Digital Transformations in the age of COVID-19
Digital Transformations in the age of COVID-19
Digital Transformations in the age of COVID-19
Before COVID-19, a number of enterprises were already invested in the adoption of modern operating models. However, for the most part these efforts were anchored largely in the idea of ‘start small, succeed, and scale up.’ The pandemic forced an unprecedented acceleration of that journey and turned it on its head; the only way to continue to operate was to ‘scale up and succeed.’ Virtually overnight, teams across most organizational functions needed to self-organize and remain productive whilst infrastructure organizations scaled up capacity to support an almost exclusively remote workforce. In this article, experts across Citihub Digital (a Synechron company) and Synechron will offer their perspectives on why a ‘return to normal’ may erase the productivity gains and diminish the upsides of this new way of working in ways that may not be in your organization’s best interest.
Moving forward, do businesses need to become more technical?
Krishan Chauhan, Synechron: The past COVID-led months have challenged organizations to work faster. Teams have needed to set up rapidly and virtually, without compromising delivering value at scale and innovating to dynamically meet customer needs.
To achieve this velocity, it means executing in shorter timeframes. With time being a constant, the only way to achieve this is to change how you are operating. More work needs to be done in parallel rather than in sequence, and more focus needs to be placed on delivering value and frictionless interactions across functions.
So how is this achieved? One key impediment are the organizational boundaries across silos and different functional groups. Organizations must prioritize removal of obstacles that prevent teams from working together efficiently. This will naturally lead to better overall coordination and workflows across different teams, and provide essential learning about how much more of the end-to-end delivery operating model there is to execute.
While better streamlining the cross-organizational workforce is part of the equation, this alone isn’t enough. To deliver on transformational change faster, it should be an objective for business teams to become more technical, and vice versa. A shared manifesto and vision of the end-to-end service will translate into an unwritten synergy. This will allow teams who have traditionally sat apart to better understand how others work, and more jointly align to a common set of business objectives requiring applied technology solutions. Organizations that achieve this business-technology alignment will find it significantly easier to execute while naturally eroding legacy organizational silos. It will also accelerate the desirability versus feasibility versus viability conundrum, which is a hallmark of a high-performing team.
Businesses that not only understand its customers’ needs, but simultaneously understand technical parameters for feasibility, will find they can achieve better results faster. They will be able to link business uses cases to technological value propositions more easily. Firms that are unable to pivot their culture and build this level of joined-up productivity will continue to experience more organizational conflict and wasted efforts, ultimately limiting their ability to compete in the digital age.
As we learn more about building better productivity across highly scaled organizations we’ll see that deeper collaboration between teams requires a different set of principles and structures for the organization — one that will be ultimately more cross-functional in nature and more capability-led.
Will corporate organizational structures become flatter?
Krishan Chauhan, Synechron: We have already seen that financial service firms want to be flatter and T-shaped. This is very commonplace for newer FinTech entrants, and a trend that larger firms are trying to replicate but are at a disadvantage given their organizational heritage. Firms that demonstrate consistently higher value and agility in responding to their customers have simpler structures with clearer objectives and faster decision making.
A successful strategy has been to bring executive leaders closer to the problems their teams are trying to solve. The result is a better understanding of the problem and a better method to removing blockers. However, it needs to be more than just a label and it means pushing more autonomy down to delivery teams.
A flatter organization implies fewer layers with better communications, collaboration and decision making. Those are all good things for the team and the organization. What is critical is creating business value from the good things it offers, and ensuring the enabling components and technologies are being built to make those objectives real.
Organizations need to make sure their people are empowered to make decisions. Executives and managers need to create a culture that enables that to happen. This includes establishing a structure where authority is delegated, not just information. Further, a commitment should be made to ensure there is a robust set of technology ‘enablers’ and principles are in place to support that model.
One recent example is HSBC, which announced it has removed the private offices for the leadership team and has moved to hot desks. A move toward a hybrid-model at the highest level is taking one step to promote a flatter structure throughout the organization. Teams will be flatter when they no longer refer to themselves by the organizational and silo structures they belong to but by the capabilities and business outcomes they offer.
What are the implications on pricing models, cost allocation/recovery and cost management?
Krishan Chauhan, Synechron: Scaled adoption of new technologies to enhance or create new capabilities has been on most firms’ agendas over the past 12+ months. However, they have been accelerated due to global market conditions and the rate of innovation.
This has also heightened the decision making needed on achieving a valuable ROI. Adopting new technology may be cheaper than it has ever been, but it is still an expensive venture. The promise of lowering operating model costs will remain a promise unless tangible outcomes can be measured, banked, and evaluated over a multi-year basis. The pursuit however is a worthy one.
To support the hybrid working arrangement that is unfolding post-pandemic, it is imperative that a scalable and sustainable model is in place; one that both supports workforce flexibility, can scale rapidly and is attained at a competitive cost. The future model should not only lead to a lower cost of operation but should be evaluated across all of these objectives. The pandemic forced a change in how we work and presented an opportunity for organizations to make a long-term pivot in their operations. Wholesale improvements in enterprise technology have enabled capabilities to be rolled out swiftly whilst providing a clearer cost of usage.
The accounting ‘sugar rush’ to remove large swathes of expensive office space is appropriate. However, this needs to be carefully balanced with an honest assessment of how well your organization operates and what a successful hybrid workforce model looks like. If the critical components for a high-performing team aren’t in place, it could be an expensive decision in the long-run for both productivity and innovation. Furthermore, there is an obligation placed upon IT service firms and product providers to outline not only the initial value of adoption, but how benefits can be realized through adoption over time.
