The benefits of combining competitive and digital strategy together

As digital ways of working and technology continues to penetrate all sectors, organisations are faced with a range of strategic opportunities and threats impacting their competitive advantage (a key one being the potential impact of digital transformation on their non-current assets).

So what tools can organisations use to strategically respond to their rapidly changing competitive environment? Given the disruptive, unpredictable nature of digital it may feel like a completely new approach is required. But arguably the fundamentals of competitive strategy to identify, choose and implement strategic options to achieve differentiation and cost optimisation are still valid – the difference is how they should be applied in a digital context (for example using Porter’s Five Competitive Forces to analyse Digital Disruptors).  Here are some further examples:

Please note: these tools have strengths and weaknesses – there are no absolutes in strategy development. Their value comes from understanding, tailoring and selectively combining these imperfect approaches together to gain the right critical insight about digital and its impact on an organisation’s competitiveness.

Value chain analysis:  A model (defined by Michael Porter in the mid Eighties) that enables an organisation to identify the primary and supporting activities its business units perform to deliver its products or services. Such activities in isolation may have limited value but when combined become sources of competitive advantage.

This approach can be used to understand how an user centric Agile approach to digital transformation can positively impact an organisation’s operating model. This is because it identifies how using user experience design to make improvements to the “front end” customer experience can only deliver sustainable benefits if business unit activities effectively and efficiently support such change – the application of value chain analysis and user experience design as an integrated response to the challenges of competing digitally.

Resource based view: Popularised by Robert M. Grant in the early Nineties; this approach assesses how an organisation’s resources are sources of competitive advantage based on their fit to market needs and the ability of competitors to imitate or provide substitutes for them. Arguably organisations with high demand for their differentiated resources hold strong positions in a market.

Such an assessment can be used to understand how an organisation can maximise the competitive advantage of its greatest resources – its people – by empowering them to effectively adopt (and adapt) digital ways of working and technology. By applying the resource based view to inform talent development, organisational design and cultural values, an organisation can differentiate itself through its unique (i.e. difficult to imitate) people resources skilled in digital.

Balanced scorecard performance measurement: Developed in detail by Robert S. Kaplan and David P. Norton et al in the Nineties; it applies four different, interrelated organisational perspectives to measure strategic and operational performance:

If the right, well trained and motivated people (HR view) are doing the right things (operations view); customers are delighted (marketing view) and the organisation is profitable (finance view)

It provides a combined holistic view of an organisation’s strengths and weaknesses in delivering competitive advantage.

An organisation can use such perspectives to consider how using different digital ways of working and technology will impact its sources of competitive advantage. This could include how a Chief Digital Officer could potentially address challenges C-Suite may have about Digital Transformation.

If you would like more information about how competitive strategy tools can help your organisation maximise the benefits of digital transformation please contact the Sopra Steria Digital Practice.

Why I signed the Digital Inclusion Charter

Like so many others, I spent most of my commute this morning in the digital world – powered by the smartphone technology in my hand and the invisible tendrils of communication in the air all around us.

As I left the house, I remembered my still snoozing son was collecting an award at his school this morning so sent him a message of support and a request for excited updates later in the day.  A quick check of the transport network showed my train was on time, but I was not – so I picked up my walking pace to ensure I didn’t miss it.  Once on the train, a reminder prompted me to pay an outstanding bill – a few clicks, then done.  Leaving time to review my diary for the day, coordinate a weekend outing with a few friends via Facebook (clearly I’m getting old) and manage a quick scan of various  news-feeds all before the train pulled into London.  Whilst walking to catch my usual bus, my Fitbit app pings me – I am close to hitting my weekly step target but need to push – so I ditch the bus and decide to walk to the office instead!

Many of us will have our own variations on this kind of journey – each with different apps, activities and platforms supporting the engagements we choose – but all with the common thread that being ‘being connected’ is now a ubiquitous part of our daily lives.

Being connected feels great…

Being connected feels like the future…

Being connected empowers us to make more efficient use of our time and more informed choices…

… and of course it now drives our expectations.  When our retailers began offering online services, we expected our banks to.  And when they did, why not our insurers, our healthcare providers, our travel agents,  our schools?  Now we expect it everywhere, including our Public Services.

Millions of people interact with government every year. We pay our taxes and apply for tax credits. We look for jobs and make benefit claims. We need passports and driving licenses. Last year over 1.7 billion government transactions were completed at a cost of £7.1 billion and over three quarters of those transactions were completed online.

