I have spent the last few years working in and with companies that wanted to deliver benefits to customers faster. There have been clear winners and losers in that time, and those that have had true success have shown similar characteristics.

Companies are full of intelligent people who can identify that change is required to create efficiencies, but the key is being in harmony with what the customer wants and working together towards that common goal. Organisations who think that simply moving to a new technology platform will be the silver bullet to fixing their business are underestimating what is required.

Gaining a true understanding of how a business should invest to gain the most customer improvement is key. Business led transformation can result in shadow IT, and IT led transformation usually leads to technology and platform changes. However, with a lack of customer focus, and while some back end processes may improve, customer experience does not really change, the business will not be transformed!

As digitisation of companies’ assets becomes more and more prevalent to help them keep up with competitors, companies are looking to accelerate this transformation so they do not get left behind. Economic insight into Australian companies has shown that those not investing in technology are already being noticeably being left behind by their competitors that are, recently the Australian RBA Governor Philip Lowe was quoted as saying he “saw the economy divided into "leading and laggard businesses", with firms that are unable to take advantage of new technologies slipping behind and feeling under pressure.” With those that are investing finding they have increased profit margins, productivity improvements and cost reductions as the top three benefits achieved by their current digital transformation initiatives. With IDC research finding that “researchers predict digital transformation to add an estimated $45 billion to Australia’s GDP by 2021 and increase its compound growth rate by 0.5 per cent annually.”

It is no longer technology versus the business...

So how should organisations proceed? By elevating technology into the executive leadership (ideally on the board) and allowing it to be a key part of the business. With the role of the CIO being part of the executive with a seat at the table alongside the business, change can happen in partnership and that is the key to success.

Let's look at speed to market, which requires the correct processes, security, tooling, agile methodology and self-organising team structure. Even three months is a long time to take a new product to market in today’s technology-driven world. Although this timeline may be satisfactory for quarterly shareholder reports, it is by no means acceptable to today’s digital-hungry customers and prospects.

Speed to market is forcing organisations in Australia to think differently, given the rate of change required to deliver better products for customers. An organisation that cannot change its products quickly will be overtaken by its competitors.

What we are seeing is the business and technology are now forming a symbiotic relationship. Strong technology aligned with a strong business strategy are bearing fruit for the companies that are being bold in this space. Crucially, technology is only part of the solution. I have worked in large enterprises that with limited automation or DevOps, but with streamlined processes along with reversing the usual non-tech to tech personnel ratio, have successfully increased the frequency of releases to every three weeks. Enterprise organisations have become reliant on managing risk via layers of governance, and this is a great example of a business problem that a strong transformation can look to change.

Simply moving your existing inefficient processes and old operating model to sit on top of a new technology stack will result in little to no benefit for the organisation. This can be useful to satisfy or remove some risk items within the organisation, but is hard to tie into real business benefits. This is technology for technology's sake, and will not provide the silver bullet an organisation is looking for.

Transformation is not new, but what is different now is that organisations are taking a multi-pronged approach to this change. Adopting new technology is one pillar, which is fundamentally changing the structure of how the organisation is run, allowing it to become truly customer focused. For example, Australian businesses have been sheltered from change for a number of years, but new legislation (Open Banking, Bank Executive Accountability Regime (BEAR) and others) means that customers are looking at other options. Competition and the opening of markets is driving change.

Transformation is driven by the need to make a business more efficient or to expand revenue streams. Compliance requirements in an organisation have traditionally been managed by teams of people with checkpoints and reviews to ensure that the company is not breaking any laws. A clear opportunity is then to realign the organisation to work completely differently, we are seeing this in a number of Australian organisations as an Agile transformation. It seems the trend is to follow these four steps:

  1. Create a new business strategy or update the existing one
  2. Realign the whole organisation around a new operating model (e.g. Agile aligned)
  3. Significantly reduce the senior management layers
  4. Significantly increase the engineering teams in the organisation

This then enables the organisation to focus on the customer (via these new products and digitisation of products) and change the approach to compliance and regulation. This also allows the organisation to shift the burden of compliance and regulation into the technology stacks, significantly lowering the cost of compliance. This approach should allow organisations to reduce costs in the short to medium term and improve revenue in the medium to long term.

Taking the bigger step and looking inwards at the organisation and really understanding where the business is constrained allows will solve the problems that the business truly needs to solve.



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Andrew Brydon

VP of Consulting - APAC

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