Skills for shaping the digital enterprise

In the world of digital transformation happening, how do we see the roles emerge? Does the old definition still hold good? Here is a brief view.

Most organization will become “digital” in some way or other. When they change from a monolithic to a digitally agile unit, usually a saviour is recruited and he or she is called CDO (Chief Digital Officer). But things do not end there. Rather it is a start. The entire organization should become digitally nimble. For that, we also need to see how the roles encompass some of these aspects. Mind you, today’s world will not be strict 1-1 mapping. We will find that CHRO and CMRO should work together in incubating labs and the would be their joint KPPs.

CHRO (Chief Human Resources Officer) - Starts with identification of digital gap and engages in acquisition of such talent to fill the gap. Target is for the CHRO to own the “digital experience” and initiate a culture of “incubation labs” that foster and nurture talent closely allied to business as the enterprise becomes digital throughout.

CMRO (Chief Marketing Officer) - Starts with setting up marketing related digital aspects. Target is to own the “digital experience” along with CHRO. All start up labs / eco-systems for building products and experiences should be the mainstay.

What about CTO (Chief Technology Officer)? The vision of CTO means a nice team of geeks who set the enterprise architecture standards for the organization. Of course, the starting point is development of digital architecture. Target will be to own digital product labs.

The all-pervading CIO (Chief Information Officer) will be responsible, initially, for defining and managing digital infrastructure as part of the enabling function of IT. The entire portfolio including the actual digital infrastructure of the organization as well as the target channels of interaction should be governed in the end.

The CDO (Chief Digital Officer) is the digital evangelist at the beginning. He or she should lead the digitalization initatives as well as the incubator labs.

Chief Data Officer is responsible for modelling digital standards and driving data access. All the development of data-driven products and usage of digital to fuel more data and innovation will become de rigueur.

In summary:

1. Culture will change form strict compartmentalization to porous boundaries. Roles and KPPs will impact each other and will require working together not only across functions but also with various service providers and other technology partners.
2. A common set of traits will form the bedrock of digitally nimble organizations. They will include digital thinking and lean principles. The mindset will move from a generalist to digital generalist taking into account the “domain” knowledge specific to the industry.
3. Finally, every one in the new era cannot be a risk avoider. No reward for such a strategy. They will be encouraged to take calculated risk, try out new things rapidly harnessing data from different channels, discard things that do not work out but in the process go towards what is likely to work.

Trends in Banking and their impact to IT service providers

As part of an IT service provider in financial services especially to banks, we are constantly reminded of  and surrounded by what’s happening in the midst of our customers. The changes are hard to miss. We ignore these trends at our own peril!

I see the following 3 key changes happening in banking that have huge impact to IT service providers.

#1. Banks are placing more importance on open banking standards and providing APIs (Application Programming Interfaces) either due to regulatory pressure or from a desire to stay relevant

#2. Banks are using data and AI in almost all services where possible to provide differentiation.

#3. Banks invest a lot in understanding and enhancing their end-customers' engagement with them. They want to make their customers' journey – as much STP (Straight Thru Processing) as possible whilstnot comrpromising on customer experience.

Where do the new customers, especially the millennials, shop for financial products? Where do they perform the analysis and comparison? The answer is in their own mobiles or hand-held devices.  In other words, a strong integrated data management that helps in analysing real-time structured or unstructured data to understand customer better and create a personalized experience is required. IT service providers who understand this and build solutions that can adapt will survive. Such an IT system should allow customers to engage in the channels of their choice at any time. The switching from one channel to another should provide a seamless experience.

Second, long winded vendor selection process (perhaps robbing of certain revenue for “Sourcing advisors”) with a view to reducing cost of the landscape is gone. This is because banks have started focusing more on enhancing experience than cost reduction. This, of course, doesn’t mean the latter is not important. It is just that it has taken a back seat to the former and has huge implications in terms of the type of skills a service provider needs to engage with the banks to develop suitable solutions. And the banks are not prepared to wait for 3 months or more in order to select a partner! Failing fast is the new norm.

