Fiona Tan, CTO of Wayfair, said alignment between business and technology is critical--especially when navigating a demand surge and a pivot to efficiency. The key to navigating the change is to have a platform mindset.

At Constellation Research's Connected Enterprise conference, I caught up with Tan, a Constellation Research BT150 member, to talk about business and technology alignment, transformation and being nimble enough to scale up and down. Before becoming CTO at Wayfair, Tan was Global Head of Customer and Supplier Technology at Wayfair, and Head of Technology at Walmart US. Tan also managed engineering teams at WalmartLabs, Ariba and Tibco Software.

How Wayfair's tech transformation aims to drive revenue while saving money Get this customer story as a PDF

Here are the highlights of our conversation.

Wayfair scaling up amid a demand boom and then honing its cost focus. When the Covid-19 pandemic hit, Tan said Wayfair was well along with a migration to the cloud. "We were fortunate that we moved a lot of things so in some ways we were well protected when we scaled up," said Tan. The challenge came after the pandemic waned and consumers had already upgraded homes and offices. Tan said the thinking at the top would be that high growth rates would stay, but the home category saw a pullback. The pullback was "a good forcing function to go back to be really proficient with our costs from a technical perspective and operational perspective," said Tan. "We've been able to really focus on growth and profitability and continue to grow our market share."

Business and technology alignment. Since Wayfair is digitally native the business case is usually enabled by technology. "My leadership team is there to ensure we have the right platform and infrastructure from a technology perspective to enable us to grow in a flexible, scalable, lean way," said Tan, who noted that everything from customer reviews to service and support to marketing is enabled by a platform mindset.

Tan said:

"We work closely on great business use cases. One thing I appreciate is that a lot of our stakeholders realize there's tech enablement of the business that's important. Our stakeholders on the commercial and operational side are very open to technology and that comes from being a digitally native company."

Wayfair's value chain. Tan said the lens of technology at Wayfair revolves around the entire value chain since it orchestrates third party suppliers and customer purchases. Wayfair is merchandising to customers, managing logistics and the supply chain. "For suppliers, we're making sure that we provide them with a platform that enables them to sell their products and represent them in the best way possible," said Tan. "We are shipping and handling some of the toughest things to ship. We support both the commerce part as well as the supply chain operations."

Metrics for success. Tan said her metrics revolve around the KPIs for the business. "From a company perspective, it’s about making sure we have the right products at the right price for customers with selection and availability," said Tan. For instance, Wayfair needs to understand and analyze supplier parts and goods, know the customer, customize offerings, and support marketing. All of those functions will have their own metrics.

Technical debt. Tan said a big focus with Wayfair's transformation is retiring technical debt. "We've been doing a lot of work to pay down technical debt," said Tan. "We are trying to harness the latest technology to fix problems." Tan added that CIOs should look to legacy code, databases, procedures and processes to see what can be reused elsewhere. "There's always something new to learn and maybe something old is going to come back to address a use case," said Tan.

What's ahead for 2024? "We will be focusing on our tech transformation and continuing to enable new capabilities," said Tan. "I think there will be some interesting changes in how customers interact and we'll need new user experiences." She said generative AI can make buying home goods more conversational. Tan added that large language models also can be useful for text and imagery used for presentations.