Tag: Digital Reality

Digital Reality Episode #16: Goodbye 2020, Looking forward to 2021 | Blog

In this podcast, we share the top 5 themes that we believe will shape the nature of weapons-grade digital transformation efforts in 2021. We unpack the next-generation of work from anywhere, anytime, connected ecosystems, the scaled agile organization, digital-first engagement models, and hyper-automation.  

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Jimit Arora:

Welcome to the 16th episode. And guess what? It’s the last episode of the 2020 series of Digital Reality. It gives me a lot of joy to talk about how this very interesting year is coming to an end. But again, I get overjoyed by the prospect, but anyways, Digital Reality is our monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Jimit Arora.

Cecilia Edwards:

And I’m Cecilia Edwards. Each month, we’ll bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results. As Jimit said, we’re towards the end of 2020.

JA:

Woo hoo.

CE:

It has certainly been a year for the history books. So as this year draws to a close, we thought we’d take some time to reflect not backwards, but on some of the things that we can look forward to in 2021. So besides a vaccine, whose widespread distribution will allow us all to visit in real-time, real-life, instead of in Zoom and give all of our loved ones that don’t live with us in our homes hugs…besides that there are a number of business shifts related to digital that are likely to become part of our reality for 2021. So, what we’re going to do in this episode is take a look at five of our favorite ones. So Jimit, why don’t you start us out with the first one?

JA:

This was a hard list. We debated a fair bit about it. I also wanted to acknowledge – before I moved to the top five – to three of the honorable mentions. The first one is cloud. Yes, we’re going to talk about cloud. It’s going to be the underpinning strategy, but we think it’s assumed in the operating models of the future. So, you won’t hear us talking a lot about cloud. Same way, and you won’t hear us talking a lot about automation because again, been there, really core, but not foundational.

The one that almost made the list, and I know we debated this a fair bit, is continuous simplification. There’s been a lot of focus on how do you drive continuous innovation, continuous improvement. Well, we think one of the things that’s going to really drive success for it in the future is continuous simplification. This whole mindset to simplify and keep simplifying. We again think that this idea is not yet mainstream. There’s still some more complexity we need to add next year before we go to simplify, but watch this space for more discourse on that.

So, having addressed the runner-ups, let me go to theme one. Despite the excitement that we have around the vaccine, and the fact that we’ve spoken about the next generation of work-from-home, we think that the first theme that really is going to stay with us in 2021 and beyond is this next generation of work from anywhere and anytime.

CE:

So Jimit, is that an acknowledgement that perhaps I won that debate on whether or not work from home was going to be here to stay?

JA:

No. No. As you can see, you did not because our debate was about work from home. I’m talking about work from anytime, anywhere.

CE:

Oh, okay. Okay.

JA:

Words matter. I am not conceding! Sorry. I promise not to go there. But anyways, I still think that we’re still some ways off in knowing with certainty how prevalent this trend will be in the long term. What we are entering is this next iteration of IT that supports working from anywhere, anytime. We go back to 7 to 10 years ago, when mobile proliferation was taking hold, IT departments were asked to provide the capabilities to work anywhere at any time. This gave us BYOD. Then we saw a lot of the trends and the need for mobile versions of applications. However, this was applicable only to a small portion of the workforce that were believed to have a need to perform their jobs with stakeholders that got away from the office. Think of sales. Think of the executive teams. This also created a new set of security protocols for mobile devices.

As we look forward, and we think about the next iteration, it’s a much more expanded version that we think extends to all employees, and in some ways, removes the requirement for on-premises work. Yes, there are companies that will be looking to have a portion of their employees back in the big campuses. Collaboration is a big piece that we’ve spoken about, but as this takes hold, the workarounds that were put in place to enable more of an emergency shift to remote work will start to become a lot more formalized. As we formalize that, as we remove some of the barriers, we’ll start to see an improved employee experience. We’ve seen some examples of this with the evolution of the collaborative tools. Think of our beloved Zoom meetings, and Teams meetings. The feature of the year for me was virtual backgrounds, to be honest…

CE:

Love it.

JA:

…but I think that’s changing. Think of it as the always-on VPN infrastructures, that don’t necessitate that the need to remember to log into VPN, sacrifice the bandwidth, etc. So, I think all of the changes that we are progressing towards take this approach that was considered temporary and make it mainstream. So, I think that’s going to be a big development for the network and security teams.

Then, speaking of security, a lot of the protocols that were related to physical measures will now need to be addressed to technology or software to truly eliminate all barriers to work from anywhere.

CE:

Yeah. So Jimit, regardless of where you come out on that debate around whether long term everybody’s going to work from home and we’re eliminating the need for on-prem, I think what’s going to be important, and what we have the opportunity to look forward to in 2021, is the option. That enterprises are going to have more mature options where they’re not having to make the sacrifice if they choose or if something comes up, and they need to have people work remotely – it’s not going to be those patched together solutions, and the employee experience doesn’t have to be eroded.

JA:

Yep.

CE:

So, I’ll take number two, which is really thinking about a bit of a more connected world. So, for several years now, fact-based decision-making in the enterprise has really been on the rise. Consumers and business users alike are becoming increasingly comfortable with, and even expecting, that large amounts of data will be available to help them with all manner of decision-making. In other words, we want our things to be connected so that we can use our data to make decisions. We’ve got the increase in 5G and other advanced high-speed networks that are really enabling real-time data feeds to be available anytime and anywhere. You’ve got IOT and telematics that are growing in popularity with their sensors that are being put on more devices to collect large and small amounts of data. Our comfort level with artificial intelligence is growing.

So, a consumer example of this is related to how we work out and manage our health. So, I’m a bit of a tech geek, a data geek. I’ll share my data-rich fitness approach. First, I have an Oura ring that I wear at night, and this measures how well I’ve slept. It gives me an indication of how hard I should work out for the day. So it looks at my average sleep patterns, what my heart rate has been, what my temperature is, how much I tossed and turned, and it calculates a recovery index and gives me a sense whether or not it’s a go-for-it kind of day, or you’d be better off in the long run doing a recovery type of workout taking it a little bit easier.

The scale that I step on in the morning automatically sends my weight to the health apps that are on my phone. So I can actually track any trends that happen in my weight fluctuation. Then I start to work out on my Tonal, which is kind of the digital weight system, so eliminating the need for free weights – I’ve got a digital version of it. I let my watch know that I’m starting the workout, and that it is a weightlifting workout so we can keep track of what’s going on. Then I turn my heart monitor on.

I have my heart monitor on because Tonal keeps track of what’s going on in my heart rate, and it shows me that trend. I can see how fit I’m getting by what’s going on with my heart rate or whether or not I’m working out hard enough if I happen to be doing something that’s supposed to be high intensity. Tonal keeps track of my strength and performance score on each exercise and uses AI to adjust the weights when it senses that I can handle more.

I just learned that my treadmill will soon be able to adjust the intensity of my workout based on a targeted heart rate zone that I put in. So, for a data junkie like me, this is pure heaven that happens all before 7:00 AM in the morning.

JA:

Yeah. I knew there was a reason that I wasn’t looking forward to this recording. It’s like, you’re just making all the fuss. I take a very precise data-based approach to all of this, but I don’t need any information to not do any exercise.

Just kidding. No, but I think these are great consumer stories. Disclaimer: none of the companies mentioned in this podcast have compensated us in any way. But for those of you who are thinking about New Year’s resolutions, here’s a pro tip: Connect with Cecilia to make sure that you can succeed by taking a very data-centric approach to fitness and health.

CE:

Data-rich. Exactly. Here’s the funny part. Why do I do all of that? Because I only like to work out for 45 minutes. That’s it. I’m not going to be in the gym for two hours. So how do you get the most efficient and effective workout? I set my goals and use the data to help me get there. But this is just the tip of the iceberg. We’re going to see more of these types of use cases, both on the consumer side and in the business world, in 2021.

JA:

Awesome. I say that begrudgingly. Anyways, let’s move to topic number three. We’ve spoken about agility for a fair bit. We think that the whole concept of agile is going to become a lot more pronounced. As we think about it, this agile organization concept is going to manifest itself in a variety of ways. Not only in the context of software development, where I think one of the big changes that 2020 taught us was that the proximity thesis that agile is best done when done in small co-located teams, just didn’t work. So, I think people have gotten more comfortable with the compromise; I still tend to think of it as a bit of a compromise, but it still works. So, people have gotten used to that compromise of distributed agile, and we see that scaling.

Then most companies today are fairly comfortable with the ideas of running scrums, maintaining backlogs, releasing new functionality every few weeks. But what we’ve really seen is that it’s not just that agile is being applied to the software development world. The whole concept is one where we are moving towards an agile organization. We are embracing other thesis around agile project management, agile funding vehicles. In our previous podcast, we spoke about how you really do agile planning exercises.

CE:

That’s right.

JA:

For companies that have been frustrated because 2020 was the year where they started to experiment with agile, we believe that there’s a lot of hope. You should have something to look forward to in 2021 because we’ve seen this work out in a variety of ways. Cecilia, I think you called the entire concept one of strategic agility.

