Below is a lightly edited transcript of my conversation with CarMax CIO Shamim Mohammad. CarMax is a highly disruptive and fast-growing company that’s committed to providing superb experiences for people buying and selling cars. In Shamim’s six years at CarMax he’s led a variety of strategic business technology initiatives, and recently he and his team have completed a huge implementation of Salesforce.com applications.
This interview took place in August 2018.
Shamim Mohammad: Good morning, Bob. Thank you for having me on the show. Really looking forward to the conversation.
Bob Evans: Thanks so much. So, Shamim, as a CarMax C-suite executive, how would you describe the company’s unique position and value?
SM: Bob, CarMax was founded 25 years ago to disrupt the automotive retail industry. And our goal was to disrupt the industry by making the car buying and selling processes simple and seamless and bring transparency and integrity in that business. So, today, in about 200 locations across the country and with 25,000 associates we are still inspired by this mission.
So, our industry is going through a pretty significant evolution right now: the digital transformation and ever-changing customer expectations. So, we are now focused on disrupting our industry once again and continuing to be that leader as it relates to automotive buying and selling.
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You can stream this whole conversation on Cloud Wars Live.
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BE: It’s fascinating because when you talk about being highly disruptive I think the words that really jumped out to me were things that before this a lot of folks might not have associated with car buying and selling, which was integrity, honesty, transparency. So, it’s not just the e-commerce side of things but the whole experience of it – right? – that you’re addressing and that CarMax has been changing.
SM: Absolutely. And the way we’ve been leveraging and technology since the beginning is really what’s enabled us to make sure that we bring an integrity and also provide a very transparent, simple, and seamless experience for our customers.
BE: That’s great. In an age where customers are becoming so much more demanding, it seems that 360-degree view is just essential. So, before you sort of came through this transformation here, and some of CarMax’s customer data was siloed, what did that prevent you from doing? And what were the customer-facing challenges that you had to overcome?
SM: At CarMax since the beginning data has been a key asset for us and we’ve been using data to optimize the experience, optimize our business operations. So, we use data everywhere. But we found that there was a gap, and the gap was bringing the online experience and the industry experience and making it seamless. So, with the digital transformation we’ve been going through, a lot of the initiatives we have going on right now, we’ve been able to bridge that gap.
BE: Fascinating. Now, with the Salesforce rollout how have things changed as far as the expectations for what your company feels you can deliver to customers?
SM: So, let me give you a little bit of background there.
Over 90 percent of our customers begin their journey online. So, they do their research at home. And then, when they come to the store they expect that shopping journey to continue and they expect that all the work they did online, this should just continue and they don’t have to redo that. So, with the Salesforce platform we’ve been able to really take all the information the customer had created online and then bring that into the store, and then giving that information to the fingertips our associates who are helping the customer. So, that’s where the 360 degree view of the customer is becoming really very helpful, because before that experience was not very seamless.
BE: So, even though they had done – 90 percent of your customers had done extensive online experience, when they came into the store before this implementation they sort of felt – when they engaged with your sales consultants they felt like strangers almost, because the sales consultant had no idea how much work or what the interests were of this customer. Is that right?
SM: That is true, because again, before this we didn’t really have all the information really available in the hands of our sales consultants in the store.
So, that’s where the Salesforce implementation really has enabled us to provide a great experience for our associates because they have all the information they need to provide the customer the right support. And at the same time the customers also have a much better experience because now they don’t have to start over.
CarMax CIO Shamim Mohammad on Integrating IT with Core Business
BE: Shamim, I think it’s still challenging in some businesses where the CIO is focused more on what, as you described it, on the outputs instead of the outcomes. And it sounds like what you’ve been able to do is sort of fuse together the initiatives and the objectives of the technology team with the core business of CarMax.
SM: Absolutely. You know, what happened also as part of this digital transformation that we’ve been going through, technology has become a core part of our business. Now, technology always played a big role in our business, but over the last few years now it is much more tightly integrated. At CarMax right now our technology strategy is our business strategy, and our business strategy our technology strategy, which is pretty interesting because a lot of companies haven’t made that type of leap forward yet.
Also what has happened over the past few years is we’ve been able to attract some really awesome talent. These are the talent that are able to work in this new world in the cloud-first, mobile-first kind of environment and in a rapidly changing environment. Also, we are also looking for more talent like that because we don’t have enough, and we have a number of really awesome opportunities now to come and join our company and help us continue to go down this transformation that we are going through.
BE: That’s fascinating, how you described it, of the business strategy and the tech strategy, now that they’re completely unified. And I think for some companies in this type of market, where digital transformation and becoming and end-to-end digital enterprise is so vital, those companies who go into that with disparate tech strategy over here, business strategy over there, it’s going to be really difficult for them to make that leap. Right?
SM: Absolutely.
CarMax CIO Shamim Mohammad on How Speed is Solving Challenges
BE: In this journey, Shamim, could you talk a little bit about some of the big challenges that you and the team and the company had to overcome?
SM: I’ll share a story which will cover both the challenge and the surprise. So, one of our bigger challenges was that we had to transform the core technologies that are used by thousands of associates across the country. So, one night this year we rolled out the new CRM system which is on the Salesforce platform. It was turned on or 8,000 CarMax associates. Now, Bob, you’ve been in the industry long enough. You know that any time you deploy anything that’s transformative and large, that has a lot of issues.
Our goal with the Salesforce platform was to equip and empower our associates with the right capability. And as we talked earlier, we also wanted to make sure that they have the right information about the customer’s shopping journey so that when the customers come to the store they have a great experience. So, this new system – mission critical. It also had to integrate with all these other technology platforms we have in the company. Needless to say, it was a massive, massive undertaking.
