Here’s how food banks are embracing digital transformation

This article was originally published by McKinsey & Company. Copyright (c) 2021 All rights reserved. Reprinted by permission.

Companies aren’t the only organizations remaking themselves into digital enterprises to meet customers’ needs. When the COVID-19 pandemic hit, food banks accelerated their digital trans­formations to get more food more quickly to more people in need.

One of them is The Greater Boston Food Bank (GBFB), which estimates it distributed 56 percent more food in 2020 than the previous year because of the pandemic. Although crisis-related hardships have begun to recede, demand for charitable food aid in GBFB’s eastern Massachusetts service area remains significant. It prompted the food bank’s leaders to rethink their practice of adopting technology in a piecemeal fashion. Instead, they’re in the initial phase of implementing an approximately three-year, $5 million plan—dubbed “Project Everest”—to operate as a unified, digital-first organization.

The goals are to optimize digital to make the food bank’s operations more efficient and to create better experiences and support for its four key stakeholder groups. Chief among those are people without enough to eat, plus the approximately 600 food-distribution partners that GBFB works with to get food to them. GBFB hopes its digital-first approach will also improve interactions with donors and support its workforce.

“In the end, it’s all aligned with our strategic plan to close the meal gap and move people from being food insecure to food secure,” said Catherine D’Amato, CEO of GBFB.

Food banks had begun the journey to digital, but, like a lot of other organizations, they accelerated their digital transformation efforts during the pandemic out of necessity. Their main motivations were to deal with higher demand for food aid and to adhere to strict safety measures that limited in-person interactions.

Food banks employed more advanced data analytics to match demand for food with changing sources of food supply, including government food-box programs. They brought on new tech­nologies to improve warehouse operations and to expand the network of community groups they partner with to provide services beyond food aid, such as help with healthcare and job hunting. Some embraced more sophisticated forecasting models to better predict the effect of changing economic conditions on the demand for food in their area.

When it comes to embracing digital, GBFB officials say they were early adopters. The organization had already replaced antiquated IT with newer systems. Four years ago, it implemented a NetSuite e-commerce platform so that it could take food orders from its food-distribution partners and order the food that the organization buys to supplement donated goods. GBFB also upgraded to a Salesforce customer-relationship-management system to manage interactions with donors and volunteers and to allow food pantries to schedule deliveries. In addition, most of its office staff, about 100 people, had been outfitted with laptops.

When the pandemic struck, GBFB helped its food-distribution partners convert to distributing food through curbside pickups, drive-through events, and other forms of contactless delivery. The laptops made it possible for office workers to immediately transition to working remotely.

But the crisis exposed deficiencies. GBFB had added applications for a single department or isolated process without considering how everything could or should work together. Other applications had been adopted because they were readily available, economical, or just because somebody wanted it. As a result, some departments “had all the bells and whistles,” but others still relied on manual processes, D’Amato said. “There wasn’t a cross-business knowledge base. Departments were very isolated,” she said.

The mishmash of systems and the lack of a unified data framework meant GBFB’s IT department did not have a method for prioritizing projects. Despite its previous efforts to upgrade, the food bank often fell short of serving its ultimate customer—people in need. Surveys of people with food insecurity and food-distribution customers showed that people sometimes missed getting food because they didn’t know the right location to visit or when it was open. They also couldn’t always get the type of food they wanted or speak English well enough to communicate with food-distributor personnel. Some were afraid to share the personal information that a distributor required.

Food-distribution partners had issues too, including the need to send data about food recipients to GBFB without knowing how that information would be used or what benefits to expect in return.

Once GBFB leaders felt they were adequately responding to the unprecedented increase in demand for food created by the pandemic, they began to think about the future. That meant figuring out how to move existing systems from good to great. In addition to becoming more efficient, the goal was to improve the experience that food-insecure individuals, food pantries and community agencies, and donors have when they interact with the organization.

Improving the customer experience fits into GBFB’s strategic vision to ensure everyone in the 190 towns and cities it serves has reliable access to enough high-quality food for three healthy meals a day (Exhibit 1).

