Last year, I endured a podcast grilling via a jugular question: "Give me one example of a retail company that's had a successful large-scale transformation." I came up with only one - but even that one has open questions.
Those who advocate large-scale transformation must concede: legacy architectures (and attitudes) are a tough slog. Who has years for results these days?
But now I have a vivid use case to kick tires on: Ingram Micro. Not because their transformation is complete - but because of how they got digital traction, and got it fast.
I blame Sanjib Sahoo, Executive Vice President and Global Chief Digital Officer at Ingram Micro. About to go in the chair for a DisruptTV appearance, I heard Sahoo talking about Ingram Micro's transformation view. Things got real: "Don't automate junk" - an automation gut check. Then, the concept of DigiOps - transformation as a discipline.
But are you digitally fit? How does Ingram Micro assess this? This one was worth hopping on a plane for. At Constellation's Connected Enterprise 2022 event in Half Moon Bay, I got the inside story from Sahoo.
A platform-driven transformation - why Ingram Micro rolled out Xvantage
But the key to Ingram Micro's transformation isn't any of these things. Rather, it's Xvantage - Ingram Micro's platform (and data mesh). Why is this such a big deal?
- They built this "AI-driven, self-learning, ecosystem platform" themselves.
- They built it as a cloud layer on top of their legacy architecture - without any rip and replace.
- They did it fast - as in five months fast.
- It had immediate, transformative impact.
- The Xvantage platform provides the fuel for the rest of their cloud migrations - a multi-year process that can now be paced, because the platform brings the immediate value, not just internally, but to Ingram Micro's external partners.
Yes, platform-driven transformations can happen, but they are usually about migrating onto a third-party platform over time - not building it yourself. As I told Sahoo, I don't care how much your organization has a human desire to change; if the platform can't support your business model evolution, you will stall out. So what makes Xvantage a true "ecosystem" platform? Sahoo responded:
Because it really collects data today for all our partners, and creates a single pane of glass, personalized for our partners, to actually have that experience and take complexity out - and make it easy and simple to do business with us.
Sahoo's team follows the consumer-grade UX playbook:
I talked about the entire consumerization - bringing it into distribution. So that means recommendations, insights, personalized widgets, personalized views, everything.
Amidst the personalization hype, here's a truth we shouldn't forget: your AI is only as good as your data. Xvantage has that. Sahoo continued:
This platform uses more than 40 years of data to really drive that machine learning and artificial intelligence, connecting our vendor partners with our associates, as well as with our customer partners. That is all done through the real-time data mesh that we have created, on top of all legacy systems.
Ingram Micro's digital platform play - results to date
Building on top of legacy systems means going for the jugular: get the customer impact now. Sahoo's team took inventory of every legacy system they want to change: "it will take a long time." Well, Ingram Micro can't wait:
We took an approach of: build on top of it now with modern technology creating the data mesh - and then build intelligent, headless engines on top of it. That drives frictionless experience for our customers.
Xvantage will eventually be the global platform for all of Ingram Micro's partners, but it already has critical mass. Live in the US, Germany and Canada, more than 10,000 partners are already running on Xvantage. Want to reduce change management efforts? Start by building an intuitive UI.
The feedback we got was that the platform worked out of the box; there was no training required. It was simple, intuitive, easy to use. My personal philosophy is that the product should be so intuitive and easy. You can use it out of the box. We don't need a training manual for an iPhone, right?
Mix in the personal touch, and pro-active communication:
At the same time, our DigiOps group really took the time to communicate with the customers, via feedback loops; we gave them the heads up. Based on the partner, some hand-holding was also done to make them acclimatize with the change. But it's been pretty fast to adoption.
With 10,000+ partners already on the platform, what are the results so far?
The feedback we're getting is that this takes complexity out of their own business. So instead of spending time on, say, tracking renewals, because they had to have people focusing on that, it frees them up to actually now grow their top-line - and focus on building solutions for their end customers. That's what we hear a lot about how this platform is helping.
What is DigiOps? Transformation as a discipline
How long did Xvantage take to build? 15 months from white board to go-live. The coding took only five months - though features are still added continuously. And what about this "DigiOps" thing? As I see it, transformation is never done. Done properly, it is a discipline, a commitment to ongoing change, with an edgy blend of humility and ambition. Is Ingram Micro's "DigiOps" a way of operationalizing transformation? Sahoo says you need something beyond technology to hang your hat on:
Often, by the time you get adoption, technology changes. DigiOps is actually a continuous way of creating and capturing value, as digital technology evolves. So in my organization, I have DigiTech. That is primarily creating value. And DigiOps; this captures value. You bring them both together to create that entire digital spirit, that is both creating and capturing value simultaneously together to drive transformation.
Therefore, we can stop thinking about transformation as something that's ever really done - and think about embedding it into our culture permanently.
