A recent study shows there is a close correlation between technology proficiency and business growth. How does your organization’s level of digital proficiency compare to competitor brands in your market? How can you build technology as a culture into your organization at all levels? In this podcast, we discuss the advantages that lie in technology proficiency existing beyond the office of CIO and the impacts in business growth across regions.
Karen Dumville: Welcome to Pragmatism in Practice, a podcast from Thoughtworks, where we share stories of practical approaches to becoming a modern digital business. I'm Karen Dumville, Head of Global Marketing Operations at Thoughtworks. It's a pleasure to join this program as a new host.
Technology was once seen as a skill set that needed to be represented in the boardroom by a CIO. Now, it has become core to everyday decision-making in order for modern businesses to prosper. In fact, a survey commissioned by Thoughtworks earlier this year of over 900 C-suite decision-makers across 12 countries, shows there is a close correlation between technology proficiency and business growth. In today's market, enterprises that are flourishing are the ones that have put technology proficiency at the core of their business.
We are going to talk today about the global context of technology as a culture and a mindset. Our guests will share highlights from their regions where they see future priorities in tech and opportunities for growth. With that, I'd like to introduce from Thoughtworks, Jessie Xia, Managing Director of Southeast Asia, and Sudhir Tiwari, Managing Director of India. Welcome, Jessie and Sudhir. It's nice to have you here today.
Jessie, let's perhaps start with you and what you're seeing in Singapore. As people reemerge from pandemic-related restrictions, the Thoughtworks Technology Proficiency Report suggests that 2021 is a significant year for technology and innovation. How do you foresee businesses utilizing technology to prepare for realignment and rebuilding? What are you seeing specifically from businesses in your region?
Jessie Xia: Sure. Technology proficiency results indicate that, globally, the three most popular priorities for business in the year ahead are to improve operational efficiency, grow the customer base, and to increase profitability. The data also correspond with other finding from the survey, which shows that Singaporean companies are more likely to double down on transformation as a driver of growth compared to the global average, 67% versus 56%. This indicate that Singaporean companies might be looking more towards leveraging and investing in technology specifically to overhaul current systems to stay global competitive. Just to talk about an example in Singapore. DBS is a leading financial service group in Asia, which is headquarters' in Singapore. DBS Bank is at the forefront of leveraging digital technology to shape the future of banking. Having been named the World's Best Digital Bank by Euro Money, it also concurrently hold the three global best of bank awards.
Your recent media interview, the group CIO of DBS, I think Jimmy Hong, he said, "in 2020, DBS, we'll be diving even deeper into technology, scaling the use of data, artificial intelligence, and machine learning, while experimenting with emerging technologies". DBS Nimble responses to COVID-19 crisis has been a good parameter of the effort they have put in place and affirmation of they're on the right track. Hope this example gives you a good sense about what's happening in Singapore.
Karen: Thank you, Jessie. That's a really relevant example. Sudhir, what are you finding in India? Are you seeing similar or something a little bit different?
Sudhir Tiwari: Well, one statement you'll hear, I think a lot of execs and a lot of people talk in the industry is-- the question which people ask, "What really drove your digital transformation?" It's not that digital transformation is something new. I think all have been trying it for a period of time. The answer really is it's COVID, which really has driven the digital transformation in a lot of organizations right now.
With all the segments, we work in the market, we're seeing this appear in very different forms right now. We work with a lot of digital natives, and we see the urgency for them on scaling. A lot of traditional organizations, something be called the India Business Houses, I think they are really embracing technology in a big way right now because they need to compete with the vibrant startup community, which is right now, almost everywhere in India.
We have seen the government also investing heavily on building the digital infrastructure. I think the other big segment is what we call the GCCs or the Global In-house Capital, or the Global Capital Centers, they are now being seen as places where a lot of transformation can be driven. Overall, even for the parent organization, if they are located in an offshore region, they have a lot of advantages of being able to do that. All of this is coming to the forefront because people now realize they need very different business models, post-COVID.
I remember Brett King, the banking visionary used to talk about a few years back, that banks will no longer be a place where you go in the bank, but banking has to be anywhere. That's a great example. All the banks and financial institutions, they are investing heavily in technology. We're seeing that's very similar trend, which is happening across banks, I would say in India. Education is another big area where we're seeing a big change with most of the kids working from home. Most of the colleges now providing online education. Do we have the right tool sets to enable that? Health is another area where we've seen a massive change.
