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CIO podcast: Fintech, Shoosmiths & RB CIOs reshape processes

Shane Scott, Darrell Stein and Joanna Spicer Brown discuss reshaping business processes

Written by Mark Chillingworth Photographed by Matt Gore

Key to many successful transformation programmes is to reshape an organisation’s business processes. As customer expectations and new business models appear it is essential for an organisation to reshape its business processes. In recent years a number of CIOs have become COOs and a factor in this is that CIOs are at the forefront of reshaping business processes and are well placed to become COO.

Constantly modernising and improving business processes is key to any size of organisation, as a result this week’s Horizon CIO podcast features business technology leaders from a Fintech startup, a major national business and international fast moving consumer goods maker.

Joanna Spicer Brown is a director with Fintech challenger Insignis Cash Solutions and has held major technology leadership roles with organisations such as publishing and education firm Pearson. Shane Scott is IS Director for Shoosmiths, the nationwide law firm and Darrell Stein is CIO with RB the consumer goods giant.

“We look after the cash and savings in accounts for individuals, organisations and charities,” Spicer Brown says of the Cambridge based Fintech. The digital service enables an individual, business, trust, local government or charity to open multiple types of account from multiple providers from a single digital service. “We fit between moneysupermarket.com and Paypal and my role is to make those things happen,” Spicer Brown says

“Shoosmith LLP is a large full service legal services provider, effectively we have five businesses in one and that covers everything from corporate commercial, private, real estate, clinical negligence and conveyancing and working for the financial services sector we have a recovery division,” Shane Scott says of his organisation.

Darrell Stein says: “RB is a global health, home and hygiene business with 20 or so global brands and hundreds of local brands in 65 markets across and a complex set of processes and technologies that face into those. So it is a big complex wide scale organisation.”  RB is best known for brands such as Dettol, Harpic, Durex and Air Wick.

All three business technology leaders face a daily challenge to improve business processes and explained the complexities of their varying vertical markets.

“It is very very process driven and everything is a process that has to be optimised as margins are getting tighter and tighter, as 70% of what we do is fixed fee so any over runs we right off,” Scott says of the legal sector. In many ways the legal sector epitomises processes, but Scott makes it clear to his peers that the challenges coming from the customer base are having as strong an impact as any other market.  “It is a very complex IT environment. From the outside looking in you’d think it is a word factory, but in reality there is a lot that is process driven with over 900 time recorders all with details of 40 matters a day, each of which translates as an item on a bill. So the challenge is to deliver faster and better quality.”  

Challenging business processes

Darrell Stein is CIO with RB the consumer goods giant.

“At the back office you want to standardise and make it as efficient as you possibly can,” Stein says. “In the front office you need to be a lot more flexible than you used to be.  Five to six years ago you’d be working with a retailer and supplying one country, now there is so much inter-market trading and the supply chain is so much more flexible, the consumer is so much more demanding where they want their goods, borderless trading, where you buy goods available in China in other parts of the world, all of that means the front office needs to be a lot more flexible,” Stein says of how the market has changed and therefore business processes must change.  

While Stein is reacting to new ways of buying a soap powder, Fintech firm Insignis Cash Solutions is having to cope with financial services technology and business processes legacy. “The issue we have is that we are facing off with our banking partners.  You as an individual you have one interaction with us and we deal with all the banks and building society on your behalf.  Although they are all regulated, they all do things differently. But, because of the whole regulatory piece and the interpretation of the regulations,  that means each bank needs a bespoke solution in order to deal with them,” Spicer Brown says.  

Point solutions

In any organisation a series of point solutions have become cemented into the operations. Often as a response to a sudden demand such as a merger or regulatory change, left alone these point solutions can become weaknesses in processes and therefore customer service.  

“When I joined, we had 13 different case management systems and a myriad of different document management systems and the specialist legal practice system meant we had seperate accounts receivable and seperate accounts payable systems,” Scott of law firm Shoosmiths says of the estate he inherited in 2013 on joining from UK Mail, the logistics firm.  “We have rationalised all that down with SAP, which replaced about 16 different systems and we are rationalising the case management systems and rationalised the business processes as we have gone on. By May next year we will be down to two document management and tow case management systems,” Scott says of the journey.

