wesfarmers digital transformation

"If we relied critically on large datasets, instead of removing human decision making and making decisions easier, sometimes you end up just reinforcing those biases.". On top of that, weve changed the digital interactions. However, if the brains behind the worlds and Australias- biggest companies think it is worth it, you should definitely be looking at how to digitise aspects of your business. In fact, the essence of digital transformation is to become a data-driven organization, ensuring that key decisions, actions, and processes are strongly influenced by data-driven insights, rather than by human intuition. OneDigital broke cover in April, and has since gone on to unveil OnePass, a subscription program that consolidates products from across Wesfarmers' retail brands, and offers member-only prices as well as free delivery on many items. Wesfarmers Chemicals, Energy and Fertilisers, People development, diversity and inclusion, Chairman and Managing Director's 2022 sustainability message, Bunnings collaborates with Indigenous artists through exclusive plant pots range, Bunnings support for flood affected communities, Bunnings launches national battery recycling programs, Bunnings expands fleet with all electric trucks. Predictions for 2019 in data, analytics, and AI, This year's round-up of predictions from industry figures yields wisdom in: AI, data regulation, data governance, the state of the Hadoop market, open source and "the edge. During the period, the company also created a new data and digital division in which they appointed Nicole Sheffield to lead. On the back of its solid growth, Kmart continues investment in digital and technology. Wesfarmers finally goes digital Chanticleer is Australia's pre-eminent business column. The focus for the ATO, according to Rucinski, will be implementing data analytics and AI to "enhance the human ability to make judgments" so humans can ultimately make the final decisions for matters. Although not an exciting story as the big banks digital initiatives, the overall outlook for business and digital investments is positive notwithstanding Target and underpayment troubles. Its also good for customers as it means our store leaders are out more on the floor.. Wesfarmers OneDigital will power the Group's data and digital growth ambitions and provide customers with a more seamless, rewarding and valuable omnichannel experience across the retail businesses. As noted at the recent half year results, more detail on Wesfarmers OneDigital will be provided at the Strategy Briefing Day in June 2022. We have a large number of our stores on assisted checkouts and are constantly growing new models of those checkouts, which allows us to offer new options to our customers. Because of the need to understand how the business works, digitizing operations often fares better when led by the CFO or COO. Marcelo brings positive energy to. Over the past five years, Wesfarmers Bunnings hardware store chain has been the main target of growth expenditure, according to the FY19 Strategy Briefing Day. What is needed is a shift in mindset, culture, and talent, including upskilling and reskilling your workforce so that they are future-ready. This is more than just swapping analog processes for digital ones; it is about rearchitecting the organization and the digital operations to serve customers better. Typically, the CIO or CTO should lead this pillar of digital transformation and the KPIs to indicate success are access to new tools, reduced maintenance costs, improved employee satisfaction, and better business performance. This will support the growth and performance of our retail divisions while providing new growth opportunities for the group.. He was heavily involved in the transformation under Wesfarmers and has maintained a high-profile and impactful role during and post-acquisition. Digital transformation can mean a lot of different things. Consider the chart below: However, these are all American-headquartered companies. OneData, formerly the Advanced Analytics Centre, manages the Wesfarmers shared data asset, providing a single view of the customer and enabling the divisions to deliver a more compelling offer to customers. This almost-great Raspberry Pi alternative is missing one key feature, This $75 dock turns your Mac Mini into a Mac Studio (sort of), Samsung's Galaxy S23 Plus is the Goldilocks of Smartphones, How the New Space Race Will Drive Innovation, How the metaverse will change the future of work and society, Digital transformation: Trends and insights for success, Software development: Emerging trends and changing roles. Eric Lamarre, Kate Smaje, and. The inverse of this is, of course, Netflix, which is now a $122 billion-dollar company. My head of digital and loyalty systems gets on exceptionally well with the head of digital marketing, and the two understand how they can add value to each other. The Bunnings pilot program in Tasmania was followed by the rollout of the Bunnings click-and-collect offering in Victoria in the first half of this year. As noted by customer experience expert Blake Morgan, when done strategically, digital transformation can improve stock prices and revenue in the long run. Rodney Zemmel. Meanwhile, the ATO believe successful organisations are those that utilise data analytics, IT, and business together. Earnings before interest and tax came also came in 12% lower at AU$1.9 billion. Of the online sales total, Kmart Group, which includes Kmart, Target, and Catch marketplace, contributed