Six CPG technology trends enable digital enterprise
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The document discusses three digital disruptors and three digital enablers impacting the consumer goods industry: 1) Data supply chain - Data should flow throughout the value chain and be used to power analytics and personalized experiences. 2) Digital/physical blur - Technology will integrate the digital and physical worlds to provide contextual information to consumers and employees. 3) Crowdsourcing - Companies can expand their workforce and ideas by tapping into crowdsourcing platforms. The digital enablers discussed are: 1) Business of applications - Companies should develop app ecosystems for flexibility. 2) Hyperscale infrastructure - Harnessing big data requires new approaches to data processing and storage. 3)
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Six CPG technology trends enable digital enterprise
- 1. Consumer Goods 2014 Technology Vision: Every Business is a Digital Business
- 2. Copyright © 2014 Accenture All rights reserved. 2 Discover the Next Wave of Technology Disruptors and Enablers in CPG 2014
- 3. Copyright © 2014 Accenture All rights reserved. 3 Digital Disruptor No. 1: Data Supply Chain
- 4. Copyright © 2014 Accenture All rights reserved. 4 Unleash Your Data to Empower Your Employees, Supply Chain and Consumers THE IMPACT: • Data is not static, it should not live in silos and it has no real end point • It is becoming part of a “Circular Economy”, living and breathing through the data supply chain, being shared, used and even returned like other products • Pull data from across the value chain over and again, using it to make better business decisions and deliver personalized experiences WHY IT MATTERS NOW: • Easy availability of data is allowing companies to innovate in analytics – identify your strategic issues, then source the data you need from new technologies – iBeacons, video analytics and others – and new partners • As consumers demand customization, the best forecasters will be fastest to market and most efficient, serving the right stock at the right time • In the factory, machine learning algorithms will help maximize manufacturing uptime by alerting employees to predictive maintenance
- 5. Copyright © 2014 Accenture All rights reserved. 5 Bringing the Data Supply Chain to Life We are working with Verizon Wireless to design, build and bring to market a service that helps US retailers, publishers and venues understand and engage with audiences more precisely, efficiently and profitably Beiersdorf is sharing their own data plus syndicated data throughout their organization, helping them better understand market share development across a variety of products, brands, and countries
- 6. Copyright © 2014 Accenture All rights reserved. 6 • Develop a data architecture strategy that enables movement of data • Break down data silos so users can access the breadth of available info intuitively • Leverage data services platforms and data discovery tools • Look for insight gaps against critical parts of the value chain • Isolate one key problem and develop a data supply chain for it • Identify how to capture the right data, put it in the right format and share it at the right moment Building Your Data Supply Chain Package it for action Unlock it Let it flow
- 7. Copyright © 2014 Accenture All rights reserved. 7 Digital Disruptor No. 2: Digital / Physical Blur
- 8. Copyright © 2014 Accenture All rights reserved. 8 Connect Across the Value Chain Through Context- rich Intelligence THE IMPACT: • Technology will become a central part of the way consumers interact with brick and mortar stores • Data collected by devices can provide demand visibility from the aisle back, enabling micro-adjustment of the supply chain • Employees in the field, at their desk or after hours will be empowered with insights and next-best-actions at the moment of need WHY IT MATTERS NOW: • Wearable electronics, such as heads-up displays and smart watches, will heighten consumer and employee expectations for improved experience • Distributors and sales agents can be enabled with optimized routes and task lists that adapt dynamically to changing market insights • Information will be embedded in the real world – from planograms to plant equipment performance – to access untapped potential across the value chain
- 9. Copyright © 2014 Accenture All rights reserved. 9 Bringing the Digital / Physical Blur to Life Google Glass Fitbit Flex Wireless Activity + Wristband Nest Learning Thermostat Today’s latest innovations blur the digital / physical line
