2020: The Product Owner C-Suite?

A key source of competitive advantage for digital disruptors is their ability to effectively apply Agile ways of working to deliver increasingly responsive, personalised marketing offerings. Such success has triggered a wide debate about the suitability of the “traditional C-suite” to strategically lead and shape these new forms of organisational capability.

This can be evidenced by the emerging significance of the Chief Digital Officer (CDO) as a key leadership role, the proposed re-invention of an organisation’s lead technologist as a Chief Internet of Things (IoT) Officer or even formally embedding continuous improvement in C-suite by hiring a Chief Process and Innovation Officer.

Although the maturity of these roles varies considerably (most large organisations in North America are expected to have a CDO in place within the next five years for example); they all share the same concept of C-suite defining and owning integrated capabilities that directly serve customers – something arguably not possible using its conventional functional silo structure of Finance, Marketing, Operations, HR etc.

This notion of the “Product Owner C-suite” is reflective of the disruptor’s approach to market; the use of Agile to remove barriers between senior management and sources of competitive advantage.

So what are the potential benefits of a Product Owner C-suite for an organisation? Here are some ideas…

Improved customer experience: By focusing C-suite accountability and responsibility directly on the performance and innovation of front-end products and services; frontline employees should be empowered to deliver a consistent, quality service to all customers.

Enhanced innovation/balanced risk: An iterative approach to continuous improvement, based on the rapid sharing of customer feedback between strategy and delivery teams, can enable these organisational stakeholders to adopt a more collaborative open approach to innovation strengthened by a balanced, informed appetite for shared risk.

Increased asset liquidity: Because a C-suite Product Owner has clearly defined ownership of an organisation’s resources and capabilities; he or she can make timely decisions about how these assets should be provisioned and managed – strategic decisions to procure or sell assets can potentially be made at tactical speed to drive cost optimisation.

Unique organisational learning: Although it would need to be sensitively managed; C-suite’s ability to use feedback and insights gained from applying the Agile approach “fail fast, fail often” to inform its decision making and delivery could be a source of considerable competitive advantage – a context specific, people-led learning process that competitors can’t directly imitate.

Integrated employee advocacy: C-suite can use the Product Owner role as a platform to positively promote its on-going commitment and passion to its organisation’s brand daily using marketing and social media channels. Not only does this form of top-down employee advocacy drive customer engagement, it can also intrinsically motivate employee performance.

If you would like more information about how Agile Transformation can benefit your organisation please contact the Sopra Steria Digital Practice.

What will be disrupting our world in the next 3 – 5 years?

In 2015, we used this blog forum to talk about how our future digital business world is being shaped by some key technologies, what impact they are having and the resulting societal challenges they are bringing about. You may have listened to the podcasts from ‘Aurora’, Sopra Steria’s horizon scanning team that discussed digital automation and human augmentation.

In 2016, we are broadening our research and focusing on three areas of disruptive technology and the effect they have on us as individuals, the world of work and the planet as a whole. We are even more fascinated by where these stories interconnect, as shown on the matrix below:

(See end for text description of this image
Aurora horizon scanning: our six areas of research in 2016

Listen to our first podcast of 2016 where we describe the approach for our research and an insight into areas that we are interested in – and getting excited about!

We are hoping to include guest speakers for our future podcasts, so let us know your ideas for them and thoughts about our areas of research for 2016.

Leave a reply below or contact us by email.

Don’t forget to follow the team on Twitter:

@timdifford
@richpotter_
@ben_innovates

And enjoy our Flipboard magazine on iOS, Android and Windows devices.


Description of Aurora’s six areas of research in 2016

  1. The digital human: interacting with services and each other through ubiquitous devices and data-driven experiences
  2. The organic enterprise: flexible, distributed, collaborative and networked organisations
  3. The connected planet: a crowded, ageing, more connected and fluid world
  4. Intelligent insight and automation: the increase in the application of prescriptive analytics and automation to augment or displace human activity
  5. Ubiquitous interaction: the growth of sensing and interface technologies that make interactions between humans and computers more fluid, intuitive and pervasive
  6. Distributed disruption: the growth of decentralised processes enabled by the adoption of technologies which assure and automate security and trust

 

The Liquid Big Data Platform – a digital business model for all organisations?

