June 23, 2017

Amazon Snaps Up Whole Foods: Time for Some Change

4 minute read

Analysts are clamoring over Amazon’s recent $14 billion acquisition of Whole Foods. Some are calling it the first step in a move to (further) reinvent distribution, while the supermarket industry is casting Amazon as a “destroyer of worlds.”

Regardless of the end outcome for the supermarket world, this acquisition highlights the increasing rate of merger and acquisition (and divestiture) activity across industries that Deloitte discusses in their year-end 2016 M&A trend report.  With lots of industry convergence and market

consolidation occurring, Deloitte reports that, among respondents to their survey, “Effective integration planning is considered the number one factor in ensuring that deals work.”

Any company that expects to drastically reshape the nature of its business should first account for the change and opportunity management these decisions will necessitate.

Is Whole Foods the Only Fertilizer Fresh Needs?

The Whole Foods acquisition is not Amazon’s first foray into the grocery industry: Amazon Fresh, a direct-to-door grocery delivery service offered as an add-on to Amazon Prime, accounts for 0.8% of the domestic grocery market and has existed as a “guarded sapling” for nearly a decade. The acquisition of Whole Foods effectively triples Amazon’s market cap in this category, but likewise triples the complications inherent in managing their business. Will those complications prevent their sapling from becoming a redwood?

Bringing Diverse Workforces Together

In this regard, Amazon has a tough task ahead of them. They must unify two entirely separate corporate cultures, and two unique technology stacks. They must consider vendor management, bringing contracts into alignment, and dozens of more details that, while they may have been independently managed effectively, will now need to exist as parts of the same information ecosystem.

As they identify their priorities for the above initiatives, a lot of work will also go into educating employees on how these changes will affect their day-to-day lives.

This is where information governance and process integration come in. With the proper metadata (and the proper automation around metadata application), unifying the corporate records of any two entities simply becomes a matter of matching field taxonomies to one another.

Line-of-business and ERP systems like SAP generate a lot of content to support the data they manage. If that content lives outside of the above-mentioned governed ecosystem, it becomes doubly difficult to migrate that content effectively. By integrating SAP-generated content with a well-governed SharePoint instance, a business enforces consistency and data integrity while increasing findability. With the confusion inherent in any merger scenario, findability becomes a key component in any strategy intended to reduce friction.

Rendering Geographic Distribution Trivial

Amazon is headquartered in Seattle, WA, while Whole Foods operates from Austin, TX. Historically, organizations would expect to consolidate the majority of these roles within one location, inevitably causing information loss as employees, who cannot or will not relocate, to move on.

Though the pace of business has increased, the technology that evolved to support it means this is no longer the case. Employees are the most valuable resource an organization has in terms of familiarity with process and insight into operational priorities, and a mature digital workplace can make wherever an information worker is located entirely irrelevant to their efficacy or suitability to their role.

Cloud platforms such as Office 365 offer the convenience, the user experience, and the scalability organizations need to maintain a digital counterpart to their brick and mortar presence.

Receive News Updates As Soon As They Happen