Alexandre Kozlov has 20 years of broad senior IT leadership experience in leading international IT organizations in complex business environments. He has worked in multiple industry segments and is viewed as both business and IT leader. Kozlov created and successfully delivered business-focused IT strategies that transformed overall business operating models and facilitated growth and innovation. He has initiated and led successful global digital transformation and business/IT alignment programs. Kozlov was instrumental in building new enterprise IT organizations and completed several multi-billion M&A integrations and divestment programs.
Business and IT dancing together… Dancing together is an interesting metaphor. Extending the metaphor, like in tango, there should be a leading partner and it is the business that leads during any given dance. IT exists to accompany the business. IT organizations must first and foremost enable the business to achieve its goals and objectives (remember which side of the house generates the revenue). When the business becomes the paramount focus of IT, most other issues are, by comparison, smaller.
The COVID pandemic, like no other event, has accelerated digital transformation. Digital transformation became probably the most used as well as a misused phrase these days. But many companies still fall into an old trap – they focus on digital, but, in fact, the keyword in the digital transformation is transformation (compare putting in place a robot to glue stamps on postcards vs. inventing email).
Digital transformation is about the creation of new revenue streams and business operating models that are enabled by (new) technology. The ultimate goal is to have both your customers’ experience and operating model transformed. And there are different roads in this journey. One way is to go via your customer experience. This is when and where a business delights customers and expands its customer base through the offering of new products and services. Another road is to first focus on the optimization of internal processes and business models and optimize and build platforms. Both roads ultimately should converge, i.e., having built a sound customer experience, the business should look into its model optimization and creation of platforms. Similarly, having optimized its operating model and completed platforms, the business should turn its attention to customer experience. Some companies choose one of the two roads and focus on perfecting one dimension before turning their attention (i.e., investment) to another one. One may also combine the two and strategically swing between them. However, for that, a company must have strong governance in place as the two approaches require different execution models. There are also companies who chose an alternative road. Those decided rather than transforming existing units in one way or another, they leave them as-is and build a new digital business from scratch with an idea that the latter will grow, and the former will gradually decline and disappear.
The staffing industry is very fragmented – the top ten companies combined have typically less than one fifth in each market in Europe. There are many small and medium-sized staffing companies and recruitment agencies. For instance, in the UK alone, in 2019 there were more than 32 thousand staffing and recruitment companies. And the third of those have entered the market in the last 12 months. On the other hand, country labour laws and regulations are very complex and dynamic. All those factors result in very limited and fragmented/niched technology solutions available on the market. In simple words, there are no SAPs or Oracles for staffing industry and, as the result, many companies build their own solutions.
I joined Kelly Services in January 2018 with a mandate to develop and execute a new IT strategy which would enable future business operating models and support business growth. There were several urgent drivers:
- The existing IT solution portfolio was limiting business performance and growth
- The targeted business operating model could not be supported by legacy applications
- The application portfolio was diverse and complex to support efficiently and there were several key applications that were nearing the end of life
Overall, my objective was to differentiate Kelly vs. the competition with a superior user experience for candidates, clients, and employees by delivering solutions that enable and support standardized processes and rationalizing a portfolio of local solutions.
We conducted research in one of our key markets on the activities and tasks of recruiters. It turned out that more than 60% of their time recruiters spent in Outlook. That is, rather than searching for candidates and speaking with them, recruiters were busy typing emails and managing their inboxes and calendars.
I needed to turn things around in IT and get my team (as well as other functions!) to focus on business outcomes instead of looking at things through technology glasses.
Among the key principles of my new IT strategy were:
- standardization (implement common solutions that support standardized business processes),
- configure, don’t customize (unless compliance cannot be met), and
- cloud-first (i.e., cloud-smart).
Needless to say, an essential part of any technology strategy is communication. This is something that you probably never have too much of. I spent a lot of time talking about the new strategy in various business and IT meetings. I deliberately communicated across the organization in simple and clear terms without too much geek talk. I was telling our people where we are going to go, why we are going there, and what is in it for them to get there.
From a technology standpoint, our success factor was the new open architecture which allowed rapid deployment of solutions and was enabled with a new integration platform developed by my team.
Today, we got our foundation in place. The suit of new front- and back offices, advanced data analytics and integration platforms form our backbone – and now we can quickly add “functional plug-ins” and see if they work. If not, replace it. Important is that these new “bricks” are standard with no or minimum customization.
Right from the start I paid particular attention to building partnerships with our strategic vendors which paid off during the implementation. We selected a new ATS platform and utilized its marketplace partners to build up a comprehensive front office suite. We partnered with several vendors to build our new country websites and job boards.
The productivity of our recruiters increased as they started using new advanced tools for searching, parsing, and matching of candidate profiles. Some of our new tools use AI/ML technology – for instance, sourcing candidates and finding better matches. We are still exploring new features and currently working on attributes taxonomy and skills-matching functionalities.
