Edge-to-cloud powered digital transformation comes to life in this scenario of a big box retailer

Digital transformation as a business priority has been the theme of the past decade. But in the early 2020s, before the global pandemic of COVID-19, digital transformation has been exaggerated. Businesses that are on a five or even ten-year transformation path are suddenly trying to make radical changes within five to ten weeks.

At ZDNET, we’ve taken you deep into the many technologies that drive digital transformation. Most of our coverage is focused on technology, from artificial intelligence arrive cloud to the mobile phone to edgeand more.

In this article, we’ll 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 that business might need to integrate to meet its goals. growth and profits.

Because many of these initiatives tend to be kept secret inside the real-world companies that implement them, in this article we’re going to talk about a chain retailer that builds and fictitious distributor: Home-by-Home. That way, we can dive into some areas of business that a real business might not be comfortable disclosing publicly.

Case study: House to house

At a basic level, Home-by-Home stores need to be able to handle regular customer and payment transactions. While this is a common practice for nearly all retailers, it is also one imbued with technology and innovation.

Each payment transaction triggers an up-to-date data store. Inventory levels for any purchased products need to be reduced, which can trigger re-orders or transfer of shipping from warehouse to retail. That decision can be sent to a human purchasing agent or it can be managed by AI, which takes into account a wide range of pricing and availability issues around the world. optimal decision.

Individual customer, store, and region data is passed into analytics to provide product managers with insights into purchasing trends and possibly show new trends that may not obviously without access to live data.

And because most Home-by-Home stores have wireless shelf talking cards (small screens that act as labels showing customers the price of an item), a different AI process takes place. affect sales rates, demand, and inventory availability, will then automatically decrease or increase prices in the store aisle or initiate an on-site sales rebate program.

On a global level, retailers need to monitor supply chain issues around the world and take into account weather, political and shipping analytics to ensure goods are always where they need to be. need. AI also plays a role here. In fact, we will see that AI is playing an increasingly larger role in the entire Home-by-Home extended 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 vendors are able to account for the constantly changing terrain of supply and demand. international, and change suppliers, orders and promotions to suit the current situation. happen availability and logistics.

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

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

Due to a lot of processing 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 acts like a mini data center and operates out of a box the size of a small warehouse. Real-time on-premises work is processed at the edge (store-by-store) and data is seamlessly fed from the store to the central data system Door-to-door and integrated cloud operations.

The company has comprehensive e-commerce services through desktop browsers and mobile apps that help manage product availability, ordering and fulfillment/delivery processes. Since more than 70% of online customers order via mobile app and even use the mobile app while actually in the store, the company has invested hugely not only in the quality of the app but also into the integration of apps and business intelligence and real-time data flowing back from stores to the cloud.

Since 2000, Home-by-Home has converted larger stores into dual-purpose facilities, using them for customer day-to-day visits and after-hours e-commerce fulfillment warehouses. . The company added automated picking robots to overnight shifts, leading to a greater reliance on real-time inventory management, cameras, and AI. All of these improvements have allowed the company to deliver heavier and more commonly ordered goods directly to consumers from local to store, while significantly cutting wait times and shipping costs. transfer. Central warehouses that fulfill e-commerce orders still stock a few hundred thousand more confusing SKUs shipped 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 the legacy point-of-sale system and central database to the Edge-to-cloud digital transformation is being actively implemented across Home-by-Home operations.

End-to-end integration across all stores and vendors

There’s a common operating principle by which Home-by-Home measures all of its IT decisions: everything must integrate and do it intelligently. It is not enough just to have continuous streams of data coming from the stores to the organization-wide database.

That data has to be in the right place at the right time and trigger the right actions. The data flow can’t be unidirectional either. Data has to move from vendors and suppliers to different parts of the company to stores and vice versa.

Home-by-Home defines edge operations as everything that happens at the store level, as well as everything that happens in transit, at the dock, and even at the supplier’s warehouse. Home-by-Home has systematically refined its vendor choices, looking at whether their IT operations can share API and microservices data for a better view of their performance. Global dynamic updated every minute.

Home-by-Home still operates its own data centers. It has two facilities for managing confidential information including employee personal data, financial data, data that needs to be localized for many tax benefits, and information that can affect performance public stocks.

But the company also invests heavily in cloud infrastructure as well as SaaS implementations. As a general rule, any application that can be made available by on-demand subscription is selected for the period of time required to build internally.

All this end-to-end integration from edge to cloud, across all stores and providers, factoring in weather forecasting and logistics, and tracking shippers can be very complex. The sheer number of IT systems, accounts, dashboards, and management consoles is astounding. But when Home-by-Home decided to make uncompromising digital transformation a core value, it began to look for vendors who could also provide the integrations needed to make it possible. manageable.

Dynamic provisioning and on-demand infrastructure from edge to cloud are key to its solution. That way, when it adds new resources — such as when it had to ramp up support for the 450-store chain it bought earlier this year — it doesn’t just rely on forklift infrastructure. Much of the back-end functionality can be simply extended as needed and dynamically provisioned.

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

Edge-to-cloud platform

HPE GreenLake is an example of one of the leading edge-to-cloud companies offering centralized dashboards, on-demand delivery, and the pay-as-you-go benefits of public cloud infrastructure. plus for on-premises and installed edge computing. This is what a company like Home-by-Home needs to be able to start servicing its new acquisition right away. There is no ordering and waiting time for new configurations.

Also: How edge-to-cloud is driving the next phase of digital transformation

Is different edge-to-cloud provider such as AWS Outpost, Azure Stack, Google Anthos, IBM Cloud Satellite, and Red Hat’s Edge Validated Patterns provide native solutions for edge-to-cloud stacks. The bottom line is that IT professionals no longer need to have their solutions ready to solve problems at different points in their operational infrastructure.

The edge-to-cloud platform brings together the entire solution, delivering the benefits of individual vendor services but without the chaos of multiple dashboards and different payment requirements. Instead, there can be benefits of the best solutions available, but run the entire hybrid, multi-cloud, multi-vendor, multi-component network as a unified whole. This not only delivers productivity and cost savings, but also reduces errors and improves overall security.