Welcome to the Episode 355, part of the continuing series called “Behind the Scenes of the NetApp Tech ONTAP Podcast.”
Artificial Intelligence. Blockchain. ChatGPT. Remote working.
What do all of these things have in common?
They’re technology disruptors that businesses are having to learn to navigate and integrate into their day to day operations, each with their own unique challenges and benefits. They’re also all pieces of a bigger digital transformation puzzle.
This week, Kamales Lardi (@kamlardi, kamaleslardi on LinkedIn) joins us to discuss her book “The Human Side of Digital Business Transformation” as well as what digital transformation means to people in uncertain times.
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Transcription
The following transcript was generated using Descript’s speech to text service and then further edited. As it is AI generated, YMMV.
Episode 355: The Human Side of Digital Business Transformation w/ Kamales Lardi
Tech ONTAP Podcast Episode 355 – About Digital Transformation w/ Kamales Lardi
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Justin Parisi: This week on The Tech ONTAP podcast, we talk all about digital transformation with Kamales Lardi.
Intro/Outro: [Intro]
Justin Parisi: Hello and welcome to the Tech ONTAP podcast. My name is Justin Parisi. I’m here in the basement of my house and with me today have a special guest to talk to us all about digital transformation. And really what we’re talking about is digital transformation in uncertain times. We have a special guest named Kamales Lardi. So Kamales, what do you do, and how do we reach you?
Kamales Lardi: My name is Kamales Lardi and I am a digital business transformation and emerging technology expert.
I’ve spent about 23 years working in this space, cross-industry experience, basically advising companies and enabling international global companies in their digital transformation initiatives from strategy all the way down to execution. My background is really in core technology, so coding, software development and things like that.
But I started my career off really in management consulting. I was with Accenture for a number of years, and Deloitte as well. For a number of years I was the head of Deloitte Digital in Switzerland, until 2011, and then ran my own consultancy in the digital transformation space for over a decade.
And also I manage a technology company in Switzerland. So over the years I’ve really spent quite a lot of time with organizations from different industries and companies of different sizes, working with people of various functions, really helping them understand the capabilities of technologies and how technology can really enable the business of the future. I’ve brought this experience of over two decades together into a book that was recently published by Wiley called The Human Side of Digital Business Transformation. And in addition to that, I’m also a lecturer and teaching fellow in a number of higher institutions as well as a keynote speaker. I’ve done over 200 events across different regions over the years. So this is a space that I can safely say is quite exciting for me. It’s definitely my passion and I’ve spent over two decades in digital transformation.
Justin Parisi: All right, so I’m gonna be blunt here, and I’m just going to come out and say it.
Digital transformation sounds like a buzzword, so tell me why it’s not, tell me what it means and what it actually does for companies.
Kamales Lardi: It’s absolutely a buzzword, or it has become a buzzword over the last couple of years. If we really think about it, digital transformation has existed since the 80s – since we started using computers in the workplace, right?
It’s been around for a long time. It’s not a new topic. What has happened over recent years is the exponential rate of technology development and application has made digital transformation a topic that’s at the center of most organizations’ strategy development. And this is simply because we’ve got emerging technologies today that enable us to create exponential growth and scale for organizations.
Something that we never were able to do in the past. And this is what’s made digital business transformation come back into the center focus for most industries. So what is digital business transformation? First, let me start by telling what it’s not – just to kind of simplify the topic a little bit. It isn’t about just digitizing your business or operations.
It is not about implementing technology solutions and using the latest type technology that’s in the market. And it’s not really a project that has a start date and an end date and completion of a tech implementation. The way I like to describe digital business transformation is really, it’s a journey of an organization’s evolution towards a sustainable future.
And what this really means is organization-wide change that requires some kind of a structural redesign of what you do as a business and how you add value to customers by leveraging technology solutions that are in the market today. So this could involve process changes, operational changes, people changes upskilling of your workforce.
The way you engage with your customer base, as well as the business model that you utilize to generate revenue in your business. So it’s end to end changing the way you do business today.
Justin Parisi: So would you say that maybe one major example of that would be, I don’t know, going from mail to electronic mail, from there to text messaging and Slack and instant messaging. Would that be an example of a digital transformation?
Kamales Lardi: That would be definitely an example of digital transformation. I like to use the analogy of banking or financial services, which I think most people can relate to. We started off with traditional banking where you would walk into a bank branch and you would have your little passbook.
I don’t know if very many people remember those days when you had to walk into a bank branch with your little passbook that showed the balance, how much you had in your account and so on. And you’d interact with a bank teller. And then we had online banking emerge, right? So well before that we had the ATM systems emerge.
