Building a Digital Transformation Strategy with HSO – From an Ex IT Director
I’ve worked in a variety of industries leading the IT team in delivering transformative digital products into the business to drive tangible benefits. Previous roles include IT Director for a Music company and IS Director for a division of a FTSE 100 Food Producer.
The issue with Digital Strategy is that it isn’t a deliverable in itself but simply an enabler to resolving a business challenge. The difficult thing is finding that challenge.
We’ve all heard of digital disruption; simply put it’s about using technology in an established market to challenge the status quo. Amazon did it with eCommerce, Tesla with automotive supply, easyJet with flights, SpaceX with reusable rockets, Uber with taxi’s, Ocado with grocery deliveries; the list can go on. But how do you do it for your business?
Conceptualisation & Benefit Assessment
Action 1 – work out what makes a difference to your customer. What do they really want? What drives their business? The best way I’ve found to do this is to get close to the people who are closest to the end customer. That might not mean your sales team and could mean your delivery team. Ask them what frustrates the customer and their ideas on how to solve it.
Action 2 – think about your entire supply chain, is your customer the end consumer? If not, what are they trying to do to serve the consumer; can you be part of solving their problems? Can you use the information that your customer receives to automate any part of your customer’s processes? For example, if you knew when your customer was going to sell onto the consumer, could you make sure that your products were there just in time; would that make your supply chain more efficient and result in efficiency savings for you?
Action 3 – talk with your technology providers about the problem (not the solution). At HSO our consultants love working in IT because we want to make a real difference. We love the process of designing something new and we have the technology available from Microsoft to support it. Let’s do some workshops, let’s prototype, let’s fail fast and move onto new ideas, keeping the ones that work.
The process in action:
- Find the right people, get them in a room
- Ask them what’s good, bad and awful about their processes
- Group them into themes, understand which areas are about growth and which about efficiency
- Value the potential benefits in resolving each theme
- Create multi-disciplinary teams (including technology providers) to resolve the problem, encourage the millennials in your team to get involved, encourage new ideas. Use the Edward Debono (hats) style of meeting to encourage fresh thoughts and evaluate ideas correctly (rather than fall into idea destruction “we’ve tried that before”, “that won’t work”, “yes but…”
- Look at other markets and other industries to see the art of the possible, take inspiration from consumers, think about “what if” and “how” they might apply to your problems
- Join the dots between your challenges; prototype.
But does it work? An example: Our client needed to improve efficiency across the business but had a very traditional outlook. We took the approach outlined and used the 7 steps to design a new process which:
- Anticipates customer demand using consumer demand
- Phases the changing food deliverables according to the requirements of the crop
- Allows the customer to see when their delivery is going to arrive so they can schedule their day
- Allows the delivery supply chain to be made more efficient, eliminating 10,000’s of road miles
- Uses IoT technology to monitor customer stocks and provide deliveries according to the client’s schedules rather than customer fluctuations (but ensuring that the customer would never run out)
- Allows our client to change from being a supplier to being a partner, allowing them to evolve into a service provider rather than a simple trader
This allowed our client to embed themselves into their customer, to reduce their supply costs and to make their production processes more efficient.
Sequencing, Roll-out and Implementation
Sequencing is a balance between benefit delivery, change management and practicalities:
Benefit delivery – the sooner value can be seen from systems, the better. The sooner customers see change, the better.
Change Management – you will be changing the way people work; do it in a structured manner, piece by piece. Be cognisant that they could be threatened by the change, so work hard to see things from their viewpoint and work with them towards your goal.
Practicalities – the foundations need to be in place before they can be joined up. There may be operational and sequencing compromises needed.
The above are dependent on your infrastructure and the changes needed. For the example client used, we needed to change the underlying ERP which, in turn, meant changes to the Manufacturing Execution Systems (MES). Rather than wait for these to be completed (3-5 years), we opted to duplicate interfaces and take some operational compromises in order to allow the customers to see change.
Hard lessons learned
Digital disruption is painful, not just for your business but for your employees too. It may seem great to be changing quickly but change is threatening. Imagine discussing the opportunities to provide great service (as per Amazon) but without needing contact with a customer services team (as per Amazon). If you were to leak that information to your customer services team, they would feel their jobs were at risk but, in reality, it enables them to do their jobs better; it enables them to be closer to the customer, to better understand and analyse their needs and removes the need for the admin. This challenge applies up and down each business and can also be influenced by external factors including incentive plans and financial KPI’s.
The most important lesson is to introduce technology into the business in a structured way, allow your leaders to learn about what other people are doing and present to them the art of the possible. Digital disruption cannot be an IT led process, it has to come from the business.
- Be careful with your ideas; understand their impact before discussing widely
- Understand your businesses incentives and drivers; are they driving behaviours? Are they preventing innovation?
- Be clear on the benefits you expect (including the assumptions that drive them) and measure them.
- Start with your strategy. What technology truly supports your business objectives?
Mike Stanbridge, Enterprise Architect, HSO