For example, when a European retailer changed its platform to serve customers better, it discovered it could also offer other retailers products with their improved ecommerce platform and digitized logistics, enabling the retailer to create an ecosystem of products and services from third party sellers to offer to their customers. That need for real-time connectivity is apparent in the wider range of mobility projects Harvey has been working on too. On the back of its solid growth, Kmart continues investment in digital and technology. . This means were getting products through to our store fresher and in a more timely fashion, he says. dtSearch - INSTANTLY SEARCH TERABYTES of files, emails, databases, web data. Information includes sales data, stock availability, store remuneration, markdowns and waste. AI for Good, says Westpac CIO, Pleasing Progress On Digital Strategy: Wesfarmers, The Key Drivers Behind Rising AI Investment in Australia, Woolworths Announces $700 million Technology Investment, The top Supply Chain Trends according to Gartner, Amazon Reimagines Retail With Amazon Dash Cart, Woolworths announces $700 million Technology Investment, Coles re-platforms digital channel and doubles online capacity. Although embarking on a digital transformation can be daunting and requires investment, many companies worlwide are starting that journey because they know it will pay off in the future. 1. All rights reserved. View my verified achievement from Project Management Institute. "The group's retail businesses will maintain their focus on meeting changing customer needs and delivering even greater value, quality and convenience for customers. While there are some savings in using external cloud environments for test and training activities, Harvey admits significant cost reduction hasnt been apparent. But other times it involves rearchitecting the system to meet the needs of today customers. Typically, companies tackle the first pillars we describe near the start of their digital transformation journey, although as they mature they may continually upgrade to add additional pillars. Digital is not purely about the colour of the screen on the website, its what assets we as a company should be building that allow us to leverage multiple marketing initiatives and across multiple touch points. Typically, companies begin with IT uplift and digitizing operations, followed by digital marketing and new business building. Broadly speaking, these capabilities will span four use cases: Wesfarmers is also accelerating its digital transformation efforts across other parts of the group. Our diverse business operations cover: home improvement and outdoor living; apparel and general merchandise; office supplies;health, beauty and wellbeing; and an Industrials division with businesses in chemicals, energy and fertilisers, and industrial and safety products. Including Catch, this amounted to AU$2.5 billion. Challenges in the marketplace with fast changing customer and business expectations; Limited digital asset availability The first deputy CEO was in charge of this transformation and be built a team that contained individuals with strong innovation capabilities, which tested and built each new business. Click and Collect has been scaled to 100 stores, with plans to expand in New Zealand. Youve got to make someone really want the technology and see how its going to add value to them and to their mission, as well as deliver for the customer, he says. Based on our collective research on companies undergoing digital transformation, we offer a simplifying framework to cut through the confusion and conflicting demands. Kmart, Target and Catch are currently part of the OnePass program, with partnerships with Bunnings and Officeworks, and additional benefits to be added over the coming year. Also read: The Key Drivers Behind Rising AI Investment in Australia. Despite years of discussion, understanding what digital transformation means for established companies remains a daunting challenge. Although Targets performance has been below expectations, Kmart has budgeted $15mn for technology and digital enhancements aligning with growing consumer expectations and changing shopping behaviour. As part of the Bunnings digital transformation initiative, Wesfarmers says it is investing in specialised skill sets to accelerate its data and analytics capabilities. How about in Australia? It is very easy in IT to lose sight of the money that has to be made, the customer offers that have to be delivered and the customer propositions that have to be put together, he comments. This view extends to the question of who owns digital, as well as the rise of the marketing function in technology purchasing and implementation. Wesfarmers says COVID-19 disrupts H1 operations but bumps up online sales, Wesfarmers investment in digital assets pay off as online sales jump 57%, Kmart Group to shift its mainframe to the cloud, AWS skills training for 1,400 Kmart and Target employees, Do Not Sell or Share My