Digital Transformation is top of your mind as an IT Leader. What are your challenges dealing with People, Policies, Processes, Pocketbook, and Politics? Are others facing the same issues? How are your peers handling these 5Ps of Digital Transformation?
Contributors

• • William Fandrich, Senior Vice President and Chief Information Officer, Blue Cross Blue Shield of Michigan
  • Frank Johnson, Chief Information Officer (CIO) and Chief Digital Officer (CDO), City of Baltimore

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Transcript 

Sanjog Aul [00:00:23]:

Hello, and welcome to this segment on CT. And to learn more, please visit ciotalknetwork.com. And the topic for today is Handling the 5 Ps of Digital Transformation  . And the 5 Ps here are people, policies, processes, pocketbook, and politics. And the guests for today’s show are William Fandrich, who is the Senior Vice President and Chief Information Officer with Blue Cross Blue Shield of Michigan. Hi, Bill. How are you?

Frank Johnson [00:00:48]:

Good. How are you doing?

Sanjog Aul [00:00:50]:

Very good, sir. Wonderful morning here in Chicago. And we have Frank Johnson, who’s the Chief Information Officer and Chief Digital Officer for the city of Baltimore. Hi, Frank. How are you?

Frank Johnson [00:01:01]:

Sanjog, wonderful day here in Baltimore. Excited to be here. Thanks so much for having us to help share the wonderful things we’re doing in tech here in the city with you and your listeners.

Sanjog Aul [00:01:11]:

Thank you so much again. And, you know, the reason I picked this topic is because of all the the uproar regarding digital transformation. Everyone, literally everyone you talk about, they start that, oh, we are doing digital. That’s great. They are they have started on the journey, but then there are equal number of people who say that, hey, we started it. So far, we are making some progress, but it’s actually not going exactly how we envisioned. And when we see such a pattern, we wanted to discuss where the ball is getting dropped. So as the first question, Bill, I’ll start with you. If if someone is seeing what they started with, it’s not coming to fruition. Yes. Something could be, there. There could be some issues with execution, but how about we starting to how do we let’s start challenging the strategy. Where are we dropping the ball?

William Fandrich [00:02:05]:

That I think that’s a great question. And in, you know, like most things, a lot of work has to be done upfront to set things up for success. And oftentimes, maybe because of the word digital, maybe for other reasons, including inertia and organizational type of, design, What people don’t often understand, and if you don’t set these things up correctly, that the issues you often face is one, it is a transformational item. So so to do that, you have to have leadership that understands how to execute transformation, but also understand how to get it done within the culture in the, decision making process and the politics of the organization itself. Two is I oftentimes they jump into, technology solutions. And if you look at what’s core to digital transformation, oftentimes as a CIO, you are asked to lead an effort around digitization. But ultimately, it’s about the business change that occurs in understanding what many of these silos are in today’s organization and how you break those down, looking from the outside in, from the customer in all the way through the back office. And equally, you have to understand all the ingredients that have to be put in play. And oftentimes, virtually every organization has some form of business process reengineering, agile, lean, in many other functions that really help drive efficiencies and process design in the organization as well as technology. But those have to be brought to bear in a very organized, thoughtful way because you’re bringing all those disciplines together along with very significant, oftentimes organizational change, job role and skill change. In doing that is an evolutionary model versus a big bang. And I think oftentimes in setting those strategies up, there’s a lot of excitement about what the opportunity is, but it never goes deep enough about setting those foundational elements up for success.

Sanjog Aul [00:04:29]:

Now what you just mentioned definitely is spot on in terms of what are different areas we touch. So coming to you, Frank, we cannot call this as an initiative. We cannot call it as as a project. It is a fundamental rewiring of how everyone thinks, strategizes, executes, and even operates as a business. Right. This is to be looked at, I’d say, almost like there’s a newborn to be handled.

William Fandrich [00:04:58]:

Yes.

Sanjog Aul [00:05:00]:

So where are we not looking at it that way? Are we slapping in technology and say, okay. This is my kicks this how I’m gonna kick start my digital, or the business, leader comes from a golf course and say, let’s do this portion as digital. Is that where we’re dropping the ball?

