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PODCAST

Digital transformation in the new normal with Amancio Bouza

Episode outline:

  • How has the pandemic affected the workforce? Amancio Bouza shares his struggles.
  • What’s slowing down organisations on their digital transformation efforts?
  • Is technology their biggest challenge?
  • We find out the business value of digital transformation.
  • Is the pandemic a catalyst or a blocker of digital transformation?
  • What does the future look like for organisations who have not yet adapted a digital transformation strategy?

Show notes:

The global lockdown caused by COVID-19 is making enterprises rethink their business strategies to stay relevant. Remote working became the first order of business for many organisations, to make sure that their employees still work efficiently with the right options and resources provided to them.

Before the pandemic changed the way the workforce operated, 70% of people globally worked remotely at least once a week. And it’s very, very likely that the pandemic will cause a permanent increase in remote working even after the crisis.

What was once a once-a-week affair for many is now considered the new normal. With this, it’s clear that enterprises need to keep up by utilizing new technologies to continue their operations, that is, if said operations are even possible. Now more than ever is when digital transformation is crucial to ensure the continuation of business.

Apart from utilising digital transformation for remote working, how is a global health crisis fast-tracking its adoption?

In this round of Cocktails, we talk to Amancio Bouza, an API thought leader, and co-author of the book “API Product Management - Product Strategy and Execution for the Digital Economy”.

Transcript

Kevin Montalbo: Hello internet, my name is Kevin Montalbo. We’ll talk about remote working and digital transformation today in this episode of Coding over Cocktails. Joining us today all the way from Hong Kong, of course, our CEO and founder of Toro Cloud, David Brown. Hi, David!

David Brown: Good day, Kevin! 

KM: Hello! And we have our very first podcast guest outside of Toro Cloud today. Our guest is an API thought leader and he takes on many roles in the tech space, serving as a digital ecosystem advisor, technical lead consultant for various organizations and co-author of the book API Product Management: Product Strategy and Execution for the Digital Economy. That's quite a mouthful. 

He offered this book to help guide businesses in creating, launching and running API products that customers would love. It offers best practices, tactical and practical approaches and real world examples on API product management. Joining us all the way from Switzerland is Amancio Bouza. Amancio, welcome to the show!

Amancio Bouza: Hello and hi to everybody, and thanks for having me! That was a long introduction.

KM: So by the way, as a reminder to our viewers and listeners, we are giving away some lucky listeners discount gift coupons, courtesy of Amancio, to download your book. So, we'll discuss how you can win those coupons at the end of the show. So, to begin, let's talk briefly about this pandemic. You know, it's heavily affecting the way that we're working. Let's start with you, David. How have you been holding up this time?

DB: We've been holding up well as a company. We were in pretty good stead when we were told we had to start working from home. We were given half an hour's notice to get ready to work from home the next day, that the area is being shut down. And fortunately, because our systems are already online - collaboration, software, task automation, code repositories, all the rest of it - were all cloud-based, it was a reasonably easy transition for us. And I guess in terms of walking our talk in terms of digital transformation and being digitally enabled, we were reasonably well-placed. 

It hasn't been too bad for us. Most of the guys now are back at the office.  We still have some working from home, and still some in quarantine and the likes depending on the area you're living in. But you know, the hybrid approach seems to be all working pretty well. And I think it's going to make companies rethink the necessity of having people working from the office full-time and maybe having more flexible approaches to the workplace.

KM: Yeah. How about you, Amancio? Has the pandemic affected your work at all?

AB: Yes, totally. I would be really happy to say, “Yeah I figured out how to work in this pandemic.” But to be honest, it’s really bad because before, I had a life at the office, a team that I met everyday. And now, it's home office time but it doesn't work out for me. 

So, I'm a father of a two-year-old boy and he does not understand yet that when I'm at home, I'm probably not available for him. And so I always have to leave and go to an empty room, or somewhere in a restaurant or in an empty office space just to get work done. So, really in isolation, without the benefits of using public transport or moving several hours by train or by bus to an office - I don't get the benefits. I don't meet people. I'm more isolated. And, yeah, my two-year-old boy [has] his problem understanding it. So in the end, it's bad.

