This article first appeared in The Times.
The past six months have been a tough time for businesses, but they’ve been tougher for some more than others. The organisations that have fared best are those that have pushed digital transformation to the top of their agenda, believes Gary Steen, managing director of technology, change and security for TalkTalk, one of the UK’s largest internet service providers. “I think that digital transformation used to play second fiddle to business-as-usual activities, but now it has become a business-as-usual activity.
“I read a great question recently. It asked, ‘Who’s driving digital transformation? Is it the CEO? Is it the CTO?’ And it gave the answer, ‘No – it’s Covid-19.’”
So, amid the chaos and disruption it has wrought, the pandemic has also provided the chance to accelerate transformation – but businesses have to be ready to grasp the opportunity. “Everyone says they are doing digital transformation,” Steen says. “But I’ve seen a lot of smaller operations – particularly in e-commerce – that are losing revenue because they are not really digital businesses and they have not scaled up. They can’t cover the volumes.”
The FTSE 250 broadband provider’s own digital transformation – which began in 2018 when it moved its HQ from London to Manchester – meant it was in a strong position when lockdown struck in March. “We were ahead of the curve,” Steen says. “We had used the move to re-engineer the entire business and had already got rid of all our desktops and switched to laptops running Office 365 and Teams.”
Consequently, the abrupt shift to remote working caused few ripples. “We were already working in a semi-agile way so there was very little disruption,” Steen says. “We just scaled up a couple of licences for VPNs and other things we needed for people to work remotely.”
One issue that did have to be tackled was the loss of TalkTalk’s offshore contact centres, which meant that a “virtual call centre” of several thousand UK agents working from home had to be established in a hurry. “We decided to move onshore pretty quickly,” Steen says. “We’ve never had any of our agents do customer telephony from home and we were worried about how well the technology would work.”
Disruption during the changeover was minimised by resolving as many customer service queries as possible online, and fears that the remote technology might cause ongoing customer issues proved wide of the mark, he says. Both the virtual call centre and remote working are here to stay. “It went fantastically well, the Genie is out of the bottle now. We started off saying ‘Right when are we getting back to the office?’ But now it’s more like ‘What are we rushing back for?’”
All the same, the office still has a role to play. “We’ve found it’s good to get into the office and meet when we are shaping a new project with a customer – that’s when you get the spark.”
TalkTalk’s HQ in Salford’s Soapworks has been reconfigured to provide socially distanced “collaboration space” rather than desks and meeting rooms. “There are whiteboards and screens and decent audio, it’s almost like a lecture theatre,” Steen says.
Underpinning it all has been the need to keep TalkTalk’s broadband network up and running – to ensure that the nation’s new army of remote workers can continue to log on, of course, but also to provide an increasingly large proportion of its customers’ everyday needs. “Decent internet access is no longer a luxury, it’s a right,” Steen says. “People live online thanks to Covid-19– what can you do without the internet? It’s become absolutely critical.”
TalkTalk has weathered the pandemic in reasonably good shape so far, Steen reckons. Although in June it predicted a £15 million hit as a result of Covid-19, earnings for the coming year are expected to be stable. What of the economic turbulence that is likely still to come? “I am optimistic. Telecoms is such a vital service and the demand from customers for more bandwidth just continues to grow. “I think there is a recognition that we now have an opportunity to give the UK the kind of digital infrastructure we have long deserved.”
“People have been looking more clearly at digital, because it’s a faster way to execute. Six months ago, if you didn’t turn up in person [for an important meeting] you may have been perceived as not being interested or engaged in the topic of discussion,” says Ian West, head of technology, media and telecommunications at KPMG. “That’s no longer the case – it’s not considered disrespectful to decide that it’s more efficient to video call into the session instead.
“Several months of Zoom and Teams calls from kitchen tables and spare rooms has removed the stigma of remote working and also given the digital transformation agenda a boost.”
However, the rising customer preference for digital channels, whether out of convenience or because of Covid-19-related restrictions, has also exposed shortcomings.
“There’s the phrase attributed to Warren Buffet that, ‘Only when the tide goes out do you discover who’s been swimming naked.’” says West. “It’s a cliché but it’s true – there are organisations coming back to us as clients who thought they were in a good position for digital, that they provided a pretty good digital customer experience. But when the pandemic came along, they found that the experience was one that the customer was merely tolerating.”
For consumer facing businesses in particular, some executive mystery shopping can help leaders work out where they sit on this spectrum. “My advice to CEOs and COOs – try out your customer experience. Go onto your website and set up a new customer account, try buying something, and try returning something. It will reveal more than you might think.”
Tackling these problems – while embracing a mix of remote and office working – means that collaboration in future will be about how to manage online and offline contributors in a seamless “hybrid” environment, West believes.
To this end, KPMG is launching Ignition – a new way of working which is enabled by a physical “problem-solving” centre; an environment to collaborate and drive tech-enabled change in person, remotely or a mix of both – it’s a realisation of that new hybrid environment.
“The Ignition Centre isn’t just a physical space,” West says. “It’s fine if some clients want to go into the Centre to solve a gnarly problem. But it’s also fine if others want to join them remotely. You can add just as much value and extract just as much from the conversation, thanks to the amazing technologies we have put into the space to enable powerful collaboration.”
For telecoms providers like TalkTalk, the recent burst of digital activity has been a golden opportunity to prove their worth as the “fourth utility”, West reckons. “The networks should be proud of themselves. There were a few wobbles here and there but overall they have done a very good job of rebalancing their networks as people moved from working in the office to working at home.”
It is time for the networks to capitalise on their achievements and build a new relationship with the regulator, West believes – one that recognises not only the need for short-term consumer gains, such as lower prices, but also the long-term requirement for greater investment. “There is an opportunity to renew the two-way relationship with the regulator. To have a conversation about the need to make a fairer return, so they can invest more in the network.”
When it comes to managing their own digital transformation most effectively, he adds, leaders must make bold decisions not only about putting new processes and systems in train but also about discontinuing superannuated ones. If you have a new digital order processing system, for example, then turn off the old analogue one, don’t waste effort by running them both in parallel. “Businesses have been brilliant at putting new things in place, but also continuing with the old, just in case. We need to be decisive about what we are going to stop doing, the things that are no longer valid because of digital transformation.”
In terms of the immediate future, however, West says the priority should be protecting the wellbeing and productivity of the workforce to make sure they have absorbed the implications of the new reality and are ready to rise to the next challenge: “Employees have been on a ‘war footing’, but they can’t stay in that state of stress forever. I think the smarter organisations will now take a moment to pause for breath, to carve out some time to look at what they did well and what they didn’t at the height of lockdown. So that if there’s another pandemic in the future, they won’t make the same mistakes and they will be ready to put the positive things they have learned into action.”