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Podcast Transcript

[00:00:00] Kimberly: Welcome to Pragmatism in Practice, a podcast from ThoughtWorks where we share stories of practical approaches to becoming a modern digital business. Digital transformation and enterprise modernization are critical to building a flexible business that can adapt to changing business conditions. However, achieving successful outcomes for modernization initiatives is far from a given and most efforts struggle to deliver the desired results.

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ºÚÁÏÃÅ partnered with Forrester Consulting to commission a study to identify what those organizations that are successfully executing transformation programs are doing differently. In today's conversation, we'll dive a little deeper into those findings. I'm your host, Kimberly Boyd and I'm here with Lee Sustar, a Principal Analyst with Forrester Consulting. Thanks for joining us today, Lee.

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[00:00:47] Lee: Glad to be here. Thank you.

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[00:00:48] Kimberly: Lots to talk about in the transformation and modernization space but one of the things that I wanted us to start with for today's conversation is, we often hear, we've seen the quote, we've seen the statistics that modernization initiatives often fail but there really historically hasn't been much data around why they fail or why the few that do succeed are able to reach successful outcomes.

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I know the study that we commissioned with you really wanted to focus on the secrets of a successful digital transformation. I was curious, in the study and in the study findings, what was the biggest aha for you when diving into what was revealed?

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[00:01:35] Lee: Well, I think that one of them has to be the digital transformation budget that had to be dedicated because I think a lot of times, people who are tasked with carrying out some of these projects are really focused on the tools, they're focused on incremental elements, which of course an agile methodology would want to do but actually stepping back and looking at it through the full horizon of digital transformation, I think is a key marker for success.

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Why is that? It's because when you start there, you start to bring in the various stakeholders' line of business, even risk management, and audit so that they can all come together to better understand what the overarching goals are and are better able to contribute to that success and have the acceptance criteria that makes sense for them.

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[00:02:22] Kimberly: Well, I think there's often this thing of what gets funded is what gets done and what gets paid attention to. Really having that dedicated budget is a great way to get that alignment and get the folks participating that are required for that success. Curious around that, have you seen in your experience that a lot of organizations do dedicate the budget or is that something that's a realization for them mid-transformation or post-transformation?

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[00:02:52] Lee: The question about where this digital transformation budget comes in I think depends a lot on the organization. The ones that are typically more B2C oriented, focusing on consumers have some idea of the systems of engagement that they want, they are better able oftentimes to conceptualize what a digital transformation should look like.

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They start from that standpoint of how we meet our customer goals and objectives and then roll back towards what kind of tools and methodologies that are needed to stand that up. Those are often ahead but I think now, the advantage is that there's enough of a pattern and enough of examples out there that enterprises and organizations, government entities, wherever you like, can actually look at those and learn from that and begin to implement that as well. I think the fact that the numbers showed that, this was 71%. That they had a dedicated transformation budget indicates it's well on its way.

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[00:03:58] Kimberly: In an ideal world, that's some of almost like the pre-work that's taking place before actually kicking off the modernization of transformation effort. Following that then, we've seen and I think what was also revealed in the study is that the first step to successfully be on that journey is defining what success looks like for that. What stood out for me was the goals that the successful transformers focused on were really oriented around customer-focused goals and success measures versus purely technology or productivity-enabled ones. Is that also consistent with what you've seen when working with client organizations?

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[00:04:53] Lee: I think so. Forrester has done a lot of industry-leading research on customer experience and also user experience. One observation I have from that is that increasingly, always-on consumer or in cloud services has really raised the bar for what people think of as acceptable in terms of system availability, data, ease of use, all those things. That, I think, is driving a lot of these changes, where typically an infrastructure organization might be oriented mainly on uptime, an old sysadmin approach, let's keep this as much as possible, let's see why change management well, and so forth.

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All of which remain important, even in a cloud-native, site reliability engineer, DevOps type of organization, but increasingly, instead of guidance and iterative needs and abilities to meet those needs coming from the business units or something that's now being taken on board by the various stakeholders within IT.

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[00:06:00] Kimberly: It almost reminds me a little bit of the chicken or the egg. When organizations want to become more digital, it's always touted as focus on the customer at the center, but the ones who are going to ultimately be more successful are the ones who realize that before they actually do the digital transformation. I think that really brings us to another point of the study in that one of the things that successful transformers highlighted was the importance of having a partner and selecting a partner that was well versed and familiar with what's required for successful transformation and modernization.

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Do you really see that being where the partner can play a valuable role as helping guide organizations on setting up the appropriate succession measures for their effort?

