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Most businesses will go through several digital transformations throughout their lifetime, but their success is not always guaranteed.
At the latest CW500 Club, the panel dished out advice on how to deal with the people, processes and cultural challenges that IT transformation projects bring with them.
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According to Chris Boyd, director of digital architecture and transformation at Telefonica, digital transformation can mean anything, depending on who you speak to. For Telefonica, a company with 22 businesses around the world, digital transformation means providing new, digital services for its customers.
“Your flavour of digital and my flavour of digital could be really different,” he says.
“We’re going through a major transformation. In reality what we’re doing is creating a number of shared services. We’re transforming the core services to try and simplify everything we do in order to deliver the services that you traditionally know, cheaper and faster, with simplified processes for customers and our operations.
“[Technology] is a great power for good, but I also recognise that it’s about making cash at the end of the day.”
Right people, right skills
For Telefonica, much of the digital transformation is about innovating for mobile and delivery to improve services for the customer. Boyd points out that our digital home and work lives are intertwined as technology cuts across all parts of our lives.
Externally, Telefonica is bringing in new services such as connected homes devices, but the bigger challenge is internally. Much of it is about culture – or in Telefonica’s case, cultures, as the company operates across the world.
“From our perspective it’s about making the workplace as good as a home. Seven years ago we would’ve said that technology in the office was better than the technology at home. But now, for many people – especially the younger generation – technology at home is far more powerful than anything they would get at the office,” he says.
The aim therefore is to match the work environment with the home environment by bringing in new technologies.
“We should be doing some very simple things for people just to make business life easier and better. Those are areas where we could really start to shift culture and it would attract the right talent,” he says. It would also mean the business would be perceived to be digital, which again affects the external market.
He also says that after coming back to the telecoms industry after 15 years out, one of the big differences was that when he left “we seemed to have a bunch of engineers who could actually engineer things, build software and run services”.
But when he returned, he found programme managers “who could manage a contract beautifully”, but in terms of doing a bit of coding or writing APIs they weren’t up to scratch.
That, he says, was one of the biggest challenges. What Telefonica is doing now is to try and avoid situations where people work in silos, focused only on their “core role”.
“From a tech point of view, some folks have what I would call traditional IT, and in the digital side we’re doing some recruitment trying to rebuild coding skills,” Boyd says.
That includes good business intelligence people, data analysts, but the company is also retraining people to move into more digital roles and fragmenting its IT operations.
“What we’re doing is encouraging that and starting to embed the IT into the business. Our strategy is to have very combined roles. If you got somebody in digital marketing, we like them to understand some level of coding,” he adds.
“We’d like them to be able to build a beta trial of the requirements they’ve got and not fill in a requirements form. We’d like them to sit next to somebody who understands a little bit of marketing but actually is an expert coder, who can take that code and make it fit for purpose.”
Sort out your requirements
Richard Philips, digital transformation programme director at the AA, is also trying to improve mobile services. For him, stakeholder management is key to a successful IT transformation. If you don’t have the right people involved, a project is doomed from the start.
This also includes managing expectations and requirements around the product or service you’re developing. He says: “Everyone’s got their placards of what they want and you sit there thinking you only have so much money, how are you going to do it?, how do you prioritise?”
The AA has been around since 1905 and, like many long-standing companies, has a number of legacy systems, which can act as a barrier.
“One of the guys I work with was the coder on the first website 15 years ago and he still recognises some bits,” Philips says.
What people want
The company is working on bringing in new technology and recently launched a smartphone app with an emergency “rescue me” button. If you break down, you will immediately get a call back and help right away.
“It’s a very neat digital experience and it’s good for the company as well,” he says. However, Philips adds that it turns out that most people report the problem on their laptop, so the company launched the self-service on the website.
“If you break down, why would you log into a laptop?” he muses. “But people want it, so you can’t take the customer for granted. You really have to think hard about what the customer wants.
“It sounds obvious, but when you start the design, think about what people want.”
Focusing on the customer is something independent consultant and former CIO Pete Connor has found hugely important. He says that in the retail sector there is huge scope to become more digital as people increasingly shop online and on smartphones.
However, that too comes with its challenges. Just as at the AA, established retail organisations have a legacy systems base built up over the years.
“What a number of retailers are doing is to focus very rapidly on changing the underlying systems architecture,” Connor says.
That should include not just changing the technology, but changing the way people work. That can mean moving people into different roles and recruiting new people to the organisation.
With new roles and technology springing up, Connor says that responsibilities have also changed, as senior IT leaders take on the role of enablers in terms of the deployment of technology and the way it is done.
“The role of an IT function in my experience is changing from being a controller of technology into an enabler and a governor of technology to ensure investment is spent wisely on behalf of the business,” he says.
“In my experience this a big change as traditional technology responsibilities are challenged.”
New people, new expectations
Another issue may be that bringing in new people leads to different expectations.
“A lot of these people will have different expectations and want to do things in a different way. Culturally this may be very different from the traditional ways of getting things done,” Connor says.
Digital transformations typically focus on making it easier for customers to shop, and improving their experience from stores to online.
“This is usually bought about because customers are shopping in different ways, with expectations continually being set higher, quite often by competitors. This leads to investments in technology that will give customers a richer and improved shopping experience,” he says.
However, internally the story may be very different.
“I have experienced bringing in new people to do amazing customer-facing digital transformation, but then giving them old legacy systems and technology, making it difficult for them to deploy new solutions,” he says.
In a previous role Connor had to kick off an internal IT transformation programme to “change the internal technology to enable people to develop and deploy systems as they should do in the digital age, and to help improve the engagement of the organisation as whole.
“The bit I learnt when embarking on a digital transformation was don’t forget about the internal processes and systems.
“While you’re enabling things for customers, make sure internally the colleagues have the ability to serve the customer and feel engaged and empowered by having those tools.”