Stein at RB has been on a similar journey, also with SAP. “We have standardised and SAP fits what we need. In the front office the spirit is more to encourage different solutions now. The use of cloud solutions, what you need to service your customers in developing markets is completely different to what you need in mature markets so very different solutions for consumer or customer facing solutions and encouraging differentiation there.”

Differentiation is key in the highly competitive consumer goods market where brands from Procter & Gamble and Unilever, but the demands are not reserved to the supermarket shelf. Legal and financial services firms face new levels of competition. “You have got to differentiate yourself differently and you have got to be open 24 hours a day as that is what the customer expects,” Scott says.  They expect you to be responsive and they could be in New York or Shanghai and they want to be updated on their matters, so that moves us into online and agile ways of working. When I joined we had about 100 mobile users, now everyone is a mobile worker and every office is an agile office, there are no fixed desks in any of our offices, so that has been a real transformation, getting that mobility.”

For a Fintech the opportunity, interestingly comes from the authorities: “There is a lot of things coming into banking; regulations such as Open Banking and PSD2 for example and these are big challenges for banks, some of which are still running on systems from the 1980s and some of which we still have to deal with by fax as that is the only thing they can cope with,” Spicer Brown says.  “We can help those banks more open.”

Before joining RB Stein spent eight years as CIO with retailer Marks & Spencer (M&S) during the first period of disruption that retail went through.  “The FMCG industry is about to go through the process of digital disruption, when I think back to retail, when I used to sit at M&S and you’d say who is Asos and you would laugh at that now,” he says of how online fashion house Asos has become a dominant global brand.  

The impact is not only changing business processes, the consumer goods CIO believes it is changing the place of technology teams in the organisation. “IT is now becoming more aligned to the marketing function because the data that you can mine from sales, missed sales, are we putting the right things in the right stores at the right times?  That is a joint activity by some very able people in analytics and data scientists working alongside the marketing teams and that part of IT is becoming a lot more front office and the back office is getting rid of 20 odd systems,” Stein says.  

Joanna Spicer Brown is a director with Fintech challenger Insignis Cash Solutions

“One of my banking partners said their IT budget is £7 million and £6 million of that is keeping the lights on, they don’t have any spare capacity for innovation,” Spicer Brown contrasts of how financial services is not meeting the challenge that Stein is. “So they are looking for partners like ourselves to help them deliver what they can to make their customers experience better without having to revisit the legacy.

“When you are in a Fintech you have the ability to start new, but that becomes as outdated as quickly as everything else,” Spicer Brown says. “All of the time we are trying to keep up with the latest trend and all the time not back the wrong horses and go down a route that is costly. As a Fintech margins are nothing and we cannot afford to spend a lot of time going down a direction where we cannot deliver.”

Scott in the legal sector has a similar experience to Spicer Brown: “We have to deal with the Ministry of Justice, where fax is still the primary communications medium. There is a challenge between sustaining an innovation and that is the key thing we have got to get right, getting the right proportion between sustaining and innovation.”

All three CIOs have to walk the line between legacy and innovation.  “The challenge is squashing your run budget in order to sustain your innovation budget,” Stein at RB says. “You don’t want six sevenths of your budget to be on run IT, you have got to get it to 50% and that is the challenge that we all face.”

Checking your processes

“Some of the front office ROI you can get in six months, the back office ROI is a lot more difficult and it takes a lot longer as it ultimately is about laying people off,”

Just as with introducing new technology, changing a business process needs an organisation to measure and assess the new process to ensure it allows the organisation to move forwards. Scott and Stein both highlight the importance of this. “We ask and analyse every single step and every business owner we ask ‘Is this a statutory requirement? If it is not, is it adding value to the client?’ If it is not, then don’t do it,” Scott says.

“How much do you want to spend is the first question and what are the benefits?” Stein adds. “And the three answers are: does it sell more stuff, does it take cost out or does it reduce risk? If you cannot answer those questions then you ain’t going to spend any money.

