Stephen Allott on Growing Profitable Businesses in the Second Machine Age

Stephen Allott spoke at Bos Europe 2016 – just one example of the smart software people we bring to our events.

We’re in the Second Machine Age, demand for software is rocketing. Large enterprises and governments are adopting cloud, open source, SaaS platforms and bespoke agile apps. They’re trying to re-engineer processes, transform service quality and costs. There has never been a better time to grow a software business and sell to large organisations.

Companies in all industries want a ‘digital transformation’ but also have to overcome the internal barriers within their own organisations to change. Stephen, draws on his experiences working with the UK’s Government Digital Service to share lessons learnt in attempting to transform one of the largest, most IT intensive behemoths into an organisation that is, ‘Digital by Default’ How can you profit from this shift?

Find Stephen’s talk video, slides, notes, transcript, and more from Stephen below.

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Video

Slides

Stephen Allott Growing Profitable Businesses in the Second Machine Age BoS2016 from Business of Software Conference

Notes

• Digital Transformation – How to Succeed
  • Quote from somewhere: Nothing better than to eat… with nice people. To drink… with nice people. To sleep… with a contented heart.
  • “I think in the context of industrial revolution… we are in the 2nd major revolution, the digital revolution.”
• Topics today
  • Digital transformation: how to succeed
  • How to sell to government
  • A surprising thing I found out.
• GOV.UK
  • Projects trying to decrease friction of access to gov services.
• Choosing the right pilot projects…
  • How many?
  • What types? Large vs. small. Front-end vs. Deep backend
  • How to manage?
• How to succeed
  • Digital Exemplar best practice
    • Right approach
      • Must get top-down commitment. If the boss isn’t committed, it’s going to be very very difficult
      • Insource management and development.
      • We found this is the right approach for success.
      • Establish agile governance (business case, service & product management).
      • Top-down = waterfall. Bottom-up = agile… there’s a collision in the middle that is messy.
    • Right thing … This is really critical…
      • Tools for the Right thing: hack days, user research, user lab testing, MVP, split testing, beta testing, tight link to helpdesk to react to feedback in real time.
      • Start with user led design.
      • Develop a MVP
      • Right-size the components, sourcing from suppliers, COTS, and open source.
      • It is hard to convince large orgs to go with smaller companies because there is a high value in economies of scale.
    • Thing right
      • Install requisite…
      • Use vest…
      • View as…
  • Roles you will need
    • Portfolio, product & service management
    • Agile product team
    • Web ops
    • Business representative

• How to Sell to Government
• A surprising thing I found out
  • Aggregation by default is wrong
• Centralised purchasing works in a world where things that are bought are parts, not tools.
• Peter Kraljic published HBR article in 1983 http://bit.ly/Kraljic Has informed almost all coporate spending policies since but it is hugely inefficient when it comes to buying technology where innovation is a 10x multiplier.

Transcript

Stephen Allott: One of the things I learned from Mark when I invited him to speak at the computer laboratory in Cambridge is that he’s a master of audience participation. So to follow his lessons I will ask you all to stand up. That’s it! Just stand up! And now, so I’m the last thing between you and dinner [laughter] so anyone who is not looking forward to dinner can sit down, but if you do, then stay standing. I think that’s 100% vote for dinner so I will keep this pretty short and sweet.

The very famous judge called Lord Denning, you can sit down now by the way [laughter], said that he knew of nothing better than to eat with nice people, drink with nice people and to sleep [laughter]…to sleep with a contented mind and I think we got that to look forward to this evening. The – I was listening to Donald Trump making a speech the other day and he said he followed three golden rules when making an afternoon speech, which was to keep it short, funny and make it about sex. And he said he would stand up and say it gives me great pleasure [laughter] and then he’d sit down. So it gives me great pleasure to meet you all this evening. Some of you may have heard me say that particular joke before.