Frank Johnson [00:05:16]:

So I I well, first of all, I agree with everything that Bill just says, but it always starts first with the commitment of the leadership of the organization. If, technology and investing in technology and therefore digital transformation is a priority for the leadership, then it becomes a priority for the organization. So first and foremost it starts with vision and commitment from the top. The second thing I’d like to throw in there is kind of interesting. We’re talking about the 5 Ps but not the technology has always been the easy part. So we’re gonna make it more concise. Bill, I’m sure you’d agree with this. Somewhere between 80-90% of every IT project I’ve been associated with comes down to two things. The five piece, culture and resource. The 10-20% is the technology piece. That’s always the easy piece. Changing the way people do business digitally or enabled by technology as opposed to by paper and manually is always the long pole in the tent. Now let me suggest something that we should talk about. I’ll argue, Sanjog, Bill, and your listeners, that we’re talking about maybe a 20 to 30 year problem. Because when the Gen Y’s are in charge 30 years from now, they’re growing up with an expectation that, of course, there’ll be digital document management. Of course, I’ll sign that contract electronically. That’ll be the expectation. So part of this I’ll argue that this culture thing that we’re dealing with, that people didn’t grow over the technology that are currently in control or in charge or in leadership or managerial position. And we’re probably talking about maybe a couple of decade of a problem or issue or retraining we need to deal with. The future leadership will have a much easier time with culture. Again, because that entire generation has grown up with the technology as a part of the fabric of their upbringing. But without a doubt, changing the way people do business is and planning upfront, carefully retraining is absolutely the lion’s share of the work. No doubt. 

Sanjog Aul [00:07:25]:

So what you just said so Bill coming to you, one is to say, okay. I’m going to use digital technology to check my mails, to handle images, to exchange ideas, communicate, etcetera. But that that statement has a technology underpinning to it. Another thing is to look at how you could take your same business and elevate the experience by rethinking or fundamentally doing some creative destruction, which means you remove the old to give way to the new of how even this is possible when I’m not gonna keep lingering on with keep keep tagging along the old way of doing things. Because that old way has to go away for the new way to come in, and then let’s talk technology. Then let’s talk about how we’re gonna automate or apply AI, etcetera.

William Fandrich [00:08:23]:

So Yeah. So I think you’re spot on on that. And it is one of the things I’ve often done and try to do is CIO even independent of the joke, but it’s even more important given the reasons you suggest that, or just brought up, is that you need I avoid using technology virtually in all my discussions or engagements with the business around digital, because those oftentimes what happens in these projects is it quickly evolves to a upgrade of the portal or a new technology platform, and you’re not really changing the business, you’re just automating a component of it or attempting to automate it, and you haven’t dealt with the fundamental issues. If you go to the discussion, the comments by my colleague about looking at it from a generation who’s used to and expecting to do business a certain way. You have to have them look you from the experience that’s expected. And then you need to break down those traditional barriers. And we all know, as was discussed, that the long pole in the tent is we all I mean, this would be much easier if we didn’t have legacy environment, legacy operations, traditional ways of doing business that may serve the companies very well. You’re trying to transform that and change that, but those things take time to change. So you have to go through this evolutionary process, but you can’t ever lose sight of what it’s been, what you’re trying to accomplish with the experience. And you need to measure that experience from the eyes of the customer and those who are accustomed to doing business in a different way from that lens. And I think having a good diverse team, including representation of different generations of people that are used to doing business more in this way is critically important.

Sanjog Aul [00:10:45]:

So so, Frank, let’s let’s talk about the pocketbook side of it. And besides the fact people may not be reaching the desired outcome, They are also reporting that one of the reason is that somewhere, while they got the initial thumbs up from the business, but somewhere, they start becoming anxious because they’re thinking, oh, I’ll pull out a magic bullet and give them something yesterday. When it doesn’t happen, they start becoming more resistant to adding more funding because they don’t really see something shaping up. And we I’m not sure how we promising them or how they are imagining that something will shape up in two days. The funding starts dwindling. The supports and sponsorship that you mentioned is most important starts dwindling, and then you are left holding the bag. So who is not setting the right expectation or who as a leader is not understanding that this is not gonna get done yesterday?

