What does "digital transformation" actually mean? According to George Rigby, senior director of solutions at NTT America, there is no single answer technology-wise.
As more and more nascent and booming technologies come under the umbrella of digital transformation, Rigby explains, enterprise customers are best served by their service providers and network operators when the process is viewed as a custom-made solution for business growth.
In this lightly edited Q&A, Rigby highlighted just how flexible and fungible the notion of digital transformation can be on an enterprise-by-enterprise basis.
Telco Transformation: When it comes to digital transformation, are most of your enterprise customers focused on growth? Or are they more trying to fix or streamline what they already have?
George Rigby: I guess "digital transformation" is often a bit of an overused term. If we're purely talking about digital transformation in its kind of pure definition, I would say that it's customers that are looking to innovate their organization. And why they are doing that is because they are looking to grow or change the way that they deliver their services, and that can be in response to a number of things. They could be disrupted by competitors and they have to play catchup, or they might be market leaders themselves and being innovative in finding new ways to relate to markets to create products and to create customer channels.
So there's no one-size-fits-all answer. But if we're talking about real digital transformation, which is really about creating new channels, doing the digital channels to connect with consumers and partners, or to innovate the way that you create products and service, it's often those kinds of growth and -- yes -- forward-looking aspirations.
There is a cost-savings element, I would suggest, in some instances, but that's often as part of a process to unlock budget to reinvest in your organization. So it's kind of part of the bigger picture. The concept of year-on-year costs reduction and cost savings out of IT, and that being the primary driving mandate -- we're seeing that going away. The cost reduction is still a priority, but it's there to help underpin -- or to make funds available for -- those transformative efforts within digital IT, technology, whatever you want to call it, to support new business ventures and new business transformations.
TT: When you're having these conversations with your enterprise customers, are they coming to you and saying, "You know, I want to get me some of that NFV, that cloud, that IoT, whatever"? Or do you find that they're more often coming to you saying, "I have X business problem; what do you recommend for a tech solution?"
GR: I would say that the trend is moving toward asking for solutions to business problems and not being prescriptive about what technology do they use. That is a trend.
Is everyone doing that? No. And there are still traditional procurement-driven processes where the customer is coming with a predefined view of what they want -- and I would suggest that those tend to be the less mature engagements, if I'm to be honest. Look at how those engagements, those sales processes, ultimately play out with those vendors. They're more challenging. Where we have a more collaborative approach with the end customer to work on a solution to a defined business problem, we often get much more quickly to the right solution. It doesn't waste everyone's time, and that really helps customers achieve their goals more quickly and more efficiently.
So to give you an example that sits somewhere between those two comments: We worked with a large international loyalty-management solutions provider. They went to market for a pre-prescribed data center outsource consolidation -- pretty standard stuff in the IT industry. These things are inefficient, and we think we need to reduce the number and have less of these them, and in better concentrated areas. So that's all fine; that's a pretty standard approach. Once we actually engaged with the customer and started scratching away at the surface, we realized, and began to understand, what the business drivers are and what some of the underlying challenges are -- and also where they aspire to be not next year but maybe in three to five years' time. The solution they were asking for was perhaps not the right one.
These are scenarios where what looks to be a very straightforward procurement of products and service becomes more of a consultative approach. We end up designing a kind of journey -- a transformative journey -- that's underpinned by our infrastructure technology. So that customer aspires to transform their organization in delivering a higher volume of digital services, and therefore we recognize some of the things they need to achieve within their IT infrastructure and services to support those new ventures; so agility, flexibility and more programmatic services, high levels of visibility, what's being spent and where, and how it's performing. Some of these things we build into a strategy for them and deploy them as a service that underpins the business approach and the business objective and aspirations -- rather than let the customer pre-prescribing exactly what they want.
So, in short, we can engage in different ways. There's a trend towards working on solutions or business objectives rather than asking for products. But we use our consulting approach to help underpin some of the engagements where the customer perhaps thinks they know what they're looking for but perhaps needs some advice and some consultancy.
TT: To speak of the question of where you aspire to be not next year but in three years to five years' time -- or longer: How does this play over culturally? How do you deal with these cultural conflicts and cultural objections?
GR: Well, it's a good question. With any transformation, you need strong leadership because you need the objectives set forth by the business to be common across the organization. So one of the first things that we often explore with the customer is whether their appetites have changed and their ability to perhaps implement that change from the top down.
It's often said that we want to do less digital and more transformation because digital is a buzzword, but ultimately what we're doing is we're changing the way that we work and operate. The way that we view the spend within IT or how we interface with IT. And that's more of a human cultural change within our organization than a technology change. So we need strong leadership, and that strong leadership needs to create a common set of objectives within the organization. And then, of course, what we need to do is to make sure we have flexibility in how we design solutions and chart the path toward the future objective because it is the future and the future is often unknown. We need direction, and we need to have a vision, but often that vision changes over time as demands, ideas, innovations, etc., occur in that lifecycle. So we're focused on making sure that our service -- from managed service to the infrastructure itself -- allows bits to change over time. We don't want to lock customers in for a five-year outsource against an objective that is set in the past because by the time you get there you'll need to make changes. So we adapt with the changes in the digital transformation organization.
We need a common agreement on what the vision is, and make sure that everyone's pulling in the same direction so that we can collaborate. At the same time, we as a provider need to be flexible and cognizant that those objectives and those strategies may change. That may be, to your point, through personnel changes, but it could be through a number of different reasons. But to drive and thrive in today's economy, you need to change and adapt -- and do that very quickly.
— Joe Stanganelli, Contributing Writer, Telco Transformation