Digital transformation | Change, challenge and opportunity

Written on 3 May 2019

This Insight is based on a welcome speech delivered by Catherine Hammon at our recent dinner for female General Counsel and senior in-house lawyers, with guests from a wide range of commercial sectors and discussion focused on digital transformation. The dinner was hosted by Mary Lawrence and a number of Osborne Clarke's women partners and senior lawyers.

A very broad swathe of change

A swathe of change is currently taking place, driven by new technology, new connectivity and new ideas. Some of the change is driven by advanced technology; some of the tech is much simpler but no less disruptive. Digital strategy is no longer reserved to the digital sector or for businesses of a particular size or location. This issue is transforming the commercial and industrial landscape right now, or in the near future, for all sectors.

The change is “gradual then sudden”

A Hemingway character was asked how he went bankrupt. “Gradually then suddenly“, he responded. Similarly, this is a creep of change, a steady flow, and not a sudden tsunami. As Tim O’Reilly has pointed out, digital transformation doesn’t happen overnight – but when we look back, we realise how far we’ve come.

In the world of legal practice, a search for evidence used to involve reviewing mountains of paper documents manually, turning the pages by hand and physically flagging relevant documents. When email and soft copies arrived, we diligently printed out whole Inboxes so that we could turn and flag the hard copy pages, one by one. Then, online document review tools were developed and we sat at a screen, turning digital pages and adding virtual tags. Then we started to pilot using advanced review tools to pattern the types of needles that we wanted from the haystack of documents. Now we can choose the most efficient approach for the review task in hand, with the option of letting artificial intelligence do some of the “menial cognition” for us (as the chess grand champion Garry Kasparov puts it).

Our approach has changed hugely, but it’s happened in stages and felt fairly steady – until we look back and realise that “normal” has become something completely different. As Bill Gates said, we tend to overestimate what we can achieve in two years but underestimate what we can do in ten.

But if it’s all so steady and manageable, why is digital transformation being talked about as a paradigm shift?

Transformative tech is changing the business model

Digital transformation is at its most impactful when it changes fundamental assumptions and redefines “business as usual”. The internet and e-commerce have fundamentally changed retail. Fast mobile connectivity and sharing platforms have fundamentally changed hailing a ride or finding a place to stay. Internet of Things technologies mean that assets can be leased on the basis of real- time use, instead of sold outright. The relationship with the customer becomes much more of an ongoing one, the revenue stream changes, the cost base alters and pricing can change as a consequence. New business models mean that competition gets shaken up.

Interestingly, evidence suggests that fortune favours the bold in this context, with defensive strategies tending to be short-lived in their success. Incumbent businesses that decide to disrupt themselves with a bolder approach, rethinking their business model altogether, typically do better in the face of competitive digital disruption.

This is why we talk about the digital revolution – “normal” as being upended.

Digital transformation is big, strategic, hard work

What reconciles these two apparently contradictory points – that the change is incremental and yet radical – is the sheer hard grind needed to achieve it. There may be a big bang at board level, with a bold decision to pivot strategy and embrace change, but the time, investment and collective effort needed to implement that strategy means that there may well not be any sudden shift from the perspective of the end- user.

Good tech needs great humans

The breadth and depth of these transformations often means that they are most successful when a collaborative, open approach is taken, drawing on the collective intelligence of the organisation. What do you really need? What doesn’t need changing? How can we build that? What constrains what we do? What would make you trust this new tool?

Indeed, there is often a cultural transformation needed to achieve a digital one. A notable feature of so many of the discussions that we’ve had with our clients and colleagues about transformation is the human angle – good tech needs great humans. So often, new tools are introduced which don’t get used; or new software rolled out which was expected to generate great returns but fundamentals were overlooked; or users were not adequately trained and incentivised to adapt their working practices; or perhaps adoption has been prevented by legitimate concerns or simple misunderstandings about the impact of the technology on the workforce. The human angle can be just as much of a challenge as the tech aspects.

Collective intelligence is a powerful tool and can be harnessed to address many of these problems. Feeding diversity of thought, expertise and experience into the project can ensure that key issues are not overlooked, problems are anticipated and addressed, and consultation and input is wide-ranging, raising challenges where needed. Moreover, individuals from across the business who have been invested in a transformative project from the planning stages, can evolve into a wide network of ambassadors and advocates for the new strategy, as it is implemented at ground level.

Embracing technology to power up for the future

As a legal services firm, we face disruption, tech-driven change and challenges to our current business model as much as any other sector. But we feel hugely positive about the future. Transformation across all sectors is creating opportunities and opening new potential avenues that we haven’t even realised yet.

Whilst some old ways of doing things will be left behind, technological advances can create whole new industries – not least the digital sector itself. It will generate ease and simplicity, insight and discovery, understanding and efficiency.

We’d love to travel on the path of digital transformation with you, as you – gradually then suddenly – transform your business for the future.