When we think of digital, we rarely think of brownfields, those large organisations that predate the Internet. We usually think of Amazon, or Uber, or Netflix: companies with digital at their core, which grew to take advantage of it. That makes sense, in a way. As a rule, brownfields have over time accumulated established ways of doing things, and often a large and change-resistant bureaucracy.
But many of the biggest benefits of digital come when it’s applied to brownfields. It’s something we saw quite clearly when I worked in government. Users of public services don’t come to government because things are looking up for them. They’re typically coming at a time of high stress – when they need to file a court claim, for instance.
That’s one of the main reasons why governments all over the world are looking to reform their digital offerings. Forcing people who need certainty and clarity to navigate confusing digital services doesn’t work for the users of the services, nor:
- the government, whose policies are obviated if they don’t meet user needs
- the public, who pay for services that often need remediation via staff at call centres or shopfronts.
Delivering simple, clear, fast public services is in everyone’s interest.
The same is true of brownfields more generally. Industries dominated by brownfields are that way for a reason. They’re often in industries like insurance, banking, retail or healthcare, where consumers are making decisions that are important to their lives. Users place a high priority on the trust and sense of security they feel when dealing with a well-known, established organisation. But a brownfield will lose that confidence if it provides digital services that lag behind what’s on offer in the rest of the economy.
Transformation involves changing our established way of doing things, quickly. It can be painful. But, given the scale of benefits on offer – and the incentives they open to competitors, old or new – it’s a challenge brownfields must take on.
Time is of the essence. As Wesfarmers group managing director Richard Goyder said recently, “US online retail behemoth Amazon will "eat all our breakfasts, lunches and dinners", unless Australian retailers become more innovative and barriers to competition are removed.”
The same pressures are being felt in the financial services sector. When have you ever heard a CEO of a big four bank invite those with ideas on how to improve customer service to email him or his group chief technology officer directly? That’s precisely what ANZ CEO Shayne Elliott did early last year. More importantly, how would most banks be able to make those changes quickly, given their existing IT and governance?
The successful transformation of brownfields requires three key steps.
1/ Changing internal IT structures
Transforming a brownfield requires structural change. Brownfields normally task their CIOs with a broad range of disparate responsibilities, from ERPs to back-office to public-facing services to their infrastructure of networks and devices. Each of those tasks is often outsourced to a number of private vendors. This makes it almost impossible to design a great user experience, since an understanding of what users are looking for is fragmented between different silos. It also creates a false separation between the digital service and the back office that supports it. Chief Digital Officers are too often brought in to clean up services with a neat website, without the scope to make sense of the back-office behind them.
Instead, brownfields should rethink the separation between digital and back-office. Since great digital services also require great back-office processes, policies, operations, people and systems, IT and operations can’t be separated from digital.
Both should fall underneath a person with responsibility for services delivery – a Chief Digital and Information Officer – with the back-office IT function subsumed within that. Meanwhile, in highly federated organisations, like government, highly commoditised systems like ERPs that are not specific to the business should be the responsibility of shared services centres. This will help avoid the duplication of basic tools like HR or payroll systems that can occur across different branches of the same organisation.
Organisational change like this can be difficult. It’s taken about four years for the process to complete in the UK government – and the first step to digital transformation was having an empowered internal team and leadership that focused on meeting user needs at the heart of their organisations
2/ Raising internal capability
Transforming a brownfield almost always requires significant capability uplift across the organisation. That usually means insourcing responsibilities and talent, rather than relying on vendors to provide it. It also means ensuring that the organisation has the technological capability to support great people.
It doesn’t make sense to use iPhones for entertainment at home, and then have to use clunky devices which require half an hour to boot up at work, when our productivity is most important.
We should expect to have IT at work that is at least as good as our IT at home.
3/ Cultural change
Transforming a brownfield means changing then dominant corporate culture. When we talk about the way start-ups work, we say that they focus on user needs, or that they start with an MVP, and iterate wildly from there.
Those traits aren’t unique to start-ups. They’re relevant to any business that wants to improve the satisfaction of their users, or to get their IT projects to operate on human timescales, rather than geological timescales.
The culture of brownfields can make that change difficult. They’ve had the decades - or more - of operation to accrete large, self-preserving bureaucracies that resist change. This means that digital transformation requires a commitment from the top of the organisation to invest political capital to do things differently – whether from governance, to procurement, to HR, to product management, to IT to the way that the company is structured and competes – to create brilliant services that their users will love and promote to others.
Transforming a brownfield isn’t easy
Creating a few websites, or digitising some existing processes, is not enough. Organisations looking to create great user experiences will have to radically redesign both internal and external processes.
Restructuring internally to get rid of the false distinction between IT and digital, uplifting organisational capability, and driving cultural change will be the be the first steps to thriving in the digital economy.
Paul Shetler is an adviser to governments and corporates around the world who are undergoing digital transformation.
He is a speaker on digital transformation and organisational change.
Paul was the CEO of the Digital Transformation Office and the Chief Digital Officer of the Australian Government.