Views on value creation

Our advisors have significant delivery track record with first hand experience creating and helping realise tangible value.

The following posts provide a small collection of related insights.

Keep data raw
- don’t destroy the as yet unknown hidden value

Realise hidden value

The previous wisdom was always to clean data from whatever the source as early as possible to distil and purify it, mapping to agreed standards and ensure things like referential integrity.  ETL (Extract Transform and Load) as used in the world of data-warehouse and BI solutions is a classic example; however in doing so you effectively unwittingly destroy some of the nuances of the data.  It’s like recording music and quantising it – yes it cleans it up and gets it in time – but actually there may be significant value in the nuances/oddities that are thence removed.

You can often spot fraud in the odd inconsistencies people purposefully / unwittingly embed in financial data – which if you clean the data you’ll miss.  When quantising (keeping a musical part in time) it’s best done none destructively so that you can apply varying degrees afterwards and undo it – always retaining the original.  I argue we must always do the same with all raw data if we’re not to destroy unwittingly those nuggets of nuance and value we didn’t even realise were there.

Fine, de-duplicate it and have a cleansed version but always keep the raw data – it’s the oil of the information revolution.

IT as a profit centre
– develop and monetise the intellectual property

Creating a Profit Centre from cost

Some of the most successful business leaders today are technology pioneers.  It isn’t just new start-up ‘digital pioneers’ and it isn’t just for technology based businesses.  Amazon is a great example – it’s doing a great job of selling nappies and milk… (as well as everything else….)

IT once used to ‘just’ deliver the IT systems that ‘the business’ used to deliver end customer business and make money; as such IT was a cost centre.  Now IT is delivering the majority of many of the business processes and the traditional business owners are dealing with the exceptions.  IT is fundamentally not just enabling [digital] business but delivering it, and yet in most instances IT is still a cost centre with associated KPIs.

For IT to truly be all it can be it needs be a true owner; be incentivised as any other owner – owning P&L as a profit centre is a core element with associated financial objectives and reporting…

Intellectual Property implicitly or explicitly is the atomic source of the revenue, profit and differentiation.  Creating, nurturing, protecting and monetising Intellectual Property (technology related, enabled or otherwise) is fundamental to every business and technology is ever more important in our information revolution…

How are you going to use data and technology to generate new revenue, increase profit and reduce the cost to serve?  Are you a cost centre or a profit centre? If not, why not?

Be the entrepreneur you want to see.

The opportunities in data – monetise the oil

The opportunities in data
– monetise the oil

Data is the new oil no matter which way you look at it the only difference I can see is that there is an exponential increase in data… – though once it’s gone it’s gone (or is it…? – given it’s actually quite difficult to truly erase…)

Data is one of the most valuable commodities we have (whether public sector or private).  If we take one example – our houses and business premises, a little known government agency has accurate plans and details of every single building in England and Wales for the purposes of facilitating calculation of Council Tax and Business Rates.  Having worked as the CIO for this Agency (the VOA) I know how much time, energy and money is invested in ensuring its’ accuracy.  Indeed the Ordnance Survey has helped (at their cost) cleanse the geospatial aspects of this data for mutual benefit.  Ordnance Survey, the Land Registry and the Post Office all make money from their data (as trading entities) and yet (whilst their data is arguably at least as valuable), the VOA does not.  Why?

You can argue (and people do) that the data should be available for free (as the tax payer already pays for it) and that making it available will enable entrepreneurs to create new value from new and existing business models.

You can also argue that it should be sold to help pay for the maintenance of the data and broader public services.

I continue to argue we’ve got to do something with it and the worst of all worlds is keeping it locked away and the extra value is lost completely and don’t over ‘clean’ or you’ll also potentially destroy your latent value.

This is one mere example and given we’ve got a big enough deficit and all are asking for ways to raise money and cut costs – my vote is to monetise the data, that way everyone wins.

