A very incumbent problem

September 9th, 2016 by · Leave a Comment

This article was authored by Jouko Ahvenainen, and was originally posted on telecomasia.net.

I had a meeting with an incumbent company in an industry. We talked about opportunities to utilize data and analytics. They commented to me that it is so easy for startups to do anything with data, but they have their regulation, internal processes, legacy IT systems and responsibilities.

I tried to be polite and understand their problems, but I felt angry. Do these people have the slightest idea how hard it is to build a business from scratch, with nothing, no money, no people, and no data? At the same time, they summarized the problem their have and why startups have opportunities. What is that problem?

This company is in the finance industry, but I have had very similar discussions with telecoms, retail and media businesses. These companies have a lot of data, internal resources and customers, and they should just utilize them. But the problem is that they have developed their systems, people and organizations to produce something that used to be good business and it is so damn difficult to change anything.

And it might indeed be difficult to change organizations, processes and IT systems. But it is not really the problem this comment highlighted. The person basically said that she believes they are not allowed to change things. This belief is the problem.

People can blame external restrictions, like regulation, laws and competition, or customer expectations, or internal reasons like limited resources, pressure with all daily duties, or management, or other departments. But in the end the main obstacle is often in people’s heads.

This is starting to sound like some life coaching. And it is not my point. The point is more that these restrictions are often based on assumptions and fears that are not real and it would be at least worthwhile to check facts.  It is also the case with data. There are all sorts of privacy, security and system issues, but there are also a lot of creative ways to find solutions and respect all rules and limits.

It is also important to remember that changes typically happen with small practical things. One issue in big organizations might be that too many people think big changes, but too few make small practical things. For example, in the data area, it can be one application that can improve customer experience, or internal processes, and it must be based on a real need from customers or employees, not an idea to copy a startup or artificial strategy session results.

If an employee believes that something can be done in a better way, but he or she feels it is not allowed in the organization or by the regulations and a startup could do it anyway, then the employee should make a simple version during his or her free time. Seriously. It doesn’t need to be perfect, but at least it gives an idea about how easy or difficult it is for a startup to make it, and it gives at least something practical to ‘sell the idea’ internally. Or at the very least it develops competencies in the person that will be sorely needed when disruptive startups come to change the business.

It is not easy to change things in big organizations and legacy IT systems are often a real problem. But the reality is that startups start without any IT systems, data or organizations. People in big organizations must also focus on how to get something done, not why some external reasons might prevent it.  If you want start a data analytics or AI project, take a minimum data set, some free orinexpensive tools and make an application you need the most. By doing things it is much easier to find the limits than by speculating about external factors.

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