Digital done wrong

For readers in the U.S., the following is an all-too-familiar—and painful—story I need to tell to make a point. Warning: reading this may raise your blood pressure or tie your stomach in knots.

Jeannie is a middle-aged woman who takes medication for two chronic conditions. She will likely take both for the rest of her life and is grateful for her employer-provided health plan.

Because of the long-term recurring nature of these medications, her health insurer insists they be purchased from its in-house mail-order pharmacy. One of the medications is generic and inexpensive—it has been around for years and is supplied by the normal pharmacy in 90-day intervals. The other is a brand-name, recently launched drug that costs almost $3,000 per month and is supplied by the insurer’s specialty pharmacy in 30-day intervals.

On any given day, Jeannie may receive a robo-call from the insurer stating one of her prescriptions is ready to be shipped, but they must speak to her to confirm her order. She thinks this is likely the more expensive, brand-name drug she takes, so she immediately presses the button to be connected to an agent. The Interactive Voice Response (IVR) system takes her information, including her birthday and ID number, and she is quickly connected to an agent. The agent immediately asks for the exact same information, and then asks her what she is calling about.

Jeannie says, “Actually, you called me! But I suspect it’s about shipping my regular prescription X.” The agent responds that her request is handled by the specialty division and needs to transfer her call. This happens quickly, but the new agent again asks for the exact same identifying information before processing the order. Jeannie wonders why the smartphone app she was asked to download by her insurer doesn’t make this any easier. Days later, Jeannie receives an email from her insurer asking her to call in. Thinking it might be about the second medication, she calls and repeats the process of providing the same information three times to a machine and two people. At this point, she discovers it is about the same drug she already addressed in her first call! A few days later, she gets the same email, judges it to be yet another repeat, and ignores it.

A few days after that, she gets a letter in the mail saying the company has been unable to reach her and is unable to fill a prescription unless she calls immediately. She does call, goes through only the two-step process (the specialty pharmacy isn’t needed in this transaction), and her other prescription is filled.

She again wonders why she can’t handle all this on the app, which uses fingerprint recognition for extra security. She investigates on the website and it turns out she can refill her generic directly on the website, but not on the app. The specialty drug requires a phone conversation and cannot be filled by website or app—so she is stuck with two processes.

Jeannie goes through this tedious exercise at least once a month. Almost always, within a few days, there is a follow-up call to survey her on her experience. A heavily accented voice reads a script. When she is able and willing to answer, she gives the call center rep detailed feedback on how to streamline the process for her: “Tell me which drug we are talking about, verify my information only once. Better yet, let me do everything on my smartphone and save us both some time!” Nothing changes.

Here comes the point: The irony is the insurer has all the tools at its disposal to provide a successful omnichannel digital experience. It is hindered by what are obviously some legacy processes and organizational silos that just don’t make sense.

As with so many digital stories, the technology to make this a great experience is all there—the barriers are human and organizational! Why hasn’t anybody noticed that fingerprint verification is easier (and more secure) for both the customer and the company? Why hasn’t anybody written code to alert the agent that the person on the other end is responding to a call from the company? Why have two completely different divisions deal with the same customer’s medication?

CIOs that want to stay relevant must understand that digital experiences have to start with the customer and work backwards into the enterprise. The enabling technology is, in most cases, already there. Is your company willing to make the hard changes required to go digital successfully?

Source: cio.com-Digital done wrong

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Is your digital transformation process truly transformative?

Digital transformation is what big data was for organizations just a few short years ago. Everyone is talking about it, and organizations are scrambling to make sure it is a strategic initiative by having some sort of digital transformation process.

Just like big data, the term digital transformation gets its popularity from the size of its potential impact rather than being a new tool for improving operations. Since the first days of robotic automation in manufacturing, people have been using technology to improve and simplify work. Now, we are shifting the use of technology to a wider array of complex work, such as customer interactions, reporting and decision-making.

