Eager shoppers couldn't wait to get their hands on a piece of the Lilly Pulitzer for Target action when the half-priced luxury clothing collection launched online and in stores Sunday morning.
The demand was so high that the number of visits to Target's site reached Black Friday levels, the selection sold out online within three hours and -- here comes the point for CIOs -- Target's website and mobile shopping apps were unable to cope. Not only did the retailer delay the online launch by two hours, but it also had to take the website down for about 20 minutes as traffic got heavier -- prompting annoyed customers to take to Twitter, which fed yet more interest in the clothing line and led to more social media complaints.
The event has fomented a lively debate among retail types about whether any of these glitches -- lack of inventory, IT failures and customers in high dudgeon -- were a bad thing for Target. "It is a marketing advantage [and] creates more demand," one marketing expert told The Wall Street Journal. For CIOs, however, the moral of the Lilly Pulitzer story could not be more different, according to Glen O'Donnell, a vice president and research director at Forrester.
"This is a good example of what happens when capacity is not up to snuff," he said, adding that planning for sudden surges in capacity demands, such as what happened with Target, is not as straightforward and predictable as it was in the past. But it's certainly possible today with cloud.
Yet like Target, many enterprises have largely let capacity planning fall by the wayside, O'Donnell said, because there's too much "artistry" and not enough systems engineering in how IT organizations function. Artistry?
Artistry in the sense that "things are sort of handcrafted in the world of IT. They're not industrialized," O'Donnell explained, citing automobile manufacturing as an analogous example of this dichotomy. When you buy a hand-built car, you understand that while it will be highly customized, it will also be considerably more expensive than, and probably not as reliable as, a product that's been mass-produced through industrial means, he said.
Cameron Haight, research vice president at Gartner, calls this industrial approach to IT "Web-scale IT" -- a "total re-think of the IT value chain" that allows born-digital companies like Amazon, Facebook and Google to maintain low data center and operations costs while rapidly providing new services in order to meet the needs of their digital businesses.
Integration of applications and infrastructure
But today, it's not just these cloud-native companies that have a need for industrialized IT. "More and more [companies have] come to the conclusion that they too are increasingly a digital business, and thus they need to assess where they may be able to apply Web-scale IT concepts," Haight wrote to me in an email.
In fact, there's already quite a number of companies today applying industrial IT within pockets of their organizations, the analysts said. For instance, Gartner predicts that by 2020, 40% of global enterprise CIOs will have launched a Web-scale IT initiative. Today's Web-scale IT projects are found mainly in areas that deal with systems of engagement -- customer-facing systems like mobile apps, e-commerce sites and other digital channels customers directly experience.
But these cases are not widespread. Moreover, for an industrialized approach to take hold enterprise-wide, there needs to be a transformation in how most IT organizations deliver IT, said Forrester's O'Donnell.
Right now, "we look at the different pockets and optimize the different pockets, and we don't really look at it very effectively as a whole system," he said. A systems level of thinking involves looking at applications and infrastructure as integrated, something that born-digital companies already do. "When you look at Facebook … they bind their applications and infrastructure together as one system, and that's necessary for them. But it's also becoming very necessary for your typical enterprise," O'Donnell said.
There's another hurdle CIOs must clear to operate more like these Web giants, both analysts said.
A systems level of thinking is "a fundamental change in the behaviors of the organization," said O'Donnell. For one, CIOs have to help their teams understand that they have to let go of having total control of the technology. "We can't babysit the technology anymore. We have to accept that it's going to be more highly automated," he said. This means letting go of certain practices and skill sets IT has held onto tightly in the past.
Culture shock: More risk-taking, less babysitting
According to Gartner's Haight, revamping the IT value chain also involves adopting a culture of learning and practical risk-taking that facilitates innovation. And CIOs play a significant role in this shift.
"Senior IT's role in a DevOps/Web-scale IT world becomes more of coaching and mentoring (and setting out broad business and ethical guidelines), while enabling and supporting technical and other decisions being made by people closest to the problem," he said.
So could Target have avoided the Lilly Pulitzer snafu had it taken a more industrialized approach to IT? O'Donnell suspects so. "If Target was doing better with its systems engineering, this probably would not have happened," he said. (As for the question of whether Target was helped or hurt by the systems failure -- we'll leave that to the marketing gurus.)
Meantime, Haight said it's important to keep in mind that even cloud giants like Netflix also fail sometimes. But their culture is different from that of many typical enterprises: "They make it part of their culture to continue to practice recovering from failure and hence restoring service."
CIO news roundup for week of April 20
Here is more technology news from the week:
- Google is taking on wireless service providers. On Wednesday, it debuted Project Fi, a basic phone service that charges customers only for the amount of cellular data they use per month; each gigabyte of data costs $10 a month.
- Box is opening its software to outside software developers. Chief executive and co-founder Aaron Levie unveiled to coders Wednesday ways they can build an application using Box's software kits. The developers will then be charged for each user of the application.
- What happened at the RSA 2015 Conference in San Francisco? For starters, experts questioned whether the IoT security hype is justified; former federal officials called for better information sharing; and security administrators mulled over how to trim bloated security portfolios, reported sister site SearchSecurity.
- The Apple Watch finally arrived in stores today. But before you head to the nearest Apple Store, be forewarned: The supply will be very limited.
Read more about why Gartner ranks Web-scale IT as a top 10 strategic trend for 2015. Then, dig deeper into how companies and CIOs are striving to keep up with multichannel customer engagement.