Episode 60: Digital Transformation Three Years Post-Pandemic

Aaron: Yeah, thanks so much. 

Kiran: Excellent. So I invited Aaron and Lisa on today because we are now officially well over three years since the pandemic first hit. And digital transformation efforts have changed so much in the past three years, and Aaron and Lisa both have extensive experience supporting clients that have weathered change over change since the pandemic first hit. And in some cases, organizations now are actually re-evaluating a lot of the steps that they quickly made back in early 2020. So before we talk about what’s happening now, I want to just rewind a little bit. 

And Aaron, could you set the stage for us? You and many others were just watching how companies and people were responding so quickly. It was like, digital at all costs, at any cost, full speed ahead. And in some ways like I said, that reevaluation is happening now, but let’s look back. 

What was it first like three years ago? And what were some of the things that you were seeing that were happening as far as digital transformation is concerned?

Aaron: Yeah, for me it’s putting myself in my basement, in my office, working there suddenly full time, and also having my kid’s school canceled. I think we all remember what the early days of the pandemic was like for us. 

And also what it was like for our clients. Suddenly our clients had no way to interact with their customers except for digitally. And some of our customers were really scrambling because they might have had a proto-strategy, they may have been dabbling for a few years. But suddenly, that was the only way that they could reach their customers, and so there was a hard move in the marketplace. Digital experiences, whether it was on the web or mobile were coming out very quickly. 

And some of them worked well and some of them didn’t for a lot of different reasons. And our customers really learned to evolve quickly, heroic in some ways. For me and my family, we were able to acquire the goods and services we needed. Just basic — getting toilet paper, at least sometimes, was amazing for us. Or other types of transportation or whatever it might be. Yeah, it was a big scramble. 

Kiran: Yeah. Lisa, tell me about your reflections. Obviously, personally it impacted almost everyone, but again in the work that you saw taking place with clients. How are people responding three years ago?

Lisa: I will echo what Aaron said, I saw a lot of heroics. We do work with a wide variety of clients, people who are retailers to governmental entities, and I think about all the people who’ve really have spent lots of time and effort really honing that in-person experience having to think about it in a completely new way. We have to shift all that work we’ve done, to be in a building and in a space to craft an experience that’s great to a digital environment. What happened allowed people to think differently quickly. I think thinking about one of our clients that put basically an emergency response team that to this day has continued in a sense, because they realize they have to move quickly. There’s too many things happening. 

And I think we see that acceleration continuing with some of the new technology, like AI hitting, the market if you will, spin around for a while, but now this idea of these open generative models impacting business — we’re not going to slow down, we’re only going to speed up.

Kiran: Yeah, that’s a great point. Lisa, I want to ask you. So obviously, you’ve had to deploy numerous different strategies and advise in different ways, considering the speed at which things were changing. And so, now we’re here in 2023 and well over three years have passed. Do you see — I mean you talked a little bit about AI, could you talk a little bit about some of the issues that you see clients facing now? And any re-evaluating that might be taking place as far as looking back at some of the efforts, and how companies are evaluating what worked and maybe what didn’t work so well.

Lisa: Yeah, that’s a multi-layered answer I think, Kiran. Right now there’s some basics that companies need to work on. I think technical debt is only getting more expensive. Aaron and I’ve talked a lot about this with a lot of different companies. If you’ve had disjointed systems, if you’ve had siloed processes, if you have team members who aren’t ready for this new environment, all of those add up to more and more debt over time.

And so how can companies really start picking and choosing? I think that’s what a lot of what we’re seeing today is, help us figure out what we should be working on next. What is the next layer of solution? 

And often, it’s looking back at the foundations. And so there’s work to be done there, looking back to speed up. I think that’s — Aaron I’ll let you jump in here because I know you’ve have a lot of thoughts on this. 

Aaron: Oh yeah, absolutely. I think reflecting back on what was the heroics, right? And some of it was just brute force, but others were adopting new platforms, new architectures, and even new development approaches that were needed and managing that remote work. So it’s people, processes, and technologies that were changing so quickly and — great job. Our companies really stepped up at a time where we needed them to support us and our needs as consumers and individuals or patients even in healthcare. 

