Critical success factors for digital transformation
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Critical success factors for digital transformation

Mark Shapland — January 2018
Ensuring investment in digital technology turns into real business value requires a ‘fail fast’ culture and deep understanding of customer experience. Five tech leaders share their insights.

Over the past five years, a wealth of advanced technologies — from big data analytics and machine-learning to augmented reality and biometrics — has poured into organizations, opening up tantalizing possibilities. But one big challenge still remains for technology leaders as they buy into such innovations: how can they tell if any particular technology will actually deliver the promised benefits to the business?

It was a question the keynote speakers at the recent Digital Transformation Conference in London tried to address head-on. Irrespective of their industry — whether online groceries or fast fashion, hospitality or energy supply — they all agreed that exploiting innovation in today’s rapidly changing markets while also meeting expectations of finance chiefs for RoI requires two fundamental capabilities: experimentation and customer-centricity.

By failing fast — experimenting with technologies until they prove their value or rapidly and ruthlessly abandoning them when there’s a hint they won’t — technologists can get to successful outcomes quicker with lower risk and spend.
Agile innovation

According to Anne Marie Neatham, chief operations officer for technology at online grocery company Ocado, as part of any digital transformation journey, CIOs and digital chief need to embrace failure and create a culture that accepts — even encourages — failure in the innovation process.

Anne Marie Neatham, COO for technology, Ocado
Neatham pointed out that Ocado has experienced its fair share of technology dead ends, adding that moving on quickly from those is key. “It is really easy to spend money on technology. As IT leaders, we’ve all gone in with begging bowls to financial controllers [even when we] can’t always explain what we are spending it on.” But by rapidly trialing ideas, recognizing when things are not working out and moving on, the innovation budget goes further, the risks are lower and you get to success quicker, she explained.

Such agile innovation is evident at the UK-headquartered National Grid, where digital innovation manager Richard Wiles has experimented with technologies that enhance health and safety in the work environment.

Richard Wiles, digital innovation manager at National Grid
In 2016, Wiles’s team explored the use of Microsoft Band, the fitness and activity-tracking wristband, to monitor the well-being of engineers in the field. “We developed an app for this and put it out there on trial — only to find that four weeks later Microsoft stopped producing the Band,” he said. Rather than a project-killer, the trial was seen as proving the concept. And today staff at National Grid’s system operator organization wear Fitbit devices, “contributing immensely to employee fitness and well-being,” says Wiles. “It’s not what we originally envisioned but it has proved useful and has been fully implemented. Leave space to experiment in your organization if you can,” he advised. “Giving people the freedom to innovate is important. Just because the end result comes out differently to what was first anticipated does not mean it is a waste of time.”

In a similar vein, National Grid is currently experimenting with the use of Amazon’s intelligent personal assistant Alexa in conjunction with home networks and smart meters. Wiles says the focus is on enabling customers in the UK to use Alexa to provide details of electricity usage and source — how much is derived from coal, biomass, nuclear or other sources. This has also been extended to provide forecast and demand information for gas.
False starters

Also experimenting with Alexa, Darren Goldsby, chief digital officer at restaurant and media group Jamie Oliver, reinforces the sentiment that initiatives that look like they are unlikely to add value for customers or employees needs to be reconsidered. That was the conclusion the group came to with its initial efforts to exploit the Alexa interface.

“Even before Alexa was launched, Amazon was telling us that every kitchen will have a digital personal assistant.  But our early approach of putting recipes into voice format was simply too complex. We always need to make things quick and easy, as we do with our books,” Goldsby outlines.

Darren Goldsby, CDO at the Jamie Oliver Group
His team went to great efforts to exploit the Alexa interface by changing the format and description of existing recipe content
— a costly and time-consuming undertaking. “Alexa is an amazing thing and the team who built our app did a brilliant job, but it didn’t quite work for us first time around; perhaps that was because we hadn’t talked to people [consumers] about the approach and made it as simple and useful as it needed to be,” said Goldsby.

He emphasizes that the Jamie Oliver Group has by no means ditched Alexa. “We continue to be on the platform and are always looking for new ways to use it as we think it has real value for us.”

Customer first

As that experience underscores, a vital approach to ensuring technology adoption delivers valuable business outcomes requires a laser-like focus on the customer and what they want. It is too easy for technologists to become captivated by a new digital trend or product while forgetting about the nature of the customer and their experience.

Nick King, CDO at Auto Trader Group
Nick King, chief digital officer at £282 million ($387m) classified advertising business Auto Trader Group, believes a good example of this is the way in which many technologists are still focused on addressing a single digital demographic: millennials. He said that many developers have failed to spot that the biggest adopters of digital are now actually baby boomers. So products designed with millennials in mind need to be changed.

Millennials can cope with endless amount of choice and content variety online, said King. But that is less appealing to their parent’s generation, who want interfaces that enable them to make confident choices without feeling they are overloaded with information. For example, his organization has observed that almost 40% of women over the age of 45 say they “dread” the experience of buying a used car. “Clearly your customers should not feel dread when they are on your website, ” he said. “The key is to create technology which builds trust.”

UK online fashion company ASOS comes at its audience with a similar viewpoint to Auto Trader, believing all technology must be implemented with the customer firmly in mind. “You have to start with the customer experience and work backwards towards the technology,” said Sakshi Arora, lead business analyst at ASOS.

Sakshi Arora, lead business analyst at ASOS

When redesigning its online platform last year, the focus at ASOS was on optimizing the mobile experience and customer journey, while making the site more visually impactful. Part of that demonstrated ASOS is not afraid to expose its customer to cutting-edge tech. It added visual search capability, based on machine-learning that allows customers to upload an image and find items on the website which are a close match. It’s an algorithm-based approach that will be refined as usage grows, fitting with a “build-measure-learn” — and sometimes fail — approach to innovation.

• Article update: Darren Goldsby is now managing director of data-centric technology consultancy ODIN

First published January 2018
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