The “observer effect” applied to digital transformation

A different take on GDS’s Performance Platform

The “observer effect” states that whatever you observe, by the very act of observation, it changes. Developing tools to measure the performance of a digital transformation – such as the GDS Performance Platform – is a key step of any transformation journey itself, as it can accelerate the process and guide it to bear positive outcomes.

The act of measuring is change itself

In science, the term “observer effect” refers to changes that the act of observation will make on a phenomenon being observed. This is often the result of instruments that, by necessity, alter the state of what they measure in some manner. A commonplace example is checking the pressure in a car’s tyre: this is difficult to do without letting out some of the air, thus changing the pressure.

The GDS’s Performance Platform

Started as a simple dashboard to display web traffic data on gov.uk, the Government Digital Service (GDS) Performance Platform has now become a key tool that gives departments the ability to monitor the performance of their digital services in real time, aggregating data from a range of sources including web analytics, survey and finance data.

The digital by default service standard – a set of criteria for all government services to meet – now mandates the following four key performance indicators (KPIs): cost per transaction, user satisfaction, completion rate, digital take-up. These KPIs can be used to measure the success of a service and to support decisions and planning of improvements.

Similar to the tyre pressure, the very act of measuring those indicators is influencing and accelerating the transformation process, focusing the departments’ attention to delivering efficiency and quality of service to citizens. This is a key enabler of any transformation journey and it will be interesting to see how far the Performance Platform will go in the coming years.

(Note: although this example is specific to the public sector, the above is easily applicable to private organisations too – this will the subject of another blog post).

Where next? The difference between performance and evaluation

Performance measurement and evaluation are complementary activities. Evaluation gives meaning to performance measurement and performance measurement gives empirical rigour (evidence) to evaluation.

Performance measurements do not question the objectives themselves and, therefore, stop short of any final judgement as to whether the programme or activity was good or bad – only if it was successful (or not) within the narrow confines of its mandate.

The current debate on Gov2.0/Government as a Platform is precisely around the purpose of governments in the 21st century, with two schools of thoughts arguing that it’s the profitable thing to do or, well, it’s the right thing to do.

Although a clear approach on how to evaluate the impacts this approach will have on the wider society is not yet agreed, tools such as the Performance Platform can and will inform and support this discussion.

What do you think? Does this capture the distinction between programme evaluation and performance measurement – or is there a lot more to it? Is your organisation measuring the performance of its transformation? Leave a reply below, or contact me by email.

Blending Kipling with stakeholders to gain Insight Advantage

Rudyard Kipling is an unlikely candidate as a guru of Insight Advantage. But as a Nobel Laureate for Literature, he understood the role curiosity plays in firing the imagination. Both curiosity and imagination are as important now as when Kipling was at his creative peak and wrote “I keep six honest serving-men” – essentially his recipe for creativity.

In our white paper on How to Improve Business Performance with POST-Digital Capabilities, Elliot Howard, John Batchelor and I outlined the importance of customer curiosity, a term first coined by Elliot. We wrote:

“Customer curiosity extends beyond simple customer centricity, it incorporates constant focus on improving insights into customers so that why they behave as they do is as well understood as the more easily identified what, where, when and how elements of behaviour. It requires a culture of experimentation. Experiments create new data and new insights. And ultimately customer curiosity is about creating an increasingly rich data profile for each customer.”

In essence, customer curiosity boils down to asking questions – more importantly, asking the right questions. And while customers are the most important stakeholder group a business has, they are not the only one. Insight Advantage stems from curiosity about each stakeholder group – how they can be better served and gain created as a result.

The second article in my series on Insight Advantage describes how you can blend Kipling’s honest serving-men with stakeholder theory to identify the questions that you should be asking, rather than simply asking the ones that you know can be readily answered.

What do you think? Leave a comment below or contact me by email.

New kids on the blockchain

At Sopra Steria we often talk about a world ‘beyond digital’. This is so that we can help our clients to prepare themselves and their organisations for the challenges they are likely to face looking out three to five years into the future.

I shared some of the topics we have identified for a world beyond digital with an audience of digital and eCommerce professionals at a Thought Leaders of the North West event a couple of weeks ago. Our themes seemed to resonate with those in the room prompting plenty of discussion and debate.

One theme attracting a lot of interest was the ongoing challenge we face in the world of Information Security, where we see protection from attack being built into new products and services from the ground up rather than as an afterthought.

We also see an emerging era of unprecedented corporate responsiveness and agility as industry giants look to iterate their business models ‘on-the-fly’ in response to unforeseen threats and attacks in the way Sony Pictures did recently in immediately releasing ‘The Interview’ to digital channels and abandoning its plans for a full theatrical release.

Disintermediation is another concept having an immediate impact on the way we live, work and do business. Services such as Uber and AirB’n’B are already beginning to transform different aspects of the travel industry through their creative use of the crowd, the cloud and the semantic web.

In financial services we see the ‘blockchain’ threatening to disintermediate the traditional banking industry as Bitcoin continues to gain profile and transacting in such crypto-currencies nudges its way ever closer to the mainstream.