But it did create a lot of debt out there. And I think now as the dust is settling after a few years, the only way through is through, that’s where we’re at. These digital experiences, the architectures that were created, the processes that have been put in place to build and manage these various platforms, are here to stay. But they’re not serving our businesses, the back end of our businesses, the way they need to use.

And some of those cracks are felt by the end users. Suddenly, there was a huge need for better scalability, better integration, to quickly evolve features but do it in a way that aren’t introducing breaking bugs and experiences. And so, faster with quality is the call that we’re seeing even more so today. And so, we’re on the backside of a pretty big amount of investment. Companies are now going, okay we can only go forward, but this needs to work for us and our people, and so how can we do this in a way that is more sustainable? 

Kiran: Yeah, can you talk a little bit about the need for solid foundations in place in order to withstand what may come?

Aaron: Yeah, absolutely. And I think a lot of that is process-based, so having a good automation foundation is an example of a way to create new features and get them deployed as quickly as possible in a way that is virtually error-free. So this is standing up infrastructure, rolling out the new features. 

And then also testing them, not only in pre-production, but post-launch just to make sure not only is it not introducing new system errors, system performance issues, but also are the users adopting it? Are you getting a better adoption rate on a feature or outcome that’s in the user’s best interest, or do you start seeing those desired actions go down? So a measured approach on building and maintaining your ecosystem is a big thing, especially around automation. 

Kiran: Yeah. Lisa, I’m sure you have anecdotes you can share as far as the experience side, as Aaron was noting. Why is it so important to make sure that the experience companies are creating is one that users need and want at the end of the day?

Lisa: That’s the foundation of our business, isn’t it? Having experiences and interactions that people need and want. And I think, it’s interesting — I think people were very tolerant of rough around the edges during the pandemic, right? If you were shifting to buying groceries online, or if you were going to have a telemedicine visit. You were willing to put up with a little bit of roughness to get through that transaction. 

Now, again, people don’t have the tolerance for it. And I do think if companies can’t get those transactions and that whole customer journey right, it’s going to just — you’re not going to be able to survive because there are people working on getting it better.

The tools are ubiquitous, right? It’s not about the tools, really. It’s not about the tech. It’s really about how you string all these things together into this experience architecture, if you will. So it is back to people, process, and technology all in sync working together, and it’s not easy, right? This is not easy stuff. It’s stuff that you have to work on over time. And you have to put in the practices to manage it within a company. And there are companies doing an amazing job of that. And again, it’s continuous improvement. And how do you put together the right team, the right tools and the right processes to get at that continuous improvement mindset within the company?

Aaron: Lisa, I love that concept of continuous improvement, and I think one of the big drivers in that is data and data driven, in both how you consume that data internally and also how you use that data and insights for great impacts on your end users. Thoughts on data and insight?

Lisa: I love data, Aaron. Yeah no, data strategy, there’s a lot coming out of it. We have a team, Jen Nowlin and a crew talking about data as a product. Again, there’s whole new business models that are coming out of this world of data integration and data strategy. Data is the lifeblood for understanding experiences too. It will also, obviously as we’re entering this time of AI, be vastly important for how companies will take advantage of this new technology.

So if you don’t have your data house in order, a lot of things are going to be problematic, and that’s, I think, one of the biggest areas of technical debt we see right now. 

Aaron: Absolutely, I think the data and the importance of data and AI in the next 10 years, it’s paramount. We’re getting to the point now where we’re generating so much data and there’s real value in there not only in creating great experiences, but also making sure you’re focused on building the right features, so portfolio management. And also, use this data in running the platforms, the digital platforms out there. 

And we touched on it a little bit in terms of making sure that you have good ecosystem health. The changes that you’re introducing are having a positive versus a negative outcome. But even to the point where your digital ecosystem — the build is so complex now that portfolio management for enterprises is — it’s difficult for them to keep their arms wrapped around the investments they’re making and making sure that those investments — one, they’re understanding what the interdependencies are in their ecosystem, they’re sequencing their investments properly, and their investments align with their strategy. 

