Digital transformation is highly prized but poorly understood. While more than two-thirds (69%) of directors want their organisations to accelerate digital business initiatives, as many as 80% of IT leaders fail when they try and change their organisations for the better.
The reason for failure is often a lack of alignment between IT and business leaders. Too many digital transformation projects still focus on changing back-end systems at the expense of involving line-of-business managers in the development of front-end services.
The best way to deliver digital transformation success, suggests Joe Soule, CTO at Capital One Europe, is to build Agile, cross-business teams that work to build creative solutions to customer challenges.
SEE: Guide to Becoming a Digital Transformation Champion (TechRepublic Premium)
At Capital One, Soule has helped the bank move away from legacy ways of working and towards an investment in software engineering capability and Agile methodologies. It's a long-term rebalancing act that has seen the company adopt close-knit development teams with clear and concise deliverables.
"Changing little and often is now a reality for this organisation," he says. "That change is the mark of the difference between large, monolithic Waterfall delivery of implementations to open-source software, delivered incrementally in feature form on existing products. We've converted most of our IT spending on assets into people. That's been a stellar story."
Back in 2014, there were 30 engineers – most of them infrastructure engineers – working for Capital One Europe. Today, there's as many as 300 engineers in the UK business alone. The vast majority are software engineers, compared to just a few six years ago.
Soule says this transformation to Agile working has had a "game-changing" impact on the delivery of applications to customers. In the old Waterfall-based way of working, systems and services would take years of effort and millions of pounds to create.
These big projects, says Soule, consumed resources and meant other interesting innovations fell by the wayside: "Often other things didn't get done because all the focus of the development engine was on that one big thing."
Now, the approach is different. Working in an Agile way means the tech team is able to deliver better results quicker to its customers. The engineering team at the bank is closely aligned to the business at all times and delivers products that meet their requirements.
"When you're doing lots and lots of little things, you can do many of those things for many more people. In fact, you tend to embrace opportunities – and so we've become a huge optimisation engine for the organisation," he says.
Soule says a successful Agile approach to digital transformation requires excellence in two key areas: a focus on design-led thinking and a high level of senior stakeholder buy-in.
"Real agility comes when you've got product and design engaged with tech as part of a big team that includes non-technology elements," he says. "The head of product now sits on the executive committee. That's a mark of a successful transformation – it's all about what voices are heard at the top table."
In total, the bank has about 60 Agile teams that are set up as self-contained units. Software engineers interact with line-of-business peers to create products that meet customers' requirements in a timely and cost-effective manner.
Each team has a backlog of roughly three sprint's worth of refined work against the investment plan for the year. Soule works with his team to ensure that targets are always relevant and achievable.
The ability of the team team to answer new requirements quickly was tested like never before earlier this year when the UK went into lockdown due to the coronavirus outbreak. The first priority was to ensure 100% of the bank's workforce could work from home.
That new reality meant the tech team's focus switched overnight from some of its long-term strategic activities to short-term priorities, such as ensuring mobile and web-based systems and services were resilient and able to cope with the surge in online activity.
"The big focus was those new use cases around technology – so voice technology for a remote worker who is a front-office agent; we hadn't explored that but we solved that challenge in less than two weeks," he says.
By being able to switch priorities quickly at a time of crisis, Soule's IT team was able to deal with the complex challenges associated with the pandemic. When the new normal was established, they returned to long-term, strategic activities.
"The agenda paused rather than radically pivoted," he says. "The most I ever threw away in both people's thinking and anything else was two or three sprints. We didn't really feel like we were in chaos. My observation is how quickly we got back to our knitting – and that's the mark of the transformation in this organisation."
It's a sentiment that's backed up by research from the Harvard Business Review, which suggests companies can transform quickly when they adopt Agile methods.
Modern business life has become intrinsically associated with almost-constant socio-economic upheaval, whether that's digital transformation, environmental change or financial instability.
HBR suggests the post-COVID age won't be all that different. It will present companies and their boards with a series of unexpected challenges and opportunities, and business as usual will no longer be sufficient.
The researcher suggests an Agile approach to business systems will help companies to thrive in uncertain times: almost-constant change means the ability to shape-shift rapidly is going to become a defining characteristic of responsive IT departments and successful businesses, all of which means Agile principles could be the key to coping with whatever challenges arise.