Leadership Insights: Digital Transformation in Business

Transcript

Charlene O’Hanlon: Hey, everybody. Welcome to The Digital CXO Leadership Insights series. I’m Charlene O’Hanlon, and I am here now with Dinesh Keswani, who is the CTO over at CloudBees. Dinesh, thank you so much for joining me today, I do appreciate it.

Dinesh Keswani: Thank you, Charlene. Thanks for having me here. My pleasure.

Charlene O’Hanlon: You bet, you bet. I wanna talk to you a little bit today about digital transformation because—well, nobody’s been doing digital transformation, right? It just seems to be something that is on top of mind for so many organizations these days, and especially with respect to just being able to basically run your business during the pandemic. And we’ve seen a lot of digital transformation efforts hum along just fine and then we’ve seen some that are just not succeeding in the ways that organizations had expected.

So, interested in finding out from you where you see digital transformation efforts kind of falling apart.

Dinesh Keswani: Oh, absolutely. It’s an important shift in how we consume services, right, post pandemic. And I think the transformation was happening all along. Companies were building products and services that were digital, but what they weren’t thinking about is the holistic customer experience, the supply chain that lets them fulfill their digital commitment, right? Mostly, it was cost driven in order to make their supply chain more efficient.

But if you look at every company now, it’s over investing in digital technologies to commit to the experience that they promised. I’ll use a simple experience that we’re all going through right now—grocery delivery. We didn’t think of it as much, it was an in thing a few years ago. The leading-edge adopters would get their groceries delivered, and you needed special infrastructure in order to enable grocery delivery. And very few of the large grocers were actually thinking seriously about it pre-pandemic.

But that’s the outcome, right, of the digital experience. It’s not enabling the online shopping experience, it’s the outcome which just matters, which is, did I get my groceries within two hours of ordering it from the big box retailers? And that didn’t exist. To make that happen, the entire supply chain had to shift. We had to build partnerships, you have to build crowd sourced alternatives instead of hiring thousands of deliverymen. So, that small nuance of focusing on the outcome versus focusing on digital product itself and bridging that gap is so much more important today.

What you’re seeing is traditional shops that were not technology or software shops are now software driven, largely. I would say large organizations in the Fortune 10, places like Walmart are hiring thousands of engineers to fulfill this mission, right? I’m just using them as an example of a company that’s embraced digital in a big way.

Charlene O’Hanlon: Yeah, and it’s interesting to see that organizations of all sizes are really kind of approaching commerce these days with a digital first attitude. And a lot of that has been borne of necessity and it’s a matter of survival during pandemic times. Food delivery, you know, that’s a perfect example right there. I mean, I never thought that I would wanna have—well, for my kids, McDonald’s delivered. [Laughter] Not that I eat McDonald’s, but you know, it’s just something that never really entered the realm of thought in my life that I would ever wanna have fast food delivered. But, you know, during pandemic times, sometimes it was the only way to get it.

So, it was definitely a cultural as much as a technological shift for a lot of organizations, I would expect. So, you know, when we are kind of taking a look at it from that lens, if you will, that cultural lens, do you think that digital transformation efforts have thus far kinda taken in or considered the cultural shift that has been necessary for digital transformation efforts to be successful within an organization?

Dinesh Keswani: Not holistically. I’d say a lot of organizations are also struggling with it. We saw corporations move to remote first, trying to collaborate. Collaboration, actually, is a hard problem, right? We’re on video here, talking to each other, but we’re not ________ with each other, we’re not sharing ideas.

Charlene O’Hanlon: Right.

Dinesh Keswani: Implementation becomes harder. You’re not walking and observing shoppers in an aisle, so how do you experiment with shift placement, you know, in the digital world? [Laughter]

Charlene O’Hanlon: Right. [Laughter]

Dinesh Keswani: How do you get that habit, you know, in there? And therein lies new products and new thinking that comes along. How do I accelerate experimentation in the digital world where I don’t have real shelf space? How do I get observability? You know, how do you get testing done? Do you ship out containers of food to people and they send you observations back? Do you have a digital supply chain there to run large scale experiments?