That’s a kind of digital transformation that happened. And then we had online banking where we took the exact systems and services that were provided in the bank branch into an online website. And then we had mobile banking where we basically took all of the same services and offerings into your mobile device.
And so you could do all of these things that you used to do in the bank branch now online, on a website, as well as on the go with your mobile device. Now, what’s happened with digital transformation in recent years, all of these things were evolutions of technology. It was evolution of the way the business was run.
But in recent years, we’ve seen the number of digital touchpoints, the way we interact with customers, the sophistication of our customers has exponentially grown and developed because technology has enabled a myriad of different ways of doing things within the same business area. So for example, we have the Metaverse, which has also gained quite a bit of hype in recent months.
We have financial services companies going into the metaverse and setting up kind of a bank branch. If we take JP Morgan as an example, they have something called an Onyx Lounge in the metaverse called Decentral Land. And it’s a virtual environment where you can pretty much simulate this feeling of going into a bank branch and setting up a virtual mortgage, doing your day-to-day banking and transaction, but you are in a complete virtual immersive environment.
So technology has really allowed us to take these traditional services, these traditional ways of interacting with businesses and doing business. They’ve allowed us to create new touchpoints, new possibilities, and create these almost hyper personalized experiences for every single individual customer.
And this is one of the examples of digital transformation. But, in order to do this, in order to deliver these sorts of capabilities, you need to have a whole new set of processes in your company that caters to this new service. You need to have a range of new digital products and services as well.
You need to have people within your organization who are educated on what these new technologies are and how customers could use them, and what are some of the compliance and regulatory requirements within these new environments. So you need a whole new set of capabilities and skills, and you need a new business model as well, that will allow you to generate revenue in these new forms.
And all of these together is really what I call digital transformation.
Justin Parisi: So with any digital transformation, there’s gonna be a subset of challenges, right? So for your bank example, going from a paper checkbook or a log of your transactions to going online is gonna require some different security than you normally would get used to.
And really everything that changes causes people to kind of pause and say, okay, wait a minute. Do I really need to do this? So what are some of those challenges that people are facing when they’re trying to look at digital transformation and what’s kind of the driver for some of these things?
Kamales Lardi: There’s a range of different challenges. We can look at it from a regulatory compliance perspective. We can look at it from a cyber security perspective. A lot of things that I deal with are also at a very human level. For example, leadership teams who have certain hesitation or fear of new technology implementations simply because they either don’t understand it or they fear losing control within the traditional business environment. So digital transformation challenges or in implementing successful transformation initiatives, we typically need to work with leadership teams so that they can engage better with these solutions and understand the value of these transformation. And then sponsor them or put money down to make sure that they are funded and there’s the right resources and the right capabilities involved.
You also need to start looking at team structures and the way organizations basically function or operate. A very simple example… it takes a completely different set of processes, operations and people capabilities to run a online banking service compared to a metaverse service. So a lot of upskilling is required and a quite a bit of training and education and handholding.
A good example of this I can share with you in recent years, I implemented a blockchain solution in agriculture. And this is one of the biggest lessons of digital transformation for me as an expert, but also in terms of just looking at industry transformation, because we have this environment in agriculture where you have the range of different types of tools and capabilities being used from Excel sheets, right up to traditional tracking and tracing devices as well as traditional agriculture based technology solutions. Bringing all of these solutions together, this different range of technology maturity, you want to be able to implement blockchain within that space. It’s not about going from A to B, it’s about really transforming your organization and preparing the infrastructure to make sure new technologies can be implemented.
The one thing I do want to stress though is we tend to look at digital business transformation a lot of times also from a technology perspective. Emerging tech really does give us capabilities or possibilities around exponential growth and scale at much lower cost than we had in the past.
But the real clue to success comes from the transformation bit, not from the digital bit, because the transformation part really then helps you look at creating a solid foundation. Taking people in this ecosystem of business from A to B, creating this solid foundation that allows you to accelerate this exponential possibilities of technology.
And that’s the exciting part about digital transformation.
Justin Parisi: So can you give me an example of a time where you’ve consulted a company through a digital transformation where the digitizing or the technology piece has turned into a positive outcome? So tell me what the technology was and tell me how the outcome changed their lives.
Kamales Lardi: I think a recent example that I can share was with a consumer finance company that I’ve been consulting with for quite a number of years. When I started working with them the level of maturity or the digital maturity that they had within the organization was fairly low. They had a traditional core system that allowed them to basically record information and provide compliance for the customer financial requests.
