The retail market has changed a lot over the last years and Covid is often referenced as the main driver for digital transformation and self-service offerings. Retail customers can easily compare products and customer feedback online via various comparison websites and search engines.

The customers interact with the e-commerce application that allows them to search for products, purchase them and keep them updated about the delivery status. Customers do not care where the application is hosted or what the technology stack is. They care about things like usability, speed, features and they want to interact with the applications on different devices.

What is Cloud Native?

Cloud Native is an approach where your application leverages the advantages of the cloud computing delivery model. Cloud-native systems are designed to embrace rapid change, large scale, and resilience. With this approach you let AWS do the Undifferentiated Heavy Lifting and your team can focus on the actual application. For example, you can deploy your code to fully managed runtime environments that scale automatically and AWS manages all the operational aspects and security of those runtimes for you.

Why is Cloud Native a retail enabler?

Taking a customer centric view, you want to focus on the things that provide value to the customer. The most visible aspect of the retail solution is the actual application or service – not the IT infrastructure behind it. Therefore you want to make sure that your application keeps improving without wasting time and budget on things that can be commoditised.

Let’s look at an example: You run a coffee shop. You grind the beans so the coffee is fresh.  Your customers can then enjoy a great tasting experience. This is the ultimate business value that the customer can see. You would not generate the electricity yourself, as an energy provider does that in a much more efficient way.

This is exactly the same with all the underlying infrastructure of your retail application: AWS can manage this for you in a much more efficient, secure and cost effective way. AWS calls all those activities that do not differentiate your business from others ‘Undifferentiated Heavy Lifting’. By handing all those Undifferentiated Heavy Lifting activities over to AWS you can focus on the things that really matter to your customers – like good coffee!

How do you get started?

If you start from scratch then you have an easier journey ahead because you can tap into all the cloud native offerings right from the beginning. For now we will assume that you already have an application and you want to move it to the cloud, leveraging the advantages of Cloud Native services. At the beginning of your journey you will make sure you have answers to some of the typical discovery questions, such as:

  1. Understand your current state and pain points
    1. Time to market:
      Do you get new features out quick and often enough. If not, what is causing those delays?
    2. Data insights and metrics:
      What insights do you need to understand what your customers want and how you can increase your conversion rate?
    3. Quality assurance and security:
      Are there sufficient quality checks in place before you release new features or product catalogue items? Do you have guardrails in place that protect your team from security breaches?
  2. Understand the Return on Investment of Cloud Native and why do you want to migrate
    1. Lost opportunity:
      What is the impact of not moving to cloud native? For example you will be slower in releasing new features than your competitors.
    2. Operational simplification:
      How can you focus more on your customer facing application when you remove the Undifferentiated Heavy Lifting?
    3. Business agility:
      Do you need geographic data isolation to meet regulatory requirements or do you need temporary environments for testing or demos?
  3. Are your ways of working aligned with where you want to be in the future?
    1. Internal collaboration:
      Is your internal communication structure future proof? “Conways Law” describes  how organisations design systems which mirror their own communication structure. This is one of many reasons why organisation move towards cross-functional delivery squads.
    2. Team hand-offs:
      Do you have many hand-offs during your software delivery life-cycle? This will slow down the process due to waiting times between team hand-offs and also potential communication gaps.
    3. Skills:
      Does your team have the required skills? By offloading the Undifferentiated Heavy Lifting to AWS the required skill set becomes narrower and your team can focus on training that is relevant for the application development and test automation.

How to expertly execute a Cloud Native approach

  1. Understand your strategy:
    1. Strategy:
      The strategy will articulate why you want to achieve change and what principles will guide the the target state
    2. Target State:
      The target state describes where you eventually want to be. Words like ‘customer focus’ and ‘simplification’ should be on the forefront of your mind. Amazons “Working backwards from the customer” framework and the AWS Well Architected Framework can help you here.
    3. Transitions:
      The transition states describe how to get to your target state. The transition states are individual architecture blueprints that describe your transformation stages.
  2. Build a roadmap
    1. Define a backlog:
      The backlog articulates the expected business outcomes typically in form of user stories that can be achieved within a sprint duration (1-2 weeks). Good user stories also include acceptance criteria and test cases.
    2. Understand dependencies:
      The backlog is driven by business outcomes but there will be some technical dependencies that dictate in which order some activities need to be completed. Understanding those dependencies is important to make sure the team can be productive and do not have unnecessary wait times.
    3. Identify skill gaps and build a learning plan:
      Once you build your backlog you get a better understanding of the required skills. This helps you to plan for training courses and other learning initiatives.
  3. Build a governance framework
    1. Strategic guidelines:
      Having clear articulated guidelines in place will help you to speed up the decision process for any changes you will perform. Make sure the required teams are represented in your governance working group so that you don’t miss out any requirements and concerns.
    2. Align with best practices:
      There are lots of best practices that can be utilised rather than reinventing the wheel. The AWS Well Architected Framework for example can help you with architecture guidelines and principles.
    3. Define how you measure success:
      You need to know what good looks like: what does a good customer experience look like and what are your milestones? What is the productivity, team happiness and customer satisfaction that you need as a successful and sustainable retail business? Agree on a set of metrics that you can compare against. You can gradually build up these metrics.
  4. Establish cross-functional teams (squads)
    1. Squads:
      A squad will have team members representing architecture, development, testing and technical business analysis. The goal is to establish an autonomous team that can tackle the user stories from the backlog. Depending on your organisation structure the squad will be represented by members from different business units.
    2. Ceremonies:
      Since the squad members can come from different business units, they might not have worked together before. Therefore a good team collaboration is crucial and agile ceremonies will help with that. Some of the key ceremonies are sprint planning, daily standups (maximum 15 minutes), a demo at the end of the sprint to show the stakeholders the produced outputs, followed by a retrospective to get feedback from the team.
    3. Experiment:
      When you change your ways of working approach it is easier to start small and pick an initiative that is not overly time critical. This way you can start with a smaller team, establish short feedback loops and tweak the approach for your organisation. The insights from the retrospective will help you to improve the process. Once you have established one successful squad you can start rolling out the new process further.
  5. Measure your outcomes:
    1. Feedback from your team:
      Your team will provide feedback during the retrospective session at the end of each sprint. You can measure aspects like: How much did the team learn, did it feel like they delivered value? This gives you visibility of any trends and if any changes around the process result in better feedback.
    2. Feedback from the customer:
      There are several ways how you can measure this. Customer surveys are insightful if you ask the right questions. Statistics from your website will be very helpful for any retail organisation. You can measure things like average time on a page, bounce rate, exit rates, conversion rates. If you can link those numbers back to your releases and release changes you can actually see which website updates change the customer behaviour. Machine learning is another way how you can identify customer patterns and determine the sentiment of online chats or phone calls to a virtual call center like Amazon Connect.
    3. Insights from your automation tools:
      Your automation tools can provide metrics such as number of incidents, criticality, ratio of successful deployments, test coverage and many more. Once you can capture those metrics you can run historic comparison and project trends. If you link incidents to releases you will also get insights into the root cause of problems.

Key Cloud Native takeaways

Adopting Cloud Native is not just a technical challenge, it is a journey. If you want to turn it into a success story you need to consider the cultural changes and also a governance process that makes sure you are heading in the right direction. This can be complex and challenging when you haven’t done it before. The good news is that Anchor have championed it many times and we can help you on the journey.