So, everything’s been rethought, and some people that have embraced that are being super successful, some people are slow to adopt. Not to say that the offline business is completely disappearing, but the way we consume has changed. We are, with our kids, a multi-device, multi-generational family. We have different consumption habits than the next generation. So, we’re accounting for all of that [Laughter]—

Charlene O’Hanlon: Mm-hmm.

Dinesh Keswani: – in digital transformation right now. And some companies do it better than the others.

Charlene O’Hanlon: Yeah, and to your point, I think companies that do kinda tap into that younger generation and how they approach consumption, I think those are the ones that are actually succeeding more. Because they understand that, you know, I will give the younger generation credit, because they are, they’re so much more well versed in digital technologies in general, but they’ve also had a whole lot of shortcuts here and there and discovered the best way to approach, whether it’s their school work or the gaming or whatever they’re doing on their digital devices, they are truly experts at doing it. And the organizations that kind of approach, take a look at how the younger generation is consuming digital, whether it’s media or retail or whatever, and catering to that, I think, those are the companies that have really kinda hit the sweet spot there.

But to your point, also, it’s really about those outcomes, you know, making sure that the customer has what they need at the end of the day, but at the same time, we’re also talking about digitizing a workflow process or a methodology that is, you know, from an operational perspective, has certain ramifications or implications on the employee workforce.

So, from an internal perspective, what are organizations—how are they going about addressing a lot of those changes that are happening along with digital transformation with respect to employee responsibilities, job titles, job responsibilities, things of that nature? I mean, has that been addressed effectively, do you think?

Dinesh Keswani: I think it’s a paradigm shift again, and a lot of people appreciate the flexibility that they received, you know, working from home, working remote, hybrid work space. The tools aren’t mature enough to support that type of interaction. If you have more than 50 percent workforce working from home, how do you account for security data and transactional data? We’re seeing the rise of the secular workplace at home drive those challenges.

And, too, what we’re seeing from a CloudBees perspective is when the employee wants to do everything they were able to do at the workplace from home as well. So, be as productive, you know share thoughts digitally, so collaboration tools have taken a front row in this form, and companies have invested in deep collaboration and offline and asynchronous work seem to be doing much better.

We’ve always been a remote first company at CloudBees, so, we didn’t see much of a difference except that we’re spending more time on video calls than we ever were.

Charlene O’Hanlon: Yeah.

Dinesh Keswani: It’s become second nature to just think about a meeting and think about video as the first presence. We rarely get on phone calls any more. [Laughter]

Charlene O’Hanlon: Right. [Laughter]

Dinesh Keswani: But I think the most important shift is how we think about serving our customers in terms of outcomes, right? And as the organization, and as we look at products, we look at, hey, how effectively can we serve the people that use our tools, that develop our ecosystem, and what is the outcome that they as remote employees are looking for, you know—better collaboration within our developer ecosystem.

So, we’re building collaboration into our toolkit so that the outcomes can be better. So, if you look at how many people are integrating with Slack and is that a norm today, it is absolutely a norm, you know? Slack is a communication tool. Today, it’s a collaboration tool that’s built into most products, right? It’s not an afterthought any more. So, we’re seeing that Salesforce acquired Slack with that thought process.

Charlene O’Hanlon: Mm-hmm.

Dinesh Keswani: And we are squarely focused on the developer ecosystem, and we see that collaboration happening within the toolkit. Because it was different at the workplace where you could shout out or reach across the desk or send a quick e-mail. But now time zones and everything play into that factor as well.

Charlene O’Hanlon: Yeah.

Dinesh Keswani: And we’re learning from the next generation here, right? The next generation is always on their devices, texting each other, having asynchronous conversations, and that’s exactly what our workforce is reflecting.

Charlene O’Hanlon: Yeah, it’s interesting to see, you know, some people—I see they’re on Slack and they’re texting and they’re checking their e-mail at the same time. It’s like, they’ve got three different conversations happening, and that’s in addition to all the multiple conversations they’re having in Slack at the same time. So, I applaud those who are able to have that many conversations happening simultaneously without inadvertently sending something to somebody that they shouldn’t have. But that’s beyond ________.

