26th Feb 2018CIO
by Stephen Ingledew - Chief Executive, FinTech Scotland
Can Technology Transformation be the Enabler for a Customer Led Business?
Technology is impacting practically every aspect of our daily lives. Whether this is in the way we socialise and entertain ourselves, the way we buy things as well as the ways we look after our health and travel.
Similarly, technology is changing businesses in how they engage with customers, how they operate efficiently as well as how they are designed and the skills they need to execute strategies.
Therefore, in this age of dynamic change fuelled by digital and data advances, technology transformation is something all enterprises will now be experiencing in one shape or another, whether proactively or reactively.
However, technology transformation is complex and will mean different things for organisations depending on their respective strategies and level of maturity in embracing the array of new technical machinery and capabilities.
For this reason, there is no ‘one suit fits all’ answer to technology transformation and each business will need to find its own way in bringing about a paradigm shift in the external and internal functioning of the business.
There are though some key leadership lessons when considering how best to embrace technology transformation and ensuring it results in good customer and commercial outcomes.
Being very clear on your customer outcome across the whole business is critical to going on any technology transformation journey and this will be unique to each organisation.
The customer outcome focus acts as the ‘north star’ in guiding teams through the change, particularly when implementation is challenging and there are competing priorities.
Whilst this can be very obvious, it is a key foundation to ensuring all teams are aligned, irrespective of whether they are technology experts or not.
Furthermore, the focus on the outcome will ensure that the technology transformation remains an enabler and not an end in itself, in other words, avoiding the ‘tech tail wagging the business dog’ scenario!
This is not in any way to down play the critical role of technology leadership and teams in bringing about positive change in delivering good customer outcomes.
To achieve the desired customer outcomes, the technology transformation needs to be genuinely end to end across the organisation and not geared to solely developing attractive front end customer engagement tools.
For example, delivering a seamless and rewarding customer experience goes beyond an engaging website and will require strong operational systems and architecture that enable processes to work effectively across the entire enterprise.
In other words, good customer outcomes will require consideration of the full lifecycle and how the technology architecture and systems supports this.
If the technology transformation fails to address this then optimising the customer experience and pursing operational efficiency will in reality be an unreachable goal.
Technology transformation can, therefore, be a driving force by ensuring the front end and back end systems are equipped to tap in to the data sources to create engaging experiences across the customer journey including higher levels of personalisation.
Technology transformation will need to be much more than about the latest digital devices, software tools and data capabilities.
Real change can only come about if employees across the enterprise are enabled to make use of the new technology and understand the how the application helps them fulfil their specific objectives.
Of course, this is not to say that everyone in a business becomes a technology expert or is enrolled into the IT department!
Nor can technology transformation certainly be about fostering an uncontrolled environment with the development of shadow technology systems and increased data security risks.
However, enabling employees, regardless of role and functional responsibility, with an agreed architecture of systems, applications and data can be hugely powerful in driving positive and cohesive change in the business.
It is now very much recognised, that organisations with a high ‘technology IQ’ have more engaged employees and greater operational efficiency as well as improved end to end customer experiences.
In other words, focusing on the employee journey as well as the customer journeys can be hugely effective in ensuring all people are driving the technology transformation and that the IT team are not alone in doing the all the hard work.
For example, encouraging operational employees to take on tasks that in the past would have been past to the IT help desk department allows the technology experts to focus on more strategic developments.
For technology transformation to deliver the desired customer outcomes there will need to be to a strong foundation of collaboration throughout the organisation.
In reality, this has to be much more than people getting along well in project meetings and a general mutual respect for the different types of business and technology skills in each team.
Important consideration will need to be given to alignment of metrics and accountability and adopting a shared balanced scorecard approach to effective collaboration.
Having some people focused solely on reducing risk, improving security, governance and control whilst other teams are fuelled by the task of driving revenue and bottom line performance will inevitably give rise to tension between teams.
This can be overcome by the leadership adopting a balanced scorecard to the metrics and then, importantly, coordinating incentives to ensure positive outcomes for all.
The other key factor to rewarding collaboration is ensuring teams are empowered to drive forward the various elements of the technology transformation
Once again, there needs to be a balanced approach to the this. For example, on the one hand empowering business teams to have more influence and control on the use of technology in order to achieve their objectives.
This would need to be balanced against avoiding the introduction of ‘unauthorised’ technology, otherwise known as ‘shadow IT’, such as software licences and tools which give rise to integration and security corruption issues.
The leadership can address this by embedding a strategic technology framework and defined estate with clearly empowered ownership for digital and data assets and channels throughout the business.
A framework which defines the accountability in this way will enable the business teams to retain a good level of flexibility in driving change while enabling the technology experts to manage the strategic and complex tasks as well as the evolution of the broader framework.
This means IT does not need to be involved in every minor technology need in the organisation and people can become more self-sufficient and technically proficient in understanding systems, data and processes.
A Modernisation Mind-set
Technology transformation has the opportunity to go beyond upgrading and improving existing systems and processes for engaging with customers.
The new digital and data capabilities enable leaders and teams to completely rethink how the business can perform more effectively and efficiently in the future.
They could even open up the development of new business channels and revenue streams that were unimaginable before the technology change journey was embarked upon.
This will require a modernisation mind-set across the business and IT teams in which technology fuels a new type of innovation.
For example, innovation that questions conventional know how in the organisation and even acts as a disruptive force in challenging the existing well-established business model, in other words, disrupting the market before a competitor does so!
However, the innovation that drives incremental improvements, for example to optimise customer experiences, still has a vital role to play.
Unleashing a customer need based and design led approach as part of the technology transformation can introduce new thinking which embraces the modern world consumers are living in.
Although a modernisation mind-set will need to be balanced with a pragmatic and realistic understanding that technology transformation has no ‘magic wand’ to achieving significant business change.