We go for cloud and APIs not because it is cool and trendy. There is not much-added value today to custom develop or heavily customize acquired applications – the market and, hence, business demand changes rapidly. Application portfolio built on cloud and APIs allows us to experiment and quickly implement new solutions. And, if you stay within the standard functionality of your applications, it is much easier to replace module A with module A 2.0 or B from another vendor. What is probably even more important is that it is very likely that the business will be better off with new standard functionality vs. the customized legacy.
When you embark on a transformation journey, you need to put the horse in front of the car – decide about the business operating model first and then, based on that, look for suitable technology solutions and organizational setup.
So, before even scanning the market for tools for our new front office, we started our transformation journey with a series of business modelling workshops with all business functions in key markets to design the to-be business operation model. The key objective was to design a future operating model that should be in place in three-five years. An important element here is to take an outside-in view, i.e., what the market and demand would look like (not how we operate). To make that exercise less academic, we started from process outcomes and worked backwards building the shortest and most efficient path to design sought workflows and processes.
Then we took the new model and looked for available solutions with the agreed objective that the future tech solution stack should cover the core 80% of requirements. Rationales behind this approach are straightforward: there will never be a solution which covers 100%, the remaining 20% is usually what would add 80% of the cost and time to implement, and, finally, as markets change, the model needs to be adjusted, hence, the focus should rather be on core processes standardization and agility. We also put in place a formal change management framework and allowed customizations only to meet mandatory legal requirements.
It took us 18 months to complete the whole program – from the first modelling workshop to the last go-live in the 15th country. When the COVID pandemic hit, we were right in the middle of the implementation. There were concerns that the pandemic would severely impact the program (lockdowns, travel ban, etc.). But we had an outstanding cross-functional team which rebuilt the deployment framework and processes on-the-fly so that, in the end, we even managed to accelerate and completed the program ahead of schedule and below the budget! I need to point out that partnerships established with key program vendors and vendors’ flexibility contributed to the success. As they say, aim at building a great team instead of a great system – if you got a great system, eventually, it becomes obsolete, but if you got a great team, it could always build a great system. Another key success factor in the implementation was an absolute alignment with the executive management, its trust in the chosen strategy, and a cross-functional program team. Even during difficult times when revenues abruptly dropped, management supported the program and preserved the required funding and resources.
Digital transformation must be initiated from the business side, not technology. It does not mean that IT just “sits and waits”. Business transformation initiatives should tie back to the business, grounding each initiative to explicit P&L results and having specific metrics to track progress against business – not technology! – KPIs. Another crucial factor is the size of the transformation. Although you should avoid initiatives that try boiling the ocean, limited scope often results in failures as little change quickly disappears under the pressure of remaining legacy. Another rather surprising lesson I learned is the existence of a fallback option might undermine or even nullify transformational efforts as teams might quickly default to doing things the old way.
Of the three ingredients in a tech project – people, funding, and time – the latter is the most difficult to gain or recover. It is not just the coordination of interdependencies in a transformation program, as challenging as that can be – it’s the sequence of initiatives so that they bring in change and build value quickly. It is essential that a tech transformation delivers business value within 6-9 months. Beyond that, skepticism builds and enthusiasm and support fade away.
To keep focus and momentum, the transformation program should undertake a few changes at a time, each of which ideally could be completed within six months – not too long to wait for results and enough time to change and adapt to.
Although, digital transformations are often associated with technology, in fact, talent remains the holy grail of technology transformations. I used to tell my team that technology is the easiest part of the puzzle they try to solve, and the most difficult part is not in the data centre or cloud, it is between the chair and the keyboard. And I encourage them to start with themselves looking at things from a different angle or, better, through business glasses. Reskilling and upskilling talent in the business and IT function are becoming a high priority these days.
Today IT is at the forefront of building up a data-driven business. Netflix got a pretty good idea of what you are going to watch next week, Amazon could envisage what you are going to order next week. How about a staffing company forecasts what job a candidate will be looking for next month? Or, alternatively, based on analysis of internal and external data, forecast changes in talent demand in industries and then, taking these data, knock on the door of the client company and tell them that, say, in two months they are going to look for new hires for these roles and here are top 5 candidates for each one that the client could interview next week.
One of my favourite hobbies is cooking. Having a meal together is maybe one of those universal things that bring everyone together. In all cultures everywhere around the world, people eat together. Cooking is not about the chef or food; it is all about people. I also think management is like cooking – it’s not about the leader or project, it’s all about people. And in management – like in cooking – having all ingredients listed on a recipe does not guarantee success.
I have recently come across statistics that today globally up to 69% of employers are struggling to find workers with the right blend of technical skills and human strengths (soft skills). This is the highest number for the last 15 years. With the accelerated speed of change, finding the right talent becomes one of the top priorities for employers. The staffing industry will play a crucial role in helping companies with this challenge. Having the right technology solutions in place is an essential competitive advantage for staffing companies. However, technology is like a magic rod – it will give you what you ask for, but it will not tell you what to ask. It is for the latter that IT needs to dance with the business. You need two to dance the tango.