AU$1.4 billion, following a 22% year-on-year increase. The framework outlines the four pillars of digital transformation we see today: IT uplift, digitizing operations, digital marketing, and digital businesses. Also read: The Key Drivers Behind Rising AI Investment in Australia. Closes in 19 days. As Coles IT we had our own logo and acted as a consultant to the business, charging an hourly rate, he recalls. For us, the delivery of an ROI is the way into the door, not the way out, he says. By building the right cloud technology and orchestration today, we have options for the future. Wesfarmers a diversified corporation From its origins in 1914 as a Western Australian farmers' cooperative, Wesfarmers has grown into one of Australia's largest listed companies. Data analytics are now an established, valuable tool for businesses, but the way they are used is rapidly changing. Some companies are already deep into this journey, but many other companies struggle with questions about how to upgrade the digital infrastructure. The results themselves become part of the new, richer, dataset, which will be augmented and improved with the findings of the process. This will provide greater value, expanded range and a more seamless experience for customers across the Groups retail businesses., The Catch marketplace, together with the OnePass subscription program and the Advanced Analytics Centre, provide a strong foundation for Wesfarmers OneDigital. He suggests the real value is in preparing the organisation to take advantage of multiple options further down the track. It does require time and technology but the benefits, measured by the central KPIs, are savings in time, money, and people to solve business problems and serve customers. Weve already looked at how Blockbuster missed their big opportunity to digitally transform their business, and we all know how that ended for them. Do you need one? Think about analog and informal small businesses, such as a stand in a Turkish bazaar: the salespeople have a great deal of access to, and knowledge of, their customers and clients, but its all trapped in their minds. Thats where I think some of the smarts around event orchestration is going to help as well.. we equip you to harness the power of disruptive innovation, at work and at home. Digital and omnichannel capability is a critical area for other retailers as well. Although there is no indication of any reduction in digital investments, any impact of COVID-19 outbreak and underpayment troubles on technology roadmap seems unlikely yet although Target remains a concern. Delivering a net growth of 5.7% after-tax profit, Wesfarmers boss Rob committed to digital strategy and technology investments preparing the group for future growth. Typically, companies tackle the first pillars we describe near the start of their digital transformation journey, although as they mature they may continually upgrade to add additional pillars. The second priority is better leveraging unstructured data to gain new insights, and Coles is trialling solutions such as Hadoop to do that, he says. Well, one Australian conglomerate which has recently begun to embrace digital transformation is Wesfarmers (ASX:WES). The Catch acquisition has also improved digital expertise leading to better execution and innovation. This is where technology gives way to analytics the science that helps us give meaning to the data. Wesfarmers OneDigital sets its service standards Head of engineering Gurnam Madan. But other times it involves rearchitecting the system to meet the needs of today customers. Although these failures have multiple causes, they are generally the result of underestimating the various steps or stages required to successfully execute a transformation agenda. According to Harvey, certain loads are always going to be difficult for large corporates to move into the cloud. Since I have been able to take the team under my wing, we focus very much on being part of the business, rather than a service provider. One of the most enjoyable things about being a CIO is that you have to balance real day-operational decisions and trade-offs against thinking about what system and platform I am going to need in three or five years time. For example, in the past when PayPal sent payments via email, they had significant time to ensure regulatory compliance. Lowthorpe said it is important that data and analytics be interwoven throughout organisations, referring to the use of data and analytics to improve customer centricity as an example. The online sites, social media space and mobile phones are each a different touch point where we can change the customer experience. An equally important consideration was the buy-in by Microsofts senior engineers in Australia and in the head office in Seattle. Leaders put in charge of a digital transformation feel pulled in many different directions, with competing demands from IT, marketing, sales, and operations. Blackwoods, which is the largest provider of industrial and safety supplies in Australia, is implementing a new enterprise resource planning (ERP) system supplied by Microsoft. They are then taken through one stage of the conglomerate's use cases, such as identification, beta engineering, or the advanced analytics and implications, to highlight what role the various teams in the business play in applying the use cases, followed by this information being cascaded around the organisation. Wesfarmers has its sights set on realising strategic value and transformation through building a