Black Swans, Barking Dogs, and Changing Future Technology Thinking

The dust has far from settled on the storm kicked up by COVID-19, but around the world businesses have largely bedded into working remotely, optimised their VPNs, bought in fresh enterprise collaboration tools, and set about trying to continue with business as usual (BAU) – in times that do not lend themselves to it kindly.

Those business leaders who are not consumed by fire-fighting are thinking ahead. As one leading CIO told Computer Business Review: “I’m trying to use this horrible outbreak to change future technology thinking across the business.”

He is not alone. In speaking to over 20 senior IT business leaders, CIOs and technologists, a desire to leverage some of the shifts brought about by the pandemic (physical, technical and cultural) to build more agility and flexibility was palpable.

Technology: Not a Panacea

Peter Groucutt, the MD of business continuity and disaster recovery specialist DataBarracks notes that “mitigating the impact of incidents is a fundamental of good Business Continuity Planning… [but] technology isn’t necessarily the right tool.

He adds: “It is rare to add more automation or technology in a disaster scenario. Robotic Process Automation (RPA) and digitalisation of processes are what we are all trying to implement in our businesses during ‘peacetime’. If is possible to lower costs and streamline operations – you want to benefit from that all the time.”

Yet more technology has inevitably been an outcome of the pandemic.

Businesses have had to build up video conferencing, improved zero trust architectures, for some companies, roll out tracking systems for remote workers.

CIOs overseeing large customer service teams meanwhile are testing technology that assesses levels of “unnatural” background noise: this would let supervisors tell contact centre staff that they need to find a way to stop the dog barking…

Cash is At a Premium

In our conversations, one thing that came up several times was the scope to build more technology around the CFO’s role, in no small part to improve cash flow management.

From accounts receivables to supply chain management, paper-based processes remain widespread and were often alluded to as a roadblock to progress. (Typically managed in scale at centralised locations, they were an early victim of global lockdowns. The simple outcome for many businesses has been that they simply haven’t been paid).

(One recent study found that 31 percent of procurement/supply chain teams’ time is spent on paper-based/manual procurement processes. Research by consultancy the Hackett Group meanwhile suggests that the typical finance organisation can cut its process cost 43 percent by becoming more technology-enabled.)

There Are Good Tools Out There…

As Alex Saric, smart procurement expert at Invalua notes: “It is nearly impossible to gain the visibility [businesses] need to assess supply chain risk [using paper]. With many employees suddenly working from home, paper-based processes can create total stoppages, impacting the flow of goods, delivery of services and cash flow.”

With no shortage of tools emerging that are designed to optimise supply chain management (Invalua is one, Coupa is another — customers can opt in to anonymised “community intelligence” that allows customers to benchmark suppliers/costs against over $1.5 trillion of transactions), CIOs looking to get rid of paper and streamline supply chain management have no shortage of tools at their disposal.

(Computer Business Review is often startled by the gap between the capabilities — or promised capabilities — of vendors and the awareness from buyers of the options to digitalise processes that available to them in an admittedly crowded tech market).

Accounts Payable is Ripe for Automation

Speaking about the finance function, Neil Robertson, Executive Chairman, Compleat Software was also among those lamenting the ongoing existence of paper processes: processes which the pandemic has exposed anew as being so inefficient.

He said: “Paper-based processes adds zero value, keeps people in the dark and wastes an estimated 70 percent of an accounts payable team’s time, plus the time of everyone else involved in the process across the business. Yet many businesses still haven’t cottoned on to this. Why? Because the overhead of accounts payable is simply not a priority issue in most businesses and more often than not, the “if it ain’t broke, don’t fix it” rule is proactively applied by people who don’t like change.”

He adds: This position is understandable when the productivity gains of automation can be as high as 90 percent, why would the people performing this role want to change? [But] COVID-19 is forcing organisations to re-evaluate.

“As we enter March month end (and for many, the financial year end), finance departments are discovering that manual accounts payable processes simply cannot function in a timely manner with remote working.”

According to Gartner, the cost of manually processing one invoice in the UK averages between £4 and £25, and if there is a query, up to £50.

What does it cost to automate this? Robertson says: “As a guideline, we usually outline the cost for rolling out AP Automation for five users per person per month at around £16, and for 50 users reduces to around £11 per person per month.”

Cultures Need to Change

To bake in resilience and help streamline some of the functions alluded to above, cultures still need to change, was one frequent refrain.

Exactpro, a trading software testing company, is used to ensuring resilience for customers. But as CEO and co-founder Iosif Itkin told us: “Too often we hear demands to avoid ‘unrealistic’ scenarios while doing load testing and other types of testing as well.

“In one case we were told that the testing should be strictly limited to double of the previously observed maximum in production – an approach that proved to be controversial if we just look at the trading volumes caused by the recent market volatility… The best way to minimise the impact [of unexpected events] is to relentlessly ask yourself “What if the worst will happen?” and act accordingly.

“It is not enough to test a technology system to validate that it works within the predefined SLAs or KPIs. It is necessary to go beyond its capacity.”

Tim Flower global director of business transformation at Nexthink agrees, adding: “The fundamental problem in IT operations [is that] they are built to react, from the smallest incident that affects only one employee, to the largest Sev1 outages that impact the entire company. I would argue that every incident that impacts the normal execution of business is a black swan, in that it was never supposed to happen, and IT should have known it could happen and taken steps to prevent it. But we don’t. We wait for the outage, wait for the user to complain, and then we react to restore service.”

Businesses need to allow their IT teams to be proactive, he notes.

That may involve similar shifts in culture to those taking place in the finance functions of many blue chips, where traditional, periodic planning cadences are increasingly being supplement with just-in-time forecasting; scrutinising any changes in underlying assumptions in order to allow rapidly shifting tactics.

Peter Groucutt notes that somehow, crises sometimes need old school workarounds to keep business flowing: “What you want are the most cost-effective ways to keep your operations working as close to normal without incurring greater cost.

“As an example, if the digital signage stops working at an airport, for a short period of time, staff can write on whiteboards. This happens all the time and, in many cases, flights take off on time and there is little impact on the airport. But there’s a reason we have digital signage: it’s cheaper, easier and makes being at the airport a more pleasant experience. The cost in this situation is the staff who are writing and keeping the boards updated. [But] it’s a small increase in manual labour and it’s an effective work-around that keeps the airport delivering for its customers.”