CE:

That’s right.

JA:

So, we think that going into next year, agility as a concept will become a lot more mainstream within the IT departments beyond just software development. In some ways, the organizations are going to find ways to mature their capabilities, to listen to the market, rapidly address short-term needs, while simultaneously building towards a longer-term resilient strategy. In fact, we believe that agile is going to become a way of doing business, not just IT.

CE:

Yeah. I think that’s spot on. I think we were talking previously about demand. Nobody knows what demand is going to be in any real fashion. We’re going, “What’s going to happen with the demand for cars? The demand for pants that aren’t stretchy? The demand for coats when nobody’s going outside?”

JA:

Stretchy pants are going to be always in demand, I think more so than ever before.

CE:

I think so for quite a while, but how do you predict? Again, just bridging this to a consumer example, people have been home for months, and talking about pants, nobody was buying pants that weren’t stretchy. Just tops. Well, the retailers have said that people are getting fatigued and now are starting to buy shoes, and purses are two of the big things that people are buying more of. They’re starting to get dressed at home just because they’re tired of being bums. So how do you predict when there will be this shift in demand for clothes? How do you figure out if you’re Uber or Lyft, when people will want to a ride somewhere? All of those things, there will be surges. There will be shifts, and they will come rapidly. So, definitely agile is a way of doing business, but it’s also going to be the way that you survive.

JA:

Absolutely.

CE:

Let’s talk about digital-first engagement models. One thing 2020 has taught us is that boomers can be digital too. Not only can they be digital, but this pandemic has forced them to become digital. I remember working with a client at the beginning of the year, and we were having a conversation around their digital transformation strategy, and how they were thinking about it. They said, “Boy, our salespeople are really a bit more old school, and they like to go visit the customers. They like everything to be done face-to-face. They use paper. There’s no way that their population of customers is going to do things digitally. They have to have paper and have somebody hand-hold it.” Well, that company didn’t go out of business over the last eight months. So miraculously, all of those boomers, all of those seniors, figured out how to get digital.

As you think about the fact that you no longer have to reserve digital for a small group of the population, this actually creates a trend that we can look forward to that should be a relief to a lot of IT organizations. Digital-first engagement models are going to be important to the entire customer base. So, you don’t have to do as much segmentation, and it’s not going to be important to just Gen Y and Gen Z. Nobody talks about the Xers. I don’t know what they think our generation did, but it’s just not going to be about Gen Y and Gen Z.

So, all of these plans that you had to have before, allowing paper and manual processes and face-to-face models to remain dominant while somehow preparing for the next generation who will tolerate both things. The war between those two business models is really going to go away. So enterprises will be able to get rid of those analog-only approaches and they can double down on omni-channel digital models that allow for chat, that allow for AI assistance, and that allow for voice engagements when support is needed beyond the digital channels, because everybody in their customer base has figured out how to get digital.

JA:

I think, Cecilia, you make great points. So, what’s the right channel for the right audience at the right time and the right context? All of these become really important issues to solve for. Error time and experience are key.

CE:

Exactly. So, Jimit, you want to bring us through our fifth and final trend that we want to look forward to for next year?

JA:

If I just think about the four that we spoke about earlier, a lot of it is rooted in terms of how we do business, where we operate from, the kind of technology we use, the kind of data we use to drive high-intensity personal fitness goal that makes most of us feel something. But I think the one that we keep coming back to…so, at the end of the day, technology groups to get successful in their digital strategies need to create the right organization, the right culture. I think 2021 is also going to be a year where we start to truly embrace the concepts of purpose. I think that’s a conversation that’s becoming true across the board where you start thinking about what’s really the purpose of the organization beyond profit. Some of those initiatives – be it around green, be it around sustainability – are becoming a core charter as we see a lot of IT organizations and a lot of CEOs, they are thinking about the re-pivot on that talent side.

There’s a lot of emphasis on that purpose. What it’s also causing, thankfully, is a very strong dialogue about how do you really create a culture that embraces diversity, that embraces the fact that you’re going to have multiple cohorts of people. You’re going to have Gen Z, yes, but you’re also going to have the Ys and the Xs.

CE:

Thank you.

JA:

All of these different generations together. Aligning them to a shared purpose is going to be key to be able to deliver against the goals for a sustainable future for a sustainable business. So, I know it seems a bit disconnected or disjointed from some of the other technological aspects that we spoke about, but we see that shift coming. Most of the large banks, large consumer companies, have already pivoted in that direction. If the company’s mission statement involves a purpose beyond profit, it’s only natural that technology needs to embrace that purpose as well.

CE:

Thank you for that. So, if you choose to look on the bright side of things, 2020 has forced the advancement or the maturation of much of the digital agenda, even without full-scale digital transformation. Because, if you notice in the conversation today and for the past several months, Jimit and I have not really been talking about a full-scale, big-bang, digital transformations. We’ve been really talking about continuing to use digital to advance business situations and address challenges. So, we’re rapidly approaching the point of digital being a routine manner in which business gets done. Pretty soon, we’re going to need to drop the word digital from this because it’s just how business is. So, during this final podcast of the year, we will leave you with the following digital reality checkpoints. They’re a little more philosophical than usual, but appropriate as we look to the end of this year.

The first one: The challenges of 2020 have provided an opportunity for businesses to accelerate aspects of their longer-term roadmaps. Develop a plan for 2021 to mature those capabilities within your organization. Second, revisit your first principles and build your execution plans from there. Focus on meeting customer needs, and that will guide so many of the strategic decisions that you need for 2021. Lastly, forget about a return to times past, because it’s hard to imagine that the market will revert back to pre-COVID norms. Instead, look forward to all the opportunities for re-imagining and transforming your business that 2021 will present.

JA:

Excellent. Thank you so much, Cecilia. I think those were great points to reflect on. To all of you who’ve been part of this journey, we wanted to take an opportunity to wish you very happy and healthy holidays. Take some time off. Come back into the new year with new hope and rejuvenation, and for a brand new series of our Digital Reality podcast. You can check us out at everestgrp.com. Follow us on LinkedIn @JimitArora and @CeciliaEdwards. If you have a story about how you want to transform digital and how you want to transform your reality in 2021, reach out to us at [email protected]. Happy holidays!

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Digital Reality Episode 15: Talent for the Future | Blog

This month’s podcast is all about the evolution of IT roles and the need for what we call Shift Right. In tech, we say Shift Left; when it comes to talent, three things contribute to the Shift Right: Right Scale, Right Skill, and Right Shape.

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Cecilia Edwards:

Welcome to episode 15 of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Cecilia Edwards.

Jimit Arora:

And I’m Jimit Arora. Each month, we bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results.

When we were entering 2020 and talking about digital transformation, one of the biggest concerns that CIOs had expressed was their ability to get the right talent at scale and speed to support their transformation agendas. Pretty much every hot skill was in the red, based on our analysis, which looked at the demand-supply mismatch between the different skills across different geographies. And in a lot of these hot skills, such as machine learning, AI, and cloud, we saw that demand was exceeding supply by over 40% in select markets.

So, in this very changed environment as we close out the year, we’ve seen a few very different things play out. The one real thing has truly been that digital adoption has accelerated. And one of the things that we’ve always kind of spoken about is that technology is the relatively easy part of the change agenda. It’s the people part, be it the talent or the organization, which needs a lot more focus.

CE:

Right, the culture.

JA:

Absolutely. Absolutely. Any time you say, “Hey, technology is the easy part of digital transformation,” you get a funny look from the technologists. But if you talk to the leaders, you talk to the CIOs, they’ll agree with that. Maybe it’s because they don’t have to actually do it, but essentially it comes down to managing the people agenda, the organization, the culture, as you rightly said, Cecilia. And we see now more than ever before, just given the pace of change we are looking to drive to, the big demands on talent due to the scaled modernization efforts. And then also, if you think about the change that has happened in the operating model, in terms of how we work, where we work, all of this is truly emphasizing the need to look at talent in a fairly different manner than what we were at the beginning of the year.

Which is why today’s podcast is all about the evolution of the talent base, the evolution of the roles, and the broad theme is what we call shift rate. Again, in technology, there is a desire to do more automation, we call it shift left. When it comes to talent, we are saying, “Hey, let’s shift right.” So what do we mean by shift right? It’s building the right scale, it’s creating the right skills, and then defining the right shape of your talent model to really succeed in the talent transformation agenda.

Cecilia, I know we’ve spoken a lot about these three “shift rights.” So talk through the right scale pieces that you’ve been helping clients figure out over the last few months.

CE:

Okay, great. And for those of you who don’t know Jimit well yet, he loves alliteration. So, I will kick it off with our first “R.” so, here are some stats.

JA:

Cecilia, just one thing the “R” and “S”. So, right, right, right, scale, skill, shape. So, yes, I do love my three’s and the alliteration.

CE:

Seeing a double.

JA:

The double alliteration this time.