But I guess what I’m wondering then is, as we kinda move into this second phase of digital transformation, which I think we’re squarely in right now, because most organizations that started their digital transformation at the beginning of the pandemic, they’ve gotten what they needed to get out of phase one and now they’re kind of finessing what they’ve got and adding more functionality or more to their digital transformation in general.

But do you think that they’re kind of approaching it, maybe, from a different angle this time around? Because before, the first phase was, “Let’s just get this in so that our employees could work and so our customers could get what they need.” But now, are they focusing more on technologies, perhaps, that are beneficial to the organization as a whole to make their employees’ lives even better from a productivity standpoint or just an ease of use standpoint as well as perhaps end user technologies that kind of increase or improve the customer experience? Or have we kinda moved into that phase effectively?

Dinesh Keswani: Yeah, absolutely. There are two big trends that happened that were primarily the case for digital transformation. One was the adoption of mobile devices and edge computing that accelerated everyone to invest in those areas and beef up infrastructure.

Charlene O’Hanlon: Uh huh.

Dinesh Keswani: But employee experience wasn’t as paramount, so we’re seeing an increasing investment in hybrid employee experience, and that’s an internal focus. So, a lot of large enterprises that are our customers and technologies that we use, we’re seeing better integrated experience across the platforms we use. That’s an internal aftereffect, I think, to increase productivity and manage chaos. [Laughter]

Charlene O’Hanlon: Right. Lawrence:

Dinesh Keswani: Internal IT ________. But the second big trend we’re seeing is the outcome focus. Yes, we’re shifting to digital products, but are the customers getting what they need, right? Initially, it was, “Yes, I’m delivering grocery to you” or, “I’m delivering food to you.” But the next step is, I’ve gotta make food out of the groceries you delivered. [Laughter] So, am I shipping menus along? Am I buying ready to eat meals that you could shop alongside your grocery for the weekends, you know?

Charlene O’Hanlon: Okay.

Dinesh Keswani: And we’re seeing an integrated supply chain. But to enable that, large companies also must experiment and think about these things. You know, what else can we help with the outcome that the customers [Cross talk]? The outcome is that the customer of their product, which is grocery, delivery, eventually has to eat food. [Laughter]

Charlene O’Hanlon: Right.

Dinesh Keswani: And can we help them get better quality food at a lower price and how do we make that frictionless? Similarly, a mortgage provider, the ultimate aim for the customer is to help them get a new mortgage and get them in the house, not just get the alone, right?

Charlene O’Hanlon: Mm-hmm.

Dinesh Keswani: So you see mortgage providers saying, “Here’s a loan, but by the way, if you use our services, we guarantee you get into your new home within 10 days of closing the loan,” right? So, how do we integrate the supply chain so the long closing process goes from 45 days to 10 days, and we give that experience? So, we’re seeing partnerships with Zillow, with mortgage providers—what are the intermediaries, insurance providers—come together in that supply chain.

So, we’ll see a whole slew of acquisitions and integrations, and all of these companies are turning into software companies now.

Charlene O’Hanlon: Right, right.

Dinesh Keswani: That’s another big thing.

Charlene O’Hanlon: That’s, you know, and that’s an amazing thing to think about. If you really take a step back and think about the ways that organizations that, you know, traditionally might not have partnered together or worked together, now they are bringing to life a whole new level of customer experience that just, before, was not, it wasn’t possible, and if it was possible, it was really complicated to make happen.

So, I guess if there’s one thing that has been a positive from the pandemic, it is the fact that organizations, companies are working on ways to work together for the benefit of the end user.

Good stuff. I’m really excited to see what’s going to be happening in the next phase of digital transformation. You know, we had an employee focus, customer focus, and I wonder what’s gonna be the next focus, but I guess we’ll just have to wait and see, huh? [Laughter]

Dinesh Keswani: Absolutely. And it’s been a pleasure, Charlene. Thank you very much.

Charlene O’Hanlon: Well, thank you, Dinesh. I do appreciate having the conversation, and you know, it’s always fun to talk about digital transformation, so yeah, I do appreciate your time.

Dinesh Keswani: Thank you, Charlene. Talk to you soon. Cheers.

Charlene O’Hanlon: Okay.