By Abdi Essa, Regional Vice President, UK&I, Dynatrace.
The COVID-19 pandemic has changed the way people shop, making mobile and online experiences more important than ever. In response, many retailers have accelerated their digital transformation, and the pace is set to increase even further as customers’ expectations for sophisticated shopping experiences continue to rise.
Retailers are increasingly running core systems in the cloud due to the inherent flexibility, efficiency and scalability benefits. However, the introduction of more dynamic multicloud environments introduces a scale, complexity and frequency of change far greater than retailers had to manage in the traditional data centre model. This means operations can quickly get out of hand, becoming excessively complex and unmanageable by IT teams, to the extent that just ‘keeping the lights on’ costs the average retailer $4 million annually.
Retail IT under pressure
Lockdowns have put retailers under huge pressure to deliver new digital capabilities to their customers quickly and effectively. Apps and cloud systems have become central to all facets of the business, from driving revenue and operational and supply chain transformation, to supporting new shopping experiences for customers. Fast-changing demands and growing cost pressures mean digital teams must now innovate more rapidly, collaborate more efficiently, and deliver deeper value.
Nearly 9 in 10 retail CIOs already see the pace of change accelerating within their organisations, according to recent research. A majority (61%) also expect their digital transformation to continue accelerating. Success here will be a challenge, as 43% of tech teams’ time is now spent ‘keeping the lights on’ to make sense of increasingly complex systems.
With most retailers already operating in multicloud environments and 60% set to increase their use of them this year, nearly three-quarters warn more manual effort and time will be needed to keep these systems performing well. Nearly two-thirds fear that their multicloud environments have become so complex that humans alone simply cannot manage them.
The drive to more dynamic, distributed architectures has stretched retail IT teams more thinly than ever. For example, containers and microservices come and go in seconds, and IT teams are faced with an unprecedented volume and velocity of data from the metrics, logs and traces generated by these cloud-native ecosystems.
To understand and monitor their technology stack, retailers are grappling with an average of 10 technology monitoring solutions. Yet still, they are only achieving real observability into 10% of their architecture, putting internal operations, customer experience, and ultimately revenue at risk.
A radically different approach
The spread of multicloud environments, while essential to agility and innovation, puts the spotlight on the need for change in most retail IT departments. To prevent serious risks to their operations and customer journeys, retailers must take a vastly different approach to IT Ops, DevOps and digital experience management.
Nearly 85% of retail CIOs want to reduce the number of tools and amount of time spent monitoring these complex environments and maintaining the user experience. In the research, they highlight several core capabilities that will become essential: most of all the ability to identify the relationship between IT performance and business metrics, as well as automation, to replace much of their manual instrumentation and maintenance. For many, the ability to combine visibility across the entire cloud environment with business metrics in a single platform, will become essential.
To understand what is going on in their dynamic, multicloud environments, retailers need a new approach that delivers sophisticated capabilities such as distributed tracing and real-time topology mapping, and code-level detail on entity relationships and user experience, all in context.
As a result, observability with continuous automation and AIOps, is now a business imperative. Full-stack observability, spanning metrics, logs and traces, as well as data from user experience and the latest open-source standards, provides the insights retailers need to deliver outstanding digital customer experiences, while automation and AIOps eliminate manual processes that hinder customer experience innovation.
Nearly all retail CIOs surveyed see AI as critical to IT’s ability to cope. They estimate 40% of their time spent “keeping the lights on” could be eliminated through automation, which would also deliver, on average, $1.6 million in annual savings for retailers. Having a reliable, single source of the truth, backed by a common model for data, improves retailers’ ability to optimise digital shopping experiences and frees up more of their time to drive valuable growth.
Now is the time for retailers to act. As multicloud environments grow in scale and complexity, there is a clear need for them to harness automated observability with AI at the core. Ultimately, this approach will help reduce their focus on mundane, manual tasks and enable them to focus on more strategic work that drives greater value for customers, and more success for the business. That capability will be invaluable as the industry looks to bounce back stronger than ever as the world emerges from the crisis of this pandemic.