In taking such a step, GBFB is following the lead of other public and private entities that have been reworking their customer experiences to be more people-centric. Creating a customer experience that meets new consumer needs and expectations has become important for any organization’s success, especially in the wake of the pandemic. Given the rapid rise in consumer expectation driven by companies such as Amazon, customer expe­rience and human-centered design have become significant differentiators. McKinsey research shows that superior design is closely associated with superior performance, whether an organization provides physical goods—as is the case with food banks—or digital products and services, or a combination of these.

Working in a people-centric way is especially impor­tant for organizations that interact with marginalized groups, such as food-insecure individuals, who frequently face stigmas that affect whether and how they seek resources. For that reason, providing a positive, convenient customer experience makes it likelier that food-insecure individuals get the support they need.

GBFB partnered with McKinsey to review the organization’s existing technology setup and to create a digital strategic plan. Surveying food-distribution partners and people with food insecurities was part of that process. So was interviewing GBFB personnel in operations, IT, and other departments. Staff identified internal pain points that could be ameliorated through adoption of digital to create more efficient processes that ultimately could advance the Project Everest mission of delivering more food aid to people who need it.

The transformation team uncovered and sorted issues by which aspects of the organization they affected, such as service quality, cost, and risk. The team brainstormed options for making improve­ments, including where the food bank had existing capabilities that could be enhanced and where it may need to build solutions from scratch. From there, they identified short-term, midterm and long-term goals, and they did a cost-benefit analysis to determine which projects to work on first (Exhibit 2).

In addition to operating more efficiently, potential goals for the digital transformation included the following:

GBFB created a position for a vice president of digital strategy to oversee the organization’s digital-transformation effort. The organization hired Unmesh Gandhi, a software architect turned management adviser with experience in corporate strategy and digital transformation. “The ultimate goal is to make quick decisions and lower costs and risks,” Gandhi said. “Another goal is to deliver continuous improvement,” so systems can evolve as needs change, he said.

The price tag of the food bank’s digital transfor­mation might sound daunting—$5 million represents a two- to threefold increase over what the food bank would normally spend on resources, technology, and engineering in a three-year period. But, despite the price tag, many of the changes aren’t necessarily difficult; they are simply steps that the food bank hasn’t taken before and that require working in new ways, D’Amato said. For that reason, a major portion of the transformation will be helping the GBFB staff assimilate the changes. “Our biggest issue will be the cultural shift and the impact on the team to do things differently,” she said.

GBFB plans to increase access by shortening the figurative distance between the food bank and its partners, and ultimately people in need. Its willingness to innovate extends even further, including working with an array of outside partners to test new ideas and stretch what it can provide.

In early June, GBFB announced a deal with Amazon, which is donating the services of a full-size tractor-trailer and driver once a week to deliver food from the food bank’s 117,000-square-foot distribution warehouse in Boston to a satellite dock in New Bedford that serves about 45 food-distribution partners in the area. Amazon has committed to moving 1 million pounds of food in an as-yet-unspecified time period, according to a GBFB spokesperson.

This past summer, GBFB teamed up with Massachusetts Institute of Technology to test a prototype of a warehouse-disinfectant robot in the food bank’s distribution warehouse. The robotic system, created by MIT’s Computer Science and Artificial Intelligence Laboratory and Ava Robotics, disinfects surfaces that might have come in contact with the coronavirus and eliminates airborne virus particles, according to the lab.

In February 2020, GBFB partnered with the Mystic Valley YMCA in Medford to open the Mystic Community Market food pantry to serve the com­munity there and to test food-distribution models. In one example, when the pandemic hit, Mystic Community Market introduced a mobile app for people in need to order fresh produce, protein, dairy, and other foods and pick them up curbside. Separately, GBFB partnered with YMCA Southcoast to create and fund the Full Plate Project, a food hub serving five affiliated YMCA branches that aims to distribute one million pounds of food in 2021.

GBFB is using the digital-transformation project to reduce its carbon footprint through improved energy use and digital monitoring and automation, among other things. Toward that end, GBFB has optimized truck routes to conserve fuel and maintains Silver LEED certification for its warehouse.

GBFB is still in an early phase of implementing the plan. So far, the organization is weighing McKinsey’s recommendations along with findings from the transformation project’s initial discovery and assessment phase. As they launch initiatives, food bank leaders say they will depend on data to track measurable effects of the changes while staying open to innovation and experimentation.

“We have a high affinity for creativity,” D’Amato said. “We’re willing to try new things.”