If you put all of this together, there are some very interesting trends. The whole concept of a super app, and I think Gojek in Indonesia, they most likely in this region popularized that whole concept. We have seen a lot of all the businesses very curious about, should we really be looking at a super app? What would that mean?
We're seeing what I would just say a proliferation of marketplaces where buyers, sellers, financers all come together. That's a new mega trend, which we're seeing in the market. A lot of headlines have been captured in the past by the B2C segment, but now we're seeing B2B also embracing technology in a big way. I would say a trend, which I know started off possibly in China a few years back, but the whole concept of online and offline coexisting, I think that's another big trend which we are seeing.
I would say a pre-COVID, there were a lot of these discussions people knew that they had to change to make this happen. I think just during the whole COVID period, we've seen an acceleration, these are all the areas. Yes, I expect a lot of investments, a lot of change happening across industries.
Karen: Sounds definitely like the pandemic has spanned a lot of change and growth, and it does sound like there's a lot of parallels between your regions as well. I want to talk a little bit about this idea of culture in the report. We spoke a bit about how important a technology culture was to really aid with proficiency.
Technology was once seen as a skillset, but today it's really seen as a culture, a way of thinking that the whole management team really need to embrace. Jessie, I'm interested in your view on how you'd describe technology as a culture and what does that mean for businesses?
Jessie: Sure. I think we can probably think of from the three areas. You have mentioned technology as a culture is a way of thinking, where technology informs business strategy and everyday business planning conversations. For example, a lot of topics are among the management teams of our client companies, like data analytics, how they can improve customer experiences by using the right technology and also drive digital transformations. The second aspect is the boardroom culture. In the past, the boardroom always have like CIO or CTO as a representative, who are proficient in technology. Just those two roles are owning this, but now it's different. The boardroom culture built around tech can help senior executives better understand the use of tech developments in specific areas and make more informed strategic decisions. This is also very aligned with what has been said in the report.
The third area I'm thinking is setting technology as a business priority through the tone of the top will also cascade downwards to encourage all the employees have a deeper understanding of tech's positive impact, so that their employees probably can think wider, think deeper about how they can best use technology to help their day to day work.
Karen: Great. Sudhir, do those three points resonate with you also and what you're seeing in India? Do you have anything additional to add to what you see as technology culture?
Sudhir: No. Absolutely, that does resonate. The organization's we work with and what we're seeing in the market, I think there's a reality that technology now has just accelerated the speed of business and also the breadth of the area which needs to be covered. How does the culture of an organization leverage technology to its advantage? That's what I would just call tech as a culture within organizations.
Unfortunately, we've not seen a lot of organizations realize that yet. There's almost a journey which they go through. We have a lot of cases where we see investments in technology happening, but their operating models are still maybe belonging to a different era right now. Some examples could be, do they have common goals across business and technology, or are they still operating in silos?
Which used to work very effectively a few years back, but now you need those common teams, you need those common goals. I think technology is all about experimenting and failing fast, and that's a lot of stuff which we talk about internally. This experimentation is not only on the new thoughts and ideas, but even possibly on the org structure which people need to put out. All the way, the funding models need to exist.
I believe there's a massive change which is needed on the way organizations need to work, the way they need to incentivize. It's all leads to the way they embrace technology. That's a bit slow right now, but that's something which we're seeing increasingly businesses now raising the question now. We get the importance of technology, how does that seep in within the organization?
Karen: I think that leads on really nicely to my next question, that idea of a core operating model in the business. What do you see as some of the main obstacles to embracing tech proficiency as a core business competency for organizations, and any examples that you might've seen with your clients? Jessie, maybe some thoughts from you?
Jessie: Sure. Yeah. I think Sudhir has talk us some problems, obstacles, which we have observed from our experience working with clients. I think overall from the result it suggests that there's a core relation between how frequently technology issues are discussed as a board level and a company's growths prospects. A growing business will more likely to discuss technology at a board level on a monthly basis than firms with stagnate growth.
