Cloud: the dangers of transforming too fast

Nev­er before have busi­ness­es, even the most risk averse, had to trans­form their strat­e­gy so rapid­ly. When the coro­n­avirus pan­dem­ic hit in ear­ly-2020, busi­ness­es had to dig­i­talise fast. With employ­ees shift­ing to work­ing from home overnight, exec­u­tives had to find ways to keep their teams work­ing, engaged and pro­duc­tive, while sup­ply­ing valu­able ser­vices to their clients, with­out ever meet­ing face to face. 

Busi­ness­es that had trans­for­ma­tion strate­gies and plans for adopt­ing dig­i­tal tech­nol­o­gy in place had to reassess their approach and those with­out any dig­i­tal­i­sa­tion in place had to get on board dou­bly fast. This instant adop­tion of approach­es that may have oth­er­wise tak­en years made old ways of work­ing obso­lete. 

Accenture’s Tech­nol­o­gy Vision 2021 report recog­nis­es this accel­er­a­tion and lays out some stag­ger­ing fig­ures. Accord­ing to the research, we are see­ing unprece­dent­ed lev­els of dig­i­tal trans­for­ma­tion, with lead­ing enter­pris­es com­press­ing a decade of change into just one or two short years. Some 92 per cent of lead­ers report their organ­i­sa­tion is inno­vat­ing with “an urgency and call to action” and 77 per cent of exec­u­tives state their tech­nol­o­gy archi­tec­ture is becom­ing “crit­i­cal to the over­all suc­cess of their organ­i­sa­tion”.

Some­times being forced to evolve is the only way many com­pa­nies, par­tic­u­lar­ly those set in their ways, were ever going to do so. How­ev­er, mov­ing too quick­ly can mean busi­ness­es aren’t get­ting the best from their new dig­i­tal strate­gies. 

The Accen­ture report explains that dig­i­tal lead­ers – the top 10 per cent of com­pa­nies lead­ing tech­nol­o­gy inno­va­tion – achieve two to three-fold rev­enue growth com­pared to their com­peti­tors. They call this chasm the “dig­i­tal achieve­ment gap”. How­ev­er, it is not enough to trans­form dig­i­tal­ly with­out recog­nis­ing and analysing what you’re doing and why. 

Steven Dar­rah, chief exec­u­tive of Euro­pean Tech­nol­o­gy Risks, believes that while chang­ing things quick­ly is exhil­a­rat­ing, it can cre­ate unex­pect­ed prob­lems in oth­er areas. “When inno­vat­ing in more tra­di­tion­al sec­tors, such as insur­ance or bank­ing, it can take a lit­tle while to gen­er­ate trac­tion, both with ser­vice providers and cus­tomers,” he says, adding that com­pa­nies need to be aware of cus­tomers’ ret­i­cence to try some­thing new.

It’s impor­tant to be aware of the dis­con­nect which tech­nol­o­gy can cre­ate too, espe­cial­ly if the tran­si­tion isn’t han­dled cor­rect­ly. Ser­vice providers may think they are doing a good thing by inte­grat­ing a new piece of tech­nol­o­gy, but it can lead to some users feel­ing unloved and cast aside.

Dar­rah believes data is the best way to track insights, which can be invalu­able when hop­ing to dis­rupt a sec­tor. “Data can also tell you when you are going wrong. Even the small­est of changes in the user expe­ri­ence can result in a dra­mat­ic dip in sales per­for­mance, so analysing the data can keep you on the right track,” he says.

Mar­ket­ing ana­lyst Jo Gor­don helps busi­ness­es make the best deci­sions with a data analy­sis approach of econo­met­rics-mar­ket­ing mix mod­el­ling to mea­sure out­comes. “It is risky to set any new busi­ness course with­out know­ing first where you start and where you think you may land,” says Gor­don. 

She believes data analy­sis is the clear­est way to help busi­ness lead­ers avoid falling flat on their race to evolve. “There is now enough data to analyse and mea­sure the impacts from one com­pa­ny to the next,” says Gor­don. These dif­fer­ences can be com­plex, as some effects may be pos­i­tive for one com­pa­ny, but neg­a­tive for anoth­er. 