KM: I agree. I have a lot of distractions at home too when I was working at home, when we were at home for Toro. I have a one-year-old son and a four-year-old daughter, so they like to fight a lot.

DB: I have those circumstances here in Hong Kong. My kids are in boarding school in Australia. I'm hearing a lot of those stories from the experts in Hong Kong. The schools here have been shut down since January. So yeah, [for] several months the schools have been shut down. The apartments in Hong Kong are not big. And so they're often not set up with home offices. 

So, what you have is you have the whole family, including school-aged children, working from home and they're all doing their homework and the mother or father are doing their business from the dining room table. It's tough, right? And you have to be, you know, homeschooling the children as well as running the business. So, we're hearing a lot of heartache from friends located here in Hong Kong and finding those things challenging.

KM: Yeah. Now we're transitioning to the workplace, as for us here in the Philippines who are already working. Some of us are already working in our offices and in our workspaces. So, the question is David, like you, since you're running a business, I want to talk to you about the term digital transformation. What does it mean to you when you hear the words digital transformation?

DB: Well, to me it means, breaking down data silos and creating a cohesive view of that data across the enterprise. And so what does that mean? Well you have data locked up in various data sources or knowledge bases. It could be a SaaS application online, or it could be a legacy system you have deployed for the last decade or more that just powers the core functions of your business, a line-of-business application that you've written and customized to perform a particular function. There's stuff tied up in spreadsheets and custom databases. There's all these data silos existing in an enterprise. 

Digital transformation, to me, is breaking down those silos, getting a cohesive and consistent view across the data, and then creating innovative products. Once you've got that cohesive view, you can start looking at creating new digital products out of it.

So most companies, they have some sort of proprietary process or data, which they own, which they're particularly good at, right? So, [for example] I sell widgets. And the way I sell those widgets, the process I have for selling those widgets is my intellectual property. Or it could be some data you've collected from operating a business or from various data sources, but that data or that process becomes my property. 

So, digital transformation entails creating digital products out of that intellectual property or data, and starting to create new revenue streams and new business models beyond your traditional approach to selling the service that you’re used to selling. You may now sell it for cents per request or you may start creating subscription models based on it. There's all different ways you can start participating in the digital economy.

KM: Yeah, all right. So Amancio in your article, “The catalysts and blockers of digital transformation,” - fantastic article, by the way - you talked about how digital transformation also somehow calls for a cultural transformation within organisations. What do we need to change that would make it easy for the rest of the world to quickly embrace this digital transformation or a cultural transformation?

AB: Yeah. So, I can second whatever David said and there's more to it. So, one thing maybe you should remove from the question is “quickly,” because it's not about just setting up the new technologies that are out there to leverage these benefits, but it's really about the transformation of the identity of the organisation. 

So for one, to make a better example, just imagine a caterpillar. And all the companies, they think, “Okay, let's eat more. Let's grow, get bigger,” then you're just becoming a bigger caterpillar. But digital transformation is really about going into a cocoon and transforming the identity of the organisation, of what you are able to do. It's not doing the same things like optimising business processes, making them faster, [having] faster time to market, but [it’s] really [about] how you think not about the products that you provide, but having a mission to really understand: being able to understand customers, being able to learn from data, what the customer needs, how are their needs changing and really being able to adapt to these things that's really changed the identity of a company.

Also, a change in this “project mindset” where you need to set up a goal and achieve it, but after the project has finished, it just stands there. So, you really need this kind of “product” thinking, really having a customer in mind and caring about their problems, and then using technology that is best to resolve it. It’s not about “project” thinking where you do it for you to achieve a goal and you make a plan how to achieve it, but [it’s] really to continuously create a better solution for the customer and understanding iteratively, learning, experimenting what the customer actually needs. That's really the changing of the identity and the behaviors of the organisation. 

KM: Now since you say this, is this the reason why you think companies are having a hard time trying to embrace digital transformation?

AB: Yes, absolutely. I mean, when it comes to digital transformation, it sounds very technical. Like okay, the IT department will evaluate some products. What are the business benefits or the promises? And they just pick through and just integrate it. I'm in a lot of companies. They buy great technology. It’s great full-fledged, full-lifecycle API platforms, but nobody is using them. Nobody's using the API. It’s not externally outside of the market and sometimes not even internally. 