- 10. Copyright © 2014 Accenture All rights reserved. 10 Finding Clarity Amid the Blur • Establish platforms that enable the creation and delivery of contextual info • Integration with retailer, supplier and distributor systems in near real time • Use dynamic analytic engines to identify the right offers per consumer • Deploy a digital content management system to move personalized content • Pilot programs to evaluate the effectiveness of digital promotion tactics and technologies Eliminate lack of context Get personal and execute with excellence Test and toss
- 11. Copyright © 2014 Accenture All rights reserved. 11 Digital Disruptor No. 3: From Workforce to Crowdsource
- 12. Copyright © 2014 Accenture All rights reserved. 12 Expand Your Workforce and Idea Pool to Differentiate from the Competition THE IMPACT: • Access new ideas that increase consumer relevance and sales • Increase your speed, scalability and competitive differentiation through an expanded workforce • Source unique and difficult to find capabilities, and pay by the week, hour or even minute to manage margins WHY IT MATTERS NOW: • Consumers want to co-create new products – through crowd “funding” they even pre-pay for them, guaranteeing demand before product launch • Rallying your internal crowd – your employee base – gives a low cost and low risk way of uncovering new insight and ideas • The breadth of challenges in today’s market requires an ever increasing breadth of expertise – the crowd lets you tap thousands of experts for fast, differentiating solutions
- 13. Copyright © 2014 Accenture All rights reserved. 13 Tapping the Full Potential of Crowdsourcing Companies are turning to Kaggle to help solve problems ranging from retail store location optimization to airline flight optimization PepsiCo’s “Do Us A Flavor” campaign, asks consumers to come up with the next flavors of Frito Lay chips - with over 4 million interactions in the first US program
- 14. Copyright © 2014 Accenture All rights reserved. 14 • Bring consumers into the innovation process for new products and line extensions • Leverage an expanded workforce to gain immediate access to specialized skills • Use the crowd to access real-time information • Ensure this data flows through your service organizations What it Means to Rally the Crowd Co-create Staff up for the short term Bring the store to you
- 15. Copyright © 2014 Accenture All rights reserved. 15 Digital Enabler Trend No. 1: Business of Applications Create an ecosystem for flexibility and responsiveness THE IMPACT: • Software is becoming a core competency for all companies • Shift toward simpler modular apps for customer and consumer engagement • Expose more of the data supply chain to outside developers – e.g. serving product data to e-commerce sites or offer a coupon engine to eRetailers WHY IT MATTERS NOW: • Mobile apps hosted on the cloud can provide agility and scalability to enter new markets • Integrating apps to create an ecosystem can increase consumer engagement and meet consumer demand • Shifting towards integrated app platforms enables rapid development on top of the entire value chain – data and apps from the farm to the shelf to the consumer
- 16. Copyright © 2014 Accenture All rights reserved. 16 Bringing the Business of Applications to Life At Michelin tire company, Accenture rolled out a mobile app store capability, an app factory and a set of APIs to help independent tire dealers develop better apps for their customers Walgreens is using Apigee’s API management platform to integrate their systems into a broad array of third-party apps that leverage Walgreens’ services
- 17. Copyright © 2014 Accenture All rights reserved. 17 Build Your Software Competency Take stock Own your apps Serve insights
- 18. Copyright © 2014 Accenture All rights reserved. 18 Digital Enabler Trend No. 2: Harnessing Hyperscale Power up to control and capitalize on mission-critical data THE IMPACT: • Today’s digital technology creates an exponential need for data processing power • To create increasingly customized experiences, harnessing the right data is key • Gathering this data will require a whole new look at infrastructure WHY IT MATTERS NOW: • The demand for processing data at scale is rapidly increasing • Today’s hyperscale applications have the capacity to perform real-time analytics on huge datasets in-house • Infrastructure innovations are paving the way for faster, cheaper and bigger hyperscale systems
- 19. Copyright © 2014 Accenture All rights reserved. 19 Bringing Hyperscale to Life IT’S THE ERA OF “ALWAYS ON” The services provided by hyperscale data centers are expected to be up 100 percent of the time—not just 99.99999 percent of the time.
