Digital transformation driven by the edge to the cloud comes to life in this large retailer scenario | Daily News Byte



Digital transformation as a business priority has been the theme of the past decade. But in the early 2020s, in response to the global COVID-19 pandemic, digital transformation was accelerated. Businesses that had been on a five- or even ten-year transformation roadmap were suddenly trying to make radical changes in five to ten weeks.

Here at ZDNET, we’ve taken you through many deep dives into the technologies driving digital transformation. Most of our coverage is focused on technology, ranging from AI to the cloud to mobile to the edge and more.

In this article, we will take a slightly different approach. Instead of starting with technology and what you can do with it, we’ll visit a prototype business and look at all the technologies it might need to integrate to meet its growth and profitability goals.

Since many of these initiatives tend to be confidential within the real-world companies that run them, in this article we’ll talk about a fictional chain of home and building goods retailers: home-to-home. That way we can dive into some of the areas of the business that the actual business may not be comfortable disclosing publicly.

Case study: from house to house

At a basic level, door-to-door stores must be able to handle normal billing and customer transactions. While this is a common operation for almost all retailers, it is also deeply imbued with technology and innovation.

Each billing transaction triggers a data update repository. Inventory levels for any product purchased should be reduced, which may result in a reorder or transfer of shipments from warehouse to retailer. That decision could be sent to a human purchasing agent, or it could be handled by AI, which would take into account a wide range of pricing and availability issues around the world to make the optimal decision.

Data on individual customers, stores and regions is fed into an analytics engine to help product managers gain insight into buying trends and potentially uncover new trends that might not be apparent without access to live data.

And since most Home-by-Home stores have wireless talking shelf tags (small displays that act as labels to show customers the price of an item), another AI process factors in sales rate, demand and available inventory, which will then dynamically decrease or increase in-store prices or start a discount offer on the spot.

Globally, the retailer needs to monitor supply chain issues around the world and take into account weather, political and delivery analytics to ensure goods are where they need to be when they are needed. AI also plays a role here. In fact, we will see artificial intelligence play an increasing role throughout the extended Home-by-Home 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 take into account the ever-changing terrain of international supply and demand, and change suppliers, orders and promotions to match. – event availability and logistics.

The company has thousands of stores ranging from about 105,000 square feet to about 170,000 square feet, with 30,000 to 60,000 individual products depending on the market in which it operates. To keep track of all this inventory on each store floor, each store is using a ton of IoT, especially in RFID and theft prevention. RFID items also help speed up checkout for some of the lines where consumers check out.

In addition, the company uses an array of sensors to manage environmental control (humidity control is critical in some departments) and energy costs. While Home-by-Home has long had security cameras in stores and parking lots, it recently began pumping video through a series of intelligent image processing systems that help flag safety incidents and accidents immediately.

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 and temperature-controlled computer bay that functions as a mini data center and operates from a box the size of a small shed. Real-time on-site operations are handled at the edge (each store) and data from the store is continuously fed into central data systems from home to home and integrated cloud operations.

The company has a comprehensive e-commerce offering through a desktop browser and a mobile app, which helps manage product availability, ordering and the shipping/delivery process. Since more than 70% of online shoppers order through a mobile app and even use the mobile app while actually in the store, the company has invested heavily not only in the quality of the app, but also in the integration between the app and the business information and real-time data that is returned from stores to the cloud.

Since 2000, Home-by-Home has been converting larger stores into dual-purpose facilities, using them for customer visits during the day and as warehouses for e-commerce fulfillment after closing hours. The company added autonomous picking and packing robots for the night shift, leading to an even greater reliance on real-time inventory management, cameras and artificial intelligence. All of these improvements have enabled the company to ship heavier and more frequently ordered goods directly to consumers from local to store with significant reductions in wait times and delivery costs. The central warehouses that respond to e-commerce orders still have several hundred thousand obscure SKUs that are sent via package delivery services.

Earlier this year, Home-by-Home acquired a competitor with 450 stores and began a significant migration effort to move them from legacy point-of-sale systems and central, separate databases to an edge-to-cloud digital transformation that is actively in practice. during all door-to-door operations.

End-to-end integration across all stores and suppliers

There is one general operating principle by which Home-by-Home measures all of its IT decisions: everything must be integrated, and smartly. It’s not enough to just have constant streams of data coming from stores to databases across the organization.

That data must go to the right places at the right time and trigger the right operations. Data flow can’t just be one-way either. Data must flow from vendors and suppliers to various corporate departments to stores and back.

Home-by-Home defines edge operations as everything that happens at the store level, but also everything that happens during shipping, on the docks, and even in supplier warehouses. Home-by-Home systematically refined its vendor choices, considering whether its IT operations could share API data and microservices to have an up-to-date global view of operations.

Home-by-Home still has its own data centers. It has two facilities that manage confidential information, including employee personal data, financial data, data that needs to be localized for various tax benefits, and information that may affect public stock performance.

But the company is also investing heavily in cloud infrastructure as well as SaaS implementation. As a general rule, any application that can be secured by logging on demand is selected over the time it would take to build it in-house.

All this end-to-end integration from edge to cloud, across all stores and suppliers, taking into account weather and forecasting logistics, and tracking shippers can be extremely complex. The sheer number of IT systems, accounts, dashboards and management consoles is staggering. But when Home-by-Home decided to make uncompromising digital transformation a core value, it set out to find suppliers who could also provide the integration it needed to manage it.

Dynamic provisioning and on-demand infrastructure from the edge to the cloud is key to its solution. That way, as it adds new resources — like when it had to ramp up support for the 450-store chain it bought earlier this year — it’s not just relying on forklift infrastructure. Much of the backend functionality can be easily scaled up as needed and provisioned dynamically.

Seasonal spikes are also accommodated, allowing the company to add about 30% additional IT infrastructure resources for critical home improvement seasons, but then scale back and reduce spending during months when consumers are focused on other interests.

Platforms from the edge to the cloud

HPE GreenLake is an example of one of the companies offering edge-to-cloud services that bring a centralized dashboard, on-demand provisioning and the benefits of public cloud infrastructure for a fee to on-premises and edge computing. installations. This is what a company like Home-by-Home needs to be able to immediately start providing services for its new acquisition. There is no ordering and waiting period for new configurations.

Too: How edge to cloud drives the next phase of digital transformation

Other edge-to-cloud providers, such as AWS Outpost, Azure Stack, Google Anthos, IBM Cloud Satellite, and Red Hat’s Edge Validated Patterns, offer their own view of the edge-to-cloud stack. The key takeaway is that IT professionals no longer need to hoard their solutions to solve problems at different points in their operational infrastructure.

Edge-to-cloud platforms help aggregate entire solutions, providing the benefits of individual vendor offerings, but without the chaos of many different control consoles and billing requirements. Instead, it is possible to have the benefits of the best available solutions, but manage the entire hybrid, multi-cloud, multi-vendor, multi-constituent network as a coherent whole. This results in not only productivity and cost savings, but also reduces errors and improves overall safety.


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