A lot of people ask me, being a technology person, "What is digital transformation?' I say it's a spirit. Yes, it is a DNA. It will never stop. 10 years ago, remember, we talked about Hadoop... You cannot run behind technology. We have to create a DNA in the organization that is a spirit. It's about embracing change, eliminating fear, failing fast, and constantly creating and capturing value. Sometimes you will fail. But you fail fast. And you move on; you improve it.
Why organizations need digital fitness - a different kind of scorecard
On DisruptTV, Sahoo shared his view of digital fitness. So is "digital fitness" a report card on the state of your digital operations?
Exactly. There are two reasons why digital fitness is important. The digital longevity of the organization can be measured by understanding your digital fitness level... This is what I call digital BMI.
Once you know your digital BMI, then the company can go through different phases of digital maturity, and digital fitness... But it's very important to understand that digital fitness is a mindset change.
Your company might be riding high revenue-wise, but if your digital fitness is faltering, you're laying the groundwork for future obsolescence. Therefore, a "digital fitness" assessment provides an alternate - and vitally important - scorecard to your present balance sheet.
Some companies don't have performance damage;l they're really doing well. But their digital fitness stinks, right? Eventually, you're gonna go down. Companies have to address the opportunity gap, because you do not know where competition comes from.
Sahoo cited a classic example: Blockbuster - turning in great financial results while Netflix laid the digital groundwork to destroy their market share. Grading your digital fitness isn't easy; there are multiple criteria in play. On DisruptTV, Sahoo ran through some metrics with Constellation co-hosts Ray Wang and Liz Miller:
- What is the status of your legacy applications?
- How is your data maturity?
- Do you have a product mindset?
- Can you innovate and operate, and integrate that together?
- Are you truly focused on customer excellence?
My take - beyond a flawed approach to automation
Multi-year transformations need quick wins - at this point, that's beyond obvious. Yes, moving line of business applications from legacy to SaaS is one way to notch those wins, but realistically, that plays out over time. Rushing your cloud apps migrations in search of "quick wins" is likely to backfire, via move-to-standard go-lives that aren't focused on customer needs.
As I see it, Ingram Micro has taken the "quick wins" mentality further. The Xvantage go-live is more like front-loading your transformation with high impact, and riding that momentum. That's much more than a quick win. Could Ingram Micro still run into trouble? Sure - markets are volatile, and multi-year plans always test your resolve. But there is plenty to learn from this model.
Granted, not every firm has the internal skills to build their own AI-enabled platform. But these lessons could be applied to third-party projects as well.
One highlight from Sahoo's DisruptTV appearance warrants follow up: rushing into automation. Sahoo had a memorable line here:
Today, digitization is experience. Experience first; automation follows.
We shouldn't start with a machine learning algorithm and seek to use it. Start with what the customer wants, and then automate. That is a big shift in digitization today. We call it an experience-driven organization.
Wang's memorable rejoinder:
Why would you want to automate crap?
Sahoo cited Uber as an example of how to lead with experience. But as I told Sahoo at CCE, when I started using ride share, the experience of the ride itself wasn't necessarily better than a taxi. The automation (of hailing the ride via the app) was the better experience. So how do we reconcile that? Sahoo's warning: be careful about the knee-jerk RPA approach of simply automating analog or paper-based processes. Instead, reverse-engineer from what the customer truly needs:
The reason I say that is from an enterprise context, you should start with the end user, or your customer - and reverse engineer the experience. Then, automation follows. in the example of a taxi versus Uber, the main problem in the entire customer journey which needed to be changed: was the uncertainty of getting a taxi, at your will, and convenience. So that was solved by an automating technology in the background with a mobile app platform, and one click - but the problem was still solving experience.
And yes, employee experience is just as crucial. Sahoo told me how they vigorously communicated Xvantage plans, via digital collaboration, online story sharing, and, more recently, in-person gatherings:
We just had our leadership meeting with 200 leaders last weekend. All our employees, I think, everybody was looking for a change.
Yes, Ingram Micro was already successful, but as Sahoo explained, there wasn't necessarily anything that truly felt differentiated about Ingram Micro, versus the competition. Xvantage has changed that:
We are a great company, with great relationships, but how do we take them to the next level? So there was a general enthusiasm about being a platform business, and working on building this platform, because ultimately, it helps us to delight our customers or partners.
Yes, there was some initial skepticism, as the platform proved itself, it faded quickly:
A lot of people are interested in participating in this to learn new skills, find new ways to actually help our customers. I must tell you that while there was initially some skeptics and naysayers, thanks to the timeline and how aggressive we are, it has not been that difficult to have a cultural transformation. The company was ready for a change, from leadership top to bottom. Every single employee is now geared towards Xvantage.
That's good - because there are 160,000 more IT solution providers (in 56 countries) to bring onto the Xvantage platform (demand side), along with 1,500 vendor partners (supply side). That should keep Sahoo's team busy - and, as he would say, digitally fit.