Why digital transformation rarely goes to plan

speaker-0: Hello and welcome to the Digital Lighthouse, where we get inspiration from tech leaders to help us navigate the exciting and ever-evolving world of digital transformation. I'm Zoe Cunningham. We believe that meaningful conversations can illuminate the path forward, helping us harness the power of technology for innovation, scalability and sustainability. In this episode, I'm delighted to introduce Andy Burton.

who has over 30 years experience in the tech industry. He's currently interim CTO at a GSUK, having moved there from his role as CTO at Eshore Group, where he led a huge transformation project that we will definitely be chatting through later on in the show. Previously, his experience includes 10 years in senior tech leadership roles at Sky Betting and Gaming, and a CTO role at The Very Group, the UK's biggest integrated digital retailer. In this episode, we'll be exploring leading people through change, big and small.

We'll look at key stories from Andy's career to draw out the important lessons on why, how and when to consider the impact of change on your team. Andy, welcome to the Digital Lighthouse. speaker-1: Thank you, really good to be here, really nice to meet you. speaker-0: start by telling us about your journey to get to the role that you're in today, what you've done, you know, how you kind of, speaker-1: Yeah, absolutely.

I I started in tech nearly 40 years ago now, so late 80s. That's my first job as a grad. So hands-on software. Well, we called ourselves analyst programs in those days, actually.

We didn't have such specialisms. So we did a bit of everything we did, you know, requirements. We did coding, we did testing, we supported stuff that was live. And I spent probably 10 years, nearly 10 years in various financial services organizations, really sort of learning the trade of, you know, software engineering and being a ⁓ technologist.

I then felt I wanted to get a more commercial focus, not just focus on the tech side of things. So I joined KPMG Consulting in the late 90s, which was a really good move for me. I was in at deep end time and time again. This was at a time when people were just starting to get onto the internet for the first time, didn't really know what to do, they were nervous about, know, is it safe, is it secure, et cetera.

So I spent four years at KPMG and, really I learned a huge amount through that. By the end of that, 2002, the whole landscape of business and commerce and tech was completely different from what it was before, of course. After that, I then moved into, I joined FreeServe. if you might remember FreeServe, was an ISP.

It was a virtual ISP, actually. started in the late 90s. Really innovative business model. Nobody had done it before.

Hugely successful and became the biggest ISP in the UK very, very quickly. Listed on the FTSE. was acquired by a French business and that's about the time when I joined. And that was a great experience for me.

It was a time when people just trying things, know, was lots of things that we talk about now, whether that's agile or whether it's social media, you know, we didn't call it those things in those days, but that's what we're doing, you know, and it was about getting products, know, consumer facing products in front of customers quickly, as fast as you can, getting feedback. Some of them flopped massively. Some of them worked really well. The whole world was changing really at that point, certainly from a tech point of view, companies like Google, just starting to come through.

They'd just bought YouTube at that point, so really early stage of a lot of the things that we take for granted now. After that, it became part of Orange. was acquired again by France Telecom, became part of Orange, and I was in charge of web development for Orange in the UK. That took us up to probably about 2006, 2008 in fact at that point, and I then left and I joined SkyBet.

At that point, a very small business, was part of Sky, part of the larger Sky Group, ⁓ hugely well established brand, very successful in broadband and TV of course. And they had this very small business based in Yorkshire around online betting and gaming. I went along, I met the team there, I the CEO and the rest of his team and I felt, yeah, this could be some really interesting, I don't know anything about online betting, but it sounds like it could be really interesting and I think it's a bunch of people to work with.

I'll take that and see how it goes. And actually it was a fantastic experience. I was there as a CTO for nearly 10 years in the end. We scaled the business hugely.

We became the biggest in the UK. We invested massively in tech and product. It's such a competitive online betting like online retail, which went on to later, hugely competitive. And you have to really be on top of your game in terms of the customer experience.

know, you need to be getting the right price, the right product in front of customers at the right time. got to, yeah, constantly evolving and, you know, coming up with new speaker-0: And fast, right? And fast, yeah. speaker-1: new products, new ideas and trying them out and seeing again, a like free service, seeing which ones work and some don't and some can go on to be massively successful.