This is great news for those who are connected… BUT there are over 7 million adults in the UK who are not. Over 7 million adults defined as digitally excluded, primarily because of a lack of access to the internet.

7 million people. That’s why we’ve signed the Government’s Digital Inclusion Charter

There are digitally excluded people within all communities of the UK but older people and those that are economically disadvantaged are more likely to be so.  There are also 11 million adults in the UK who need some assistance to interact with government online.

The implications for government are enormous.  The estimated benefit to the UK economy of getting one million new people online (assuming 70% become regular internet users) is £1.5 billion. If we enabled the digitally excluded to change just one of the interactions that they have with government from a face-to-face or paper interaction to an online interaction the government would save £900 million a year.

The implications for society are equally significant.  Every consumer who is online saves on average £560 a year by shopping around and looking at deals.  The poorest families could save over £300 if they were online[4]. Children who do not have access to the internet are at a disadvantage – over a million children’s exam results will be on average a grade lower than their peers every year because they do not have internet access at home.

Severe implications. That’s why we’ve signed the Government’s Digital Inclusion Charter

In our day jobs at Sopra Steria we deliver technology and business services across the public sector trying to help government make all our lives better and safer.  Across both public and private sector,  we have great staff with valuable digital skills and an in-depth understanding of the needs of their many users in many walks of life. Underpinning that, sustainability has been a core part of our ethos in Sopra Steria for many years.

  • We actively support local communities with initiatives including working with local schools to support their technology education programmes, encouraging girls to consider careers in IT,  offering technology and business apprenticeships to local young people, supporting communities and charities through our annual Community Matters activities, and in India, helping improve the lives of over 66,000 children by giving them access to education – including IT education
  • We’ve cut our carbon emissions by 48% in 6 years, made all our Datacentre services CarbonNeutral® by default since 2013 and scored a perfect score of 100A in CDP Climate Change in both 2013 and 2014 – joining the CDP’s  ‘A List Report’ as a result
  • We are also an active member and sponsor of Digital Leaders in the UK and work with that community looking at all aspects of the Digital Transformation agenda including the challenges of digital exclusion

All of our experiences and initiatives have shown us the real difference people can make when they work together – the digital inclusion challenge cannot be solved by any single person or organisation alone, but I believe it can be solved by many people and organisations working together…

We must fix it together. That’s why we’ve signed the Government’s Digital Inclusion Charter

Are you signing the Digital Inclusion Charter? Leave a message below or contact me by email.

UN-tangling accessibility

On the occasion of 70th Anniversary of the United Nations, there has been an initiative to raise awareness about the importance of web accessibility. As a measure of immediate change, the organisation has started to improve all the UN websites.

Logo: accessibility guidelines for UN websites

UN Secretary-General Ban Ki Moon’s thought-provoking article stresses the importance of eliminating digital barriers. This also includes a brief but highly effective video highlighting the importance of accessibility and this notable line:

Accessible websites benefit all visitors, not just those with disabilities. On an accessible website, the user is put at the centre of the experience.

This is a lesser known fact about accessibility. Apart from the obvious advantages of creating an inclusive environment and increased market reach, accessibility enhances the overall user experience by improved clarity and structure. One of the hidden benefits is improved search engine rating (in fact Google essentially is like a blind person looking for information). But above all, it is all about acknowledging the diversity in the end user community, accepting the fact that we are all differently-abled due to many factors.

I’m passionate about User Experience (UX) – improving the digital experience for the user, particularly for the disabled users. So to learn about the scale at which this is being taken up by UN is very energizing. It is high time that this topic garners the attention it deserves. It is legally, ethically and commercially important make technology a level ground for those with disabilities. A live example of its benefits is the legendary scientist Stephen Hawking who uses various assistive technologies to express himself. What a loss it would be for the world to not provide that opportunity to participate!

Today’s IT service providers have to sit up and think what they are losing by not getting their act together in terms of accessibility. In fact, it can be considered a discrimination for a service provider to host an inaccessible website and hence be subjected to legal action. However, rather than fearing accessibility for such reasons, there is a strong case for businesses to consider improving web accessibility because of the positives it brings with it. There have been glorious examples of businesses reaping benefits by making their websites accessible. There have also been some infamous stories about those who have paid a price for disregarding this aspect.

To be fair, there have been some examples where organisations have put accessibility on the top of their list, particularly where a new system is being built. For example, during the development of GOV.UK portal (Government Digital Service), I am told that the delivery would not get progressed to the live environment unless there was a complete approval on the accessibility aspect of it. However such examples are far and few between. Sadly, most seem to have chosen to push it down their ‘to do’ list. In some cases it is seen as too significant an area of impact on development processes and hence not to be taken too lightly. i.e., hold a lot of discussions rather than take any action. Why do they do that I wonder?

