Oracle customers share their views on the business impact of digital transformation

Safra Catz and Anna Manz (@philww)

Customers on stage at last week's Oracle CloudWorld Tour in London shared their experiences of digital transformation with Safra Catz, CEO of Oracle. One of the common themes was the need to bring together data across the business, but an equally strong message was that organizations need to look beyond the technology at how the business operates. Here are some of the main takeaways from the discussion, starting with Anna Manz, CFO at London Stock Exchange Group, who says:

This is not a systems change. This is a change in how we run our business. And so it has started with understanding our data.

Get to the heart of the business

London Stock Exchange Group (LSEG) doubled in size when it acquired data company Refinitiv two years ago, putting it in direct competition with the likes of Bloomberg and S&P Global. Along with prior acquisitions, this brought integration challenges to a head. Manz says:

That history of acquisition means that our internal processes are a muddle. In that we stitched stuff together at the top, to the customer, and we stitched stuff together at the bottom, to report — and everything in the middle flows every different way. Our journey is to work our way through simplifying that.

The first stage of this transformation has been to spend time understanding and defining the business goals of the project. She elaborates:

We've really spent quite a lot of time over the last 18 months, going slow to go fast. What I mean by that is, if you don't know how you want to run the business, it's very dangerous to embark on a transformation then. So the work that we've been doing has been to really make sure we understood our customers' needs all the way back to the data and insights we needed to run our business, to then actually change our processes and the systems that are in place.

This included some very lively debates about product definitions, with different elements of the business taking different views of how the group should describe some of its offerings. She goes on:

It goes right to the heart of your commercial model and how you sell. As we have thought through that, ready to configure a system of record that delivers on it, it's also making us think through where our business is evolving to ...

Those are really big questions. They're not finance questions. They go right to the heart of the business we're trying to build. But you need to know the answers. Otherwise, you build the wrong thing.

Even though the systems transformation is still a work in progress, those discussions have already borne fruit and have had an impact on the bottom line. She says:

I think some of the work that we've done, under products and customers, some of the work that we undertook to understand what our key KPIs are, and how they will deliver value, is already allowing us to actually accelerate revenue and deliver cost savings. But that is through the understanding of the behavioral change that's gone with that, ahead of actually being able to configure it into the system.

Make the business case

Catz chimed in to comment that this story illustrates how much the CFO's role has changed with the advent of modern digital technologies. She says:

Finance in the 20th century was about, I would call it, sitting in the back seat of the car, looking backwards, writing down what happened. The world is now about sitting in the navigator seat as part of business, explaining what's profitable, what isn't, where should you invest more to get revenue, all of that — that is a true partner to the business.

Nevertheless, Manz recognizes how hard it is to make the business case for ERP change. She says it's important to acknowledge how tough it will be to make the change, but to emphasize what it will deliver. More automation will help retain staff, for example. She says:

The labour market is such that if your work is low-value and frustrating, you go to another company. So there's a very clear goal for us around removing some of this inefficient, duplicated work, which will not only make our lives easier, but it will make it far more seamless to our business customers ... because they'll be interfacing with a single workspace.

Beyond the efficiency gains there's an opportunity for revenue acceleration from having better and more timely visibility into business data. She explains:

Today, I'm leaving the realm, after 18 months of work, of having visibility of revenue and cost separately, to having customer profitability, and product profitability. The army of people, prior to implementing this, that it takes to give us that data is significant. And the pace at which we are able to take that data and use it to impact the business environment of customer engagement is too slow.

We're effectively a fintech business. The pace of product change is really fast. So I think the other big enabler is — build this right first, automate it first, yes, we get the efficiency benefits — but the bit I'm really excited about is the embedding of the behaviors across the business in how we work and make decisions to create those faster revenue outcomes.

Build in composability

Another customer that emphasizes the importance of reacting fast to data is Nestlé Nespresso SA, creator of the popular coffee capsules and home coffee makers. The company prides itself on innovation and uses behavioral analytics to inform its product development and the taste experiences it creates or suggests for customers, both at home and in-store. Sometimes the data points in new directions, and it's important to have a flexible enough architecture to be able to perform those sudden shifts. Nicole Clayton, its Global Chief Digital Officer, says:

We've all been there, where you might have a very clear vision of where you want to go, and maybe the data is telling you something different, and you have to all of a sudden shift gears and really pivot. So for me, that's one part, you have to really be agile and be flexible as an organization ... The other thing that I think about is how it's changing so quickly, and how technology plays a part here.

There are principles that I think govern both areas. You have to have this high level of flexibility. You have to be composable. You have to have components that you can build upon, and really be able to turn on a dime as you worry about what your customers want, what their needs are, and how you can better service that.

Act faster with real-time data

Network Rail is the publicly-owned infrastructure manager and owner of the British railway network, which works in close collaboration with the privately-owned train operating companies that run passenger and freight services on the network. It is upgrading its IT to take advantage of the capabilities of modern connected digital technologies in areas as diverse as timetabling and track maintenance.

Simon Goodman, Group CIO, says the company has been able to improve safety and efficiency by moving away from a historic "fix-on-fail based mentality" in maintenance, instead adopting a more predictive approach based on data collection and analysis. For example, in the past, detecting an irregularity that was developing in the track would depend either on physical inspection or on following up a driver report of a bump felt in transit. Locating the site of the issue based on that report could be very difficult given that the train might have been travelling at up to 140 miles an hour — over 200 feet per second. With digital sensors, the task becomes much easier, as he explains:

With modern-day technology, we can use track monitoring sensors actually on the physical trains themselves, and relay that data back so we know exactly where a specific fault is, which serves two things. One is it allows us to get out there and fix the fault before it causes service disruptions and delays to passengers. But it also means that, because we could target our maintenance colleagues out there to the specific point, they're spending less time [locating the fault]. So that's a really simple thing that's helping us to transform maintenance activities.

The use of AI in timetabling is one area where Goodman believes there's new potential for innovative business thinking. Network Rail's nationwide track system connects 2,500 stations with many different routes and carries a variety of traffic, from high-speed passenger services to commuter lines and slow-moving freight. Creating passenger timetables and scheduling other services around those timetables is already a massive data analysis project, but AI could help identify new ways of easing bottlenecks and optimizing journey times or energy efficiency. He says:

I could see a world where we start using machine learning and AI to come up with, 'What is the most efficient timetable to run, on certain parameters? That I can see, over the course of the next three to five years, is really going to transform how we set up and deliver the timetable.

In the future, he believes the network could become part of a more integrated transport system that starts to take into account other services such as buses and taxis when planning journeys, use advance booking data to forecast demand, or if passengers encounter disruption to services, suggest what alternative routings are available.

My take

It's not often that a tech vendor keynote dives into customer stories within five minutes of the CEO stepping out on stage. Kudos to Oracle and Safra Catz therefore for giving over the opening keynote at Oracle CloudWorld London to allow four customers to tell their stories, three of which I've referenced here. It's even more impressive that these stories didn't dive into the technology or product specifics. Instead they focused on business impact — which, after all, is the real-world purpose of any investment in tech.