The banks are willing to pick up customers at any point in their journey but want to provide a wholesome experience that lasts long and enhances the relationship. A customer may have come to avail a particular banking service, say housing loan, after using online comparison or aggregator tools. But it is in the bank’s interest to hold on to the customers by understanding their preferences and evolving a bouquet of services that are way better than what they are currently having. IT systems can no longer be built to do only one thing. Instead, they should be nimble, lean, have the ability to learn and grow very quickly and provide a means of differentiation to the organization.

Impact to IT service providers

All the above changes affect the Indian IT service providers (ISP) in many ways and in different dimensions.

• Capability: The skills, required for building or changing IT systems, are continuously changing. As a result, people who can adapt quickly are the need of the hour. How fast can a service provider deliver such skills? This has huge impact on reskilling, cross-skilling, recruitment etc. As service providers grow hugely, such changes take long time implement. They have to start exhibiting in pockets and spread them across the rest of the units. They can’t afford to wait for global roll-outs! 
• Skill mix: Major impact in the percentage of thinkers vs builders. As the IT systems of the bank move to providing more and more business value, the fundamental nature of the skills change. ISPs used to break down every piece of IT work and execute 80% or more of them at offshore. This ratio is becoming more skewed. Some of the new type of IT work demands more than 40% work be done close to the customer and falls into the "Thinking" category. As the release cycle reduces, very quick execution is required. This would place huge emphasis on collaboration tools to enhance the quality of work and provide a seamless experience to the banks.
• Location is the third aspect. As the banks expand into new markets and offer new services, there would be demands from ISPs to service them locally. For example, there is a growing market in Baltic region. Many banks are targeting customers in the region who are considered very tech-savvy. Such demands have to be met locally very close to customer. Traditional models of building capability in a monolithic way and transporting the people to the desired locations may not work. The lead time may not be advantageous to the ISPs. Many ISPs make use of centres in off-beat fancy locations. How many of them are known for certain capability other than being a low-cost location? The customers are paying increasing attention to the capability and people being developed in various delivery centres.

All the above will call for various measures, in a co-ordinated way, to be implemented by the ISPs. Guess what, implementing these will not only be simple but add to their growing costs. But the banks may not be willing to give you a long lead time nor absorb a temporary surge in their IT costs! Only those ISPs who are not afraid to experiment and who invest in understanding their customers' journey are more likely to succeed.

Skills relevant for the 21st Century and the role of Universities

What are the skills relevant for the coming decades? Are our institutions imparting them? Two important observations stand out especially in our Indian context:

1. There is a growing feeling that more and more focus, especially in India, is given to STEM at the cost of all other subjects. In fact, we can go on to say that those taking up humanities are frowned upon.
2. How relevant are the skills being imparted? Do they help the students fit into the society better and prepare them for solving the problems of tomorrow?

Assuming the key focus of education, amongst many others, is to prepare students for the job market, there is an inherent assumption that how the job market will look like and what skills would be necessary are well known. Sorry to throw a spanner in the works!  The rate of change is so fast that a research suggests that 35% of the skills necessary to thrive in the job market today will be different 5 years now. Former HCL Technologies CEO Vineet Nayar, once, remarked that 50% of revenues, 5 year thence, would come from services that did not exist in the present. Though the statement was made in the context of a specific industry, it applies equally well. Is this alarming? Yes and No.

Mr Bullrich, Education Minister of Argentina, succinctly summed it up:

Argentina is making rapid progress. In Finland, the “teachers” are the best paid and command a huge respect. Self-discovery, team play and soft skills dominate.

It is worth recalling the following comment:

“We prepare children to learn how to learn, not how to take a test,” said Pasi Sahlberg, a former math and physics teacher who is now in Finland’s Ministry of Education and Culture. “We are not much interested in PISA. It’s not what we are about.”

India has started opening up recently with a view to discovering the long lost “Liberal Arts and Sciences”. Universities like Ashoka, FLAME, Jindal, Shiv Nadar University and Krea are some examples where attempts are being made to help the students discover their true passion. It is true that data is going to be the oil of this century. That doesn’t mean that everyone should aim to become data scientist. A combination of analytical, technical, linguistic skills will be required. No problem of today can be understood and analysed within a single dimension. To solve the poverty problem, economic, data, sociological and technical skills will be required. It is all the more reason that team work will dominate.

