CIO roundtable: How tech chiefs are overcoming digital transformation hurdles
- 21 March, 2018 10:00
Coates Hire's Stephen Wilson: Challenges in equipment rental industry make it ideal for a digital solution.
Last November, Forrester senior analyst Tim Sheedy said Australian organisations were not moving fast enough to digitise their operations and now risk falling way behind and potentially going out of business as new, disruptive startups hit the local market.
What Sheedy is saying is that if you don’t digitise your core platforms and processes to serve time-poor customers better, new market entrants will take your business away in a heartbeat. One of those companies is US-based startup Lemonade, which captured 30 per cent of the household insurance market in New York City in 12 months.
Tech chiefs from various industries gathered for a series of four roundtable events in Sydney and Melbourne in February and March to discuss how they are rolling out digital transformation programs across their organisations. The events were supported by HCL Technologies.
The ability for organisations to establish a culture across employees, vendors and partners that fosters and furthers rapid innovation and transformation is perhaps the greatest challenge facing organisations within and beyond Australia’s borders, according to a HCL spokesperson.
“For many, the siloed nature of the more traditional organisational structure, including ways of working, vendor and partner contracting and the tools and technologies deployed - is inhibiting the blossoming of a more vibrant culture of collaboration and the ethos that enables a ‘fail fast’ approach needed to thrive in the current and future economy,” the spokesperson says.
The legal sector, which is traditionally risk averse, has been slow to embrace technological change but lawyers need to be open to the changes that new technologies will inevitably bring in delivering more efficient and innovative legal services to their clients, says Beth Patterson, chief legal and technology services officer, at Allens.
"Technology on its own is not the holy grail but it's an enabler for helping solve clients' business problems. At Allens, we see our people as key to success of our technological developments. When we roll out new technologies we identify champions; lawyers who embrace technology and are experiencing its benefits," says Patterson.
Separating the hype from the reality around newer technologies such as artificial intelligence (AI) and blockchain can also be a challenge, but internal teams work together to assess the risk profile against the benefits, she says.
Patterson adds that law firms need to embrace design thinking principles to build a culture that is flexible, accepts experimentation and supports some failures.
"We have an in-house team of more than 80 specialists across a variety of disciplines that work together with our legal teams and directly with our clients on product design and delivery. Our legal project managers, technologists and knowledge experts lead agile development projects that deliver tailored solutions and share knowledge and skills on hot-bed topics such as machine learning and AI with our legal operators."
Allens is working with technology companies such as Stone & Chalk and SproutX to improve internal efficiencies and create new technology solutions for its clients. The firm has also created 'Allens Lawlab', where it incubates and builds bespoke technologies.
To date, equipment hire firm Coates Hire has been digitising manual processes to provide real time data, leveraging mobile and web technologies, says interim CIO, Stephen Wilson.
Wilson says the nature of equipment rental has interesting hurdles to overcome on the path to digitisation. Equipment is often used in the fast moving and harsh physical environment with a business model that is high volume with high touch transactions such as repairs, maintenance and transport.
“Couple this with industry business rules that make it hard to ascertain when items will be needed or returned, the accuracy that is required by digital channels make the industry complex from a supply chain perspective,” he says.
“However, these challenges make the industry ideal for a digital solution and solving this complexity will come with high rewards for customers and providers.”
A key challenge for media and digital marketing company, Dentsu Aegis Network, is to capture data only once across the organisation and into a clearly defined “source of truth," says the company's Australia and New Zealand chief technology officer, Winston Benedict.
Data must then become available (through automated integration) and to all other processes that require it, he says.
“This is required to increase the pace of transacting, address data quality and eliminate non-value add work. A specific step includes our implementation of an integration architecture that automates how these systems talk to each other. Another is digitising how we capture and process our client briefs,” he says.
Garvin Institute of Medical Research's digital transformation challenges are not 'IT-centric' and can include spending time understanding and possibly redefining existing processes or educating key stakeholders on what digitalisation can bring to the organisation, says CIO Jackson Chan.
“People have a different understanding and ideas about what being digital really means. Investing the time to really align that understanding with key stakeholders in the organisation is critical to the success of the digital journey,” he says.
Determining success or failure
HCL advises that organisations need to first understand what a successful digital project looks like and the measurements they will use.
Many companies fail to grasp the importance of coordination across their ecosystem, particularly as it comes to collecting, managing and governing data to drive meaningful insights into what is working and not working in their business, a HCL spokesperson says.
“Many legacy organisations have neither the ability to bring their business data together for comprehensive internal insights, let alone data-driven customer experiences.
“Customer 360 programs, for instance, often fail to understand the importance of driving internal performance analytics with a hypothesis-driven culture of product development to see the true opportunity that can drive a positive result. This is often coupled with arcane financial management budgeting cycles and the ability for an enterprise to rapidly and proactively drive their industry rather than forever playing catch-up,” the spokesperson says.
Dentsu’s Benedict says his organisation prioritises a digital project based on the size and credibility of the business case, whether or not it differentiates the services delivered to clients, as well as its ability to absorb new work alongside other priorities.
“Success is defined by the business case – either financial or via feedback scores – and is measured two to six months after deployment. Where a program failed to meet the business case, we determine why and correct the gaps in the delivery across technology, business process and/or behaviour,” Benedict says.
Overcoming cultural challenges
Many organisations are turning to agile ways of working as part of their digital transformation activities. But it’s often done with the wrong focus and leaves out the most important components, says a HCL spokesperson.
“Without a holistic understanding of organisational transformation, it’s common to see organisations push a lot of rapid, tactical shortcuts as a solution to delivering more rapidly - only to end up with a massive pile of technical debt that slows them down, in some cases, to the point of standstill,” the spokesperson says.
“A successful organisation understands and embodies the needs across all levels and areas of a business, from finance through to sales, customer service and technology.
“Often, contracts and relationships with vendors – and in some cases, employees – are in place that harbour misalignment and friction, leading to missed, incomplete and or unsupported devices. Re-architecting the relationships both within and beyond the contracts is a critical step towards improving interaction and manageable governance across the board,” the spokesperson says.
Coates Hire uses a mix of agile and waterfall delivery methodologies, says Wilson.
He says that aligning digital products with business owners has been vital and there has been very little resistance to the move towards agile as the product owners like to see the progress of the sprints, collaborate as a team and have accountability.
“This alignment helps ensure that effort is placed on items that can drive true customer value,” Wilson says.
Dentsu’s Benedict adds that getting past the fear of failure is a key challenge associated with moving to an agile way of working. Hiring the right people and trusting them to get on with the job is also important.
“We also need to adopt a mindset that we are now living in a world where business-as-usual does not exist anymore – instead it is under constant evolution,” he says.
Benedict says he promotes the right staff behaviours by celebrating the learning from failures in addition to the successes.
“I grant autonomy to my team and let them own the outcomes. The only old school thing I hold onto is I don’t want any surprises."
Garvin Institute of Medical Research’s Chan says his organisation primarily uses waterfall methodologies when creating services.
“However, a number of teams are starting to use agile and there are some positive tensions between the teams on how things are being done, but the key thing that is holding it all together is the team’s desire to get the right outcome for researchers,” he says.