And before Corona hit, one of the biggest challenges that we faced was we wanted to start this digital transformation piece. The management team had brought me in and they were fully supportive of this transformation, but it was quite a challenge to convince the middle management that the systems needed to change.
We had to replace the core system. We had to create a new mobile app that would allow customers to basically make applications on the go. And the company would be able to provide digital services fairly quickly. And I’m not gonna name the technologies, but I think the relevance here is the fact that they were creating a mobile device or a mobile app from scratch, which was something completely new for the organization. Now, we were able to take them on this journey really creating transformation or helping them see the transformation in a positive light. But they were not really bought into the process in the sense that most of the people who were part of the project understood this had to get done.
And this was something that had management support, so we had to tick the boxes. And so they started working on the project. But when Corona hit, and this was at the end of 2019 when the pilot app was successfully launched, we didn’t have that many users.
There were certain uptake of customers using it, but not that many. But when Corona hit and Corona was really once in a lifetime shift in terms of the scale and uptake of technology that happened during that period, a once in a generation shift that happened. The number of people that adopted this mobile app and the fact that they now had an access point to the company, which didn’t exist before and became such a critical part of their daily life to be able to make payments, to be able to check their balances, to be able to apply for loans and credit and so on. That uptake, that ability to get access to customers completely transformed the view of customers of this organization as well as the people within the organization of the capabilities of technology.
So it was a highly positive shift of mindset that happened. The conversations that I was having with companies and leadership teams before Corona around the use of technology, the necessity for digital transformation was almost like a nice to have. And after Corona, this mindset completely shifted for most organizations, and that, for me was a big win, right?
Despite the challenges that we faced during the pandemic, it was a massive, massive shift in mindset. That things can be done in a different way, and digital transformation could enable organizations to do things that they never thought they could before. And this was quite exciting for me.
Justin Parisi: Yeah, I would imagine that before Corona you were having trouble convincing people to change how they were doing things cuz it was like one of those things where if it’s not broke, don’t fix it.
But after Corona people were like, oh, maybe we do need to look at this, right?
Kamales Lardi: Absolutely. And the mindset shift was the big plus factor that happened during that time. You can imagine before Corona, if you had walked into an organization and said you can run an organization in your business without physical presence, without having employees being physically on site, or having a discussion about hybrid work environments. That was almost impossible except for some organizations that truly believed in work-life balance and flexibility of your working models.
What we’re seeing now, though, after this shift happened and we saw this acceptance of hybrid working models. We’re seeing a slight shift back into companies enforcing kind of back to work, come back into the physical space discussions. And I think this is also testament to the fact that the mindset shift may not have been permanent.
We’re still kind of falling back into this traditional environment of business and my prediction of what’s gonna happen in the next couple of months. Employees, people, and customers as well have gotten a taste for what’s possible with this digital space and this hybrid workspace that we have, they’re not going to accept being forced back into the workforce, into this traditional physical space.
And so that’s gonna get rather interesting for many companies as well.
Justin Parisi: Yeah, that’s kind of my opinion too. The mindset shift for the companies might be different, but once you’ve opened the box, everyone’s like, oh, this is what life can be like, right? I don’t have to sit in traffic anymore. I don’t have to pay for gas anymore. I can work from the comfort of my home. So there’s a lot there that’s gonna have to be kind of ironed out. And I think that is gonna eventually land usually somewhere in the middle. But, you know, ultimately I think that’s gonna be good in general because it’s really gonna force people to think of things in different ways, you know?
And one of those things they have to really consider is the cloud. When you’re talking about digital transformation, I would imagine that the cloud comes up in these discussions. So when it does, what do you say?
Kamales Lardi: I think this is the example that I like to use. Digital transformation was really enabled by a lot of these fundamental – I call them basic technologies.
Basic in the sense that, it’s not a nice to have. It’s almost a necessity that every organization needs to consider having these technology enablers. As I said at the beginning of our conversation, digital transformation has existed since the 80s, since we started using our first computers and technology in the workspace.
But what shifted or changed over a decade ago was this rapid acceleration of technology. We started to get access to the global connectivity with the internet. We started to get access to unlimited storage capacity, to cloud capabilities. And so all of these elements coming together have created a perfect storm that accelerated technology development. And that was the source of acceleration of AI-based systems, acceleration of blockchain technology and all these new emerging technologies that we are seeing transforming the business and our global landscape today.