Existing websites, old technologies, ongoing business, impact on BAU?

Accessibility is not easy to understand. You need to involve people with disabilities to fully realise the problems. How easy is it to engage people from that community in the software development process?

ROI: is there really an audience or are we just going through a lot of hassle for a small minority?

We need specialist companies to do justice to this topic; can we afford to get them on board?

Well, let us face it, all these factors are actually very real. I very much empathise with the businesses in the challenges involved around accessibility. It is a long way to achieve the utopian idea of fully accessible websites across board. But to me, the first step is not the implementation – it is to develop the will to support accessibility, to include it in the thought process, to talk about it in meetings, to encourage innovation around it, to consider investing in it. In my opinion, there usually is not enough research done before concluding that it is not for now, it is a topic to be taken up some day in the future.

This actually calls for a change of perception and practices, a real determination to make disabled users feel more welcome. There are some immediate measures a business could take up to reflect an inclusive line of thought. For example, carrying out an audit on the existing websites to understand the current issues is a good starting point. Implementing easy fixes sometimes does not call for a huge investment. Publishing an accessibility statement on the website is another recommendable measure, to acknowledge that there are known issues and to offer the users a way to report the issues they are facing. There could be other innovative, technical solutions to accessibility issues. There is a lot businesses could do, if there is a will of course.

We might want to take a cue from the construction industry. In today’s age, there perhaps would be no new building without a lift or a ramp. Even in existing buildings, there have been excellent examples of creating an accessible route with minimal impact to the structure. It is perhaps very natural for architects and engineers to factor it in by default. It is perhaps a matter of time before accessibility in IT attains a level of importance it gets in building constructions. But we IT professionals can make it happen sooner – for the sake of 15% of world’s population, for the sake of equality and human rights, or perhaps for the sake of our own old age!

And how do we do that? By learning more about it, by raising awareness, by talking to our customers about it, by trying our best to include it in our proposals / web designs / user interfacing programs / testing activities. It is our choice to be just an audience to this initiative started by the UN or to be an active part of it.

Please spread the word!

What are your thoughts on web accessibility? Leave a message below or contact me by email.

Fostering innovation in Government

Efficient, personalised public services require innovation to be part of everyday business. That requires an approach which incentivises and encourages learning, change and improvement but which does not crowd out local innovation with central direction. We know from the experience of working with government to deliver business process and technology transformation that a focus on outcomes is critical.

Innovation starts with a responsiveness to the public and to users. More and more, the public’s ideas, ambitions, aspirations and resources are the source of inspiration for how public services can change. We must help unlock a different kind of relationship between government and citizens. Choice and competition are important ingredients. But we must move beyond consultation to conversation and collaboration. The success of the Government Digital Service (GDS) and their digital transformation agenda is a relentless focus on users and their willingness to have a dialogue leading to change, rather than a culture of ‘we know best’.

Second, we know government is full of talented and passionate teams who are committed to radically improving the services they deliver. But processes and systems can sometimes prevent good ideas from taking root and spreading. Innovators at all levels of government – local leaders, service professionals and citizens themselves – need more support to flourish. In other blogs we have highlighted the work of our Digital User Experience team, that adopts and extends the standards set by Government, working to meet customer expectations by researching target markets, rapidly prototyping and helping civil servants to visualise ideas, create usable and intuitive designs and delivering multi-platform solutions.

Third, we have to make sure that government at the centre is supporting innovation. The UK must be the best place in the world to run an innovative public service. As budgets are squeezed, new approaches are even more vital to improve the efficiency and quality of services, tackle strategic challenges and build new kinds of services for a new global economy. Innovative approaches will be focused on addressing long-term challenges, such as the need to reduce re-offending and promote social cohesion. For example, we are working with private and third sector organisations to explore how digital and mobile technologies can promote nudge behaviour and promote self-help within the offender community.

Finally, changes in people’s expectations and knowledge, combined with technology are revolutionising the way people find solutions to problems and support each other. Much innovation in society is undertaken through new channels such as online communities. For example, hundreds of thousands of people share practical ideas through sites such as netmums.com or moneysavingexpert.com. These and other channels could enable the public to engage with government much more effectively. Government must move further from traditional one-way consultation to a genuine two-way conversation and collaboration with citizens. And better engagement is needed for service redesign, encouraging front-line public servants to come forward with their own ideas on how to cut waste and continually improve services, along the lines of ‘lean’ initiatives.