I think in Singapore, it is quite surprising to see that tech issues are discussed the less frequently in a boardroom compared to global respondents. For example, in Singapore only 34% of companies discuss digital transformation at a board level on a monthly basis, the lowest the figure among countries covered in the research. This might have resulted in Singapore, surprisingly low level of tech proficiency, which 45% of Singaporean companies admitting that their use of tech is falling behind the competitors higher than the global percentage of 31%.
From all these data we can see the fundamental issues those technology topics still ,haven't been discussed frequently enough to raise awareness among the senior executives. It's not too surprised to see they are falling behind. A lot of them admit they fall behind but I have to say there are some companies, they are quite advance. Probably, majority of the respondents we interviewed in the survey, they still seen as issue among themselves.
Karen: Sudhir, what are some of the obstacles you're seeing in India on companies and their ability to embrace technology proficiency as a core business competency?
Sudhir: I think the biggest one we still see is most likely business asking technology to prove its worth. We keep coming across that. That's almost a pattern we see, where the business were challenged whether do they really need to change, how will take really add value? How will that modify or actually change the business moving forward?
This is almost a pattern where the business would first ask almost the tech organization to prove itself. Then, once they start seeing the benefits, they realize, "Okay, other changes are needed?" Then it gets back to, I think, what I was mentioning earlier, getting the right operating model. Businesses still has questions on the effectiveness and how that'll happen, and then it quickly moves into the next big obstacle being, they don't have the right operating model. I would also agree with Jessie was saying completely that, while conversations have started in the boardroom, is the urgency coming from the boardroom or is it just, "Hey, let's make these investments in technology." I think a lot of that urgency needs to come in from the boardroom.
One message which I talk a lot of clients on is, "your digital transformation is now your business transformation". That really needs to be driven from the top. The urgency really needs to come in from the top. Places where we have seen that change being successful, we know that urgency has come in from the boardroom or from the CXO's office, rather than that urgency coming from someone in the IT department.
Those are boundaries which any way we want to see disappear. We don't want those silos between technology and business have to move forward. I would say, yes, the change not being driven right from the top, I think not having the right operating model, and business still asking, "Hey, I'm not quite convinced," I would say these are the three big obstacles we've observed.
Karen: You've talked a couple of times on this call today just about this idea of the right operating model. Do you want to expand on that a little bit? What does that mean for organizations?
Sudhir: If you see traditionally what's happened with organizations is technology has always been a supporter. Someone in the business comes up with a thought, an idea, there's a classical funding cycle which happens and someone throws the budget and the specs over the wall, and then folks in tech actually build and deliver that. This is maybe a decade back, and this has slowly gone through a change.
What we really see now is the urgency for every business, as we say to be a tech business, which is now a tech business which is maybe doing retail, a tech business which is maybe doing banking. That's the mindset which is slowly seeping in. The way they need to operate, the way the new ideas come in, the way you need to recognize the potential of technology, the way funding needs to happen, the way you need to figure out what it needs, let's say, to be a data-driven organization versus if you want to be a customer-centric organization, I think a lot of that thinking and how does that whole thing come together is still missing.
In a way, you have a lot of new thoughts and ideas, but people seem to be putting it into something which has been working extremely well for these organizations in the past. That's the whole notion of the operating models which we see. To put it very simply, a lot of people still feel if you just create a new platform or used technology, the business would change. That's not the reality right now. That really gets down to choosing the right metrics, which you need to run the business. How do you figure it out a very new product launch has gone well or not? Is every part of the organization aligned to what we're trying to drive? We see a lot of that missing right now. It's not an easy change. It doesn't change overnight. Larger organizations, as I said, some of them have been extremely successful in building things out, but maybe for a very different objective. People need to recognize that needs to change.
Karen: Jessie, was there anything you wanted to add about that idea of an operating model? Anything that you're seeing in Singapore and with your clients?
Jessie: Yes. I think just to expand a little bit about what Sudhir has said, which I agree with all the points he has been talking about. One thing he also mentioned earlier about these silos of organizations, the department into our organization. When we build technical solutions this become probably more obvious as a obstacle about how our client organization can move fast enough because there are silos in departments.