- 20. Copyright © 2014 Accenture All rights reserved. 20 • Identify your data storage needs • Forecast their expected usage based on one and three-year growth strategies • Update your digital business’s most demanding computing processes • Maintain hybrid hyperscale deployment strategies that improves offerings across SaaS, PaaS, and hardware Benefit From the Renaissance in Hardware Innovation Inventory your IT Model before you modernize Be flexible
- 21. Copyright © 2014 Accenture All rights reserved. 21 Digital Enabler Trend No. 3: Architecting Resilience Build a CPG enterprise that is ready for anything THE IMPACT: • Consumers are increasingly using online channels and expect that their information will be protected • Keeping mobile apps, social media, in-store and e-commerce technology running requires building systems that survive failure, and then recover quickly WHY IT MATTERS NOW: • With today’s technology, data breaches can and do happen; building up resilience is a critical factor for succeeding in the digital world • With economic pressures and increasing concern over quality, manufacturing processes need predictive optimization to maximize uptime and use of raw materials
- 22. Copyright © 2014 Accenture All rights reserved. 22 Bringing Architecting Resilience to Life Netflix uses a program called Chaos Monkey—an attack force whose entire mission is to try and make Netflix’s systems fail. The company learns from each attack to build up resilience. This is the kind of mindset very few CPG companies have, yet it is a critical factor for success in the digital world
- 23. Copyright © 2014 Accenture All rights reserved. 23 • Look for security and infrastructure- related investments that maximize business process resilience per dollar spent • Shift compute loads to public cloud infrastructure • Create a security road map to build advanced detection and external threat intelligence capabilities Engineer to be a Nonstop Business and Reduce Risks Invest in your suit of armor Migrate business risks Thwart threats
Notas do Editor
- Each year at Accenture we examine the top technology trends driving business value. This year’s trends are: A data supply chain The digital / physical blur From workforce to crowdsource The business of applications Harnessing hyperscale Architecting resilience Explore the next wave of technology disruptors and enablers that CPG industry leaders need to act on in the next three to five years as they continue the journey to becoming digital enterprises.
- Imagine Claudia leaving for work at 6:55. She fires up a navigation app on her mobile phone to get the least congested route to her office. In the background, her app looks for deals based on her preferences and purchase history. A local coffee shop offers a deal in real time based on Claudia’s recent purchasing behavior and her preference for vanilla—as indicated through her “likes” on Facebook. Claudia gets the pop-up offer and instead of grabbing a cup at the office, she quickly swings through the drive-thru of the coffee shop to claim her 50% off beverage.
- The concept of a Data Supply Chain is a critical need as CPG companies evolve to digital enterprises. Think about your data as more than a static element—the latest buzz word is data lakes which describe the vast pools of data. Data needs to be something that lives and breathes through the supply chain, is shared, used, even returned—just like other products. Our research shows that only 1 out of every 5 companies actually integrates data across the enterprise. When you take that into consideration, it explains why, while 80% or our clients indicated that they are investing heavily in analytics in our latest high performance IT research, only 40% say they are getting the value they want out of the data. So, we know data is important, but we haven’t yet made it flow through the organization. To create a data supply chain, you must think of an enterprise analytics strategy and data governance in order to ensure you have the ability to treat it in the right way. CPG companies have access to vast amounts of internal and external data that can be harnessed to improve decisions around consumer products, engagement and experience management. And doing this today is critical given increased competition, the ability to engage directly with consumers, and their rapidly changing expectations and localized tastes. Our recent research on analytics in consumer goods revealed that while CPG companies realize that Analytics is a required capability to compete effectively in today’s global marketplace, few have succeeded in capturing the business value they wanted or expected from their Analytics investments. While companies have pockets of localized Analytics capability, fewer than half have ingrained Analytics or believe it to be a differentiating capability within their organization. We believe these challenges can be addressed if companies take the time to develop an enterprise-wide Analytics strategy and underpin it with an operating model designed to harness the power of Analytics. Taking this type of issue-to-outcome approach is critical because it puts the focus where it should be: on tying Analytics directly to making decisions, taking action and delivering value for improved business performance. The results of our research also show that CPG companies are more adept and focused on descriptive rather than predictive capabilities. Consistent with this finding is that firms appear far more focused on data management activities than on things such as data visualization or predictive modeling (32 percent versus 8 percent and 9 percent, respectively).
