This episode of IT Leadership Insights is the first of three in our miniseries on digital transformation. In this video and podcast, our expert, Janne Marie Van Vlastuin, explains how organisations should prepare for digital transformation.
Why do digital transformation? Where to start? What are the typical mistakes when preparing for it? How much of the digital is there in digital transformation? – these are just some of the questions that Janne Marie van Vlastuin – an expert in commercial business transformation – will answer.
The next two episodes of this miniseries will cover doing digital transformation right and explore the topic of what happens after a transformation project has finished.
Janne Marie van Vlastuin is the Co-founder of 10DED who support organisations in humanising technology, both ways. They do this by helping leaders and organisations transform in becoming ready for the digital era in a pragmatic and understandable way. Janne Marie has a unique combination of hands-on experience as a leader in Sales, Marketing, Service, IT and HR, combined with extensive knowledge and experience of best practices, change management and various methodologies. This enables her to speak all the languages needed to get organisations moving and providing them with the right tools and frameworks in the right way. She is different, but this has made her a successful expert in transformational programs within the commercial domain. Janne Marie was nominated as the Most Innovative Leader 2017 by the CIO magazine in the Netherlands.
Jaroslaw Granat is Future Processing’s Head of Client Engagement, working to ensure the highest level of services for the company’s clients. He is a graduate of Computer Sciences and Psychology in Business and has worked in IT for the last 10 years.
The transcript of the episode
Jarosław Granat (JG): Hello and welcome to IT Leadership Insights by Future Processing. My name is Jarosław Granat and today we are going to talk about digital transformation. As we know, this is a massive and complex topic, and we could easily talk about it for several hours; we won’t do that, but we will talk about it in this episode and next two episodes, especially because we’ve got such a brilliant and experienced guest with us, who is Janne Marie van Vlastuin, who is a commercial business transformation consultant. Hello.
Janne Marie van Vlastuin (JMvV): Hi. Thank you.
JG: Janne Marie, could you please tell us a little bit about your experience and your background?
JMvV: Yeah, so I am an organisational scientist, that’s what I studied for. During my study, I wanted to understand technology because all change is driven by technology and has to land in technology. So I can design systems, change organisations, I can sell, do marketing; so at the end, put the whole package together and that’s what I’ve been doing for the past 12 years.
JG: OK, perfect. So, thank you for joining us here. Janne Marie, over the last decade or so I’ve been talking with our clients, our business partners, and they all – the top point of the agenda of that people is digital transformation, and as far as I understand, everyone has their own definition, and sometimes I can even feel that it’s like a buzzword or something, because everyone’s talking about it, so I as a CIO need to talk about it as well. So, for the start, I would like to know what’s your definition of digital transformation?
JMvV: My definition of digital transformation is actually enabling the company to keep up with the pace with what is happening in the outside. We are currently in the second large social revolution – the first one was going from hunter-gatherer into farming, where we changed our lives completely – and right now we are changing the way we are interacting, we are communicating, we are building relationships, and you have to be ready for that.
So we are not physically coming together anymore, but still the relationships need to be built, not only externally, but also internally, and you have to use technology. And you have to see the value of what technology is really bringing your company: how you can be more efficient, effective, and also be able to sustain. So that is basically my definition of digital transformation.
JG: You’re talking about the society but also the technology.
JG: Would you be able to say how much of the digital is there in the digital transformation?
JMvV: Well, it’s my definition, again, is not about the digital, it’s about the data.
So actually becoming smart enough as a company to understand who you’re dealing with, so that’s data; and, in order to do so, I think 95% is about people: understanding values, understanding structures, understanding relationships, and 5% is really about IT technology and then translating it to solutions, so…
JG: So, it’s just, like, a solution, IT is like a final solution –
JMvV:Yeah, it’s a solution, and it’s about making use – maximum use – of the capabilities that are brought in currently by your partners. So, can I give an example?
JG: Please do.
JMvV: What I like to compare it with the steam machine, steam engine. When you had the steam engine, in the old days, centrally propelling all your production lines was changed into electric engine and those who changed the electric – not changed the steam engine to the electric engine, but thought, “Hmm, I can use an electric engine on every part of my line, so that whenever something shuts down, I can still produce.” And this is the same with the digital transformation: before it was the tool that was brought in, it was already bringing value.
Right now you have to think about how you can maximise the value and what kind of tools you need in order to become and stay relevant. So it’s a different way of thinking, it’s – this is not the replica, the change of the steam engine into electric machine, this is not the change of having certain CRM system into a new one, no, it’s really about how you are going to reorganise or restructure your organisation and way of working.
