‘Digitalization’ has become some sort of an industry buzzword of late. According to BoF and McKinsey&Company’s ‘The State of Fashion 2019’ report, prominent fashion executives have highlighted four trends that will dominate the industry: mobile dependency, a platforms-first mentality and start-up thinking. All digitally driven. As a result, the role of the CIO is getting increasingly bigger in every fashion company, as they are tasked with the heavier responsibility of guiding their CEOs and companies with an IT-centric corporate vision. Gartner has reported that 47% of CEOs are challenged at the boardroom level to make progress in digital, and 56% of CEOs have already discovered increased profits through digital improvements.
If you look at the fashion industry, digitalization is in fact already happening. But this phenomenon is proving to be a double-edged sword. While there is an urgent need for fashion companies to digitize and automate processes for more data and transparency, CIOs are dealing with an increasing amount of disparate IT systems, creating more organizational silos. For example, a Forbes Insights report states that a business app requires an average of nine operating systems, eight cloud services and nine data management systems. Therefore, CIOs have to be careful when it comes to selecting which new systems to adopt, by studying the past – their legacy systems and the future – by ensuring their systems are Industry 4.0-compliant.
Examining the Past
In 2018, it’s all about digitalization; but in 2019 – it’s all about effective digitalization. Replacing all existing systems with new ones will be extremely costly, so fashion CIOs have to prioritize processes to automate, while ensuring compatibility between old and new systems and tools. Developing a good digital backbone that can combine both systems is a good way to start. Many fashion companies are already doing so with the help of PLM solutions. They need to keep track of their technology portfolio, and the expected lifetime of each asset to be able to make good investment decisions. According to a Gartner survey, companies usually have these priorities in mind when it comes to investing in new technology:
To upgrade IT processes and capabilities
To offer out-of-the-box products and services
To enhance the customer experience
To increase profits
With these long-term objectives, fashion CIOs need to find a balance between allocating budget to maintain existing systems, and disruptive technology. They also need to factor in the amount of time needed to retrain their staff on how to use these new systems.
Investing in the Future
Fashion CIOs also have to ensure that their current systems are compatible with future IT trends, to ensure that they have longer life expectancies. They should take advantage of these four trends that underpin digitalization and are most relevant to the fashion industry:
Gartner’s ‘2019 CIO Agenda’ report states that more than 50% of the companies surveyed have moved at least one function to the cloud, and 20% of the top performers’ ERP systems are completely powered by the cloud. Cloud technology has numerous benefits, including operational agility, limitless data storage capacity, and heightened computing ability.
Created either from customer touchpoints our from each business’ own internal operations and processes, ‘big data’ can help fashion companies gain valuable insights into the buying behavior of their consumers, and enable companies to create the exact products that their consumers want.
Internet of Things
In today’s world, consumers value experiences more than anything else. IoT has made it possible for fashion companies to collect real-time data to increase supply chain responsiveness, improve the shopping experience, by creating a consumer feedback loop for continuous improvement.
Fashion companies can use the insights that they derive from customer data to offer personalized shipping experiences via artificial intelligence.
By bridging the past (i.e. legacy systems) and the future (i.e. new technology), fashion CIOs help their companies derive more value from their IT eco-system.
To learn more about how they can do so, please read our e-guide, ‘Fashion Digitalization: How can CIOs set the Trend?’