Personal Information. Going beyond what the legislative requirements is something I think creates sort of a threshold for ethical standards which is a really good mindset to have: are we protecting this asset in a way that customers want us to?". Embracing change has become a mantra for CIOs looking to take a more strategic and innovative position within their organisation today. This will provide greater value, expanded range and a more seamless experience for customers across the Groups retail businesses., The Catch marketplace, together with the OnePass subscription program and the Advanced Analytics Centre, provide a strong foundation for Wesfarmers OneDigital. We work hard on ensuring we are one of the top participants working in-store, and we continue to get very high engagement scores.. The focus for the ATO, according to Rucinski, will be implementing data analytics and AI to "enhance the human ability to make judgments" so humans can ultimately make the final decisions for matters. To the degree that we have meaningful insights, a story, a notion of what may be going on and why, or a model, we will be able to test this model through a prediction. Its also good for customers as it means our store leaders are out more on the floor.. To do this, we always try to tie up our messages across all customer platforms, so that whenever an opportunity arises for example the One Direction competition we are building a reusable asset for when those opportunities arise in future, and so we have the capability to do another competition.. Finally, digital opens up many new opportunities for established companies. Announcing the half-year results, Managing Director Rob Scott said: pleasing progress continues on Wesfarmers digital strategy. One business strategy that Wesfarmers has adopted, Lowthorpe explained, is a one-day program focused on data analytics for leadership teams that teach them about data analytics, including the differences between advanced analytics and business intelligence reporting. Wesfarmers formally acquired the online retailer Catch for $230 million in August 2019. Trevor Collens. Cloud Technology: Cloud technology has . The investments in data and digital transformation continue with an additional $10mn budget with the data and analytics initiatives enhancing productivity and inventory optimisation. View my verified achievement from Project Management Institute. For leaders, it can be hard to know where you should be focusing investment and what kind of digital transformation youre really after. But with the right expertise and tools, data can be turned into insights. Our database provides customer insight and contextual information on which enterprise applications and software systems Wesfarmers (Bunnings Warehouse) is running and its propensity to invest more and deepen its relationship with SnapHire, SAP, UKG or identify new suppliers as part of their overall Digital and IT transformation projects to stay . We are getting exceptional high take-up of that, and its an example of a win-win for both Coles and our store managers, Harvey claims. The Warriors intend to use Google Cloud's services to automate data workflows, create machine learning models, visualize data and share analytics with coaches, staff and players. how to upgrade the digital infrastructure, a team capable of running experiments to validate the new business opportunity, Network Advantage: How to Unlock Value From Your Alliances and Partnerships. He says the company rejected SAP and Oracle because these software systems are not only expensive to install but have to be customised to suit the business. Following an initial pilot in Tasmania (Bunnings is not rushing this after the UK debacle), click-and-collect will be rolled out in Victoria and then the rest of Australia. IT should be helping marketing evolve the platforms, tools and assets it can deploy in the digital space, making it easier to exploit the opportunity to be had in digital, he says. Melbourne, VIC. Bunnings announced setting up of a Technology Centre in Bengaluru which is not surprising. In fact, the essence of digital transformation is to become adata-driven organization, ensuring that key decisions, actions, and processes are strongly influenced by data-driven insights, rather than by humanintuition. Big data to deliver business efficiencies and better customer engagement is another majority area of focus for Harvey, and he explains his team is taking a three-pronged approach to information management. But what happens when an organization becomes too large or complex to know your customers or employees on a personal basis? It is no secret Bengaluru is the destination to recruit tech talent and Bunnings doesnt seem to be missing on that important tech link. Following Wesfarmers acquisition of the Coles Group in 2007, Harvey became IT group general manager across a team of more than 700 staff. The Catch acquisition has also improved digital expertise leading to better execution and innovation. Wesfarmers primary