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The Cloud is Just the Beginning, Not the End, of the Journey

The Cloud is Just the Beginning, Not the End, of the Journey
In any conversation about IT architecture, data, or business transformation, the cloud will feature heavily. And rightly so. The cloud presents significant opportunities to do things better, differently and more cost effectively. It’s also very easy for it to be seen as the ‘final destination’ though, a tick box goal – we’ve got to be in the cloud to compete. In reality, the cloud is much more than a place – it is the design model for the Retail and CPG of the future. As such, simply getting to the cloud is not enough to be successful. It’s about both how you get there, and what you do once you arrive.

Tempted by low initial costs, ease of use and the relative simplicity of cut and pasting data from existing systems into new cloud applications, many rush to replicate what they have now on a new cloud infrastructure. Indeed, leading ‘hyperscale’ cloud providers positively encourage this approach. Tip all your data into our elastic storage pools and work out how to integrate and use it later. This approach ticks the box of being in the cloud, and may also save some costs in the short term. However, it can really miss the point of the cloud, and waste a perfect opportunity for true transformation.

Avoid disconnected cloud silos

The real value of the cloud lies in its opportunity to transform the way the organisation uses and understands data. Ultimately that is a governance and leadership issue. Most CEO’s and other C-Suite personnel don’t understand the nitty-gritty of data and IT architectures – and they don’t need to. What they do need to understand are the opportunities around connectivity, governance, and control. This is what is often missed as teams sprint to get into the cloud.

Clear, top-down governance is needed to prevent cloud applications from becoming a myriad of disconnected data silos solving lots of little problems. There certainly is value in solving those problems, but doing only that results in running to stand still. To flourish in the hyper-personalised, omni-channel future of Retail and CPG, you’ll need an architecture that can help solve both the old AND new, really complex problems/opportunities. Those that require thousands of predictive models that can score millions of records, using integrated data from dozens of systems across multiple departments.

For example, working with Teradata, a leading U.S. drugstore chain now delivers more than 30 personalised recommendations, to each of its 90 million loyalty card holders, every single week. To do so it integrates transactional, promotional, product data and customer history. It then analyses 3rd party data on pollen counts, weather, and locations to generate 1.3 billion optimised scores each week to drive the most relevant messages to every single customer in near real-time. This level of personalisation is simply not possible if data is locked in departmental, application or analytics silos, whether in the cloud or elsewhere.

Collect once, refine once, use many times

An enterprise data strategy, defined, understood, and driven from the top of the organisation will set the correct parameters for a data architecture that provides the strongest foundations for digital transformation. Rather than a myriad of fast, seemingly cheap, departmental projects shifting to the cloud, leaders need to define a common set of principles to ensure that data is collected once but integrated, processed and modelled in ways that are repeatable and useful to all consumers within the organisation. Establishing these rules for how you move to the cloud is one of the foundations for a successful journey.
Figure of retailers and CPG of futureRemember to look beyond the ‘lift and shift’ mentality, or at least having a stage two of your plan once you have done that. Simply replicating what you are currently doing by moving it to the cloud has little long-term value. If you have an old bike and move it from the front of the house to the back of the house, you still have an old bike.

The big, scary challenges facing Retail and CPG today require collaboration to solve them. Luckily, the cloud provides the perfect infrastructure for collaboration, dissolving boundaries between departments, functions, and applications. Shifting to the cloud can also create the opportunity to change people’s behaviour, so that a shared, trusted data set becomes the foundation of debate and decision making. Data and expertise can then flow seamlessly across the organisation and be integrated into powerful features that can be created once and then used at scale across the enterprise. The right data architecture will support this, but the CEO and their team must put the governance in place and lead the ‘one team’ changes in behaviour required to maximise the return on investment.

There are many short-cuts to the cloud, and they can deliver initial returns, but to be transformative takes time and investment. Those that sprint to the cloud without a grand plan may have the means to meet the challenges of today, but probably not tomorrow challenges. Just like any investment, moving to the cloud needs a well thought out strategic goal, clear objectives, and detailed plans for driving as much business value as possible to achieve the optimal return on investments. As with so many things, the combination of the best technology and people will deliver the biggest dividends in the long run. The cloud is not the latest shiny new toy to be picked up and put down, governed only by departmental leads. It is the foundation of the future of your organisation, and decisions made now will shape the trajectory of your business for years to come.

Quick fixes may be appealing, but opting for deeper business transformation is clearly the smarter choice. Ultimately, your IT department will be responsible for building your cloud architecture, but building the successful Retail & CPG organisations of the future is the CEO’s accountability. Defining the right route to the cloud, and knowing what you plan to do when they get there, will therefore be critical for long-term success.
Portrait of Chris Newbery

Chris Newbery

Chris Newbery leads the Retail & CPG Industry Consulting practice for EMEA. Working with major global Retailers & CPG's to deliver high value business outcomes, strategy and thought leadership to achieve Architecture, Advanced Data & Analytics, Supply Chain, Manufacturing, Finance, Marketing & Commercial excellence, through Teradata's software, services, consulting and partnerships. Before joining Teradata, Chris has driven growth for leading Retailers and global CPG's since 1998, with a cross-functional background having worked in Consulting, Customer, Marketing, Digital, Operations, Commercial & Merchandising roles, across all online and offline distribution channels, in multiple countries. View all posts by Chris Newbery

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