Panel Discussion of Operations Transformation Forum 2017

At Huawei’s Operations Transformation Forum, Trevor Cheung, The Open ROADS Community’s COO, chaired a CXO panel discussion with five senior executives to understand how leading businesses across industry sectors accelerate their digital business transformation.

The panelists began their discussions by describing their roles in their respective organizations, and how their positions allowed them to be catalyst for digital change.

OTF panel discussion

Paul Cobban, Chief Data and Transformation Officer, and Managing Director, Group Technology and Operations at Singapore’s DBS Bank Ltd, noted that his role oversees many aspects of the bank’s operations, including its CX operations, agile transformation initiatives, and DBS’ deep engineering center.  “How we bring each of these things together allows for the magic happen in digital transformation.”

Javier Albares, Head of Strategy for the industry association GSM, says that his job is to go “wherever global collaboration is required.” 

Alex Arena, Group Managing Director at HKT sees his role as “Chief Troublemaker—I challenge everything that we do.  Systems and people ossify; we need to disrupt, otherwise we will be ‘Kodaked’,” referring to the fate of the once-mighty photography industry leader which failed to make the shift to digital business quickly enough.

Peter Weill, Chairman of MIT’s Center for Information Systems Research (MIT CISR) and a Senior Research Scientist at MIT Sloan School of Management has led his team in research on more than 100 global firms, to define and “prove” best practices in digital transformation, and engage senior executive teams in re-imagining the organization, efficiently and sustainably.

Ramez Younan, Managing Director, PCCW Solutions, says his main job is to think about “customers and how do they grow, and how we can orchestrate a level of partnership to deliver this growth.”

Cheung then turned the conversation towards observations of the current state of digital maturity, in the communications sectors, and others. GSMA’s Albares has notes that the communications industry “has seen fantastic growth in value, but stagnant revenue growth,” echoing a point from his earlier keynote presentation where he noted that while the market capitalization of the GMSA’s core members has grown from roughly $1trn to $1.3trn over the last decade—but the ten largest digital businesses (Google, Amazon et al) has seen threefold growth, to over $3trn, in the same period.

Panelists agreed that there is no lack of digital capabilities or understanding in the telecoms industry, but in order for participants to accelerate their transformation progress, they must build on a common set of tools and framework to create a common language and KPIs for digital transformation. MIT’s Weill observed that his team’s research shows clear linkages between digital leadership, profitability, and innovation: digital leaders have three times greater profitability and 38% higher Net Promoter Scores (NPS) than average firms, and see seven times the average revenue earned from new products launched. Professor Weill described the four essential success factors for firms when making the transition to all-digital business:

1. Think digital first, in every initiative

2. Think from a ‘customer-in’ perspective, so that end user needs, not technical requirements, guide product and service development

3. Build ‘platforms, not spaghetti’: design applications and tools which can service and adapt to multiple constituents and channels

 4. Adopt a decision-making culture which is evidence based.

HKT’s Arena echoed this sentiment, noting that while his company’s financial rewards still largely come through ‘traditional’ telco communication services, HKT finds new opportunities by focusing on a customer-centric culture. “We need to constantly think about the amazing relationship with our customers, leveraging the data we collect to deepen our knowledge of the customer and provision them with what they want.” Arena pointed to the deep insight over their existing VOD customer base which informed their unique partnership they have with OTT video entertainment giant Netflix, which “realized it was better to work with us than compete.”  

When Open ROADS’s Cheung asked his panelists to compare their digital transformation experiences to what they have seen in other firms or industries, DBS’s Cobban noted that “it was uncanny how similar the digital transformation challenges between financial services and telecoms are,” noting that the banking sector traditionally looks to the telecoms sector for guidance “as that industry is further out on disruption curve” with the rise of OTTs and other new entrants. Now, however, the advance of financial technology (fintech) firms have meant that traditional banks are facing similar competitive threats from technology-enabled ‘disruptors’, meaning the transformation challenge for traditional banks it to prevent themselves from becoming “dumb balance sheets” in the same way telcos fear becoming ‘dumb pipes.’ “Banking needs to embrace fintech approaches, while leveraging huge customer bases and data.”   Again, Cobban notes, this is exactly the telco transformation challenges, although he observed that telcos probably had a bigger challenge, in that “customers have an expectation that telcos will automatically keep up with the latest technology—and it is difficult to differentiate on tech alone.”

PCCW’s Ramez notes that the pressures that digital business creates often have a unifying effect, as digital business allows for new entrants to easily enter adjacent industries, meaning “banks and telcos are no longer just competing in their own vertical segments.” Added to this is the power that digital devices and channels give urban, time-constrained customers, which is pushing businesses in all industries to rethink their distribution and sales channels using smart applications, such as unmanned shops with RFID and biometric-enabled payment platforms, to serve customer better.

Other panelists shared examples of how iterative digital transformation across the customer experience process was already yielding tangible results. HKT’s Arena noted panels of 3 to 5k customers that volunteer to be sounding board, close engagement on web-based collaboration.

DBS’ Cobban explained how Digibank—an all-mobile bank DBS started up in India a year ago, which already services 1.5m customers—was created with a goal of limiting its operational expenditure to 10% of what a traditional bank spends. “This doesn’t happen automatically” simply because it was an all-digital operation, said Cobban, describing how DBS created Digibank with ‘Design for no operation’ principles, which include chatbots in their customer service channels which answer 90% of all customer queries. At 25% of traditional bank opex, Cobban conceded that “we are not there yet,” but as he expressed in an earlier presentation, the key is remaining consistent to digital business practices throughout the transformation process—such as employing design thinking to reconfigure ATM and customer care processes, or reinventing talent acquisition through hackathons and crowdsourcing.

MIT’s Weill pointed out that one common constraint that firms across all industries face is that “the digital savvy of their boards is not very high. They struggle with technology’s implications, and their roles must change over the coming years” if they are going to help with tackling “the huge strategic, surgical change needed in the organization.”  DBS’ Cobban noted that he and his senior colleagues spend a lot of their time “pushing digital understanding at the board level.”

Cheung concluded the discussion by inviting panelists to describe how they effectively measure digital transformation progress, eliciting a broad range of responses, which points to how pervasive the digital transformation challenge is across the entire organization. Quantifying the impact of transformation was one theme: GMSA strategy head Albares noted the importance of tracking growth in traditional revenues versus the contribution of new revenues sources. DBS’s Cobban expressed it as “digital value capture—what percentage of revenue comes from new ventures,” which while simple in concept, has been an extensive eight-year undertaking to define precisely at the bank.  The human component of digital transformation was noted by PCCW’s Ramez, and MIT’s Weill, stating the importance of measuring talent management and cultural change respectively. HKT’s Arena concluded with an interesting evolution of the company’s traditional churn metric: “we’ve replaces this with a ‘happiness index’ of 60-plus indicators, that tell us where each customer is are on their journey and the data behind it allows us to understand their state of mind”—to be able to predict upcoming churn, rather than simply record its occurrence.  

Ross O'Brien

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