The Evolution of Digital Transformation at OBI: A Deep Dive with Tim Engler & Dirk Weckerlei

Digital transformation is not just a buzzword—it’s a necessity. OBI, one of Europe’s leading home improvement retailers, has embarked on an ambitious journey to modernise its technology and business processes. In a recent episode of #allcomposable, Tim Engler, head of the technology team at OBI, shared insights into the company’s transformation journey, challenges, and vision for the future.

A Journey of Transformation

Tim Engler’s career at OBI spans over a decade, with the last six years dedicated to leading the company’s technology team. Under his leadership, OBI has embraced digitalization, growing its e-commerce business while managing over 600 stores across Europe.

Six years ago, OBI launched OBI Next, its digital transformation unit, focusing on customer-centric projects such as app development, an enhanced e-commerce platform, and a robust CRM system. However, as the team dug deeper, they realized that true transformation required more than just front-end improvements—it necessitated a complete overhaul of core retail functions, ERP systems, and product data management.

Breaking Free from Legacy Constraints

Navigating legacy systems and ingrained processes is a significant hurdle in digital transformation. Engler pointed out that while legacy systems stem from past business decisions, they often become bottlenecks over time. OBI tackled this challenge by adopting a domain-by-domain approach, modernizing systems incrementally. The company started with key areas such as e-commerce, logistics, and purchasing, using a “lighthouse” project strategy to address immediate concerns while ensuring a clear path forward.

Securing Leadership Buy-In for Transformation

Successful digital transformation requires more than just a top-down mandate; it demands alignment and commitment from stakeholders at every level. Engler emphasized that OBI was fortunate to have strong backing from its CEO and supervisory board, which provided the necessary support for bold decision-making. One critical move was securing agreement to temporarily freeze performance enhancements on search and checkout functionalities, allowing the team to focus on rebuilding the core platform. This strategic pause ensured long-term stability and scalability.

Balancing Quick Wins with Long-Term Goals

OBI adopted a dual-track approach to maintain momentum: customer- facing experience teams continued improving front-end interactions, while backend teams worked on foundational changes. This ensured customers saw continuous improvements while the technology team executed a more profound transformation behind the scenes.

Shifting to a Product-Driven Organisation

A key shift at OBI was moving from a traditional waterfall approach to a fully product-driven organization. Instead of operating in silos, business and technology teams collaborated closely on shared objectives. By structuring teams around business capabilities—such as product search, checkout, and order management—OBI eliminated the disconnect between business needs and technological implementation.

Leveraging MACH Architecture for Agility

Microservices, API-first, Cloud-native, and Headless (MACH) architecture played a critical role in OBI’s transformation. While microservices provide flexibility, they also introduce complexity. To strike a balance, OBI implemented macroservices, enabling faster scaling and simpler management. This approach ensured that technological advancements aligned seamlessly with business needs.

Time to Value: The Ultimate Metric

For OBI, the key measure of success is time to value—the speed at which meaningful results can be delivered with minimal disruption. Engler highlighted that instead of striving for perfection, OBI prioritizes progress, ensuring that every step taken translates into tangible business value.

The Role of AI in Retail Transformation

AI is a game-changer in retail, and OBI is leveraging both predictive and generative AI to enhance its operations. Predictive AI is already optimizing pricing, stock forecasting, and workforce planning, while generative AI is being explored for customer-facing applications such as product recommendations and chat-based interactions. The key to scaling AI? APIs. By integrating AI through robust API frameworks, OBI ensures seamless deployment across various functions.

Looking Ahead: The Future of OBI’s Digital Journey

As OBI continues its transformation, key focus areas include modernizing assortment and purchasing systems, refining product information management, and embedding AI-driven solutions throughout the business. The ultimate goal is to ensure that technology acts as an enabler, seamlessly integrating with every facet of the company’s operations.