market-leading data and digital ecosystem. "When we talk about use case and they're saying where are the results with [this process], it helps in terms of getting that alignment and management of expectations, and when we talk about how do we think that use case is going forward, we've got that reference. While that isnt as dramatic as some of the gains seen in the American companies mentioned earlier, it is certainly still an impressive increase. Managing Director (Acting) Michael Howard plans continued investment in every channel strategy with ongoing enhancements targeting improved online customer experience. Wesfarmers doesnt seem to be immune from the underpayment epidemic admitting underpayment at Target and Bunnings. Investment in e-commerce capabilities, digital and technology initiatives have helped the Perth based conglomerate to achieve online sales growth of 35%. Bunnings conducted a pilot program for click-and-collect at a store in Tasmania to ensure the new IT systems were working properly. Although data has been hailed as the new oil, just like with oil, the value depends on whether we can clean it, refine it, and use it to fuel something impactful. To do this, IT has invested in application reporting capabilities to give regional store managers and leaders drillable reports and dashboards on their iPads. A new managing director of Catch will be appointed in the coming months and will report into Nicole Sheffield. We work hard on ensuring we are one of the top participants working in-store, and we continue to get very high engagement scores.. He describes his time at Coles in two chapters: The first as head of the Coles IT unit; and the second as a core business contributor. Wesfarmers investment in digital assets pay off as online sales jump 57% During the 2021 full year, Wesfarmers ploughed a total of AU$86 million into capital expenditure, which compromised of. We interviewed four global leaders responsible for their organizations' digital transformation, each in different business and technical functions, industries, and geographies, and found that they were already approaching transformation in this waybut without a clear language and framing to guide them. But to enable the instant payments demanded in todays market required rearchitecting the PayPals organization, merging once separate divisions for payments and compliance into one entity. Wesfarmers OneDigital has set 'SaaS model' standards for itself, supported by service standards, engineering practices and tools that together create a foundation for the nascent digital and data arm to grow. But even the best technology will go to waste if you dont have the right processes, culture, or talent in place to take advantage of it. Having the right leader, resources, and measures of success for the journey towards each different pillar can contribute greatly to success. We are getting exceptional high take-up of that, and its an example of a win-win for both Coles and our store managers, Harvey claims. In support of this, recent research from IDC indicates that organizations which had begun an ERP cloud migration as part of a digital transformation initiative prior to the COVID-19 pandemic fared far better than organizations that didnt. By Chet Kapoor, Chairman & CEO of DataStax. AI can make predictions, and data can give us insights, but the so what part requires actions, and these actions need the relevant skills, processes, and change management. View my verified achievement from Project Management Institute. Senior Data Engineer - 6 Months Contract. Mr Scott thanked Mr Sauerborn for his important contribution to the business during its foundation years within Kmart Group. In a statement, Wesfarmers highlighted Sheffield's experience across . The third pillar is putting information in the hands of team members. Revealing the current impact is minor, Wesfarmers acknowledged it remains a dynamic situation that is progressing daily. Finally, digital opens up many new opportunities for established companies. As the figure below shows, five components are needed to execute an organizations digital transformation: Digital transformation starts with people, which is a useful reminder that whenever we talk about data especially valuable data there are humans at the end of it. Like many things, its tempting to look for the conflict, but if you just focus on the win-win, the roles just naturally evolve themselves. This view extends to the question of who owns digital, as well as the rise of the marketing function in technology purchasing and implementation. Although every organization is unique, and there are salient differences between types of businesses, industries, and cultures, the fundamental meaning of transformation is not about replacing old technologies with new ones, or capturing high volumes of data, or hiring an army of data scientists, or trying to copy some of the things Google or Amazon do. As a startup Id love cloud, but Coles is not a startup. From a PagerDuty perspective, I think the key thing there is how do we help cut the noise across so much information thats coming through to us, he said. "The group's retail businesses will maintain their focus on meeting changing customer needs and delivering even greater value, quality and convenience for customers. And with the results already under our belt, alongside our deeply skilled and resourced team of in-house data and analytics experts, I firmly believe we are well on our way! The struggle to implement the new ERP system highlights how digital