Those were accelerated by these foundational basic technologies that have been put in place now. If you talk about data capabilities, data analytics, cloud capabilities, all of these things are required, but they’re not elements that just can be put in place.
Companies have to think about their strategies around this, right? So when you consider cloud capabilities in Switzerland, for example, you need to think about data privacy, particularly when you look at financial services. There are many financial services companies here that wouldn’t consider cloud capabilities because of banking secrecy and so on.
So organizations really need to look at , what are the requirements or what are the necessities within my business space and how can I utilize these technologies and these solutions in the best way for my business? How can I utilize these solutions to ensure that I’m getting the best that I need in my business environment?
And this would be my response to that.
Justin Parisi: So I would imagine in your business, in your line of work, you encounter a lot of skepticism, right? So I’m curious, what is the thing that people have the most skepticism about, is it blockchain? Is it AI? Is it the cloud?
What is it? What are they rolling their eyes the most about when they hear you say it?
Kamales Lardi: There are a few things when you talk about skepticism from things like when I talk about blockchain and blockchain is one of my passions because I do see the transformative capability of blockchain solutions. The basic thing that I find quite challenging in my line of work is the misconceptions or the lack of understanding for certain tech solutions. For example, I am still explaining to so many business leaders that blockchain is not cryptocurrency. And, we’re like 12 years in and you’re still having to explain the fundamentals and the difference of what this technology is, that this is a technology solution and that’s a digital asset or a digital currency.
So the fundamental misconceptions… it’s kind of a two side of the same coin, right? Information today’s democratized. So there’s a flood of information and knowledge available freely at our fingertips today. But at the same time, there’s so much information that trying to find the right knowledge and insights is also challenging.
So I’m still at the point of explaining technology. And there’s also a misconception, for example, now with ChatGPT becoming the next hype. People are starting to look at AI-based technologies as the silver bullet solution for everything. It is not. The technology is, as I said, an enabler.
At the end of the day, you still need to have value proposition for your market, for your consumers. You have to have a good business plan behind it. You have to have a problem space that you’re addressing with these technologies. So it’s not just about the technology, it’s about the how, the what and the when and the whom and all of these different elements coming together.
And so for me, this is the biggest challenge really talking to people about what technology can really do and what’s the best way to utilize that solution.
Justin Parisi: So that kind of leads me into the next topic here where we kind of think about the strategy. How do we plan out a digital transformation? If I’m a company looking into this, what are some things that I need to consider and how do I get there?
Kamales Lardi: A lot of times we do tend to overcomplicate, particularly when we talk about technology implementation within an organization. For me, digital transformation, it’s a journey.
And with any journey, any traveler knows, you’ve gotta have a starting point and an end point, and this is what I describe in the book "The Human Side of Digital Business Transformation." I give a very pointed step-by-step structured approach on how companies could address transformation. And it really starts from situational analysis, which looks at, where are you today?
What are you doing today? What do you do well? What do you need to improve on and what your strengths and capabilities are, what are the market developments and trends that are going to impact your industry and business? So taking stock of where you are today, and then plotting your journey to where you want to get to or where you need to get to.
So if you think about three to five years, where do you propose or where do you expect your industry and business to be, considering the rapid development of some of the things around you, like consumer adoption of solutions and technologies, as well as the rapid development of technologies, the convergence of the different technology solutions and so on.
Where do you see the market heading? And how do you make sure that your company is the one that’s going to be the front runner in that journey?
And this is not just about a technology solution that you’re building, it’s the evolution of your organization. So how you do things today, how you operate as a business, how do you create value for customers in the market? What is your purpose as an organization? How do you motivate your staff, take them on this journey with you.
How do you transform the mindset of leadership teams? Where do you need to invest? All of these questions do come into play. This is a fairly tall order for any organization. So what I’ve done within this process is to break it down into consumable or smaller building blocks, I would say.
And these building blocks really try to address four key areas in your business. The customer experience element. The product and service element. The third building block is people, process and operations. And the fourth element is your business model. Within the framework that I’ve described in my book, I really try to help business leaders understand these four building blocks, and not all of them have to be addressed at the same time. You don’t have to be focused on the entire transformation journey. You can break it down into simpler, smaller chunks that can be addressed for quick win and success. But at the end of the journey or through this journey, you eventually have to address all the building blocks over time. This way, organizations are able to prioritize where they put their focus in investments and efforts and resources to get the quickest outcomes that they need from transformation and the ability to then utilize technology solutions to the best of their abilities as well.
Justin Parisi: Earlier we talked about challenges and I’m curious if you have a top three list. Like what are your top three challenges that you see for companies that are trying to encounter a digital transformation?
