Digital Transformation Journey in Traditional Corporate

Hi, this article is a documentation of my journey of helping a traditional corporate through their digital transformation journey. After working years as a software consultant, helping some of the big companies, working in a startup, and cofounding startups, Now I’m joining a traditional company and helping them through their digital transformation.

Strategy

Before the transformation begun, IT team was the sole technology provider for the company, they provide all the necessary infrastructure, software and all related technology matters.

To drive the Digital Transformation, our CEO is forming Digital Team and for the first time there are 2 technology provider in the company.

Structure

Both IT and Digital Team both reporting to CEO. Both has separate budget, Tech Team and Tech Infrastructure.

IT has separated division like IT Infrastructure, IT Architecture, Policy & Security, Project Management, Software Development, Budget Control and IT Operation. While Digital Team is working as a single Division, working from architecting solution, development and operation.

Systems

Going cloud is the way forward. So, every mobile app and web app which developed are all maximising cloud. While most of core system are reside on premise, then we are establishing connection from our cloud provider to our internal network. This practice is necessary to achieve faster connection and also to minimise risk so that some data is going through direct connection (instead of through public internet). The cloud provider server was also inspected previously by IT Infra and IT Security guys to satisfy certain standard, they literally visit the server colocation site for the inspection.

Initially the Digital Team working on cloud while IT are working on premise, however after a while some of the corporate application which handle by IT also moved to the cloud.

Cloud is very good to drive innovation because it’s providing all necessary tools ready for us to use. However, as a traditional company we need to be very wise on choosing which application to move to cloud. Some of the core application seems almost impossible to move because it’s using a very old software which only a few people understand, and any glitch can cause a very severe impact. Roadmap was created for those legacy core system, we plan to divide into micro services and modernise the infrastructure for hybrid /multi cloud approach.

Shared Value

Having 2 technology provider (IT and Digital) in a single company can cause some kind of cold war. Those 2 are often has different argument and sometimes feel a competition happening among them, i.e: which programming language to use, which SDK to be embedded into the app, when to go deploy to production, and so on and so forth.

To minimise friction all important persons from IT and Digital are meet once a week (for 2 hours) and discuss about anything. At the beginning, this sounds like a waste of time but eventually it create a good connection between us and makes us aligned. Yes there are some heavy arguments happening but we can find some balance and sort it out together.

It’s very important to put “business first” instead of technology. So that from business perspective: we deep dive on what need to do, and technology follows (not the other way around).

Style

As a new team, Digital Team is fostering Agile, and we implementing Scrum and Design Thinking for SDLC (Software Development Lifecycle). This is an alien approach to traditional IT Waterfall SDLC process.

Actually everyone were already very familiar with Agile concept, information are everywhere on the internet and everyone read it. However, implementing it can be daunting. Because the current process seems working for years, why on earth we should risking the perfect harmony with the new approach? This is difficult question no one can answer in a formal corporate meeting.

Digital Business is generating revenue for company, but it’s relatively small compare to conventional business. So we are implementing the new style (i.e. Agile) and all new technology to serve Digital Business initially, since the risk was considerably small. This is when the transformation start rolling. We start using scrum (with all those artefacts and ceremonies), design thinking, kubernetes, micro services, cloud providers.

After few years, the Agile method is now also implemented in IT and conventional business to drive transformation at scale. It’s still on progress, everyone working very hard for this, and I hope things will going as expected.

Staff

Unlike any other team in the company, Digital Team is comprise Business Guys and Tech Guys. With this setup we can go full stack and create a holistic solution from idea into implementation, and generate real sales.

After few years and Digital Team become bigger and bigger, we are pairing both business guy (digital business and conventional business) and tech guy (digital tech guy and traditional IT). With this setup we can benefit from each other and go toward company common goal.

Responsible for the tech side, I choose different approach by having most of the tech guy in house instead of relying 100% on external partners. I think we should have a strong internal team, know what / how to do, and also work together with external partners.

During my time as software consultant, I saw a lot of corporate IT guy know nothing about technology, and they merely doing administration to onboard vendors to do software / IT work and decision. This approach is very dangerous because as an external party, consultant might not understand fully what the corporate needs, and end up offering what products they have on hand. On the other hand, it’s a safe bet for the IT guy, because when the work messed up or apparently it was a bad decision, vendor is the one to blame. But if the work is great, then the IT guy get credits. Sometimes I feel that some consultant paid for so much money to bear the risk. Anyway… Innovation always carry risks.

