How has the technology conversation changed?
When we started out, we used to call it automation more than anything else. Simplification of the business process, we expedite the business process, let’s talk about operations for example. There are various processes and operations we need to automate. That was nothing but digitization if not transformation per se. The discussion changed later on primarily because the expectations from users changed.
Users have different expectations and we had to keep up with the pace. So when we called it digitization we changed the game plan slightly. What that means is that we started with the customer. Let’s go to the customer and see what they want. Changing something just because there are digital tools available there today it doesn’t make sense. So we would start with the customer and then trace back and see what we need to do as a business to provide value, to provide relevance.
Very often we could not do a digital transformation. It was not possible to transform the whole business, but we could do some digitization and that is basically small steps towards the transformation, a gradual iteration.
So the discussion changed over the years because of the expectations from our customers and because we had some tools available to change the business and take some “giant leaps” instead of making small tweaks as you are doing earlier when I was a developer.
What does digital transformation mean?
Every company has to define the journey for themselves and its very different for each company. Many of the companies, although they call what they are doing digital transformation, are doing some kind of digitization. Let’s take for example, yesterday I was at the car rental place. Rather than stand in line to take the rental car I could go to the kiosk and put in my number and get a rental car.
That kiosk is not a transformation, that is just another interface that is given to help the customer. I wouldn’t say the business has changed. They’re still in the car rental business. It just another way to serve the customer better. I would call a digitization.
Let’s take the banking industry, for example, they’re lagging behind slightly. I see various smaller companies that disrupt and they’re doing digital transformations, they’re finding new ways to serve their customers. That’s digital transformation, whereas the rental car had just provided another digital way of doing business.
It’s becoming clear that each company has to define their own journey, whether you transform or not, you have to serve the customers better. And in doing so, let’s use some modern digital tools.
How important is it to identify the ‘right’ technology?
We found that the customers do not really want to talk to us and that is probably true for many companies. They try to avoid talking to you and me, the regular people, we don’t like to pick up the phone and call, if there is a chat available on the website, we’d rather use the chat. That’s the norm.
Chat is very common, but chat has some limitations. It can only do so much. It doesn’t have the same level of intelligence. We decided on how we can make the chat so intelligent that customers will come to us who do not want to talk to us but feel very comfortable talking or chatting and have a more human-like interaction. Not only that, the chat will help them in their buying decisions, almost like a human being.
We used to see the people that come to our website put the goods or merchandise in the cart and then abandon it. So what is going on here? At the last moment, they’re hesitant. We can use the chat to help the customer as they probably need answers to some very small questions.
There was a business case and a need. We identified a need as to why we should make the chat intelligent. So we looked at different platforms and did our research. In this case, we decided to use Lex, which is basically the platform that Alexa uses. Lex is serverless. We use a serverless version, what they call the Lambda, meaning you don’t have to install anything, you just use the server as is, which is hosted by Amazon.
Through Lex we added some intelligence and then integrated that into a chat bot. We integrated it into the back end with ERP system, with CRM, with product management system. So now the chat knew the customer, what kind of buying history that customer had from the ERP system, all the POs and so on, chat knew all the product details and we had built in some data modeling to identify the customer at a granular level.
The chat will walk you through each step of the buying process. In this one example, we identified a tool, readily available and we went for it.
How do you stay in tune with the evolving digital trends?
That’s a very difficult question and since there are so many tools mushrooming everyday, it is becoming very difficult for me, especially as in CIO to keep up. So I try to read as much as possible, I try to attend conferences, but it’s not easy as there are a lot of shiny objects out there.
Take blockchain, I’ll not be able to talk about blockchain because I really do not know blockchain, but I have the basic idea and once I get the basic idea, at least I know how blockchain is relevant as far as my current industry is concerned. I’m not going to learn about blockchain because some financial institution is using it or something like that. So that judicious or business acumen is something one needs to have at C-level, I assume.
I think it is just keeping up with the trends, learning. But unless they are specific use cases, I don’t think one needs to really start using a tool just because it’s a new tool and somebody might be using it.