- We are seeing this Data Supply Chain trend come to life in CPG today. Through our research, we found that many CPG companies have specialized teams providing Analytics services or capabilities. This approach allows companies to spread these rare skills across the business so that they enhance decision-making in existing business processes. The downside is that it doesn’t build a sustainable, enterprise-wide Analytics capability. Instead of bolting Analytics onto current processes “as needed,” we advocate adapting cross-functional processes, activities, roles and responsibilities to infuse Analytics into daily decision-making. This approach generates a greater return on Analytics capabilities, as well as institutionalize their use in everyday decisions, in near real time. Companies will need to reengineer decision-making in business units and functions to become more Analytics-driven. It will take conscious effort, because even though 62% of CPG companies we surveyed believe that Analytics makes for “quicker, more effective decision-making,” only 25% habitually rely upon Analytics in that process. Companies will also have to take a hard look at their ability and willingness to re-engineer processes so that functions such as marketing, sales, supply chain and service work more collaboratively to use consumer data. CPG companies will also need to coordinate with retailers to ensure that the new insights are acted upon at the shelf. With digital and mobile technology and automation, data and analytics can be shared across the extended enterprise in real time, and quickly and easily applied to processes to improve decision-making. I have a few examples of this to share. Accenture has been working with Verizon Wireless to design, build and bring to market a new service that helps US retailers, publishers, venues and other enterprises understand and engage with audiences more precisely, efficiently and profitably. Verizon Wireless Precision Market Insights is powered by the layering of behavioral audience insights based on mobile engagement, location and demographic information. Also, Beiersdorf, a global skin care provider, is using their own data plus syndicated data from research companies such as Nielsen, sharing it throughout their organization and to board members to understand market share development information across a variety of products, brands, and countries. It’s a great example of how you should think about not just your own data, but outside data as well. To develop and run a Data Supply Chain like this requires special skills that are difficult to find. More than 70% of CPG companies are actively looking to hire analytics talent. Analysts with advanced Analytics skills along with an understanding of the complex CPG network and the ability to deal with volumes of structured and unstructured data will be the key focus area for the coming years. Our experience is that most formal Analytics organizations require several analysts of various tenures across roles and skill levels.
- Unlock it: Think about where you can get the raw ingredients to manufacture the most valuable insights. Develop a data architecture strategy that enables movement of data and breakdown of data silos, so that users can access the breadth of available information and increase ROI on data and analytics investments. Let it flow: Key to uncovering new insights are tools that enable movement and examination of data, including data services platforms and data discovery tools. Make data available and look for gaps against the critical parts of the value chain. For example, trade marketing may be a spot in the value chain where optimization can drive major impact. Package it for action: Rather than trying to put an ocean of data through a funnel, isolate one key problem and develop a data supply chain for it. Identify how to capture the right data, put it in the right format and share it at the right moment. Realize that data distribution is not limited to people inside the company—it may include packaging data for customers, regulators or even consumers.
- Imagine Lena heading for the drug store with a quick hit list of health and beauty items she wants to purchase before a weekend trip. She enters the store and opens the retailer’s mobile app, which knows the store location, based on geospatial data pulled from Lena’s phone. The app syncs up with Lena’s shopping list app, which then highlights those items on an interactive map of the store. Within minutes, she easily finds everything she needs, aside from one item that is out of stock. Not to worry – she selects the “home delivery” option and that item is on its way. Meanwhile, the retail system notices Lena’s order and informs CPG field agent Alex that there is a potential stock issue. Cues from Lena’s shopping experience guide some of the actions that Alex will take on his store visit. He resolves the issue on the fly and is sure to email Lena a promo code that she can apply to her next online purchase with that brand.
- The lines between the physical and digital worlds are now blurring When digital technology is seamlessly infused in real-world experiences, it yields rich and contextual information to augment experiences Wearable devices, smart objects and machines are providing us with real-time intelligence that is changing how consumers interact with products and how CPG companies operate. Data is now being continuously streamed and captured on consumption, shopping, and lifestyle behaviors. This creates new opportunities for insights, but also brings new challenges with data storage, process, and security Consumer Goods companies can now make more informed decisions within a small window of opportunity that matters - interaction with consumers at the point of sale and point of use, for example, allowing for more real-time, in-context interactions and memorable experiences Because of these real-time, in-context, and always-on opportunities, consumer needs can be anticipated and predicted even before consumers themselves realize them A recent example is Amazon’s announcement that Jeff Bezos is considering the use of drones to deliver packages from a warehouse to your door. While this may seem far-fetched and certainly has many security and regulatory implications to think through, it’s not as far off as you think. It certainly opens our minds to the kinds of things that can leverage similar technology. Already real estate agents are using drones to take aerial photos of homes they are listing on the market. There’s more to come and this is an exciting space to watch. You will also realize the benefits of the digital/physical blur beyond the commercial side of the business. Digital devices in manufacturing plants and on production floors will enable plant management to see “inside” manufacturing processes to identify issues before they strike and enable higher uptime.