Kiran: Yeah, in some ways as we think about getting ready for AI, it’s almost like it’s a different inflection point now than it was three years ago, and it’s almost — and I’d love to hear from both of you — perhaps Aaron you can share first, but anything companies could keep in mind as they attempt to quickly ready themselves to prepare for AI? Perhaps lessons that could be picked up from the initial response to the pandemic. Or sometimes you don’t have that opportunity to wait, right? You just have to act so quickly. Just your thoughts on comparing the two moments in time. 

Aaron: Yeah, it’s so hard to answer that question because the opportunities for businesses and their clients and customers are almost endless when it comes to AI. AI can be used in running systems more efficiently, and driving down costs and effectiveness up. AI can be used to better understand their customers from a hypothesis perspective so that they can start to test more effectively. Yeah, it’s hard to really say, oh, you should go do this. Of course, the real popular thing right now is talk about generative AI which — that was an amazing and impactful what ChatGPT did, at least for the conversation around AI. And there’s a lot of opportunities there as well, but the AI field and the opportunities for businesses is almost limitless. 

Kiran: Yeah. Lisa, your thoughts on the moment that we’re in now, in terms of obviously AI and so many things happening rapidly, just how that compares to the moment we were in a few years ago?

Lisa: Yeah, I think getting ready for AI is going to be a shift in people’s mental models around their data. Again, it was like the shift that happened when the web came out. It’s like, what does IP mean? What do we keep and what do we share? And we’re at that moment again, where there’s a huge mental model shift about what do we own and what are we sharing with others? And this idea of platforming data so that it can be used in different ways.

And so this idea that you’re a lone company sitting on your own off in a corner and you’re doing your thing, that’s going to go away. You’re now in an ecosystem, and how you manage that ecosystem, what you share, what your experiences you’re going to tie to other things, it is truly becoming systems design, and companies really need to understand that this sea change is coming.

I think there’s three main things that people need to think about. At least now — there’s probably more, but this is what I’m thinking about. Data strategy, like how do we get our data in an accessible place, way that we can move it around to where we need it? How do we start — and a lot of the companies I’m working with are wrestling with this is, in a sense, identity management. How do we understand our customers through the entire life cycle? How do we know who these customers are and how do we manage that identity through the entire experience? 

And then also this idea of what is our data transparency model going to be for the company? What are we going to share? What are we not going to share? And who are we going to share it with? So these things are going to become really important, really quickly here. And I think there again, like the Internet age, there’s going to be winners and losers. It’s gonna come very fast. And so I do think people have to understand what’s the tsunami that’s coming at us.

Aaron: Lisa, I really agree with that. And I think what’s different between the onset of the — and both you and I lived through this — the web versus AI is the web was easier to pivot to. And I think with AI, you have to have the infrastructure, the knowledge, and the strategy, and you really have to be building a good foundation for it for you to capitalize ’cause you won’t really be able to pivot as quickly as companies did by just putting up simple brochure website, or eventually they got into an e-commerce situation where — this is harder to pivot to. 

Kiran: Yeah. Aaron, could you talk a little bit about systems communicating with one another, and I think we mentioned health care briefly, but government and health care are both examples of industries that had to move very quickly initially. And now, we may have systems that don’t plug into bigger systems, so yeah, just your reflections on that and why it’s important to be mindful of how things connect to one another. 

Aaron: Oh sure. And can we maybe start with data governance. And if we go back to this storytelling that we’ve been doing about, oh, the thing that happened three years ago and how we all pivoted, and in heroics were had, and the day was saved, in the least digitally.

