How Dell does digital transformation – Stacey on IoT

The top barriers to entry for digital transformations have changed in the last two years. Image courtesy of Dell.

Two weeks ago, Dell and Intel released the results of a 2018 survey in which they asked medium-to-large enterprises about their readiness for digital transformation. It was the second time they’d run such a survey; the first was in 2016. They put the results from both years into an index, and it makes clear that most businesses didn’t make much progress in the intervening two years. The majority of companies that did move forward were in telecom, technology, and financial services and located in emerging economies.

While the survey was interesting, I wanted to talk to Dell, not as the author of the survey, but as a large enterprise trying to transform its own business. So I spoke with Greg Bowen, SVP and CTO, Dell Digital’s Office of the CIO.

Bowen’s role is to shift Dell’s internal IT organization so that it can use technology to solve business problems as opposed to being an isolated department where product managers come when they need a tech resource. Such a transformation is essential to the adoption of connected sensors and useful data analytics inside a company. Because of the “I” in IoT, most information tech departments get the final say on such projects, and sometimes a role in making sure they work.

Without a rethink of the IT department and the organization as a whole, the IoT is often doomed to stay in one-off pilots where it is unable to change much at all. Which is why Dell’s survey was interesting and Bowen’s commentary was even more so. The survey divided companies into five categories, with the least technically adept and those with no interest in digital transformation slotted under “digital laggards.” About 9% of companies globally fell under that category in 2018. The 33% in the middle are called “digital evaluators” and are gradually embracing technological change.

At the highest level were the “digital leaders,” the companies that have digital tech ingrained in their processes, mission, and workspaces. Just 5% of the companies surveyed fell into that category.

Bowen classifies Dell as “digital adopter,” in that it has a mature plan for a digital transformation in place, as well as established investment. Almost a quarter of the 4,600 surveyed companies fall into this category.

So how did Dell get there? One of the disturbing findings in Dell’s research is that the percentage of companies in each category stayed relatively the same from 2016 to 2018. For example, in both years, only 5% of the companies surveyed were classified as digital leaders. What seems to have happened is that a few companies moved up in the rankings, but only got as far as the “digital adopter” classification. Dell was one of them. Bowen says that the IT department at Dell is working on several fronts to push the company to the next level. Ultimately, it’s trying to turn all internal technology into a service.

“How do we move from projects with people throwing requirements over fences to IT and turn what we do into a service,” says Bowen. Notably, before he was at Dell, Bowen worked at Amazon, where the mantra early on was to build all internal IT projects as things that could be turned into outward-facing services.

So far, one of the areas where Dell has been successful in overcoming some of the barriers to digital transformation (see image above) is in refashioning its product teams to include business folks and the IT shop. For example, as awareness over security issues have increased, Dell has added a security researcher to its product teams.

Bowen says it used to be that programmers would build code and then run it by the security team for evaluation. Any problems were then flagged and — presumably — fixed. But as Dell’s projects scaled, securing products that way became untenable, especially products with constantly changing features. With this new model, security is part of the design process from the beginning. And it can influence code, UI, or other elements as needed. That means Dell hires more security people, but it has also changed how it hires for roles in general.

Today Dell is a cluster of several technology companies, including giants such as EMC, Pivotal, and VMware. Bowen took a look at hiring practices across the companies that Dell has acquired and found that Pivotal’s hiring process worked especially well for the service-oriented organization he was trying to build. Rather than administering an esoteric skills test in the interview process, Dell started looking for potential candidates with particular skills and then assigning them to work on live code with existing staff. That way, the applicant got a feel for the code and the culture, while Dell could assess how they worked with others.

These may not seem like huge innovations, but as anyone who has worked in a large company can tell you, changing a process is hard. You have to get upper management involved, as well as the lower-level managers who are overseeing the actual work. You also have to align your metrics and incentives to this new way of doing business.

Bowen says that’s still an ongoing process at Dell. He says the company is trying to focus more on metrics correlated to the outcome it is after and the business problem any given team is trying to solve. So if, for example, a team has a goal of growing a specific segment’s revenue by 10% instead of just adopting a new feature that would enable it to charge more or sell to a broader audience, getting IT involved earlier might surface some other options. Additionally, Dell might be able to get customers involved to understand demand a bit better.

Bowen says that Dell is currently evaluating the metrics it’s using across all facets of the business — from HR to manufacturing — in order to focus on solving business problems. He says that as any organization undergoes such a shift, ultimately their culture will matter just as much as their technology. I hear this again and again from companies that have tried to change their businesses to adapt to the new rush of information and decision-making capabilities that IoT projects have enabled.

All the technology is the world can’t help if the people overseeing or using that technology aren’t empowered to do something with it. That’s because it will change the nature of the people a company hires, how that company builds its products, and even its measures of success. For more on Dell’s survey results as opposed to things Dell has learned through its own efforts at digital transformation, visit here.

How Dell does digital transformation – Stacey on IoT