“There's no point in buying a system or supporting a process if there's lots of manual steps. Those manual steps are going to take away from your billable hours, they're going to consume potential revenue generating time from your service delivery individuals and so, automation is key.”

Intro:
Welcome to the Agile Digital Transformation podcast, where we explore different aspects of digital transformation and digital experience with your host Tim Butara, content and community manager at Agiledrop.

Tim Butara: Hello everyone, thanks for tuning in. Our guest today is Scott Bales, vice president of Enterprise solution engineering and delivery at the time intelligence company Replicon. In this episode, we'll be talking about why companies and organizations that are offering professional services need to embrace digital agility and become more future ready. Welcome Scott, it's great to have you with us today on the show. Anything to add here or should we just jump straight into the questions?

Scott Bales: Thank you Tim it's a pleasure to be here today, thanks for having me. When I was given the opportunity, I felt like I could contribute uniquely because in addition to providing software that helps with digital agility to our customers, internally I oversee our service delivery group. So, it was a unique position I’m in to kind of comment on both sides of the fence if you will. Yeah, thanks again.

Tim Butara: Nice, then we're definitely in for a great conversation and it's really cool because the name of our podcast is Agile Digital Transformation, but I think that most of our topics have been more focused on digital transformation. So, it's really cool to get one that’s focused on agility as well.

Scott Bales: Absolutely.

Tim Butara: So, let's just start with the primary thing. So, why do professional services need to become more agile? Are there any common reasons for this across different industries?

Scott Bales: I think there are several reasons if we think about why organizations need to become more agile. I think in the last year, what we've seen is a change to how we're delivering those services. We went from booking flights and getting on planes and registering for visas to figuring out how to set up zoom war rooms and I really see that as an agile delivery mechanism, right? And all of these reduced logistics and overhead that was associated with in-person, meetings and arrangements - all of that overhead is gone now, and what we're seeing in the market is customers responding to it and saying we don't need to do that, we don't need you in the room, we need to get on a zoom, we need to make decisions now.

They really see that as an empowering mechanism to add efficiency to their implementations, reduce overhead, reduce iterations and so customers are demanding it, they recognize the value of remote implementations and service delivery and they're clinging to it because the longer the service delivery is, the more costs to them. The organizations that are able to deliver that service with agility and with those quick pivots and transitions are going to drive a competitive advantage. So, those service organizations that are still going through an antiquated waterfall method and the different phases of deployment or delivering services in the same old way and sometimes on paper with carbon copy documentation they're going to fall behind.

And the last reason is transparency. So, the agile fast-moving organization has transparency baked in to what it is they're delivering, there aren't these long breaks of time where the service deliverer talks to you, then they go away into their back room and they come back and they deliver and they go away, come back and fix. It's really in the spirit of transparency that they're delivering those services real time and again with quick iterations that speed up timelines from a deliverables perspective. 

Tim Butara: So, agility is not only nice to have or like a great fit for these current times, but it's actually a necessity for companies that wish to thrive in a post-Covid era.

Scott Bales: Absolutely, yeah, I would agree. 

Tim Butara: But so, if that's the case, then why haven’t these companies embraced agility yet? What are the main challenges that are preventing them from embracing agility?

Scott Bales: Yeah, this is where I get to my internal hat versus my external hat. So, probably the biggest thing, if we look at service delivery organizations that are revenue generating, my service organization is cost recovery internally, but if we look at revenue generating service organizations, I’m going to take a consulting engagement firm. There is a certain attraction to that external billable revenue and having resources out there generating revenue: to keep the doors open, to keep the lights on, to keep the employees paid and the partners happy. When they look at using those same resources to work through an internal project, to get a system in place or a digital transformation in place or process optimization in place, they look at the billable hours and the revenue, they say “hey, we're making money, our margins are where they need to be at this point”, so the internal projects just get pushed to the back burner. Given an external revenue generated project and an internal optimization project nine times out of ten the external revenue generating product project is going to take precedence and that’s what happens. 

The other thing is a technology bottleneck. So, the solutions that they're using today just aren't fit for purpose. They’re not able to be agile when they don't have purpose-built systems or they're still on paper for a portion of their workforce or they’re on a legacy system that's not designed for a post-Covid or a mobile workforce. I’m glad I said mobility because mobility is a huge piece of what our agile workforces need to be considering. To be agile you need to be available and that device that's in your pocket makes you available all the time. Yes, I know we're told that we have to turn it off service revenue situations, that's hard to do. And those mobile devices are going to enable your billable revenue generating resources to be more responsive and more agile to customers’ requirements and so, mobility is key. Some organizations have not embraced mobility as any type of tool let alone their primary tool in delivering services. 

