Leadership Insights: Digital Transformation Outlook

Transcript

Mike Vizard: Hello, and welcome to the latest addition of the Digital CXO Videocast. I’m your host, Mike Vizard. Today we’re with Joseph Princz who’s CEO of the Wrecking Ball, which is a consulting firm that specializes in digital transformation work. Joseph, welcome to the show.

Joseph Princz: Thank you for having me.

Mike Vizard: We’re in 2022 now. What do you think the outlook for the year is going to look like for these types of initiatives? Are they going to accelerate or do you think maybe they may decelerate because people are getting used to the new normal?

Joseph Princz: I think there’s going to be a combination. A lot of the things we’ve heard regarding experience lately, the last few weeks, have been around metaverse, with changing their name. And it almost brings us back to the time of the hype where we had Second Life and the experience of everyone jumping onto Second Life bandwagon. It’s all of a sudden out of nowhere become the biggest buzzword, whether it’s marketing or technology or engineering.

Almost anywhere we go, even if they’re not a technical person, we keep hearing things about the metaverse and even more so people dabbling in how to – which app am I going to buy land in? And it’s almost going back to the late ’90s heyday and then the Second Life heyday. So I think there’s going to be an expansion in some areas. I think experience-wise, probably a deceleration with the exception of the social media sites of like the endless scrolling.

Because you could sit there for hours and scroll and scroll and scroll, which is a content experience but not like a user journey kind of experience. I think we’ve seen a shift in the scrolling types of experiences more so to something that has some more information that people can interact with.

Mike Vizard: I think that shortly after the pandemic started there was kind of this mad rush to reinvent and to be seen to be doing something to help the business survive. Do you think folks are starting to rationalize some of those projects based on the feedback that they got? Are they killing some and prioritizing others?

Joseph Princz: Yeah, we’re seeing both. We’re seeing some that have come in that they realize we need to pivot, that are no longer going to continue at all. And there are others that are still doing the true transformation, that their business did change, and electronically or technologically are retrofitting and modernizing a lot of their stack or tech stack, at least, in order to get their goals for ’22, ’23, even for the next generation. A lot of optimization and plans being put in place that may take a year, two or three years to execute on.

Mike Vizard: Have you seen any patterns in the last year or things that digital CXOs should copy that might make them more successful?

Joseph Princz: For me, for our clients, I think the bigger trend, at least the trends we’ve seen, are more just public information out there about the company, that they may not have put out there initially. A lot more empathy, especially on social media feeds and trying to really engage at almost any touchpoint as possible. And this is, again, more of the enterprise scale, so not every company has a budget to do this. But at least for enterprise, staffing and whether it’s on pretty much any platform and listening to customers when they do have issues and trying to resolve as best as they can.

So really putting human capital into empathy to help any of their customers, or maybe they’re not a customer yet but have read some great review or issues that were resolved and are becoming a customer. And it’s pretty much through any field as well.

Mike Vizard: What do you wish that digital CXOs knew before they engaged you or at least they would come more prepared when they do engage you, and what would make your life easier?

Joseph Princz: That’s a great question. We talk about this often. The biggest thing for us when we are brought into an organization, and we share this with other orgs in general, is for the CXO or anyone in the C suite to have an understanding of what their company’s current tech stack is, what are the limitations, the guardrails, and working with them if there is something that can improve workflow in a company, profitability of a company, to be open-minded, to change the tech stack. And not say, well, this is how it’s been for the last X amount of years and this is where we need to stay and IT says so.

Where more so it should be this is what we currently have, this is what’s coming recommended from a third party company on the outside that has the ability to see the whole landscape. Maybe we should listen to them and say, alright, there’s a point. And we can integrate these other types of technologies into everything else that we do and this will be the result, rather than always block it initially with the word no at the onset. That drives us nuts.

Mike Vizard: Do you think that people are too invested therefore in their legacy platforms and they can’t just in their minds throw them away because, I don’t know, maybe they don’t feel like they got the return yet, and maybe the issue is they just have to be willing to throw something overboard?

Joseph Princz: It’s a combination. There’s a lot of hesitation sometimes just because of ROI, whether it’s a Capex or Opex expense, where’s the budget going to come from. Other times it could be where if they’re still running racked hardware, which millions of companies still have. What does it mean to migrate to the cloud? What does it mean for our licenses? What’s the cost of that?

A lot of job protection and job security, where there are companies running legacy systems that for a fraction of the cost can be modernized and can be fully protected as well. Look, if Amazon or Google Cloud or Azure is going to go down, it’s going to go down and not just affect one person. It’s going to affect millions of people, like a few weeks ago. So that’s the only hesitation that we’ve really heard, but then at the same point people can do multiple zones to protect their infrastructure and assets.

So we’re seeing a lot of hesitation for some companies strictly because of domain knowledge, job security. Other companies that have embraced it are amazed at the cost, where one transformation project where hardware was outdated, needed to be renewed, was estimated cost of about $500,000 to $600,000 for the hardware itself, and we were able to get the same materials in a cloud-based system for about $30,000 a year or so, give or take. So it was a huge savings, but they didn’t believe it could be done.

And once we scoped it out for them and showed them it’s possible, they slowly started to change their minds. So I wish more people would be open to cloud infrastructure, true transformation that can save them business money. But also what it allows for is the opening up of additional services that Amazon might be running, for example. Like integration with voice and voice services. So once your data is housed within the environment, if you want to implement an Alexa skill or a Polly skill or use machine learning to analyze your data, there’s all these additional services that are available that really when you’re in your own datacenter are not as easily accessible or readable. Even just for some simple R&D to play with and see the what-ifs.