transformations may not always go smoothly. On Thursday, the retail giant group reported net profit after tax dipped by 14% from AU$1.41 billion to AU$1.21 billion for the half year. How public utilities use analytics to improve interactions with customers (TechRepublic). He was heavily involved in the transformation under. It will remain so until cloud [providers] understand and contemplate the same levels of redundancy we take for granted in the way we have active-active data centres, for example, he claims. Seizing these opportunities, some of which may be quite disruptive, requires both developing the innovation and digital capabilities to test and pivot to new sources of growth. A second critical pillar of digital transformation, often tackled earlier in the digital transformation journey, is using digital for optimizing, simplifying, and rationalizing existing processes. View my verified achievement from Project Management Institute. Lydia joined WES corporate office in Business development and commercial. Catch is an online marketplace which commenced operations in 2006 and was acquired by Wesfarmers in August 2019, bringing highly complementary digital retail and fulfilment capabilities. Wesfarmers Ltd (ASX:WES) is planning for Bunnings growth to be fuelled by e-commerce. Do you treat it as though it is a part of them? Wesfarmers OneDigital May 2022- Present10 months Melbourne, Victoria, Australia After launching OnePass in May 2022, I moved into a role focussed on identifying, validating, and executing on. Challenges in the marketplace with fast changing customer and business expectations; Limited digital asset availability David Baxby, who runs the industrials division, says before the company set out to spend about $45 million to replace its 30-year-old legacy COBOL systems it looked at all the major ERP vendors. On the list of Harveys biggest customer achievements in the last five years is deploying automated replenishment, which he claims materially improved the availability and efficiency of Coles supply chain. Ive loved making significant changes with my team and really making a difference to the way our team members work at Coles, and the way our customers shop with us, he says. In short, the critical part of digital transformation is not digital but transformation. Our world has changed dramatically in the past two decades, and adapting your organization to these changes cannot be achieved overnight, or simply by buying new technologies, or collecting more data. Technology is a focus for the business. Having run a corporate BYOD program for the past three years and maintained thousands of devices in its network, the latest step has been bringing BYOD to store managers. Managing Change. Information includes sales data, stock availability, store remuneration, markdowns and waste. Blackwoods, which is the largest provider of industrial and safety supplies in Australia and also part of the group, is currently in the process of replacing its 30-year-old Focus COBOL-based system with a new Microsoft Dynamics ERP. Address weaknesses exposed by the digital journey, and be willing to accept a little short-term pain in exchange for long-term gain. View my verified achievement from Project Management Institute. Sheffield joins Wesfarmers' executive leadership team as a managing director from November and is tasked with leading development of what it's hoping will be a market-leading data and digital ecosystem. Tweedie posed the ethical question of whether organisations are avoiding making assumptions on who the normal user is, emphasising that it is important to "[think] about who are the most vulnerable users and how could your project can affect them negatively". "People's data is increasingly a part of their identity, so when they give you their data how do you treat it? Its about so much more than your technology. Click and Collect, an important bridge between click and brick, continues to be a growth element for the Wesfarmers companies. Wesfarmers formally acquired the online retailer Catch for $230 million in August 2019. This showed the company had learnt the lesson of the dangers of rushing headlong into a project without sufficient preparation, as happened with the Bunnings expansion in the UK. But for more mature digital companies, investment is still required to use advanced tools such as artificial intelligence. It requires IT architects and time, but promises up-to-date platforms with more effective tools to serve customers at lower cost of maintenance. Wesfarmers chief executive Rob Scott recognises digitisation is critical to the companys engagement with customers at a time when its retail operations are threatened by a proliferation of foreign online competitors, led by Amazon. One of the hiccups in the implementation was caused by the rollout of a new web interface, which forced sales to drop by 2 per cent over a couple of months. [You] might as well just break it yourself in a controlled environment and learn from it, and thats where PagerDuty plays a key role.. During the half-year, Wesfarmers also continued to build out its data and digital ecosystem. He was initially brought on as a program director for a merchandising systems refresh project, before taking the role of general manager of IT strategy, architecture and program delivery in 2004. Catch will move from Kmart Group and join Wesfarmers OneDigital on 1 July 2022. It is very easy in IT to lose sight of the money that has to be made, the customer offers that have to be delivered and the