delivering great customer experiences.
Pandora and IBM digitise jewellery supply chain
Pandora has overhauled its global supply chain in partnership with IBM amid an ecommerce sales boom for its hand-finished jewellery.
The company found international success offering customisable charm bracelets and other personalised jewellery though its chain of bricks and mortar retail destinations. But in 2020, as the COVID-19 outbreak forced physical stores to close, Pandora strengthened its omnichannel operations and doubled online sales.
A focus on customer experience included deploying IBM’s Sterling Order Management, increasing supply chain resiliency and safeguarding against disruption across the global value chain.
Pandora leverages IBM Sterling Order Management as the backbone it its omnichannel fulfilment, with Salesforce Commerce Cloud powering its ecommerce. Greater automation across its channels has boosted the jeweller’s sustainability credentials, IBM said, streamlining processes for more efficient delivery. It has also given in-store staff and virtual customer service representatives superior end-to-end visibility to better meet consumer needs.
Jim Cruickshank, VP of Digital Development & Retail Technology, Pandora, said the digital transformation journey has brought “digital and store technology closer together and closer to the customer”, highlighting how important the customer journey remains, even during unprecedented disruption.
"Our mission is about creating a personal experience and we've instituted massive platform changes with IBM Sterling and Salesforce to enable new digital-first capabilities that are much more individualised, localised and connected across channels and markets,” he added.
Pandora’s pivot to digital
The pandemic forced the doors closed at most of Pandora’s 2,700 retail locations. To remain competitive, it pivoted to online retail. Virtual queuing for stores and virtual product trials via augmented reality (AR) technology went someway to emulating the in-store experience and retail theatre that is the brand’s hallmark. Meanwhile digital investments in supply chain efficiency was central to delivering on consumer demand.
“Consumer behaviour has significantly shifted and will continue to evolve with businesses needing to quickly adapt to new preferences and needs,” said Kareem Yusuf, General Manager, AI Applications and Blockchain, IBM. “To address this shift, leading retailers like Pandora rely on innovation to increase their business agility by enabling and scaling sustainable supply chain operations using AI and cloud.”
Yusuf said Pandora’s success was indicative of how to remain competitive by “finding new ways to create differentiated customer experiences that protect their enterprises from disruptions to help mitigate risk and accelerate growth”.