That was a really, scaling the tech team from about 30 when I started to about 800 when I left. As you kind of scale things that work at a certain point, Ways of working, teams, structures, operating models, all that stuff. They work to a certain point and then you scale a bit more and it starts creaking and you have to. pivot and you have to try different models.

And it's the same with the tech stack, of course, as we were scaling from a small customer base to the biggest in the UK, we had to constantly innovate, try new models, new products, new open source products, so it could keep scaling the platform so that the response times are where they need to be and customers could find the products really quickly. And as part of that, we sold the business to a private equity firm and then we sold it again later. We went into Italy, we went into Germany, so hugely hugely successful from a business point of view, hugely rewarding from a personal point of view.

I learned a huge amount through that. I think we created a fantastic culture and a tech-led business there. And then I went on to, as we sold the business, I then left, I was at CTO at very group. So the biggest integrated online retailer and financial services business in the UK, know, big, big customer base, many of them paying on credit.

So it's regulated by Financial Services Authority, Financial Conduct Authority even. speaker-0: Is that one of the reasons that Vary was, is that kind of one of the principles it was set up with to sell? speaker-1: Yeah, so if you remember Littlewoods actually, so this goes right back to the 1930s I think and John Moore's and his business that he started selling essentially on credit. people getting things that they didn't necessarily have the money upfront, they'd get the clothes for the kids or whatever it was, know, through the catalogues in the old days and they'd pay it off on a weekly or monthly basis.

And it's that same business model that had been transitioned to online. The catalogues and the Littlewood shops and everything had gone. and it's a purely online business at that point. Again, very, very competitive, you know, so many online retailers, so being able to stand out, you know, having innovative offerings, everyone's got similar products, so you know, it's really about the customer experience through all those different journeys, you know, that's where you, you know, and using data through betting and then through online retail, having the right data at the right time to be able to, you know, make decisions is really critical.

And then I, what I've been doing for the last five years actually, I joined Eshore. in just five years ago, actually, That was at that point, it had previously been a founder led business. It had scaled up to a certain point and then the founder had sold to a private equity firm and they had a very strong vision to really re-platform the business and to build, you know, a modern insurance company, know, tech-led insurance company. So we spent five years, well, three years doing transformation and the last two years really driving the business forward from there, which culminated in last year in the business being sold to Aegeus, a large Belgian based insurer.

So for the last six months, I've been the CTO of that business as an interim whilst I replace myself and go on to do my next thing, which is exactly what brings us right up to date. speaker-0: All right, well, we'll definitely be talking about that. And actually just looking at your career history, right, there's so much change in so many roles where it's almost like the day to day is change. You know, if you're scaling, you might be selling the same things to the same people on nominally the same platform, but actually everything is changing every day.

And in many ways, that's the hardest type of change to manage because it's gradual. You're not like, One day it's this, next day it's this, it's like every day it's a little bit. speaker-1: Yeah, yeah, I think that's right. And I've seen that in different, different forms, actually.

There's that type of change. There's also the bigger change. So if I think about my time at FreeServ, the business when I joined was very simple. was a dialogue broadband business.

Again, great model. You go along to Dixon's or PC World, you get your laptop, people get online for the first time and you know, around about turn of millennium, lots of people got the first laptops, they open the box and there's a CD inside to connect them to. the internet and the first page I hit is freeserve.com.

you know, we kind of started off a really simple business, but as time went by, we were constantly bringing in major types of change and moving to from dial-up to broadband was a really substantial change. And then bringing in things like voice over IPs and then, you know, TV over IP. So using that connection into your home for all different types of product. And each time it got more sophisticated, you know, the billing relationship, the CRM, the data warehouse you needed to back it all up.

So you get those kind of big changes and the constant week by week changes underneath it. speaker-0: and some are incremental and some are kind of totally changing direction. On which note, let's talk about this big transformation at Eshore because I think sometimes you can learn from the most challenging situations we're in. I think you can always learn lessons that actually then apply even in more simple, you know, simple challenges, hopefully.

So what was the state of play at Eshore when you joined? speaker-1: joined it's 2020-21, so just over five years ago. As I said, the business had been sold, the founder had sold the business to a private equity firm. They brought in a new CEO.

