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Digital transformation as a business priority has been a theme of the past decade. But in the year In the early 2020s, in response to the global Covid-19 pandemic, digital transformation kicked into overdrive. Businesses that had been on a five- or ten-year transformation roadmap were suddenly trying to make radical changes in five to ten weeks.
Here at ZDNET, we’ve taken you on several deep dives into the technologies driving digital transformation. Much of the coverage is focused on technology, from AI to cloud to mobile to edge and more.
In this article we take a slightly different approach. From getting started with the technology and what you can do with it, we’ll visit a prototypical business and look at all the technologies it can integrate to achieve its growth and profitability goals.
Since most of these initiatives tend to be secret in the real-world companies that operate them, in this article we will talk about a fictional distributed home and building materials chain retailer: Home-by-Home. In this way, we can get into some areas of business that a real enterprise would not be comfortable with publicly revealing.
Case Study: Door-to-door
At a basic level, door-to-door stores must be able to handle regular checkouts and customer transactions. While this is a common practice among all retailers, it is deeply embedded in technology and innovation.
Each scan transaction triggers multiple data updates. Stock levels of any purchased product must be reduced, possibly by re-ordering or shipping to the retailer. That decision can be delegated to a human purchasing agent or managed by AI, which results in a wide range of global pricing and availability issues to make the best decision.
Data on individual customers, stores and regions is fed into an analytics engine to give product managers insight into buying trends and reveal new trends that might not be obvious without access to live data.
And since most home-by-home stores have wireless shelf-talker tags (small displays that act as tags to show customers an item’s price), another AI process can pinpoint sales volumes, demand and available inventory, which then lower prices in dynamic store aisles. Or add, or start a discount sale offer on the spot.
Globally, the retailer must monitor supply chain issues around the world, and analyze weather, politics and shipping to ensure goods are available when needed. AI also plays a role here. In fact, we’ll see AI play a bigger and bigger role in the home-at-home’s entire extended network, as well as its supply chain.
By combining API access and microservices with big data and real-time analytics, Home-by-Home and its suppliers can adapt to the ever-changing global supply and demand landscape and change suppliers, orders and promotions according to the situation – the happening availability and logistics.
The company has thousands of stores ranging in size from 105,000 square feet to 170,000 square feet and stocks between 30,000 and 60,000 individual products, depending on the market. Each store uses a ton to track all of these items on each store floor. IoT, especially RFID and theft prevention. Some of the lines where RFID devices allow users to self-check in can help speed up checkout.
In addition, the company uses a variety of sensors to monitor environmental control (humidity control is critical in some units) and energy costs. While Home-by-Home has long had security cameras in stores and in parking lots, it has recently begun streaming video feeds through a series of intelligent image processing systems that help quickly pinpoint security risks and hazards.
Because so much processing has to be done in real-time and in individual stores, Home-by-home has invested heavily in the edge-to-cloud concept. Each store has its own secure, temperature-controlled computer bay that acts as a mini data center and is the size of a small shed. On-site real-time work is carried out at the edge (in each store), and the data is continuously fed from the store to the central data systems and integrated cloud operations.
The company has a comprehensive e-commerce offering through desktop browsers and a mobile app, which helps manage product availability, ordering and the fulfillment/shipping process. Since more than 70% of online customers order via mobile app and even use the mobile app while in store, the company has invested heavily not only in the quality of the app but also in the integration between the app and the app. Business intelligence and real-time data from the stores is fed back into the cloud.
Since 2000, Door-to-Door has been converting large stores into dual-purposes for daytime customer visits and after-hours use as e-commerce fulfillment warehouses. The company added autonomous pick-and-pack robots for overnight shifts, making it more reliant on real-time inventory management, cameras and AI. All of these improvements have enabled the company to deliver heavy, bulk-ordered items directly to local-warehouse consumers while significantly reducing lead times and shipping costs. Central warehouses that respond to e-commerce orders still stock a few hundred thousand additional uncleared SKUs to be shipped by package delivery services.
Earlier this year, Home-by-Home acquired a competitor with 450 stores and began a major migration effort to transition from legacy point-of-sale systems and centralized siled databases to an edge-to-cloud digital transformation. All home-to-home jobs.
End-to-end integration across all stores and vendors
There is one general operating principle by which Home-by-Home measures all of its IT decisions: Everything must be integrated, and it must be done intelligently. A constant stream of data from stores to enterprise-wide databases is not enough.
That data must go to the right places at the right time and trigger the right actions. Data flow cannot be one-way either. Information must flow from vendors and suppliers to various corporate departments to stores and back again.
Door-to-door describes everything that is done at the store level, but also during shipping, in the docks and in the suppliers’ warehouses. It’s systematically refining the door-to-door vendor choices, enabling IT operations to leverage API data and microservices to provide an up-to-the-minute global view of operations.
Door-to-door still operates its own data centers. It has two institutions that manage confidential information, including personal employee information, financial information, information required to be localized for various tax benefits, and information affecting public stock performance.
But the company invests heavily in cloud infrastructure as well as SaaS implementation. As a general rule, any application that is delivered on-demand will be preferred over the time it takes to build it in-house.
All of this end-to-end integration across all stores and suppliers, checking weather and logistics forecasting and tracking shippers can be extremely complex. The sheer number of IT systems, accounts, dashboards and management consoles is overwhelming. But when Home-by-home decided to make asymmetric digital transformation a core value, it set out to find vendors that also offered the integration needed to manage it.
Flexible provisioning and on-demand infrastructure from the edge to the cloud is key to the solution. That way, when it adds new resources — like when it had to mobilize support for the 450-store chain it acquired earlier this year — it doesn’t rely solely on rolling infrastructure. Much of the backend functionality can be easily expanded and dynamically provisioned as needed.
Seasonal increases are also accommodated, allowing the company to add up to 30% more IT infrastructure resources for critical home improvement periods, but scale back and reduce spending during months when consumers focus on other needs.
From the edge to the cloud platforms
HPE GreenLake is one example of edge-to-cloud services companies that bring the benefits of public cloud infrastructure to on-premises and edge computing with a central dashboard, on-demand provisioning and pay-as-you-go. Loads. This is what it takes for a company like Home-by-Home to immediately begin offering its services to new buyers. No ordering and no waiting time for new configurations.
Other edge-to-cloud vendors such as AWS Outpost, Azure Stack, Google Anthos, IBM Cloud Satellite, and Red Hat’s Edge Certified Patterns offer their own take on the edge-to-cloud stack. The bottom line is that IT professionals don’t need to simplify their solutions to solve problems at different points in their operating infrastructure.
Edge-to-cloud platforms help integrate comprehensive solutions, providing the benefits of individual vendor offerings, but without the chaos of multiple disparate control consoles and payment requirements. Instead, it’s possible to take advantage of the best available solutions, but a fully hybrid, multi-cloud, multi-vendor, multi-component network is generally consistent. This not only increases productivity and cost-effectiveness, but also reduces errors and improves overall safety.
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