The other consideration is a bench workforce. So, in a situation where you've got resources in-house that they can develop solutions or attempt to work on those internal projects, I call them self-medicating organizations. They have this bench workforce that they use to band-aid or wrap existing services, existing products and processes to band-aid the ability to deliver services in an agile way. And as long as you have those resources in-house, they're going to potentially delay your path to agility. They're also maybe not going to know the best practices from an agile platform perspective and they make some mistakes in the solutions they provide and that's always going to introduce risk and overhead when you've got to have your own local resources maintaining and supporting a legacy system. So, those are all reasons why they haven't embraced agility yet and there's probably a lot more but those are kind of the main ones I think about. 

Tim Butara: So basically, companies want to be agile but when it comes down to like walking the walk and not just talking the talk, it's hard to justify all the effort put into it when you can't really quantify the ROI that accurately.

Scott Bales: That’s right and again we're, I’m uniquely positioned because our CEO says to me, where are we at with the latest version of the product in-house? So, I don't get a choice. It's very easy for me to walk the walk because when the CEO asks, I answer. But it’s a top-down drive and at the top revenue often overrides other priorities. 

Tim Butara: Okay, but, so, on the other end of the spectrum, how does such a company benefit from going agile and what does agility look like in practice at a professional service company?

Scott Bales: Yeah, I’ll go back to the first question a little bit. It's really a huge competitive advantage because, what you're going to have if you're supporting agile systems that allow you to respond to customers more efficiently, then that's going to give you the ability to take on additional work, understand where your resource gaps are. A perfect example of this would be a professional services software delivery organization that has an opportunity come in the door for six months of work in a software implementation. So, the first thing that an agile organization should be able to understand is, A) do I have the right resources to take this on? How am I going to figure that out right? Am I going to call around to all of my resource managers or is there a system I can go look at? Next I have to figure out, if I have the resources, then I have to figure out if they are available, if they're not available, when are they available.

And all of those questions and interactions are going to take time and that's time that maybe that opportunity slips through the cracks and you lose the opportunity to service that engagement. It's also very inefficient because all of that inspection and investigation takes up hours and those hours are lost billable hours for your organization. They really need a platform that's going to support real-time data and reduce their decision cycles? Because if they have all of that data in one place, it's very simple and easy for them to go there, see the resources they need, oh! there's gaps, okay, I need a requisition order for this type of contractor, great, done. Okay, when are they available? Two weeks from now. Okay, prospect, I can start the work in two weeks. Here's the estimated cost and if that system is purpose built for those services organizations, they also know what their margin is going to be on that project as they deliver it.

So, again they're forecasting revenue out into the future that they're a much healthier organization and it's going to prevent the inefficiencies that we see in organizations that are managing project by project by project. Because I’ll tell you what happens, you get 10 project managers that come back to you and they say, ‘oh! our projects are profitable’, so you get 10 project leaders that all think their individual project is profitable and then you look at the P&L for the business unit at the end of the quarter or the end of the year, and that business unit wasn't profitable. And it's because every project leader isn't taking into account all the other costs around the business unit. A single source of truth with 100% of your staff and costs embedded in it, is going to give you that insight and it's not going to manage profitability by project. You're going to manage profitability by the business unit and again that system is going to give you a competitive advantage in an agile service delivery model. 

Tim Butara: So, if you don't go agile chances are high that you'll lose business or you’ll start losing business to companies who are already becoming agile.

Scott Bales: You got it. That's right Tim.

Tim Butara: I like that this is already kind of moving into my next question with the unified platform. So, how do digital technologies, does digital transformation factor into all this, and how can digital innovation enable or maybe power agility for these companies? 

Scott Bales: Yeah, that's a good point, I mean once you recognize the power of agile service delivery or agility in general within your organization, you need to make the right technology investments and like I was talking about in the previous question is, you need to identify those products and solutions that are in the market that also recognize the value of agility. That may be one system that has recognized agility and can deliver on all of your needs as a service organization; what most likely will occur though is a best-of-breed scenario. Where in the market, we're seeing the largest organizations and global consulting firms, they’re bringing on best of breed solutions saying, ‘no, we're not going to invest in a consolidation play, we're going to bring in the best of breed solutions that meet our agile requirements today.’ So, it's making the right technology investments in your technical stack and it is in fact a stack of multiple best-of-breed solutions.

