IBM isn’t about dark suits and starched shirts anymore: focused on providing tailored customer experience

Beginning of last week I was in San Diego for IBM’s Amplify customer and partner conference. While I have been fortunate to have had traveled to some interesting places in our world, this was the first time I had been to San Diego. One of those oddities of my travel. It certainly did not disappoint, unfortunately I was not able to visit any of the beaches nor were the Padres in town. But I digress.

IBM had over 3700 attendees and large number of their partners in attendance at Amplify 2015. Not surprising for a company of IBM’s stature. The show kicked off with Alex Banayan, Author; Venture Associate with Alsop Louie Partners on stage followed by Deepak Advani the General Manager for IBM Commerce. Nothing of great notice other than the fact this is IBM and you had a millennial hosting and IBMers presenting wearing denim rather than the pin strip blue suits and starched white shirts! But this contrast is not lost on what IBM is looking to do with retail and eCommerce. From main stage the message was clear – we are here to empower our clients to provide their customers with an experience that is second to none. IBM is gambling that their wide breadth of offerings, from software to services all tied back to powerful analytics powered by…you guessed it…Watson is a winning formula. A timely message for a market that is ripe for new business models for addressing customer demand and desire. Hardly a gamble, but more a sound strategy to gain market share within retail.

So how is IBM ready to provide the framework necessary to meet this growing need? Deepak outlined 6 pillars that IBM is building their solution around. They are split between customer engagement and partners & suppliers. Around customer engagement they are:

  • Marketing
  • eCommerce merchandising
  • Customer analytics

Focusing on the partners & suppliers portion, IBM is focused on following three areas:

  • Procurement
  • Payment
  • Integration B2B

 

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Deepak and IBM are betting on the belief that these areas of focus will allow them to provide retailers, and really anyone in the commerce supply chain, the framework to address many of their business issues as well as allow for new business models. These pillars allow IBM to leverage their large portfolio of products and more importantly – services – in a well-articulated offering.

The one area that is lacking is with regards the retail execution and fulfillment portion. An aspect of the commerce supply chain that during my numerous hallway and formal conversations was not lost on both IBM executives as well as customers. It will be something to watch as they have a partnership with the likes of JDA and Pitney Bowes that should address this gap in the their offering. In the long term it will be interesting to see how these partnerships evolve. Does IBM stand to lose some control of their relationships with certain opportunities if they cannot also offer these execution and fulfillment offerings from their own suite? How could this impact both their sales forces and those of their partners, aka who will lead in certain deals? What happens if an implementation of the solution does not live up to expectations, which side will shoulder the responsibility?

Clearly IBM is not shy about partnering to augment their offerings or fill in gaps. They announced during the event a partnership with Facebook, which coupled with the partnerships with Apple and Twitter, demonstrate that IBM is not averse about pulling a wide variety of players into their ecosystem. These partnerships are cleaner since for the most part they are to provide IBM with some powerful and rich data sources to feed their growing analytics machine. When it comes to filling out the pillars Deepak mentioned, in the long run will IBM want to have the remaining pillars to be IBM blue or can partnerships suffice?

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Digital Disruption from the Peach State – but where can you buy peaches in the future?

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Last week I was in Atlanta with our founder Ray Wang as well as with my colleague Alan Lepofsky. We were hosting a successful second road show event for Ray’s wonderful book – Disrupting Digital Business. During the event we were able to listen to leaders from Adobe and Infosys about how they are dealing with the rise of digital in their businesses. Of course we also heard from Ray on main stage about the key findings of his book. Click here for a link to the tour information.

Alan and I had the opportunity to host two round tables. Alan focusing on how these trends will impact the future of work and collaboration while I focused on retail and the supply chain.

As for my round table, both sessions had lively discussions around how this digital revolution is fundamentally changing the retail and overall supply chains. Here are some take aways:

  • Digital is impacting the future of the store. What is the role of the storefront? eCommerce, mobile, social were a few areas that have had deep impact on how we trade and the role of the store front. We covered such areas as stores becoming multifunctional assets – acting as both traditional stores as well as distribution centers. Or even becoming primarily show rooms. One of the issues that this creates is how the financials will also have to change. Revenue per square foot may not be a true measure of a store’s usefulness with these new functions. Savvy CFOs need to be aware of this shift and figure out how to navigate those waters.
  • Can players within the supply chain work to do a better job with data sharing? A question we have been dealing with as long as there have been supply chains. Anyone who has played the beer game can attest one of the biggest hurdles is to have better data exchange amongst all the players in the supply chain. While all the parties know that conceptually this would help all their causes, the ability and desire to actually share data continues to be an issue. Clearly based on our discussion at the round table this has not been adequately solved. An ever increasing infusion of digital technology within the supply chain is not a panacea. The ability to have players within the supply chain to share more information is all about process change, cultural transformation and trust. What digital and data can provide, are some hard numbers to demonstrate the value of being more open. But remains a challenge.
  • Our shopping experience has only seen the beginning of disruption! We spent a good amount of time thinking ahead, what will the retail experience look like in 10 years. Everything from virtual reality shopping, similar to what Burberrys has attempted in London, to shopping experienced leaning on driverless vehicles that would whisk us from our homes and through stores to purchasing products in customized packages, quantities, sizes – true customization for the individual. All great examples, all that could come true due to the digital revolution we are in the midst of. Of course few CxOs are willing to invest capital in futuristic concepts that do not have a tangible ROI. As with many of these changes, CxOs need to focus on the use cases that can provide returns and benefits in the short term, build on these use cases to lay down the digital rail road tracks that will be necessary for the more futuristic opportunities.

A whirlwind tour last week, between being in San Diego and Atlanta, but the Digital Disruption tour was a wonderful event. Selfishly it was great to spend time with companies such as Coca Cola, Carters, Adobe and Infosys to name a few and discuss how digital is impacting their businesses. The road show will continue, now swinging through Europe. Well worth attending.

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NetSuite brings full retail experience to a tablet near you

Last week was a tad crazy when it comes to conference season, there were at least 4 conferences I could have and should have attended. However until I can figure out how to be in two places at the same time I had to pick which events I could attend. One of those events was NetSuite’s SuiteWorld in San Jose. Unfortunately I was only able to attend the first full day, but what I took away from the time I spent was their new offering for retail.

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They announced SuiteCommerce InStore – a next generation POS (point of sale) and retail reporting tool that bridges the online and brick & mortar experience. Click here for press release. This new offering from NetSuite, which builds on their existing solutions, follows the mantra launched from main stage. Is it an ERP or a web site? At the core of this statement is the belief that you must treat your business from a unified view. There is no longer a view of inventory that is for the eCommerce engine versus one for the traditional brick and mortar world. There is only one view – one that takes a view at ALL inventory, regardless of what channel it is destined for. What this means for retailers:

  • Retailers, by providing a more complete view of customers, can now empower their stores to better satisfy customer needs. For example, if Lawrence Williams walks into a Williams- Sonoma store to purchase a new Cuisinart mixer, if equipped with this solution, the store manager and associates will have access to all the data associated with Lawrence. Did he search the web site for the mixer? What color? Which model? Did he look for other products? The store associate can now anticipate and deal with Mr. Williams’ needs more effectively.
  • Much better coordination between the online and physical world. One of the most frustrating issues retailers face is have a promotion for a product in a store that could also be fulfilled online, but not having that full view of the inventory. Companies that leverage SuiteCommerce InStore, will be able to react with much more flexibility to fluctuations in demand or inventory, regardless of where the drivers are coming from. This unified view of inventory and customer is key when it comes to meeting the demands of consumers.
  • A greater understanding of what is happening on the ground. Retailers have always struggled with gaining a richer sense of what is happening within their stores. POS (point of sale) data is nice, so are orders and even advanced video technology. But what if you could add a rich layer of information that tied in the online and in store experience of the consumer? Retailers will not only be able to empower their stores to better manage the customer experience, but they will also be able to collect behaviors of those customers.

It will be interesting to observe how this solution progresses. It fits into our Matrix Commerce model that looks at the places where digital has allowed the customer and the supply chain to converge. This, edge of the retail network, at the store level, is one of these intersection points. NetSuite retail customers should see this as a positive evolution of the retail solution. Over the past few months, many of the retail executives we have met with expressed the desire to provide their store locations with a complete view of the customer. NetSuite’s SuiteCommerce InStore solution addresses the needs of the retailer to gain greater channel agnostic insights.

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Meet me in Atlanta to discuss digital disruption

Digital disruption is all around us, how is that for a bold statement! But the reality is we are in the midst of a business and supply chain world that is being transformed, in ways we could never imagine, by the digital revolution that is underway.

We are all aware of these changes in our personal live – Uber, Facebook, Airbnb, Twitter, Amazon are a few examples of how digital has impacted our daily lives. But what about in our businesses and supply chains? In these areas we are also seeing disruptors emerge – 3D printing and IoT are the latest to capture the headlines. But we have already seen mobile, social, big data and the cloud have major impacts on our businesses and supply chains. These forces are both disrupting but also empowering the supply chains of today to move forward.