- Wearable devices are now more prevalent than ever (and increasing). In fact, in a recent Accenture survey on Digital Consumers, more than 52% plan to buy a fitness monitor, 54% a health monitor and 59% a home safety monitor, showing the various ways that digital is entering our daily lives. Consumers are expecting more personalized and in-context interactions Device adoption is also increasing internally within corporate functions (supply chain) Content is increasingly being developed to create these second-connections with consumers Google just placed a huge bet on Nest What does this mean to you? Empower your retail execution and field sales teams to deliver more targeted, successful compliant promotions by automating core processes and providing your in-store execution team the right information to make informed decisions with intelligent alerts highlighting key promotion and NPI related tasks Support multi-roles with all mobile functionality on one device for retail execution, merchandising, direct store delivery and van sales roles. Drivers can better plan tours and manage vehicle checks, as well as monitor stock levels, manage merchandising and other sales activities—and more, supporting efficiencies from A to Beyond 2017, Gartner estimates that over 50 percent of analytics implementations will make use of data streams generated from machines, applications and/or individuals These new data streams and devices require new data capturing, storage, and security solutions—will you be ready?
- Eliminate lack of context: Establish platforms that enable creation and delivery of contextual information. This includes infrastructure upgrades to process data and integration with retailer, supplier and distributor systems in near real time. Get personal and execute: Deliver digital coupons and offers that are highly relevant, based on a solid mix of rich social CRM data and awareness of that consumer’s individual needs, preferences and history. Dynamic analytic engines can help to identify the right offers to share one-on-one with consumers at the right moment; and digital content management will move this personalized marketing content. Align your supply chain with trade promotions, marketing and brand teams to ensure products are available to meet consumer demand. For instance, if teams are running a new global campaign, you need to have the right amount of product in the right markets where the promotion is running. Test and toss: Pilot programs to evaluate the effectiveness of digital promotion tactics and technologies. If they don’t move the needle, move on.
- What if consumers were part of your field force? Imagine your brand runs a Facebook promotion that asks consumers to post a picture of them enjoying your product in real-time. Thousands of brand loyalists snap a selfie while brushing their teeth with your toothpaste—in a hotel bathroom, at a restaurant or at home, after breakfast. You don’t just get a marketing campaign, you get instant access to a wealth of insights from across the globe—use patterns or consumption time versus time of purchase. For participating in the promotion, consumers receive a 20 percent off digital coupon for the toothpaste, leaving everyone smiling.
- Rise of an enterprise whereby you are no longer contained by using your own employees: -Source talent in the ‘crowd’ in imaginative ways to accomplish what you need—sometimes for free -Enabling technologies include cloud, social and collaboration technologies - literally changing the face of your workforce The scale and diversity of the crowd enable some unique capabilities—not just as extra bodies, but because there are certain tasks they can do better than your internal workforce: Increase speed, scalability and diversity of perspective, while reducing costs A great example in consumer goods is Field Agent, a research company based in Fayetteville, AK -250,000 agents enabled with an iphone app that pays them to conduct basic field research -Execute 15-20K jobs per week performing in-store surveys complete with photos and quantified merchandizing metrics -Fast, often near-real-time results -Cost around $10 per job, vs. $60 industry average Imagine real-time insight into execution of a strategic promotion in 20 stores for less than $200—that’s what field agent, and competitors like gig walk, are already bringing to life.
- But it’s not only low cost and scalable labor—the insight here is that consumers want to work and contribute, improve things—and are willing to bring their unique skills to the table, sometimes even for free. If you combine this with unemployed workers eager to take contract work… with consumers that are always looking to engage with companies to provide comments / feedback and suggestions, you end up with a large pool to resources just waiting for companies to tap into. Analytics: companies like Facebook, GE and MasterCard are turning to Kaggle, a global network of computer scientists, mathematicians, and data scientists—to help them solve problems ranging from retail-store location optimization to airline flight optimization. Talking to thousands of experts exposes them to thousands of approaches—which leads to better solutions than an internal team might come up with. Product Innovation: PepsiCo has been leading the charge in crowdsourced flavor development with the Do Us A Flavor campaign, asking consumers to come up with the next flavors of Frito Lay chips. The result has been 3 new flavors, thousands of entries, and tremendous marketing collateral. Some companies are taking this a step farther and asking consumers to crowd “fund” products, paying before the product even enters production, and thus guaranteeing demand. So how does a CPG company take advantage of the crowd? It starts with finding the right opportunities in your company to bring them in—speed, scale, cost, diversity of perspective—then opening those problems to them. For consumer goods companies, there’s massive potential in the consumers who already love your brands, and want to be involved in them. But leveraging the crowd at scale also requires that processes be designed with the crowd in mind, with tasks that can be easily isolated and given to a person with little context and potentially minimal industry expertise. Last but not least, in order to get value from the crowd, key thinkers in your organization need to begin to focus on curation vs. creation—relying on the crowd for idea generation or problem solving suggests many solutions will be proposed, and curation will become critical to establishing a path forward. Start small and cheap Isolate problems suited to the crowd Rethink processes to create stand-alone steps or problems Focus on curration vs. creation
- Co-create: Bring consumers into the fold for product innovation. They will offer comments, feedback and suggestions about the flavor, fragrance and color of the brands they love—and do it for free. Staff up for the short term: Leverage an expanded workforce to gain immediate access to specialized skills, such as analytics, as needed. Pay by the week, by the day or even better, by the winning submission. You’ll alleviate margin pressure while also increasing the speed, scalability and diversity of your perspectives. But carefully consider how you will manage information security and confidentiality agreements with this dynamic, virtual workforce. Bring the store to you: Rather than deploying your people to the field for store visits, use the crowd to share information about poorly displayed products or lack of inventory. This flexibility can be especially important in emerging markets where stores might be difficult to physically reach, and this is one of the easiest ways to pilot crowdsourcing. Then make sure the data from the store checks flows through your sales, marketing, supply chain and service organizations to enable employees to rectify issues more quickly.