JG: OK, because I’ve read that it’s a must for companies, but I’m thinking about the reasons that are behind it, why do companies invest so much money, because, let’s face it, it’s a huge amount of money invested in the digital transformation programs.
So, what are the reasons?
JMvV: Yeah, but imagine, if you look at 2030, Gartner predicted that 80% of all communications with the outside world with your customers will be done via AI.
OK, right now we’re in 2019, so that’s 11 years from now. Look at your organisation, how many people are still supporting the customer communications, and look at what all needs to be done in order to do so, because you have to give people personalised experience to have a proper relationship with them.
So it’s not a matter of whether you should innovate to stay relevant, because our past has shown time over time that if you look at the curve of innovation, that new companies come, and others die; if you do not want to die, you have to stay relevant and really see what’s out there.
And become smart because this is what is needed; world’s becoming more complex, so you have to be smarter as a company.
JG: So it’s all about being competitive, right?
JMvV: Yeah, and remaining relevant.
JG: So, let’s imagine, because this episode is about preparing for that, so if I were a C-executive, and meet you, what would you ask in the beginning? Because I think I have a problem, or I have a need, but I do not know where to start, what to ask, what to do, so what would you recommend or what questions would you ask?
JMvV: Are you looking for the symptoms, for example, of how you can get awareness also on the business side?
JG: Let’s say that I – so many people think about it and talk about it, and I have a feeling that I need to do something in my company as well because maybe we are lagging behind, maybe there is something to improve, et cetera, but I do not know where to start.
JMvV: Well, actually, if you look at having owners in your business, for example, domain owners, functional owners, or owners of data; if you have not defined that yet, you could actually say that your data, the chances that your data is clean and also clearly put in the right sources, that you have clear masters and that you are ready to innovate whatever you want to on top of that? That you are not there.
JG: But it’s typical, isn’t it?
JMvV: Yeah. Yeah, but that really is something that is happening today in companies. If you, for example, have a big gap between your strategy, what you want to measure and with one push on your dashboard get the right report out and what you actually get, that’s also a signal that even if you are not able and retrospective to create proper insights, how are you going towards predictive, and then predictive-AI, machine-learning? You are still not ready on the fundamentals. So, if you look, that’s really nice, there’s this curve, it’s called the Kondratiev curve, that’s the latest innovation curve that goes from the 1980s to 2012, that’s when it ended, so that’s the economical wave, and you know what that curve’s named? That’s the curve of information technology.
So basically, in theory, if you want to be ready for the new one, so that’s the one of AI, you have those basics fixed. So, if you don’t have that fixed, you better start worrying, because it might be that you’re already too late.
JG: From your experience, how many companies are not ready today?
JMvV: So many.
JG: I have the same feeling.
JMvV: Yeah. So many, and that’s the thing that’s also very nice, is that that is why the company lifespan has shortened from 30-I think-to 15, to 5, and that is because the world is changing so fast, if you, as a company, are not able to react and respond, and be as flexible as the world is changing, you die.
We’ve seen that: large companies, that have been existing for more than 100 years, they’re not here anymore, especially in retail, it’s under pressure, so they have to find a different kind of value. And so, this is why digital transformation is not about putting the systems in, it’s about understanding what is happening in the outside world, getting into the complexity, being able to predict what’s going to happen, to remain relevant.
JG: I was thinking about the common mistakes that are done during this preparation phase, it seems like, for me, like this is one of the, might be one of the common mistake when you think that you are ready and invest in something, but you have to do some fundamentals. Is that right?
JMvV: Yeah, so yeah. So the fundamentals is really getting governance and ownership in place. Decide first-hand, first, before you start: who can decide on which kind of topic?
So that you have a supplier, internal supplier, have the internal supplier role, have the business manager to really take the responsibility and take decisions on his business, the policy, sometimes policies are so full of legacy that there’s no value coming out of it, especially in pricing, it’s making it really complex where this is not necessary, so decisions need to be taken there, as well, to be able to go back to the core of how you want to do business. So, then, second of all, if you have that in place, then you have to look for a project where you can start creating big value at the low risk. So, take a part of the organisation which is currently feeling a sense of urgency to get them to come with you, and you do not need to have the whole organisation behind you because nobody likes change, only the ones that are screaming for it. So, find the ones that are screaming for it, and show them the value, if you do it right, if you start with golden record definition first, if you start with the ownership, if you start with not talking in tools, but looking at what kind of company do you want to be? What kind of department do you want to be? How do you want to operate? And then look for the solutions that fit that, and not take a solution and mutilate it to something else where it was not originally designed for.
Because that is usually the way it is being done. So, and then, when you have your success? Then all of a sudden, people see the magic of data.