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Join my colleagues Ray Wang and Alan Lepofsky in Atlanta on May 14th as we discuss how digital is impacting business. Ray will highlight and delve into his recent book – Disrupting Digital Business. While Alan will lead discussions on how the intersection of analytics and collaboration tools will power the next generation of productivity software.

I am excited for the event which will undoubtedly be a smashing success. If you are in the area and want to join us for what will be a lively discussion and enjoyable event click here to register.

The is open to VP or C-level executives and is free of charge.

The team at Consteallation Research and our sponsors from WiPro and Adobe look forward to seeing you there.

>>>REGISTER NOW!<<<

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Remodeling your kitchen – rather than granite think smart counter tops

In a report we recently published we looked at how the Internet of Things (IoT) would impact the retail world. One area we focused on was the food and grocery portion of retail. An idea we explored was how IoT could allow grocers and other players within the food supply chain to extend their reach beyond the store shelf and into the shelves in our pantries and refrigerators. Eventually grocers and manufacturers could leverage this connectivity to better understand demand patterns, usage and even correlations between different items. This use case has taken another step closer to becoming a reality.

Companies like Orange Chef have started to market and sell “smart counters.” Granted the one offered by Orange Chef is more of a chopping block sized device for your kitchen, but let us project out into the future. These counter tops aren’t so much about whether or not you want black granite, Azul Macauba or a fine Italian marble, but how many sensors, beacons and connected nodes your new kitchen counter tops will contain. The smart counter top will be able to identify what you are placing on it. For example you may place on it a nice

About to get a whole lot smarter!

About to get a whole lot smarter!

salmon steak or some lamb shanks. The smart counter will then be able to offer you ways to prepare the food offering you recipes and other items you may want to include. The counter will also be able to tie back into your wearables as well as other applications. Training to run a marathon and using your smart phone to keep track of your progress – maybe that bacon isn’t what you should be eating this close to race day – your counter top will tell your phone or wearable, which will tell you. Trying to cut back on red meat – the smart counter will keep tabs on what you are preparing for your dinner. This is a great example of the kitchen becoming smarter and more interactive.

It is not a big leap to go from the kitchen and your counter top being proactive in your meal preparation to being tied into a larger network – say in your neighborhood – that would communicate with local grocers and even distributors to better manage what they stock. Maybe the paleo diet is catching on your neighborhood, if the smart kitchens figure this out, the local stores might want to ramp down on some of their processed food orders.

Of course this will also come with the expected questions around privacy and information sharing. Will consumers trust the likes of Tyson Foods, Mondelez, Kraft, Dannon and other large food providers to have access to such data? If these companies or a third party (think Nest for your grocery bill) can demonstrate or help consumers with their spending then consumers will become more at ease with sharing their information. The fact that households in the United States spend on average $166 a month on energy – the target for Nest – yet they spend 30% more a month on their grocery bill (based on U.S. Department of Energy and the U.S. Bureau of Labor Statistics) would indicate that there is an opportunity for enhanced intelligence to be applied to this sector. IoT empowered devices could bridge that last consumer mile for grocers, CPG and food manufacturers.

We wouldn’t just have our mothers and significant others to remind us that late night ice cream isn’t good for us, our smart kitchen will do it as well.

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Filed under Consumer Product Goods, IoT, Retail, Supply Chain, Wearables

Death, Taxes and Supply Chain Disruptions!

It is that time of the year again here in the United States…tax day. You know how the saying goes:

Our new Constitution is now established, and has an appearance that promises permanency; but in this world nothing can be said to be certain, except death and taxes.

Benjamin Franklinin a letter to Jean-Baptiste Leroy, 1789
I might add another certain to Ole Ben’s letter – supply chain disruptions. Unfortunately much like death and taxes, these disruptions are not something to look forward to. But much like taxes and death, the inevitability of their happening does not mean we shouldn’t plan for their potential impacts. By preparing for these events we can ensure that we emerge from these situations in the best shape possible.
During the first few months of this month I have heard the same concerns about our supply chains:
  • Acts of nature are unpredictable. Yes floods, tsunamis, earthquakes, blizzards, ash clouds, hurricanes and the list goes on, of natural events are unpredictable and constant. While one day we
    Making cars not boats

    Making cars not boats

    maybe able to control the weather and other natural phenomenon (according to some James Bond villains) today we remain at the mercy of Mother Nature. Our abilities to predict acts like the weather are better but certainly not 100% accurate. And we have have to find good ways of pinpointing where earth quakes and volcanic eruptions will occur.

