Cloud technology is associated with innovation, agility, and flexibility. But can technology help enable transformation for a business in a turnaround?
Skullcandy, a company that designs and markets audio and gaming headphones, earbuds, Bluetooth speaker docks, and more, found its business had stagnated by 2012. After years of rising revenues and profits, the company’s performance suddenly fell. Instead of growing at 30% as it had been doing, sales dropped by 30%.
Skullcandy brought in new leadership in early 2013, recruiting its new CEO, Hoby Darling, from Nike. Darling’s strategy was aggressive and required the company to put a laser focus on allowing customers the flexibility to engage with the brand and buy its products whenever and wherever they want—on mobile, in the store, in their home country, anywhere in the world. For a company the size of Skullcandy, these goals were lofty, to say the least, and it needed to move quickly in a highly competitive market.
Fortunately, Skullcandy’s IT team was geared up to support Darling’s game-changing strategy with an agile hybrid cloud architecture. Mark Hopkins, director of IT at Skullcandy, touted the impact on the business: “Cloud enables us to scale and be flexible. We chose to deploy a hybrid model with a virtualized environment for back-office functions such as forecasting, e-mail, analytics, and so on, that are integrated with business processes hosted in the cloud. We use SAP Business ByDesign running in a private cloud, and a number of other applications hosted in the public cloud.” Skullcandy’s IT strategy reflects its culture: fun, young, and irreverent in a way that’s creative and active.
When it comes to delivering innovation and customer experience both online and offline, it’s clear that IT is a critical partner for the business. I asked Hopkins to share his insights on how cloud technology is supporting Skullcandy’s business transformation. Here’s what he had to say:
International expansion—“We’re putting our foot on the accelerator for international expansion going forward. As we start running our company as a multicurrency, multi-country operation, we’re leveraging the SAP Business ByDesign international functionality. When we implemented SAP Business ByDesign we had no idea that three years later we’d be operating business in several different international locations. ByDesign enabled us to quickly move and keep all corporate transactions in one system.”
Seamless e-commerce experience—“We’re expanding our footprint in our e-commerce area. We have a lot of different systems we need to couple together to run these processes. We need to be good at integration of apps, web sites, e-commerce, customer communications, and fulfillment. We need to connect these things together in a way that’s quick and flexible.”
Strong supply chain—“We used distributors internationally to get our foot in the door in a new geography and build awareness of our brand. Over time, we transitioned to selling direct internationally where it made sense. Developing supply chain fulfillment in the countries is key. In the United States we did a 3PL integration with UPS. We did the same with DHL in Europe and Teckwah in Asia, and were able to do so quickly.”
Omnichannel commerce—“On the IT side, the things that I think are really cool are the way we’ve got an environment that’s heavily integrated. We have B2B and B2C business. We have a solid omnichannel foundation, including our own stores, retailers, distributors, and outlet sales. We have our own branded Web sites, affiliate sites like eBay and Amazon, and branded drop ships for customers like Gov-X and eBags.”
Insight-driven innovation—“We have become a data- and metrics-driven company. A good example is sell-through information. Many retailers provide us with point-of-sale information but it comes through in a variety of formats including EDI, text files, and spreadsheets. We put in place a reporting backbone using analytics to consolidate and review sell-through data. Our goal is to leverage that data and have more real time, productive conversations with retailers.”
So, can technology enable business transformation? Skullcandy has certainly answered with a resounding yes.
Last week at SAPPHIRE NOW, in a session entitled “Go from Startup to Rocking the Globe,” Hopkins discussed Skullcandy’s success with cloud computing, business intelligence, and Web services integration to provide a cost-effective and agile platform for growth. Watch the replay:
Top image: Hani’s Skullcandy (Photo credit: FailedImitator)