CE:

That’s right. So, here are some stats. According to a recent study, about 58% of organizations do not have sufficient internal resources to drive their programs. 58%. Furthermore, more than 90% are unable to source and train their talent on key next-generation capabilities. So, that whole model of on-the-job training and seniority, that’s kind of not working. So, these issues get further compounded by challenges related to attrition and project readiness or thinking about the time-to-value of these resources. So here’s where we see a pretty significant challenge in the current environment, and we think that coming out of this pandemic, there really is an excellent opportunity to go back and fix the scale issue at a time when the market’s not yet super hot.

So, some of the key things we see in companies looking to right scale their environments are these. First, they need to forecast the demand to get an objective view of the gap assessment and plan accordingly. That’s obviously going to be a little bit more challenging, but it’s a critical first step that they need to do in terms of right scaling.

Second, they need to create centers of excellence for the areas that are the hardest to find, and they need to drive the company’s recruiting efforts accordingly. You can no longer just have a, let’s say, fair recruiting approach or a generic model. You really need to focus on those areas that are going to be hardest to find.

They need to re-skill. Re-skill and not just replace. So, we’re going to capture this right skilling in a little bit, but you need to do some re-skilling.

You need to partner with the ecosystem. Academia is actually a great place to incubate and absorb talent for the future. I had a client last year who was in the middle of the Midwest, and you’re kind of going, “Where in the world are you going to get the talent?” And there was a school not too far from them. And you know what? They’ve had their best success by partnering with the local universities. So you to actually think about if you’re going to train up the people, why not train them in the skills that you need? So partnering with academia is a great place to do that.

For the remainder. They need to build a robust pipeline of services partners that can ensure that the talent is available and ready when the demand hits. So, there’s this whole piece around, make sure you know what you need, focus with the centers of excellence, think about re-skilling and not just replacing, and then find ways to create a pipeline that’s going to be helpful in your ecosystem. And then at the same time, go ahead and borrow skills from your partners. A group of service partners that can do that for you when the demand hits. So, that sort of helps you with the flexibility of demand that we all know is part of the current business environment.

JA:

Actually, I just have a quick question for you. So as you go back to that first thing, when you mentioned a forecasted demand, we’ve seen that the time horizon that people need to look at needs to change. So, traditional planning assumptions were for a one-year period. What are you seeing change there? Is that becoming longer shorter? What’s your sense?

CE:

We’re actually seeing this interesting combination. It’s got to be shorter, but it also has to be longer. So, weird mix. They actually are needing to still think through what the one-year and three-year plans are going to be, but that cannot be your demand forecast that you’re reacting to. You’ve got to pull that in into much shorter horizons, which is why, if you think about all of the things that we just mentioned, things like partnering with academia, that’s actually going to help you with a longer-term plan. It’s going to help you next year and the year after that, to make sure that you have a flow. If you think about connecting back into that pipeline of services partners, that’s going to help you with the things next month. And so they’re actually having to plan both time horizons, but it certainly, I think, more than ever before, the planning cycle on the shorter end is something that is going to be relatively new for most organizations. And they’re going to have to think about strategies a little bit differently.

JA:

Yeah, that’s a great point. I think what we’re truly seeing is this whole thesis of agility permeates every part of the IT organization.

CE:

Every part.

JA:

You’ve got delivery, you have agility in budgeting to make sure that you don’t create static one-year plans. And now you’re saying that, hey, you need that same agility as you also start thinking about building your talent pipeline.

CE:

Absolutely. Absolutely. So a great example of this right scale is the right scaling initiative of AT&T. It has a vision to change business from hardware to cloud and from a landline business to a mobile-first enterprise. So, the situation was that about half of their employees didn’t have the necessary skills to keep the company competitive. Those are some pretty big shifts. To move to the cloud, but even moving from a landline business to mobile-first, pretty big shifts, and they just didn’t have the talent. The cost of hiring new employees was greater than retraining the existing ones, and replacing workers meant making new ones learn the company culture from scratch – that was going to be a really big challenge.

So, here’s what they did. They started a future-ready initiative where employees were able to get trained by web-based online courses on things like data science and cybersecurity and agility, all of these skills that were going to be necessary in this cloud-based mobile-first world. They developed an internal portal called Career Intelligence where workers could actually see the jobs that are available and the skills that were required for each and the projected salaries, and whether that area has a scope for future growth because what that did is created some incentive because you could see where the opportunities are and then take advantage of things like the future-ready program to train yourself up on skills. And you have a sense of not just why it was good for the company, but how am I going to benefit from it as well? Because I can look at where the salaries are and where the opportunities are for other jobs within the company.

And then the third thing they did was they collaborated with Georgia Tech to launch an online master’s degree program in computer science. So again, they were focusing on: I have a pool of people here today, I’m going to do what I can to re-skill them, work on the culture a bit to motivate them, and then think about longer-term how I’m filling that pipeline so that the marketplace outside of the organization, that those new people coming in would actually have the skills that they need. So there’s a little bit of a summary of our right scaling.

Jimit, do you want to talk about skilling?

JA:

I sure do. I think the last point you made about what AT&T did with Georgia Tech, it actually serves two purposes. One is you’ve got these programs that help you with right skilling, which I’ll get to in a second. But it also, in some ways, acts as a finishing school where maybe in the last semester, there’s a bunch of specialist courses that just make you AT&T-ready so that the company has to spend a lesser amount of time in the first six months to just onboard them on the things that matter. So bridging the gap between academia and business while the students are, are finishing school.

CE:

That’s a great point.

JA:

I’m a great fan of these collaborations between big business and academia. So, right, scale, and this is the one that actually gets a lot of attention, so I don’t think we need to unpack that too much. Most organizations that you speak to instinctively recognize the need to rescale, upscale, right scale. And what we are now seeing is a new set of operating models, which are causing us to redefine the existing job descriptions. And also new roles are emerging. In fact, in the same study that we’d completed earlier this year, about 67% of the organizations said that they expect new skill gaps to emerge because of structural changes in the business, given the current situation.

Let’s take networking as an area. It doesn’t get spoken about a lot, if you think across, everyone’s focused on the agile development on the cloud side, cybersecurity, underpinning all of this as the big network and, hey, we started talking about AT&T, so let’s stick to the team.

We place significant demands on infrastructure in a work from home environment.

And Cisco, for example, identified five new roles that are focused just on making sure you have resilient networks that are secure, that have the throughput to make sure that people stay productive. The one that I find the most interesting is the one called a business translator, and this role effectively takes the business need into a service level security and compliance requirements that can be applied and monitored across the network. And this is astounding. It’s starting to say that there’s a hierarchy of business needs and the network configurations that you need to support these need to be thought out and planned. That’s what that business translator is doing. I know we’ve had variants of this in terms of within your data center, you’ve got X levels of redundancy, but this is trying to create more granularity into that process.

Similarly, we’ve got new roles coming in such as a network guardian, somebody really got creative with these names, I must say. You’ve got a network guardian, you’ve got a network commander who centrally manages automation and orchestration processes to drive intent-based networking. You’ve got a network orchestrator, and then this is my favorite, truly is, you’ve got a network detective. So, what does a network detective do? They queue network assurance tools to ensure that the business intent we identified is being delivered and then work closely with the ITSM and SecOps teams to really identify if there are any places where, well, if it’s a detective if theft is happening in the network protocols, I guess.

CE:

Yeah. As you think about things like network, it’s one of those things that you mentioned that doesn’t get a lot of attention because you just assume it’s just the pipes and it’s taken care of. And I think that it highlights the need to really take a good, hard look at the kind of talent that you need because this environment that we’re in is making us rethink a lot of the things that we took for granted, and those things that were in place and worked extremely well in the old world now have different demands on them. And you just kind of highlighted a few of them, as people are working from home all over the place, you need to now rethink these things. And it’s not the exact same skill that was there before. This network detective’s job just got a whole lot harder with the entire workforce being distributed all over the world and in homes and in any kind of environment. So, definitely important to rethink all of the roles that you have in IT now.

JA:

Here’s the interesting part. What you see on the network side, you take that to applications, you probably have the best examples there. So, the traditional developer tester is becoming a full-stack engineer. You’ve got DevSecOps engineers. And here’s the part that I find the most interesting or frustrating as you start looking at the job requirements which are cookie-cutter, “Hey, I need Technology X, seven years of experience.” Technology X has been around for three years. So, that’s been the traditional mindset. Guess what? You aren’t going to find these people out in the marketplace. And what you really need to do is you need to take who you have right now, re-skill them to fill the gaps in their capabilities to become what you need. So, we’ve done a lot of analysis in terms of what are the best skill pairs. So, if you want to get to a network detective or a network orchestrator, the places where you will start is with your Cisco-certified network engineers. You just want to augment what they have and take it forward.

CE:

So, Jimit, let me ask you this. It seemed as though, not too long ago, we’ve been talking about talent for a while, that one of the themes was: it’s hard to re-skill. Who’s going to teach people how to do it? Where’s that coming from? Have you seen a shift, as we’ve been dealing with this challenge for a while, that there are more resources available to support this re-skilling?

