With this degree of transformation across the organization, it's akin to doing open heart surgery or running a marathon.
It’s a heartfelt sentiment from Scott Lindblom, now just over a year into his role as Chief Technology Officer at US retailer Bed, Bath & Beyond. It’s inevitably been something of a baptism of fire, taking up his position in the middle of a global pandemic that plunged the retail sector into disruptive crisis. Add to that the fact that Lindblom also took on the technology hot seat as Bed, Bath & Beyond executed on a 3 year transformation program to turn around its fortunes.
At diginomica, we’ve kept a close eye on this particular retailer over the years. For a long time, the company seemed beyond hope of resurrection. But a change of CEO and a subsequent refresh of senior management positions across the board looked to have achieved that rarest of rare things - a digital transformation program that did indeed turn around the organization and put it seemingly back on track. The firm’s latest quarter did experience an unpleasant bump in the road, but the overall journey continues apace.
The goal is clear, argues Lindblom, speaking at this week’s Google Cloud Next event - to re-establish Bed, Bath & Beyond as the omni-channel home destination. The starting point for that is the $1.5 billion worth of business and technology transformation, taking in as partners the likes of Oracle and Deloitte as well as Google Cloud:
We’re comprehensively re-imagining our business and IT capabilities. We also have a renewed focus. We've divested several companies - for example, Cost Plus World Market and Christmas Tree Shops - to focus on what's important, our core brands - Bed, Bath & Beyond, Buy Buy Baby and Harmon Stores. We are transforming how we operate and how we can deliver an exceptional customer experience. We're looking to improve the customer experience through re-designed business and IT capabilities at the center of the transformation.
This is tied into business and organizational changes alongside, such as an increased focus on Own Brands products and re-designing physical store layouts. Lindblom says:
We've been focused on omni-channel, and digital, really trying to serve our customer how they want to engage with us, be it in stores, online or through the app, and also fulfilling that demand through the stores, implementing capabilities such as Buy Online Pick-up In Store, curbside pickup and same day delivery. These changes will be delivered through re-designed business and IT processes and tech enablers to deliver new capabilities to the business.
In the past, Bed, Bath and Beyond’s IT operation had been very much a custom development shop, running a lot of 1990s technology - including Lotus Notes - but the transformation program is changing that. Lindblom explains:
It is a full modernization of our business applications, infrastructure, and also new ways of working for the IT organization. Our strategy is to build applications for differentiation and buy applications for existing retail solutions and foundational capabilities. We're modernizing our applications throughout retail, corporate and store systems, implementing leading practices and best-in-class solutions for a new ERP solution, which includes core retail as well as finance modules, demand and inventory management to improve our how we manage inventory and ensure we've got the right level of inventory in each location to better serve our customers.
Enhanced Product Lifecycle Management capabilities will be used in support of the Own Brands initiative:
We're looking to grow [what has been] historically about a ten percent penetration of Own Brands to exponentially more. We also are looking at our marketing technology, focused on loyalty and also personalization and then re-platforming our e-commerce platform to the Google Cloud Platform [GCP]. GCP is the end state for our e-commerce site and we're moving our analytics capability to the Google Cloud. Also though, in this transformation, as you can imagine, we're dealing with multiple vendors and multiple clouds and so GCP also plays a very important role in integrating the set of applications and really bringing these together.
All of this has also led to an evolution of the tech operating model overall, he adds:
We're running a significant number of legacy systems and older technologies and platforms. The tech transformation has been an opportunity for us to re-think and re-design our operating model. We've defined a new cloud services team to deploy and support the new GCP platform and integrations. We're more tightly aligning our application teams with the business functions they support to increase collaboration with the business. We've also implemented a Transformation Management Office, focused on tracking and managing the costs and benefits of the transformation. And finally we're up-skilling resources, re-training and working hand-in-hand with our partners to increase the knowledge and expertise in the new technologies that were implementing.
As noted at the start, Bed, Bath & Beyond has had a bumpy few months of late as the COVID resurgence led to lower traffic in-store and the global supply chain crisis took its toll. But the transformation program continues apace, with CEO Mark Tritton making the case that:
One quarter does not define or derail a multi-year strategic plan.
From Lindblom’s point of view, there’s still a lengthy to-do list:
Obviously we've got a lot to get accomplished to modernize our core systems and capabilities. But with GCP as a common hub platform, we're positioned to build on that to really continue to innovate and deliver value. We feel that the structured approach we're taking to this transformation, supported by Deloitte, is setting us up to make this continuing innovation a reality. It becomes an 'art of the possible' discussion [around] capabilities like real-time data, mobility and looking at functions like end-to-end supply chain visibility, or looking at Artificial Intelligence and Machine Learning, chatbots, Precision Marketing. And then also Augmented Reality is interesting in terms of creating that more immersive customer experience in-store and online.
All told, there’s plenty to keep Lindblom and his team busy, something he recognizes:
Given the scope of the transformation it is an exciting time leading this initiative to re-invigorate the business and drive sustainable growth