Our team was delighted to welcome an array of clients and other digital business leaders – at Elsewhen’s recent Rebase forum event discussing the importance of digital strategy.
The theme was “Make your strategy count! Narrow the gap between strategy and implementation” – and this sparked an impressive variety of strong opinions, expert insights and stories of real-world experiences.
Digital leaders love creating compelling visions for their products. But, often, that vision remains just that – a stunning deck or a document.
Our virtual meetup addressed the importance of building an action-oriented digital strategy – one that can actually be executed in practice. Attendees discussed the different pulls and pushes, shared their obstacles and considered how to overcome them.
Should a business prioritise action over planning? What is the role of the customer and technology in 2022? What are the latest trends that just can’t be ignored?
Our event Moderator guided the discussion on digital strategy, ranging across five key topic areas. Speakers have been anonymised below under the Chatham House rules of our event.
Topic 1. Research vs action
Questions for discussion:
Where do we stand in our approach of working on an effective executable strategy? How do we balance the need for action and the de-risking of planning? With methods like ‘Lean Startup’ and ‘Customer Insights’ in our toolboxes, how do we find the right balance?
Financial services industry executive’s insights
Strategic approaches will vary
Your approach will depend on what you are doing. Are you already relatively advanced in daily digital contact with your user base or customer base, for yourself or on behalf of the customer?
Where research meets action
Regarding software and digital technology, in many aspects, the action is the research. You need to test and learn as you go. Through design, development and testing, you provide the impetus and ability for things to move forward and improve quickly.
Learning from rapid releases
In terms of expectations, the above drives how quickly and often any organisation releases software updates to users. Maybe 15 years ago, you would have made annual or bi-annual releases. Now the updates and improvements can be so frequent that the action of each release drives the learning.
Digital products
The above approach is different from a product launch approach: In our industry, we may build digital products for ‘B2B2C’ – shipping these to organisations that want to use them to interact with their own customers. Before you launch and run a product, you need to research user behaviour, preferences and issues – to demonstrate you are solving a real problem, and prove the value in the proposition. What market needs are you solving? How broad is the scope? Are you solving a problem for the entire world or a specific region?
Doing the research
Before you design, prototype, build and run any product, you must gather research and insights – which is typically done via an agency, focusing on the end-users. You need to have all the proof points to launch a product that can be shipped to your customers, so that they will understand and appreciate its value.
Private equity sector executive’s insights
Planning against problems
From an internal organisational perspective and an Information and technology lens, the technology department is not directly servicing customers or consumers. Little ‘design thinking’ methodology or approach is applied in this context. In our sector, the department is dealing with platforms that move millions of dollars around the world. The focus is very much on research and planning – as we have zero tolerance to failure of IT.
Varied pace
The pace of change in financial services is different – sometimes slower is better. It takes different timescales to get projects to the finish line. User acceptance testing (UAT) and quality assurance (QA) may take a month or more before each software release. That’s very different from the speed of the big tech companies with consistent daily releases – the likes of Amazon.
Utilities industry executive’s insights
Vital accuracy
The utilities industry is highly regulated. Your data and processes have to be accurate and operational – or the consequences can be huge in this sector.
Overcoming legacy mindsets
It’s true that the utilities industry is traditionally an environment with a lot of legacy technology. There is still a tendency to have a convoluted architecture – as the legacy mindset is difficult to split out. But there are pockets of digital product development across the industry that are moving away from that – but they can get slowed down by the greater set of dependencies that still exist.
Researching user experience
User research is an approach used for many utilities projects – such as when building a digital toolset for our field workers. This is important because there are so many operations and processes in the mix, working on different technologies. Also, because of the regulations, there is a need for better efficiency and utilisation of people. We need to get a consistent understanding of how those field-workers will operate when using the technology and processes that serve them. We can then also provide more flexibility around the type of job you can give to those individuals moving forward.
CAPEX vs OPEX
Capital expenditure (CAPEX) is a traditional part of the utilities industry. It’s very project-based, with the CAPEX model driving that. Moving systems to the cloud over recent years has been difficult – because of the operating expenditure (OPEX) type of operating model that cloud and SaaS bring. There’s not a lot of familiarity or confidence around digital product aspects like frequent releases or minimum viable product (MVP). The different financial model of digital requires a different way of thinking.