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[00:06:54] Lee: Very much and I've seen that in practice a lot of different times. Again, if you go back to that old sysadmin type of model, SysOps, where you're tasked with keeping things up, you're tasked with meeting whatever SLAs you might have internally. You don't actually necessarily have the bandwidth needed to undertake a modernization journey. Typically, that's more effective when you have either internally a group of people who are tasked with stepping back from that day to day and mapping that out.

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Generally, the successes I've seen are greater when partners are involved. They could be a variety of different partners, that could be more limited focus around a particular application, they could be much more far-reaching but to provide a kind of a benchmarking function, provide some guidance on agile transformation, iterative functions. Whatever agile methodology you want to use, making that part of this process is key.

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It might be the partners very often bring a lot of technical skills and expertise but they also bring this wider perspective on the organizational implication of monetization. Sometimes just for sheer limited bandwidth is much more difficult to generate internally.

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[00:08:09] Kimberly: Probably too I mean, when you're thinking about these things are all fundamentally change efforts and it's difficult to get people and organizations to change. Sometimes perhaps it's easier if it's coming from a third party. They're kind of the independent source of truth that can help drive the adoption of some of these changes and practices in an organization. Is that fair to say?

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[00:08:31] Lee: I think so. There's always a skill issue as well, we should talk about that's hard to find internally what you need. There's the independent perspective part of it, as well as this skill-building effort, which I think is key to any one of these sorts of efforts. Businesses don't want somebody who's just going to dump projects on somebody, they want a relationship where they can benefit from that exposure to some more high-performance development teams and really learn from their projects or ongoing relationship.

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Some people have talked about that as a teach to fish model, where you come in, you help people stand something up, you do something, watch us do it, let's do it together and then you're moving on. I think that that model is attractive to a lot of companies, which find themselves as IT organizations become more differentiated with software as a service and public cloud and on-premises, they find themselves working with more and more different entities.

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They sometimes don't actually get that transition part of where they start to simply take this and run it on their own. A partner that can bring that is always seen as a value add.

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[00:09:40] Kimberly: Let's definitely jump in, I think, a little deeper on that talent point that you mentioned because I think that was something that clearly came out of the study as well as the organizations that felt that they were successful in driving to their desired outcomes had retained and invested and were able to allocate the appropriate staff to their transformation effort. Now, realizing that can vary widely, and not every organization is always going to have the luxury of that. Where perhaps do you recommend they even start pre-transformation? Just like we talked about spending time to align the budget upfront and then setting those success measures. What do you see the successful organizations doing when it comes to thinking about the talent required for their transformation program?

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[00:10:33] Lee: Well, again, the study shows one of the key findings is 81% said that utilizing a trusted partner's skills and expertise is more important than the tech. I think that's-- underline that because look, there's a lot of different ways to do DevSecOps today. There's a lot of different tools people using, a lot of different toolchains. You can do that natively on the cloud. You can buy a third party. Some people build their own in custom ways.

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It's really the expertise and perspective that you get from partners who can generalize those patterns and then adapt them to the specifics of what's happening. What's interesting is that I see a lot of people in organizations who understand where things are going and they're off on their own with their own GitHub accounts or taking courses and they understand that there's a transformation underway and they want to be part of that, but they don't always get the ability to bring that back to work.

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If they don't get that, they might go somewhere else. Typically, what you'll see is a partner that comes in with these patterns, almost be a magnetic effect to draw people towards that who might have actually been developing those skills all along and weren't actually recognized, there was no way to express that internally. Then you can help train people who are interested. Haven't done that yet, but who are interested in doing that. I don't think there's any shortcuts for that. The skills question and labor shortage issues are common around the industry and people-- [crosstalk]

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[00:12:00] Kimberly: Pervasive is probably, I would say. [chuckles]

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[00:12:02] Lee: Pervasive, yes. People can get into bidding wars for all that. Maybe sometimes they might have to do that. Generally speaking, you're going to have to find people who can help cross that bridge and develop those skills internally, as well as augmenting them as they move forward.

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[00:12:18] Kimberly: I think that's an important point you raised. Individuals very may well have the individual capabilities and the desire, but I think what truly is necessary to drive the widespread organizational transformation is being able to do that on scale. Then that's where partners and their patterns can really come in and help take those individuals who already have those capabilities, or at least the desire to grow those, and really offer a construct for them to do them in mass versus individually.

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[00:12:51] Lee: Absolutely. We're just talking about how the cross-functional part of that comes back into play in that regard because you're going to have to make investments one way or the other. You're going to have to make investments and partners and skills, maybe some new tools, but the organizations who have to move beyond the cliche. Everyone's a software organization, well, maybe, but you're also a bank or a manufacturer or something like that.

