Industry
Retail
Omnichannel CX and Intelligent Innovation – The Future of Retail
HIGHLIGHTS
- Heavy investments in technologies such as cloud, automation, ERP, AI, and data platforms often do not translate into significant business benefits. For retail organisations, the challenges are magnified by demand volatility, dispersed store networks, and operational silos.
- As generative AI (GenAI) rapidly progresses to enterprise-scale deployment, retailers should select and scale AI use cases that deliver maximum business value. This will ensure the best return on technology investments.
- Essentially, retail organisations must switch to value delivery orientation from project delivery mindset where the success of any IT transformation is defined not by go-lives, but by measurable business outcomes.
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Abstract
Organisations worldwide continue to increase investments in digital and information technology (IT) transformations, yet struggle to measure or realise their true business value.
Despite the scale of investment, transformation efforts often fall short of their goals due to weak execution or misalignment between the IT and business functions.
In the retail sector, with thin margins and rapidly changing consumer expectations, the stakes are even higher. In our performance study of 875 global retailers, leaders significantly outpaced peers. We saw that revenue for the top decile grew at more than 4x the median rate, delivering nearly 3x higher EBIT (earnings before interest and taxes) margins, while the top quartile touched roughly 2x of the median performance. This widening gap underscores that sustained leadership requires disciplined investment in core technology, process modernisation, and artificial intelligence (AI) adoption. With generative AI (GenAI) proof of concepts rapidly progressing to enterprise-scale deployment, retailers need to select and scale AI use cases that deliver maximum business value. Whether it’s hyper-personalised promotions, dynamic pricing, or AI-enabled demand forecasting, success now hinges on translating innovation into measurable gains in sell-through, shelf availability, customer experience, and margins.
There is a need to shift from a project delivery mindset to a value delivery orientation where the success of the transformation is defined not by go-lives, but by measurable business outcomes. This paper provides a structured approach to value realisation from IT transformation, combining academic frameworks, analyst insights, and examples from our work with industry clients.
Value realisation
Despite rising investments in cloud, automation, enterprise resource planning (ERP), AI, and data platforms, the realised business impact often falls short of expectations.
In retail, the challenges are magnified by demand volatility, dispersed store networks, and operational silos.
The common reasons for investments in the latest technologies not yielding the desired results include:
- Lack of business user alignment: Limited early involvement of store managers, merchandisers, and supply chain planners reduces adoption and relevance.
- Absence of innovation and design thinking: Digitising outdated processes, rather than reimagining them, to enable frictionless customer journey and store efficiency.
- Inadequate change management: New systems require new behaviours, which are rarely managed well.
- Siloed execution: Store managers, merchandisers, and supply chain often run separate initiatives, missing cross-functional synergies and organisation-wide results.
- No accountability for benefits: Unclear ownership leads to missed targets.
- Business case not refreshed: Failing to revisit assumptions means benefits can be lost over time.
Our experience shows IT benefits must be actively managed as they don’t trickle down post implementation. Additionally, benefit management shouldn't end with technical rollout. It must continue until all anticipated outcomes are either fulfilled or it's clear they will not be achieved.
For example, a client moved to S/4HANA but overran budget and missed value. A post-implementation review revealed gaps, including not keeping tabs on budget versus expenditure and not revisiting the business case to determine financial impact. In our experience supporting value realization programs, we found that business cases evolve—and that’s perfectly acceptable. What isn’t acceptable is being unaware of the reasons that caused the change and missing the chance to intervene early. Waiting until the end of the design or implementation phase means losing the opportunity to optimise value. This is precisely why embedding end-to-end value tracking and governance is crucial to be able to adapt proactively, course-correct in real time, and ensure outcomes stay aligned with strategic intent.
Why it matters
Value realisation ensures IT investments deliver tangible business outcomes such as cost savings, revenue growth, productivity, or customer satisfaction.
We use a four-stage value realisation framework to help organizations achieve their business objectives:
Figure 1
Four-stage value realisation framework
Figure 1
- Identify: Prioritise opportunities by impact, feasibility, and alignment with strategic goals.
- Justify: Build quantified business cases using financial metrics like net present value (NPV), internal rate of return (IRR), and payback period.
- Realise: Execute with value tracking, agile governance, and course corrections.
- Sustain: Embed key performance indicators (KPIs) into business-as-usual and continuously refresh the value road map.
1. Identify: Effective value realisation involves robust opportunity identification and a prioritisation process informed by:
- Outside-in: Industry benchmarks, competitor analysis, and digital maturity assessments.
- Inside-out: Analysis of value chains, inefficiencies, capability gaps, and cost structures.
Each initiative is scored on strategic alignment, value potential, feasibility, and time to value.
