As Digital Pulse’s founding partner, John Riccio, transitions into a new global role that will take him around the world to PwC’s Experience Centres, he reflects on his time building PwC Australia’s digital consulting arm, the things he wishes businesses really knew about ‘digital transformation’ and establishing Digital Pulse.
Digital Pulse: You were instrumental in setting up PwC’s digital consulting services in Australia. What was understood about the term ‘digital’ when you started?
JR: There was a very limited understanding of what digital was, and people equated digital with technology or mobiles. A lot of tech, but no concept of a transformation agenda in terms of transforming and digitising business. We started with digital strategy to try and get our clients to understand the extent of the impact facing their businesses. Given my retail background we also delivered multichannel retail strategies for many Australian retailers.
In terms of digital at PwC, there wasn’t much. An AFR article at the time called out that we had little skills or capabilities in the area, which wasn’t helpful, but it turned out to be a blessing in disguise as it gave us the impetus to actually make something happen. That was when we started on the journey.
Digital Pulse: Was it an uphill battle to set up a digital practice?
JR: Yep. Constantly. From laptops to networks to branding to hiring, and even acquisitions. Everything was hard and we had to fight for all of it. That’s when we launched Digital Pulse – we didn’t have editorial rights, we didn’t have release rights, we had to go through R&Q, we weren’t allowed to brand it differently. Everything was a battle. We worked through each of the challenges with the business and successfully launched the digital publication. Since then it’s gone from strength to strength.
Digital Pulse: Hard won in the end then. What was the market response like?
JR: The Australian market was different to other territories. Because other firms had started doing digital in Australia earlier than we had, the mindshare of executives was with them. Our brand was very strong in our core traditional services, but it was a tough journey extending that recognition into new areas.
We were chasing our competition for a while, and our biggest challenge was raising the awareness of the capability we had, what we could actually do. In many cases in the early days clients wouldn’t even consider us as they just simply didn’t know we were in the space. We did a lot of marketing and news articles, but we were only just building a consulting practice at the time – let alone a digital one.
Digital Pulse: It seems very different from PwC’s attitude to digital today. What changed?
JR: The proposition evolved.
Back then we had a separate little team, not-integrated, not even sitting in consulting because it was being incubated. We got together as a global team because there were a number of countries that had made acquisitions and were starting to build their own digital practices. But we didn’t want a siloed, standalone business – we wanted something integrated.
So we all sat around the table and came up with the Digital Services construct, and the Experience Centre model. This was a big change in our digital journey, because we decided not to follow our competitors, we wanted to build something that was an extension of our capabilities, not a competitor to it.
That differentiation, combined with bringing together capabilities from across the firm to address digital challenges, not just technology ones, has really paid off and been rewarded by trust from the market in a really gratifying way.
Digital Pulse: You’ve spoken about how hard it can be to implement digital into a firm even when they’re sold on the idea, and it seems like you’re speaking from experience. What’s a critical error you see businesses making over and over?
JR: Businesses still think digital is about mobile and web and they normally give the agenda to the CIO. Even in today’s market, many CEOs don’t understand that digital is about a fundamental transformation of the business model to drive down the cost of doing business, and drive up efficiency and experience to survive and compete.
You hardly need to look to see the many examples illustrating the stark contrast between a digital and traditional business. A digital business can have a cost base that is a third of a traditional competitor while generating almost as much in sales. For them to make a buck they have to work much harder because they’ve got an inefficient operating model. I think the biggest challenge for business is to make sure they totally redesign their business model and digitise as much as they can, so that they can use their people to do higher value work. The ones that haven’t have already disappeared.
Digital Pulse: You are obviously very passionate when it comes to the possibilities of digital technology and experience. What’s the one takeaway you wish businesses would understand/embrace about digital?
JR: There are a number of things. Businesses need to stop treating digital as a bolt-on, as a technology solution, or as funky new toys that are required because they’re cool. They must start taking digital seriously in terms of a fundamental shift in transforming a business, a mindset, the way people think and act. It’s not about being ‘agile’, ‘startup’, ‘cool’, or ‘trendy’. Digital is about the basic fundamentals of business, enabled in a totally new way that is possible today in a way it wasn’t ten years ago.
And it has to be pervasive in the business. If you still have a head of digital, or they report to the CIO or to marketing – then the organisation doesn’t understand the journey they need to embark on.
Digital Pulse: Is there an element of ‘transformation fatigue’ that is contributing to businesses not embracing digital fully?
JR: Absolutely. I think there’s a view that people have tried digital transformation, transformation generally, and none of it’s worked – it’s all failed. And therefore there’s a reluctance to start again. But failure has nothing do with the technology – it’s the culture and mindset that’s holding people back.
The fatigue is around the frustration that people are having with leadership and the frozen middle. No one’s prepared to give up the power or embrace change because they’re too fearful of it, and if they can survive another five to ten years then they’ll be retired and won’t need to worry about it anymore. This stagnant change is frustrating to younger people that can see change needs to happen, and want to drive it, but see it get stalled.
Digital Pulse: Looking ahead, what’s the one technology that you’re really excited about?
JR: The way AI is being used is really interesting, even if I just look at the changes that seem to be more apparent in Google now, and the way it looks at your mail and groups stuff together and sends reminders and follow ups and determines whether it’s important or not. The power of analytics and artificial intelligence – I think we’re just scraping the surface.
If you couple that analytics, artificial intelligence engine with machine learning and voice – I think that’s a really interesting space at the moment. The voice assistants on the market are still quite immature. They’re not natural and that frustrates people. But if you know the commands, and as they get smarter, it’s going to be really, really transformative to the way we do things.
Digital Pulse: Any final thoughts on your journey in PwC Australia’s Digital Services team as you move into your new role?
JR: Even though there’s been frustration and challenge and all the rest, I don’t think I would have wanted a different job over the last six years!