How and why is Ingram Micro becoming a platform business?
Our history is rooted in a traditional distribution model of marketing, selling, and shipping vendor products to our resellers. But today, we’re working toward becoming a platform business, and recently re-entered the public eye under the NYSE: INGM ticker symbol. Many digital transformations focus on platforms to support the business, but that’s different from running a platform business. To be a platform business, you need a network, demand, supply, data, and a customer experience that differentiates. This requires re-wiring the DNA of the organization and creating a high-performance team that believes in the art of possible.
Ingram Micro doesn’t manufacture anything. Instead, we own the mode of connection between OEMs, technology brands, vendors, and hundreds of thousands of resellers. We connect demand and supply, but we don’t own production. Our business is our people and our platform, Ingram Micro Xvantage.
As a platform company, we’ll be able to price every SKU in real time, push personalized product recommendations, and bundle solutions. We’ll also be able to provide product feedback and usage insights to our partners. With these unique capabilities, the platform is fast becoming what facilitates the technology ecosystem. Ingram Micro’s reach extends to nearly 90% of the population, and with Xvantage, we’re working to have everything happen in minutes and seconds versus weeks and days.
What were the technical considerations moving from a distribution model to a platform?
We divided the technical challenges into a few areas, none of which focused on an ERP rationalization strategy. We focused on extracting data from the ERPs through our data mesh using our own custom-developed technologies. The strategy was to replicate transactions from those ERPs in near real time, and stage the data in a purposeful store format on the cloud.
This data was created with both an AI ingestion factory and an operational data store, so that each transaction updates our records and improves our algorithms. These data and models then feed into intelligent headless engines, which use microservices to drive business logic both synchronously and asynchronously. They chain together with the transaction boundaries to create the experience, and we created abstraction in every layer of the architecture to create flexibility, and help scale and pivot business models.
How would you categorize the new skills you needed to build the platform business?
The first hire we made in our platform journey was a chief data officer with experience from Instagram and Priceline. We then hired talent from the hyper-scalers, as well from Google and Meta. When technical experts like these join the company, we group them with our more business-minded technologists so each can learn from the other.
We also created a digital operations group called DigiOps, which is responsible to ensure our digital investments drive ROI. They are P&L leaders who understand the needs of our business partners and customers, and help drive adoption. While the technology group is responsible for building and running the platform, DigiOps focuses on creating commercial value with everything we build.
Most technology initiatives fail because the team lacks a business-focused, growth mindset. Our DigiOps group gives us a single point of accountability for digital investment value, and creates an operational spirit in the technology team. We can’t be a technology company without bringing business operations into technology.
How did you manage that shift in incentives?
We have a platform value goal and technology goals for reliability, stability, and compliance. One is a value capture goal and the other is a run goal. These high-level metrics tie to every leader’s objectives. If we don’t meet the overall value goals, then we’ve all failed.
As a platform company, measurement is crucial to success. To keep us accountable and moving forward, I conduct a monthly and quarterly operating review with my team where we assess financial results and value so everybody knows how we’re trending. We do this because we want our engineers to understand how their work creates value.
This is crucial in a value-driven development model. DigiOps and platform operators look at our priorities, as well as commercial and go-to-market strategies, and prioritize accordingly. We have a very tight way to govern and measure our efforts so we don’t focus on things that don’t deliver value.
All of this is intertwined. It’s not just about cost optimization or uptime. Those are important, but we prefer to use FTM: follow the money.
One day you were a distribution business, and today you’re becoming a platform business. How did you get everyone on the same page during such a huge transformation?
Our CEO Paul Bay and I talk multiple times a day. We’re aligned, and Paul has made the importance of this transformation clear to the company and our stakeholders. Every week, Paul and I meet with the regional presidents of our top-performing countries to assess how the platform journey is progressing. We discuss everything. We look at the results and metrics and share our thoughts.
This transformation is now in our DNA. It’s the number-one strategic focus for the company. Everybody is rowing in the same boat and we talk about it constantly.
What are your transformation leadership lessons learned?
First, no company is ever ready for transformation. You need to make them ready. To do this, a transformative leader will spend adequate upfront time analyzing the situation from different perspectives.
When I joined Ingram Micro, I knew nothing about distribution. My job was to improve the e-commerce experience, not build a platform business. As I worked with my team and we considered the future of this industry, becoming a platform business became our answer and vision. The second lesson is to stop aiming for perfection. Transformation is about being imperfect, and once you accept that, you can focus not on perfection but being a little better every day. That is the essence of transformation.
The third key lesson is to maintain your humanity throughout the process. Transformation leadership is about communicating with compassion while executing with passion. It’s about being vulnerable and letting people relate to you. Be transparent and don’t hesitate to have the hard conversations. Be comfortable with being uncomfortable, admit your faults, and ask for help. It’s important to be relatable and empathetic. Acknowledge failure and commit to doing better. Be aggressive in technology, value creation, and timelines, but remain amazingly human.
Read More from This Article: Transforming distribution: How Ingram Micro is becoming a platform business
Source: News