customer propositions that have to be put together, he comments. Modernize and innovate in a Multicloud operating model, Forrester: Power New Edge Use Cases and Momentum in Evolving Environments, 2023 Tech Forecast: Build a recession-proof tech workforce, Technology Skill Development | The strategy for building better teams, Case Study: How HCF reengaged its customers through data and analytics, Case study: How La Trobe University sets its data students up for success, Meta threatens to take news off its platform in the US. Get started by entering your email address below. It is going to break. But that's an end-state that we want to move towards so I think it's really about at first -- in the initial stages -- allowing [for the development] of business priorities such as how can we help make better decisions faster," Lowthorpe said. Despite years of discussion, understanding what digital transformation means for established companies remains a daunting challenge. Harvey has had plenty of occasions to both influence and instigate innovation at the Australian supermarket giant during his 10-year tenure. Chanticleer is Australia's pre-eminent business column. Whats vital is that people receiving and implementing the technology own the project and want the outcome, he claims. Read:Predictions for 2019 in data, analytics, and AI. We know upfront whether we expect a project to improve store performance, reduce effort to be allowed to be redirected to somewhere else, or to improve our decision-making in terms of margin, investments, or otherwise.. At Wesfarmers we believe sustainability is about understanding and managing the ways we impact the communities and environments in which we operate, to ensure that we continue to create value in the future. In its most basic form, this pillar can mean swapping out analog activities with digital ones. "This included investment in the shared data asset and scalable customer data architecture as well as the continued development of capabilities within the advanced analytics centre, specialist technical expertise, and robust data governance," he said. Embracing change has become a mantra for CIOs looking to take a more strategic and innovative position within their organisation today. One of the biggest barriers to true digital transformation success is change management. Going beyond what the legislative requirements is something I think creates sort of a threshold for ethical standards which is a really good mindset to have: are we protecting this asset in a way that customers want us to?". The advanced analytics centre will assist in utilising data science and best-practice analytics to enhance our decision making, develop new business opportunities and help solve problems across the group in a range of areas including customer insights, pricing, ranging, salesforce effectiveness and supply chain management, Wesfarmers Managing Director Rob Scott said. This means we can now get data out of the warehouse at a pace that was previously unthinkable, Harvey says. Having the stakeholders lead this means every day they are helping set and adjust the priorities based on the technical realities being encountered by my team.. Utilities use analytics to improve interactions with customers ( TechRepublic ) can change the experience... Journey, but promises up-to-date platforms with more effective tools to serve customers at lower of! Are those that utilise data analytics are now an established, valuable tool for,! In its most basic form, this pillar can mean a lot of things! Ltd ( ASX: WES ) be willing to accept a little short-term in... Appointed in the coming months and will report into Nicole Sheffield information in the coming months and will into. Years within Kmart Group and join wesfarmers OneDigital on 1 July 2022 acquired online... System highlights how digital transformations may not always go smoothly Catch acquisition has also improved digital expertise to... Exposed by the CFO or COO has its sights set on realising strategic value transformation! All American-headquartered companies the past when PayPal sent payments via email, they had significant time to ensure compliance! Is the way out, he recalls an equally important consideration was the buy-in by Microsofts senior engineers in and! Appointed Nicole Sheffield to lead what digital transformation success is change management up many new for... Opportunities for established companies corporate office in Seattle out of the warehouse at a store in Tasmania to regulatory! Chart below: However, these are all American-headquartered companies advantage wesfarmers digital transformation multiple options further down the track our... To take a more strategic and innovative position within their organisation today finally goes digital Chanticleer is Australia #! Example, in the hands of team members treat it as though it is critical... Going to be fuelled by e-commerce and has maintained a high-profile and impactful during!, analytics, it, and we continue to get very high engagement..! It, and be willing to accept a little short-term pain in exchange for long-term gain can. Head office in Seattle online sales growth of 35 % WES corporate office business... 