Frank Johnson [00:11:50]:

And I, in my humble opinion, this starts first and foremost with the commitment from the leadership. And that leadership absolutely has to be conditioned in understanding the value of investments in technology, both hard costs and soft costs. Too many finance departments that I have engaged with throughout my career, very, very good at short term 12 months. How do I get a return? Oh my gosh. Sometimes some big transformational projects, you won’t see a return on that investment till years 3, 4, and 5 of a typical transformation. And a lot of that ROI to the organization are soft cost, efficiency, productivity, customer experience. So first and foremost, we work in close partnership with our finance department to come up with a very fundamental approach that everybody agrees with. We call it our cost benefit analysis. It is both hard cost and soft cost of what will it take to implement any new capability before we start. And everybody understands. It’s a series of spreadsheets. It’s a couple of graphs. But it is a methodology and a process that everybody believes in, so that the leadership can make informed decisions about investing in this digital transformation project, or maybe in this other capital expenditure. Here’s another thing that’s a real challenge for everybody that’s in procurement and finance, Sanjog. I’m sure that Bill has this experience too. Our industry is shifting from one that’s very capital intensive to one where I’m now procuring capability as a service. Okay. So, you know, years ago, I would buy servers and licenses, very capital intensive. And every five years, I’d have to ask for $10,000,000 or $20,000,000 to upgrade my server infrastructure. I run the data center. Well, now I’m gonna go procure cloud services as a service and pay monthly. So on top of doing cost benefit analysis, we now need to teach our finance partners and our procurement departments how to procure capabilities as a service instead of the way that we used to, which was much more capital intensive. But we absolutely do not do anything without close collaboration with our finance partners. They’re absolutely key part of our tech transformation team. Heck, they’re actually at the table helping us write our digital transformation plan for the city. Can’t do it without them.

Sanjog Aul [00:14:22]:

Let’s take a quick break, listeners. We’ll be right back. And, Bill, I’ll come back to you and say that what should be those initial sets of expectations that we set for the top leaders so so that you can show that I’m gonna give you a quick wins, a few quick wins, but that doesn’t mean that’s your holy grail. So don’t stop your support. Don’t stop your sponsorship. What does it take? Please stay tuned listeners. We’ll be right back.

Sanjog Aul [00:16:49]:

Welcome back. So, Bill, as, we spoke about the different ways people are trying to, get this started, digital transformation initiative started. But then there are some expectations which are getting set unintentionally, which is causing us to lose get get these people to lose their interest right when we want their most support. So would you have any specific things you’ve done in your organization or anything which you when you look back and say you should have done so that these people will know this is like building a castle one brick at a time. So we just got started, guys. It’s gonna take some time. Don’t lose

William Fandrich [00:17:29]:

I think you have, you’re spot on with the journey and evolutionary approach that has to be taken. I think you also have to go back to what I talked about earlier, in the ingredients. You have to assess the culture, where the culture is on its organization. If you’ve already done and have a strong familiarity with concepts such as agile, and that’s been a business adopted approach to many of your initiatives, or even some of the multi year efforts around process reengineering, then you probably already have some foundation that you can leverage to link it back to something they’re familiar with to help tie you to that evolutionary path. And that’s oftentimes what we’ve done is compared it to other things of how we’ve done things evolutionally so they understand, but also recognize and constantly reiterate and communicate at virtually every certainty of evidence is this is what this accomplished. These are the things that need to will need to be addressed in the future. This is how we’re gonna be tackling them in kind of almost like a rolling 9-12 month plan. Now if the organization is not familiar with agile or some of those evolutionary other methodologies and approaches to executing work today, I think you do need to go through a fairly intense educational program that helps people understand the iterative approach that comes with digital. Oftentimes, you can use many of the agile training programs, and we’ve done that extensively throughout our organization with a very formal in parallel education to the stakeholders both at the senior leader, but also at the business operating areas and certainly within IT of the agile. What it is, how it’s used, how it works, and constantly reinforce and have the right coaches as part of this who can continually educate and reinforce that to the team as well as the key stakeholders.