And also, even after six months, maybe, see how you can even predict, “OK, if I do this investment there, it’s 10% more turnover, if I do it there, it’s six, hmm, maybe I should invest it there first.” So, and then they see, “Wow, this is really helping us in becoming better, and easier, less frustrating, because now we can cooperate. We got the same view.” That’s really, yeah. That’s where I should start.
JG: How do you initially convince the people to invest such a time in the beginning to sort things out? Because I can imagine that plenty of people who are CEOs or business persons would like to have the results as fast as possible.
JMvV: Yeah. Yeah, that’s a good one. I usually say to them, “The first six to eight months you see nothing from me, you cannot push a button, you cannot switch something on, because now we’re going to do it for the long term.”
JG: How do they react?
JMvV: Most of the time they start laughing and think I’m not serious, but then I show them why, and if they want to have something fast, the chance is that it won’t work in four years.
That it is big. And if you look for the long term, the long term is really about the emerging technologies.
Technologies and preparing yourself for that. The long term is not now for use, most companies’ long term is already three years; that’s not the three years. That’s really even behind that. So you have to have the fundamentals right. So: clear definitions, and no customisations in the systems, no abusing, off the tables, it’s just: do as it’s supposed to be done. And that takes time.
JG: Alright. I can imagine that there is huge support needed from outside of the organisation because of the lack of competencies, knowledge, whatever, you name it. Which moment would you think would be the best for engage with kind of partners; development partners, software development partners, other partners, vendors, suppliers, et cetera?
JMvV: I would say, when you have your digital vision ready, as early as possible. Because there is so much knowledge within the vendors and there is a big gap between what companies see in their daily operation – because, if you are in IT, you are focused on stability, you are focused on managing the issues you are having, and you’re focused on the projects that are running, and project portfolio management, maybe if you are in sales? You’re focused on making sure the targets are met, you’re making sure that, for example, your market share is keeping up to standards, or expanding, or at least you’re not losing it, you’re making sure that your people are actually going to the customer, and not sitting at home, so this is really, to put it, really black and white. Most of the people whose profession it not is are not focused on what is all happening in the outside world, and what capabilities come with that, because everybody has their own specialty, and the generalist roles in companies the past years there was hardly any investment in generalists. So everybody is a specialist in a certain way, and what you need now to break those silos are people that are generalistic in how they approach things and look holistically at things, so, and those people you find at your partners, you find outside of your company, and also at the clients of your partners who also went through certain types of transitions where you can learn from. So it’s really about learning from the outside and having people who are standing with both feet in the outside world in the mud, and working there, showing you how you can work on that land, use the tools to become stronger yourself. So, you cannot learn from yourself on that, you have to learn from others.
JG: Hmm. So, if you were to choose a list of top three advice for people who’d – for C-levels, executives who’d like to start a digital transformation project, what would that be?
JMvV: First of all, you have to be a team yourself, so if you are part of the executive team, if you are still doing power play and fighting, it will become one big mess, and it will be a waste of money, because digital transformation is about connecting people, so that means cooperating, so that means that you have to be willing to transfer power from yourself to your colleague, and your colleague has to be willing to transfer power from him back to you.
So there has to be a trust basis, if it’s not there, don’t start, and start working on trust first.
So that’s the first one. The second one is: don’t go for the tool, but go for your vision. And if you can’t find the right tool, to enable it, keep looking.
Because usually, you still see that there’s a vendor, or supplier, that comes in and shows, “This is the tool we have,” and then the department starts running with it, it’s being pushed through, whereas if you look how disturbing it is for your architecture, yeah, that was really a bad idea. They think it’s a leap forward, but it’s actually five steps back, so, and do it data driven. So really start with data architecture and assigning data owners so that people are responsible for data, and even to the level, because really data is the fuel of your organisation, is the fuel brings oxygen to your brain so you can think, so you really have to invest in data, and put it in everybody’s KPI, because everybody is responsible for bringing in qualitative, good data for the common good.
And I think those are the three points, as a starting point; whatever you do, you have to take in the back of your mind before you actually start with doing huge investments. And don’t go cheap. Because if you do cheap, you get cheap.
JG: OK. Thank you for that summary, Janne Marie. And thank you for the whole conversation, it was extremely interesting.
JMvV: Well, thank you.
JG: And thank you, the viewers for watching this episode of IT Leaderships Insights by Future Processing on preparing your organisation for digital transformation. That was the first episode of our miniseries of how to do the digital transformation, so please make sure you watch the next two episodes, as well. As always, if you liked that, please share it and recommend it and if there is anything you’d like us to talk about in further episodes, just let us know. Once again, thank you. Until next time.