He was hiring his new exec team and I was the CTO as part of that. When I actually landed on the ground, and actually it wasn't, we're in middle of COVID, but we'll perhaps come back to that. At that point, we already had hundreds of people working on this transformation program. There was a sort of clear set of pain points that we're trying to solve and it's a clear direction of travel, a target we're trying to get to.

And we'd mobilise really quickly. We've got really ambitious plans. We wanted to do this transformation within three years, which was really to completely re-platform the business. So to your question of what was it like, if I think about some of the core elements, from a customer experience point of view, over 80 % of, at that point, over 80 % of customer contacts were phone based.

So customers calling us. So had big contact centers. had, you know, as a business scaled, we would have had to keep scaling these contact centers. It wasn't a great model.

So a big part of what we're doing then, it was very analog, and a big part of what we wanted to do was to really digitize the business or the customer experience. So that's part of it. had the platforms that we already had in place and the applications that we had in place, very traditional. So it's on premises.

It was, you know, a big tin sort of base systems. Probably not much open source at that point. expensive licensed products, the pace of tech change was very slow. was a constraint on the business.

know, there's so many things that business owners wanted to do and they weren't able to. Had to really prioritize because the funnel of getting stuff through that change pipeline, it was very narrow. that was one of the big drive pain points and drives of change. You know, we weren't really talking about innovation because we couldn't even get the basics out quickly enough.

speaker-0: I mean, it's like a double whammy, isn't it? Because you've got an old system that can't do what you need, but also that's built at a time when there was no appreciation of how quickly things need to change. So it doesn't do what you want and it's really hard to change and make it do what you want. must have been going in pretty clear that change was needed.

What was your outlook like at the time? Like, what were things that you maybe... thought then would happen that didn't or you weren't expecting, yeah. speaker-1: Yeah, so it's an interesting one.

And again, the timing of it was, it made it more of challenge. So 2021, it's quite easy to forget this now, but we're in lockdown, you So I joined in January 21. I didn't actually go into the office, the physical office for the first four or five months actually, because of various lockdowns. So one the things that didn't happen that I thought would happen was that we'd all get back into the office and we'd work in the office.

previous pre-COVID model really, we saw this at Skybetten of places that I worked, people are working in squads, product delivery squads, in the office five days a week, their squads, literally very close together, product and tech, working side by side, and by doing that we got phenomenal velocity, you got phenomenal understanding of customer needs, and got really close to customers. And there was no bridge, no speaker-0: Like, closely together. speaker-1: gap between tech and the rest of business.

We were a tech-led business. I naively, I suppose, assumed that we'd all back in the office one day and working in that model. The reality was we never did. because we wanted to mobilize quickly because of the ambitious plans, it meant that we're not going to hire 500 people and they're not going to be in Rygate, which is the business was headquartered.

So we worked with our existing teams and we partnered heavily. We've had some really good partners. A lot of people in Central Europe, so in the Baltics, in Romania, Macedonia, North Macedonia, places like that. And we did the whole thing remotely, which, you know, it was no doubt about it.

It was a very successful transformation program. We achieved what we intended to do. We actually did it remarkably in the time period. We almost did it on budget.

In the overall scheme of things, it was, you know, it's pretty good. And we really sort of built, we didn't just replace the platforms. We didn't just digitize the business, we digitized ourselves. So we became, you know, when I talk about a digital business, there's lots of digital business out there on the face of it, digital, the web and you know, they might have, they might not be telephone based, it might be chat based and everything.

But actually digital on the inside for me means it's about how you work and it's, you know, lots of people recognize it. It's the way that you get customer feedback, the way that you prioritize your roadmaps, the way that you deliver incrementally. the automation that you have in place, the AI you have on top of it, all those things. That's for me about being digital on the inside.

And so we were transformed to that. And we also became much more lean agile business across the whole business, not just the tech and product area, but across the whole business. Every aspect changed along the way, whether it's finance, legal, risk, compliance, InfoSec. Over that three, four year period, we really transformed all of those areas.

speaker-0: Yeah, I think we've kind of come a long way because I remember when I was kind of starting out in my career and it became rapidly apparent that tech had applications in literally every part of a business and it was like anything you want to do, tech can help you do it better. And then COVID really accelerated that I think for a lot of businesses that maybe hadn't quite got with the program. Suddenly people were saying, ⁓ okay. this needs to be digitised and this needs to, you know, all of it needs to be digitised.

speaker-1: Yeah, yeah, I think that's true. think often, you know, you start in certain areas and you know, you have certain obvious areas and certain allies maybe amongst the exec who really, you know, not having stuff pushed on them, they're pulling it. They want to be more digital. Some get it more than others.