Will technology provide any competitive advantage to businesses in the future, or will the value come from the analysis, interpretation and presentation of data?
Utsav Ratti, Citihub Digital: As we have seen from many of the early pioneers of the digital age, benefits will arise when both technology and data are combined to deliver something that is greater than the sum of its parts. For banks’ sales and trading lines of business, competitive advantage has been measured in milliseconds (and microseconds), but now we are seeing more business channels driven by speed, accuracy and the analysis of information. Technology must be applied to data in a way that yields accurate insights faster than the competition to deliver profitable revenue streams.
These benefits are unlikely to come purely from the design of new technologies from the ground up. Instead, those who can understand the business advantages that arise from the alignment and integration of new tech offerings, and can orchestrate their delivery, are most likely to reap the rewards. That orchestration will remain a balance of build vs. buy, but more likely aligned to end-to-end platform services — PaaS (build) vs. SaaS (buy). Competitive advantage is unleashed by the software that makes the best use of the underlying commodity platform, and that software must necessarily enable technology innovation and unlock data consumption and insights better than anyone else’s. Data analytics, interpretation and visualization will continue to grow in importance. The ability to both identify and act upon existing and new arbitrage opportunities faster than the competition will unlock new revenue streams and maximize existing ones.
Corporations need to align their organizational designs to take full advantage of these platform technologies and data analytics capabilities, and to get there quickly enough. Modern digital operating models are more likely to succeed when they smash the silos between business and technology teams (learn more here); think BizDevOps, where business and tech teams are embedded together to focus on value creation based on shared outcomes.
How will regulation adapt to a model where the workforce, customers and data could be based anywhere in the world?
Utsav Ratti, Citihub Digital: The pandemic has served as a catalyst that is expediting a reality that was already unfolding pre-pandemic. Data is not made more secure, nor corporations less vulnerable, by purely co-locating workforces and their data in the same physical spaces. Regulators who understand this as well as the technologies employed, and who work with the industries they oversee to adapt control frameworks in ways that still create effective transparency and risk mitigation, will be part of the solution. Those who do not will more likely harm the very interests they are intended to serve.
While it may be tempting to equate the decentralization of workplaces and data with the emergence of a more homogeneous regulatory landscape, fragmentation will continue to be a reality with which multinational corporations will have to grapple. Given the prevailing political climates across much of the globe, companies should expect that they will continue to report to multiple regulators across diverse jurisdictions, and global consistency will remain an elusive target.
Does a successful hybrid cloud model persist in 10+ years’ time or will everything run in public cloud?
Utsav Ratti, Citihub Digital: Public cloud technologies bring with them many technical and financial advantages over the operation of self-managed infrastructure that can be summed up in one word: flexibility. It isn’t necessarily cheaper to operate in the public cloud. But, when capital expenditure is redeployed as operating expenditure that brings with it on-demand access to modern technologies, an organization’s ability to respond to changing market conditions improves significantly.
It is therefore difficult to imagine why any company would want to maintain a predominant footprint of on-premise technology, even for sensitive client data or proprietary business analytics, if the regulatory environment and a commoditized technology services market permits a better solution. This does require a level of maturity around financial management, product management and service management that some organizations will struggle to manage. That is especially true if their current chargeback models are effectively a ‘top of house’ tax on the business. Nevertheless, these are solvable issues.
Looking ahead, private cloud in public cloud data centers may remain but will be increasingly expensive and anachronistic vs. public cloud coupled with appropriate security controls. When viewed against the backdrop of current thought leadership from visionaries, such as Tim Berners-Lee popularly known as the father of the World Wide Web, it isn’t difficult to imagine that the public cloud will operate in a much more decentralized fashion rather than in today’s implementation — the consolidated data centers that are run by a handful of tech giants. Over time, it would be unsurprising to see them become much like the cable television companies of today, with their own technologies and infrastructure used to disintermediate them.
JOINING FORCES! is a blog series aimed to showcase the synergies between Synechron’s and Citihub Digital’s SMEs.
Synechron’s October 2020 acquisition of Citihub Digital allows for multiple complimentary offerings across the combined firm. This acquisition expands Synechron’s existing digital, consulting, and technology capabilities across the global financial services and insurance industry’s landscape. Together, the firms provide a targeted focus on digital transformation, architecture/operating model and application modernization, cloud enablement, critical cybersecurity, and other strategic business solutions.
About our SMEs
Utsav Ratti, Associate Partner, Citihub Digital, UK
Utsav serves as lead for Citihub Digital’s Enterprise Transformation practice and has more than 20 years of technology management experience, leading international teams with a focus on customer engagement, execution and team work to achieve a high degree of client satisfaction. He enables his clients by identifying, understanding, prioritizing and translating their needs into functional product strategies and corresponding organizational designs to ensure effective and efficient delivery of outcomes.
Krishan Chauhan, Head of Innovation Management, Synechron, UK
Krishan heads up Innovation Management for Synechron Business Consulting and leads the Digital Strategy pillar for Synechron in the UK. His role covers three areas: supporting clients solve their core business challenges and accelerate their digital transformation journey; designing market leading innovation propositions; and developing the innovation management capability and its people across the globe.
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