“You have got to focus on how many extra products it will sell as the cost has got to come out of someone’s budget. If you want to spend a million then there has to be a return on investment (ROI).

“The ROI is starting to shorten and that is a business demand,” Scott adds. Three years was the norm when I was at Akzo Nobel, now it’s two years or less, the former CIO and programme director with the major chemicals company says.

“Some of the front office ROI you can get in six months, the back office ROI is a lot more difficult and it takes a lot longer as it ultimately is about laying people off,” Stein adds.

ROI is also hard to achieve if organisations you deal with are not keeping pace with digital transformation.  “Most of our business partners are the banks,” Spicer Brown says. “And they come in three types: big banks with huge infrastructure where we need to do all the ducking and diving to make things work, the middling banks that have been around for a while, but are up to date and some of the new banks whose tech is really really hot, but they don’t have the background in banking.”

Any business change requires a focus on people, process and then technology and over the years the majority of CIOs describe the people change element the hardest – and often the most rewarding to achieve.

“Law firms can have a variety of personalities in them, ranging from the die hard this is the way I have always done it, to the yummy new technology solicitor who has his iPhone connected up to the central heating and his TV,” Scott says half joking.  “The key thing is, show them the potential, then we will get them onside. They don’t visualise the theory, so it has to be done with Agile methodology where you show them a prototype. If you go down a waterfall route that does not work, as they cannot articulate what they really want.”

Stein adds: “Ruthless prioritisation. If a project does not have the right sponsor then I will not do it.  I like a track record of success. As a CIO you are responsible for every penny you stick into technology, if you have an unwilling sponsor then stop and invest in something where you have a good sponsor,” the RB CIO says.

Technology partnerships

“I’m sure we all have scars on their backs from backing the wrong horse,” Scott of Shoosmiths LLP says.  The CIO cites K2 and SAP as two of his key technology partners.  “It is crucial that you find the right partner who can work with you, in the way that you are working.”

“It is all about the team you can get,” Stein says.  “You pick the right partner, once you have the right partner you have to make sure that you get the right team and that is all about having the right supplier engagement and making sure they are aligned to your objectives, they get paid if you hit the objectives.”

Future processes

The next wave of technologies have the potential to totally change and in some case replace business processes. Inevitably if you place three of the UK’s leading CIOs in a room they will discuss technologies such as artificial intelligence (AI) with both a technological passion and a deep concern for its impact.

“There is a great opportunity for AI and machine learning to make operations as optimal as you possibly can,” Stein says.

Shane Scott is IS Director for Shoosmiths, the nationwide law firm

“One of the challenges is the social and professional impact it has, AI has the potential to take out the whole learning process that solicitors go through, AI can do it in hours where a team can take days,” Scott says.  “The use cases for AI are massive. In a clinical negligence case we will have a panel of solicitors that will assess the viability of taking that case to court and whether we could win it. You could have an AI that will look at every similar case and come up with whether it could be won and that has that challenge to learning.”

“I am fascinated by it in legal,” Stein says. “I think it is huge, in the back office, the opportunity for centralised invoice matching, in the front office, I think AI can really help you pinpoint where you should be spending your marketing dollars, but there is still an element of human touch required to do selling. Could you provide systems that allow retailers to do their own in store marketing, as there is a huge sales force that goes out to stores and positions goods, that is a big leap.  There are some big changes,” Stein says.  

“AI is making our back office happen and we then see that as something we can sell to other people and they can use that rather than go down the journey,” Spicer Brown of Fintech Insignis says.

“Getting systems to speak to each other is a big common thing,” Stein agrees with Spicer Brown. “AI can correct that, if you have half a dozen systems all with different descriptions.  The old fashioned way was to create a big master database the new way is to stick the descriptions, file a report and it finds the commonalities.”

Just as technology moves on at an increasing rate. It is clear from the debate in this week’s Horizon CIO podcast that business processes will also continue to change and the CIO is a key member of the organisation in changing the business processes to meet the changing needs of customers.

 

 

 

This week’s CIO podcast is brought to you by process automation and cloud platform leaders K2

 

 

 


 

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