Before we carry on, I would like to get to know you a bit more so to continue with the standing up thing, if you’ve come here from Asia or Americas or outside Europe, would you stand up? We’ve got 1-2 look at that! Well thanks for coming all this distance. You can sit down. Anyone who’s come from the continent of Europe? Do stand up so we can see – welcome! You’d be pleased to know that Britain certainly thinks it’s in Europe and I can promise you we’re not leaving. Who is here from Ireland? North or South – stand up to see. Who here is from the UK? Quite a lot and if you’re from Cambridge, stand up and everyone else can sit down. Quite a few representatives. It’s good to see – do sit down now. I think we’ve got representatives from the BBC and the Irish press so it’s a very diverse gathering.

So you’ve heard today, this morning, the story of Nick telling you how his start-up was different, we’ve heard from Eva Pascoe how we know the future trends in technology are gonna change the businesses we do. We had heard how a brilliant speech by Rory on how to design your product to take into account human psychology. Absolutely fascinating talk! And we’ve heard from Stelli about how to do sales and we’ve also heard from Clark Ching about the theory of constraints and as you’re running your business, how to diagnose where things are going wrong and from Guy how to turn around $100 million and to make a success of it.

So I will talk to you about an enormous business opportunity that’s just arising and I think in the context of industrial revolutions, this is gonna be one of the biggest ones human kind has ever experienced and we’re now in it already. So the .com about 20 years ago where I was fortunate enough to be involved in the business, I think it’s not anything compared to what’s going on at the moment, the digital transformation, the second machine age. People have a lot of different words for it but we’re now in a period of enormous change so I will tell you a bit about that firstly. Secondly how to try and make some money out it and thirdly I will tell you about something really curious I’ve learned in the last years that might be helpful for you.

First thing to introduce me, I started in Cambridge as well, worked in the computer companies Xerox and Sun. Then went to McKenzie to learn about tech strategy, worked in the computer lab in Cambridge for 3 years, set up my own firm which is still going, I worked in the government for the last 5 years and I’m called the crown rep and I finished that at Christmas. And now I’m chairman of Pebble Code and we got Toby the founder sitting here in the front which is an Agile development shop and service design shop. And along the way I’ve chaired 10 companies, that’s me. That was the thing I was quite known for, the company called Micromuse. And the other thing I’ve done is climb mountains on my bicycle, this one is called Mont Ventoux and that’s me, nearly at the summit and I recommend it to anyone who likes a challenge.

Digital Transformation: How to Succeed, How to Sell to Government, A Surprising Thing I Found Out

But what I’ve got covered pretty fast before dinner is firstly, digital transformation, the revolution that’s going on in our society, how to succeed if you’re doing it, if your company is going through the digital transformation and some lessons learned from how to do it well. For many in the room, you’re running and thinking well what’s all that about? but the rest of economy is that they’re undergoing this digital transformation and I want you to understand how it feels to them. Secondly I will tell you about how to sell to government – it’s been going through this massive digital transformation, it’s one of the world leaders in that area so how it feels like to be on the inside and therefore some insides on how to sell to someone during the digital transformation and finally the surprising thing I found out along the way which I think will be helpful to all the small businesses in the room.

But firstly digital transformation, this – does anyone – hopefully everyone recognises this site, it’s gov.uk. the government spent the last 3-4 years building it and they’ve replaced every single central government departmental website with this, it was a massive undertaking. They probably got rid of 20,000 websites or something like that and put it all on gov.uk and this is really the symbol of the digitisation in government which is called digital by default. So the idea was that every single citizen interaction with the state was gonna be digital by default, no more paper and telephones ultimately, it’s all gonna be online and they started that 3-4 years ago.

Would anyone in the room like to have a guess to how many citizen services there are in the UK? Just shout out a number! Let’s see a few! I think it’s about 850 at the last count, so the significance of that, that’s 850 separate digital transformation projects, that’s a lot of projects and this is one of the videos they put together promoting this. It’s only a couple minutes long but I will show it so you get the feeling of excitement that’s underway [plays video].

Choosing the Right Pilots

So I really love that video cause it gives you a scale of scope of what they were undertaking, there were 25 of these examples and pilot projects, the government conducted over the last 2-3 years and those finished last year before the last election. If you’re doing a digital transformation, you’re a huge organisation or a supplier trying to sell digital transformation things have to start somewhere. The question is what pilot projects do you do? And that’s pretty big decision choosing the right pilots, how many should you do? What types? There was large scale and small scale ones, deep back end integrations and how do you manage them? Do you have a central team directing this across the business or do you let departments do what they want to do? It’s got to design your transformation program is really critical.