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What's the right mix here? Where are you going to have talent you're going to develop internally? What part of IT do you still want to handle? Typically, what people will settle on is finding the strategic things where they really do need to invest in skill sets. That's where they can have a much more focused approach about what the cross-functional parts of this ought to be.

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Typically, the C-suite of course needs to be involved in that. One of the findings of the report was that 86% said that their organization's culture and strategy were more important for modernization success than the specific technology chosen. Again, it's the same theme is about the skills and the partners. If people are buying into this, then they do it. There's different ways you can organize that. You have the safe agile framework, which is a big overarching approach. You can have much more discreet lines of business or business unit or geographical approaches.

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The main thing is that those stakeholders need to be involved on an ongoing basis with the technology transformations in order to get the results that everybody wants. I think that the IT people who have been hesitant about that early on, because of a previous way of working, where they would see a series of static requirements and then abrupt changes somewhere in the course of development will welcome this and be able to adapt to it much more readily because there's accountability on both sides about what's being delivered is actually what's needed.

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[00:14:54] Kimberly: Absolutely. I really like the point you made too about being able to focus on the specific skill areas. Because I imagine if people are trying to focus on everything all at once, it can become just overwhelming. If you have that resource helping you create the construct, creating the ability to scale, then you can look within that system and say, "Where's our organizational knowledge and unique value come in? Let's focus there and make that resourcing much more manageable," than saying, "Let's boil the talent ocean to deliver on this transformation program."

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One of the things we talked about was the teaching the fish analogy. I think for lasting transformation success, turning into adoption, not just a one-time effort that learning how to fish, and embedding it in the organization becomes incredibly powerful. What have you seen from transformation partners who are delivering on that ability to upscale? What are they doing differently with the client organizations they partner with?

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[00:16:13] Lee: I think the successful ones understand that, at least initially, there's this fishbowl effect, and they're in the middle of that, and everyone's scrutinizing them all the stakeholders. They find themselves often mediating between different stakeholders who may not have had that much contact before. They find themselves needing to play almost an interpreting role between these different stakeholders, and try and set that.

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It's a very sensitive moment, and I think it's one that typically takes place relatively early on. If they're able to navigate that and be able to better understand the organization, they can much more readily, first of all, deliver what they're tasked with delivering, but also create the models and the patterns that are going to be needed to move forward overall. Some organizations where they're coming in, if they're in the lead of trying to this part of the transformation, it can be difficult for them. There can be a lot of pressure.

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If they can navigate through that, then they're able to set an organization off on its own, and a different type of self-generating internal dynamic takes place where this new way of working comes in. There are different ways of doing that. Some will have a more discreet model. It might not necessarily be the most important high priority item, but it's one that could be done in a relatively fast manner, where people can actually learn the pattern, and then tackle some of the more difficult ones, or it might be starting with the most difficult than strategic ones, and then generalize afterward. It really depends on the priorities, I think, given organization.

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It's that moment where our partner can come in and be able to help an organization almost understand what it's trying to accomplish. I think that that's really what comes through in these numbers because the overall perspective in relationships were actually more important than the tech tools, that's key. It really shows that the tools are there, the question is how do you use them in the most optimal way? Not in some abstract way, but in a way that makes the most sense for a particular organization.

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[00:18:17] Kimberly: I think that's a little bit of the theme of our conversation today. The tech piece of these initiatives is easy, it's all the other. What I found really encouraging was that actually very consistent with what we hear from our clients as well. Like, "Oh, the tech piece of the transformation." That's a breeze. It's really, like you said, getting people to the table, getting them aligned on the priorities that's the true challenge.

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These partners are probably, in some regards, the transformation therapist for an organization versus just technology partners when it boils down to what they're really focusing on and where they're actually able to drive the heart of the change in organizations. Is that fair?

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[00:19:06] Lee: I think so. There's that or I think there are therapists, but there are also people who have some practical leadership, and they can step in and actually help put A and B together in a way that shows how that's done. They can actually step in with the skills, say, "Okay, we're going to build this, but here's how we've done it." It's a manifestation of a pattern that we've seen in the past.

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Yes, there's that consultative therapeutic part of navigating the organizations, but having somebody who knows how to roll up their sleeves and say, "Okay, this part is difficult, we've done it before. Let's make it work."