A Liquid Big Data Platform uses cloud technology and agile ways of working to enable organisations to share and analyse large volumes of data together for their mutual benefit.

If this model is scaled to a global level where any organisation (both large and small) anywhere in the world could use it collaboratively, what new business models could potentially emerge?

Here are some ideas…

Accelerated design advantage

Many organisations are already exploiting Big Data driven Machine Learning to improve their services in real time (such as search engine optimisation, medical diagnosis and fraud detection).

In the so-called “arms race”, big name tech, automotive and pharmaceutical companies are reportedly spending billions of dollars annually to realise their own IP in this area of Artificial Intelligence. A potential strategic implication is that these first movers will create barriers of entry that prevent other competitors (including small or medium sized enterprises) using AI as a disruptive source of rapid, responsive service design and organisational agility.

A global Liquid Big Data Platform could enable a form of co-opetition between these competitors to realise shared Machine Learning capabilities as a source of competitive advantage that would be unfeasible using their own limited resources. Also, by sharing with each other data or insights about their customers or services could lead to forms of innovation first movers can’t deliver in their silo positions.

Public sector power house

In the UK, health and social care organisations are exploring ways to share Big Data collaboratively to deliver better outcomes for their service users and wider society. A key technical challenge they face is interoperability – the ability of different systems to talk to each other effectively – as their data is often on different legacy networks and applications arguably not originally designed for such a cross-boundary approach.

A cloud-based Liquid Big Data Platform could enable these organisations to overcome these technical barriers to focus on the real value of this business model – joined up preventative and reactive care delivery. Also, if this platform is scalable it could enable organisations with the right analytical capabilities to efficiently power such services in other countries – global collaboration as a source of public service improvement.

Global cost optimiser

Many organisations are migrating their IT assets to cloud to enable cost savings and increased market responsiveness. This includes applications, data and other digital assets that are the source of their competitive advantage. For example, many digital disruptors exploit cloud capabilities to create platforms for services across different countries or the emergence of government transactional services on one shared platform.

An agile Liquid Big Data Platform could continually optimise such benefits by seamlessly moving these assets to different geographies or markets that offer the lowest costs and best support.  For example it could be continually transferring hosting services to different countries with the most favourable exchange rates or where there are higher skilled technical development resources.

If you would like more information about how Big Data can benefit your organisation please contact the Sopra Steria Digital Practice.

What digital transformation can learn from the Hollywood Studio System

The past still matters in our digital age

If anything, we should be learning as much as possible from the industries of yesteryear to understand how they used new ways of working and technology to drive competitive advantage.

One example that provides such insight is the so called “Studio System”, where major Hollywood studios dominated the North American film industry during the first half of the last century. The ways they achieved this and how this “Golden Age” came to an end could help shape an organisation’s competitive strategy today. Here are some ideas…

Value chain dominance

The major film studios owned or controlled the production, distribution and exhibition of films in North America during this period. They achieved this vertical integration of their value chains by effectively combining mass film making technology with a production line approach to content creation.  This meant they could lever significant economies of scale to control costs end-to-end to deliver sustained profitability.

However, their competitive advantage was contingent upon them being able to maintain a monopolistic position with limited government intervention. This led to a federal antitrust suit that forced these studios to give up control of film distribution in the late Forties – effectively ending their monopoly of the North American market.

Today we can see examples of companies being scrutinised about how they leverage digital capabilities to exert ownership or control over value chains. For example, Internet search engine providers have recently been challenged by the European Union about alleged anti-competitive behaviour in the way they handle product search results.  They also find themselves subject to other forms of government intervention relating to their collection of personal user data.