There was that pivot, I think a lot of times from a data governance perspective. Corners were cut, and we’re now living with that. And that could go under technical debt, it could be data governance debt. We’re uncovering that in that quick move, we’re maybe moving sensitive data around and platforms that are not — that data shouldn’t be there, or we’re sharing it in ways that we shouldn’t be sharing it. And those things need to be corrected. And the industry is going through that as part of the thing that we’re going through in the settling phase of, okay, we moved fast because we had to. What do we have to do? Some of it is technical and some of it’s governance related. 

I think the other one is there was such a fast pivot into different platforms. Some of them were really expensive to operate on and there’s more efficient ways. Either it’s better architectures. So doing a rearchitect, doing an optimize for costs, which you can save immense amount of operational cost, OPEX spending that way. 

And then the other topic we see is that there was a huge push to move to the cloud. And some workloads, it’s more appropriate we’re finding to have our data centers. And so there’s a little bit of a pullback from the cloud in terms of — and that’s definitely impacting our product business in a positive way, which is excited to help customers figure out where is the right place to run their compute and storage workloads. And cloud-appropriate sometimes is the comment we use. And some things were moved too quickly and customers are finding out that some workloads are best run in either colos or in their data centers. 

Kiran: Okay, yeah. Lisa, similar question for you, just in terms of, can you speak to the importance of systems connecting and thinking about that bigger picture,, so you’re not stuck with parts and pieces in silos?

Lisa: Yeah, I’m going to start with people part of that, Kiran. That’s a good question. I think what’s interesting to me after the pandemic is that we’ve got a shift in how the corporations are talking about their technology. The CIO is the CTOs, the business leaders are in deeper conversations than I’ve ever seen them before, which is leading to better conversations, and I also think right now more conflict because there’s still this idea of how do we — what domain does each of these practices run and they’re coming together.

Again, if we’re starting to think in systems, you can’t silo different discussions. So it’s really interesting to see this collaboration, but more — and deeper collaboration between the business and the technical folks within the business. And I think it’s a good conversation and it’s imperative to being able to move in a more sophisticated direction. 

And so it’s exciting and also new, and I think we’re helping different companies navigate those conversations because the business doesn’t often understand the trade offs on security or cost structures, and the technical folks don’t understand necessarily the impact to the bottom line of the business in terms of new revenue and new businesses.

So to get the integration right on the technical side, if you want to talk about that to me, it starts with the people and having the right conversations and creating the right decision matrices and all of those. And I think that’s another big change we’ve seen since the pandemic. People are shifting the way they make decisions.

Aaron: Yeah, and it’s funny, we’re not just seeing it business to tech, but you’re also seeing some of the silos coming down within IT departments, digital departments, where traditionally you’ve had like your application development, and then you have your traditional infrastructure. 

And we’re seeing a more blended approach to that. Sometimes you’re seeing responsibilities for vertical portions of the technical stacks of specific business services going from the application all the way down to the infrastructure to support those, and those becoming parts of a team to one, introduce velocity, lower costs, and then, increase the quality. So we’re seeing companies restarting to restructure that, more of what I would call a product mindset. And it starts with the business all the way through starting to verticalize portions of IT as well. 

Kiran: Yeah, excellent. Aaron, question for you as far as our work and how we plug into these conversations. So can you talk about how we help clients determine priorities in terms of their digital transformation strategies, and what work looks like there?

Aaron: It depends. Yeah, I think in some ways they tell us what their priorities are, but based on their priorities, then we help suss out where they should focus. We are seeing a little bit more of a shift towards optimization from opportunity. 

And so customers are coming to us with concerns. Are they running their processes efficiently? Are they getting the most output from their development teams? Any of those features are they getting in quality they should see? Are there OPEX spend? Are they getting the most compute storage from that?

And those are more becoming more predominant right now, and I think that’s reflective in this period where we saw a huge investment in the last three years in digital experiences. The dust is settling. And so, there’s a little bit more focus on that like, man we’d love this, but could we do this more efficiently or cheaper, better, faster? And so there’s a bit of that focus. 

Maybe Lisa, you can probably talk a little bit more on the opportunity side. 