Mike Vizard: Do you think that this point that the biggest limiting factor is the technology or rather is it more of the culture within the organizations or we don’t have enough people? What do you think is the biggest challenge organizations are looking at right now?

Joseph Princz: I think it’s culture. The money’s there, the people are there, the cloud services are mature enough to have things locked down, even for virtual private clouds within the larger cloud stacks. I really think it just comes down to the people and security, whether it’s job security or security of their data, but there’s always ways to remedy that, even to have hybrid approaches as well if you’re worried about, concerned about certain data and data classifications.

Mike Vizard: Do you think digital transformation will lead a lot of organizations to kind of blow up their org charts because so many of these processes need to span marketing, sales, and supply chains? And maybe the way we’re organized is not helping things.

Joseph Princz: Yeah, too many layers. And this is across every enterprise. 25 years, blessed to be working with amazing global brands, we see it with most of our clients. There’s too many layers, too many people, and all for a good reason when it was different times. But redoing the org chart, slimming things down – again, if you’re going to go from a true digital transformation, a lot of the technology in place can automate a lot of the systems that are already out there, and again, just offer things that people might not even know that are available at a fraction of the price.

Mike Vizard: The vendors make it sound like it’s easy these days. What is your sense of what are the capabilities of the vendors in this space versus the expectations that maybe they create?

Joseph Princz: Yeah. It’s like the saying you have the right tool for the right job. So for a plumber, it’s easy to come in and change a toilet because he knows where the wax ring goes on the floor, or to fix a sink because he has the right size wrench that most people don’t have. But that also comes with years of training and knowledge. And it’s the same thing that we’re seeing now with tech.

There’s a lot of companies out there that can speak the language. It may not execute well, and there’s many projects we come in to do the cleanup work for where they were in the middle of a project and were removed from the project and we’ll come in and assist to do the cleanup and get them to the finish line.

Mike Vizard: Do you think that the digital CXOs really understand their processes? I think initially up top they seem to do that, but then it turns out there’s more exceptions than there are rules and you wind up spending an inordinate amount of time taking apart these processes.

Joseph Princz: Absolutely. It could be a CXO, CDO, CAO, whatever C title you want. Great ideas, and some of them can be grandiose, and common sense-wise should be able to scale and execute typically. But once the process gets put in place without knowing the underlying work that it’s going to take to get the initiatives done, that’s where we find out – it’s like peeling back the onion, right? You do a few layers and, all right, we’re good to go now, and there’s another block or another block where you keep pulling back and find out the next thing.

We look at that as a positive thing, because going back to transformation in general, if it’s not done you’ll never know. And once you start the process, if there’s a multiyear goal ahead, that it needs to be done anyway, keep pruning that onion back until you get to the core of what the issues are and then put new processes in place that will again carry the business forward for the next 5, 10, 15, 20 years-plus on a new stack that will also be able to offer customers new experiences, or even internal tools as well that were not available prior.

Mike Vizard: I feel like there’s more attention around this buy versus build conversation than ever. If I look at a SaaS application or something, it can automate a certain process. It may not be a high value process. And then a lot of organizations have these application development teams and they go build all these custom apps for things that are relatively routine that might be handled by a SaaS app. So what’s that line between when I go buy something to automate a process versus build something?

Joseph Princz: So we do both for our clients. We’ll guide them to platforms that may already be available and/or we build custom solutions, or they’re hybrids as well. Typically when we look at the requirements, if there is a solution out there that meets about – well, first budget, right? What’s the budget that’s already been allocated to that, and then the value of what products may be out there and how much does it solve?

If it solves 70 percent of the issues, and that’s good enough for the organization, for the dollar amount they’ve allocated, then great. But if it’s really that last 20 or 30 percent, the crux that they really need to get to and the solutions out there are not good enough, then we’ll do the build approach. And typically, many of our clients we wind up with the build approach after a lot of due diligence.

Mike Vizard: So what’s your best advice to folks? at the end of the day, what is the thing that they should be focused on for 2022 that will make them successful in 2023? Because it seems to me if you don’t make the turn now you might not be around to see how it all turns out.

Joseph Princz: Yep. Internally or externally find the right staff or partner to execute on the ideas that you have. Let them do the proper due diligence, because when a company or CXO does find the proper team, anything is possible. Literally anything is possible. So find the right team and culture and people to help you get there.

Mike Vizard: Alright. There is no shortage of large firms out there that focus on this space. Why should we go partner with somebody who might be a little smaller and maybe closer at hand?

Joseph Princz: Yep. So the boutique firms like ours are better at budget management, better at timeline management, more transparency, less layers of people to have to get through, not beholden to any stockholders with numbers that have to be met all the time in order to keep the machine going, and for us the number one thing has been culture. When we work with the larger firms or the larger clients – let me flip it around – when anyone’s seeking a larger firm or small firm, our experience from our clients is the larger firms you’re a number. You might have your team in place, but you’re a number. And the small firms, the relationships become personal, even though it’s still a business, and more can get accomplished once you break the barriers down like that.

Mike Vizard: Hey, Joseph. Thanks for being on the show.

Joseph Princz: Glad to be here. Thank you for having me.