How not to be a dinosaur - Oracle's Catz and HSBC's Fielding avoid the winner's curse
- Digital transformation is an ongoing journey without end. Oracle's Safra Catz teamed with HSBC's Joanna Fielding to share war stories and offer up some tips for others to follow.
Every one of us thinks about being a dinosaur.
That was among the opening lines from Oracle CEO Safra Catz during one of her rare public appearances at the firm’s Modern Business Experience conference in London today.
I confess my first reaction was a flashback to the infamous billboard that rival Informix put up on Highway 101 outside the Oracle headquarters at the height of the database wars of the 1990s - 'Danger, dinosaurs crossing'. (The eventual extinction event went rather differently, of course...)
But that’s a side effect of 27 years of covering Oracle as a journalist and not something that would have occurred, I imagine, to anyone else at the Excel Centre, there to hear about digital transformation and how to do it.
For them, Catz had some cautionary notes to strike, not the least that transformation is not something that has a beginning, middle and end, but rather is something that never ends. Organisations need to be constantly changing - and that should be seen as a positive, she said.
What’s essential is to avoid what she called “the winners curse”, explaining:
When you’re the winner, you think you can win forever if you just keep on doing what you have been doing. Well, surprise - that’s exactly when you are at the most fragile when hubris sets in from doing things the way you’ve always done it.
From that perspective, Oracle has benefitted from having founder Larry Ellison at the helm and being actively involved with the development team, said Catz:
We had a focus on what technology should really be helping enterprises to do. Technology is simply valuable in letting you run your operations better. True digital transformation is about having better information so that the talent in your organisations can make better decisions, decisions about who are your best customers, how do you serve their needs?
True digital transformation automates away the work that does not need manual intervention. It unleashes your people to truly take decisions. Everything we do and build into our products, we learn from our own experience. With the move to the cloud, we realised that we had to change everything about our engagement model with our customers. Customers don’t want to be in a six month contract negotiation with us. In the days when a five year implementation was the rule when putting in a system, six months maybe sounded reasonable. Now you can go from beginning to end in a month, the very concept is absurd.
That realisation resulted in Oracle’s Accelerated Buying Experience which has automated the cloud procurement process, freeing up Oracle staff to work only on the most complex or individual tasks. But changing processes and practices, even when they have been impractical or unpopular in the past, is difficult, said Catz:
The hard part of this is not the tech, it’s the sociology of it. Computers do exactly what you tell them to, even if it’s foolish. People are not the same - they need to be convinced. You have to lead. As much as people say they like change, they like it when you change. Even if it’s processes they haven’t liked, when you ask them to change, they are afraid.
There are two ways to deal with this, she advised:
Make sure that there are very quickly tangible benefits in the day job. Systems must result in improving their capabilities immediately. Incent them by showing how much value there is in it for them.
And you need leadership. You need courage. You need to say, ‘You know how we’ve always done it, we’re not doing that any more’. We have to change before we get changed.
As an exemplar of all this theory, Catz introduced Joanna Fielding, Chief Financial Officer of HSBC Global Services, who joined the banking giant 2.5 years ago as CFO of the technology operations and real estate divisions. That role expanded after her first 100 days in the job resulted in some fresh thinking on what was needed for the future:
During that period there was a lot of change in the banking sector, particularly around regulation. It was apparent that we needed a global infrastructure to support the bank.
Among the regulatory changes was the UK Banking Act which required the retail bank operations to be ring-fenced from the corporate investment arm. While that resulted in two businesses, there was a desire not to have two service organisations. The question of global reach across 70 countries also had to be addressed. HSBC had 13 existing service centres and created two new ones in the UK, as well as looking at adding another in Hong Kong.
Key to all this was cloud adoption, said Fielding:
HSBC had traditionally built or bought and changed technology. We wanted to keep our technology current and cloud forces us to do that. We wanted to do it quickly. While we run big data centers ourselves, we couldn’t have got stuff up as quickly as the Oracle Cloud. We also didn’t want to take technology and then change it; we wanted to take technology and change HSBC.
The result is codenamed Project Velocity, an ongoing initiative to replace back-office systems and legacy infrastructure no longer fit for purpose. The decision to go with Oracle’s Fusion applications was made after bringing in Deloitte to assess the options on the market. Fielding said:
One of the things we have found is that it has been a partnership. We selected Oracle and we have Deloitte as implementation partner. If we’d done this on premise, we’d have done it ‘the HSBC way’. [The cloud approach] enabled us to leapfrog that and look at it as ‘what’s the best way of doing this?’.
In terms of lessons learned, Fielding said it’s necessary to be creative about how you bring people along on a transformation journey, particularly when, like HSBC, there is over 150 years of legacy around ‘the HSBC way’:
You’ve got to work hard bringing people on the journey. It is tough. They may not have liked the paper-based processes they had before, but getting someone to do something electronically is hard.
You also need courage, she advised:
I am the face and brand of Velocity. It does feel quite lonely at times. Executive sponsorship is really important. This is the first cloud implementation for HSBC and it’s not a small one. Having very senior leaders standing behind me and saying, ‘This is the way’ is good.
Courage and leadership - two qualities needed for digital transformation. It's a simple truism perhaps, but none the less pragmatic for that.
As an aside, how refreshing to see a technology conference with two female executives of two of the world's biggest firms leading the keynote discussion on digital transformation.