Sanjog Aul [00:19:44]:

Now given the way you explained, like, you know, we bring suppose agile or we talk about other collaborative approaches to doing things. That is would you say that is that culture or is that behavior that we are trying to have them adopt? Because culture is something a person will do the right thing when nobody’s looking or nobody’s measuring. They are they are, gung ho from inside out to jump on this digital or the new way of thinking, new way of connecting, or no new way of even, innovating to to help the organization. It’s like a the swarm of ants who want to work together to get to their destination. So maybe this is a question, Frank, you may wanna take to say, if if I have to say this is a this is a template of a culture independent of what that organization does, what would be the core tenets which will make it conducive to take on the digital transformation and and that will result in least resistance towards moving it forward?

Frank Johnson [00:20:51]:

You know, I, so I’m a certified leadership instructor, so I know a lot about this. It may starts with good old fashioned leadership. And the one leadership tenet that reigns king here is collaboration. And it starts with the discussion that we just had about how important are the business leaders or the users. Right? Today, everybody is an IT expert because they’re all consumers of technology. Everyone carries around their iPhone. I can remember a few years ago, several CIOs, you know, refused to enable smartphones in the enterprise environment when they first started to show up in the market. But I would always say to myself, never underestimate the power of the user base to get what they need. Because at the end of the day, they’re the customer. And lo and behold, what happened, people started using their smartphones for business needs, their mission needs. And slowly but surely, every IT department started to support it and had a mobile strategy. That was driven by the needs of the business or the user. In today’s environment, there is no way that anybody could pull off a successful digital transformation plan that’s enterprise wide or a specific project without close collaboration with the customer, the business unit, or the agency in this context. And I’ll throw something else out there. You know, we have this constant debate within IT. Should IT be centralized or decentralized? My answer to that is yes. You cannot do anything today without technology. Nothing. So if you’re a business unit, they shouldn’t have to be bothered with managing the ping power in the pipe of the infrastructure. But they absolutely need to be well versed in the applications, the data, and the cybersecurity requirements to achieve their mission. But as soon as something like, let’s say, something that is germane to multiple divisions or multiple business units, then it’s up to the central IT authority to pull that out and provide it as a service enterprise wide for everyone for all of those aforementioned efficiency and productivity cases. But the most important thing to me is that collaborative spirit, customer first, put yourself in the shoes of your customer and work backwards. If any of you are following the Amazon story today, what is Jeff Bezos’ number one priority for that great company? Customer experience. It all starts with a customer. And in our context, our customers are the internal business units or agencies of whom we serve. And those relationships are absolutely key to success. Because at the end of the day, that’s who we’re serving. IT for IT’s sake is nothing unless it’s enabling a business outcome. It’s allowing us to get to market better, faster, cheaper. It’s driving productivity or efficiency. That’s what matters.

Sanjog Aul [00:23:44]:

So culture and skills will not be developed in a day. So, Bill, when you and your organization embarks on this journey, I’m assuming that would not be a prerequisite that you will not move a needle till the time you have the required culture. You got but you don’t have all the skills. So this is a work in progress and will stay work in progress. So how do you tackle or how do you wear the suit which is being sewn right now? You see where I’m going?

William Fandrich [00:24:18]:

Yes. And I think that as you describe that, some of those challenges virtually through every generation of or any type of initiative that a company is trying to change, whether it’s changing its business model to evolution to other business lines, etcetera. That culture change that you described is always there. And I think there are some foundational things that need to be put in place. First of all, you have to add the constant reinforcement support from senior leadership. That’s critical in alignment around that. With that understanding, it is a journey and it’s one brick at a time. The second thing though is I think oftentimes people try to boil the ocean and get everyone to change. And I think we all know the nature of how people and organizational often change, especially organizations that may not be used to this kind of change. You have to find those wins or those champions that that one will have the respect of the organization, but can adopt and understand how to work differently and really champion this. And then you do have to constantly evolve that makeup of that group to bring other champions in. And over time, you start chipping away with that. But often, what we all need to understand is in any organizational change and model change, and certainly in digital, that there are people impacted by this. There’s people that may not get it, and will not be able to make the change. There’s roles and jobs and skills that are going to be different as you evolve. In dealing with that proactively is also critical. Not assuming that everybody’s gonna get it and not assuming that there isn’t gonna be an impact to that, but also doing it in a very thoughtful way.