Shadow IT - Enable the [digital] business together

There can’t be an IT department on the planet that hasn't discovered “shadow IT” at some point. Any business with creative, problem-solving users will naturally form small teams to deal with bottlenecks and holdups. When those users are technically savvy, it doesn't take long before those teams are installing unauthorised apps, buying web services and even programming their own solutions to business problems. To the dismay of the IT department, it sometimes seems as if everybody is having a go, with varying degrees of success. It’s sometimes not even clear when user self-reliance and creativity (good) becomes shadow IT (perceived bad). For example, imagine that many years ago a user with IT skills created a Microsoft Access application to simplify her department’s customer service processes, which her colleagues have now discovered they can share with other offices using the cloud. It has been around for so long that everyone in the department long ago learned to put up with its limitations. For example, they often need to rekey customer data that “belongs” to another department. When they requested access to that department’s customer records, the IT department refused, because their application wasn’t secure. An official customer service application is a development project for the future - a future that everyone knows will never arrive. But someone in a branch office knows how to get around security and extract customer data as a .csv file once a week, which he then emails back to the ‘rogue’ developers, who import it. As far as they are concerned, the application works - but now there’s an uncontrolled, insecure, inefficient process, and a simmering distrust between IT and ‘the business’. Of course everyone is in ‘the business’ just with different roles and expertise and human emotions naturally mean people get sensitive… What to do? On one hand, the application can’t be ignored. It breaks internal security rules and flouts data protection regulation. It’s vulnerable to errors and obsolete, and users are constantly working with out-of-date information. The app hasn’t been tested in years, and the service level is poor. A simple security audit would shut it down immediately. On the other hand, an amateur application developer in the business can be an ally for the IT team/department. There’s a middle ground between laissez-faire and lockdown. As a former CIO and CTO in large organisations, I discovered that there were often capable, entrepreneurial “developers” outside the IT department who understood what their colleagues needed, knew how to provide it as a simple web service, but needed some help along the way. Instead of policing the network and shutting down all rogue applications, IT professionals should instead be creating a framework to reward their work. They can do this by cooperating so that they can develop services without breaking internal security. The IT professionals can provide policy, standards, help with reuse, and expose interfaces to the data and related services the developers need. There are some tasks that rightly remain the province of an IT department: e.g. secure backup, data integrity, a single sign-on, network service levels. But no one would volunteer to take this away from IT, even if they had access to the organisation-wide resources they would need. Allowing developers to take advantage of IT’s security and service expertise empowers them to use their passion to build - and proactively support - apps that may benefit the entire enterprise. With the maturing of technology and digitalisation of the business becoming a reality these pressures and opportunities are all around us. This isn’t a small change, but in my experience it is possible. Most IT departments have the expertise and the incentive; what some of them lack is the will to let this happen. It’s natural to feel threatened by shadow IT and refuse to “let go”. As IT professionals, we must ask ourselves, what are we letting go of? In many cases, it’s the tasks we don’t have the time or the inclination to do. Shadow IT can show us that other people can do an application development job just as well as we can - and sometimes better, if we want to create a truly Empowered Enterprise and enable the digital business together

There can’t be an IT department on the planet that hasn’t discovered “shadow IT” at some point. Any business with creative, problem-solving users will naturally form small teams to deal with bottlenecks and holdups. When those users are technically savvy, it doesn’t take long before those teams are installing unauthorised apps, buying web services and even programming their own solutions to business problems.

To the dismay of the IT department, it sometimes seems as if everybody is having a go, with varying degrees of success.

It’s sometimes not even clear when user self-reliance and creativity (good) becomes shadow IT (perceived bad). For example, imagine that many years ago a user with IT skills created a Microsoft Access application to simplify her department’s customer service processes, which her colleagues have now discovered they can share with other offices using the cloud. It has been around for so long that everyone in the department long ago learned to put up with its limitations. For example, they often need to rekey customer data that “belongs” to another department. When they requested access to that department’s customer records, the IT department refused, because their application wasn’t secure. An official customer service application is a development project for the future – a future that everyone knows will never arrive.

But someone in a branch office knows how to get around security and extract customer data as a .csv file once a week, which he then emails back to the ‘rogue’ developers, who import it. As far as they are concerned, the application works – but now there’s an uncontrolled, insecure, inefficient process, and a simmering distrust between IT and ‘the business’.  Of course everyone is in ‘the business’ just with different roles and expertise and human emotions naturally mean people get sensitive…

align focus on the outcome

What to do? On one hand, the application can’t be ignored. It breaks internal security rules and flouts data protection regulation. It’s vulnerable to errors and obsolete, and users are constantly working with out-of-date information. The app hasn’t been tested in years, and the service level is poor. A simple security audit would shut it down immediately.

On the other hand, an amateur application developer in the business can be an ally for the IT team/department. There’s a middle ground between laissez-faire and lockdown. As a former CIO and CTO in large organisations, I discovered that there were often capable, entrepreneurial “developers” outside the IT department who understood what their colleagues needed, knew how to provide it as a simple web service, but needed some help along the way. Instead of policing the network and shutting down all rogue applications, IT professionals should instead be creating a framework to reward their work. They can do this by cooperating so that they can develop services without breaking internal security. The IT professionals can provide policy, standards, help with reuse, and expose interfaces to the data and related services the developers need.

