I recently wrote a previous blog about Starbucks Digital Transformation to highlight that, it is really happening and that there are actual business results out of their strategy. It is not only a marketing campaign nor a crazy idea but a vision and a strategy to drive business outcomes. As part of Digital Transformation, Cloud, permeates everything we do and powers digital transformation. Its impact on customer experiences, business processes and models, and workforce innovations, is undeniable.
To continue the conversation, with Starbucks as an example, I found some interesting readings and here are some conclusions:
Customer experience; Starbucks driver for Digital Transformation
This is just a personal conclusion but, from a business outcome perspective, I believe it’s fair to say that this is the main driver that Starbucks wants to achieve. According to their CTO, Gerri Martin-Flickinger, their focus is to provide customers with a “consistent global user experience” regardless of what store they visit. Its not only a geo related experience but also a currency experience and beyond; it’s getting to know you better and understand when you drink coffee, from what store, at what time during the day, what you order and more. It goes beyond than the barista knows your name and, probably, remembers what coffee you ordered last time.
“With about 90 million transactions a week we know a lot about what people are buying, where they’re buying, how they’re buying,” said Martin-Flickinger. “And if we combine this information with other data, like weather, promotions, inventory, insights into local events, we can actually deliver better personalized service to other customers.”
From a cloud (not too technical) perspective
Starbucks is planning to migrate everything to the cloud. The status according to an article dated on Dec. 2016:
- Currently they have 22 different mobile apps around the world so the plan is to unify everything into one single app.
- To build that consistent global user experience, Starbucks plans to connect its device applications through a cloud-based commerce system that will give it the “elasticity and stability” not available in Starbucks data centers
- The rewards program requires connecting the in-store point-of-sale system with the back office accounting system
- The mobile order-and-pay system was then layered on top of that and now, personalization is being layered on top of that – all in that same back-end system
The solution then is to re-architecture it through the cloud to connect all locations, whether corporate-owned or licensed. A huge amount of data will need to be stored and analyze the data coming from the store such as store location, hours of operation, products, price and others; and marry that information with the customer’s personal data. For me, this is the perfect scenario where we see a Hybrid IT world.
From a recent IDC study, we have seen that there are five levels of cloud maturity and that the companies with a cloud-optimized strategy, only 3%, excel in business outcomes, as Starbucks has. When adopting cloud, companies need to make sure that they have a clear strategy to lower what IDC call, the cloud gap. This gap comes in different forms depending on the IT infrastructure, the company culture, processes, etc. Some of the technological issues that I believe, Starbucks is addressing concerning the cloud gap, are the following:
- Application management and performance. How to ensure a consistent management, compliance, and user experience from one environment to another?
- Security. Cloud…infrastructure…customer’s personal data…always on… This one has a lot to mention. No company would like to see their name on the news as the last attacked/hacked company.
- New network needs. Embracing cloud will bring some new traffic patterns to their network and no one wants to be disappointed with the network performance.
- DevOps environments. Embracing a DevOps model with continuous development and integration requires profound organizational and cultural change.
There might be others, for sure, but I believe that these four are a good start. In fact, some articles position Starbucks as a technology company rather than a retailer or coffee shop. When you go to their website and check the job offerings, look what I found in the “Technology Careers” section :
- Sr. network engineer: will focus on the Retail Network space encompassing multiple datacenters and thousands of stores internationally. Experience with Cisco Systems switches and routers. Able to implement network performance improvements based on understanding of network trends and patterns.
- Sr. devops engineer-security. Ability to establish cross-functional, collaborative relationships with business and technology partners. Enables team members to understand “why” security controls are important to mitigate enterprise risks
The list goes longer but I’m pretty sure this reinforces my point on how they are addressing some of the challenges listed above.
I would suggest that first, you need to define the business outcome that you want to achieve on your digital transformation journey and cloud as one of the enablers. Then think on your current environments and the complexity of your IT infrastructure. Marry both and list the vendors and providers who can help you. The most trustworthy ones and start from there. It does not matter if you want to migrate everything to the cloud as Starbucks is doing, you’ll need some help in management, security, analytics and network as you can probably foresee or saw if you already have some cloud environments. We can:
- Enable application lifecycle management with one integrated platform for your traditional and cloud applications
- Secure users, data, and applications everywhere
- Use both infrastructure and application insights to improve your security and customer experience
- Ensure scale, agility, and secure user-to-cloud access across your environments
- Offer your choice of technology, professional services, and cloud partners to help you meet your specific business needs
Cloud is not a product or a single solution. It is a consumption model that address a strategic business or IT need. We can help.
- If you want to assess your company in your cloud maturity (using IDC best practices), go here.
- Click here to see how we can help in your cloud strategies.