CIOs: innovating to unlock the potential of omni-channel

Austin WidmoreAustin Wildmore, EY, Executive Director Advisory Services, looks at the four key challenges for consumer goods and retail CIOs.

Organizations are innovating with seamless new customer experiences that cross a multitude of channels, from bricks-and-mortar stores to smartphones. Omni-channel — which promises a seamless “any time, any place” experience, has become the engine of growth in consumer goods and retail.

As organizations re-engineer their supply chains to deliver a frictionless omni-channel experience, CIOs will have a crucial role to play.

According to a recent EY report, 88% of consumer goods and retail companies believe that they can no longer rely on traditional sales channels to drive growth. For consumer goods and retail companies seeking to unlock further potential, omni-channel has become critical.

But 81% of those companies surveyed for the report do not think that their supply chain operation is ready for omni-channel.

Meeting new expectations

Consumers now expect to be able to browse, purchase and return goods across a variety of channels. So the supply chain has to extend beyond the store and into the home and pickup points.

This requires real-time visibility of inventory across the supply chain and a single view of the consumer as they move across channels. And if a customer wants next-day delivery, companies need their IT systems to meet that demand.

Omni-channel presents CIOs with an exciting opportunity to put IT at the heart of the customer experience. They have a key role to play in building the agile and responsive supply chains needed to meet the growing expectations of customers.

To succeed, they will have to meet four key challenges:

1. Get in the customer’s shoes
Organizations should not rush in with their omni-channel strategies. They should take a step back and consider what is possible for themselves and for their end consumers.

CIOs need to take the time to put themselves in their customers’ shoes. By doing so, they can make sure they build the right innovations into their organization’s omni-channel approach, and deliver IT that is truly responsive to the complex and changing preferences of the omni-channel consumer.

2. Exploit big data
Omni-channel is driven by consumers. So it requires an intimate understanding of their needs. Typically, up until now, the marketing function has been responsible for consumer insight. Or it has been outsourced to third parties.

Going forward, the CIO must employ data and analytics tools to harvest the insights available from their disparate databases. And they must ensure their system complies with data privacy regulation.

3. Identify the right cost-to-serve model
New investments will be required in logistics technology. However, it will take time to find the right cost-to-serve model for complicated product fulfilment. Before the right model can be found, CIOs may need to get hold of better analytics tools in order to answer some basic questions:

  • What level of automation is required?
  • What can be outsourced?
  • Is it possible to find economies of scale from other production lines?
  • How flexible must solutions be?

4. Experiment and innovate
For many companies, shifting to omni-channel will mean trying lots of new ideas and only retaining those that work. This means CIOs will have to support experimentation without a clear view of the potential return on their investment. CIOs will also need to decide when to commit resources when projects go from trial to full-scale implementation.

For CIOs, omni-channel is an opportunity to demonstrate how IT can drive real innovation. While it is a hugely complex undertaking, it is also an exciting opportunity to demonstrate how technology can be deployed to keep the organization in tune with customers’ ever-growing needs.

For questions about omni-channel please contact Andrew Caveney, Global Lead Partner Supply Chain & Operations or Andrew Cosgrove, Consumer Products Strategic Analyst, Global Markets – EY Knowledge.


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