The other consideration here is purpose-built solutions, there's no point in buying a hammer to do the work of a screwdriver. You need to recognize what service you're delivering and look for purpose-built solutions or if you're not going to find a purpose-built solution for your particular service, what you need to do is look for a product that will be configurable and flexible and support your specific needs as a service delivery organization. And that's key, because what you want to do is avoid workarounds, you want to optimize the user experience and that won't happen if you're using the wrong tool for the job. 

The last point I would make here in digital transformation is understanding the value of automation. There's no point in buying a system or supporting a process if there's lots of manual steps. Those manual steps are going to take away from your billable hours, they're going to consume potential revenue generating time from your service delivery individuals and so, automation is key. A system that's able to automate the most menial tasks in your service delivery workflow and to give you insights, is going to be key because it will save individuals for revenue generating activities and take them away from overhead tasks on a regular basis.

Tim Butara: Yeah, I think that's an excellent point about the value of automation and its true value actually being in freeing the employees up to be able to do the work that really matters and that can't be as easily done by an automated process. So, yeah. 

Scott Bales: Yes. 

Tim Butara: So, you mentioned making the right technology investments and having the right solutions, I assume this counts for both for the organization internally and externally, for their website, their apps especially now with such a proliferation of different devices and everybody basically depending on digital experiences all the time. I assume true agility means having your internal processes optimized and streamlined and also delivering that same experience to your users, your customers, anybody who needs your service basically.

Scott Bales: You got it. That's right. 

Tim Butara: Okay, maybe now let's get even more practical. Do you maybe have any examples of clients who are making this transition?

Scott Bales: Yeah.

Tim Butara: Can you tell us more about some of the common trends that you've been seeing throughout your work with clients? 

Scott Bales: Yeah, I alluded to this earlier, there's a couple that come to mind. The first use case is really on one end of the spectrum. We've recently started working with two of the largest consulting organizations globally in rolling out our solution as their global mechanism for capture. So, this is at the front end of service delivery, this is where users are documenting what they're doing for their clients and then that data flows through their backend ERP systems for billing purposes. There are some things that are in common between those two and one is consolidation, and one of those consulting agencies has grown by acquisition.

So, what happens is these organizations grow by acquisition, they don't want to rock the boat, they've got a revenue generating business unit. They acquire another one and its revenue generating and it's profitable and they’re like, ‘okay, we’ll transition them into our systems later,’ before you know it, they've acquired another one and another one. So now, before they started talking to us, they had 20 separate systems that were actually capturing data from the front lines for billing purposes and that was just becoming a nightmare for them. So, organizations of that size are recognizing the value in consolidation and they're also recognizing the value of best of breed. Instead of asking an ERP system to serve as the front end for users and become a mobile app and become a project management tool and a business reporting tool, they're saying, ‘hold on a minute, there are purpose-built solutions for services organizations to do this and feed.’

So, we're seeing that in the market, they're moved towards best of breed, they’re recognizing, obviously these newer cloud-based systems are inherently more agile in the nature of their development, in the nature of their releases than these big hulking back-end ERPs that get updated once a year or that haven't been updated in years because they’re scared that they're going to break something or that cost them millions of dollars to upgrade. So, by making that solution or making that decision to move to a best-of-breed model and consolidated at the same time, they're getting a more agile solution that not only empowers their employees to be agile in their delivery, but is agile itself with releases every week, giving users new functionality and capabilities week over week and that's important in the solutions that they're choosing. 

We also see on the other end of the spectrum, though smaller organizations, Readiness IT is an example. And in their case, they were dealing with all of that overhead that I talked about. It's not a huge organization but they still struggle to make business decisions real time. They didn't know where to look, they'd have to pick up the phone or send an email or wait for a response. And they couldn't cater their customers efficiently and that was lowering their margins and so, they looked to the market for a platform like ours to help them find a single source of truth for all of their time and resources and projects because you're delivering services, having the resources to deliver those services is key. And at the end of that they're able to retrospectively look at how much time was spent, how are they utilized,  and make future business decisions around growth and projects based on the knowledge that they had in one place, in one system. Two kinds of big trends that we're seeing in customers we're talking to you. 

Tim Butara: Yeah, I’m glad that you brought these specific ones up because these really showcase how essential agility is in this day and age for any sized company basically.

Scott Bales: Yes. 

Tim Butara: And there are different applications, you know. It's not just agility that will enable you to do this, and if you have issue x then you should embrace agility but no, you can have issues from a to z basically and agility can still benefit you. 

Scott Bales: For sure, and in both of those cases, it was the same platform that was meeting both of those needs. So, your platform selection is key and making sure that you have a platform that is flexible.