What are your thoughts? Leave a reply below or contact me by email.

Personal best

Our propensity for feeding internet services with personal data is exploding

In 2014 we made 2.4 million posts on Facebook, sent 204 million emails, sent 277,000 tweets and made 4 million searches on Google – every minute.

For users of the Ashley Madison extra-marital dating site, personal data was meant to be just that: personal. The recent hacking and exposure of data is an unfortunate example of how much private information we are willingly, and sometimes unknowingly, giving away about ourselves.

So what is personal data, and why is it so important?

To get an idea of scale we have to understand that not only are we talking about your search history, social media and emails which you knowingly generate, but also a vast amount of other data from your smartphone tracking your location and your medical history to your buying habits. The scale of this data is so huge that it’s recorded in terms of Exabytes – a unit of storage 1 billion times the size of a gigabyte (and, if written, contains 18 zeros).

For years businesses have been decidedly opaque in the value they extract from personal data.  What we are now seeing is that customers are becoming more aware of this data and its value. And this is leading to them being more protective and selective when giving it away and more concerned over the security and privacy surrounding their personal data.

In Europe the midata initiative is exploring this growing change by putting tools and processes in place for people to access their own data and understand the value that is holds. One early project has been brought together by midata and GoCompare for the financial services industry – who has used personal data to enhance the value of their products for a long time.

By understanding their customers’ spending and living habits they have been able to carefully select specific products and market them to the right customers with the right risk appetite. The GoCompare tool however lets consumers conduct the same kind of analysis on their spending data as banks, running this data through a catalogue of financial products to tell customers clearly and visually what the best product should be for them and exactly how much they could save, demonstrating the financial benefit and personalisation they can receive through access and control of their personal data.

The key to the future of personal data lies with a clear appreciation of its value. In the future people like you and I should have access to our own data and a full understanding of how sharing our data can benefit us. We should be able to personalise the amount of data that we are sharing, decide how it’s used and understand the level of security and risks that it brings. Whether you are engaging in a relationship you shouldn’t be or building your nest egg, you should know what you’re giving away and to what end.

So is the future of personal data ownership a bright one?

Personally, I think the data points that way.  The age of Big Data has already arrived, but the era of Small Data is yet to begin.

If you’re interested in this subject and want to join the conversation, leave a message below or contact me in the the Aurora team.

How disruptors use digital transformation to gain sustainable competitive advantage

Digital disruptors like Uber, Airbnb and TaskRabbit are using digital ways of working and technology to aggressively take B2C market share from both big and small companies alike.

Right now they look unstoppable – but how did they did achieve such a feat and what can other sectors (especially those in the B2B space) learn from this experience?

One way to understand their success is to consider how they challenged – and then used – “Porter’s Five Forces” to gain competitive advantage…

(It’s also worth noting that the “Five Forces Model” was developed by Michael Porter in the late Seventies – digital and business Strategy are two sides of the same coin)

1. Threat of new entrants:  Digital disruptors have arguably penetrated markets where barriers of entry are relatively low for smaller companies (e.g. taxi hire, rental accommodation, home repairs, etc) but industrialisation of such services at a global level was previously thought unfeasible.

Yet these disruptors have succeeded at this level not by overcoming such barriers (like start-up/sunk costs, licences/rights acquisition and customer loyalty) but by mostly “subverting” them to deliver services at competitive prices.

For example; Uber provides a platform for customers to contact directly a driver located nearby – effectively eliminating (or replacing?) the established “middleman” taxi firm or other service provider competing in that area.

Uber doesn’t have to carry the costs of running a fleet of taxis, the majority of any local laws or regulations remain the risk of the driver/supplier, and switching costs for customers to use its service are virtually nil.  These barriers of entry have now become a threat to existing taxi firms because they impact their ability to compete with Uber on price and customer convenience.

2. Threat of substitute products or services: A challenge levelled at disruptors is that their commercial model could be easily imitated by other digital service providers.  But this is where they exploit first-mover advantage – they have already created large scale services used by millions of people; a customer could find rental accommodation using a new, different service for their long trip away to an unknown place but why bother when Airbnb is an existing reliable brand they trust?

3 & 4. Bargaining power of customers/buyers and suppliers: The disruptor’s role is to provide a digital service that brings buyers and suppliers together at the right price – TaskRabbit is a marketplace that gives customers and contractors access to the same information (including requested service, desired price and ranked supplier performance) to enable an informed purchasing decision for trade services. TaskRabbit’s success comes from effectively using buyer and supplier bargaining power to drive better collaboration between customers and contractors rather than itself being challenged by such competitive forces.