The bound­aries may also shift, whether due to con­sumer habits adjust­ing or the impact of long-term lock­downs. “Com­pa­nies that already had ana­lyt­ics in place are in a much bet­ter posi­tion to nav­i­gate this com­plex­i­ty. They could not bet­ter con­trol how they were hit, but they were able to unpick the mul­ti­ple threads and game-play like­ly sce­nar­ios to min­imise uncer­tain­ty,” she says.

Lua Coop­er at dig­i­tal con­sul­tan­cy Green­gage pre-empt­ed these grow­ing pains. “For a long time, we talked about the dig­i­tal rev­o­lu­tion that was com­ing and the ‘future’ of work,” she says. “We knew we need­ed to pre­pare. More often than not, this was a prob­lem to solve tomor­row, for tomorrow’s bud­get and on tomorrow’s time­line.

“Last year, dig­i­tal trans­for­ma­tion pro­grammes that were set to roll out across years, were sud­den­ly signed off and speed­i­ly rolled out in the days, months and weeks ahead. Work­ing four times as fast, with a frac­tion of the resources, left room for mis­takes to be made.”

Coop­er ref­er­ences the fail­ure of the NHS Track and Trace data­base, arguably a noto­ri­ous­ly expen­sive mis­take, as emblem­at­ic of the draw­backs of tran­si­tion­ing too quick­ly. “With lit­tle time left for test­ing, data col­lec­tion and analy­sis, the sure­ty of the solu­tions remain in ques­tion, but even more dam­ag­ing than a bug or two are the rum­blings of the lack of staff buy-in and frus­tra­tion,” she says. 

The most “expen­sive mis­con­cep­tion” is believ­ing that the term dig­i­tal trans­for­ma­tion relates only to rolling out tech and sys­tems in your com­pa­ny. The real­i­ty is far more com­pre­hen­sive. “It’s the com­plete reimag­i­na­tion of your busi­ness in the dig­i­tal age,” says Coop­er.

Dig­i­tal trans­for­ma­tion encom­pass­es many key areas: arti­fi­cial intel­li­gence, new hard­ware, cloud deploy­ments, remote-work­ing solu­tions. Data analy­sis can be an invalu­able tool when avoid­ing pit­falls, but it’s impor­tant not to for­get the humans involved in busi­ness, espe­cial­ly at a time when we don’t always see them. 

“When your teams are not able to han­dle the changes that come with dig­i­tal trans­for­ma­tion, then you could actu­al­ly slow down instead of accel­er­at­ing. You should upskill your teams and at the same time update your sys­tems to cope with the changed land­scape,” say Anto­nio Mar­soc­ci and Sebas­t­ian Kraft, man­ag­ing part­ner and dig­i­tal direc­tor of Think Pos­i­tive Agency respec­tive­ly. 

It’s also key to prep your clients or find new ones as your exist­ing clients might be used to find­ing you on the shelves of their local super­mar­ket or retail­er, but now you sell direct to con­sumers, how do they find you?

Coop­er agrees, cit­ing a sta­tis­tic from the Lloyds Dig­i­tal Skills Index that notes 52 per cent of the work­force still lack work­place dig­i­tal skills. This isn’t a fail­ure on the part of the indi­vid­ual, but on the employ­er. Dig­i­tal moves quick­ly and employ­ers need to active­ly train peo­ple inside their busi­ness to evolve. This has been near­ly impos­si­ble in a year with­out face-to-face office-based con­tact.

“The best tools in the world will gath­er dust unless they have a team will­ing to get behind them and work dili­gent­ly to help opti­mise them over time. Dig­i­tal trans­for­ma­tion starts with your peo­ple; you can imple­ment the tech, but don’t for­get the peo­ple who have to use it,” says Coop­er.

Dig­i­tal trans­for­ma­tion is both excit­ing and nec­es­sary, but with­out prop­er­ly assess­ing the data and fac­tors, busi­ness­es will find they lag behind or encounter dam­ag­ing pit­falls. The lessons learnt from the last year point to a cou­ple of ways to insure your­self. 

One, invest in data analy­sis to under­stand the slight­est changes to your busi­ness, even incre­men­tal ones. Two, don’t for­get the peo­ple involved. Even if you move every­thing to dig­i­tal process­es, your clients, cus­tomers and employ­ees are still human beings who need to adapt. With­out being taught how to adapt to new ways of work­ing and con­sum­ing, they’ll fall behind and your busi­ness will too.