There are several reasons for this increased attention to digital: the pace of disruptive technology, the need to do more with less, the need to maintain competitive advantage and, above all, the need to be more customer-centric. Though digital tools and technologies significantly affect the way business is conducted, many organizations continue to struggle with them or struggle to put into place a comprehensive and effective digital transformation process.

Why are organizations struggling?

A report on the 2015 global digital business survey conducted by Deloitte and MIT Sloan Management Review said “maturing digital businesses are focused on integrating digital technologies, such as social, mobile, analytics and cloud, in the service of transforming how their businesses work. Less-mature digital businesses are focused on solving discrete business problems with individual digital technologies.”

The root cause of organizations’ struggles seems to start with a key word — transformation — that often either gets overlooked or misinterpreted. Transformation can be defined as a significant organization-wide change that orients the organization in a new direction. This can include a change in its business or operating model. Transformation, however, is not merely an incremental improvement or transition to a new system or application.

Unfortunately, many organizations are not embarking on transformations. Instead, they are solving discrete business problems with digital technologies. This means they are creating one-off solutions for a single business problem rather than looking at an integrated approach to solve multiple business problems. Because these types of projects have digital components, they get mislabeled as digital transformations.

When this occurs, organizations struggle because the digital transformation process lacks an overarching purpose and plan to tie the efforts together. Ultimately, this lack of an overarching strategy results in confusion among those tasked with execution because they don’t know the following:

  1. What’s in. There are often no parameters or criteria to define what parts of the business need digitization projects or to help scope and prioritize efforts. For example, an organization that wants to use digital technology to improve its finance function will have no guiding criteria to help pinpoint which processes should be automated.
  2. What the right solution is. There are no criteria for determining the fit of the plethora of solutions available. Without clear goals, the organization can’t clearly articulate what features it needs, potentially resulting in overbuying or making expensive modifications afterward.
  3. How the pieces will fit together. There is often no holistic perspective on digital projects to help the organization understand the intersections and interdependencies between projects and the work they are accomplishing. This can result in post-implementation integration projects and add-ons.

How to tell if your efforts are transformational

Understanding the difference between a digital project and digital transformation is easier said than done, especially given that digital transformation should be comprised of interconnected digital projects.

However, strategy, rather than technology, should be the guiding principle of the digital transformation process. Additionally, digital transformation tends to hinge on two characteristics: a focus on customer experience and its organization-wide impact.

The purpose of digital transformation is creating value, and that includes for the customer’s experience. Hence, organizations not only need to understand their customer’s journey, but must also use the impact on customers as one of the key criteria and measures of their digitization efforts.

The transformative work of an effective digital transformation process requires looking from the outside in, and that includes value chains and cross-functional, end-to-end processes. To ensure organizations stay focused on the end user, digital efforts must help break down operational silos and improve collaboration for managing customer value.

To categorize the initiatives in its digital transformation process, each organization should ask itself these four questions:

  1. What’s the value to the customer? Is the effort focused on creating customer value, and is that value clearly quantified to measure success? If the focus is on the steps and efficiencies of a business process and not on establishing the customer value, it’s not transformational.
  2. Are we changing how we work? Is the initiative going to change how we conduct business or does it simply apply a new technology to how we’ve always done things? As noted earlier, there is often a misconception that digital tools are equivalent to digital transformation.
  3. Who’s involved? Is the effort limited to a specific business silo — e.g., marketing or finance? Because transformations are organization-wide, they are cross-functional by nature.
  4. Why are we doing this? Transformations are focused on changing how the organization conducts business in an effort to create value. If the focus of the effort is solely on cost reduction, then it’s not transformational.

Though only a high-level start, the answers to these questions can help organizations start to clear up some of the confusion around their digital transformation process.

Source: searcherp.techtarget.com -Is your digital transformation process truly transformative?

Is the legal sector embracing the tech revolution?

Dan Taylor, director of systems at Fletchers Solicitors, explains how the legal sector is opening its mind to the innovations tech has to offer.

