The Art of Transformation: Part 3 – Digital

Andy Nicol founded Sputnik in 2000, quickly establishing them as a leading innovation and digital engineering agency, providing strategy, UI design and build of secure, scalable and fast web and mobile applications for enterprise. Having been involved in the digital industry for over twenty years and one of our key strategic agency partners, we knew that Andy was the perfect person to speak to about this exciting topic.

What does transformation mean to you?

It will be no surprise that my mind defaults to Digital Transformation.

Digital Transformation involves reframing the use of IT beyond putting a monitor and keyboard on everyones’ desk, and beginning to imagine how an ecosystem of mobile devices, cloud hosting, the gigabytes of data you’ve accumulated over 20 years and automated process can deliver value to your customers and employees.

Taken far enough, Digital Transformation can fundamentally change the way an organisation operates.

The transitions between post, fax and email took long enough that even the most conservative organisation had time to acclimatise to change. The internet has driven change to happen much faster, bringing threats and opportunities that organisations need to be able to respond to.

This ability to adapt requires both a modern mindset to seek better ways of doing things, and the building of capability through internal, digitally focussed teams and external partners.

Examples include;

  • Creating a mobile app to allow remote teams to access information or submit reports from site
  • Connecting telephony, web chat, social media and email to create integrated customer
  • Allowing customers to order 24/7, view their order history and resolve issues through a customer portal
  • Using Open Banking to provide accurate, compliant and convenient KYC (Know Your Customer) or credit checking
  • Development of a Management Information Dashboard to gain real time visibility of stock levels across a global manufacturing base
  • Replacing paper forms (internal or external ones) with online ones, bringing convenience, operational efficiency, improved audit trails and real time management information.
  • Building new capabilities to monitor and improve productivity, market insights, customer relationships, sales or product development.

The applications are limitless, and specific to every industry, and every business within them.

The benefits include;

  • Access to real time information
  • 24/7 access through cloud based solutions
  • Cost savings
  • Access to new markets (eg. serving 1,000 consumers spread across the country is a lot easier when you do it online)
  • Competitive advantage
  • Increased conversion

RPA (Robotic Process Automation) is the part of Digital Transformation that deals specifically with creating software “bots” to connect separate software systems.

The RPA captures information from one or more systems, follows a set of rules (or develops and continually optimises those rules using AI), manipulates the data and triggers an action in another piece of software.

Describe your own expertise and involvement in the space of business transformation.

Our first Digital Transformation project was a Customer Centricity programme for Agilent (part of Hewlett Packard) in 2006.

Pretty much everything we’ve done since has involved some degree of transformation.

We even approach website projects from a different angle to marketing agencies. Of course, we understand the brand and messaging elements, but we are always looking for ways to take a client’s website from being a brochure with an enquiry form, and making it an integrated part of the business process and customer journey.

Over the years we’ve built Quote & Buy journies for Swinton Insurance, numerous websites and RPA projects for GoCompare, a meeting scheduling system for VisitScotland and a customer portal for Fluent Money.

We define ourselves as an “Innovation and Digital Engineering” agency. We keep a close eye on digital innovation wherever it is, which allows us to bring the latest ideas to see how we can apply it in a client’s circumstances.

We then help in the delivery of these ideas to enterprise standards – secure, scalable and optimised.

Our experience spans across the spectrum of industry sectors, although our brand values of expertise, integrity and professionalism lead to us being selected to deliver business critical projects, often projects in regulated industries such as financial services.

How and when should a transformation programme begin?

Digital Transformation takes time to plan and requires investment to deliver.

There may be some quick wins that can be delivered within 3-6 months for a few tens of thousands of pounds, but meaningful transformation requires the modernisation of the underlying tech stack, an audit of existing processes, activities and customer journeys, and a plan to roll out change over a number of years.

Digital is already happening all around us. Many businesses are still failing to take advantage of the opportunities made possible in the last decade, and need to lay those foundations before they can seriously plan for the current trends of artificial intelligence, voice and 5G.

The good news is it doesn’t all need to be done at once.  In fact, the best approach is to have a general idea of the direction of travel, and tackling your ambitions in a series of smaller projects that can incrementally deliver value to the organisation.

As well as improving the component parts, they will be designed to work together more effectively, and be easier to upgrade in future. Over time you will be well on your way to meeting your larger goals.

The outcome is an efficient, effective and agile organisation that is fit and prepared to deal with the ever increasing pace of change.

What are the risks of transforming a business model?

The most obvious risk is pure financial investment – either internal, external or both. Digital Transformation is essentially the investment in software and third party integrations, and this involves planning, license fees, design and development time.

Unlike buying the wrong car or computers, there’s no trade in value for bespoke software. Choosing the wrong strategy is money you won’t get back.

Even if you get the strategy right, you need the right team. If you ask a designer to draw you a logo, you can see pretty quickly whether they’ve got the skills. Set a team of developers on a task, and it can be months of sunk costs before you get a glimpse of whether what’s inside the black box is of the standard you expect.

It’s sometimes acceptable to cut corners, for example to meet a tight deadline, or to try out a proof of concept. Organisations need to be mindful of the technical debt they may be building up, and have a plan and budget to revisit it.

The way to manage all of these risks is to embed Digital Transformation within your organisation.

Rather than trying to plan a large, expensive and untested transformation programme, try and break work up into small tasks that you can deliver in weeks or months. This allows you to keep investment manageable and benefit from returns on investment as each task is deployed.

You get feedback with each release on what’s working and what isn’t which informs your decision for what to do next.

Of course, the goalposts will move, and move further away as you immerse yourself in change.

There’s always a risk of underestimating the cost of a project, or scope creep where the project continues to grow once it has begun. Sputnik’s approach is to have honest and frank conversations about costs and timescales up front in order to avoid a breakdown in our relationship once everyone is invested.