Lisa: Yeah. I think in terms of moving forward, I think people are looking at what do we need to fix next to get things working together better? So I think we use tools like service design, journey mapping — and these are just very tactical tools to start laying out what’s happening, helping people actually visualize what’s working and what’s not working. We can use these tools to help prioritize work. 

And I don’t think that’s a bad thing. There’s all these — there’s big things happening, and then there’s all the day to day things that have to be right. And so we have to work on them at the same time, and often that’s how we’re working. How do we prioritize the little things, because we have a certain spend that we can deal with today? And again, we’re in a bit of a belt tightening era with people trying to really retain cash. And so, how do we prioritize?

And I think we can do some research and some mapping about areas that are going to give us the biggest bang for the buck for the spend right now. If nothing else, we should be at least ticking off those rough edges, if you will, of what I talked to you about before, but there’s parallel planes going on here. You have to think about the long term and the bigger picture, the business, and then you also have to think about the day to day operations. And that’s no small feat either, I think for a lot of companies. 

Aaron: And then on the operational side, our customers are coming to us and there’s things with their processes. So optimizing their agile process, their safe agile process, portfolio management. The other ones, their DevOps approaches with automation, and looking at, okay, where can we automate more to increase our velocity, lower our costs, lower our error rate. 

And another thing is around an architectural assessment around costs. So how can we take this expensive workload and lower our costs? One of our customers had — it costs them, let’s say 10 per device to run their platform. We were able to lower that cost per device, and we’re talking about millions of devices down to 50 cents. And so, that’s some real money to recover from the OPEX spend. In some cases, it’s the difference between making or breaking a business case with a digital experience. 

Kiran: I think you’ve both done a great job of talking about challenges that are all in place at the same time. And at the same time, just some of lessons learned that can be hopefully put in practice now. 

Lisa, any final notes, observations that you’d want to add to this conversation? 

Lisa: Yeah, I think what I would charge our clients to do and think about is pulling people in the room that you don’t often talk to. Take a more operational approach holistically to digital. Think about it from the people side, from your customer side. Begin having the conversations that you haven’t had before. And I think that’s a good way to start. And I’m obviously the people side of the business, so that’s where I always want to start. 

But I do think it’s worth it because if you can understand the trade offs, the cost structures, the security issues — I mentioned some of these before, the experience trade offs that we’re having. I think when we all start marching towards the same direction and understanding the constraints and the opportunities, that’s where companies can do a better job. If anything, break down the silos that you’ve got between technology departments and your customer departments and your product departments.

That would be the first thing, so create a new steering team. And we’ve had customers do that, and we’ve guided them in that direction, and I do believe it opens up possibilities that weren’t there before. We would call it radical collaboration. 

Kiran: Yeah, love that. That’s great, Lisa.

How about you, Aaron? Any final thoughts or words for this conversation? 

Aaron: Lisa, you and I have been working together, what, three years? Four years? Something like that? 

Lisa: Yes, three years!

Aaron: Three years. That’s the thing I really appreciate about you, is your focus on the impact of people. And I’m just going to double down on that. And it’s not just the end user and creating the experience. It’s also your employees. The teams that have to figure out how to make this work. And they’ve lived through this heroics, and the dust is settling, and it’s like, how do we improve their lives? How do we make their lives, work life balance better? How do we get it to the point where they feel like they’re being more and more successful, and they’re doing things in a way that are industry leading? 

And so there’s a whole employee experience to this, even though we’re thinking that we’re talking about, oh, how do we make better architecture? And there’s a real impact on people and employees that is, in some ways, a higher calling here. 

Lisa: Yeah, I would say if you went back to doing things the old way post-pandemic, you’ve just lost all the opportunity that you were given to make change during the pandemic. So I would say companies, think about the future, integrate the lessons you learned, and create new ways of working.

Kiran: Love that. Appreciate you both and your insights today. 

Lisa: Thanks Kiran!

Aaron: Thanks Kiran. 

Kiran: You’ve been listening to Ten Thousand Feet: The OST Podcast. 

OST, changing how the world connects together. For more information, go to OSTUSA.com.