At the start of 2017, the Law Society (guardians of the UK legal profession) published a report on the state of tech in the nation’s law firms. In his opening address, Robert Bourns, head of Law Society of England and Wales, expressed the belief that the reputation of lawyers as technological Luddites was undeserved and that the sector was “one with energy and ideas, ready to promote a revolution in how we deliver legal services.”

In the same report, however, research into the awareness of lawyers regarding a range of tech innovations revealed a slightly more realistic picture; a sector where innovation is being led by a select few, with the remainder following in their wake.

This is, perhaps, understandable and not too dissimilar to many other professional services, where the emphasis is on human judgement and skill – rather than efficiency and scalability.

However, what is clear is a growing appetite for innovation and an increasing realisation that technology isn’t replacing professional skill and judgement, but instead enhancing it by enabling lawyers to focus their energies to best the effect.

What tech is currently capturing the attention of lawyers?

The Law Society found that, at best, a quarter of lawyers are unaware of emerging technologies (in areas such as artificial intelligence), rising to 38 per cent, 64 per cent and 75 per cent for Big Data analysis, IBM Watson and RAVN respectively.

However, at the other end of the spectrum, the sectors’ innovators are focusing on a range of potential solutions, with artificial intelligence and natural language processing (NLP) being most closely followed by 14 per cent to 20 per cent of the most innovative firms. These areas of tech are narrowly ahead of other appealing solutions, such as Robotic Process Automation (RPA) and expert systems.

A key reason why these are being singled out and gaining the most attention is that they are seen to be most closely aligned to improving client services, making the administration of legal services smoother and quicker, while maximising the quality time with their lawyer.

The report also singles out the desire by firms to use tech to become more agile and stimulate growth. In particular, firms are looking to increase collaboration – with those both inside and outside the firm – and use technology to access new markets, particularly by better serving the needs of international clients.

What specific solutions are lawyers looking for?

In 2015, there were 600 legaltech start-ups offering new solutions to legal clients. Despite this, the report by the Law Society found that there is still suspicion over the extent to which these can currently replace tasks carried out by lawyers and their human assistants.

Instead, the interest appears to be focusing on the future development of ‘augmented workforces’, where computers and humans form a true partnership. Machines will be capable of following basic human-to-human social interactions and lawyers will possess more computer skills to better tailor and utilise technology to support their day-to-day work.

The role for AI

AI programs and solutions have the potential to be invaluable when it comes to coping with the increasing amounts of data that lawyers have to handle, making it easier and quicker to sift through and analyse large collections of documents. It can also be used to automate a number of time-consuming tasks, particularly when it comes to legal research.

Greater use of intelligent systems could allow lawyers to focus more of their time on more complex, high value tasks like the core legal analysis, driving efficiencies and helping lawyers to make quick and accurate decisions. Such systems also have the potential to reduce overhead costs and increase profits.

Optimising online legal services

Law firms have operated online for many years, but at the moment, many firms only offer a small selection of their services online. A large number of legal services offered online merely comprise of external links to communication services, such as Skype, or online forms to be completed for primary legal processes, such as conveyancing or probate matters. Very few legal firms offer “end to end” fully integrated online services, which have long been adopted in other sectors, such as insurance or financial services.

At some point, law firms need to acknowledge that the legal expertise that’s long been the preserve of lawyers is becoming more freely available to the public. Once this is accepted and embraced, law firms will need to start offering their services both in the traditional way in order to survive, while also offering a variety of different online-based options to allow the client more flexibility in how they purchase legal services.

Introducing intuitive management systems

As of yet, such an intuitive case management system isn’t currently available, even though the technology exists and we all use it. This would reduce the time spent on case management significantly and would free up more time to get through more of the core legal work. The development of such a system will surely dominate the market, and those law firms that adopt these systems would see huge efficiencies in productivity and cost savings.

