William Hill’s CTO explains why open source and digital trump buying one big IT box

SUMMARY:

Finbarr Joy, William Hill’s CTO, is leading the betting company through a radical transformation that no longer means looking to one vendor to solve its problems. It means open source, failing fast and insourcing skills.

William_Hill-1Established back in 1934, when gambling was still illegal here in Great Britain, William Hill is one of the oldest bookmakers in the country. And like most other industries out there, it is facing a significant amount of disruption from new digital challengers and it is having to adapt.

Whilst once a retail footprint on popular high streets was enough to ensure the business’ success, William Hill is now facing competition from online companies that were quick to recognise the value customers place in the web experience.

And it is having to transform its business rapidly to ensure it can keep up. A big part of this, and likely the most crucial part, is shifting away from a one size fits all approach to IT and embedding digital design across the whole of the organisation.

William Hill CTO Finbarr Joy explained to me during a briefing this week how this means that the company’s IT is now around 50% cloud-based, whether that be SaaS apps or provisioned infrastructure, it is also making use of Apache Foundation open source technologies and it is deploying machine learning.

Nothing about what William Hill does now is about going to one vendor and asking for a solution that fixes all of its problems. The company is iterating products quickly, it is failing fast and it is using data to personalise its offering. Joy said:

The dynamics around retail planning are not the dynamics that are going to make us successful in the future. We don’t even know on what are customers are going to be using our products in the future. How do you plan for that?

When we sit down and think about what our product is going to look like, we can’t be in the behaviour of second guessing what that is and doing the traditional strategic IT five year plan.

Joy said that in the past William Hill was no different to many other businesses out there and it typically went to just one vendor and asked it for an answer to all of its problems. He believes that this just doesn’t work anymore – because that model doesn’t solve problems for the customer, just the organisation. Joy said:

The compound capabilities (cloud, big data, social, mobile) that we have got now are spectacularly more disruptive than the kind of things we saw [back in the 90s]. There has never been a better time to work in the space of technology, the kinds of capabilities we have now are profound.

We used to be that entity that would rock up to the IBMs, the Microsofts, the Oracles and seek ‘what is our answer?’. We would buy a great big box and place it in the centre of the business and it would crunch all our numbers and do everything. Ultimately the demeanour of that whole sector is to suit the IT buyer, there is no part of that conversation that is about the customer.

Joy goes as far as to say that “procurement guys are not even in the conversation now” and that William Hill is looking at wholesale changes across IT. Instead Joy looks to the likes of Facebook, Google and Twitter, the consumer web companies, for insights into how to run and build a digital business. A lot of this focuses on, according to Joy, on the “bottom-up element from the open source community”. He said:

There is a Darwinian force taking over about what is successful and what isn’t.

The changing face of IT

So much of what Joy said is incredibly interesting, that it’s quite hard to pick and choose what to highlight. But what he did provide great insight into is how to get your business from A to B, where ‘A’ is legacy and the old way of operating and ‘B’ is digital.

When I hear about a company being ‘digital’, more often than not this just means upgrading to the latest version of software provided by whatever vendor they chose back in 1992. There may be a bit more cloud here and there, but nothing really has changed so much that the customer is seeing a material difference.

This is what William Hill is getting right. You can tell from talking with Joy that the company has undergone a fundamental shift in its approach to designing products and how it operates. Joy said:

It leads us to a different way of operation, we have started to necessarily evolve how we work and what we used to call the IT department and what it looks like. And that makes root and branch changes to how the whole business operates. Especially how a traditional PLC business would operate in this sector.

Structures were hierarchical, top-down, centrally driven. As you source these technology sets, you start to get more into a networked model, where you literally see things evolve on a Darwinian basis. Some of the things that you see today are successful because they’ve proven to be successful.

Whereas you wind back four or five years ago, you would create projects and sit on that project until the damn thing got up the line – regardless of how much it was costing. We are now running much smaller exercises, much smaller teams. Letting the test driven approach work.

Joy talks about letting the customer experience drive the evolution of the product and letting feedback from the customer drive design. He said that William Hill is now able to intervene in the customer experience in real-time and change things, based on how it is seeing the customer use the product.

This is allowing the company to focus on customers at an incredibly granular level. Joy said:

Finding out what the opportunities are and presenting them with more discrete opportunities for their scenario. It means that we can offer different types of promotions and do that on a cluster of one. This whole basis of not doing what marketing has always done and agreeing segments of customers, but literally create personalisation down to the distinct individual.