Building a tech solution, it's not going to be end-to-end for a team. There's a lot of handoffs between teams. Certainly, it create a lot of waste. Also, it just makes the cycle times really long. When you say, "I need to really have a fast response to the market," it's not going to happen. You have so many processes. One of the things how they can change your operating model to be more effective efficiency, they have to really look at how they structure their organizations.
In this way, if they bring all the teams together, how are they going to change their performance review? How they measure people. These are all the things that they have to think about. It's quite not easy problem to resolve, but that's something is really a big hurdle for the technology innovation.
Karen: Sounds like that idea of the operating model really goes back to that whole idea about technology culture within an organization.. Since you both represent two very different geographies, we'd like to take the opportunity to better understand firsthand what recommendations and experiences you might like to bring to the discussion on tech proficiency.
Jessie, you spoke a little bit before about how 45% of companies in Singapore admit the use of tech is falling behind competitors, which is higher than the 31% of companies globally in this position. Do you have any context on why there is a lag for Singapore companies and what advice you might have for companies to reassess their use of tech to create a competitive advantage?
Jessie: Yes. In Singapore is interesting. We work with a lot of clients, but we do see our clients, their technology proficiency level is quite different. You certainly observe some of our clients are very advanced. They are really thinking ahead about how they can leverage technology and also how they can do the right thing, not just building some technology products.
Some are quite behind. Even the senior level don't have a good proficiency of technology knowledge and they are quite behind in the industry or maybe the whole industry not moving fast enough. Our experience with client in Singapore is more about how the client can keep focusing on credit customer values when building tech solutions, instead of focusing too much on completing projects with predefined specifications. That's the big advice we want to give a lot of our clients.
Karen: Sudhir, in the survey, businesses in India noted a high number of priorities for the year ahead. Improving operational efficiency was top of the list, but increasing profitability, growing the customer base, and improving customer loyalty also scored very highly, perhaps showing how many firms are looking to tech to boost performance across a range of key business indicators. Do you have any context on the vast range of priorities for Indian businesses? What would be your advice for companies looking to tackle so many initiatives?
Sudhir: It shouldn't be that surprising, Indian businesses want everything. I guess COVID has had a significant impact on businesses right now over the last year. If you look at all the numbers right from the GDP numbers for India, so they've taken a hit right now. I'm not surprised that a lot of firms are looking at the profitability which becomes quite key as they emerge from COVID.
At the same time just the whole, I think realization that the customer base and I think what they need and what they realize, what can be done with technology again has significantly changed. That's where all the initiatives of how do we get back to the pre-COVID growth and how can we explore it? At the same time having a realization that customers have now a lot of options because almost everyone is pivoting at the same time.
If I'm a bank and I take more services to our customer, how can I ensure the loyalty again becomes a big target? Yes, it seems a lot improve the bottom line, get new customers, drive growth get new offerings out, but that's a challenge in the market right now. Maybe not so bad it will be great for the consumers with, I think a lot of competing products coming out, all eying for their attention right now. It's really going to boil down to organizations which are able to prioritize well. Figure out the investments which are not working, continue on the investments which I think are paying off. A couple of things which we we've already seen organizations do, a lot of traditional organizations are now really, I think the term they're using is "preparing the war chest" because they know a lot of investments need to happen.
We are seeing some very innovative ways in which they are raising capital and keeping money ready for this whole transformation which needs to happen. That's a welcome change. They're borrowing a lot from what we've seen VCs or the Ps traditionally do, they've seen a lot of that coming into the just traditional organizations. I think that's a welcome change. It'll be interesting to see how that pans off.
As the customer base grows, we've seen another trend where people realize, and this is where a lot of the operational stuff is coming in, is a realization that their existing systems most likely will not keep up, either in scale and volume or the flexibility which they need. We've seen another massive trend where people are now looking at either cloud technologies or they're looking at, the term we use is legacy modernization, how do we start changing their systems to be able to support this?
I think businesses, I would say this need to juggle with all of this, invest on getting customers and at the same time in anticipation of those customers coming in, make sure their operating systems are prepared for that change right now. No easy answer, but I would say ruthless prioritization, make sure the funding is available and then be prepared to fail fast, down things or initiatives which may not be working quite quickly.
Karen: Thank you. It sounds like good advice. Jessie, I want to just go back to something you were talking about before around having those conversations at the board level and at the senior executive level. Let's say there is a business executive with limited technology depth, but they understand the importance of technology as a means to grow and scale the business. What are the steps you'd recommend they take to ensure proficiency at the exec level within an organization?