The Law Society’s report reveals much about where tech and law with combine and thrive. Most notably, it is those areas where tech isn’t seeking to replace the human element, but instead to enhance it – augmenting rather than replacing the skills and judgment of lawyers to the advantage of their clients.

Source: itproportal-Is the legal sector embracing the tech revolution?

Have we finally become an industry? Have we become the Digital Operations Industry?

The worlds of software, business operations and services have always been chasms apart – different mindsets, vernaculars, conversations, ideas of what constitutes value – and vastly different cultures. Software people never understood the operations folks and vice versa – each thought they were top of the corporate food chain.

However, the past couple of years have seen the coming together of these diverse groups of people to rethink completely how we run global operations in this robotically digital era (or whatever we want to call this curious period of time in which we exist).

One thing is abundantly clear: the outsourcing phenomenon which has gripped the Global 2000 over the past decade is making way for a genuine industry in which we all play a part – an industry where we have no choice but to develop learning programs, sustainable business strategies and make real, actual investments in order to survive. And what’s most fascinating are the new conversations that have rapidly emerged to bridge this divide between the technologists and the business operators.

Suddenly, we’re talking about business logic, about datasets, about redesigning processes with genuine business outcomes in mind. We’re talking about deep learning AI systems that store what has been learned in the past, take notes of how variables and results have changed under different scenarios and then make decisions based on that.

The narrative has radically changed and the focus is now firmly on bringing together all the components that can escort us to this promised land of Digital Operations. So let’s take a look at what has transpired to get us to this point, where we can actually claim to be part of this emerging industry….

“Outsourcing” never materialized as an “industry”

Having spent the best part of the last two decades trying to make some sort of sense out of “outsourcing” I have come to the simple conclusion: “outsourcing” was never an industry – it was simply the practice of moving work around the world to save money. It consisted of people selling outsourcing deals and the poor suckers who’d been lumbered with trying to manage them – and the deal brokers and lawyers who took money from both sides making it all happen. It was never an industry, it was greedy corporates slashing their wage bills, and those lovely folks who were just so keen to comply with their wishes to turn a profit. Outsourcing has always been an activity searching for a higher purpose than cost take-out. While service providers and advisors undoubtedly feel part of an outsourcing industry, the buyers do not – they are operations people doing their job deploying whatever techniques are at their disposal to improve efficiencies and operating costs. They would not class themselves as “outsourcing professionals”. It’s like selling gym equipment to gyms. The seller is in the “gym equipment business”, the gym itself is in the “gym business”, and the customer at the gym is looking after their fitness. The “industry” is ultimately the higher purpose of which all the entities are all constituents – in this instance, it is the fitness industry – which could also encompass sportswear manufacturers, specialist outlets stores and so on.

How traditional outsourcing has left us in a right pickle

Outsourcing was like a one-time thing C-suite execs arranged on the golf-course to take 30-40% off the operations budget for a set of low-level processes – and enjoy the bulk of those savings upfront for a nice impact. Many folks became heroes overnight for making these deals happen, and they were lauded and courted at conferences as those radical executives who possessed some secret talent ingredient to make this all possible. Yes, a mystique around outsourcing was created, advisors did an amazing job making a science out of the “art of the deal”, and the façade of a new profession and (possibly) a whole new industry was borne.

Sadly, there was never (really) a long-term plan to sustain those productivity impacts, beyond moving as much work offshore, without overly impacting business performance and finding even lower cost cities to take on the low-hanging fruit to eek out a little bit more cost off the bottom line. Eventually, that well runs dry if you don’t make fundamental improvements to the quality of your processes and the convergence of the data sets they support.

Yes, we had a lot of fun creating useless qualifications and meaningless SLAs, but the end results were always the same: clients figured out how they only got what they had paid for, and the fancy innovations they were fed on those lovely pitch decks were always subject to change orders (or never really existed). The only real leverage came at rebid time, when the incumbent would usually make some new promises to get their house in order, if they felt there was actually a chance they could lose the business. Otherwise, it was business as usual.

