By Erin Harris, editor-in-chief
A Q&A With Erin Harris and Tom Schuetz, CIO, hhgregg
Today’s retail CIO must be equal parts technologist, trusted advisor, and business co-creator.
Tom Schuetz, CIO at hhgregg and Innovative Retail Technologies Editorial Advisory Board member, has spent the majority of his career in retail’s C-suite and knee-deep in the drastic changes facing IT. Here’s what Schuetz has to say about digital transformation, multicloud environments, and the ever-evolving role of the CIO.
As more retailers undergo a digital transformation, what does this mean for the retail CIO?
Schuetz: The digital transformation in retail has meant a watershed of opportunity for the CIO and the IT teams to contribute to both top- and bottom-line growth for the business.
The technologies around mobile, cloud, IoT, and real-time analytics have matured to the point that retailers can now effectively string together an enhanced customer journey, reduce transaction friction, and drive increased revenue with an improved customer experience. For example, BI Intelligence cites nearly $50 billion in retail sales in 2016 was influenced by beacon-triggered messaging to consumer devices in the moment.
The digital transformation continues throughout all areas of the retail business — collaboration tools, enhanced supply chain visibility, and powerful customer analytics. The additive combination of all these technologies will provide for exciting times for both IT and the business into the foreseeable future.
Tom Schuetz, CIO, hhgregg
As enterprises move to the cloud, multicloud environments will be the norm, not the exception. How should retail CIOs prepare for multicloud environments?
Schuetz: Considerations for the move to cloud are agility, flexibility, and cost-effectiveness. The CIO is probably considering business-adopted cloud environments and internal IT projects that started as “proof-of-concepts,” but have evolved into business-critical production systems.
As CIOs prepare for management in a multicloud environment, we need to develop an effective strategy to manage the diverse cloud resources upon which the business depends. These cloud resources — often interconnected with rich APIs and delivered in scaled containers — add a new level of complexity to the environment. The strategies we apply today concerning demand intake, simplification, standardization of data interchange, performance monitoring, and service level metrics do not change how we will approach and manage the cloud — the methods and tools we use will likely change.
Some large cloud-hosting vendors are creating tools to allow for intracloud management across the major providers (e.g., AWS, Google, and Microsoft). These tools are not quite there yet, but expect large cloud-hosting providers to start presenting other vendor clouds to the customer for management visibility, provisioning, and performance monitoring in the near future.
CIOs will want to follow their critical customer data to ensure compliance with regulations (specifically data sovereignty compliance in multinational organizations) as well as employ a common security model for authentication and access. Controlling access with one standard provisioning tool will ease the ongoing management and improve compliance posture for the organization.
While the combination of social, mobile, analytics, and cloud has been present and disrupting IT departments and enterprises as a whole for over two years now, in many ways organizations have still not fully embraced them. Do you believe this to be true?
Schuetz: I would tend to agree. You have to remember that it took retailers about 10 years to get the basics of omni-channel retailing flowing through their new and legacy systems to a point where the end-to-end business processes were perfected.
Barriers to adoption remain the same — legacy systems, new system investments, switching costs, and internal labor skills. However, the organization will be forced to adopt quicker this time around as the business requirements drive the change for competitive parity and differentiation.
These capabilities have all presented themselves in the past five years and are now at a point where the use cases are well-defined, as are the expected benefits. The rate of growth and technical advancement has accelerated with the additive nature of the technologies creating an opportunity that is larger than its parts.
IoT is a great example and one which we are working on in the big ticket appliance area as it relates to extended product warranties. The last thing a product warranty business wants is a customer calling with a problem — it’s not the friendliest process for the consumer. But what if we were now able to gather appliance performance data via connected devices and proactively communicate to the customer of an imminent failure that could be avoided — finally, value-added service in a traditionally nonfriendly business process. And the components to build this type of application are perfect for an IaaS solution.
Tom Schuetz, CIO, hhgregg
The role of the modern IT executive is complex and has evolved to include both technologist and business-focused leader. In what ways has the modern retail CIO evolved?
Schuetz: The evolution of the CIO from “trusted operator/advisor” to “business co-creator” has been interesting. I come from a business background, and my bosses always instilled the “you had better understand our business before you tell me what I need” mantra. Arguably, IT is the best place to see the business in its entirety — the business can no longer run outside of IT, and there are no longer silos of automation.
The applications we implement and manage, such as merchandise planning, ERP, pricing, POS, WMS, labor planning, timekeeping, etc., forced the IT department to learn the functional side of applications intimately to often act as the change champion on behalf of the business unit requiring the new functionality. We’re often the champion of system replacements on behalf of our business partners, helping them with the business case, project management, and overall coordination of training and implementation. Partnering with the business at this level really helps further IT business understanding and helps the IT organization be seen as a partner in the success of the business outcome.
The business is wholly enabled by IT, and, as such, IT has been forced to learn the business and move from technical stewards to trusted subject matter experts to co-creators of value.
When you attend a retail industry conference or event, what educational sessions do you attend and why?
Schuetz: I look for customers speaking about their experience in the implementation of new technologies. What worked, how long it took, cost, and lessons learned are valuable as we consider similar solutions for our organization. Making a personal connection with these presenters who are willing to act as a sounding board as we evaluate similar technologies has been invaluable to reduce risk for my organization.
In terms of true educational sessions, I try to align the business’ strategic plan and projects I am being asked to deliver with the technology platforms and solutions in the market. If a “cloud first” strategy is approved by my business, I will want to learn about companies and vendor partners that went through the same journey I am about to embark upon (e.g., what were the critical items to evaluate, prework and sequencing of events for success, considerations, etc.).