In their final piece for WhichPLM this year, Orlando Zambrano (Oz) & Trina Foster of Manner Solutions discuss the industry’s fascination with ‘digital transformation’, and the steps needed to ensure success.
These two words have captured the attention of, and driven enormous investment from, the retail industry as a whole. And rightfully so, when the stakes are do or die. Yet, what people in charge don’t care to openly admit is that digital transformation comes with an implicit haunting that takes away the joy of a good night’s sleep, leaving many with the nostalgia of the ‘good old days’ – when hard work alone could warrant business success. In an industry such as fashion, driven by creativity, is it possible that the subject of digital transformation could be a big headache that makes us all ask about how to achieve readiness? And, in spite of the sheer time the topic has vested in C-suites and boardrooms, do people secretly wonder if transformation is even possible?
If this is you, you’re not alone.
In July 2017, a survey of 1,239 global IT and business professionals, conducted by the digital performance management company Dynatrace, showed that 48% of its participants “stated digital performance challenges were directly hindering the success of digital transformation strategies in their companies.” The survey also refers to an appalling 75% of respondents, “who had low levels of confidence in their ability to resolve digital performance problems.” The lack of confidence of those in charge could not be more eye opening. And this was only two years ago.
The particular thing about using technology to solve data sharing processes in multi-function matrix organizations, where the product journey does not follow a linear chronology, is that it is tough. It takes a clear understanding of intertwined workflows and intricacies of data dependencies to be able to put in place frameworks that target the necessity of purposeful information at the time when it is useful and valuable for planning and reporting purposes. This may result in head twisting for IT professionals that focus on satisfying the demand for off-the-shelf applications that solve unidimensional problems, thus enduring silos by encapsulating disjointed data for limited group use. But – and we can’t stress this enough – change is possible, and there is a business upside to transform digitally.
There is a significant opportunity to improve and optimize data sharing in fashion businesses. Think of each group – design, production, tech, merchandising, marketing, sales, customer services, these cross-functional disciplines are fluid and rely heavily on real-time data and images. The current state has them working on unique manual processes and files. They may have their systems of record – a PLM, a CRM, an ERP – but nothing is helping them see the relevant style metadata in one place. In our experience, these changes are rarely communicated effectively, and, as a result, teams struggle to manage critical business needs to communicate and engage with customers and consumers.
We believe it’s time to wake up and shake off the hokum of digital transformation. The fact that we live in a world of data that powers productivity accentuates the need to access real-time information so organizations can make on-demand data-driven decisions, especially organizations that thrive on creativity. If your roadmap to “transform” does not deliver on that, then it may warrant a good second look. Technology must enable productivity in a way that supports growth and positive ROI. Systems must be able to pay off planning and reporting needs with immediacy at low operational risk – and do so in an all-access, democratic, and even way across the organization. If the basics are not in place, true digital transformation won’t be possible.
We’ve had the opportunity to work with multiple organizations whose focus is to automate processes. The good news is that companies are increasingly spending more time addressing roadmaps that are rooted in the problems that they need to solve. But make no mistake, to be able to leverage AI initiatives, you need data, and an environment for the convergence of normalized and actionable product data.
Gone are the days of working for companies that will task functional teams with “making things happen” with disregard for creating institutional processes and capabilities. The fact that they see burn out and turnover is expected and predictable. It is the job of the very top of the organization to instill these processes. No wonder that, according to the 2019 McKinsey and Business of Fashion “State of Fashion” report, retail and fashion sectors have among the highest employee turnover – and this affects the bottom line. The Society of Human Resource Management (SHRM) estimates that replacing an employee can cost anywhere from 90%-200% of their salary depending on their position. Not to mention the negative impact on lower morale, engagement, and performance that impacts the loss of institutional knowledge and increase of training costs.
Despite where organizations may find themselves on the road to transforming, it is clear that they need to focus on the basics before they start to do so. This means that processes for sharing and aggregating data are clearly defined and frameworks (the way data is used, how it is used, by whom, when, why, and overall requirements) are adopted by core users. We have found that the lack of understanding of workflows can mean a very rocky road to transform – or even correctly function. For instance, an excel extract of a subset of data from an enterprise system to inform a workflow that may yield further business data is far from what digital transformation is supposed to be. When teams spend more than 60% of their time chasing data (and people to provide it) to do their job, it represents a waste of the capacity of any organization, and a decrease in the time that could be dedicated to creativity.
And this could explain why digital transformation is a main concern of business leaders. It’s not surprising that the rise of AI makes the list of the four factors that concern CEOs the most, according to an editorial piece in the Business of Fashion a couple of years ago:
- An outdated business-model
- The rise of AI
- Human Resources
- Environmental sustainability
In discussions with clients, managing data and retaining talent are concerns we hear time and again. It’s hard to decouple these two. We believe in the lasting relationship between managing and optimizing data and retaining talent. This is the reason digital transformation plays a much more significant role in companies that see themselves trying to resolve the puzzle of how to get rid of analog processes that don’t reflect the reality of their business demands and the interest and necessities of their staff. The fact that the impact of technology on employees doesn’t get enough attention speaks volumes on the issue. It appears that the majority of technology investment is externally-focused, e.g. e-commerce platforms, social media, and interactive retail experiences. But brands also need to invest in technology to motivate and engage employees, and empower them to develop, produce, and market the most innovative and inspiring products possible.
In conclusion, despite how daunting digital transformation may seem and how little confidence some business leaders may have on its success, it takes in-depth knowledge of fashion operations logic to be able to point technology to produce automated solutions that are effective and have a more significant and far-reaching business rippling effect. People live connected lives, and they come to expect the same connectivity when they come to work. Digital transformation is an essential and exciting part of our days, and companies must walk the walk if they are to compete in a culture where consumer immediacy has the upper hand.
It’s time to see the bottom of the pool and to hope that digital transformation will save us all in the end.