I mean, the big challenge there is really not the technology to integrate it. Well, there are challenges like getting good engineers that can solve it. But really changing the behaviors, how to use this technology, how to collaborate, how to bring developers, the IT together with the business and really understanding the customer needs - that's changing the identity. And there is no known installation manual for that.

DB: Amancio, do you have some case studies that come to mind when you talk about companies which have overcome this sort of challenge? How they identify, as you say, the customer needs and how they are able to transform and deliver something?

AB: So, not case studies in the scientific sense. I mean, I just have personal experiences. One was at Swisscom. So, [it’s a] telecommunications [company] in Switzerland, and there, it was a journey. It took years to really start from having a platform, creating APIs, but in the end, nobody really consumed it. And then they really changed the organisation, like the Spotify approach, where you have squads that are focused on business value. They can decide by themselves what they are doing, how to create business value by themselves. And that was a journey.

And then with this kind of change of the organisation, the API platform became valuable. So, they create the API products that really came out, set in from the customers, from the market, and they create those API products to create new revenue streams for the organisation. 

DB: Okay. So, perhaps where they went wrong in the first place was that lack of understanding of the marketplace, what the market was really demanding, is that what you're saying? And by creating these small business groups, which were able to respond faster to the market and perhaps more in touch with the market, you're saying that they were able to deliver API-based products which were in demand. Is that what you're saying? 

AB: Yes. And also, I mean the things that happened there was how difficult it really is to change the mindset of the people. So, these teams came out of the IT department and everybody told us, “Okay, you are here to reduce costs. That's your role, and you are not supposed to talk with customers.” So, you need to change the organisation. That way, the right people can really go to the customers. The set up is kind of like learning from the customers and also measuring the behavior of the customers, how they consume the products, such that they have a really kind of a learning cycle. And that's also something that is usually interesting, this kind of monitoring and analysis, to really learn and experiment. 

DB: That's an interesting point. We often talk about iteration through API design and an API-first approach. When we talk about an API-first approach, [it’s] iterating with stakeholders over that design, really having in mind internal stakeholders. A stakeholder might be the developer of a mobile application and how is that developer for the mobile application going to consume my API? Or it might be my marketing department that needs to have access to marketing and sales data throughout various systems. How do they want to consume the API? 

But what you're saying is that in that API design process, in taking an API-first approach, you really should be iterating through the design with the customer itself. Now, if it's a customer-centric API, you should be talking to that customer and understanding their requirements and designing it in collaboration with the customer. 

AB: Yeah. Maybe not in designing the API itself, but making it based on the understanding of the customer needs and the right decisions to make the right design. So, it's still API-first and it involves it. I mean, [it] depends on what customer you're speaking of. Sometimes, you have business customers, sometimes developers - internal or external. Some are familiar with good API design or the concept, REST or GraphQL, these kinds of things. Sometimes, they are not. 

So, the important thing is to understand the problems and translate it to something, to an API design. And also of course, validate this API design that could be of service to the customers or the users of the APIs.

DB: I understand.

KM: All right. I want to dig a little bit deeper about this cultural transformation that you were saying. But let's go to David first. Let's talk about the workplace and its employees. David, how can digital transformation help enterprises in keeping their businesses running and managing their employees? There's a lot of challenges. Obviously you would change. So, how will businesses try and cope with that?

DB: Increasing productivity. We're talking about in office spaces so I guess that comes down to your process automation and giving the employees access to data. So, that's why I said one of the main frustrations of employees is when they need to request access to data through different data silos, that they're doing manual business processes that could otherwise be automated. And so, these are the system automation and system integration type processes that can be done through technology. It's that foundation layer I was talking about, which can be done before creating your digital products and services. It's the base productivity and system integration type level.

KM: Yeah. All right. Amancio, for you, how does digital transformation create more business value? More opportunities open up new gateways to more innovative products, especially now during this pandemic. Do you see that the pandemic is currently a catalyst or do you see it as a blocker for digital transformation?

