Deloitte and CCFA release Guidelines for Retail Chains to Adopt Cloud Platforms

Published: 10 April 2019

Deloitte, in conjunction with several leading retail chains and cloud service providers, jointly released the Guidelines for Retail Chains to Adopt Cloud Platforms (the Guidelines) at the Cloud Computing Session of 2019 China International Retail Innovation Summit organized by the China Chain Store & Franchise Association (CCFA) on 10 April.

The Guidelines analyze the critical steps and approaches for retail chains to apply cloud platforms, focusing on eight topics: the development of cloud computing; cloud platform adoption planning; cloud platform technology stacks; considerations in cloud platforms implementation; approaches for retail chains to adopt cloud platforms; options for using cloud platforms; recommended steps to leverage cloud platforms; and the best digital transformation practices for retail chains.

"As indicated by the preliminary research, retail chains leveraging cloud services is an irresistible trend. Therefore, CCFA worked with related companies to develop the Guidelines throughout 2018, aiming to help retail chains address risks and problems related to the use of cloud platforms. CCFA will implement further initiatives on how to make good use of cloud platforms to drive the deep, extensive application of cloud computing in the Chinese Mainland", says Peng Jianzhen, secretary general of CCFA.

"Cloud computing has been advancing rapidly since 2009, and has now become the technological base supporting almost all new technologies. Cloud management platforms and other key technologies that enable most applications are increasingly mature. After analyzing the status quo, development history, application and expansion and future trends in cloud computing, we expect businesses to apply the technology on a massive scale in the future. Riding this trend, retail chains can adopt cloud platforms to cut operating cost, optimize management and working processes, improve innovation capability and seek new growth points," adds Chen Hongjiang, Deloitte China chief cloud service architect.

"New technologies are more widely used by consumers than by businesses, which is disrupting the retail industry and driving companies to take transformative action to meet new consumer demand. The efforts of retail chains to adopt cloud platforms are typically hindered by challenges related to coordination of processes, system selection, access control and safe operation", explains Zhang Tianbing, leader of Deloitte Asia Pacific Consumer Products and Retail Industry.

Companies generally need to complete six steps through a cloud process adoption: system assessment, system verification; data migration; application migration; system deployment; and monitoring improvement. There are generally three types of cloud platforms for business application: private, public and hybrid clouds. Retail chains should select cloud platforms based on their specific business characteristics, which the report divides into four categories:

• Complex industry chain players with many related businesses and systems and widespread business units;
• Large entities with complex production and operation management systems;
• Highly dynamic load distribution to some businesses (such as promotion and holiday campaigns) with different resource support needs according to business load; and
• Internet applications related to third party users.

Based on a comparison of advantages of private, public and hybrid clouds, and analysis of the typical business characteristics of retail chains and development trends in hybrid cloud, the Guidelines indicate that hybrid might prove the best choice for retail chains to implement their cloud strategies. Hybrid cloud is usually structured as application, platform service, hybrid cloud management platform and integration. After clarifying their business and application needs, retail chains need to define the dependency of their expected load on different cloud infrastructures when designing a hybrid cloud structure. As for cloud platform technology stacks, retail chains can establish functional frameworks covering professional applications, platform services, infrastructure services, unified cloud management platforms and safety management, the Guidelines suggest.

"By applying cloud platforms, traditional retailers can access data more safely, easily and efficiently, thereby realizing smart retail transformation. Companies should also consider issues related to technology, expenses and personnel management to facilitate migration from local to cloud storage. One priority is to maintain the stability of hybrid cloud platforms", adds Michael Liu, leader of Deloitte China Cloud Service. Stability is crucial for connections between cloud platforms and corporate intranets. It can be challenging to manage and operate hundreds of host servers for cloud services.

In addition to the necessary technical tools, management and operation systems are fundamental to providing basic support for effective planning, implementation and control of cloud platforms, according to the Guidelines. System design should therefore cover two aspects: organization (the who) and process (the how). Organizational structure clarifies roles and responsibilities during the operational process of cloud platforms, based on which teams and guaranteeing systems will be established to address the problem of "who". Meanwhile, processes have a direct impact on implementation and management during the daily operation of cloud platforms, thereby ensuring effective and efficient operation and addressing the problem of "how".