In March 2017, a story circulated on social media, comparing the investment performance of two companies: Apple and Dominos Pizza.
The article revealed that an investment in Apple stock in 2009 would have yielded a healthy 370% return by 2017. However, an investment into the comparatively unglamorous Dominos would have returned the investor’s stake more than 20 times over.
The story predictably generated a mixed and sometimes incredulous reaction. Much of the analysis (including the article linked above) focused on pizzas, but missed the key point: Dominos Pizza is one of the most digitally transformed enterprises in the world. To adapt an overused cliché: they are now a technology company that sells pizza.
Take their British subsidiary, for example. Dominos UK only took its first mobile phone order in 2010. At that time, online sales accounted for less than 30% of revenue. Seven years on, digital transactions account for 80%, with the UK smartphone app accounting for more than two thirds of those sales.
Worldwide, the company has innovated and experimented, embracing almost every popular consumer technology. In some countries, customers can opt to order favourite pizza as soon as their app opens (a ten second countdown is the only protection from accidental deliveries). They can order via a Facebook messenger bot, a Tweet, or any of an increasing number of smart devices.
The company has embraced agile delivery. 2014 saw the launch of the “Pizza Mogul” service in Australia, enabling customers to design and market their own pizzas, sharing revenue with Dominos. This came to market after less than five months of development.
In short, the company has relentlessly focused on a technology revolution. CEO Patrick Doyle recently pointed out to Harvard Business Review that fully 400 of its 800 head office employees work in software development and analytics.
In a remarkably short time, Dominos has changed from traditional walk-in/phone-up chain retailing, to being one of the great digital success stories.
Critically, it has done this by focusing its technology resources on the front-line. While Enterprise IT shops have focused inwardly on the “Consumerisation of IT”, Dominos has concentrated on “IT’izing the consumer”. In doing so, they have carved big share out of an intensely competitive market.
This is a hugely important point. Most Enterprise IT is built on models and processes that pre-date this kind of transformation. The customer is the employee. Even when it looks outwards, ITIL still defines an external customer in business-to-business, rather than consumer, terms:
A customer who works for a different business from the IT service provider.
However, this is not an accurate description of the kind of customer who may experience an issue with an application like Pizza Mogul. They are members of the public. They may or may not work for a business (maybe they are simply living off their Pizza Mogul successes).
A customer experiencing an issue with an externally facing system is more likely to interface with the business’s customer service department than its IT channels (and hence critical issues may first appear in the CRM system, rather than in the normal trouble ticketing tool). Marketing, rather than IT strategy, becomes the primary driver of changes. Those changes (or fixes), incidentally, are delivered rapidly to the front-line directly by the software developers, with the path to production smoothed by DevOps practices which evolved outside the ITSM ecosystem.
This illustrates the big disconnect between the traditional model of Enterprise IT, and the kind of innovation that has driven such success at Dominos. Corporate IT does, of course, have a very important role to play in enabling and engaging employees. The Digital Workplace is a hot topic, and it will create huge benefits in areas such as operational efficiency, communication, and even employee retention. However, it’s difficult to imagine any such internal initiative producing the equivalent of Dominos’ 2000% growth.
Every CEO knows this, and as a result, when most enterprises talking about digital transformation, they are looking outwards. While few have gone all-in like Dominos, many have significantly increased their commitment to in-house development of customer-facing applications.
I’ve had many conversations with both developers and ITSM representatives at these companies, which have highlighted consistent and increasing challenges: Even high-quality customer service departments lack the technical sophistication to deal with incoming technical issues and transfer them to the right team in the correct way. IT service departments struggle to get visibility, particularly once tickets are thrown “over the wall” to developers’ SDLC tools. And developers lack context on the customer, which makes prioritisation difficult. Often a large number of developers are integrated with support processes for the first time (a travel company told me last week that as many as 3000 developers might receive tickets, a number far bigger than their internal IT organisation), which may amplify these issues.
Most enterprise IT functions were built around service provision, rather than product innovation, and around the needs of employees rather than external customers. Digital transformation will change this to a greater or lesser extent for every company.
This morning, I received a LinkedIn post notification which made the following statement:
“At its core, DevOps is simply about better collaboration between development and operations teams. In fact, it should be seen as a means for improving ITIL® processes”
This statement feels very representative of much of the current dialog (there are plenty of other recent examples to be found). However, this logic, while reasonable (and sensibly aspirational) risks missing a wider point. Yes, DevOps is about collaboration, but it is merely one set of practices and philosophies which have evolved as part of a much broader digital transformation revolution. Many other things have also changed, from the underlying technology stack right through to the recipient customer.
History provides numerous examples of organisations which got very good at optimising what they did, only to find that the world had moved on without them. While IT organisations have great opportunities to add huge value on an ongoing basis, we can not assume that digital transformation will be best served by “ITSM done better”.