Digital change and the Amazon ‘killing machine’

The former head of Australia’s Digital Transformation Office (DTO), Paul Shetler, might have been frustrated by his public sector role but argues there are many parallels between governments and large corporate organisations, such as banks, when it comes to digital transformation.

In an interview with the RFi Group’s Chloe James, Shetler said the opportunity to digitally transform government services and focus on the “bigger picture” had been very appealing.

“I wanted to do something big again. I was used to working in large organisations and when you change the way an entire network works, it’s something you can actually talk to your friends about,” he said.

“Government and the bigger picture was so appealing to me, I could say: ‘Look! We did this thing!’, point to it on my phone, or browser - and show that it’s so much better than it used to be.

“It’s fulfilling, an achievement, something fundamental and concrete - especially if it’s something that’s user facing that people deal with in their everyday lives, solving real problems.”

One unique umbrella

While Shetler has cited a public sector resistant to change and broader culture issues as reasons for his departure, he also noted that it’s only natural for there to be bureaucratic issues and historic legacies that despise change in big organisations like governments and banks.

“When I was working in banking it was all about ‘we own the customer, no WE own the customer’ - but, really, no one does,” he said.

For Shetler, digital transformation is about working together and, most importantly, under the one unique umbrella. He notes that organisation who “achieve digital success” spend a lot of time and money understanding exactly what they are trying to do.

“I think the distinction between Digital and IT has a lot to do with the fact that historically IT has been very slow to take up modern consumer technology - internet technology,” he explained.

“What that meant was that marketing departments could just go to Amazon and hire a couple of designers and do whatever they wanted without having to involve IT. That’s typically the pattern. At the end of the day, to deliver the services to the end user, the customer, you have to go into the back office.

“A better model takes into account the fact that things change over time and that different methodologies are better suited for certain problems and after a certain point, a product will probably move and evolve to different spaces.”

'Killing machine'

So who is doing this well? Unsurprisingly, Shetler points to Amazon as doing a really great job.

“The retail sector is the stand-out, and specifically, Amazon. They are going to be a big, big deal in Australia when that really hits here, especially because of the industrial structure we have here,” he said. “When someone like Amazon comes here, it is already in tooth and claw, they're just a killing machine. And honestly, I don’t know how people are going to respond to that.

“Amazon have got a lot of things right. They have the end-user-facing stuff, which they’ve done a really good job with, all the complexity, all those financial supply chains, physical supply chains that they have to integrate to provide their service. You as a user, me as a user – we know nothing about it, it’s completely hidden from us. And it works.

“They literally don’t even sell anything, they’re a platform. Platforms can become quasi-monopolistic, and they are the real ‘ones to watch’. They have huge efficiencies and the more people on them, the more efficient they are. They are constant and it’s very hard to compete against that.”

His advice when it comes to platforms, the cloud and operating in this space is to stop building data centres. Why, he questions, are businesses competing with the Amazon’s, Google’s and Microsoft’s of this world?

“With so much capitalization there, how could you possibly compete with that - you can’t - so just don't,” he said.

For the full Chloe James interview with Paul Shetler, click here.

Shetler will address RFi Group’s ‘Australian Mortgage Innovation Summit - The disrupted mortgage' on 23 and 24 February 2017 and you can also catch him in Auckland at RFi Group’s ‘Global Digital Banking Conference - New Zealand Edition’ on 8 March. For more information on these and other RFi Group events, click here.

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