Jewellery retailer Pandora produces and manufactures all of its own products. Its chief technology officer (CTO) and senior vice-president, Sunil Srivastava, says this sort of end-to-end vertical integration is fairly unique in jewellery retail: “Our processes span everything from manufacturing plant, to produce, to cash.”
For Srivastava, one of Pandora’s strengths is the speed at which it operates, but he acknowledges that this can also come at a cost. “A startup oftentimes would not operate at scale in the same way that you would find larger enterprise companies [doing],” he says.
Recognising the need to scale the company’s technology platforms, Srivastava embarked on an organisational change of IT. “We needed to get more leverage out of the technology we invested in so it could drive global processes, not just local processes,” he says.
To help drive innovation, Pandora’s IT operation is organised in a federated way, where different areas of the business run IT rather like a franchise.
A recent Gartner survey of 917 CIOs found that 46% co-own their organisation’s digital initiatives. In this approach to organising IT, a central IT function is often tasked with taking control of the underlying platform and IT security and governance framework.
But according to Srivastava, the value of IT is created in business functions, rather than in the central IT function. “We do this because it helps to drive innovation and creates value quicker,” he says.
For instance, by abstracting away IT plumbing, he says, departments like marketing and finance can build and deploy new applications much faster. So long as the business functions stay within the terms of the contract they agree with IT, they are free to use whatever platforms they wish, he says.
Public cloud costs
Srivastava believes the rise of software as a service (SaaS) has been a big driver in his approach to organising IT around a kind of franchising model. Since SaaS providers can be vetted to ensure they do not diverge from the governance and security policies set by IT, he says: “You are able to have business functions operate safely. It’s a key factor.”
When asked about the public cloud, Srivastava believes a lot of companies are trying to figure out whether they are making effective use of all the capabilities provided to them with the elastic infrastructure offered by public cloud providers. He says many are shocked by the costs associated with running IT in the public cloud.
“Cloud providers have increased their costs over the years due to energy price inflation,” says Srivastava. “We’re being a lot more mindful about how we utilise cloud infrastructure and the best use of that type of capability within our technologies and services.”
Build versus buy
Looking at the build versus buy debate, Srivastava says it is important to examine closely what matters to customers. “It’s our products. It’s our design. It doesn’t really matter too much how we collect cash. What matters to our customers is how fast we ship our products,” he says. This informs the way Pandora invests in IT.
“We have partnered with SAP to deliver [ERP] capability. But … we don’t want our software to dictate how we manufacture. We want that to be something unique for Pandora”
Sunil Srivastava, Pandora
The company is running a major enterprise resource planning (ERP) project with SAP for operational data provisioning. “We have just partnered with SAP to deliver this capability,” says Srivastava. “But … we don’t want our software to dictate how we manufacture. We want that to be something unique for Pandora.”
The partnership with SAP is helping the company achieve some of these objectives, but it wants to do something unique for manufacturing so it has “raised the bar” for technology in this area.
For the capabilities that differentiate Pandora, Srivastava believes software should be developed specifically for the business. Even when software is purchased off the shelf, he says it buys from software partners that accept that Pandora has particularly challenging requirements and are prepared to work with it to meet those requirements.
Srivastava joined the jeweller at the start of the Covid-19 pandemic. Looking at coming on board, he says: “I think a lot of it was just adapting to the culture. I immediately got labelled as the ‘crazy CTO’ with some of the ideas and pace of change that I saw. I think some of the initial reaction from people was that this is a lot of change in terms of how we operate and how we deliver. I recognise that.”
His previous experience includes working on digital transformation at retailer Nordstrom, and for Expedia at a time when the travel company was focused on major expansion. From a culture perspective, he says: “I found Pandora to be very entrepreneurial, very much like a startup. It has operated like a startup for many years.”
Startups are often blessed with agility and the ability to do things quickly, but some things cannot be achieved quickly. One of the main challenges of change management is that the different stakeholders often move at different speeds. “We all want to arrive at the same business outcome so we all agree on the end state, but what I’ve learned over the last few years is to be more adaptable to the path it takes – sometimes it goes fast and sometimes it goes a little slower. We need to learn to be more patient.”
And when it comes to changing behaviours, Srivastava says there is no right or wrong answer. “It really depends on the contextual needs of our people.”