JA:

So, I’d say there are more resources available. It doesn’t mean that it’s become any easier. And as you mentioned in the AT&T example, it’s always more expensive to replace versus re-skill with budgets being under the pressures they are, and only about to get worse. I just think that companies are getting more and more creative in terms of trying to do what they can with what they have versus just going out to look into the market.

CE:

I’d imagine that the online has become a much more acceptable form of re-skilling?

JA:

Oh, absolutely. And you know what? Let’s take an example from the most innovative company out there, which is Amazon. Most innovative, let me back that up, I’m sure I’ll get hate mail for saying that. But if you look at what they’ve done and to think of Amazon struggling with anything when it comes to technology skills comes as a bit of a surprise, but they’ve made a lot of progress in automation. Where they were lacking was in the areas of data science and solution architects of all things. So what did they do? They initiated the up-skilling 2025 program. So, that’s a five-year horizon to retrain the workforce, create a machine learning university. So, there you go. So, that’s an online program which allows people to do self-service, self-based training.

They set up an Amazon Technical Academy, which allowed people with non-technical backgrounds to take up more technology-centric roles, and then most important, and I think this is key to the success of this, is you create learning pathways, which are tailored to the … I wouldn’t say individual, in some ways they are, but you identify personas or archetypes. And then you make sure there are trainings and certifications which help you advance these capabilities. And at the same time, you link performance incentives, where it’s not a penalty, but you get additional growth if you keep progressing on those milestones as defined. So, they’re making it very easy and they also incenting the right re-skilling behavior because they know it’s cheaper for them in the long run.

CE:

Yeah, and I think in both of those examples, AT&T and Amazon, they have a combination of, I’ve got to put the training in place, but I also have to address the cultural component. I have to provide some level of motivation for the people in order to want to participate in these things. So, very interesting.

JA:

Absolutely.

CE:

So, should we talk about right shaping? That’s the third “R.” We see that the third turn that companies need to make is really to ensure that the shape of their workforce is aligned to contemporary requirements. So, that classical pyramid-based approach to services delivery and the commoditized role definitions is really giving way. And I think, Jimit, you mentioned this in an example, just a few minutes ago, it’s really giving way to that full-stack, multifunctional teams, which have both business- or customer-aligned pods that combine technology and functional skills and essentially collapse the previous pyramid structures.

So, I know that was a big mouthful. The takeaway is multifunctional, business-oriented. You’ve got to look at tech and function all combined. So, that whole pyramid structure is really giving way to product-aligned teams, with some companies creating DevOps factories or benches to manage all the different variances in demand.

Another very important dimension of the right shape is also in terms of how companies think of the transition from STEM to STEAM. So, there’s an extra “A” in that second one. The “A” in there represents arts and humanities. So, if we think about digital transformation as helping organizations create breakthrough impact in customer experience and user experience, non-technical skills start to have a really important role to play in the shape of the delivery organization. And so, all of those become really important. So again, you take the full-stack, multifunctional, business-aligned technology, functional product, and non-technical all working together in this very collaborative way that actually helps collectively deliver the talent and skills that organizations need.

JA:

You mentioned this before, and I think it’s important to underscore the point. The whole focus on culture is really key to making sure that the scale, the skill, and the shape really come together to deliver high performance. So, the terms you tend to hear a lot is this whole thesis of a high-performance culture. And again, anytime you get into some of these squishier aspects in a budget constraint environment, then you get a few of the eye rolls, but then if you go back and unpack, why are people really putting this culture in place? It is because it’s actually a very tangible ROI defined through better productivity, velocity throughput.

So, don’t let anyone talk you into, “Hey, culture can be relegated to the sidelines, not important. I’ve got a budget to meet.” The way you meet those budget numbers is by creating this high-performance culture. What research also shows is that the high-performance culture at a team level eliminates the rock star developer role, and then you find that the team always outperforms a collection of very capable individual contributors. So, some very profound implications of not just setting up the right talent model but also making sure that you have the culture backing it up to make this succeed.

CE:

Absolutely. Whenever I hear that conversation, I’m always reminded of the All Star games. I don’t think they’re very good. You get the rock stars from a bunch of different teams together and just throw them together, and there’s no magic because they don’t have a culture. They haven’t worked together. They’re not really a team and they all want to do the rock star thing. And I think that the teams that have worked together and create that culture and rely on each other and have the mix of skills all blended nicely, definitely have the opportunity to perform better.

So, this has been a really interesting year for talent development, from a position of demand significantly exceeding supply. We have some normalcy in the talent market and more talent is available now and organizations have that opportunity to shift right on their talent journey.

So, in every podcast we call out our lessons – we call those the digital reality checkpoints. So now, obviously, I have three again for us this month. The first is put the three-year roadmap in place to shift right. That’s right scaling, right skilling, and right shaping of your organization. You need to think about that long term, even though you have to act short term. So put that three-year plan in place. The second is emphasize a culture in the organization that rewards high performance teams and drives greater alignment between business and IT. And finally, define the skills passport and the learning platform to enable your organization to respond to the dynamic needs of the business environment.

JA:

Thank you, Cecelia. And thank you for listening to this episode of Digital Reality. You can check us out at www.everestgrp.com or follow us on LinkedIn @jimitarora and @ceciliaedwards. If you’d like to share your company story or have a digital topic that you would like us to explore through alliterations you can reach out to us at [email protected]

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Digital Reality Episode 14: Accelerating a Smart Recovery | Blog

In this podcast, we examine the approaches to post-pandemic recovery being undertaken by leading companies. We examine three key priorities in creating a future-ready operating model – smart savings, smart agility, smart resilience.

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Jimit Arora:

Welcome to the 14th episode of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Jimit Arora.

Cecilia Edwards:

And I’m Cecilia Edwards. Each month we bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results.

As we rapidly march toward the end of 2020, we thought this would be a good time to focus on some of the shifts in digital transformation strategies that we’ve seen throughout the year and take a look ahead to the role that digital strategies are likely to play as businesses think about planning for the recovery from this crisis. So, let’s take a minute and step back to think about digital, kind of at the beginning of this pandemic.

During the second quarter of this year – probably March is a little early, we were just getting into it – but by the time we got to April, I think that’s primarily when the world recognized that we were fully in a pandemic. During that quarter, we were just entering it. We were making a mad scramble to figure out how to enable as many people as possible to efficiently and effectively work from home. And, really, that might be a little high of an aspiration just to be able to work from home and figure out how to serve customers remotely.

There were a number of digital strategies that were critical during that stage of the pandemic. Cloud-based SaaS solutions, especially those geared toward collaboration, such as Zoom. Right? I mean, that’s the big joke now, right? Everybody’s like, “Did you hear me?” Everybody’s kind of full of Zoom. So it’s Zooms, Teams and really the entire Office 365 Suite that allows you to collaborate on documents and collaborate with your teams. All of that was critical to keeping workers engaged remotely.

JA:

Hey, Cecilia, I can’t hear you … I’m just kidding.

CE:

I know. Are you on mute? That’s funny because I did check my mute button just right now.

Exactly. So, there’s a T-shirt that says you’re on mute. So to support their customers though, enterprises made sure that their e-commerce sites were functional and that they were able to handle additional capacity. So in general, during this time period, we saw that those who had already made the investments in their digital transformation and were further along in those journeys, those folks were able to better weather kind of this early stages of the transformation.

I think in one of our earlier podcasts, we talked about Domino’s Pizza – they’d gone on a 10-year transformation journey that left them really as an e-commerce company that happened to sell pizza. So, that entire decade’s worth of investment and transformation that that company went through meant that they were extremely well positioned to serve a socially distanced customer base during this pandemic – people who obviously still had a pretty high demand for pizzas to be delivered to them.

JA:

Let’s just say I’ve been indulging in a lot of e-commerce and it just happened to be pizza, right?

CE:

Exactly.

JA:

Yeah, I think we’ve seen a pretty significant shift. And one of the things that’s been interesting is we’ve spoken about how e-commerce is an important channel from a retail perspective. If you look across the manufacturers, the consumer goods companies, most of them have been kind of upping their game, driving more focus in helping their e-commerce partner succeed. Right? So the whole e-commerce thesis has definitely played out significantly.

One of the other things that we are seeing more as a lead indicator in some ways is that there’s a lot of transformation activity, which has actually accelerated? So most of the larger, smarter companies are doubling down on their efforts to drive transformation because they see this as a critical enabler not just for the short term but in terms of how the market has truly shifted. So, we’ve definitely seen a lot more progress over the last few months – 10 years’ worth of digital transformation in two months, I think that’s playing out quite well.

CE:

And I, for one, am very pleased because our team’s experience has improved dramatically over the past few months.

JA:

When you said teams, do you mean Microsoft Teams or do you mean people teams?

CE:

Probably a little bit of both but specifically Microsoft Teams.