5. Intensity of competitive rivalry:  A digital disruptor turns competitive rivalry on its head by making it a lot harder for incumbent players to strategically identify, assess and respond to the threats they pose.  Uber, Airbnb and TaskRabbit don’t buy or supply the services in the sectors they compete in – they are not direct competitors in a traditional sense.  Rather, they are convenient intermediaries that offer customers faster, smarter ways to buy from suppliers.  Their strength also comes from them using their established global brands at a local level in markets where switching costs are low for customers.

What could this mean for B2B service providers?  It should be noted that the disruptors explored here compete in providing B2C high volume, low risk “simple” services. Conversely B2B providers supply high volume, high risk “complex” services requiring them to have a deep historical understanding of the sectors they serve. Such entrenched capabilities give these existing players the strategic opportunity to combine their skills and experience with digital to create new services disruptors can’t imitate.

What strategic risks and opportunities do you think organisations face as digital continues to penetrate all sectors? Please share your feedback below.

For more information about digital transformation please contact the Sopra Steria Digital Practice.

Mind the GaaP – shared technology platforms and data analytics

The outcome of the government’s digital strategy has been higher adoption of on-line services and the introduction of new technologies – including social media, mobility, analytics and cloud computing. But as government delivers services that are simpler, clearer and faster to use it also creates increased expectations.

First, citizens demand services that are often universal but also reflect the levels of personalisation they get as private consumers. But government operates as a series of silos. Services, processes and technology reflect inward-looking departmental needs.

Second, the public finances demand that government boost productivity using innovative digital technologies. The government saved £18.6 billion in 2014-15 through various reform projects. But the savings attributable to digital transformation are significant but relatively small (£391m).

In an environment of increasing citizen demands and top-down cost reductions, how can technology help government be more responsive but at least cost?

Government as a Platform might reduce unnecessary bureaucracy and costs

Two years ago the Government Digital Service (GDS) set out to transform twenty-five major public services. Twenty digital ‘exemplars’ are now publicly accessible. GDS continues to work with departments to build these and other services in agile and iterative ways.

The next phase of the government’s strategy is ‘Government as a Platform’ (GaaP). This is the sharing of the core infrastructure of systems, technology and processes across departments. GOV.UK Verify is a good example. Rather than having to prove who you are to every government department, Verify uses certified companies (and public and private sector data) to confirm a person’s identify once and for all. Other potential platforms are payment processing, case management and appointment bookings – common services used all around government.

GaaP offers a number of potential benefits. First, enhanced user satisfaction by eliminating the need for a citizen to input unnecessary data and information. Second, cost savings by eliminating administrative procedures and processes (and associated transactions) that are not needed. Third, wider economic benefits by making the data open, as others who are unrelated to government can create new businesses that complement public services. Forth, citizens or community groups might also use this data to hold government to account.

Tailored and automated services offer even greatest benefits

In the private sector an ability to share systems and data through technology is leading to a more personalised service. A user is in full control of navigating, choosing and terminating a set of offers. Back-office integration enables the private sector to offer proactive, enhanced and efficient services.

How might this approach be applied in the public sector? At its most simple, the government might pre-fill data in an application form that it already possesses, based on taxation or benefit entitlements, and notify the citizen via email or text of any changes. But more significant improvements to the quality and cost of public services are available through the analysis of this data (a data platform), leading to earlier and more focused interventions.

For example, approximately 40% of hospital admissions in England are unplanned admissions. They are a problem for hospitals because they are costly and disruptive and increase waiting times. Vulnerable patients with complex physical or mental health needs tend to be the biggest problem.

The detailed analysis of historic patient level data, identification of patterns and predictive risk modelling can predict and identify ‘at risk’ individuals. Unplanned admissions can then be avoided through changes to the hospital discharge process and better co-ordination of care.

Taking it to the next level, ICT-enabled simulation and decision-support tools are also able to analyse large and complex socio-economic data sets on deprivation, crime, health, education, etc. This deeper analysis can inform early intervention and screening programmes, with resources focused on communities and individuals who most need them.

Costs can be avoided by highlighting incidences of unnecessary care or delays in treatment. And by making evidence-based information about options, outcomes and uncertainties available, patients are also in a better position to make informed choices about the treatments available to them.

This proactive approach may not be appropriate for all types of service. It will, for example, depend on access to necessary data and protection and legal access. But, when applied to high-risk and often disproportionately high cost individuals, the savings potentially far outweigh the up-front costs of investment.

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