Frank Johnson [00:26:25]:

So hey Sanjog. Let me add to that. You know, another reason that we haven’t addressed yet, but there’s also part of this somewhat resistance to change is the fact that a lot of people know that technology and automation are responsible for putting people out of work throughout the history of mankind. Now how we address that working closely collaborative with our partners, we’re like, okay, look. We’re gonna automate this. And of course, we can replace these people with some automation. But business unit lead, let’s look at the long list of things that you would love to do but currently can’t do because you don’t have enough resource to do it. If we automate this, we can take that resource and move them up the stack to do more highly value added things. Now here’s where human capital and tight partnership with HR kicks in. We need to retrain people. Baseline their competencies and skills. Give them a chance to learn and do new things that are of much more value to the organization. So there’s a huge organizational development piece, which right now in technology is very challenging because we’re in an unprecedented hot tech job market. The US university system is graduating for cyber alone maybe about 40% of the demand. Not enough programmers for everybody. Not enough analytics people for everyone. Data scientists, not enough cyber people for everyone. So we’re gonna get very, very creative. Once we go and start to implement a project, and we need those arms and legs to implement now the digital transformation, whatever it is we’re doing, our biggest challenge is the people side of it. Again, because of the unbelievably hot tech job market that we’re in right now.

Sanjog Aul [00:28:16]:

Let’s take a quick break, listeners. We’ll be right back. And let’s talk about partners. Perhaps this is the sixth p, which I did not include, but maybe the partners I see as people who may be not directly controlled by you, but you have the chance to influence them. And we more and more in this digital era or even otherwise the way we are working is we are dependent or rather interdependence is there on the partner and there is a reliance as well. So can the culture which we today are just thinking about the culture within the organization be extended to include our value chain partners so that they are not just doing it because they are your partners or in crude terms a vendor, but instead they become your true partner where they try to get their respective cultures in their organization to be such that the sum total, the output that you want for what that customer desires is the best it can be. What do we do to build such an inclusive culture which spans the complete value chain? Please stay tuned listeners. We’ll be right back.

Sanjog Aul [00:31:18]:

Partners are very important. So, Bill, what would it take to create a culture which doesn’t just is contained within your own organization, it spans across the value chain, so each partner works voluntarily to make you and in that process themselves successful?

William Fandrich [00:31:37]:

Yeah. That is extremely important. And as we know, it’s hard enough to not only change a culture internally, but it’s also quickly to recognize that more and more of everything we do, certainly in the technology space, involves partnerships and third parties with many diverse offerings. So when you go into a digital transformation, you need to recognize that that same level of work we talked about earlier about organizational change and how you handle that needs to apply with your partners. Oftentimes, if it’s an existing relationship, you’d be either providing support for development work or for work on an operational technology side and you’re trying to change that, you need to understand the dynamics of how you traditionally work and what’s gonna be needed to be successful in the future and reshape that relationship, either through the model or a statement of work, but also the culture of that organization recognizing that they also need to be educated and understand the dynamics of how this work is gonna be done differently. And certainly, depending on how your financial relationship with them works, you need to look at how you’re gonna measure success there and how you’re gonna reward and incent those changes as well. So, to me, one of key pillars as CIO is our overall third party relationships in getting away from that traditional vendor model to the more partnership model. And this is key to it: setting up those relationships upfront similar to how we talk about what you do internally and managing those very closely through this transformation.