JA:

I think the whole new way of working has been quite interesting, but just to kind of bring us back to thinking about the examples and how we’ve seen them, Cecilia, you spoke about Domino’s. Lululemon is another company that we spoke about and part of this whole journey has been to see how these companies we profile pre-pandemic, what have they done in a post pandemic environment? And if you think of Lululemon, the RFID tags that they put on all of their clothing, including all of the merchandise that was not just in their warehouses but also in the retail stores, this simple RFID tagging allowed them to shift order fulfillment for an expanded e-commerce channel, not just from the warehouse, but also from the retail store, especially in an environment where a lot of the retail stores were closed.

CE:

Yes, definitely Lululemon’s performance has shown it compared to other companies.

JA:

Yep. And if you think back, many other companies have scrambled to figure out how to truly enable their workforces to operate remotely.

The bare necessities were in place, but we didn’t really plan for this to be a sustained environment of remote operations because, hey, this wasn’t … I mean, nobody planned for how long this might go on. And as the pandemic has lasted far longer than the initial six to eight weeks we anticipated, we are definitely seeing a pretty significant financial impact, which in some ways begs the question of what’s really going to be the role of digital in the whole recovery process.

CE:

Yeah. And that’s interesting, you know, as we talk about recovery, there was a lot of debate. Are we in a recession? Are we not in a recession? Right? Because if you think about a typical recession, there are some business factors, the business cycle has driven the economy down. Well, we didn’t really have that situation. We just shut down the whole economy, which is a really different kind of situation.

JA:

And I think that’s a very important piece of context as we think through the role that digital needs to play in this recovery, which in some ways is going to be a bit of an abrupt one, right? And there’s all this conversation. Is it V-shaped? Is it W-shaped? Are we going to have another wave? We really don’t know, which is why what we wanted to do was to diagnose how you really create structural impact, which can not just give you some short-term relief, but also allow you to, in some ways, future-proof the operating model by leveraging digital transformation to ensure longer term success. So as usual, as we think about it, it’s always important to link digital efforts back to the business objectives. Cecilia and I always speaking about the fact that technology is the easy part of the digital transformation exercise but aligning the business goals is really important.

And what we do know from companies that performed well in the recoveries that followed the last two recessions is that there are specific strategies that deliver winning performance. And the companies that focus on nailing these three business objectives, which we are going to talk about in a minute, have the best chances of recovering well. And in today’s discussion, we want to call these three strategies, smart strategies. So the smart savings, the smart agility, and the smart resilience.

Start with smart savings. Yes, cost savings have been really important, but what are some of the strategies that can allow a company to change the longer term cost base that allows the business to emerge more competitive once we are on the other side of the recession? Last time, for example, we spoke about strategies for increasing productivity. This can have a significant impact on a company’s cost structure when you’re able to deliver more, faster, with less. If you expand that thinking to include efficiency and automation strategies, you start to unlock additional benefits and outcomes.

So, I think the broad message you’re trying to say is, yes, savings are going to be important. You do want to emerge leaner and more efficient, but don’t just think about savings in terms of, “Hey, what can I cut in the near term?” Think also about some of the more structural aspects, which allow you to emerge healthier. So some organizations think of this as an emerging fit for growth. We are an emerging fit for the future. So, it’s not just going to be a simple cut, but thinking about how automation plays in. Process automation, for example, can dramatically reduce the cost of operation, improve accuracy, also free up employees to do higher value activities. So yes, savings are going to be important, but there’s a smarter way to think about those savings. And the smart savings will allow these companies to grow without growing their costs at the same rate.

CE:

Yeah. You know, Jimit, I think that that’s really important because I think the knee jerk reaction of most enterprises when there’s a downturn in the economy is to cost cut. Right? And that’s kind of different than what we’re talking about with smart savings. Cost cutting, that whole idea of we’re going to stop all discretionary spending. We’re going to slash budgets equally across the entire organization. The studies that looked at the past two recessions show that companies that followed that strategy actually emerged from the recessions with the worst performance. They jeopardized their current customer experience and limited their ability to be prepared or ready to serve the customers in the future. Anytime you do a cost cutting measure that inhibits your ability to deliver value, that’s not smart. And so we like to talk about it as smart savings. And those things that you mentioned will actually result in a lowered cost base but will position you well kind of coming out of it.

So, let’s talk about smart agility. If there’s anything that we know is that we don’t know what’s coming up in this whole pandemic. We talked about agility before, but this level of uncertainty in the business market has really taken things to a new height. And the shifts in customer expectations in many instances can vary by week. And that wreaks havoc on a company’s ability to predict demand and channel engagement.

If you think about it a couple of ways, let’s talk about it from the demand perspective. Pants. If you’re an apparel manufacturer, you’ve got models that show based on the season, et cetera, what the demand for pants is going to be. Well, in the last nine months, that demand has plummeted. Lululemon’s doing well because people are looking for leggings and people are wearing sweat pants and things like that because so many people are working from home and dressing just the upper halves of their body for these Zoom and Teams calls that we’re on all day long.

And so that creates this real like fundamental shift. But here’s the deal. What happens when you lift the shutdown? What happens when people are asked to go back into the office? The demand for those pants is going to spike because, remember, we’ve all been eating Domino’s pizza for months so nothing that we have in our closet fits. So, we’re all going to have this huge spike in our business clothes. Right? And so how do you actually plan for that? Because they don’t know how long that’s going to be. They don’t know when it’s going to be. Companies are announcing every day that they’re going to extend work from home to the end of the year, to the middle of next year, or for good. So you have all of these things that really eliminate your ability to predict what the demand is going to be.

If you think about a physical branch of a bank, once this whole thing is over, who’s coming back into a bank? We just don’t know. And I think that a lot of those things around the demand are really going to be uncertain.

And then you have the channels. No one really knows what channel will be used. In the past, many businesses have looked at this kind of generationally. Oh, the boomers are all going to want in-person and we have to tailor to them, but gen X, Y, and Z are going to want to do everything digital. And it was believed that you just kind of slowly do the digital to handle that group as they start to have more buying power. And nobody expected the 60-plus crowd to be digital. Well, in this pandemic, kind of everybody is digital. All of a sudden, everyone has a demand for the digital channel. So that means that companies now need more mature omni-channel strategies. And they have to assume digital-first is going to be the priority across their entire customer base, because that’s the only thing that’s going to enable those enterprises to be able to handle the shifts in channel preferences more effectively.

Our third strategy is really around smart resilience. So, one of the scariest reports that I’ve heard lately, I think Dr. Fauci mentioned this, is that the Coronavirus may just be a dress rehearsal for future such viruses. If you think about that, like, “Oh boy, we keep talking about getting back to normal.” Well, back to normal might actually look a little bit different. Back to normal might actually look like some mix of what we’re doing today, in smarter ways hopefully.

So what that means is that we have an opportunity now to rethink what we know about business continuity. Jimit, you mentioned future-proofing a little bit ago. Future-proofing a business takes on a whole new meaning when the goal is to ensure that your business can keep operating at some level if the world shuts down again. So when we talk about this digital-first mantra, that has to be a must for as many portions, not only of the customer-facing part of your business, but for your business operations in order to keep your employees working through the next inevitable but unknown wave of shutdowns that we are most likely going to face.

JA:

Thank you, Cecilia. That last part really, really made my day. I needed that new report about all future viruses ….

CE:

Sorry about that.

JA:

I think you are spot on. That is that uncertainty is going to be the nature of how business models need to evolve. I think one of the things that we are starting to see, especially as we think about new budget cycles in the technology groups and the strategic planning season for most companies, it’s going to be an interesting year for strategic planning, by the way. What assumptions do you factor in? But the one consistent theme that we are seeing is what we call is the whole concept of “the genius of the AND versus the tyranny of the OR.” In the past when we were thinking about IT, there were trade-offs. So you could choose agility or savings.

You could choose agility or resilience, but one of the beautiful things about digital transformation and the structural changes you make to the cost profile is that you can actually get savings and agility and resilience and business outcomes at the same time. So, the one important thing that we want people to take away as we think through what’s going to happen in the future is don’t compromise. Don’t think of the assumptions as OR assumptions, because, done correctly, digital transformation can enable a lot of these AND attributes.

So like we do with every podcast, we talk about digital reality checkpoints. I already mentioned how the business planning process for 2021 is going to be unprecedented given all of the uncertainty. So, let’s talk through the major checkpoints that we wanted you to take away. One, continue the broader transformation journey for long-term success. Don’t put it on pause. In fact, if you can find ways to potentially accelerate it and see how you can support more immediate business needs.

Second, assume the uncertainty of 2020 will continue and use digital strategies to drive efficiency, productivity, and agility.

And then finally, let’s take the warning in good faith and assume that COVID-19 is just a dress rehearsal for the shocks that we are going to see in global events, which are going to create massive uncertainty and define the playbooks, which allow you to really create resilience in your business.

And finally, remember it’s an END, right? It’s not an OR, it’s an AND.

CE:

Great. Thank you for listening to this episode of Digital Reality. Please check us out at www.everestgrp.com.

