by Isaac Sacolick

Are you transforming fast enough? Lessons from Amazon’s acquisition of Whole Foods

Jun 19, 2017
Digital TransformationIT LeadershipIT Strategy

CIO and IT leaders have to drive bolder and faster digital transformation programs to avoid being "bulldozed."

How did you spend your Sunday? Among other things, I took my kids to the grocery to buy produce, meat and other ingredients for our Sunday evening barbecue. Ninety minutes of my precious weekend time driving to the grocery, navigating the parking lot, making my way through the crowded aisles, and waiting for a cashier to ring up my purchase all to make sure that I was getting the freshest ingredients at a reasonable price.

Is that the best customer experience? Amazon is betting a big $13.7 billion that it can take its advantages in technology, supply chain logistics, predictive analytics, and artificial intelligence to invent a modernized grocery that grabs margin from slower, less efficient competitors and potentially expands the market by improving the customer experience. How will they pull this off and how long will it take them?

Well, many believe that Amazon is seeking the last mile by getting more customers to purchase groceries online. But even if this isn’t the case there are plenty of ways for them to experiment with improving the in-store experience. Certainly we all expect digital payment options and cashier-less checkouts. But Amazon can look to offer many other incentives bundled with Amazon Prime, conveniences by allowing customers to pickup other purchases at Whole Food locations, or customized experiences by better integrating other digital capabilities. For example, what if my grocery cart was filled with ingredients from recipes that I selected from cookbooks in my digital library?

Lessons in leading transformation for CIO and IT leaders

The Amazon purchase offers lessons to CIO on how fast they have to run their digital transformation programs and how far to reach on scope. One article on how Amazon is leading tech’s takeover of America suggested that, “Businesses that can’t respond by becoming tech companies are going to get bought or bulldozed.”

At last week’s Sinc East IT Leader’s Forum we discussed what it means for CIO and IT leaders to enable digital transformation in their organization. I moderated the opening panel on digital transformation in the enterprise where we discussed how elements of transformation can be led by demonstrating new technology capabilities through proof of concepts and pilots. Later that day, I spoke to participants on my transformation experiences in the media industry and how little time organizations facing disruption in their industry have to execute their digital transformation programs.

Here are some of my takeaways.

  • Find a technical competitive edge that can bring a differentiating experience to customers or provide a strategic advantage to operations. Predictive analytics, artificial intelligence, and IoT are three potential areas to develop this innovation.
  • IT leaders need multiple strategies to retool their organizations with digital skills and to retain a top performing, diverse, talented team. Citizen’s development and data science programs offer one approach to engage the organization on data driven practices.
  • There’s no single approach to aligning business leaders to digital programs. Sometimes it requires the investment to align all stakeholders to the strategy while other times, using C-level mandate can be leveraged to drive home institutional changes.
  • Leading transformation adds significant demands on IT leaders, so developing time-management skills is critical. Leaders have to rethink what elements of their technology and services portfolio are strategic and others where they can benefit using outside providers.

Are you moving smart and fast enough?