Frank Johnson [00:33:41]:

If I could add Sanjog, I spent a significant amount of my career on the other side of the desk selling to CIOs. They were my customers. And I saw throughout my 25 year career the transformation. Tech sales people used to sell features and benefits. That was necessary, but no longer sufficient. Now we’re in solution selling because we had to be more valued to our IT customers. Well, that’s necessary, but no longer sufficient. Now we’re full of business partners. And throughout my career, the number of CIO friends that I’ve had that have told me along the way, Frank, I spend no time for people who are trying to sell me something. I will give an unlimited amount of time to those who have a vested interest in helping me grow my business, or advance my mission. True business partners. And every IT organization today has a multitude of partners to stand up their very, very complex, and getting more complex infrastructures. It’s just the nature of the business. And it can’t be done without partnerships. But it’s not just tech partnerships in today’s world. At least here in this community, I’ve got four other classes of partnerships. Tight collaboration with the universities here. Getting back to the people side. Not enough tech talent. We’ve got interns and graduate students here helping us innovate here in the city. The other businesses that operate in and around us, we’re sharing ideas. The other governments in and around us, we’re sharing best known methods, best practices, ideas, how we can help each other. And then, of course, the growing number of incubators, VCs, and foundations who are helping grow the tech industry. It really takes that collaborative partnership lever. Yes, the tech suppliers are part of it. But here in Baltimore City, the entire community is leaning in to try and help grow the overall tech capability of the city. And those other aforementioned players are very, very key to our success.

Sanjog Aul [00:35:46]:

So, Frank, if you look at anything in terms of digital transformation, it has to first, of course, have the support, but then you have to look at your processes, how you’re doing things, and you have to undo some of those and or tweak the rest so that you have a good foundation on which you can slap technology and the life would move on. Now that said, how with so much variety and the volume and the velocity of changes demanded by the business, this would be like you keep painting that canvas forever. You never stop.

Frank Johnson [00:36:21]:

Yeah.

Sanjog Aul [00:36:22]:

And if you do that, you could never reach a state where you say, okay. I’m done. So let me go to the next step. So how do you paint something, let it dry out, and then again try to paint on it thinking that this is gonna come to a point where I can call it quasi done.

Frank Johnson [00:36:38]:

No. I think Bill touched on this earlier when he said, hey. The discussion is all about people, process, pocketbook, the 5 Ps without talking about technology. And what we’re trying to build here is a culture of leadership, inclusive leadership, underpinned by innovation. So Sanjog, I don’t think we will ever be done. Because the tech industry will continue to find ways and create ways that we can do things better, faster, cheaper, continue to innovate and evolve. The canvas will never go dry. It’ll constantly evolve and change. Creating a culture where innovation and change is the norm are absolutely the organizations that will continue to adapt, thrive, grow, and lead. We have to be unbelievably flexible and adaptable, and continue to change with the times, keep up with the technology, or get out in front of it and shape it for a first market mover advantage. Take more risks. Do more proofs of concept. Continue to innovate. I think that is absolutely key to any organization’s survival or relevance long term. Those that sit idly by and let the paint get dry, the rest of the world and competitors will speed right past them. And see that happening in business every day.

Sanjog Aul [00:38:09]:

Yeah. So Frank, point well taken now. Bill, coming to you, one is to talk about technology, the layer which, Frank just, you know, tackled. But if you go back a layer below, which is the process changes, that’s how you fundamentally, set the foundation on which you apply technology. But here, we are continually coming back and not just saying digital means only to tackle new technology, but also to fundamentally keep rethinking how the processes work. And that’s not always very conducive to getting anything done ever if you keep tweaking it because that’s what you’re gonna automate, that’s what you’re gonna optimize using technology. So can we get it off of us art form and make it a stencil at least to say, okay. This is my process. The most tweaked it can be, and let it get to that point before we go and yet again change it.

William Fandrich [00:39:01]:

Yeah. Those are that to me, that is, you know, as we talked earlier and Frank iterated, it’s not the technology part of it is gonna always constantly change. But what you’re describing is really the organizational dynamics about constant change management. And although it’s a buzzword, it’s oftentimes misunderstood what’s important. We have to get into the mindset, in the business and in the IT. In the IT world, it is oftentimes with we’re very accustomed to it now with third parties where they release new versions of software or even certainly on your mobile phone, there’s constant updates and that changes something. But there’s a whole process around that and there’s an understanding of that change and what has to be involved and included. And if those processes are defined whether it’s on a quarterly basis or an annual basis, there’s a whole set of activities around communication, education, understanding how roles and jobs change. That dynamic needs to be built into the fabric in understanding that these are not events. They’re ongoing core capabilities that you just have to be good at. You need to be good at constantly changing and evolving and not in an ad hoc way, not in an unstructured way, but in a very disciplined way, while recognizing you’re not just doing this as a project, you’re doing this as part of a culture that’s going to constantly be revisiting and changing things, but it needs to be done thoughtfully. And that’s a core competency for the organization and often times is put off to the side or underinvested, but it’s critical for this digital journey.

