Regular readers will be aware of our ongoing coverage and analysis around Starbucks as one of the strongest digital transformation exemplars around. It’s an ongoing story of an organization whose digital DNA has been hardwired into the corporate culture as a result of the leadership of the CEO.
But of course the CEO vision needs to be delivered and realized and that’s where the onus shifts to the tech side of the business. At the Microsoft Build conference this week, Starbucks was put forward as a use case in how developers and the tech team execute on the digital goals.
The scene was set in a blog post from Starbucks Chief Technology Officer Gerri Martin-Flickinger who stated:
One of the things that I love to point out is what we call ourselves: we’re called Starbucks Technology. We’re not called Starbucks IT. We want to have a different kind of view of what we do and how we enable the brand.
We’ve established a five-year technology strategy that’s tightly coupled with our corporate business strategy. It starts to look at those disruptive technology themes that are going to become mainstream over the next two, three, four or five years. How do we start capitalizing on those and exploring those? How are we working those into our future thinking?
Because with over 28,000 locations spread across 77 countries, it takes thoughtfulness to plan out the logistics behind new, disruptive technology for our stores.
One of the things we are so incredibly excited about as an engineering and technology organization is using data to continuously improve the experience for our customers and partners. We have the opportunity in this new age of IoT [Internet of Things] to actually monitor equipment at an incredibly detailed level of telemetry and recognize when a machine needs preventative maintenance, for example. We can do this without having to bother the teams in the stores, who want to be focused on the customer. Through the Internet of Things, we are taking that next leap of telemetry from many, many pieces of equipment and ensuring a consistent experience for each customer.
At the conference itself, Jeff Wile, Starbuck’s Senior Vice-President of Cloud and Infrastructure, expanded on how the coffee firm uses Microsoft tech to deliver digital success stories, such as Mobile Order and Pay.
Starbucks has, he began, been built up over 40 years around three main pillars - its employees (or partners as Starbuck vernacular has it), its innovation in producing new beverages and creating stores that are ‘the third place’ in customers lives alongside home and work.
To those three, the firm now adds a fourth pillar - technology:
We believe that technology is the enabler at Starbucks to spread that experience everywhere. We're looking to use technologies like blockchain to track our coffee around the world from bean to cup. We're using data and modeling to share best practices with our coffee farmers around the world. We're developing systems to optimize inventory so we are delivering the right products to every store at the right time, while at the same time reducing waste.
We're creating new capabilities that optimize scheduling for partners, those 300,000 partners in the stores, to make sure that they're there when they're needed. Let's not forget our industry-leading mobile application, where we're leveraging scalable infrastructure that adjusts automatically as demand changes throughout the day. But probably the biggest transformation for Starbucks as a whole is in our partners, who have been able to innovate faster and build solutions more quickly for our business than ever before.
Underpinning all this is the use of cloud platforms, including Microsoft Azure, explained Wile:
Every one of these projects leverages cloud platforms like Microsoft Azure, which enables us to move faster and build better solutions…another benefit we see from the cloud is our ability to deploy these solutions globally. We can build it once and leverage it anywhere around the world that Azure may be. It really is helping transform our business.
Wile cited the specific example of a Starbucks outlet which is picking up orders, mobile, drive-thru or in-store at the counter:
Today, our partners do an amazing job to fulfill and craft those orders, but we do it the sequence that the order came into the store. Things get made, things get picked up, and you can see we do our very best to satisfy our customers.
But what if we could use Big Data and machine learning and AI on something as simple as creating coffee in our stores? And we could use those algorithms to help us optimize how we produce those orders. We still have the same number of orders coming in, but maybe that drive-thru order is just a cup of coffee, so we're going to fulfill that first, instead of first-in, first-out like it is today. And once that's complete, we've now handcrafted that large order for our mobile customer, and it's there ready right when they need it.
We're super excited about this capability because it enables our partners in the stores to focus on our customers and not spend time trying to figure out how to manage that queue. And we're leveraging things like Azure Cloud and the capabilities like Service Fabric, IoT Hub for our connected devices in stores, and back-end data stores like Cosmos DB to enable all of this and make it happen.
Who knew there was so much technology behind a simple cup of coffee? Our mission at Starbucks is to inspire and nurture the human spirit, one person, one cup and one neighborhood at a time.
So much of the credit for the digital transformation of Starbucks goes to former CEO Howard Schultz - and rightly so. Schultz saw the direction of travel a lot earlier than many other organizations and provided the incentive and investment to do the necessary spade work that all too many businesses still struggle to get to grips with today.
But vision is one thing; delivery is another. So it was good to see the tech team taking center stage this week and getting some of the credit they deserve. There’s a lot that their counterparts in other organizations can learn from the Starbucks exemplar.