But I think, you know, it only goes so far if you don't have your whole, you know, if your whole business isn't going in that direction. So if you, if you're budgeting or, you know, the way you think about risk and compliance or legal or data protection, it infosec, all those areas, what you don't want is You got really high velocity product delivery squads and then they hit all these roadblocks when they're trying to get live with new, whether it's big thing or a small thing.

So the answer, my answer to that is to embed all of that within the delivery cycle. So make sure that you've got your risk, your compliance, you've got your legal teams. And what I saw work really well at Esho was that all those areas, HR and various other areas, well, it really started. adopting and adapting actually some of the principles that you know that you'd use in a software in Agile software environment.

speaker-0: Yeah, absolutely. We've actually seen that in marketing. know, agile can be applied anywhere, you know, as a theoretical kind of framework. absolutely.

Well, you went through all of this process to kind of like transform the business and then sold it. Where do you kind of go from there? The business. mean, I suppose what I'm hinting at is it sounds so nice and simple, doesn't it?

You know, we have a plan for transformation. We make a plan. We start it. speaker-1: Yeah.

⁓ me piss leo- speaker-0: We finish it, we all congratulate ourselves, but actually that's not the reality, is it? speaker-1: No, it's far from reality. No, we did have a plan. We had a target we're trying to get to.

We had some KPIs that we wanted to move. So the, you know, the example I gave earlier of customer contacts, over 80 % were voice based beforehand and it's now less than 8%. It's, know, it's digitized now. So we had those, but no, nothing.

We had high level plan. It didn't work out. We had to pivot many, many times. There was a whole bunch of, you know, big things out of our control.

So, you know, the fact that we're doing it during COVID. as an example. The war in Ukraine was a big, we had delivery partners, developers and testers in all sorts of countries, including Ukraine, including Belarus and Russia, Poland, the Baltics. yeah, things like that.

Things like the whole, on the back of COVID, the supply chain issues that we had, the costs that that brought specifically into insurance. And I'm sure you remember a couple of years ago, your home and your car insurance suddenly went through the roof. And that was a direct result of all those increased costs in the supply chain. And then we had to adapt, you know, had to deal with that problem.

So there's a whole bunch of big and small things along the way that meant we had to constantly, you know, kind of pivot and iterate on, you know, how we were working. The bit that was remarkable was that we started out with a plan that we thought would take three years and we actually did it in three years. And when I say did it, we built out this brand new platform. We started selling new business on that platform and we then migrated the back book from the legacy platform onto new platform and decommissioned.

And this is really important, getting around to decommissioning all the legacy. I think lots of people, they don't get to that final step. And there's always something else that they would rather invest in rather than decommissioning. And I think that was a big thing.

From day one, we were going to decom. We didn't want this legacy that was still slowness. speaker-0: Or like a parallel system, right? Yeah, exactly.

all you've done is double the... speaker-1: Yeah, exactly. Yeah. So we made sure that we decommissioned all that.

what that meant is that we're now 100 % cloud based. We've got the digitalisation of the business that I talked about. We achieved that. We achieved the transition to being a much more agile, lean business.

So we're delivering software much, much faster than we ever could before, you know, an order of magnitude faster than we could before. And it means that we can. constantly improve the customer experience, we're constantly going after new opportunities, big and small. And to come back to your question, what does that mean?

Well, we were private equity owned at that point and of course there was always going to be an exit from that situation and that's what happened last year when Aegis bought the Eshore business. speaker-0: Was the exit kind of tied to the transformation even, that it was kind of contingent on that, guess? speaker-1: Well, it was a huge part of it. mean, there's always a world where, you know, somebody came along and acquire a came along at the right time with the right check.

