Message to the Politicians: Spend Less - Invest More in Transformation!
By Richard Sykes, Chair, Cloud Industry Forum
Election time! But this is not a Party Political broadsheet. What I argue here is that there is a key underlying issue that needs much clearer articulation to our politicians – and to us, their electorate. This is the issue of productivity (or the relative lack of it!) in the UK economy –and the role that our industry can play in its transformation.
The Chancellor, in his 2016 autumn statement pointed to the debate about the UK’s low productivity growth, which, according to official figures, has fallen well behind that of Germany, the US, France and Italy. “The productivity gap is well known, but shocking nonetheless,” Philip Hammond said. “It takes a German worker four days to produce what we make in five, which means, in turn, that too many British workers work longer hours for lower pay than their counterparts.”
The series of annual Cloud Industry Forum reports on the uptake of the Cloud demonstrate that, across the UK enterprise landscape, there is a steady transformation in progress. Our White Paper #20 (April 2017) titled ‘Cloud: Driving Business Transformation’ reports that around nine in ten respondents exploit cloud-sourced services, each using an average of three such services. But in the context of the tens to hundreds to thousands of operational services that such enterprises are built around, these are still relatively early days.
The really radical transformation these last several years has been across the vendor landscape - from Amazon sharply rewriting how compute operations are manufactured as highly automated services, to Dell restructuring the server business (hidden from sight through the power of private equity), to the venerable HP reworked/sold into four totally re-focused businesses (HP Inc. for printers and laptops, Microfocus for legacy softwares, DXC Technology for new generation Cloud services and HPE with its focus on the hybrid Cloud).
And there is the massive flurry of ground-breaking young new ventures flooding out of the US West Coast – but also the UK (London and Cambridge in the lead) - offering highly focused services based on deep intimacy with how particular aspects of the economy work, from derivatives’ trading to fashion retail to cancer diagnostics and much more. To name but two: California’s Dropbox, a recently-joined member of CIF, with its enterprise work productivity services based on high security data storage – the fastest SaaS venture to reach $1billion revenue - and Cambridge’s Improbable the virtual simulation venture that has recently attracted a $0.5billion investment from SoftBank.
What this transforming vendor landscape is delivering to us is an amazing range of new capabilities – new ways of doing our work – as individuals, as professionals, as teams, as businesses, as government departments, as third sector operations. These new capabilities we now have at our fingertips can shift both the effectiveness and the efficiency how we work. Effectiveness first – are we now really now doing the right things? Then efficiency next – are we really now doing the right things the most efficient way?
The current political debate over how much more operational funding the NHS should be given misses the point. The political debate should be about how to invest in sharply raising (and I mean sharply!) the human and asset productivity at the heart of the NHS. Given this very substantial range of new capabilities now available, each NHS professional should be challenge ‘are you now doing the right things the right way?’ The professional work of the Consultant, the MD, and the Nurse can now be quite radically re-shaped. This is not an issue of them all becoming very techie – it is an issue of them all, as key professions, seizing the opportunity to reinvent the nature of their work, based on their experience of what their work is really about.
As Chair of the Cloud Industry Forum I would argue that our responsibility is to help these professions understand, not the technologies, but the new capabilities that our industry now has on offer – in practical terms.
One of my bibles is the work of two Dutchmen, Marc Stickdorn and Jakob Schneider – ‘This Is Service Design Thinking’. They set out clearly the importance of designing services from a thorough understanding of the potential customer’s requirements – not from an enthusiasm for the technology intended to be exploited.
In the 1990’s, as ICI’s CIO, I was invited to visit BT’s labs at Martlesham to learn what they might have to offer. I made this proposal – ‘I will come to Martlesham with a colleague from (what was then) ICI Paints. In the morning we will give you detailed briefings about the Paints business. In the afternoon you can brief us as to what BT Martlesham can offer. But in the afternoon the Martlesham folk must speak in business language. If a single techie term were to be used, my ICI Paints colleague and I will walk out’.
Alas, the Martlesham team either could not or would not agree to this requirement. So the visit never took place.
Back to the core issue. Across the breadth of the UK economy the real challenge is not to spend more, but to invest in working more effectively (on doing the right things), and then in doing those things more efficiently. This requires, surely, investment in transformation – and for starters this requires a vendor community able to speak in business, not in technical, language and able to offer the transformational, educational programmes that will allow professionals across the economy to, often quite radically, redesign what their work is about (become far more effective) and then deliver with greater efficiency.
The CIF ‘Journey into the Cloud’ e-learning modules have a very real role to play here. Out growing band of Professional Members are leading the way!
I look forward to the day when our political leadership says – ‘we propose to spend less in the next Parliament – instead we propose to invest in sharply raising our productivity across the nation – investment in greater effectiveness, and in greater efficiency.’