Take a step back and go into our own old system. A student was expected to learn from a variety of areas starting from philosophy, logic, math etc. Then they were encouraged to discover the areas they would like to delve deep. Our very own interwoven system of learning was forced into oblivion and the western influence came. Instead of taking relevant aspects, we completely immersed ourselves into the new system and rewarded rote memory. In the process, we also encouraged people who take up science subjects look down on those who are passionate about history or literature!

Let’s take a look at the skills that are going to be required to survive and grow:

-          Complex problem solving
-          Critical thinking
-          Creativity
-          People management
-          Coordinating with others
-          Emotional intelligence
-          Judgement and decision making
-          Service orientation
-          Negotiation.

These skills also have a common characteristics i.e. they cannot be easily done by machines and would still be relevant in the artificial intelligence dominated world.

Coming back to the universities and institutions of learning, there is a rush to get higher and higher in the rankings. Common rankings include QS, ARWU etc. Singapore set up a target, pumped in resources, hired super star professors, increased throughput and systematically moved up higher. NUS (National University of Singapore) and NTU (Nanyang Technological University) are well in the top consistently. China’s Tsinghua, along with Korea, Japan and HK universities are in the top. We have our very own IITs/NITs and other eminent institutes. We bemoan the fact that we don’t have top ranking universities yet. There is a renewed thrust. Does this really mean the teaching is good and the students are churned to be future ready learners? We don’t know yet. One thing that these ranking may not take into account significantly is the effectiveness of teaching at the undergraduate levels. The ranking may not reflect this adequately. It may reward research or Post-graduate academics much more. This is where our institutions can make a big difference. This is not to say that we should stop aiming for high ranks!

How do you impart the quality of “Learning never stops”? Learning is not a reflection of what has happened so far. If that were the case, there would be only one way of doing things right. Today’s problems require not only analysis from multiple perspectives but require tools from different fields to solve. In Argentina, the new changes ensure the youth are provided opportunities to learn and practice in their community. We don’t see many Scandinavian universities in the top 50. I was speaking to one of my Swedish colleague. His words were to this effect – “There are no elite universities in Scandinavia and all are equal in terms of quality. Of course, some are known in specific areas of research. But students go to those universities not based on the rank but on a host of other factors including fellow students, teaching quality, opportunities for practice etc.” Their system of education has been ranked very high. Formal schooling starts at 6 or later. By that time, in India, we may have enrolled him/her in a coaching class!

Does this mean a student is allowed to roam around for 3 or 4 years of bachelor program tasting and sampling different courses just letting time fly? Not at all. If, at the end of the bachelor studies, a student cannot get up and articulate his or her basic understanding in a well-grounded context and mastery in a chosen area, the program may not have met its purpose! This is where I feel that the world is crying out for “specialists” who are grounded generalists. A biologist with love for poetry can only make the world richer. The same biologist can take up a lead role in a specific problem involving endangered species rehabilitation but prepare to take a secondary role in striking a balance between deforestation and controlled tourism perhaps allowing a environmental scientist take up a prime position. The world needs such people who can work in a team and take up varying positions that the problem demands and allow other perspectives to complement. 

Let’s allow our students to experiment, to make mistakes, to learn from others, to cultivate ability to live in the society and above all “have an appetite to continue learning”.

References:

1.       https://www.weforum.org/agenda/2016/10/the-most-important-skills-of-tomorrow-according-to-five-global-leaders/

2.       https://www.weforum.org/agenda/2016/01/the-10-skills-you-need-to-thrive-in-the-fourth-industrial-revolution

3.       https://www.nytimes.com/2013/06/23/opinion/sunday/the-decline-and-fall-of-the-english-major.html?smid=pl-share

4.       https://www.linkedin.com/pulse/20130625075243-2259773-why-learning-the-humanities-is-a-key-to-success

5.       http://www.teachercertification.org/a/role-of-education-in-the-21st-century.html

6.       https://www.insidehighered.com/blogs/call-action-marketing-and-communications-higher-education/it-time-say-goodbye-liberal-arts

7.       http://time.com/4920389/bowdoin-college-liberal-arts-education/