- The preceding trends were about disruptions in the way our businesses and markets behave, whereas the following technology trends provide the foundation. Accenture Technology Labs have identified three digital enablers that will help unlock the disruptors in 2014. What if your numerous systems and data sources could be easily integrated with each other on the fly, enabling the flexible and easy app development that exists in today’s consumer market? You would be able to easily code and release apps to serve any number of business roles without the cost and effort of major system upgrades. This is the promise of the business of applications. Think back to our field agent Alex. He was able to resolve the out of stock issue quickly because, behind the scenes, his mobile app was bringing together insights from multiple in-house, customer, and even consumer data sources. There was no complicated login, no paperwork to lug, no return trip to the office to get supplemental information from other systems. What if Alex’s daily calendar prioritized his store visits based on which location had the most burning issue to resolve? This is the power of digital in the field. Mobile apps provide customer and consumer data at the point of need. CPG companies must consider how they can build more modular platforms and applications that will provide the user experience that customers and consumers demand. Michelin tire company did it by rolling out a mobile app store capability— an app factory and a set of APIs so that independent tire dealers can develop better apps for their customers. Walgreens is using Apigee’s API management platform to integrate their systems into a broad array of third-party apps that leverage Walgreens’ services. Their first open API is for QuickPrints, a Walgreens service that enables photo printing directly from iPhone, iPad and Android mobile devices. Consumers expect an app-based solution can solve just about every problem, and increasingly those apps integrate with each other to create an ecosystem that keeps the consumer’s attention. Brands can also employ an ecosystem approach in which they identify the major apps their consumers, employees and customers use, then integrate with them to drive better ongoing engagement. This may mean exposing more of the data supply chain to outside developers – for instance, serving product data to e-commerce sites, or offering a coupon engine to retailer applications. Apps will even extend much deeper into your value chain. Imagine a world where farmers supplying ingredients for your products are enabled with information to understand commodity prices before those commodities come off the field. Expect in the future, as agriculture data flows more freely, manufacturers will gain a better understanding of where their supply is coming from. They will use that data to plan their production schedules and warehousing capacity for the next several quarters. Apps—and the flexible data and platform integration that powers them—can bring to bear the fresh ideas that just didn’t have the funding. In the business of applications, implementing new initiatives with less overhead is possible.
- Here is an example. With Michelin tire company we rolled out a mobile app store capability—an app factory and a set of APIs so independent tire dealers can develop better apps for their customers. And Several Accenture CAS clients have changed their approach from “consuming apps” to “owning apps” With Walgreens, they are exposing their prescription API barcodes so that anybody can use the API to better track and monitor prescriptions through the supply chain. Not only making their service better, but it provides people in their ecosystem with better data. This is the kind of thinking a Digital Disrupter does—they think about transforming the industry as a whole—a rising tide lifts all boats, so to speak, not just their business. And in so doing, they put themselves firmly ahead as industry leaders. What does the future hold? Gartner predicts that by 2017, one quarter of all businesses will have their own app store to manage corporate sanctioned apps CPG companies will have to build the capability to take ownership for key applications
- Take stock: Inventory your current applications and consider which may benefit from a mobile and an app-driven approach. Talk to internal capability enablement groups, consumers and customers to learn which apps would be most valuable to them. Own your apps: Your employees, customers, consumers and partners expect more flexible, modular solutions. Delivering these requires a new approach to, and a renewed emphasis on, software development and maintenance where you build your own apps. More apps require more IT hands. You will need skilled talent and the right IT capacity to deploy and manage the apps that you are providing to customers, consumers and employees. If you don’t have those resources—or you don’t want the added responsibility—outsourcing is an option. Serve insights: Creating an app-based suite of solutions requires development of technology platforms that sit behind the application layer and can be accessed flexibly, therefore enabling app development on top of them.