The Global 2000 is littered with stale outsourcing deals that need radical transformation

However which way you paper over the cracks of short-termism, costs are like hedges – if you don’t look after them properly, eventually they grow back. As a result of all these fun and games, we are left with thousands of ropy outsourcing engagements littering the corporate world, where the clients are still paying for the same number of FTEs to deliver the same tired old obsolete processes, while their providers has no incentive to cannibalise their revenue streams, and the actual concept of moving these deals to other service providers is pretty desperate – all the smart ones have no interest buying up a legacy mess, while some desperate lower tiers ones may take on the work if they can shunt it to even cheaper, lower quality delivery resources.

But there is a way forward, and outsourcing has served a purpose

Believe it or not, there is a method to all this madness – companies managed to externalize work they didn’t want to run themselves, they got a lot of cost off their books, and they opened up the opportunity to pull more levers in the future to find new thresholds of productivity. Rarely will you ever find an enterprise which regretted outsourcing – they’ll never want that work back. The big issue, now, is ensuring that work is in a state to be optimized further by improving the quality and logic of process flows, digitizing them and applying smart automation techniques, where it makes sense. However, that can prove quite a challenge when the work has been distributed across third and fourth tier cities, and it actually requires some investment to transform those processes to consider meaningful automation and other delights that digitized processes can enjoy, such as Machine Learning and AI.

In fact, in too many cases, outsourcing resulted in enterprises sweeping their real process issues under the carpet and choosing to ignore the real need for genuine transformation until that day of reckoning occurred. And that day is now upon us, as CFOs are smoking the automation crackpipe and demanding that next 50% of cost to be ripped from the bottom-line in a 3 year timescale. Outsourcing provided them with a band-aid to enjoy cost savings through labor arbitrage, but robots can only provide further band-aids if the outsourced work has high-intensity, high-throughput processes that can easily be programmed into the software. If that work is distributed across too many locations, with service providers unwilling to make renewed investments to co-invest with those clients, we have an emerging issue facing many enterprises: their day of reckoning has been reached and they actually need to make some investments in their processes and underlying systems.

Welcome to an actual industry in which we can co-exist: Digital Operations. This is why we are now emerging as an industry – we are facing the reality that most enterprises need to make long-term investments in their digital underbelly, their process flows and their people to run them, in order to find sustainable value over the next decade.

For the first time, we are witnessing deep conversations happening across the operations spectrum: RPA, Machine Learning and AI software vendors and now talking with service providers about how to embed their offering into long-term service contracts to support sustainable productivity and incremental data value over time (our data already shows close to a third of the Global 2000 are already integrating automation into their service delivery):

Ambitious enterprise customers of outsourcing, shared services heads and other operations leaders are all feverishly learning how to understand the value of software tools and how to prepare their process flows for the benefits of digitization and automation. Consultants worth their salt are rapidly training their people to develop automation roadmaps for their clients and prepare them for a longer term strategy of creating a truly effective digital underbelly. Yes, we are still are suffering from a few cowboy consultants claiming their clients can slash 50% overnight through RPA, the our observations are quickly showing that people are learning fast and know they need to address many of their underlying processes and talent issues, if they are truly going to take the next step forward.

Bottom-line: The Industry is Digital Operations, and there are six levers to pull to find sustainable value

The conversation among operations executives has changed dramatically just over the past year. As the excruciating hype around robots taking our jobs and these outlandish predictions from drama-loving analysts and academics, a sense of reality is finally setting in – roles are not changing overnight, we just need to get out of our comfort zones and learn new stuff. We need to understand the pivotal role data plays in our professional lives and become smarter about how we manage it. We need to understand where RPA adds value, where to start with Machine Learning and AI, how we can truly leverage globally distributed talent to support out operations affordably and smartly, we need to be observant about the creeping impact of blockchain and how we can truly take advantage of digital technologies to nurture new revenue streams and enhance customer, partner and employee engagement up and down our supply chains. It’s taken a full decade just to take advantage of the cloud, and we need another one before that really fulfils its potential. It’s going to be even more complex to ingest the benefits of automation, AI and blockchain into our business operations – but now we have six genuine value levers to pull to tend the hedgerows of digital operations.