AB: I see it as a catalyst. So, it's really like the caterpillar going into a cocoon, trying to reinvent themselves because the things that worked until now or until right before the pandemic have stopped working. Let's say it's a catalyst of either doom or success. So, either you figure out where you want to go or you don't. You die in the cocoon or you become a butterfly. So, it's clearly a catalyst. What was the first part of the question?

KM: Since now we've established that it is a catalyst, how can it create new business opportunities for companies?

AB: Yeah, so [like] what I said, moving forward, I think digital transformation is really about becoming this identity or the organisation just really being able to adapt to and understand the customer and their needs. So, it's not about the products that you were operating or providing. It's really about your mission and then adapting and iterating how you are solving problems  to really accomplish your mission for the customers. 

So, I think in that sense, digital transformation provides really a kind of resilience, kind of a sustainability for organisations to adapt to changes and leverage of course the benefits of new technologies and improve processes to make things faster or make things simpler and so.

KM: So, we're moving now to a post pandemic world. Hopefully soon, we're moving to a post pandemic world and more and more businesses too, will continue to adapt to digital transformation. And they might have seen the benefits already of this when they see case studies or samples from other companies, looking at them, working from home or doing a hybrid type of workplace. David, you're running a business. What challenges do you think businesses who haven't adapted yet to digital transformation will have to face in the future?

DB: Well, I think this transformation was already in process well before the pandemic. So, I didn't really see it as a pre-pandemic and post-pandemic change. I think the pandemic has accelerated the process. I think it may emphasise the requirement for it. Take education, for example. The education industry was experimenting with remote learning and online learning in most universities and colleges, but overnight the whole university had to do remote learning. And so something that they wanted to do or dipping their toes in the water, then all of a sudden they're forced to go all in, a hundred percent or their business would die. 

And so, I think the same would apply in many industries, experimenting with remote workplaces, having people work from home. “Is that going to work for our organisation?” And we've talked about some of the challenges associated with monitoring productivity of the employee, the employee having a workspace in which they're comfortable with and don't have the distractions of family or the refrigerator.

You know, there's all these things which this new paradigm has brought to the fore. But it was already a process which people were approaching before. And the process of creating new digital products or services out of existing systems and processes or data was already on the minds or directives of boards of directors or CEOs previously. But it's accelerated this whole process of, “Okay, well, if we're going to have people who are less mobile because they're in lockdown, how can we deliver digital products?” 

So, they don't have to physically come to us. And so, it's just brought all these things forward, accelerated in terms of the process, which I think Amancio has made some really important points about in terms of collaboration and understanding of the marketplace.

It's not immediately obvious to many organisations about what they should be delivering, you know? So it's easy to say, “business process automation” or “system integration.” Like you say, they're mostly technology. Solvable problems. Get good engineers, good products like Martini. Then you can solve these problems. The digital transformation of what our business should look like in the 21st century? That's probably a more difficult question to answer. 

And that's what I think Amancio was saying to us. You know, you really need to talk to your customers, understanding what they need and understanding how you can do it with more value now, but also understanding that their business is transitioning as well. So, how can you facilitate part of their digital transformation and be part of that so you can take this journey together?

KM: Amancio, I see you had some thoughts on your mind while David was talking. Do you mind sharing them with us?

AB: I had a lot of thoughts. But yeah, I mean David's absolutely right. I mean, I think that's really one thing to take away for the organisation. I mean, projects are good, you know? We were all  where the world doesn't move forward, doesn't change. But now when you provide products or services to other companies or people, their businesses are changing. 

Their needs are changing and you need to have this data driven decision making with an enterprise and that's to really understand what is actually going on. And talking with customers, being able to talk the costs down to them, how to transform the way you provide things and also what problems you're actually solving. I think that's really the new mindset that should have been in the organisation: going away from the code checks, having a kind of static target to thinking more continuously, continuously adapting what you are doing and being able to deliver it.

KM: All right. David, do you have any advice for companies? I know some of our listeners would be CEOs or managers or operational managers of their own companies. How would you advise them to get started on digital transformation?

DB: Buy Amancio’s book and Martini. 