The drive for value chain dominance is set to continue with the expected explosion of Internet of Things (IoT) predicted for 2016. This technology potentially enables a company to capture and use data solely to control any aspect of the customer experience end to end. Consequently to mitigate the risks of government intervention, such a company may wish to embrace game theory approaches such as “coopetition” – collaboration with competitors to deliver IoT services in mutually beneficial ways – to avoid being perceived as monopolistic.

The captive audience

At the height of the “Studio System” era, collectively the major film studios were producing over five hundred feature films a year. Such production at scale was essential in meeting audiences’ thirst for new content (especially given they had limited choice for entertainment apart from studio-controlled cinemas). But such volume of throughput made it difficult for the studios to maintain consistent quality – A grade pictures would often be exhibited to audiences with lower quality budget “B movies” to help drive sales of both.

This cost focus, non-differentiated approach to producing high volume content became a key strategic issue for the majors as the popularity of television surged in the Fifties.  Audiences now had more entertainment options and became increasingly discretionary about their viewing habits.  Television was a “disruptor” – it was materially cheaper to produce quality TV content (and easier to distribute) than film. The majors now faced an unforeseen challenge that exposed their films to materially greater risks of being financial flops as audience demand for higher quality content rose and their switching costs to this rival media channel was virtually nil. The “Studio System” would never recover from the impact of television.

Many of today’s companies face a similar challenge – the risk of competitors stealing customers by using disruptive technology to lower switching costs while simultaneously trying to exploit the same approach themselves to cost effectively deliver quality products or services to sustain market share.  We can see this in the once monopolistic Telco industry, where 3rd party digital-enabled video, voice and text messaging data service apps have arguably decimated incumbents’ revenue from their own telecommunication services.  As a result many existing players are aggressively adopting Agile ways of working to diversify into new digital markets (from app development to over-the-top content).

Is the effective adoption (and adaption) of Agile by companies essential to them delivering as the disruptor and market incumbent simultaneously to drive profitability?

The talent advantage

Many quality actors (or “bankable stars”), directors and writers were contracted to work only for specific film studios during the “Studio System” era.  Effectively a barrier of entry, such a move enabled a major to exploit (or sweat) these assets to their full commercial potential with no risk of them being poached by competitors.

But as the majors lost their control over distribution and the competitive pressure of television grew, these assets increasingly became their main source of differentiation.  Unsurprisingly “the talent” themselves exploited this position through demanding higher salaries and a profit share from their own pictures. Such a move impacted the majors’ ability to turn a profit, further contributing to the demise of the “Studio System” and the emergence of new business models for the North American film industry.

Today a lack of digital talent is a major risk for many companies – with notable examples being the limited labour market supply of experienced DevOps, Data Scientists, Agile Coaches and User Experience Designers. This highlights the critical requirement for organisations to adopt a resource-based view on digital strategy to help grow their existing people capabilities and leverage external market opportunities to pro-actively address skills gaps.

Although such resources are perhaps not “Hollywood Stars”, the scarcity of such skilled talent can mean they can be relatively expensive resources to hire and retain. That’s why it’s essential for an organisation to have an effective talent management function to manage these cost challenges and develop capabilities in-house to reduce long-term dependency on external labour supply. Without such an approach, a company could face spiralling wages not dissimilar in impact to the effect felt by the majors of the “Studio System” era.

If you would like more information about how Digital Transformation can benefit your organisation please contact the Sopra Steria Digital Practice.

Digital: the new competitive advantage

Companies across different sectors are searching for the right ways to exploit digital ways of working and technology to sustain and grow their profitability.

But is the key to maximising the strategic potential of digital actually about subverting this traditional view of company performance? Here are some ideas…

Digital as a market transformer

Amazon has never been about short term profitability – in fact despite its massive revenue growth (reportedly up 21% to $89.9 billion in 2014) over the last twenty years its profits have remained inconsistent. Rather, it’s pursued a diversification strategy by using emerging technologies to penetrate and innovate different markets (including on-line retailing, cloud hosting and media distribution).

This strategic application of digital-enabled market transformation is creating new forms of customer demand and supply chain processes that few competitors can effectively respond to.