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[00:19:44] Kimberly: Obviously, this study was a global one. Changing tack a little bit, curious if based on your experience, Lee, if there's anything that you've seen that differs from transformation initiatives across region to region, or do the fundamental truths hold the same regardless of where you are in the world when you're looking to transform and modernize?

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[00:20:16] Lee: I think in terms of the parts of the world that are more industrially developed and have some of these resources at hand, those patterns are fairly consistent regardless of national difference. I think that we've seen in a sense that kind of a leveling up because these tools are so accessible, because there's a great familiarity with them across international boundaries, and global work teams often are in multiple different countries and so forth.

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That, I think, again, points back to the organizational side of things, because everybody can make use of these tools. We all know they're becoming more general, there are obviously differences, which way you want to go, but these organizational steps that are needed to weave all this together is what's key. I think that the people who have been most successful in this could be almost anywhere in the world if they follow these sorts of methodologies in the right way, and use partners in the right way, where to supplement or augment their existing set of skills.

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[00:21:27] Kimberly: Makes a lot of sense. I know we've talked about a lot of different dimensions of those that are successfully delivering on transformation and modernization, but if you were going to be talking to a digital leader who was thinking about embarking on a broad scale change program, what are the two or three things you would really encourage them to do or think about to set themselves up for success based on your experience, but based on also what we've learned from this study?

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[00:22:02] Lee: I think one of the first things that people need is to figure out what their overall priorities are. What needs to be modernized now? What could actually be left for a secondary approach? What needs to be modern now? Typically those in a customer-facing organization might be systems of engagement. Oftentimes, you'll also have modernization of core applications that can be fairly monolithic, and difficult, but are also quite costly.

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In fact, often it will be a drain on resources that could be better deployed elsewhere. Some of that could go software as a service. Some of that could be containerized and modernized. Even though they're not the most exciting cutting edge apps, they actually free up resources and help streamline operations. Having, first of all, that prioritization of what needs to be modernized, then the question is, okay, what do we need to have in place to be able to do that? What's our existing skill set within these modernization ones, which are our most critical ones?

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I think in that context, you begin to start to identify if they haven't already embraced agile methodology. Let's go that way and it seems like it's been around for a while. It seems like everyone has, but not everyone-- In fact, not everyone has, or they have to retool it. There are a lot of different methodologies around, and sometimes people take ones that appear to be the most useful, and they have an abstract understanding of them, but they haven't actually ever tuned it properly to work so they might want to start to look at things like a product-centric, operating model, platform teams, things that are a step or two down the road of that agile transformation to be able to support this.

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I think from the beginning, the third thing would be from identifying what needs to be modernized and how right through this maturing the organizational model. The third thing is to figure out the partners who can help you with each one of those things. In some cases, the partners might be able to help with all three, in some cases, you can handle most of that internally. Then you want to focus on the actual practical, let's get to it, part of it, where the partners can come in and start to help with that modernization.

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Now, how are we going to navigate transformation to service mesh, for example? I'm saying a very particular skill sets that people are trying to learn more about and might need extra help from a partner to be able to do that.

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[00:24:20] Kimberly: That's a great point of thinking of the priorities, but then also doing a realistic assessment of where you are, because you might not be able to jump immediately from A to F if you don't have some of those fundamentals in place. Perhaps you might not even need to, based on what your priorities are dictating. I think what we've often seen too, is sometimes organizations feel like they have to be doing this because others in other industries are.

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Whereas what they need to achieve as their business, that particular modernization effort isn't even really going to get them what they're after. I think that's a great point to emphasize a clear understanding of where you're at and how that aligns to your priorities.

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[00:25:07] Lee: A partner that's experienced can help give them that perspective. What are the appropriate benchmarks here for this industry, for this geography, for this size of the company? Not divulging obviously the details or work that they've done elsewhere, but giving them the patterns and perspectives that actually make sense for them and help them do a self-assessment. I think crucially not giving them that assessment, but guiding them to assessing themselves so that they can further that process of stakeholder engagement and getting people to identify their own priorities internally before they proceed.

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[00:25:41] Kimberly: That comes back right again, teaching them how to fish and teaching them how to self-assess is equally as important as correctly assessing them because it's continuous for sure, how we like to think of it's an evolution. It's not just a one-stop shop. Unfortunately, however much folks might want to hear that if they're in the midst of a big program.