Jessie: Yes. Well, we say business leaders need to be tech savvy, but they may not need to be equipped with a deep tech expertise. As long as they approach tech with open mind, as about topics they may not be familiar with and keep in mind that business goals to be achieved with technology, there exist a strong foundation to ensure technology proficiency within the organization.
To fully benefit from technology investments and ensure organizational wide tech proficiency, it's more important for business leaders to first identify and zero in on their unique company's objectives and priorities, and have a broader understanding of the crucial role each aspect of technology can play and how they interconnect with one another.
Karen: Thank you. Sudhir, what would be your advice or recommendations to executives?
Sudhir: The one trend which we've seen and I hope that continues, a lot of business execs are investing more time in learning technology. It's no longer a surprise to line up in a or be on a tech conference call and then you realize there are people from a business background who are coming. That's quite welcome. Organizations need to bring in people with that tech background on those senior meetings right now.
There's a term we used to use called "Reverse Mentoring". Get maybe someone in the organization who can really mentor a business exec of what needs to happen on technology. The way technology is evolving, it might be someone who's just joined the organization and could be someone who doesn't have those many years of experience, but they really get technology extremely well. They can learn business and the business execs can actually pick up technology.
I would strongly advise that. That's something which like in Thoughtworks a lot of us do just to keep abreast of what's happening in the tech world. Things are changing so rapidly. Things can become obsolete in six months. Everyone just has to keep up pace with that. I would strongly recommend don't fall under what we call the HiPPO, which is in a lot of organizations we see-- HiPPO really stands for the Highest Paid Person's Opinion.
That's no longer true in today's world. Once you get the right people, you've hired people from outside who come in from very different backgrounds, which is needed, your gut feel, go on the right opinion rather than following, what I would say, a set hierarchy, which may have worked in a different generation or a different era. Those would be my solutions.
Karen: Thank you, Sudhir. Just expanding on that because you mentioned Thoughtworks as you were discussing there. How is Thoughtworks increasing the level of technology proficiency at the C-suite level and how does that reflect across the various functions within the C-suite?
Sudhir: We have various things which we really end up doing as an organization. Pre-COVID, for instance, we've had these annual events where business and tech came together. We have Thoughtworks Live, ParadigmShift, and these are three-day events where we've got execs from different backgrounds and different industries in different countries coming together. Our idea around these conferences has been just see different thoughts and ideas, and then get a good discussion going and see how people get inspired by these thoughts and ideas, and really learn about technology. Not only tech, but also observe possibly what some of the organization is doing, what are the common problems they may have faced? Are there solutions they can look at?
I really joined all these events because there's some absolutely great discussions which have happened. Then almost every country has variations in which they run certain events. A lot of countries do roundtable events, which could be focused on specific domains like retail or financial services. Our whole objective is just to share and exchange ideas and maybe what's the latest software thinking is in a specific area. I found them to be highly effective and this just happens across the globe.
Then what we really do a lot is with specific clients, there's a lot of effort which is put over the year, in terms of sharing our thought leadership, doing focused events. We've done Tech Radar events specifically for clients. We've got Rebecca and Neil, for instance, when they launched the book on Evolutionary Architecture. They actually did a tour and they spoke to a number of clients in terms of how they should really be thinking about architecture. How do you build systems for the future.
We've had Martin come and spend time with our clients in India, just explaining on the importance of technology. We have the audience of CEOs coming in, very curious, very excited to learn what's happening and what are the insights? What should they be doing? What is likely the competition doing? It just leads to very enriching discussions.
That's been our effort and I think we do want to double down on this space because that intimate setting and the conversations we've got some great feedback from clients where they really enjoy that and would like to see more of that.
Karen: That sounds great. Jessie, do you have any other examples from your region?
Jessie: Yes. Sure. I think it's great. The good thing is that in Southeast Asia, we are doing very similar things here too. Beside those things we are doing, I want to talk some example about our day-to-day work, which is helping build the Technology proficiency for C-level as well.
For example, during the engagements with our clients on building a technology solution, Thoughtworks' teams normally do not only interact with tech people from the client organizations. We always emphasize the importance of involving business leaders and the C-suite level in the whole processes.