objective is to deliver satisfactory returns to shareholders through financial discipline and strong management of a diversified portfolio of businesses. Weve already looked at how Blockbuster missed their big opportunity to digitally transform their business, and we all know how that ended for them. As team members, its about how we can help innovate in areas that matter to both our customers and the wider team. In other words, you will only transform when you have managed to change how people behave, and how things are done in your organization. The digital transformation happening inside Wesfarmers' industrials division presents a good case study of the pitfalls and opportunities inherent in the implementation of new technology. The fundamental meaning of transformation is not about replacing old technologies with new ones, or capturing high volumes of data, or hiring an army of data scientists, or trying to copy some of the things Google or Amazon do. While IT plays a pivotal role in informing people of new trends, technologies and opportunities, its crucial we make sure the solution, as it is formed, delivered and then run, has to be owned by the right person and right function in Coles.. Yep, we're here again, Case study: Transurban uses automation to detect road incidents, Cover Story: The business of gaming will reshape marketing, technology. By Chet Kapoor, Chairman & CEO of DataStax. As a company rearchitects their processes, they also start to unlock more transformational possibilities. Although data has been hailed as the new oil, just like with oil, the value depends on whether we can clean it, refine it, and use it to fuel something impactful. Lowthorpe said it is important that data and analytics be interwoven throughout organisations, referring to the use of data and analytics to improve customer centricity as an example. Blackwoods, which is the largest provider of industrial and safety supplies in Australia and also part of the group, is currently in the process of replacing its 30-year-old Focus COBOL-based system with a new Microsoft Dynamics ERP. Coles has been running the insights applications for eight months across 1200 iPads in-store and the Coles Store Support Centre, and is rolling out a similar application for Coles Express. Think about analog and informal small businesses, such as a stand in a Turkish bazaar: the salespeople have a great deal of access to, and knowledge of, their customers and clients, but its all trapped in their minds. I once managed to persuade my grandfather to buy a cellphone; he never even bothered to take it out of the box. Wesfarmers doesnt seem to be immune from the underpayment epidemic admitting underpayment at Target and Bunnings. Digital transformation can be bewildering and exhausting for leaders and employees alike. Wesfarmers OneDigital has set 'SaaS model' standards for itself, supported by service standards, engineering practices and tools that together create a foundation for the nascent digital and data arm to grow. Bunnings, Kmart and Officeworks continue to deliver topline growth for Wesfarmers while Target was below expectations. The Evolving State of Digital Transformation. Here's a look at how modern tech fits into the customer service puzzle. Its problematic when companies decide to embark on a digital transformation agenda without having a clear definition, let alone vision, for what it means. The . Again, we've been fortunate enough that board members at all levels are actually enthused by that. Earnings before interest and tax came also came in 12% lower at AU$1.9 billion. Do you treat it as though it is a part of them? Bunnings conducted a pilot program for click-and-collect at a store in Tasmania to ensure the new IT systems were working properly. Since I have been able to take the team under my wing, we focus very much on being part of the business, rather than a service provider. Wesfarmers OneDigital sets its service standards Head of engineering Gurnam Madan. Get started by entering your email address below. At Wesfarmers we believe sustainability is about understanding and managing the ways we impact the communities and environments in which we operate, to ensure that we continue to create value in the future. As previously announced, Wesfarmers OneDigital is led by Nicole Sheffield and currently includes the OnePass subscription program and the Advanced Analytics Centre. This material may not be published, broadcast, rewritten or redistributed in any form without prior authorisation. Were not spending the time arguing who should be doing what.. The first and ongoing strategy is an extensive replatforming of the groups structured data warehouses to Oracle Exadata boxes. OneData, formerly the Advanced Analytics Centre, manages the Wesfarmers shared data asset, providing a single view of the customer and enabling the divisions to deliver a more compelling offer to customers. In this role you will be responsible for optimising data platform engineering and architecture, as well