Source: HFS-Have we finally become an industry? Have we become the Digital Operations Industry?

Gartner Survey Shows 42 Percent of CEOs Have Begun Digital Business Transformation

An unsettled global political environment has not shifted CEOs’ focus on profits and growth in 2017. Growth is the No. 1 business priority for 58 percent of CEOs, according to a recent survey* of 388 CEOs by Gartner, Inc. This is up from 42 percent in 2016.

Product improvement and technology are the biggest-rising priorities for CEOs in 2017 (see Figure 1). “IT-related priorities, cited by 31 percent of CEOs, have never been this high in the history of the CEO survey,” said Mark Raskino, vice president and Gartner Fellow. “Almost twice as many CEOs are intent on building up in-house technology and digital capabilities as those plan on outsourcing it (57 percent and 29 percent, respectively). We refer to this trend as the reinternalization of IT — bringing information technology capability back toward the core of the enterprise because of its renewed importance to competitive advantage. This is the building up of new-era technology skills and capabilities.”

Figure 1: CEO Top Business Priorities for 2017 and 2018

Source: Gartner (April 2017)

CEO Understanding of Digital Business Is Improving

While the idea of shifting toward digital business was speculative for most CEOs a few years ago, it has become a reality for many in 2017.

Forty-seven percent of CEOs are being challenged by the board of directors to make progress in digital business, and 56 percent said that their digital improvements have already improved profits. “CEO understanding of the benefits of a digital business strategy is improving,” said Mr. Raskino. “They are able to describe it more specifically. Although a significant number of CEOs still mention e-commerce or digital marketing, more of them align it to advanced business ideas, such as digital product and service innovation, the Internet of Things, or digital platforms and ecosystems.”

CEOs have also progressed in their digital business endeavors. Twenty percent of CEOs are now taking a “digital-first” approach to business change. “This might mean, for example, creating the first version of a new business process or in the form of a mobile app,” said Mr. Raskino. “Twenty-two percent are taking digital to the core of their enterprise models. That’s where the product, service and business model are being changed and the new digital capabilities that support those are becoming core competencies.”

Half of CEOs Have No Digital Success Metric

Although more CEOs have digital ambitions, the survey revealed that nearly half of CEOs have no digital transformation success metric. “For those who are quantifying progress, revenue is a top metric: Thirty-three percent of CEOs define and measure their digital revenue,” said Mr. Raskino.

CIOs to Help CEOs Set Success Criteria for Digital Business

Deeper transformation can only be achieved at scale if it is systematically driven. “CIOs should help CEOs set the success criteria for digital business,” added Mr. Raskino. “It starts by remembering that you cannot scale what you do not quantify, and you cannot quantify what you do not define. You should also ask yourself: What is ‘digital’ for us? What kind of growth do we seek? What’s the No. 1 metric and which KPIs must change?”

Many CEOs have recognized that being open-minded, entrepreneurial, adaptable and collaborative are the most-needed digital leadership mindsets. “It is time for CEOs to scale up their digital business ambition and let CIOs help them set and track incisive success metrics and KPIs, to better direct business transformation. CIOs should also help them toward more-abstract thinking about the nature of digital business change and how to lead it,” concluded Mr. Raskino. “The disruption it brings often cannot be dealt with wholly within existing frames of reference.”

More-detailed analysis is available for Gartner clients in the report, “2017 CEO Survey: CIOs Must Scale Up Digital Business.”. You can also view the infographic at http://www.gartner.com/smarterwithgartner/2017-ceo-survey-infographic/

Source: Gartner-Gartner Survey Shows 42 Percent of CEOs Have Begun Digital Business Transformation