Our assessment is grounded in operating model levers combined with a detailed view of the retail value chain, KPIs, and financial linkages.
Figure 2
Value assessment framework for retail
Figure 2
Use case: In a strategic leadership engagement with the chief executive officer (CEO) of a leading retailer based in the United Kingdom (UK), a few high impact initiatives around category management, workforce optimization, and intelligent automation were identified. This had the potential to deliver earnings before interest, taxes, depreciation, and amortization (EBITDA) worth £100–150 million through growth and efficiency planning. Additionally, value-based conversations helped unlock multiple downstream opportunities throughout the organisation.
We employ tools such as the retail value driver tree to link retail operational improvements directly to enterprise metrics, for example, linking replenishment speed to gross margin return on investment enhancement. We also leverage day-in-the-life customer and employee journey mapping for retail personas to uncover friction points, such as inefficiencies in store associate workflows or drop-offs during online checkout.
2. Justify: The business case bridges vision and execution, providing the financial and strategic rationale for investment. Yet too many IT investments are approved on vague promises of modernisation or digital readiness. Retail business cases must tie themselves to commercial and operational KPIs like increased sales per square foot, reduction in markdown, lower fulfilment cost, and higher basket size.
Use case: For a retailer’s finance transformation anchored in ERP modernisation, we projected annual benefits worth $15 million, less than 16-month payback, and $10 million working capital release to support board-level investment approval. The impacts considered included faster period close cycles, fewer missed discounts and duplicate payments, and working capital optimisation through enhanced inventory reporting.
By mapping technical enablers to cost savings, growth and customer experience (CX), risk mitigation, and innovation, our retail enterprise value model combines benchmark, cost proformas with return on investment (ROI) templates to accelerate business case modelling and enables faster, value-driven decisions.
3. Realise: Value realisation demands structured governance, tracking, and accountability from the first sprint till post implementation. In the execution phase, value realisation planning means:
- Defining KPIs across stores, merchandising, supply chain, and assigning benefit owners
- Using dashboards to track value by store cluster, channel, and region
- Monthly governance reviews focused on outcomes, not just milestones
Agile delivery need not be at odds with value realisation. It can accelerate value realisation by prioritising high-impact features, linking sprint reviews to KPIs, and embedding value checkpoints in each sprint.
Use case: In a large supply chain transformation, we embedded value management to rejuvenate an existing business case to unlock higher-than-anticipated benefits, defined transformation-wide KPIs, tracked benefits across initiatives, and ran monthly value realisation reviews with business leaders. For example, we tracked berth time for vessels against monthly targets to unlock logistical efficiency. Stakeholder engagement and KPI scorecards ensured accountability and timely course correction.
4.Sustain: Value delivery does not end at implementation—it only begins there. Continuous evolution in business environment, customer expectations, and technology requires feedback loops to prevent decay and redirect investments. Routinely operating a transformation management office framework with an embedded value management function for all large-scale transformation programs can help:
- Track post-implementation benefits for 12–24 months
- Refresh business cases every 6–12 months
- Build capability via training and incentives
- Keep stakeholders engaged
Figure 3
Transformation management office (TMO) framework
Figure 3
New business mindset
Research shows that digitally mature organisations are more likely to deliver sustained financial performance than their peers.
However, digital maturity is not only about tech stacks—it’s about shared ownership of business outcomes.
Use case: Co-creating digital KPIs that aligned with business KPIs helped shift the narrative of a retail client from IT as a provider to IT as a partner. This was achieved by linking core business KPIs like meeting new product introduction (NPI) launch timelines with a directly accountable IT KPI namely the percentage of digital asset launches (supporting the new product) delivered on time and on budget. Eventually, these KPIs became part of the dashboards, reporting, and prioritisation, shifting the perception for IT from being just a service provider to a strategic partner.
Value is a habit
Successful IT transformations are a result of disciplined value management.
This requires:
- Identifying the right opportunities based on external and internal insights
- Building credible, quantified business cases that speak to stakeholders
- Embedding value tracking into execution with real ownership and transparency
- Creating adaptive mechanisms to sustain and evolve transformation value over time
For consultants, it is important to differentiate by blending deep inside-out knowledge of a retailer’s processes and technology, built through long-standing partnerships, with outside-in best practices to identify right opportunities. This entails designing pragmatic, context-aware value realisation plans and staying engaged beyond go-live to ensure benefits are delivered and sustained.
At the core, this is not just about IT or process, it is about aligning people, priorities, and performance measurement. Retail organisations that master this approach can turn their digital ambitions into enterprise advantage. As enterprise leaders shift from digital ambition to enterprise advantage, cracking the value code will be a competitive necessity.