Sanjog Aul [00:40:58]:

Frank, talk data and analytics. Kid you not, so many people I speak with, they are ranking themselves under five from a scale of 1 to 10 when it comes to where they stand in terms of where the data and analytic function is. And that being so core to the very digital, what we the digital dream we are trying to realize. What’s what’s holding us back from being able to inch forward and make it something which we can slightly be at least start to feel proud of?

Frank Johnson [00:41:33]:

Okay. So, first of all, everyone will agree in this day and age, analytics reigns king. It’s all about the data. Insights will drive first mover advantage. People who can figure out a way to monetize or capitalize on their data or public and private data for some competitive advantage in the marketplace will make a huge difference in business outcomes. Data is king. Now let’s be fair to ourselves as an industry. The university systems are just starting to teach and produce data scientists that we can start to employ. Up until just a couple of years ago, analytics was very, very expensive vertically integrated IT systems that cost in the millions of dollars. Thanks in the last few years to advances in Moore’s Law, now I can have the compute capacity and capability for the masses. So big data and analytics, and all of the tools that we layer on top have become much more affordable. There’s a bunch of now open source alternatives. I don’t have to buy any one specific analytics platform. So it’s that affordability within the last 3-4 years that has made access to the technology available. And again, I’ll argue that we’re just starting in the higher education system around the world to start to produce enough data scientists for companies and organizations to employ to start to develop strategies. People typically call this the CDO, chief data officer, in an organization. There’s not enough of those people available to every organization to lay out frameworks and strategies. So when each one of the business units starts collecting data, at least it’s coming in in an organized fashion so the enterprise can make sense of it. We’re pretty much at the start, from a technical capability and a competency capability, having enough talent to organize people’s data. Ten years from now, it’ll be old hat. But this is a huge priority for everyone. And then this cloud, cyber, data analytics, social, mobile, whatever you wanna layer on top, for most organizations, data is absolutely keys to the kingdom and the insights that you should be able to drive to drive some positive business outcome. Without a doubt, hugely important.

Sanjog Aul [00:44:07]:

Let’s take a quick break, listeners. We’ll be right back. And, Bill, when we come back, I would love to continue to touch on this topic because what Frank said is very encouraging where, yes, we have the new technology and we are building the capabilities to be able to get the outcome. The challenges most organizations have reported are the fact that the data part, the data engineering part, where it comes from, how clean it is, how the integrity is, and who’s the owner of the data. That’s one of the chronic issues which brought the MDM, the Master Data Management Initiative in the past, down to its knees. And it is, again, becoming the monster people are having tough time dealing. So the upstream function of this data and analytics and the ability to build a culture of data enablement is what we are grappling with. What do we do to at least inch forward in this area? Any thoughts, anything you’ve tried, will be all yours. Please stay tuned listeners. We’ll be right back.

Sanjog Aul [00:47:04]:

Welcome back. So, well, let’s talk about this upstream function where we need to have the data be owned by someone that’s the custodian, not a CDO, not a CIO because it’s business people’s data. So it should be their ownership. And then should be a way for it to come in in a manner where we can actually use it in a proper way. So that’s a dream. It’s a pipe dream, which has been their dream, and it is not getting fulfilled. People have tried very hard. Where are we falling short? What’s the way out?