as designing and building data products. If IT foists outcomes onto teams and business leads, inevitably you get a sub-optimal outcome, he says. Aug 27, 2019 - 8.57pm Share After years of talking about lifting its digital capabilities, Wesfarmers. Our diverse business operations cover: home improvement and outdoor living; apparel and general merchandise; office supplies;health, beauty and wellbeing; and an Industrials division with businesses in chemicals, energy and fertilisers, and industrial and safety products. On top of that, weve changed the digital interactions. Wesfarmers' managing director of industrial David Baxby is overseeing the implementation of Microsoft Dynamics 360 at Blackwoods. Time is Running Out, Motorola's handy Bluetooth device adds satellite messaging, Linux 6.2: The first mainstream Linux kernel for Apple M1 chips arrives, Sony's new headphones adopt WH-1000XM5 technology at a great price, The perfectly pointless $197 gadget that some people will love. I wouldnt trade that for anything because it helps keep the role real. At the moment, the cloud isnt really geared for that; its geared for quick and easy renting of capacity. But at the heart of everything Coles IT has to do is deliver ways in which the business can save money so we can reinvest that money into the price point. That said, there is one thing that hasnt changed namely the fact that all of this is just the new version of an old task or challenge every leader has always faced throughout human history: to prepare their teams and organizations for the future, and create a better future. Without a model, a system, a framework, or reliable data science, any data will be useless, just like 0s and 1s. Copyright 2023 IDG Communications, Inc. The online sites, social media space and mobile phones are each a different touch point where we can change the customer experience. Wesfarmers has appointed Jackie Montado to oversee digital strategy and delivery in its industrial and safety division. However, as AI, machine learning, and big data becomes increasingly used across organisations, Lowthorpe acknowledged that ethics must be maintained as a priority in any data-driven business strategy. For example, in the past when PayPal sent payments via email, they had significant time to ensure regulatory compliance. Or what if it tells you that customers dislike a certain product how will this influence your product development and marketing strategy? Well, one Australian conglomerate which has recently begun to embrace digital transformation is Wesfarmers (ASX:WES). Managing Director (Acting) Michael Howard plans continued investment in every channel strategy with ongoing enhancements targeting improved online customer experience. Kmart sales increased $241m, more than offsetting a $67m decline in Target. Because of the need to understand how the business works, digitizing operations often fares better when led by the CFO or COO. Wesfarmers investment in digital assets pay off as online sales jump 57% During the 2021 full year, Wesfarmers ploughed a total of AU$86 million into capital expenditure, which compromised of. The focus is to get our foundations right as we grow and solve different problems for all of the [Wesfarmers] businesses, Madan said. View my verified achievement from Project Management Institute. Senior Data Engineer - 6 Months Contract. The third pillar is putting information in the hands of team members. However, if the brains behind the worlds and Australias- biggest companies think it is worth it, you should definitely be looking at how to digitise aspects of your business. Harvey points out his own team takes a highly disciplined approach around capital and investment, knowing what benefit levers will be pulled and what will be delivered before they embark on any project. But to enable the instant payments demanded in todays market required rearchitecting the PayPals organization, merging once separate divisions for payments and compliance into one entity. But even getting to the insights stage is not enough. In fact, the essence of digital transformation is to become a data-driven organization, ensuring that key decisions, actions, and processes are strongly influenced by data-driven insights, rather than by human intuition. Deloitte US | Audit, Consulting, Advisory, and Tax Services However, in FY20 Bunnings announced that would be outlaying $30 million on upgrading its online sales platform to enable click-and-collect. After years of talking about lifting its digital capabilities, Wesfarmers is finally putting its money where its mouth is with IT implementation projects costing $75 million at Bunnings and in the industrials division. What is needed is a shift in mindset, culture, and talent, including upskilling and reskilling your workforce so that they are future-ready. Reinforcing the importance of Catch to its digital strategy and online growth, Wesfarmers lured former Amazon VP Pete Sauerborn to lead Catch. 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