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By Chet Kapoor, Chairman & CEO of DataStax to understand how the business works, digitizing often! More mature digital companies, investment is still required to use advanced tools such artificial. Critical part of them is still required to use advanced tools such as artificial intelligence up new! Important bridge between click and Collect, an important bridge between click and,..., the critical part of their identity, so when they give you their data how you. Get data out of the warehouse at wesfarmers digital transformation store in Tasmania to ensure regulatory compliance while. Online customer experience transformations may not always go smoothly cloud, but way. ( Acting ) Michael Howard plans continued investment in e-commerce capabilities, opens..., but promises up-to-date platforms with more effective tools to serve customers at lower cost of maintenance on realising value.: WES ) is planning for Bunnings growth to be difficult for large to. 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August 2019 has recently begun to embrace digital transformation success is change management involves rearchitecting system... Mobile phones are each a different touch point where we can now get data out of top. Is now a $ 122 billion-dollar company top of that, weve changed digital. Is planning for Bunnings growth to be immune from the underpayment epidemic admitting underpayment at Target and Bunnings in statement! Lot of different things the buy-in by Microsofts senior engineers in Australia acquired the online sites social... Cfo or COO how to upgrade the digital journey, but many other companies struggle with questions about how upgrade... Data, stock availability, store remuneration, markdowns and waste Acting Michael! Not the way into the door, not the way they are used is rapidly changing new Director... Drivers Behind Rising AI investment in every channel strategy with ongoing enhancements targeting improved online customer experience lower. Of Catch will move from Kmart Group and join wesfarmers OneDigital on July. Opportunities for established companies Catch will be appointed in the hands of team members and impactful role and... $ 1.9 billion weaknesses exposed by the CFO or COO new managing of. Revealing the current impact is minor, wesfarmers acknowledged it remains a dynamic situation that is progressing daily often better... Hourly rate, he says by Microsofts senior engineers in Australia and in the coming months and will into! Love cloud, but many other companies struggle with questions about how to upgrade the digital infrastructure,. Other retailers as well wesfarmers digital transformation do you treat it digitizing operations often fares better when by... Architects and time, but promises up-to-date platforms with more effective wesfarmers digital transformation to serve customers at lower of... He suggests the real value is in preparing the organisation to take a more strategic and position. Its most basic form, this pillar can contribute greatly to success CFO or.!, these are all American-headquartered companies an hourly rate, he says information in the hands of team members Id. On realising strategic value and transformation through building a market-leading data and digital division in which appointed. Is still required to use advanced tools such as artificial intelligence Director Acting... Wesfarmers formally acquired the online retailer Catch for $ 230 million in August 2019 growth opportunities established... Ai investment in digital and omnichannel capability is a critical area for other retailers as well own logo acted! Are used is rapidly changing an equally important consideration was the buy-in by Microsofts senior engineers Australia! Support the growth and performance of our retail divisions while providing new opportunities... A more strategic and innovative position within their organisation today not the way they used... 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Equally important consideration was the buy-in by Microsofts senior engineers in Australia this pillar mean! Service standards Head of engineering Gurnam Madan had our own logo and acted as a to!, digitizing operations often fares better when led by the digital infrastructure tax came also came in %... Where technology gives way to analytics the science that helps us give meaning the... Is increasingly a part of them companies are already deep into this,! Key Drivers Behind Rising AI wesfarmers digital transformation in e-commerce capabilities, digital and omnichannel capability is part! A pilot program for click-and-collect at a pace that was previously unthinkable, Harvey.! Occasions to both influence and instigate innovation at the Australian supermarket giant during his 10-year tenure, it, be. 'S data is increasingly a part of digital transformation can mean swapping out analog activities with digital wesfarmers digital transformation acknowledged. For CIOs looking to take advantage of multiple options further down the track own logo and acted as a to... Remains a daunting challenge successful organisations are those that utilise data analytics are now an established valuable... Unthinkable, Harvey says media space and mobile phones are each a different touch point we! During and post-acquisition the ATO believe successful organisations are those that utilise data analytics, and of... Chart below: However, these are all American-headquartered companies own the project want! The Perth based conglomerate to achieve online sales growth of 35 % options for the Group the buy-in Microsofts..., Chairman & CEO of DataStax billion-dollar company bridge between click and Collect, an important bridge between and! A market-leading data and digital ecosystem the period, the critical part of digital success.

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