 

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Digital Reality Episode #13 | Productivity in IT Does Not Come Easy

In this podcast Cecilia Edwards, Jimit Arora and their special guest, Ashwin Venkatesan, take a look at how productivity levels have changed for both the better and the worse over the course of 2020. They discuss a repeatable process IT organizations can use to drive and maintain increased productivity.

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Jimit Arora:

Welcome to the 13th episode of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Jimit Arora …

Cecilia Edwards:

… and I’m Cecilia Edwards. Each month we bring you a discussion that digs into the details of what it means fundamentally to execute a digital transformation that creates real business results. Today, I’m pleased that we have another guest with us, Ashwin Venkatesan, who also goes by AV. AV leads our IT and digital transformation research program. And we’re really glad to have him join us today. Welcome, AV.

Ashwin Venkatesan:

Hey, Cecilia. Hey, Jimit. Thank you so much. Really excited to be on.

CE:

So today we’re going to talk about productivity. This is an issue that continues to be top of mind for a number of IT leaders, given that we’re still in this kind of remote working timeframe. We’ve been tracking productivity through the pandemic and, not surprisingly, we’ve seen an evolution in terms of how this has panned out. In the early days, we did see a bit of productivity loss when folks were scrambling to get the right infrastructure to enable remote working. Bandwidth and infrastructure were clearly issues, but they were solved fairly quickly.

Once those issues were resolved, we began to see productivity increases. When we polled our user base, across the board we found that productivity went up on average by about 13%. The drivers of those increases were varied. Some of it was attributed to fewer distractions since people had nowhere to go. Some of it was due to less time commuting and some of it might’ve been due to people just working extra hours out of fear of job security.

So now the pendulum is beginning to swing back. We’re seeing a bit of a plateau and even some diminishing productivity, due potentially to fatigue that’s starting to set in or potentially some burnout from the starting intensity levels that people have been maintaining. So today, we want to start a discourse on how organizations are managing productivity – the productivity of their IT teams – and what techniques and strategies we’ve seen be successful in this next new normal. AV, I’d like to start with you. I know you’ve been examining this issue for a number of enterprises. So what’s your take on what’s happening with productivity right now?

AV:

Thanks Cecilia, that was great context. And it seems productivity factors are the flavor of the month. Earlier this week, in fact, JP Morgan was claiming that it has noticed productivity decline amongst employees, potentially because of the work from home lifestyle itself. So yes, structurally dealing with the productivity issue has become very important, and a number of factors are actually contributing to this perfect storm for organizations, especially in an IT context. And at the heart of this is something both you and Jimit were speaking about earlier, which is everything is on the table.

So we are at a point where companies have significantly accelerated their digital agendas. But guess what? There’s an associated conundrum to this. On the one hand, IT budgets are limited, and on the other hand, stakeholder expectations are simply skyrocketing. So consequently, people are actually having to think of this as an and function: If we think of stakeholders for IT, be it end users or our customers, these stakeholders want both speed and cost effectiveness. They want experience and efficiency. So it’s almost a duality that needs to be balanced.

And this is where CIOs are struggling, because they’re not able to make the trade-offs. Because, on one hand they need to survive and show value to the business. But on the other hand, the CIO also needs to run a more efficient IT shop. And this is exactly where the concept of productivity comes. So at a very basic level, productivity is at the heart of what every CIO wants, and it is all about doing more with less. We at Everest Group call this hyper-productivity, by which we mean that it’s about getting an order of magnitude in terms of the outcomes. And this is done by optimizing people, optimizing processes, and making changes to your technology stacks amongst other things.

So that’s kind of setting the context around productivity. And, Jimit, at this point, I would like to bring you into the conversation. So you and I have partnered to help quite a few clients, especially over the last few weeks, on this productivity issue. So what do you see as some of the starting points for enterprises on this productivity journey?

JA:

Sure, AV. I think the first step, thankfully, is a simple one. You want to improve productivity – start measuring it. I know it sounds very basic and very simple, but I think for so long we’ve been thinking about this concept that most enterprises, most IT groups, have made a big deal of this. And they don’t really have a simple measures that allow them to make progress on this. So when you complicate the measurement too much, it becomes a problem. It becomes an impediment. So step one, you need to make sure you start measuring it. And to do that, you need to select metrics that are very simple, and they need to be holistic and capture multiple aspects of impact.

So let me share some examples of what we are seeing, what companies are looking to quantify as they’re looking for their productivity journeys to get ramped up. Most often, it’s starting with what’s the speed or velocity of the output. So, how quickly did I deploy that new code? What’s the quality of output? How many changes are we seeing? So that becomes a good measure of quality indirectly.

Change failure rate is another example of something organizations are measuring and tracking quite effectively. How do you think of business alignment? And this one trips people up quite significantly, but we are seeing some very simple measures around NPS, for example, coming back in. So what’s the employee NPS on the business side? And that becomes something that you want to measure. And as you’ll see, it’s on a velocity metric, which is how we tend to think of productivity, but it is a business impact metric. And then the fourth tends to be cost. And this is where most people have simply fixated.

And as you’ll see, as we’ve expanded this definition of productivity, you want to keep this holistic. So looking at speed, which is what most companies think of. But you’re bundling in quality, you’re bringing in business alignment and cost to operate. Once you start to combine some of these is where you start to see this concept of hyper-productivity kick in. So make them simple, make them complete, and obviously make sure that they are quantitative and can be measured at frequent intervals. And here’s a big secret and in some ways a challenge to conventional thinking that we found, as teams are striving toward greater performance, higher productivity: don’t benchmark it versus the market. Do not seek arbitrary, “Here’s what good looks like in my industry or here’s what Google is doing, therefore that should be my productivity threshold.”

We don’t think there’s a single right answer or a single right industry benchmark in terms of the number of story points an ideal board can deliver in two weeks. Context is what really matters in this productivity journey. Each team and each journey will be different. And I think that’s where most organizations truly trip up. Once you measure what your metric is, you just set the next milestone in a manner that shows progress for yourself, for your team, versus trying at this stage to benchmark it in the industry. Each print or each iteration, you’re trying to drive incremental improvements over the previous baseline, over your previous baseline. And that is the approach that delivers great results. It sounds super simple because in theory it is super simple. Measure it, measure it versus yourself, keep improving.

CE:

Yeah, super simple. That’s what everybody’s looking for. So I know that I’ve been surprised that people come in thinking that there’s some secret sauce to this. Productivity to them means, “Hey, let’s bring in the smartest developers, move to low code development, and deploy a variety of tools.” So, sure, these things might help, but they don’t necessarily create a material or sustainable change in the culture. And I think that when we’re talking about looking at that process that you just mentioned, Jimit, and not thinking about an industry benchmark, but having that context, that that’s really what this is about. You’ve got to make some cultural changes.

So the heart of it really is the simple yet repeatable process. And at the heart of this approach is your context, as you mentioned. So to the extent that you’re not trying to meet these kind of arbitrary industry thresholds and designing the program around your environment, your ecosystem. And the thing we often forget is your people as well, that always works. So the key is to not force some mandated set of answers, but to really create a sense of excitement by making the team feel valued and empowering them to think, debate, and solve those problems.

I think that we’ll be really surprised at what teams come up with. I mean, it could be everything from the need to take breaks, right? There’re a lot of articles that I’ve been reading lately on the Tabata method, work for 25 minutes, take a break. Whether or not the team does team norming, how do you recreate the water cooler in a remote environment? It’s interesting that sometimes the breaks are the very things that can actually increase the productivity. So give the team the flexibility to think holistically about what’s going to work in their context for them.

AV:

You’re right, Cecilia. And just reflecting on what both you and Jimit have been saying, there is no single answer to this, there’s no silver bullet at the end of the day. There are so many variables here that we can play with to really drive progression along this entire concept of productivity. So this is going to be a multi-pronged approach.

We have obviously been researching numerous client environments over the past few years, and based on all of these experiences, we have identified a few levers that an organization can consider as it embarks on this productivity journey. And we see six of these as key dimensions where changes can be facilitated, and a productivity improvements can be achieved.

So just going through them, and in no specific order: first is the organization structure itself. Breaking silos becomes very, very important. So many IT environments have actually grown into a space and a size where it becomes really hard to bring teams together. But the focus needs to be around how you make the organization structure end-to-end. And how you enable and enhance coordination amongst the business teams and the IT teams. It’s one of the most fundamental requirements, in our view, to help drive the productivity mandate.

CE:

And, AV, I think that that’s one where we’re going to see a lot of challenges, right? Because that silo mentality is really strong. And it’s probably strongest not with the junior people, but the leaders who have their kind of empires that they’re building, their domain that they’re trying to protect. And so encouraging that collaborative versus siloed approach is really something that we’ve seen as a challenge, but it’s one of the most effective things that an organization can do.

AV:

Absolutely, Cecilia. And you point out a very important aspect, that especially when it comes to organizational structures, it has to be a top-down mandate. You need someone to bring the organization together. It’s a very valid point.

The second, then, is talent and skills. And I don’t think there are any surprises over here, it is potentially one of the huge talking points when it comes to enabling a successful IT operating model at this point in time. So how you build your pyramid, whether you have the cross-functional skills, all of this becomes very, very important.