Healthcare industry executive’s insights
Change and risk
Projects by nature involve change – and change is hard for people, generally speaking. You have to prove a case for it and bring tangible solutions to existing challenges. People are risk-averse by nature.
They may resist changes to the way they work, and fear a ‘land grab’ of their responsibilities. In the end, it comes back to managing different levels of risks. From a risk perspective, you need to manage big strategic bets versus small incremental changes.
It’s beneficial to understand, within a business, the different appetite for risks – and to know who is the most risk-averse. The risk and confidence level of decision-makers is a critical element.
Fast feedback
Our business is a scale-up, at the upper end of the digital agility spectrum compared against many others. We might push updates to production 30 times a day on average.
That gives projects the shortest and tightest feedback loop possible.
Research then enables you to increase your confidence level in the project – while knowing that you will never get to 100%. How much research is enough? You have to be careful not to fall into the trap of wanting more and more research without any release – that causes delay in delivering value to your users or customers.
Gaming industry executive’s insights
Ready for risks
The gaming Industry in general involves a significant element of risks. It’s highly transactional and revenue-focused. We’re open to making changes and optimising everything. We understand that quick iteration can generate better user engagement and increase revenues.
Researching variations
Customer research is essential because there are so many factors to understand. There are intergenerational aspects of gaming customers – Gen Z, Gen X, and so on. Then there are the geographies, with varied geo-differentiation and market dynamics – gaming in Asia is different from Europe, which is different to the US.
Topic 2: The role of technology
Questions for discussion:
What is the role of technology in strategic planning? Is technology an enabler – or is it the core? Is it following your vision – or a key pillar in setting it?
Private equity sector executive’s insights
Technology on the rise
Ours is a very risk-averse environment. Technology is not seen as the core – but as an enabler for the business. Even five years ago, technology was still perceived as just a cost centre – but since then, the tech budgets have increased dramatically.
Enabling scale
Instead of increasing headcount, we use technology to scale lean operation – to do more with fewer people. However, creating more products and types of funds, at higher velocity; does create more pressure on the operations side.
Utilities industry executive’s insights
Realising tech value
It’s true that IT is moving from a cost centre to a critical enabler in our industry, with high expectations on it. The technology footprint of utilities companies is growing significantly. Processes are moving from pen and paper to digital, as the cost of digital comes down. Businesses now realise the value of technology – especially when it goes wrong!
Regulators and technology
Utilities industry regulators now expect your revenue for a set period of time to be settled and known before any planning. It’s a step-change in the information required upfront by the regulators – we are talking years. You must abide by the rules – or not get any funds. You need to use technology to track and change your plan retroactively as you know more about the future state of the project.
Cybersecurity challenges
New regulation on operational technology (OT) cybersecurity is coming into the picture for the utilities industry. Nobody yet knows how it will pan out – but you need to improve risk management and resilience while exceeding government guidelines. Utilities companies are digitising operations and increasing the interconnectedness of their systems to gain efficiencies. At the same time, cyberattacks on energy infrastructure are escalating, and government mandates to address the problem are on the rise.
Financial services industry executive’s insights
Tech evolution
Technology for the financial sector is now a case of disruption versus Realisation. For example, the card payments infrastructure was originally created as a shared-cost utility for banks, as an easier, more efficient way to move money between them.
Now, for similar reasons, the industry is adopting digital banking. Digital payment systems are the lifeblood of the modern economy – a financial enabler for moving money, paying and getting paid. This is driving a real wave of investment into these systems. New startup digital-native banks like Starling use technology to drive costs down and increase efficiency.
Providers like Venmo and PayPal are enabling digital payments between consumers. Crypto-currencies, blockchain, NFTs and digital marketplaces provide new ways to exchange and transmit value. But digital financial systems still face many of the traditional payment risks around identity and fraud.
Open thinking
When it comes to payments and transactions, financial institutions have always had oversight into what’s happening in the market. The constant considerations include investment in safety and security – which is non-negotiable in the financial sector. Despite the continual technology push and pull to protect and scale what you have – key questions remain.