Furthermore, not only did Amazon legitimise on-line retailing as a viable sales channel, its focus on revenue/market share growth has empowered it to innovate the whole end-to-end customer experience (to the point where even the rapid delivery of goods using drones looks feasible).

As a result some competitors are adopting or adapting elements of this approach. For example, on-line supermarket Ocado has invested in digital technology to automate its supply chain and use these savings to drive its price competitiveness. Argos is also making an investment in transforming the physical retail experience by trialling integrated stores with Sainbury’s and is now offering same day home delivery for goods ordered on-line.

Arguably, had Amazon primarily pursued a strategy of profitability (over investing in growth through diversification) it would have severely limited the competitive advantage offered to it by digital.

Digital as an asset

Cross platform mobile messaging service WhatsApp was bought by Facebook for $16 billion last year. At first glance it’s not entirely clear how Facebook will make a sufficient return on this massive investment given market saturation of such applications and its limited potential for short-term monetisation (its product-focused approach means it doesn’t carry ads; revenue is generated by an $1 annual subscription fee against low operating costs).

However, there is so much more to Facebook’s acquisition of WhatsApp than exploiting its short-term profitability – Facebook now has complete control of this rapidly growing digital-enabled asset. At time of writing, WhatsApp is the world’s most popular messaging app with an estimated 900 million global user base with an additional 1 million new users registering each month.

Competitors have no direct access to this huge social media channel and the customer behaviour data it generates – Facebook is using strategic asset acquisition to create an unbeatable barrier of entry and opportunities for future profitable growth.

Digital as a public service 

Google offers a suite of cloud-based products and services, many free at point of use. Accepting there are usage limits in place (for example, high traffic websites incur fees for using Google Maps APIs) – it can be argued they provide benefits to people that cannot feasibly be delivered directly by the public sector. Consider the educational value of Google Earth for instance – a public sector organisation would probably face a range of political, economic and technology challenges if it tried to implement this tool by itself.

This approach to digital-enabled public services blurs the corporate and community boundaries of Google’s brand; fostering goodwill from its customers and employees alike (so driving demand for its advertising platforms and other paid services while intrinsically motivating employee performance). Google eschews the potential short time profitability of its products and services for altruistic reasons that ultimately confer greater competitive advantage.

If you would like more information about how digital transformation can benefit your organisation 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.

How to design digital services: imagine talking to your customers face to face?

Your customers have their own personal relationships with your organisation’s products or services. So how can you design the right digital services to deliver this personalised customer experience?

Although the hype of digital talks a lot about such personalisation, it is perhaps ironic that it encourages the use of such ways of working and technology to keep customers’ and employees’ physical interactions to a minimum.

But imagine if you were actually facing one of your customers right now; what questions would you ask them directly to help you deliver a delightful, memorable customer experience? And how could you use digital to respond to their answers?  Here are some indicative examples…

How do you feel about my brand?

How much does your customer actually like your brand? What are the reasons they selected to buy from you? Do their feelings, emotions about your brand align to you own and employees’ views? Such insight can help you assess the effectiveness of your social media strategy and engagement approach – is it effectively building, managing the right kind of relationship you personally want with your customers?

What things should I know about you before I serve you?

What information should an employee intuitively, instinctively know about an individual customer before they start serving them? What things shouldn’t they know or ask about? How can an employee genuinely surprise and delight a customer every time? This is an opportunity to consider how big data and analytics could be used by your employees to better understand your customers – how can you proactively, directly respond to an individual customer’s wants and needs without being intrusive?

How can I better serve you my products or services?

What way is easiest, quickest to satisfy your customer’s requirements? How confident are they that your employees are serving them in a safe, secure way? Does your customer feel special, unique or “just another transaction”? Understanding how and why your customers want to be served can drive effective user experience design – are you making your customers feel like they are valuable to you short and long term?

What other direct questions would you like to ask your customers to help realise effective digital services?  

For more information about Digital Service Design please contact the Sopra Steria Digital Practice.