“whilst barriers to entry are very low, barriers to mass acceptance remain incredibly high”

It was in this field, at a second technology event I attended recently that I witnessed a tense debate between an established retail bank and an up-and-coming Bitcoin podcaster.

The bank, when talking about FinTech start-ups looking to establish themselves in the emerging global Bitcoin economy, outside of a traditionally regulated banking industry, suggested that “whilst barriers to entry are very low, barriers to mass acceptance remain incredibly high”, which is the kind of thing they used to say in the music industry in the 1990s.

Nevertheless, the power of the ‘blockchain’, the virtual ledger where the crowd validates transactions without the assistance of traditional banking infrastructure and regulation, may actually be found beyond Bitcoin trading, as new and emerging use cases emerge for this technology bring it further into many people’s lives.

One such service which could be leveraged by the blockchain may be that of personal data broking, where citizens take control of the value of their own personal data and begin to firmly negotiate with local and global organisations alike based on the value of their own data as derived from their own connections, online activity and their extended social graph.

Sopra Steria is working with some of the world’s most exciting start-ups in exploring these concepts, as these ‘new kids on the blockchain’ begin to collaborate with us and our clients as, together, we continue to play a vital role in the transformation of business for a world ‘beyond digital’.

We’d love to hear how you think ‘blockchain’ technology will transform our lives. Leave a reply below, contact me by email, tim.difford@soprasteria.com or on Twitter, @timdifford

Photo: used and modified under Creative Commons license thanks to BTCKeychain

The next digital disruption: buying B2B services using social media channels?

Digital Transformation is changing how businesses interact with customers and each other.

In this environment business-to-business (B2B) service providers face the constant threat of “digital disrupters” – new entrants who don’t fundamentally change the underlying product or service but win (or steal?) market share by leveraging new ways to interact with customers/clients and suppliers.

But couldn’t an existing B2B service provider become the digital disrupter by leveraging social media to create a new, differentiated approach to market engagement to deliver sustainable competitive advantage?

Here are some (radical?) ideas…

Customer led innovation: clients could potentially benefit from best practice about digital transformation being shared rapidly from different sectors (for example, the innovative work in UK central government and retail). A service provider could use its social media channel(s) to enable this sharing in an intuitive, dynamic way tailored to specific client needs. Furthermore, the provider could use gamification to incentivise the sharing of insights, advise directly between companies (such as discounting its services for clients providing such support). This would help position the B2B service provider’s brand as a collaborative thought leader in digital transformation.

Deepening personalisation: a provider could engage directly in all the social media activity of a client (at all levels including organisational, team and individual). Although there is a risk of appearing intrusive, it’s a way of building more intimate relationships with existing clients and sourcing new ones. This would also pro-actively complement and enhance other sales and account management approaches it uses.

Intensifying responsiveness: undoubtedly radical and reputationally risky, clients could post their complaints, issues and other feedback directly on a B2B service provider’s social media channels. The value comes from how the provider deals with these issues openly in this public space; a positive opportunity to explicitly demonstrate its strong commitment to quality service delivery.

Buy buttons: underlying these social media channel approaches would be the tools to enable a client to contact a sales representative immediately to purchase the provider’s services. Depending on the agility of the provider, potentially these services could be bought and stood up on the same day – now that’s digital transformation!

If you would like to find out more about how digital transformation can benefit your business, please leave a reply below, or contact the Sopra Steria Digital Practice.

Solvency II – a day well spent

Last Thursday I had the pleasure of attending the Insurance ERM conference “Data for ERM & Solvency II“. The focus of the day was firmly on data and its importance in the risk management of insurers, something of a personal hobby horse of mine, now that I’ve spent the last 18 years of my working life on that very topic!

It was particularly pleasing to find that many of the insurers attending the event were looking beyond the regulatory compliance aspects of data management and saw the governance and maintenance of their own data as key to the success of their organisations in the digital age. David Lodge (Allianz) gave an excellent presentation on taking a pragmatic approach to implementing a Data Governance framework. A quote he attributed to his CEO explained that their organisation only had two unique assets “people and data”. It’s worth taking a moment to consider to what extent your business strategy is aligned to leveraging your own unique corporate assets, which I’d argue as a minimum should include those two.

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Sopra Steria’s Slaven at Data for ERM & Solvency II 2015

My colleague Slaven (pictured) proved a big hit during the coffee breaks and not only on account of the bowls of Haribo at our table but also his demonstration of our fully featured software solution for the last mile of Pillar 3 – SOLVARA-QRT, which will be used by over 250 insurers to get their Solvency II ducks in a row.

Later in the day I enjoyed the panel discussion with Richard Charlton (Phoenix Group) and Dominic Rau (Swiss Re) who highlighted the challenges of coping with both the variety of data required by an ‘internal model’ and also the subsequent maintenance of robust and detailed documentation of that model.  The “simple” logistics of maintaining and operating an internal model have too often only been considered in Solvency II programmes as an afterthought. The initial rush to implement exciting and exotic new algorithms has understandably been a key focus though, ultimately, the BAU success of an internal model is tied to its usability.