Tim Butara: So, if we look maybe a bit more longer term, what would be some key strategies for these companies in order for them to become more future-ready and more resilient to future disruptions? Are there major trends that you've been seeing or that you expect to emerge going forward in the near future? 

Scott Bales: Yeah, I think on-premise is almost gone for good. I say almost but I think we still have customers out there that are experiencing, I’m going to call it fake cloud, which is on-premise solutions that are being hosted somewhere else. That really doesn't expose customers to the benefits of real cloud solutions. So, I think that’s probably one place organizations should do is look for true cloud solutions, one code base, frequent agile updates and deliveries from that product or platform. Because that's going to support you long term, you're not going to get backed into a situation where you're running some custom code that can't be updated and hampers your ability to be agile and deliver in that way.

Configurability, I just alluded to that; your system has to move with you. Being agile means being means things are going to change, you're going to have to pivot, you're going to have to recognize hey we have to do things differently. A year ago, we decided we were all to work from home and your system has to be able to be reconfigured, tweaked, call it what you want to support changes in your business model. Otherwise, you're going to go back to square one and have to invest time and find a new system and insert the problem we talked about at the start where it's internal project now to find a new system or an external project, we know that won't happen. Or you're going to get workarounds and you're going to have to muddle along with a legacy system that can't be reconfigured and then you're losing the benefits of an agile approach internally by forcing yourself into a legacy product.

Mobile is no longer a checkbox. I've been having conversations with customers about software for 20 years and mobile isn't a checkbox anymore. The first early conversations where ‘oh! Do you support iPhone, Android and Blackberry?’ We lost the Blackberry question about 10 years ago and that was still just ‘oh! Do you have a mobile app? Okay great.’ Now customers are saying, ‘okay do you have a mobile app? Great, what does it do and what doesn't it do that I can do through a browser, is there offline support?’ The user base has become much more sophisticated in that way. Facebook recognized that with us years ago as they moved to a computerless workforce, not a deskless workforce but a computerless workforce, and customers more and more demanding on-par functionality in a mobile app albeit in a different user experience, but on-par functionality so user could perform all of their work on the mobile app in some fashion. And that's key. An organization that doesn't recognize mobile first design is behind the times and they need to make that a priority for their users to be agile as we mentioned earlier. 

The last one is the four letters that every person is going to mention. You already know what it is, it's AI and machine learning (ML). The systems that you're putting in place need to leverage artificial intelligence and machine learning. I would say that 40 to 50 percent of the activities in agile service delivery are repetitive and although they're automated, to some extent there’s still an individual involved. The next step in optimizing and reducing non-billable hours for those service delivery people is to completely automate elements of that interaction. 

Perfect example of this is let's say time capture, right. Time capture, how many billable hours did you log with client xyz? What were you doing? And who did you talk to? All of that information in that timesheet is available elsewhere in the system. It's in their calendar, it's in their email and it's in their schedule. Taking that data and pre-populating timesheets and preventing users from having to put any of that data in is key and that's the type of artificial intelligence and pre-population that our platform brings and others do as well. And so, that is key, machine learning-- if a timesheet for 40 hours gets approved every single week by the approver, why does that approver have to login and approve that timesheet?

I think what's key here is managing by exception and tracking actual by exception. That's the key differentiator for systems in the future, don't make me fill in something that is the same every week, tell me when it's different, tell me when I need to care, expose insights to me around the project, hey, this project is going off the rails, your ETC is much farther out than you originally planned; actions, actionable insights that I need to take on a platform are key, and artificial intelligence and machine learning are the path. 

Tim Butara: Yep, I agree with all points. I think all of the stuff that you pointed out is already big but it's only going to become even bigger as more companies adopt agile and as more and more companies start seeing not just the value of using these technologies, but the necessity as we already pointed out in the beginning. 

Scott Bales: For sure. 

Tim Butara: Awesome Scott, that's all from me. Just before we wrap up the call, if listeners want to reach out to you or learn more about you or working with Replicon maybe, where can they reach out to you?

Scott Bales: For sure. You can find me on LinkedIn, Scott Bales. I’ll include the link to my LinkedIn bio in the show notes.

Tim Butara: Okay. Awesome, well thanks so much Scott, it was a really great conversation. I loved speaking with you about the necessity of agile and going through these things. So, I hope listeners will also get a lot out of this episode.

Scott Bales: No worries. My pleasure, thanks for having me. 

Tim Butara: And, well to our listeners, that's all for this episode. Have a great day everyone and stay safe.

Outro:
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