Ultimately you do end up with a million systems, or a specific betting system for each one of our users, giving them an experience they prefer. It almost becomes an agent acting on behalf of the customer.

Taking people along with you

Another interesting remark made by Joy, was that he doesn’t believe that you can operate a two-tier IT william hillorganisation, where one group of people focuses on the legacy stuff and the other group tries to focus on the digital stuff. Gartner likes to call it bi-modal, but Joy doesn’t buy into it at all.

He believes that you need to take the whole organisation with you and in his experience has found that the people who had traditionally been focused on legacy are often the ones that make things happen. Joy said:

There’s an awful lot of literature out there about IT alignment, IT alignment with the business. For me it’s increasingly about convergence. What you used to call the IT department practically doesn’t exist. Those product teams are made up of people that you formerly called IT people, who you formerly called commercial product people, but they happen to be in the same team. We are increasingly seeing that that distinction is just going away quite frankly. The whole notion of an IT department that sits and waits for a request from the business is completely gone.

I’ve done an awful lot of hiring, we have built new facilities – the Shoreditch facility is a new one. But we are bringing everybody along with us. That whole movement around two-phase IT, we are not subscribing to that. You bring everybody along with you, you make sure the whole team is on that journey.

The legacy guys have the domain knowledge, you need them to be on the same path. They’re actually the breakthrough into some of the fast stuff you’ll do, because they know the business so well. We have to bring the whole operation with us.

So, how did William Hill make this happen? One of the key tactics that the company used was to find people within the organisation that were perceived to be influential enough to drive change. And then give them the discretion and autonomy to go ahead and make the changes. Joy said that this creates a swell of change from the bottom-up, which can then be coordinated with company strategy. He said:

In terms of the stages, one significant element for me, which typically gets overlooked, is a layer of discretion and a layer of autonomy given to the team is essential. Without that, you won’t get the underpinnings. To attempt to snap to the consumer internet, do top down and say ‘this is what we are going to do’ – that fundamentally doesn’t work and that’s where I think a lot of enterprises have struggled.

You’ve got to go fast to one of the most difficult aspects, which is how do you give teams autonomy? It’s very difficult to do. We did it on a piecemeal basis, took three individuals out of the whole organisation. Said these three had some discretion, if they’re the right three they will do something material. And then that builds up momentum. Then that momentum you meet with those top-down interventions.

You’ve got to do enough of that bottom-up autonomy, you’ve got to do enough of that top-down planning to get everyone orientated, so that one day you take your step and commit to one of your biggest programmes.

Open Source

Joy spoke a lot about the benefits he is seeing from working with the Apache open source community. He said that, in his view, a proprietary software provider can’t compete with a community that is constantly giving back and improving a product.

And William Hill has itself started giving code back and contributing to the open source community. Joy says it’s early days, but he envisions doing more on this front as he believes that it both creates a good talent pipeline for the company and ensures an element of quality control amongst his developers. He said:

We’ve been dragged into those communities and in the last few weeks started looking at what that means in terms of giving back. My expectation is that we will do an awful lot more of that. The industry experience has been that the intellectual property is not really about those mechanisms, it’s about the data. Our IP is in our data, it’s in our algorithms.

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Open alternative?

Everything else that’s infrastructure, as Twitter, Facebook and Google have proved, it does not matter if you release that out. You won’t cede any advantage. In fact you gain massive amounts in terms of the developers that brings to your door. It’s been the biggest boon to our recruitment. The challenge in keeping on top of all of this is having the right talent.

It does an awful lot for quality too by the way. When you decide you’re going to release for open source, it doesn’t half flick a switch on in people’s minds about what’s going to happen to their code. You can talk as a corporate with the best will in the world about quality management, but when you tell people that their code is going to be on GitHub and developers around the world are going to have access to it, it makes a material difference.

My take

One of the few customer interviews I’ve done this year where I’ve actually thought that the company truly understands what digital means. So many just operate in the same old way, but call it ‘cloud’ and ‘big data’. That’s not digital. It’s the same old thing given a new name.

William Hill’s model isn’t easy, but I bet it delivers better results for the customer. As Joy said:

There’s an awful lot more noise. There’s an awful lot more failure. But there’s also a lot more traction, momentum and successes.