The typical examples are our discovery and the inception phases, which C-suite leaders across various functions are invited for various workshops. This practice provides great opportunities to increase senior executives’ awareness on technology, which is also very contextualized to their industry and their business scenarios. I constantly hear very good feedback from our clients, especially the business leaders, how they really got a lot of new knowledges regarding technology through the interactions with us. During the process, we also help focus the senior executives’ attention on what values they may create for their organizations and their customers by using the right technology solutions, instead of just building products and the features based on what they have already predefined requirements.
Karen: Thank you, Jessie. My last question now, I really want to talk about a subject that's always very topical, the ever-increasing war for tech talent. Probably even more so now, post-pandemic where we’re finding companies wanting to accelerate the rate of digital transformation. From your experience with our clients in your countries, does having tech proficiency helped them with talent acquisition?
Jessie: Sure. Yes, I think there are many aspect helped to attract tech talent. For example, the significance of broader diversity, including race, gender, sexual preference and background as equally important with having technology called proficiencies when looking to secure the right talent. As many companies are moving to technology at a core for their businesses, they are building and improving their internal digital capabilities.
Leaders with high technology proficiency will have more knowledge on how technologists can unleash their biggest potential and create value. Hence, those leaders can build a culture and the environment to attract the right talent. The Singapore government is a very good example here. With the launch of Smart Nation Initiatives in 2014, many senior government officials have been talking technology topics frequently in media interviews and the conferences, this including our Prime minister and a lot of the Minister of those Ministries. It's a very amazing here.
The other specific example is a Govtech, which is a government technology agency has built 3,000 people digital delivery team over the last few years. In the recent media interview, the Govtech Chief Executive, Mr. Kok said, he hopes that Govtech becomes an agile entity that is top in class in delivering our digital government. He also said they need to continue to be at a sharp age in their ability to attract talent. You can see there's a correlation between the technology proficiency of the senior leaders and how they can build a whole counter India organization and attract the best talent for them.
Karen: A couple of really good examples there. What are you seeing Sudhir in India? Obviously, a very large talent market.
Sudhir: The war for talent is on. I guess it's always on, but it's maybe just stepped up a few notches right now. Absolutely most of the talent which last few years has been moving towards the startups is that's almost the trend we've seen, startups and scaleups. Now for an organization, if they want to embrace and take at core as we call it, attracting that talent really becomes quite crucial. People will not move to you if they don't feel that the organization's thinking embraces the latest technology, the newest ideas.
I think I spoke a lot about the cultural aspects about this earlier, having that in an organization is extremely crucial. There's a part of a rebranding, which a lot of organizations are doing right now which correlates directly to the tech proficiency. That, yes, these are the opportunity which you have in the freedom which you will have, That's something which wasn't there, I think in the past right now.
For organizations to attract that talent, that becomes quite essential. This is, obviously, at all levels because a lot of them still have, let's say a multi-vendor strategy but you need the right people who can come and manage that. At the same time, you need people who can give the right advice at the board or the CXO level, who understand business and understand technology extremely well.
When you have the choices, the way you have that in India right now, then you really need to have that brand externally to be able to extract that or to attract that talent. That's something which we've just seen a lot of organizations focus on. I think as Jessie pointed out, I think we were working with a lot of our clients and advising them on how they could do this, but they are looking at diversity. They are looking at hiring talent at all levels.
They are looking at building and how can they take raw talent and how can they groom them within the organization? What are the thoughts and ideas around that? Because everyone has realized you can't hire everyone because it just may not be possible having all the talent which you need, but you need this whole culture in general internally where can get good talent and then you can groom them and make sure they have a longer term future with the organization. You don't want people coming in and just leaving in six months. That's where just having that brand of technology is so important.
Karen: Really back to that idea of culture being intrinsic to an organization, isn't it really? Jessie and Sudhir, thank you so much for your time today. It's been wonderful talking to you both and gleaning some insights from your regions. To our listeners, thank you for joining us for this episode of Pragmatism In Practice. If you'd like to listen to similar podcasts, please visit us @ thoughtworks.com/podcasts. Or if you enjoyed the show help, spread the word by rating us on your preferred podcast platform.