William Fandrich [00:47:41]:

That’s every company is challenged with this, in particular, the traditional companies. And the back and forth between ownership is even in some ways more challenging than digital because oftentimes people don’t understand where in digital you might understand the customer experience, understanding all the underpinnings that make data governance work and the importance of that to driving business value is a very difficult thing conceptually for people to understand and drive towards. But in terms of how you tackle it, one of the things I’ve had experience both in the business and IT side in analytics and informatics is that many of the concepts we talked about for digital about how you evolve these capabilities in the organization versus the big bang are challenging even in data governance. I always look at it more from what I call applied informatics or applied analytics. You need all the core underpinnings of data. And ultimately, it will never work if the business isn’t making decisions and understand the implications of their decisions around data definitions, rules around the data, ownerships, and the importance of addressing those changes proactively as a formal part of governance. But the problem is you often try to solve those as you boil the ocean, and you try to do it from an enterprise view. Even though you need to solve it in enterprise, what I’ve often found is you start to tackle discrete areas and you start to build momentum there. Through that, you build more of the governance process and implement more formally where over time the business is taking more and more ownership and control, but they’re seeing the value and they’re speaking more about the importance. Then you evolve it over time. Fully understand where you need to go as an enterprise, but the problem with this is if you try to do it across the company in one big bang, it will fall on its knees. It’s more complicated than digital just because the underpinnings of where this data comes from, what the quality of it is, all the different iterations of data, definitions that go through our environments and systems and number of people that touch it and change it is almost mind boggling in most companies. You just can’t tackle that at an enterprise level holistically. You need enterprise support, but you gotta deal with it by area, topic by topic, and build momentum.

Frank Johnson [00:50:33]:

Yeah. And I’ll also argue that the data that’s being utilized in decision making today extends well beyond the boundaries of a traditional enterprise. We use third party data. And the most touchy one, which requires legal, moral, and ethical review in well documented governance, is aggregating citizen data. This needs to be carefully planned and choreographed. In my mind, the chief data officer is trying to lead the governance enterprise wide, develop some frameworks, syntax, standardization, and tools. So as the data scientists, which are starting to grow in numbers across the agencies or the divisions or the departments, they don’t have to—that’s been vetted for them. They can just focus on the data requirements for their mission and business, and know that if they follow these rules and standards and use these tools, the enterprise will be able to make sense of this stuff in aggregate. But in our governance model, Sanjog and Bill, all the stuff around data governance who has access, the security of it—is by far the largest part of our overall governance model and continues to evolve as we continue our journey down this path.

Sanjog Aul [00:51:59]:

So one last question for both of you. This is unprecedented. Whatever you have done in the past, I’m sure you’ve earned your stripes and earned your gray hair because you dealt with situations. You know how to deal with uncertainty. But then there are blind spots. There has not been the endurance or humanly possible, no one can tackle this much change at once. And then there are skill gaps. How would you lead others when you yourself are like a child in this new day and age? So if you are to send a message, 30 seconds each, I’ll start with you, Frank. What would be your message to the leaders who are trying to tackle this so that they can show at least some light at the end of the tunnel?

Frank Johnson [00:52:45]:

Wow. I mean, 30 seconds. First and foremost, I’ll say there’s never been a more exciting time to be in technology than right now. Once we get to billions of smart connected embedded devices, which we haven’t even talked about in this session, the amount of data that we’re gonna be responsible for managing, analyzing, storing, and handling is gonna explode 100,000-fold in the next 10 years. That to me is very exciting. The business model innovation, which we’ve touched on here today, not just the tech that we enable by technical innovation, is also very interesting and provocative. You’ve got to be wired to constantly be learning, be open to innovative creativity and imagination. You have to keep reign of innovation because a competitor, another partner, or a potential supplier is absolutely figuring out ways to leverage all this wonderful capability to do things better, faster, and cheaper. You have got to keep your organization very nimble, light, and innovative in keeping up with or ahead of the times by leveraging this capability.

William Fandrich [00:53:52]:

Super exciting time to be

Frank Johnson [00:53:53]:

in technology.

Sanjog Aul [00:53:54]:

Thanks so much, Frank. Bill, I just need two words which leadership should keep in mind. I have to close the show, but I would like those two words.

William Fandrich [00:54:01]:

I would just say business focused and perseverance.

Sanjog Aul [00:54:06]:

On behalf of the show and our listeners, thank you so much, Bill and Frank. Wonderful conversation. Love to have listeners learn from this dialogue so that they can tackle the 5 Ps of digital transformation to improve the outcome. Thanks so much again.