JA:

AV, I think on that talent and skills piece, and I know we’ve spoken about this and I struggle whether it’s an org structure issue or a talent and skills issue, I think it’s somewhere in between. What’s associated with that is also the culture. And I think that, I believe it was Google that came up with this research, where it wasn’t the smartest developers who really enabled high productivity, but it was essentially elements of culture, the ability to work together as a team, the cohesion of that unit, that really determined how successful they were. And it wasn’t about you had eight black hat grade developers in your ecosystem. So, do you see that as an important dimension to the culture?

AV:

Absolutely. I think it’s a cliche, we use it all the time, but the fact is that culture eats strategy for breakfast. And in today’s IT environment where we have essentially a proliferation and the kind of themes and the functions that are getting built in.

CE:

I think that there’s a basketball analogy that works really well on this. If you think about the all-star games, they’re never really good. You take the absolute best talent from across the MBA, you throw them all together briefly on the court and the games aren’t very good, right? The teams that win are those that have a good mix of people. So they’re going to have the superstars and then not so superstars, but they’ve learned how to work together in really effective ways. Those games are a whole lot more interesting. They produce a whole lot higher scoring and everything. So I think that that’s a good analogy to what we’re talking about here. That it can’t just be about having the best, it’s about how they work together as well.

AV:

Sure. LeBron needs a team around him. Absolutely, Cecilia.

CE:

Exactly.

AV:

Yeah. But that’s a good point. And coming back to this. So absolutely, the organization’s structure, talent and skills, culture sits somewhere in between, but there are other important elements as well.

So the third one, and we simply can’t overlook this, this is about technology and platforms. It’s about making the right choice. And what we see in many cases is there’s almost a fixation to go for what is seen as the best-of-breed technology. We really want to invest in a particular tool because this seems to be the one that the market is telling us is the best. But it’s also about ensuring that that particular tool or solution is very much compatible in your environment and can speak to your existing investments as well. So as I think of technology and platforms, do ensure that the answer is not always about going for the best tool, but it’s about how it fits into the broader environment and the existing investments that you have made. It becomes really important.

The fourth one is the service delivery process. Again, it’s very important in the sense that we have been having IT function around services for many, many years now. Again, to use a cliched term, but the focus has always been on keeping the lights green. But when you are talking about making your own environment productive, there needs to be a flip in the way you measure outcomes from a service delivery standpoint. And this is where we see that the design needs to be expedience- and business-outcomes oriented, rather than being SLA first. It’s an important pivot. Again, things around culture and people and training, everything comes into the picture over here. But this is going to be another key element that if you can get right, it’s going to help you drive significant productivity within your estates.

Location, the fifth one, and it’s an interesting angle. So the debate around onshore and offshore has gone on for quite some time, but it’s a lever that you can again use within this context.

And then finally the sixth one, which in our view is a little overlooked, is reusability. And this is essentially tied to the knowledge management angle. So how do you institutionalize your experiences and learnings so that you do not reinvent the wheel, so you save input and consequently drive productivity? Now, typically what we have seen is there’s a lot of innovation that happens across different parts of the organization. It happens in silos. So one part is obviously the cultural part of it and the org part of it. But also a key requirement becomes how do you have a knowledge management platform that underpins all of this and then helps people learn best practices, previously used tools and accelerators, and whatnot? So reusability, a potentially overlooked item, but an important element.

And the key point here is if you look at all six levers, you have a variety of choices and adjustments that you can make. And in this, your context is what’s going to dictate what’s best for you.

Let me offer a couple of examples where we have seen some of these success stories. So Cisco as an example, sometime back, they claimed that they had reduced 40% of defects in their subscription billing platform. Now this was done by just launching three agile release streams and making them work together. So it was simply an organizational tweak that helped Cisco reduce defects by 40%. And it was almost like quite a bit of time and productivity being built into their entire platform and consequently helping impact revenues.

AV:

Airbnb, very recently actually, claimed that it improved its product development by erecting a single environment wherein it brought designers, engineers, and even the researchers, everyone who’s involved in the product development process, so that they could pull in ideas and create synergies. So this one, again, is an org and a process design lever being pulled together. But again, helping drive productivity.

Now, going back to Jimit’s points: these are good examples, but we’re not saying that what worked for Cisco or Airbnb is going to work for you. We can offer a set of standard guidelines, but we want you to remember this that it is always going to be very contextual and what worked for another organization won’t be working for you. But if you want to get started on this entire enterprise productivity journey, and especially if you want a copy of a framework to get started with it, feel free to ping us. We’ll be very happy to send this across and maybe have a product conversation.

JA:

Perfect. Hey, AV, thanks for that. I think this was a very productive discussion, if I may. And I know we’ve played around with one graphic that I like fairly well, which is: think of this as an equalizer. It is a graphic equalizer where each of these individual levers serves as a toggle switch, which you can move up and down. Every switch individually will create impact once you reach the most optimal configuration for your environment, that’s when you get to beautiful music. And so I learned a fair bit, and there’s obviously a lot of lessons for us as we think through how organizations need to create a culture of high performance, high productivity – hyper productivity – and effectively achieve more with less. These lessons we call digital reality checkpoints, so there’s a few that I wanted to sum up with.

First one, don’t let perfect be the enemy of good. Don’t try to create the right perfect productivity plan. Take the first step, identify a set of simple metrics, measure them, get started. Second, recognize that each organization will have this variety of choices. You do have multiple levers to continue optimizing to deliver greater impact and increase productivity. So it’s not a one and done. And each journey is different. For those of you who’ve been with us on this journey, you know that we consider digital transformation to be a journey. Of course it is, but it’s your journey. Understand your context, try not to seek industry benchmarks as you’re starting. Eventually, yes, we’ll get to that. But don’t start by going after arbitrary numbers, which in some cases might create a false sense of progress, “Wow, I’m doing better than the industry. So I don’t need to improve.” Or, become such a big mountain to climb that they result in early failures. So it’s your journey, make sure that you progress along it in your context.

CE:

So I’d like to add my thanks to AV for joining us today. And I’d like to thank you for listening to this episode of Digital Reality. Please check us out at www.everestgrp.com or follow us on LinkedIn at Jimit Arora and Cecilia Edwards. If you’d like to share your company’s story or have a digital topic that you’d like us to explore, reach out to us at [email protected].

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The Transformation Paradox: Funding Digital Transformation | Blog

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In the ninth episode of our Digital Reality podcast series, Cecilia Edwards and Jimit Arora highlight examples of financial engineering solutions service providers are offering to accelerate the digital transformation of cash strapped enterprises. They also discuss changes in internal funding approval and allocation processes that support rapid decision-making while limiting the associated risk.

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Jimit Arora: Welcome to this month’s episode of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Jimit Arora…

Cecilia Edwards: and I’m Cecilia Edwards. Each month we bring you a discussion that digs into the details of what it means, fundamentally, to execute a digital transformation that creates real business results.

This month, as we continue to see the impacts of the COVID-19 crisis globally, we shift the conversation to an important issue facing IT leaders as they wrestle with whether they should they increase or decrease the pace of digital transformation. From our leadership team’s conversations with over 50 enterprises in the last few weeks – the biggest regret we hear is that they wish they had made more progress on our automation and digital agendas prior to the crisis. So clearly the posture coming out of this crisis is that the pace of digital transformation needs to accelerate to drive the needed efficiencies in the organizational value chain.

However, there is a sobering reality check here – digital transformation requires investment, and budgets are the one thing that have been impacted significantly given the broader recessionary environment that we find ourselves in. So this creates a paradox – companies need digital transformation to bend the cost curve and at the same time find themselves lacking the budgets to realize these transformations.

Jimit, you have noted this paradox in the past – what are some strategies that you think are important to potentially find the funding to drive digital transformation.

JA: Yes, this is indeed an interesting paradox – the good news is that this isn’t new. As an industry we have been dealing with this issue for as long as I can recall, because no CIO will say that their budgets are adequate to keep the lights on and deliver the change they need. What is most instructive is: if you look back to prior crises – the dotcom bubble, the global financial crisis, and now in the aftermath of COVID-19 – one of the funding strategies we are going to see is a resurgence in is financial engineering.

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Now, financial engineering is not new – it has been around for a while. Effectively, you end up using accounting strategies – either your own or your vendor’s – to realize benefits without incurring all of the costs upfront. The most common manifestation is that you are using a partner’s balance sheet in the form of financing to make investments today and realizing value in the near term, where the payout happens over a longer period of time. A simple example of this becomes taking investment strategies that require CapEx and turning them into OpEx.

It might sound simple, but it isn’t a one-size-fits-all approach and is going to be a function of how a company’s financial rules and internal accounting policies are structured.