How has the role of the CIO changed?
The CIO’s responsibility has changed quite a bit. They were seen as a technology person who would be the guardian of the systems. Today with cloud and all, somebody else is the guardian. We cannot be the guardian, you cannot be the gatekeeper, that’s not the road anymore.
Your role has changed and you have to explain everything and if you truly are a good technologist, then you do not have to use any technical language at all. The more you explain in non-technical words, the more people will understand better and jump on the bandwagon that you’re trying to drive and ultimately the more successful you’ll be.
Who would you say then is responsible for delivering a digital transformation in a business?
If there is a digital transformation officer, he is responsible. When I look at digital officers today, they are mainly pseudo marketing people. So they can copy the ideas, the use cases and so on. But at the end of the day, the CIO has to execute. He or she is always there, whether in the forefront or in the background, the CIO and a chief digital officer have to work in tandem.
If there is no digital officer, then there’s a CIO working with the chief marketing officer. Chief marketing officers, as you know, are very technology savvy people. He is responsible because he’s the captain of the ship but otherwise he doesn’t get involved in day to day activities.
What are the initial steps in any digital transformation?
One step is, what is the market scenario? What is the demand out there? What do the customers want? Although we might be profitable, it doesn’t mean we are complacent, somebody could easily be trying to disrupt us and take our market share away. So that pulse of the customers has to be felt. That might tell us what we need to do and how we need to transform the business.
Another method involves an R&D team. I have always had a small R&D team and their job is obviously research. Their job is to invent new products, so to say, new offerings to the customers. So this is very important, I think for any company to have a smallR&D team.
It’s important to tell the R&D team that you don’t play by any rules. Because if I impose the same rules that you have today, they’ll not be able to freely think and invent new things.
Young people these days have very little respect for the bigger institutions. If you have too much respect, too much of the baggage, you cannot think freely. So I get some new blood who, so to speak, ‘just do not care’. Maybe initially you’ll be called a rogue, no problem. I’d rather have rogues than lose my business. In the roadblock and environment let the R&D folks, brilliant people think differently. They can come with new offerings. Once you have a new potential product marketing will get involved. Here we go back to the customer and find out what is going on out there. What do the customers really want? What are the customers wanting tomorrow?
The R&D group, tell me what we could be doing given the data we have, given what our products we have today, they tell me the next big thing we could be doing. Once I’ve identified some revenue-generating new product, that’s the business case. Now, let’s look at the tools. What is the best tool we could be using? Then we look to transform the business digitally.
What are some of the biggest barriers to digital transformation?
The baggage some of the companies carry I think are the main barriers. For example, the old companies like General Motors, a humongous automotive company. They have unions, they have things that make them slow. They have huge plants which are 50 years old. They just cannot compete with the likes of Tesla.
So they have to come up with new ways to do things. Spin up a new business altogether. A sister company or something like that, but being where they are, they are just entrenched in a situation where things that are difficult for them to move faster. The political or pseudo-political reasons are the barriers. Besides that, I think some of the top people just cannot think or had the ability to come up with the right strategy.
You have to always assume that however well we may be doing, there is somebody sitting in a garage somewhere at this point in time trying to disrupt the business. So how do I keep ahead in the game? Continuously reinventing oneself, continuously disrupting oneself, or maybe even cannibalizing one self. This is the kind of strategy one has to have.
If you could give one piece of advice to anyone who’s embarking on these journeys, who’s in the midst of a transformation, what will be key to following the right path and making the right informed decisions?
I think if they have had some success they need to continue down that path. You just cannot give up. You have to continue. Even if there are failures, you have to continue down that path. Informed decisions must come from the people, the people mainly who are in touch with the customers.
The top people have to have the ability, to some extent, to see the future. That’s why they are being paid so much. They are supposed to take the business to the next level. How did the Google folks know there is a huge market of search engines? They saw the future. Somehow they saw the future. That ability has to be there in the C-level people.