But it was always assumed that, you know, it would be contingent on completing that replatforming of the business. Demonstrating that we've got a really low cost platform that we can scale at, you know, lower low cost and that we can deliver change and innovate on top of really quickly. you know, it's less than a year after completing the speaker-0: demonstrating the speaker-1: ⁓ transformation that we were then in detailed discussions with acquirers about that. So there's always a little bit of a gap, but that was definitely big part of it to have achieved that transformation, have transformed the business in the ways that I've described to become that kind of lean agile enterprise.

speaker-0: Brilliant. And what would you say is like the impact on the new normal? Is it a sense of we've done a transformation and now we're in a new phase and we have a new rule, you know, a new playbook for how we go about things going forward? Or is it more of a actually we've just learned there's so many more things we need to do.

It's almost like we're now in this constant change forever. speaker-1: Yeah, it's a bit of both. mean, so we finished, I say after three years, we finished the transformation. At that point, we'd decommissioned all the legacy.

We're on the new platform, new ways of working and so on. And we transitioned at that point to target operator model. And this is, yeah, we were largely there already, but it's really doubling down on Lean and Agile. So it was, know, product delivery squads embedded throughout the business.

There was no kind of IT department, you know, that went long gone. It's tech embedded throughout the business. It was, agile ways of working. It was about kind of lean product development.

It was about DevSecOps, all those things. We really doubled down on all of those. We got about to a year where we were really just getting really good at everything we were doing. And then of course, everything changes because that's when we move into the sales cycle.

So we were acquired by a different business. And what we've been doing for the last six months, three months in real earnest, but six months, we started to think about it six months ago, is bringing together those two businesses, you know, so we want to do in many ways, it's doing more of what Eshore did actually. So it's about getting onto new platforms, about decommissioned legacy platforms. It's about having aligned cultures across a whole business.

So that's one really big thing for me about the whole people and culture side of things and what we've got now, you know, inevitably two different businesses, two different cultures, you know, so it's about really taking the best of both of those and creating this new single UK business. with consistent ways of working, consistent approach to Infosec, for example, you know, as a CTA, that's something that's in front of mind for me. And it's bringing it all together, which that's big challenge in itself.

It's going to take the next couple of years to do that, bring the tech platforms and bring the teams and the whole businesses together. speaker-0: You must feel like a tremendous sense of personal achievement to kind of got to where you are and kind of have it in a great shape to hand over. speaker-1: Yeah, I do. Absolutely.

think there's plenty of other insurers and people outside of insurance as well who've tried, they've gone on similar journeys. They've spent literally hundreds of millions of pounds and they've had to write it off without achieving anything. I don't know about the stats or data on that. We all know that big transformation programs often don't end well.

So the fact that we actually did it, we did everything that we set out to achieve. Yeah, I think it was a really special team. It's not everybody that can do that. I I certainly took a lot of pride from that and I think it's a business we did.

speaker-0: And so what is next for you? speaker-1: So for me personally, I was always clear that that sort of phase of transformation of Eshore was a particular piece of work that I really wanted to do. I was also clear that that's probably that was going to be my last full time CTO role. Yeah, I was looking to, you know, by the end of it, or by now, you know, to move into a more sort of part time sort of advisory, maybe a bit of board work or, you know, but definitely not a full time 100 mile an hour thing.

I'm very happy to hand over this, you know, The things that I just described, bringing two platforms, two businesses together, there's a good three years of really interesting, hard, rewarding work ahead there. yeah, my replacement's just joined in the last few weeks, new CTO. And I'm sure he and the exec team, the whole business, will have lots of fun and lots of tears and lots of excitement along the way. But it's just not the right time for me.

kind of spent nearly 40 years doing that and I don't feel the need to go through that quite the same again. speaker-0: Yes. Well, thank you so much for coming on and sharing your story with us. My pleasure.

It's been really great to meet you. Yeah. This digital lighthouse episode was edited by Steve Folland and produced by Patrick Anderson. The theme music was written and recorded by Ben Bailo.

A huge thanks to our sponsor, SoftWire, for their continuing support from the inception of the show in 2019 to the present day. If you love the podcast, please let us know with a rating and review on your platform of choice. speaker-1: Thank you. speaker-0: We're always looking for feedback to ensure we're making the best show possible.

And if you'd like to take part, please drop us a line at the digitallighthouse at software.com. You've been listening to the digital lighthouse with me, Zoe Cunningham. Thank you for sharing your time with us and stay safe on this wild technological ride that we're all on.