For example, what aspects of new projects and upgrades are capitalized vs. considered an operating expense? How does your organization account for the labor involved in implementing new features and functionalities? Fundamentally, if the goal was to increase OpEx and your finance organization insists that these need to be capitalized then you may not be able to realize the benefits. I think that is one caution I provide organizations that are looking to leverage vendor financial engineering solutions to ensure that the path you are looking to go down will meet the necessary approvals of the finance organization. Which is why one of the most important things for IT leaders to do is to ensure you work very closely with your finance organization.

CE: Excellent point Jimit and a much-needed word of caution here. I think there is definitely a lot of commitment on the part of two categories of participants in the digital transformation enablement stack. BigTech vendors, like Microsoft, SAP, AWS, Oracle, Cisco, and systems integrators are preparing significantly to leverage their impressive balance sheets to enable client transformation programs to offset the decline in demand that they are likely to see.

A very public example has been Cisco, which said it is allocating $2.5 billion to help customers defer up to 95% of payments on new products and associated services until 2021. I also have examples of systems integrators that are offering to help “collapse the stack” by offering to the client a single monthly invoice that takes into account the investments in the infrastructure, software, and services by getting the client to the post-transformation run rate in year one in return of a seven- or 10-year deal. So clearly the wave has started, and companies need not be constrained by their own budget challenges, because BigTech and SIs are ready to make things happen in return for a large, long-term deal.

JA: Cecilia, changing gears somewhat. I know you have been examining an alternate mindset to thinking about investments and funding for digital transformation and you actually presented that in a recent webcast we conducted.

CE: Yes Jimit. In some ways, the approach we mention is consistent with the discussions we have had on how digital transformation is not an IT conversation exclusively but a business conversation. So three broad factors to keep in mind:

  • First, ensuring alignment of the digital transformation effort with strategic objectives is very important and often this trumps traditional ROI calculations. Why? Because in a number of situations, the business objectives might be framed on dimensions that are hard to quantify and put a dollar figure on. Coming out of this crisis, productivity and resilience are emerging as very important dimensions – and current models can’t effectively frame these into a robust ROI conversation;
  • Second, empowering those with business context to make many decisions becomes most important;
  • Third, strategic priorities will change over time. Having the discipline to stop funding for things that no longer align with the strategic priorities is important (i.e., avoiding the sunk cost fallacy) and also ensuring new funding for new priorities. Traditional budgeting approaches need to change, and ensuring that you have mechanisms to fund and defund only for value becomes paramount.

JA: Unprecedented is probably the most used (and potentially misused) word to describe the nature of the crisis at hand. However, this crisis has also helped amplify the need for digital transformation. Microsoft CEO Satya Nadella recently said that we saw two years of digital transformation in two months. And this transformation needs sustainable and creative funding strategies. There are clear lessons for us as we think through the funding strategies available to us today. We call these lessons Digital Reality Check Points:

  1. Leverage financial engineering – it is real, effective, especially in a hypercompetitive supply environment and can help accelerate your transformation journey;
  2. However, this is not a one-size-fits-all approach. Ensure the applicability of these vendor financing solutions to your organization’s financial and accounting context;
  3. Align new investment strategies to the business’ strategic objectives.

Please check us out at www.everestgrp.com, or follow us on LinkedIn at jimitarora and ceciliaedwards. If you’d like to share your company’s story or have a digital topic you would like us to explore, reach out to us at [email protected].

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Impact of Automation in Business Continuity – Removing the Human Risk | Blog

In the eighth episode of Digital Reality podcasts, Cecilia Edwards and Jimit Arora examine the impact of automation on an organization’s ability to continue operating during times of crisis, especially as it pertains to mitigating risk to human life and enabling safety. This blog is a summarized transcript of the podcast.

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Cecilia Edwards: Welcome to the eighth episode of Digital Reality, Everest Group’s monthly podcast that moves beyond theory and beyond technology to discuss the realities of doing business in a digital-first world. I’m Cecilia Edwards…

Jimit Arora: …and I’m Jimit Arora. Each month we bring you a discussion that digs into the details of what it means, fundamentally, to execute a digital transformation that creates real business results.

This month, we are going to talk about the impact automation has on an organization’s ability to continue operating during times of crisis. We are all familiar with some of the top of mind benefits of automation, such as reducing costs, increasing productivity, ensuring high availability, increasing reliability, and optimizing performance. Another use case that is frequently deployed – but may not have been as top of mind before the COVID-19 crisis as it is today – is the protection of human life. When human life is at risk, availability naturally takes a back seat. Yet we have examples, both historic and current, where automation is being used to simultaneously address both of these objectives.

Cecilia, why don’t we start with an experience that is personal for you – and that is the form of automation deployed after the Challenger exploded back in 1986.

CE: You’re right, Jimit. This accident was an integral part of the start of my professional career. After graduating from college, I was commissioned as an officer in the US Air Force and worked on the Titan Space Launch Program at Vandenberg AFB in California. So, what does that have to do with the shuttle?

VANDENBERG AIR FORCE BASE, Calif. -- A Titian IV Centaur rocket launches here Oct. 19. The rocket is the largest unmanned space booster used by the Air Force. The vehicle carries payloads equivalent to the size and weight of those carried on the space shuttle. (U.S. Air Force photo)
Photo credits: U.S. Air Force

Back in the ‘80s we had grown accustomed to successful launches of space shuttles, and deeming them safe, we sent politicians, royalty, and civilians on missions. The 25th mission, the 10th for the Challenger, ended in disaster, blowing up just 73 seconds into flight and killing all on board, including a school teacher. This incident rightfully grounded the shuttle program for almost three years as the investigation and remediation procedures were put in place to ensure there would not be a repeat.

One of the functions the shuttle performed was to launch satellites, in particular large satellites, for the US Air Force. With the shuttle grounded, the Air Force was left with no means of completing its mission of putting several large satellites into orbit. Instead of waiting it out, the Air Force made a determination that injecting a satellite into orbit really didn’t require a human, and the Titan IV program was born.

The Titan IV was an unmanned space launch vehicle with flexibility to configure the payload to match that of the space shuttle. In other words, anything that could be launched on the shuttle could also be launched on the Titan IV.

The Air Force chose to automate the launch of the remaining satellites to resume the mission more quickly and to reduce the risk to human life going forward. People worked to prepare the satellite and rocket and then launch remotely, from a control room about 20 miles away. Future disasters would be costly only in dollars, not lives.

Jimit, what do you see as the lesson companies can take away from this story as they contemplate their automation strategies?

JA: Just because you have always done something a certain way doesn’t mean you shouldn’t challenge your assumptions. What might have been the only option at one point might be outdated; you should consider other technology solutions.

Assume that at some point something will go wrong. How long will your operations be shut down if the loss of human life is a part of an incident? Can you identify ways to eliminate or minimize the risk to people so your business can quickly recover?

Given the massive loss of jobs we are witnessing right now, on the surface, it seems a bit thoughtless to be considering navigation solutions for a crisis of the type we are experiencing that would result in the loss of additional jobs. It is actually a misconception that automation necessarily results in disadvantages for the displaced humans. That wasn’t the experience at Rio Tinto.

Rio Tinto is the world’s second-largest metals and mining corporation, producing iron ore, copper, diamonds, gold, coal, and uranium. I don’t know if you have ever seen pictures, but these mines are humongous holes in the ground; trucks are required to move the mined resources. It is a very dangerous job to drive these trucks and the mines are located in very remote locations. Not the ideal working conditions.

In 2008, Rio Tinto began deploying automation, in particular, a fleet of self-driving trucks to perform this dangerous task. This allowed them to run safer operations that were more efficient – self-driving trucks don’t get sleepy – and lower production costs.

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Photo credits: Getty Images

But what was the impact on the people? They were able to reskill, upskill, and redeploy their people to safer and higher-value tasks. This technology has enabled them to create new career pathways and with investments and innovation in training, they believe their adaptability will be a key factor of their longer-term success.

CE: As other companies are thinking about increasing automation, here are some of the people considerations they should take into account:

  • Ensure you have people to work on the technology
  • Consider the implications of a blended workforce – you don’t necessarily need to get rid of people. Use the technology to make them more productive if you plan on having a blended automated and human workforce
    Side note: when Henry Ford introduced the assembly line – a major new innovation of the time – instead of people losing their jobs, with the increased productivity, they were able to produce cars at a lower price point that led to an expanded market for cars. He ended up hiring more people to keep up with the demand.
  • Train people for their new, higher-value jobs

Digital Reality Check Points

JA: Humans ought to matter to business as much as costs do. We can take a few lessons from the past that provide a guidepost on how protecting your people is protecting your business. As we do every month, we’ll share three of these lessons, our Digital Reality Check Points, that you can apply to your business.

  1. Understand the tasks in your business that are dangerous for humans to perform and determine whether there is an automation or other technology solution to protect them.
  2. Plan for humans to work alongside any technology solutions you deploy.
  3. Seek opportunities for your more efficient automated and human processes to be leveraged as an advantage in the marketplace.

Please check us out at www.everestgrp.com, or follow us on LinkedIn at jimitarora and ceciliaedwards. If you’d like to share your company’s story or have a digital topic you would like us to explore, reach out to us at [email protected]

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