Specific Challenges and How We Address

For you who about to start Digital Transformation in your company, below are some of the challenges you would face. Hope can give you a picture, and also ideas on how to prepare for them.

  • related department: Human Resource
  • challenges: why we are hiring? if we hiring, what to do when the project ended? can we just work with vendors?

It’s the first challenge we are facing, to convince HR on why we need to build internal team. To do that:

  • I was creating a 5 years cost comparison between internal hiring vs class A or class B vendor engagement. From cost perspective, internal hiring is not more expensive compare to vendor base approach. Because the team will working for long period of time.
  • Explaining the idea between Project based approach vs Product based approach. While project has end date, but we keep improving the product. It’s very different when we are creating internal corporate application, e.g. HR Information System, it’s based on what needed by the HR department. While in Digital Transformation we are serving our direct customer, and at the moment we don’t know what works with customer, at the same time everything is changing very fast so we should able to adapt immediately.
  • related department: General Affairs
  • challenges: why people on the same department sits separately? the company normally group the seat based on department, so that it’s easier for the manager to monitor/control his/her team.

I was lucky because we start Digital Transformation before Covid 19, so that the team has time to meet face to face daily and has better personal bonding.

It’s a norm that people from same department is sitting at the same place, e.g. Software Developers sits together, Product guy sits together, Design guy sits together. However, ideal sitting for me is every role should form a full stack team and a team should sit together in the same place. There are multiple teams sits side by side. Each team represent a startup.

Imagine you are in a co-working space, there’s: startupA sits together, startupB sits together, startupC sits next to other startup. This is the one I imagine the teams should sits.

Talking to General Affairs Department is too complicated since as a leader we got power to arrange seat plan. But better to settle at the very beginning, before everyone comfortable with their seat.

We got quite a challenge from General Affairs team when we are planing to attach sticky note on the wall for our scrum board.

  • related department: IT
  • challenge: why we need so expensive laptop for Staff Level? This price is for Division Head Level.

Engineers and Designer need a very powerful laptop to work. I was applying MacBook Pro for their work. This is a relatively very expensive laptop to the normal standard inside the company. With less than half the price, IT can buy a normal windows laptop and everyone using it for years.

This challenge is one of very difficult one to face because it’s uncommon to give expensive laptop to staff, IT doesn’t has experience managing macOS (e.g. what antivirus to install in mac), and it can create jealousy from other employee.

Since I’m dealing with IT guys, they actually understand about laptop and tech, hence it’s not super hard to explain why we need powerful / expensive laptop. However, it’s an exhaustive effort since I need to talk to a lot of IT guy one by by, before we make it official in a big meeting. Once settle with IT, I also talk to some Board of Directors to explain my justification and get their approval.

  • related department: IT Security
  • challenge: why we need to open fast internet access to staff level? what if they spent working hours on facebook or youtube?

In a corporate setup, it’s common to close internet access and only open to specific access to work related sites. Block access to social media, youtube and corporate unrelated site.

In the other hand, we knew that Internet is our source of knowledge. Everyone are relying on the internet to search for information, learn something new and use internet to try new things. Access to fast and open internet is a must.

After negotiation with IT security we found common ground:

  • We will opening fast internet access for everyone
  • We will block negative website (e.g. porn and gambling)
  • IT security will monitor traffic and can block any site in the future.
  • related department: finance
  • challenge: we need to utilising cloud software, we can’t pay with current method.

There are a lot of SaaS (software as a service) in the internet and ready to use. Instead of building from scratch why don’t we just pay USD10 and immediately has the feature? Using personal credit card is not recommended since the cost can grow overtime. We need a company credit card.

After several negotiation with Finance Team and some escalation to higher rank, finally we have company credit card with a big credit limit. The credit card is on Procurement Team’s hand, and ready to use when we need it.

  • related department: finance
  • challenge: we can’t pay before due date, our credit card often blocked, bank give us warning.

Traditionally the company pay a big amount of money (e.g. USD 100k, USD 500k, USD 1M) but with less quantity. With rapid purchase of SaaS, suddenly there are abundant of monthly invoice with a small amount (e.g. USD 25, USD 100, USD 500). Even though it’s a small amount like USD 25, the administration step was similar like USD 1M invoice. The person who handle USD25 was different from USD1M, but the total step is similar. This caught finance team to be busy with administration work and unable to pay on time.

This sounds like a simple challenge but it took us around 3 months to sort it out by simplifying the administration process between Digital Team and Finance Team. Most of the transformation is done inside the Finance team though.

Revenue, Cost and Profit

With all those things we’ve done, it’s a long journey to increase revenue and reduce cost.