KM: That's very sound advice. Thank you! That's all the time we have. No, I'm just kidding. 

DB: Well, it doesn't hurt, right? So, it doesn't hurt to do your research, whether it's Amancio’s book on understanding your customer and what's going to be driving these decision-making processes in our organisation or whether it's evaluating technology like Martini and our esteemed competitors and the way that products like ours are solving problems for customers. 

I think talking about case studies and how customers are solving these problems is probably more interesting than the technology itself, because everyone will translate that to their own business and experience. And they will be taking away [from them], thinking about, “Oh, I could apply that same concept in my business in my own unique ways, how my business operates.”

KM: Yeah. How about you, Amancio? Do you have any advice to companies who are processing their digital transformation projects and efforts?

AB: Yeah, so my advice would be to start small with one team and [being] isolated enough from the organisation so they can really figure out how to become this new kind of identity for the organisation. Really to get to the customers, understanding, learning to really establish these kinds of triggers, the data and establish that direction. How do you react to this new info? [These] kinds of triggers or information? 

There’s also what David said about the access, breaking up these data silos. So, data access is really key for these kinds of things, to start a small team and let them just go on this journey and learn from it. Don't integrate this team into the organisation, because it’s just like putting a spicy, good-smelling food into a huge cold pot of water. It will just cool down the same way. 

So, try to then step-by-step integrate your organisation into the environment - or for the context of this, a small team - and then grow from there. Learn from their experience. So, it's really [about] changing the identity you have. Repeat, repeat, repeat. This kind of creates what you want to become over and over again.

DB: Okay. A case study comes to mind here in Hong Kong of this exact process. HSBC is one of the world's largest banks and their biggest market is here in Hong Kong. I actually met the project managers of a division of HSBC called PayMe. And so what HSBC wanted to do is set up a new digital payments platform because they could see that these competitors coming in, particularly from China, Alipay and WeChat Pay, were potentially gonna steal the payments market in Hong Kong. 

And so they needed to deliver an electronic payment solution, which not only worked with HSBC, but across all banks in Hong Kong. Now the key part of their implementation is they know being a large bank, which moves very, very slowly, they're really good at what they do. But yeah, building new products? Not exactly their expertise. They knew that they had to take a different approach.

And so what they did is they hired people outside of HSBC. They put them in a building, completely separated from HSBC and gave them complete autonomy. They said, “Go and build us a solution which does this, and it has to work with all banks.” So it can't just be an HSBC-deliverable solution. And they took a floor in a wee work office. I think that was a co-working space. And [they] collaborated with all the banks, understood how such a solution was going to be facilitated through all the banks and in the micropayments type world and dealing with trust issues. And trust issues work differently in these markets as they do in Western markets. 

And they were able to deliver a solution within several months - a timeframe which was just staggering for an organisation like HSBC. And PayMe now is the number one micropayment solution in Hong Kong and is taking on giants Alipay and WeChat Pay. But it started from identifying that they were not going to do it in the organisation themselves. They're going to need to have a small group working on this. It needed to almost be outside of the organisation, wholly owned and run by their own organisation. But it worked as an independent group and that's how they're able to deliver a new digital product.  A next generation payment solution.

KM: Yeah. This podcast is not brought to you by HSBC by the way.

DB: It's not. 

KM: Okay. So, unfortunately that's all the time we have for Cocktails. Thank you very much, David and Amancio for joining us today. By the way, Amancio, where can our listeners go to find out more about your work?

AB: So just go to www.apiproductmanagement.com. Then you’ll find a page with the book, with the articles you will also find on Medium.com. So, in two weeks I will talk at the APIdays in Australia. It's more or less the same time zone. It’s a con about API products and how to leverage it for business ecosystems. 

KM: All right. Thank you very much! We'd hope to have you again in the near future. The first three episodes of this podcast are now available for streaming or download. Make sure to check them out or subscribe or follow us on whatever podcast platform you're listening to and visit our website at www.torocloud.com. We're also on Facebook, LinkedIn, YouTube, Twitter, and Instagram. Just look for “Toro Cloud.” This has been Kevin Montalbo for Coding Over Cocktails.


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