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[00:26:07] Lee: To that end, it was significant that in terms of the partners, what people were looking for as being most successful, 49% about half said the frequency of collaboration was key to them in real-time. That was 49%, but that was significantly ahead of any other consideration. They understand that it's not a one and done, they want that interaction. I think the art of-- for being a good partner here is to make each of those collaborations build on the next, each of those touchpoints leads to something better to help them more mature, as opposed to a permanent, otherwise, you end up in something like more like a managed service or permanent consulting engagement which is fine, there's a lot of organizations that need and want that. Typically, what you see in these modernization projects is there's an end part of this sufficient maturity where they'll move out on their own issues that model having identified what's most strategic for them to invest in as far as ongoing software development.

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[00:27:10] Kimberly: It's helping serve as the catalyst to get that effort going so then it can eventually be self-sustaining, or at least allow them to focus on whatever the next priority

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[00:27:20] Lee: In fact, that's the number two in that series of questions almost a third said they wanted reusable assets and technologies to accelerate their transformation efforts. Another said that we want a level of technical expertise with respect to application modernization or cloud native technologies.

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They're saying that to me are the numbers of saying we're learning to fish. We want to learn to fish. The real-time collaboration is number one and then that a pattern something reusable we can then assimilate in our organization showing up as the second-most third most important priority.

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[00:27:58] Kimberly: On that point, I love our fishing theme, that is definitely prevalent today. Do you think there needs to be anything in place in an organization considering a large transformation program for them to truly be in a place in a state where they're ready to learn how to fish and ready to take on that challenge? What needs to be done? What's the pre-work there to be successful?

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[00:28:29] Lee: As we move into the cloud-native era, the complexity migrates. It migrates in one level, the vendor management, and procurement, because you've got all these strategic partners that have to be brought in, but another direction for tech, if all of these suppliers are big cloud providers, for example, are big multi-cloud container platforms, for example, you're also going to need to have some focal point that makes sense for this from an organizational digital transformation perspective.

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I think that complexity migrates towards enterprise architecture, and that's a place where some of the largest business needs can be translated into some architectural approaches, which then can situate not substitute for, but really initiate the ongoing business unit type engagement by stakeholders down the line towards particular lines of development. That enterprise architecture figuring out what's consistent and sustainable over time is actually a really key starting point.

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If that is taken care of the engagement with partners will be that much more successful. Oftentimes I think partners can be brought in almost prematurely and end up doing some of that enterprise architecture work themselves. That might be necessary, but that's probably a big change in scope for what was initially planned and they'll have to step back and do that work. Organizations that at least at a high level, be able to articulate what it is they're trying to achieve, will be better prepared to then bring in the partners to help them achieve that.

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You'll still have to do these other organizational navigations that I described earlier in terms of the partner often being a mediator between different groups and try to help establish priorities and so forth. Just having good architecture doesn't resolve that, but it's a great start to it and you're not going to get very far without that higher-level approach.

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[00:30:26] Kimberly: Almost one of those reusable assets could be the pre-work of things to consider before you're even embarking on that program.

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[00:30:34] Lee: One of the advantages of the cloud era is that there's a lot of different patterns to consume and I was advised clients that don't stop with whatever cloud provider you're using, look at all of them. Look at all the different patterns that are out there for your industry and start to formulate that yourselves before you then take the step of engaging with a partner who can help you do that.

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Or it might even be a pattern for a data set, it doesn't necessarily have to be a cloud, but the practice and references for good enterprise architecture are really, I think, fundamental to this kind of transformation. Otherwise, an IT organization can end up trying to seriously address a variety of different priorities from different business units, all of which have a case to be made for them but unless there's some way to set priorities around those and get buy-in from the decision-makers at the highest level, it could be very difficult to keep all this from sprawling out of control.

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[00:31:41] Kimberly: I think that gets a little into the, you never want to be modernizing just for modernizing sake. What is the business outcome of why we're doing this? Then tying that back and seeing all the effects of order and how they impact the various areas of the business so you're not, again, giving all those siloed initiatives is definitely something. We see happening as a pattern and I think we can help organizations break based on that collective experience.

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Great. Lee, I've really enjoyed our conversation today. I think there's so much that goes into successfully delivering on these programs just because they are large and complex but I think what we were able to touch on today is there's a number of core fundamentals that if organizations are taking the time to prioritize, pre-plan, make sure they have the budget, make sure they're taking stock and having an accurate assessment of where they are as an organization, they can really position themselves for a lot of transformation success.

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Thanks so much for joining us for this episode of Pragmatism in Practice. If you'd like to listen to similar podcast, please visit us at thoughtworks.com/podcasts. If you enjoyed the show, help us spread the word by rating us on your podcast platform. Thanks so much for joining us today, Lee.

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[00:33:17] Lee: Thanks for having me. I really appreciated the opportunity to talk about this report.

[00:33:23] [END OF AUDIO]

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