There are some tasks that rightly remain the province of an IT department: e.g. secure backup, data integrity, a single sign-on, network service levels. But no one would volunteer to take this away from IT, even if they had access to the organisation-wide resources they would need. Allowing developers to take advantage of IT’s security and service expertise empowers them to use their passion to build – and proactively support – apps that may benefit the entire enterprise.

With the maturing of technology and digitalisation of the business becoming a reality these pressures and opportunities are all around us.

This isn’t a small change, but in my experience it is possible. Most IT departments have the expertise and the incentive; what some of them lack is the will to let this happen. It’s natural to feel threatened by shadow IT and refuse to “let go”. As IT professionals, we must ask ourselves, what are we letting go of? In many cases, it’s the tasks we don’t have the time or the inclination to do. Shadow IT can show us that other people can do an application development job just as well as we can – and sometimes better, if we want to create a truly Empowered Enterprise and enable the digital business together.

Merging departments forces 2 for 1
- the route to real cost savings

Merging departments forces – 2 for 1 - the route to real cost savings

Government has set about the next round of reducing the cost of delivering public services – aiming for savings of £20bn.

There are numerous ways this could be approached – some transformational and some just squeezing current expenditure.

I spent 6 six years in public sector IT and talks from first-hand experience, having been the first ever CTO of HMRC.  In that role I supported the merger of the former Inland Revenue and Customs & Excise.  I also served as Valuation Office Agency CIO during the migration of the Rent Service from DWP across to VOA.

Based on this experience, he believes government will only truly maximise the cost savings through further merging of organisations – which also presents an opportunity to improve service to business and citizens.

Yes, you can share back office services or put together common platforms – and yes, that does take out some cost – but the bigger impact is in merging the operational front office services they are there to support.  Without this end-to-end integration, the services will never really come together and the true benefits will not be realised (back office is only ever a fraction of the total anyway).

Merging customer facing services not only takes out cost & duplication of effort but also delivers a better service to citizens.  Yes, we can create a digital front end to put a skin of joined up government on it, but real joined up service comes from mashing services together.  This must be done thoroughly, removing internal politics and associated organisational self-protection to really put the citizen first.

Once you merge the organisations (which will inevitably include changes to some cabinet responsibilities) you can really start to join up public sector service delivery.  In my view, this is the only real way to truly optimise delivery, take out cost and transform customer service for the better.

Jon Wrennall

Digital technologies now enable the 1 hour expert

Whilst many believe anyone can be an expert in anything with 10,000 hours practice – in reality it’s not practical for anyone to be an expert in all skills required in business today which is why we need teams of people with complementary skills collaborating for mutual benefit. The maturing of technology to do things we could only dream of only a few years ago means on one had that with increasingly accessible tools people can drastically reduce the time to deliver the results of yesterday’s experts and on the other hand you need new experts to write, configure, support and operate the these new [Digital] tools and technologies.

On the premise that accountancy firms don’t write their own accounting software and further increasingly don’t host the software either but consume it as a (cloud) service, this negates many of the new ‘expert’ roles as all the related complexities are dealt with as part of a service, with the associated benefits of SLAs, security, resilience etc. FMS and ERP systems are effectively used to manage and run a business but thus far the data in them has mainly been used in a traditional fashion for historic and forecasting reporting, with some business intelligence and analytics. With the introduction of deep learning, and what some call artificial intelligence, we can really start to unlock this data, enriching and creating new insight – enabling new business models to be created (e.g. monetising data/nurturing new ecosystems). I prefer to call this Augmented Intelligence.

With the inclusion of Augmented Intelligence, Business Process Management and Robotic Process Automation finance departments, accounting firms (and any function/organisation) can transform the value they can deliver to a business. To do so does indeed require new technologies and experts.  The new experts that are needed to unlock this value are people that can implement and integrate these new technologies into existing investments (or transform them new cloud options), existing teams learning new skills (learning how to use the tools), supplemented by data scientists working on deep learning algorithms, iteratively enriching processes and data.

I believe that you don’t need a Chief Digital Officer as it should be part and parcel of a good CIO, CTO and or [Digital] business leader.  If there is no-one willing to take on these new aspects of todays’ ever more digitally enabled business then perhaps you do need such a catalytic change agent – but I would argue that perhaps there is a more fundamental challenge to the existing leadership as to why they aren’t proactively embracing the future as you can’t truly get the value by leaving it to someone else – true value is only really created by whole team embracing our newly empowered digitally enabled world.