Recently we have helped a number of our clients implement data and knowledge management solutions to ease the headache of model updates and meet the requirements of the ‘use test’.

The conference closed with an insightful presentation delivered by Peter Telford (Legal & General) on the division of data management responsibilities between the first, second and third lines, but not before he’d won our prize draw for an iPad Air 2!

Thanks to all at Insurance ERM for organising a very entertaining and informative conference on what can be something of a dry topic.

What are your thoughts about data and its importance in the risk management of insurers? Leave a reply below or contact me by email.

Changing the conversation from Big Data to insight advantage

With Big Data once again we in the IT industry are falling into the same old trap of talking about inputs (volume, velocity, variety and veracity) and technology (Hadoop, Spark) rather than the desired outcomes. No wonder then that analyst groups are reporting that only a tiny fraction of Big Data proofs of concept are being industrialised and put into production.

On one level this is understandable – talking about outcomes can seem a little dry.  Highlighting the potential for revenue gains or cost savings or reducing risk (of future costs or revenue losses); or indeed the underlying elements – such as operational excellence or an enhanced customer experience – that will deliver those financial gains can seem as if the same old story is being recycled. Consequently it is much more exciting to talk about what is new, which is why the technology always seems so exciting.

But this time there is a difference. We live in the information age and work in the knowledge economy. Insight is the lubricant of both and the most sustainable advantage any business can have is better insight than its competitors. And by better I mean in breadth, depth, accuracy and timeliness.

The good thing about Big Data is that data – the raw material for insight – is in vogue when for ages it has just been seen as digital exhaust. But to make the most of the transformational opportunity that is available, we need to steer the conversation away from Big Data to what it enables, strategically. We need to use the excitement about unstructured data and the internet of things to seed the concept of insight advantage in commercial consciousness.

I believe there are six steps to achieving insight advantage. Read my article outlining those steps – the first in a series of pieces that will be published over the next couple of months.

#InsightAdvantage

IoE: the ultimate digital transformation benefits accelerator?

IoE – Internet of Everything (a term defined by Cisco) – is where networked sensors, data, processes and people combine to replicate the five human senses to deliver customer and business services intelligently. It’s an exciting approach to digital transformation that has already delivered some fantastic outcomes – like heating fuel efficiency, telematics-driven car insurance and smarter cities.

But what is the potential for IoE as a tool to measure the tangible and intangible benefits of digital transformation across on-line and off-line sales channels – simultaneously, instantly – to deliver competitive advantage?

Digital transformation approaches, such as the user-centric Agile design of on-line sales channels, have already radically disrupted traditional methods of benefits realisation like payback, where value is based on the forecast time it takes a proposed change to recover the costs of its investment. This is because Agile applies continuous user feedback to drive the rapid, iterative improvement of a product or service. Consequently, an outcome such as payback may be realised quickly and cumulatively over a series of releases rather than as a long-term fixed event.

Furthermore, this approach enables the explicit linking of hard financial outcomes like payback to soft, intangible benefits like the intrinsic value of a personalised user experience. This is because these enhancements successfully deliver increased sales revenue by responding effectively to individual customer needs based on a range of instantly available data like user testing, marketing feedback and social media trends.

A key factor in the success of this approach is that an on-line sales channel is a highly controllable environment versus other channels like stores or call centres – all customers have to engage through the same small number of portals (or platforms) making the process of collecting data and responding personally less problematic than these off-line channels that require individual physical interactions in different, variable environments.

However, IoE could provide the tools to simultaneously, instantly measure the off-line customer or employee experience in ways that are comparable, aligned to on-line channel measurements. This (big?) data would then drive the user-centric Agile design of a truly seamless, responsive onmichannel experience (and consequently enable the acceleration of linked hard and soft digital transformation benefits).   Here are some ideas…

  • Sight: is customer in-store browsing (across potentially hundreds of locations) materially different to on-line behaviour during the same day? What benefits are realised when retail stores implement rapid changes to their physical layouts that match on-line channel enhancements simultaneously?
  • Hearing: how are thousands of customers reacting in store and on the phone about a product that’s receiving adverse social media reaction that started trending an hour ago? Does it align to on-line feedback? Can this collective insight be used to enable the right social media response across all channels to defuse the issue?
  • Taste: does a food product taste the same across hundreds of stores in a given day? What is the variation of quality of this product when it’s provisioned by different suppliers across different geographies? How can this real-time quality data drive consistent performance and the right pricing from multiple suppliers?
  • Touch: what impact does local temperature have on customer mood and employee sales activity? If there is a change in the weather should employees in stores or call centres be immediately directed to behave differently to help personalise off-line customer engagement? How could this also inform enhancements to the on-line user experience at the same time?
  • Smell: do all stores “smell” the same during the same day? How does this environmental factor impact customer behaviour? Is there a way of connecting/associating products with “positive” smells with the on-line user experience (for example, the use of colours that may carry the same connotations)?

If you would like to find out more about how Digital Transformation can benefit your business please leave a reply below, or contact the Sopra Steria Digital Practice.