  • Macroeconomic drivers are constantly changing. Exchange rates, the price of oil, deflation and other economic characteristics are driven by government, corporation and human action, but sometimes we cannot really understand the outcomes of these acts. Of course at some level of supply chains entities can afford to pay for influence at these economic levels…but even that does not ensure full control or understanding of outcomes.
  • Humans…yes we are unpredictable at the end of the day. When I studied political science and economics I always struggled with the notion of a “rational” actor or state. What is rational to me might not be to you and vice versa. Yet all of our theories started with some assumptions around “rational” behavior. Of course the same is true within our supply chains. Whether it is a buyer, a worker, a partner or any other human within the supply chain we cannot always assume we understand their behaviors and actions.

So what does this mean? When it comes to our supply chains we should focus on three rules:

  • Embrace the growing amounts of data and sources of that data. While data is not the panacea for our ills, Data conceptit can provide clearer picture of what is happening and where things are being impacted. The growth of data as well as what is producing the data (think IoT) opens the door for companies to get a greater understanding of their supply chain. This digital disruption will only continue to grow in importance – maximize the value for your supply chain.
  • Constantly push yourself to keep an eye on possible new business models. Anyone who has been in business, gone to business school or just read a business publication knows that the secret is to always be ahead of your competitors with “paradigm” changing models. True. But not easy to identify. However within our supply chains we do not need to always identify but more – be open to discovering and leveraging these opportunities when they present themselves.
  • Focus on what you can control. Understand what you cannot control and think about how it can impact your supply chain, but focus on what you can control. The data should help you better understand what is possible as well – but there must be a discipline as to what is controllable and what is not. Within the context of modern supply chains, this discipline is even more crucial.

Like death and taxes, disruptions to your supply chain will be a constant. The good thing is that new digital aspects have given supply chains a fresh arsenal of solutions and business processes to offer solutions to meet this disruptive realities.

 

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Water shortage – supply chain disruption that isn’t easily avoided

The headlines about the California drought have been a constant drum beat about the issues we face with this most vital of global resources. Of course when you look at what we here in New England suffered through this winter, it is hard to fathom a water shortage! Sometimes it is also surprising to read about water issues when over 70% of the planet is covered by water. But much of that water is not fresh water, only 2.5% of the global water is fresh water, and of that 70% is trapped in the icecaps of Antarctica and Greenland. Access to fresh water will continue to be a major global issue. And an underlying one for our supply chains.

  • Agriculture – no surprise here. The numbers from California demonstrate the heavy reliance on water usage. With the Golden State’s farms using a whopping 80% of the state’s water – it is clear this industry remains a leader when it comes to water consumption. Couple this with a growing global population, the agriculture supply chain will find itself under greater strain to meet this demand while controlling their Final-gallons-per-food_2usage of water. It will be interesting to see if this supply chain starts employing tactics that we are seeing in manufacturing – near shoring. When states like California supply 80% of the global almond supply, yet that crop consumes 10% of California’s water – or 1.1 gallons per almond. Granted it is easier said than done since crops require much more than just water – soil and weather play major factors in crop growth. But moving crops to different location is not that easy.
  • Manufacturing – industries such as chemical, beverage, steel, paper production to name a few are heavily reliant on water. By some estimates it takes 80,000 gallons of water to produce on automobile, 700 gallons on water for one cotton shirt and 24 gallons of water for 1lb of plastic. Supply chains have become more efficient when it comes to the manufacturing process, reducing some of the water strain from that angle. However, as our product supply chains are introducing products at a faster pace, and therefore taking out goods from the supply chain at an increased pace – the strain on the water usage is under pressure from that perspective.
  • Future of work – these water issues are not simply about how we produce goods, but the workers within the supply chain are also impacted. It goes beyond Californians’ not being able to water their lawns and their quality of life. But in regions such as northern China, parts of India, the Middle East and sub Saharan Africa the issue of water directly impacts the work force. While some of these regions might offer affordable labor and new markets, if that population is more concerned about securing water that will impact their roles as workers as well as consumers.

The bottom line is the latest water shortage in California is a reminder that natural disruptions are omnipresent within our supply chains. Of course our supply chains cannot control natural occurrences such as droughts. But when it comes to simulating our supply chain networks, determining our planning and sourcing we must factor the possibility of these disruptions.  Our supply chains function in a system that is still driven by natural forces. Those are variables we are the mercy of…understand how they can impact your supply chain. Ignore them at your own peril.

 

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