- Imagine an augmented reality shopping app that offers consumers contextualized, personalized deals in-aisle. Now imagine the data required to make that happen: deep social CRM data to understand the consumer’s history; analytics to turn that history into an ideal offer; location data to understand what retailer and what display are part of the picture; video recognition to ‘see’ the aisle and create an augmented reality experience; dynamic content management to provide customized content at the moment of need. Each of these requires processing power that was impossible a decade ago; together they require a whole new look at infrastructure. Today’s digital trends, such as creating a data supply chain or leveraging the digital/physical blur, create an exponential need for data and processing power. Consumer growth trends, such as increased globalization and anytime/anywhere shopping expectations are also driving the need. The cloud has provided a costeffective means to scale quickly to reach new markets. And today’s hyperscale hardware appliances enable the speed and power to perform real-time analytics on huge datasets in-house. Big data has even bigger processing requirements, and the demand for processing at scale is surging. Lucky for CPG companies, the cost of hardware is coming down. From advances in storage to power consumption to processors to server architecture, infrastructure innovations such as nonvolatile memory are paving the way for faster, cheaper and bigger hyperscale systems. The cloud may have delivered the necessary scale and speed for some CPG companies as globalization has opened doors to new consumer segments. However, not all cloud solutions will be possible in emerging markets, such as China and India, where government policies call for data to be physically located within the country. Businesses in these countries can use local, but not multinational cloud providers, or physical data centers.
- Inventory your IT: Identify your data storage needs and the magnitude of devices producing data in your network (including sensors, smart meters, devices and data centers). Forecast their expected usage based on one-year and three-year business growth strategies. Model before you modernize: Update models of your digital business’s most demanding computing processes to understand the advantages, tradeoffs, opportunities and risks of hyperscale hardware choices. Be flexible: Maintain hybrid hyperscale deployment strategies that account for improvements in offerings across SaaS, PaaS, and hardware to support varying enterprise activities.
- Remember when Lena made her mobile purchase for that out of stock item while in the drug store? When she made that transaction, her credit card was never shared because the transaction was fully tokenized. She gains confidence that her personal information is not at risk and she is more likely to take advantage of customized marketing experiences and offers. The retail execution systems provided another kind of resilience – this time making sure the out of stock she experienced doesn’t affect other consumers. Both are critical to the experience consumers expect. Consumers want to shop through digital and mobile channels. Accenture research shows that 89 percent of consumers now use at least one online channel (company website, review sites or others) when prospecting.5 All the while, consumers expect their information to be protected. To stem any vulnerability and keep your mobile apps, in-store technology, e-commerce sites and CPG social network accounts up and running, you need to architect for resilience—building systems to survive failure, and then recovering quickly. For example, Netflix uses a program called Chaos Monkey—an attack force whose entire mission is to try and make Netflix’s systems fail. The company learns from each attack to build up resilience.6 This is the kind of mindset very few CPG companies have, yet it is a critical factor for success in the digital world. Resilience has long been a goal in manufacturing, but today’s stakes are higher. With economic pressures and increasing concern over quality, manufacturing processes need predictive optimization to maximize up-time and use of raw materials. On the sourcing side, think about resilience all the way back to the source of food, especially as the availability of food becomes a bigger issue. If farmers knew in advance which products were most in need, they could focus on growing and increasing yield of commodities that are in highest demand – all the while reducing waste.
- Invest in your suit of armor: During the budgeting process, look for security—and infrastructure-related investments that maximize business process resilience per dollar spent. Migrate business risks: Try to shift compute loads to public cloud infrastructure—either during peak times or while under attack. Thwart threats: Create a security road map to build advanced detection and external threat intelligence capabilities. Improving security will be increasingly important as you look to the crowd to expand your workforce.