Also, remember to ask Kodak, Blockbuster and Nokia about the risks of not transforming. Innovative competitor – coming to an industry near you.

Describe a successful business transformation you’ve been involved with?

Fluent has understood the role technology can play in delivering a market leading customer experience, since the business’s inception more than a decade ago. Technology has been firmly at the core of user experience and business growth since the first day of trading.

Optimising customer experience has been an ongoing strategic objective of the board, and has meant further investment in digital advancements’ to support both the customer and also deliver tangible commercial benefits.

As a strategic growth partner, Sputnik had a clear understanding of Fluent’s requirements to further optimise the experience it delivers to its’ customers.

The process of applying for a loan and the anticipated outcome – whether that’s personal borrowing, securing a mortgage, or obtaining funds through equity release – is an experience that is often laden with emotion as outcomes for customers can be life-altering. It therefore creates a direct requirement for strong lines of communication. Unfortunately, within the broker industry those strong lines of communications aren’t renowned.

A comprehensive understanding of a customers’ wants and needs during a loan process, to satisfy growing customer expectations around information consumption and communication – whether dealing with the digitally savvy Generation Z, or the more traditional baby boomer/Generation X – has been key to deploying the platform.

Working with Sputnik, Fluent has been able to deploy an application that gives a blend of digital tools as well as access to human expertise, providing true customer choice. It allows Fluent to instil a level of comfort through easy access and timely information.

Alongside enhancements in experience, the technology has also had a broader commercial impact on the business, supporting improved operational efficiencies, reducing application attrition (and therefore business risk) while at the same time ensuring the highest levels of compliance.

What are the key attributes of a successful transformational leader?

They are the individuals responsible for driving innovation and business change.

They need a strong commercial acumen in order to understand an organisation’s brand, strategy, operations, commercial needs, opportunities and threats.

On top of this they need to be creative and curious, constantly scanning the horizon for ways in which technology can help organisations.

While they don’t necessarily need to have any coding ability, they need to be fluent in conversing about digital products, user journeys, and software tools and methodologies. 

Peter Drucker famously said that “culture eats strategy for breakfast”. What’s your view?

If you fail to define and nurture your culture, I have no doubt you won’t achieve your strategy. From that perspective, Drucker is right.

But I think the opposite is also true. An organisation full of the right people without a plan is also going nowhere. In fact, the great culture will be short lived without confidence that the leadership team know how to define and execute a winning plan.

The truth is you need both.

But as culture is probably the harder of the two to, it is also the one that gets ignored, and therefore the one that is the biggest risk to the business.

Everyone with a tech requirement is aware that the demand for software engineers far outstrips supply. It’s hard enough to find any 5 new developers, let alone ones that share your values. To meet the demands of the organisation, there is pressure to fill seats.

It doesn’t take many desperation hires to significantly change the dynamic of your team and before you know it your culture is not effective at delivering on the strategy.

At Sputnik, our culture absolutely has the potential to sink our strategy if we get it wrong.

We recognised organisations’ frustrations in delivering digital projects that were often delivered late and full of bugs. The result is significant opportunity cost when projects launch late, as well as stress and embarrassment for the stakeholders.

Our strategy is to be the go-to agency when clients need help in delivering mission critical, enterprise digital projects.

In order to deliver on that we need a culture based on flawless execution, pride in our work, and recognition that if we fail, the fallout ripples across clients, their team and their families.

We need our team to understand that for professional software engineers, accountability is more important than being able to bring your dog into the office.

What role does brand play in transformation?

Brand will fundamentally influence how that organisation pursues its Digital Transformation strategy.

From Aldi or Asda, Santander or Starling Bank, organisations need to understand their customers and how they can serve them.

Some digital opportunities will apply across a sector regardless of brand. They are so obvious, or commoditised, that they are a no-brainer. Unique and compelling opportunities for Digital Transformation often arise only when technology is considered in the context of a particular industry or proposition.

All four of the examples above have obvious customer-facing digital presences but the way they manifest have their own subtle differences which can magnify into big differences in impact.

Behind the public websites and mobile apps are networks of software systems that manage suppliers, processes and reporting. These are what allow businesses to process orders quicker and more accurately, comply with privacy and FCA regulations, sources cheaper

The values and propositions of each of them will define their appetite for risk, their drive to modernise, and the attitude of the talent they attract.

As the renowned Applied Futurist, Tom Cheesewright, proclaims in his book “High Frequency Change”: success is now defined by innovation, not optimisation.

They must foster a culture of innovation. Whether internally or with external support, they must embrace change, continuously identifying and delivering opportunities across the business to improve their delivery.

What final advice would you offer a CEO or founder about to embark on a significant transformation project?

The good news is Digital Transformation is really just doing what you’re already doing, but with a little more resolve. You will already be discussing how you can improve your product, operational efficiency or customer service every day, but perhaps undecided in which direction to go, or how to prioritise expenditure.

It’s important that the senior team understand, and commit to, both the capex and opex investment, and change in working practices required.

The next step is to explore what’s possible, and where the easy wins might be. This could be a few meetings and conversations with an experienced consultant, or the creation of a Digital Transformation strategy.

Whether you choose to build an internal team, or engage an agency, you will need an experienced project lead who understands both organisational need and technical delivery. Rushing out to hire a team of developers or a traditional web agency without strong leadership will waste both time and money.

The goal is a leaner, slicker, more agile organisation.

About Sputnik

Sputnik architect & deliver online projects for clients with big ambition. They are a digital studio who work with clients to design, build and optimise their digital products and services. Being user experience led and results driven means that Sputnik take a pragmatic, data driven approach to their work.

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