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The fashion industry is entering a highway to a reshuffling and reshaping environment with the rapid development of the digital economy, the question is, how can the industry adapt to digitalized business and make breakthroughs while reaching a turning point? On April 29, the latest issue of Face-to-Face Interview with CIOs will walk into the digital transformation journey of Cabbeen, the leading menswear company in China, with Huang Jian, the IT director of Cabbeen Fashion Limited.
Interviewee: Huang Jian, IT Director, Cabbeen
Moderator: Liu Jing, Co-founder and COO of CIO Times, Secretary-general, New Infrastructure Innovation Research Institute
Liu Jing: How is digital transformation in the fashion industry going?
Huang Jian: Digital transformation in the fashion industry is apparently slower than that in other industries, given that the volume of multi-domain data and the scale of multi-domain digitalization of manufacturers at the production end are more considerable. We focus not only on technology when it comes to digitalization, but also on reshaping the structure and operation processes, which may affect the relationships of interests with franchisees and pose challenges on our traditional clothing industry.
Liu Jing: Could you share the digital transformation journey of Cabbeen?
Huang Jian: Cabbeen laid a solid foundation for digital transformation by unifying all franchisees, suppliers and terminals on one system beforehand. We were using the domestic, traditional ERP system before 2010, and in 2010, we adopted the SAP system and started its implementation in October of the same year to meet the financial and business demands for the IPO. In the following eight years, information systems such as the EWM HR system and PLM process management system were constructed based on the SAP system, and have been transforming to a dual-middle platform system since 2019. Our digital transformation journey has not been easy considering that the SAP system is deeply rooted in the company and there is no precedent in the industry.
Liu Jing: Do you think the mindset of CIOs during digital transformation has changed?
Huang Jian: Compared to the earlier technology-oriented, technology-based sort of mindset to accelerate informationization, CIOs are still proficient in technology, yet have switched to a business thinking that requires profound knowledge of business processes can promote business development through technology.
For this reason, CIOs should never limit themselves to the communication and sharing within the industry, but keep learning from the CIOs in other industries and keep growing for more in-depth insights.
Liu Jing: What are the lessons learned from Cabbeen’s digital transformation and innovation?
Huang Jian: Cabbeen’s dual middle platforms refer to data centers and business mid-end. Ten years after the adoption of SAP in 2010, we built peripheral information systems around it, since we have a different order in the construction of middle platforms.
The challenges we had at that point led us to make the first decision that differentiated us from others—setting up data middle platforms first to expose operational problems, then working backward from the process of solving those problems to deduce what should be built in the business mid-end. It took us a year to establish the data middle platform and complete data governance, and only a year and three months to finish the construction of the business middle platform, which is ahead of others.
Liu Jing: How did Cabbeen design the full closed-loop value chain of people, goods and sites, and how is it progressing so far?
Huang Jian: Speaking of the value chain of people, goods and sites in the traditional clothing industry, the inventory cost on goods is a pain point because of the predominance of futures, and that led to our strategy of “goods first, then sites, and finally people”. For goods, we needed to foster digitalized collaboration on the mobile end with garment suppliers and fabric and accessories suppliers, thus enhancing the utilization of fabrics and accessories, improving the cost rate, reducing internal and external communication costs, and optimizing the supply chain.
In terms of sites, we facilitated store opening through visualized management tools to raise cost-efficiency.
As for people, we will carry out precision marketing, precision design or precision production based on membership tags this year.
Liu Jing: What is Cabbeen’s blueprint of digital security?
Huang Jian: There are two areas in which Cabbeen has done a great job to ensure digital security, one is setting up a system for job positioning and specifications using business mid-end to guarantee no staff accounts can be granted extra authority and to disable the accounts of terminated employees promptly for information security, and second is the regular depth testing of enterprise systems to evaluate their safety with simulated attacks, as well as finding and fixing the vulnerabilities.
In view of the pandemic, we have adopted remote offices and often use VPN for private access to accounts, in addition to watermarking most of the core data in the system, so as to reduce about 80% of the security problems. We are currently working with China Entercom to construct our WAN with its MPLS service for more stable networks and business, and planning to integrate the full-ranged private network between the headquarter and branch offices.
Liu Jing: What makes an ideal ICT service provider for enterprises?
Huang Jian: When it comes to choosing an ICT service provider, aside from the background, resource coverage, network stability, service quality, innovation, after-sales, service stability and cost, we believe it is essential to be able to grow together to keep up with the latest trends and technology and exploit better values for Cabbeen, as information technology is ever-changing.
At present, we are adopting the MPLS, security and data center solutions from China Entercom, which have raised our efficiency, enabled our staff to focus on core business, and laid a solid foundation for Cabbeen’s digitalized business scenarios with its high-quality and reliable integrated solution and professional operation and maintenance services.
Liu Jing: What will be the challenges for Cabbeen throughout the digital transformation process?
Huang Jian: Cabbeen will be facing two major challenges under the pandemic.
The first and foremost is the decline in investments in digital transformation. We are no exception as most retailers are experiencing declining revenues this year, and it will inevitably cause a reduction in digitalization investment, which is by far the biggest challenge.
On the other hand, the lack of sustainability of overall transformation and innovation has been an obstacle. Enterprises no longer believe there is a possibility of development during the pandemic, but simply wish to survive in the post-pandemic era given the uncertainty in society, and it will result in the suspension of innovative projects and transformation.
Digital transformation does not confine to technical innovation, but also innovation in operation, management and sales mode. Having connected online and offline and bridged management and people in the new retail era, digitalization will be immersed in every corner of the clothing industry and become the lifeline of innovation. Thanks to the efforts made by China Entercom and other ICT service providers, we believe Cabbeen, as well as other digitalized fashion brands, will survive and soar to the top in the new wave of digitalization.
Stepping into the era of digital economy underlining efficiency, supply chains and the whole ecology, the direction of the retail industry is shifting from business datafication, data commercialization to data-oriented business, which highlights refined management, quick response, data mining and data utilization to win the market competition.
For the retail chain industry with numerous and vastly distributed terminals, China Entercom offers a one-stop integrated and innovative ICT solution of cloud, network, intelligence and security. Possessing extensive resources backed by its parent company and partners, as well as presences in 160 countries and regions, China Entercom is able to perfect customer experience both in physical stores and on user end through its 7x24 ICT service support. Meanwhile, China Entercom’s exclusive ICT-MiiND strategy empowers an in-depth convergence of digital technology and processes inclusive of service, operation and management to speed up the transmission, value exploration and creation of data, so that the operation of all stores are under full control of the headquarter, and enterprises will prevail in the game of digital transformation.
Cabbeen was founded in 1997 by Mr. Cabbeen, who won the China Fashion Design Top Award, the most prestigious award in China’s apparel industry. Its philosophy of subverting fashion trends, being one step ahead, and dedicating to original designs has made Cabbeen the most recognized original menswear designer brand in China today.
Cabbeen is undeniably the leading fashion brand in China’s menswear industry, and has left its marks on the fashion world. As the first Chinese designer brand to debut at New York Fashion Week in February 2007, Cabbeen and the young Mr. Cabbeen captivated Manhattan with the stunningly edgy designs, turning a new page of the world-renowned designer brand.
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