Kamales Lardi: A couple of things that stand out straight away for me. So let’s start top down. For me, the leadership is the trigger point for any transformation in an organization and leadership tends to also be the biggest challenge most of the time. And there’s a range of different challenges at that level. You have leadership teams who are not able to keep up with the technology developments or capabilities around how to lead organizations that are transforming.
So it comes from a fear-based space or not understanding the technology capabilities, not understanding how companies are or should be evolving. I do have quite a few discussions with leadership teams who are measured as well from a wrong perspective, right? For example, a CEO or a C-level executive who’s measured on a quarterly basis on success.
And this is not a long-term thinking because when you’re measured on success every three months, you’re not going to be able to transform an organization. Then we go down into the technology or infrastructure environment where companies need to address. Many companies that I work with still need to transform the basics of their technology infrastructure. Core system replacements, looking at creating data strategies and updating their ability to use information and data in the best way possible. And then you have also capabilities and skills, which is the third element. Organizations that need to upskill their workforce in order to be able to operate in these new environments.
So bringing people from A to B in terms of knowledge, capabilities, skill sets. It’s not just about implementing new solutions, it’s also ensuring that the people in your organization can use these solutions effectively. The number of times I’ve been in organizations and supported them in implementing tech solutions meant to improve productivity and efficiency, and people not buying into this journey and implementation, ending up creating shadow organization structures where they fall back into the old ways of doing things and you don’t actually see the outcome and results.
So we have to really take people on this journey and I work with teams to help them understand the benefits for them as team members and how they should be using these technologies. Another key element as well is the process and operations environment. Looking at your business landscape, it’s not just about creating new digitally efficient solutions, but really transforming the process and operational environment to meet the needs of these new systems as well. To really optimize on the efficiencies that could be gained. And another key element really is bringing your customers to the center of all of this, right?
That’s really the key. And this involves really having a strong understanding for the market and your customer base, their behavior patterns and preferences and the evolution of those customers as well. How much are they adopting technology? What are the problems that your customers are facing, and how could you be part of the solution for those problems?
So a lot of these elements really comes into the, the core of what I’ve written in my book as well. Truly successful digital business transformation initiatives, companies that are really transforming for the future, will be able to understand this ecosystem of stakeholders, internal and external. Pull them together to work together from mutual benefit. And we are seeing very few companies really taking advantage of this entire ecosystem and coming out with solutions that transform industries based on these collaborations.
Justin Parisi: So it sounds like the number one problem is people, and the number one solution is obviously ChatGPT, I mean…
Kamales Lardi: [laughs] if you read the news…
Justin Parisi: Just replace leadership,
Kamales Lardi: you let them believe that.
Justin Parisi: With ChatGPT! That’s it. That’s the answer. Did I spoil the book?
Kamales Lardi: I have to say Justin, though, I’m blown away by ChatGPT.
Justin Parisi: It’s really cool.
Kamales Lardi: It’s amazing. It’s pretty amazing. But the opportunities as well are pretty amazing. I’m very excited to see what’s gonna happen with AI systems moving forward.
Justin Parisi: Yeah, absolutely. All right. Well, it sounds like we’ve got a pretty good handle on digital transformation, what it is and how to get there. And again, your book was The Human Side of Digital Transformation. Is that correct?
Kamales Lardi: The Human Side of Digital Business Transformation. I have to clarify though, because just from the title, it may sound misleading. It’s not about change management in HR, it really goes into core tech, transformative tech as well.
And how does an organization need to transform from the leadership side, from the customer base, from understanding the market to understanding technology solutions. So it really goes through this evolution or journey for an organization.
Justin Parisi: And do you have a website as well?
Kamales Lardi: I do have a website.
You can find me on KamalesLardi.com, or I’m also quite active on LinkedIn and Twitter.
Justin Parisi: We’ll include those links in our blog so that you can find out more about Kamales’s work here. Well, thank you so much, Kamales, for joining us today and talking to us all about digital transformation.
All right. That music tells me it’s time to go. If you’d like to get in touch with us, send us an email to podcast@netapp.com or send us a tweet @NetApp. As always, if you’d like to subscribe, find us on iTunes, Spotify, GooglePlay, iHeartRadio, SoundCloud, Stitcher, or via techontappodcast.com. If you liked the show today, leave us a review.
On behalf of the entire Tech ONTAP Podcast team, I’d like to thank Kamales Lardi for joining us today. As always, thanks for listening.
Intro/Outro: [Outro]
Why Is The Internet Broken? 