That was a challenge: to get our company through implementing something like this. But what was most surprising to me was the night after we went live I had a meeting with my boss, the CEO. He and I walked over the war room – you know, you’ve seen in big projects you have a war room, you have a lot of activities and usually crisis. So, we went to the war room the morning after going live. And we walked in to this room and the room was really quiet.
There were several empty pizza boxes, there were eight or ten people sitting around the room looking at some screens, and they seemed really, really bored because nothing was happening. So, to me, that was a big surprise because while I knew we did a great job in rolling out the system, but I didn’t expect to deploy to 8000 associates in 200 locations around the country and not having any major issue. To me, that’s the new age. This is how the technology should be implemented this day and age for us to be successful.
BE: Wrapped up within that, Shamim, first that delightful surprise that there was no crisis, no panic—but also you and your CEO were able to see very much firsthand that you’re shortening or accelerating the time to value. This wasn’t a 6- or 12- or 18-month rollout. This was the morning after the cutover.
SM: And that was just the beginning. What’s happened now is we’ve been able to deploy new capability on it on a regular basis at the speed that we couldn’t even think just a couple of years ago. Now, in a lot of the platform that were implemented in the cloud, we are able to deploy changes in a matter of hours in most cases, which used to take days or weeks or months sometimes.
The speed of change has accelerated almost an order of magnitude as we move through this technical or digital transformation journey.
CarMax CIO Shamim Mohammad on New Customer Expectations
SM: I know, Bob, you have two daughters and I have two teenage daughters, and their expectations are very different now, because they don’t have a lot of patience and they want things now and they want companies to know them. So, the consumers continue to have great expectations, especially on personalization, seamlessness, and speed. And with these cloud platforms we are implementing, and being able to leverage machine learning and AI, we are really able to provide that great experience.
One example would be on our website. I told you 90 percent of the customers start their journey online, so now we’re able to do about 20 million machine learning-enabled recommendations to our customers so that their experience when they’re shopping online is very personal and much more enriched. Which, again, we can do that because of the technologies and platforms we’ve been implementing.
BE: Remarkable. Shamim, how is this affecting sort of the ongoing sense of the company’s own mission and CarMax’s position in the marketplace?
SM: I think it just continues. Our mission is still the same, which is to bring integrity, transparency in the industry and continue to disrupt our industry. So, all of these things we’re doing right now is just further enhancing our ability to continue to focus on the mission that we had set out 25 years ago. And CarMax is a market leader. We’ve been disrupting and bringing up different ways to make this experience better, and we are just doing that. We are just going down that path and we are not satisfied. We are using the technology to continue to make that experience better.
The way we have been working, that also changed. The technology department and the marketing department and other departments now are organized around agile product teams. So, if you think about these teams, these teams are cross-functional, they are co-located, they are working on common KPIs, and they are given those specific KPIs and they are figuring out how to achieve those. And they have been given a lot of autonomy in terms of how to go about doing that.
In order to achieve those goals and targets, they are actually experimenting all the time. They are testing and learning. We have the philosophy of “Learn fast, fail fast.” As a result, the end product that they are coming up with is far superior and it’s happening much quicker than it used to be. And the only reason we could do that is because we have these awesome cloud platforms that are also evolving, and our partners are also investing to make these platforms much more scalable and much more feature-rich so that we are always staying current with the technology landscape changing.
BE: I love your line there about, across the organization, that CarMax employees can experiment all the time, leading to that better and better performance, better and better capabilities.
CarMax CIO Shamim Mohammad on What’s Next for His Team
So, Shamim, what’s next after this big achievement? What’s next for you and your team?
SM: What I tell my team and the way I look at the world is: it is a journey. Right? So, we’ve taken a number of steps to embark on a massive digital transformation journey where basically we’ve completed phase one, which is organizing ourselves around product teams, agile teams, around making sure of our business strategies, our technology strategies, adopting a mobile-first, cloud-first philosophy. By doing all of those we actually have taken the very first step in our digital journey.
The next thing for me is really three: three priorities I see. One is maturity. So, you’ve got to continually mature as a digital organization. And the second thing we have to do is make sure that we are efficient, because as you get bigger and you have a lot of different things going on it’s very easy to become less efficient. And the third priority is reliability, because as you think about this, we’re putting a lot of stuff in fewer and fewer platforms. So, Salesforce, for example, is a key platform. We use Microsoft Azure, another big platform. So, we are putting a lot of eggs in a few baskets. We have to make sure these platforms are highly, highly resilient because we cannot afford to have any of these platforms go down because that will impact the customer experience.
BE: What have we missed here? What do you want to be sure to mention about this remarkable adventure you’ve been on?
SM: I think one thing that’s really, really important which we didn’t cover is at the heart of a digital transformation, the heart of a company, is the company’s culture. So, at CarMax – and it’s interesting, today is my six-year anniversary at CarMax. It happens to be today, and as I was walking into my building I was just thinking that, six years later, I am much more excited about our company and where we’re going, much more excited about the people we have and the amazing culture we have as a company.
And it’s partly because we put people first at CarMax: our associates, our customers, and our communities. So, this is one area I would say that we are never resting. We are always figuring out how to make CarMax a great place to work. And to me, that needs to be a priority for all companies that want to be successful in the new digital world, because without the right culture and right talent and right focus it will be hard to be successful.
You can stream this whole conversation with CarMax CIO Shamim Mohammad on Cloud Wars Live.
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