"Digital gives you a better way of doing things over the market incumbent," Rob Fraser, former IT Director of supermarket giant J Sainsbury's told a meeting of CIOs and business technology leaders in Manchester last week. Fraser was joined by CIO 100 leader Richard Hodkinson of law firm DWF LLP and Gareth Lloyd a business advisor specialising in the disruption being caused to business by technology.
Fraser cut through the digital hype and pointed out: "It is a means to an end to do a better thing for your customers.
"Digital is worrying in that large organisations are confusing ambiguity with complexity. Startups are very clear what they want to do and that is what we should be afraid of," Fraser warned large organisations.
All three business technology leaders described disruption and challenges to business models, in which technology was a part, they steered clear of simplifying the challenge down to the word digital.
Gareth Lloyd of agency Yin Yang described how new platform models were "the recreation of an existing value chain" free of legacy business models and therefore legacy technology. Lloyd added that the redefinition of business models by AirBNB, Hailo and Über to manage other people's or organisations assets rather than owning assets was one of the most significant disruptions.
Fraser reminded the attending business technology leaders that the disruption is not restricted to technology led organisations and strategies. During his time in retail he told the audience the industry was expanding its physical floor space at a rate of six percent, but market growth was just one percent.
"Large organisations are not set up to innovate because the upside is not that great and the downside is much harsher," Fraser said. Lloyd added, "Bolting on Agile or labs is a danger that can add more process. I suggest CIOs and organisations need to solve bigger issues such as diversity to create an innovative culture."
Held at the headquarters of law firm DWF LLP, Fraser said: "Where a business is protected by legislation is where you are ripe for disruption and you should be concerned." Legal CTO Hodkinson agreed, the "heat" on the legal industry is unprecedented he said. A cultural disruption and a tough economy is seeing law firms in the same position as every other market, customers want more from law firms, but they are expecting to pay less.
"Insurance Defendant work for example is very process oriented, high volumes and a low margin. Customers want value for money and the ability which can only be delivered through a process mentality which requires unique skills and technology investment. As a result of this and many other changes in the sector, it is not now unusual to see law firms going bust which historically was unheard of," he said. Hodkinson agreed with Lloyd the competition for talent to create diversity was intense..
All three speakers and the attending CIOs from sectors such as transport and logistics, public health and professional services all agreed that digital was not a helpful term. Technology is at a point that the customer expects to be able to interact and receive services via a great technology user experience and that is what large organisations, CEOs and CIOs are struggling with.
"If you have to define a word, what is the point of using it? Digital is a cry for help from CEOs," Fraser said.
"Digital is change. The question is: is it about business model innovation or is it about new products to market?" Lloyd added.
"The bit to be excited about is that there is technology involved in all of these disruptions, so our day has come.
“Delivery should be a commodity and not the core focus in the future. I think CIOs can talk themselves into 'this is difficult' so they end up becoming the head of Opps for legacy," Fraser warned. "Try and outpace the ambition of your colleagues and accept that you will have some failure and breakages."