How do you make the environment you operate in today safe and secure for the people using it?
How do you respond to those new networks and payment innovations? Even so, you need to stay open to these new networks and payment innovations, working with them and bringing your own expertise and experience.
Topic 3: Customer focus
Questions for discussion:
Is it really all about the customer? Do we agree to laser-focus on the customer KPIs with other priorities to be secondary and cascading? Or are there equally important operational priorities?
Healthcare industry executive’s insights
Customer meets ROI
From a software perspective, without the customer you don’t have a business. But it’s not ‘just about the customer – you also have to consider your return on investment (ROI). There is always a kind of Venn diagram, and you need to be where the customer and ROI overlap. You have to consider the dynamics of the business – such as the Executive Board, the shareholders, and the growth and revenue aspects.
Serving your customers
‘Customers will tell you what they want – but never what they need. You have to understand how information from the customer will allow you to prioritise the most significant pieces of work and ensure you meet their needs.
Gaming industry executive’s insights
Customer, technology and product
A huge focus of our industry has always been on the customer. But more and more, we also focus on how technology and products have to work hand-in-hand for the customer. As such, we see the emergence of new job roles such as Chief Product Technology Officer (CPTO).
Utilities industry executive’s insights
Connecting for customers
Different elements of the customer experience don’t always work in harmony across the business.
The role of technology in this case is to bring these parts of the business together.
For example, if a customer requests servicing or repairs, they should see an Uber-like display that the engineer will be at their property within a specified timeframe. If an engineer is prioritised to an emergency over a routine installation, then the technology should connect everything automatically to keep all customers properly informed.
Topic 4: Obstacles to your digital strategy
Questions for discussion
What are the top obstacles in our organisations to successfully deciding on strategy and implementing it? How could we overcome them?
Financial services industry executive’s insights
Managing complexity
In our industry, we must manage more complex environments than ever before. We face disruption from digital neo-banks, the evolution of open banking, and new payment technologies.
You need to keep focus on what is your core, but also be open to these challenges. You have to understand how to navigate the complexities of these changes, and manage the impact of customer expectations.
You should recognise the business opportunities–and the potential threats of these new technologies to traditional business models. Trust and certainty are worth a huge amount, especially when things go wrong.
Private equity sector executive’s insights
Choice and change
We face a proliferation of available choices around technology and software. Working out which tech stack to adopt is hard enough – but the pace of change in technology means that in a few months, you find a new set of tech that changes the whole direction of your planning. And all this must be approved by many internal stakeholders – including the equity partners that own the business.
Topic 5: Digital trends
Questions for discussion:
What are the key digital technology trends that you just cannot ignore – no matter what you are working on from a strategy and execution perspective?
Healthcare industry executive’s insights
From COVID to crypto
There are many interesting trends to consider. Particularly relevant to healthcare, there’s the recent shift due to COVID in how people think, interact and travel. Where are big tech companies investing their money? They are diversifying into all kinds of other industries – often through their holding companies, such as Google / Alphabet or Facebook / Meta. There’s the rise of crypto. Web 3.0 is pretty nascent now, and that will evolve. But remember, new technology itself will not resolve your problems – it is always a question of pros and cons.
Gaming industry executive’s insights
Knowledge is power
Gaming is a bleeding-edge industry, always at the forefront of the latest tech trends. But in the end, you always have to know your market, know your audience, know your customer – and know where they’re at in their journey. Don’t give them things that they’re not ready for. Trust and regulations are also huge factors to consider.
Financial services industry executive’s insights
Infinite potential
Open-banking has not yet reached a level of full maturity. The next changes will be more subtle, rather than revolutionary transformations. People want better experiences and better outcomes.
The financial things you can do online will be more complex – such as getting access to alternative investment markets. Crypto and payments will evolve with the emergence of Central Bank Digital Currencies (CBDC).
Digital marketplaces and virtual ‘metaverse’ environments will bring new opportunities. But how property speculation will work in a potentially infinite metaverse remains to be seen!
Join the digital strategy discussion
If the issues we discussed at our recent forum sound relevant to your own digital business strategy, let’s talk about how Elsewhen can help you with the next phase on your journey.