Leaders will need to often balance the short terms imperative to upgrade or maintain existing fragmented systems with the desire to introduce the latest new modern technologies.
This cannot be done in a piecemeal way and the hardware infrastructure, data management and application architecture will require as much ‘modernisation’ consideration as the actual customer facing channels and capabilities.
In other words, a modern mind-set to deliver the better customer outcomes will need to go hand in hand deep technical know-how on application, process, rules and migration modernisation amongst an array of other IT matters.
Data, The New Oil
Data is very much the new oil giving businesses opportunities to fuel more engaging customer experiences as well as deliver better customer and commercial measurable outcomes
Therefore, data management, connectivity and integration will be a key part of a technology transformation journey, impacting the organisations systems, application and analytic capabilities.
However, with the data volume and sources growing exponentially, this becomes one of the most complex areas for organisations at address in any technology transformation.
Big questions arise such as where best to manage data, for example, within the business or in multiple clouds as well as how to do so with the appropriate security. This in turn may depend on how the data is to be accessed alongside how it will be used, updated and displayed within the business.
The importance of how the technology transformation addresses this complexity cannot be over stated especially as the opportunities to turn the data into actionable insight becomes more and more evident.
One key aim will be to enable flexible data sharing across the enterprise with standards that enable broader empowerment of teams to use the rich source of information to make business decisions.
Achieving an optimal balance between the business teams being able to be self-sufficient when working with the data whilst ensuring the technology experts securely manage the physical systems and architecture could provide a solid foundation for the business to leverage the new data ‘oil’.
The key test of success will be moving to an enterprise wide approach to turning data into actionable insight, something I have written about many times (see http://bit.ly/2nmlxEn )
Data is the new oil giving businesses the opportunities to fuel engaging customer experiences and the technology transformation will enable teams to drive and measure the improvements that it delivers.
However, there will be a balance to be struck between practical easy to use data sets which front line teams cans turn into actionable insight as opposed to the more sophisticated predictive analytic that leverages big data capabilities and detailed algorithms used at a strategic level.
Think Big, Act Small
It goes without saying that any technology transformation will invariably be huge, especially with so many interconnected technical, process and people factors.
However, whilst some form of high level roadmap will be help in providing some cohesive guidance across the whole organisation, a step by step three-year detailed plan will probably only delay execution and not be optimal in the long run.
Whilst there is a need to recognise the scale of technology transformation and for the leadership to ‘think big’, the key to success will be to break down the actual practical tasks and channelling into bit size actionable chunks and thereby ‘act small’.
This can be done by starting with a number of small well defined objectives and initiatives, with a focus on taking action, learning from it, by improving and repeat.
In other words, adopting a similar approach to how software development moved from a linear waterfall style to one based on agile using cross functional teams, quick sprint exercises, regular ‘on the job’ meetings and making improvements in real-time.
This methodology enables the organisation to genuinely be customer led and respond to constant changing consumer dynamics and expectations. For this reason, agile is not just about coding the website, but is also importantly about design, content as well as other aspects of the customer interface.
Focusing on those prioritised initiatives which together will improve customer and commercial outcomes while stitching each project together within the framework of the broader strategy will enable teams to ‘act small’ whilst maintaining a ‘think big’ cohesion.
Such a pragmatic approach enables teams to live the technology transformation across the business resulting in faster development cycles, more productive cross team interaction, dynamic iteration as well as stronger quality assurance.
Furthermore, it enables the organisation to overcome the traditional governance ‘treacle’ which often suffocates rapid and innovative progress and takes a nimble approach based on data driven action and decisiveness alongside testing and refinement.
Choosing Your Partners
Most organisations recognise that technology transformation requires some degree of external expertise and capability for successful execution and delivery of good outcomes.
There are numerous technology suppliers and consultants who will be able to demonstrate that they have the necessary credentials and latest technology capabilities to support the broader objectives of the transformation.
Therefore, selection of the right parties to work with will be crucial and will need to go beyond a simple vendor selection process, especially as the transformation will not be a short term transactional exercise.
For this reason, choosing parties who you can genuinely partner with and have an ongoing relationship with will be critical from a technology delivery perspective as well as for the customer and business outcome results.
A partnership based approach to the relationship means the external third party is invested in your success and with you for the long haul, often with shared reward and risk.
This can be demonstrated by embracing a proof of concept approach to some aspects of the technology transformation especially in fields where you are both breaking into new ground for engaging with changing customer needs.
It also enables you to work through together on how to leverage existing systems and people skills especially when re-platforming infrastructure.
In addition, the partners ability to work in cross functional teams and not just be focused on engagement with the technology professionals will be crucial to building a strong enterprise wide relationship and have an understanding of the broader challenges.
This collaborative approach should also extend to how a third party works with other co-partners the organisation is working with and thereby embrace the value that comes from a wider eco-system in delivering the transformation successfully.
More Than Just Technology
In summary, technology transformation for any business cannot just be about the latest digital, data and cognitive capabilities, even if they are grabbing the leaderships attention on the need for significant change.
The transformation has to be the business fusion of people, process and technology in order for the business to effectively and efficiently meet the needs of customers.
This reinforces the point that whilst the new technology is a crucial enabler, without the right people skills and leadership as well as appropriate processes, the progress towards being a customer led business will be limited.
The mind is sharpened on this point when you look behind the real reasons technology transformations stumble or fail to deliver.
Very often this can be put down to lack of people collaboration, cultural resistance or communication and process breakdown rather than the technical delivery of the technology.
Therefore, creating a change environment where humans, customers and the people in the business, are at the centre of the transformation and the focus positive outcomes will ensure challenges are overcome and success is delivered.
Stephen Ingledew - Chief Executive at FinTech Scotland
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