Undertaking a major digital transformation for a large retail brand is a tough ask, especially after the COVID-19 pandemic, but when your stakeholders include 64 store owners that adds a little more complexity to the task. So, it\u2019s not surprising that a session on home improvement retail chain Mitre 10\u2019s transformation journey drew a lot of interest at SAP\u2019s recent user group event in Auckland.\nAsbjorn Aakjaer, programme director for the project at Mitre 10, says the business is two years into a business-wide transformation they\u2019ve named Programme One. It includes a refresh of all the IT systems used to serve its 85 stores, owned by 64 people, and will result in an entirely new technology stack. \u201cWe\u2019ve set about to change everything, from the foundation all the way up, including the way we work and the systems that support our work, with a focus on our customers and team members,\u201d he says.\n[ Be sure to learn the secrets of highly effective digital transformations\u2014and beware the 7 myths of digital transformation. | Get the latest on digital transformation by signing up for our CIO newsletters. ]\nMultiple stakeholders for major transformation programme\nThe programme\u2019s six priorities are:\n\nFuture-proof the organisation\u2019s technology.\nExceed customer expectations.\nLower the cost of doing business.\nEnable the teams to be better at what they do.\nEnsure everyone understands how the business works end to end.\nMaintain an entrepreneurial spirit.\n\nAakjaer highlights the last goal as especially significant given the organisation\u2019s owner-operator model, which began more than 45 years ago when hardware stores across New Zealand decided to band together under the brand Mitre 10. It was inspired by a move by counterparts across the Tasman, and while there is a Mitre 10 in Australia, they are entirely separate organisations.\nMitre 10 CEO Andrea Scown appeared throughout the session in video excerpts, where she outlined the size of the organisation, pointing out it had a collective turnover of $2 billion a year, with 60% of its business in retail and 40% in trade customers. She describes the five-year transformation project as \u201ctraumatising\u201d, noting the \u201csignificant burn rate of programme cost\u201d at the current time, which is making everyone mindful of the responsibility to get it right.\nThe programme\u2019s design phase is almost complete, with Aakjaer describing a process of first assembling a small group to scope the project, to reimagine what that business could look like, before embarking on an extensive consultation exercise that included surveying 3,500 customers. The working group looked at 80 functions to determine the multiple pain points that exist in the business, with a view to solving these as they planned for a \u201cfuture business\u201d.\nAmong the complexities that need to be addressed are that there are 114 stock files across the business, so there isn\u2019t a single view of stock. As a result, the company\u2019s support centre is sometimes less informed about what\u2019s in the stores than their customers and suppliers are.\nInternal communications important to gaining staff buyin\nAakjaer points out that digital transformation isn\u2019t only about replacing the tools, it\u2019s also about changing the way people work so the organisation can become more customer-centric. It\u2019s therefore important to ensure Mitre 10\u2019s 6,000 staff understand and support Programme One; as part of his presentation, Aakjaer showed a video created for that purpose.\nThere is discussion in the video of \u201cquick wins\u201d with regards to new technology solutions that provide immediate payback to staff. Examples are bringing in text notifications to customers when the products they\u2019ve ordered arrive, and a product lookup app that enables staff to search for products on their devices when they are with customers on the shop floor.\nMitre 10\u2019s approach to vendor selection\nThe video also featured what Aakjaer described as the organisation\u2019s take on a gender-reveal party, with staff gathered for an announcement on what technology partner had been chosen. This was revealed by balloons that spelled out \u201cSAP\u201d. Aakjaer says that about 80 people throughout the business were involved in the vendor selection, so they wanted to reward them with a party for the announcement. \u201cWe wanted to make it fun and humorous,\u201d he says.\nAakjaer says they didn\u2019t set out to buy from a single vendor and were influenced by the Gartner Pace-Layered Application Strategy, a methodology which governs software applications through their entire life cycle. There are three distinct layers in this approach: systems of record, systems of differentiation, and systems of innovation.\nSAP was chosen for the ERP system, which represents the \u201csystems of record\u201d layer in Gartner\u2019s strategy. Mitre 10 has SAP Hybris for its product content management software, as well as SAP Commerce Cloud. Its transformation partner is EY. Vendor selection for its supplier portal and HR system is still under way. Aakjaer notes they have ended up with a lot of SAP technology because it was the most suitable and \u201cyou can\u2019t nickel and dime a project\u201d.\nAt the end its five-year deployment, Programme One\u2019s success will be defined in three ways:\n\nIf it makes it easy for customers.\nIf it supports and enables staff.\nIf it maintains the company\u2019s entrepreneurial spirit.\n\nScown says that a large part of the successful delivery of the project is if the entire organisation can \u201cdeliver it together\u201d in a way that leverages Mitre 10\u2019s size and scale, without losing sight of the unique approach that each store owner brings to the business.