So let me throw it out to the audience again so more audience participation. What do you think would be a good number in a decent size business of pilot projects to do? Just shout out! Someone said 10 I think so 1, 5 and 10. And how would you vary them by type? What would be a good cocktail of things to undertake? Yeah, you can factor in risk. Would you want ones who are likely to succeed or with the risk they might fail? A bit of a mix? And how else would you vary? Any other suggestions? Customer impact, user segments – time – how long will it take to do? Yeah so the cost of doing it, there’s quite a few factors so selecting the right pilot projects when you embark on digital transformation is a big decision so whether you’re Lloyd’s bank doing this inside your business or the software of one of you in the room, talking to them, it’s a big decision.

So here’s what the British government decided to do, 25. So how likely do you think that will work? So I got involved in finding the suppliers for all these and then about almost exactly a year ago doing the research, writing an assessment of how they’ve gone and these were the 25 the British government did. I agreed with the mainstream ones, targeted at all citizens, targeted at the narrow range of business E1’s. So the biggest arm was register of votes that effected 46 million people. That was actually built by a Belfast company called Canos, I don’t think they’re here today but pretty amazing achievement that any one of the 46 million of the voters in the UK can register online there to vote and they delivered that pretty quickly.

View Driver Record is the other one, that means you can look up your penalty points on your UK driving license online and that’s quite a complicated system to write cause it had to integrate with all the back end stuff and that effective 45 million drivers, digital assessment is a tax one and so on, you can see them going down.

The big one was universal credits, that’s the benefits that are paid to people in the UK and it affects 10 million – Carer’s allowance about 3.2 million, claim personal independence payment that’s for disability benefit, about 2 million. And on the business front the big one was your tax account. So they chose 25 of them and to deliver before the last election and guess what? They didn’t deliver them all. That is a matter of public record so I am allowed to tell you that but it’s not surprising when you look at how many different ones they took on, which I think is quite a big lesson learned. So probably we’re more in the 1-3-5 realm and probably a bit of balance of difficulty, but also building skills around the organisation.

How to Succeed

So from writing this report, there are certain lessons on how to succeed in doing these and came up with these 3 major headings. You have to adopt the right approach overall, second you have to build the right thing – if you build the wrong service, you clearly are gonna fail and you have to build the thing right. And I quite like this chart, it took me a week to come up with that one. Cause I interviewed all 25 teams and asked them what went wrong and right in their projects and this is their distillation into 6 words. So it’s starting with the right approach you’ve got to get top down commitment. If you try to do a digital transformation in a large organisation, if a boss from the top isn’t committed to you succeeding it’s gonna be really hard! So if you’re a vendor selling to a large organisation, make sure that bosses are committed.

The second thing and this is quite a massive change in fashion is in-source management and development of the project and for many years there’s been a fashion for outsourcing for 20-30 years of outsourcing projects, particularly strong in government but it’s happened in all sorts of industries. I spoke to BP last year and they had outsourced a lot of their IT management IP, vast outsourcing going out. This is a bit like doing your own cooking, if you do your takeaways and paying a lot for food, you might eat really well but doing your own cooking is much better value but you have to have a kitchen, pots and pans and the capability to do it. We found that in-source management is the right way to do digital transformation.

The third thing is having Agile governance and there’s this puzzle that you get a waterfall management coming down and they want to know how much you can deliver, by then and how much. Top down. And bottom up you got Agile development teams so making up as they go along. And somewhere in the organisation they collide and so you have to reconcile them. I haven’t figured out the answer to that accept you have to educate the organisation all the way to the top, the Agile means agile. But haven’t found many organisations that accept that. So that’s starting with the overall right approach.

Building the Right Thing is Key

The second thing though, building the right thing. This is the critical thing where user experience, design, service design and user insides are really critical. So I came up with this 2 by 2 just to explain how important building the right thing is. So on this axis, is the right thing. If you build the wrong here you’re here and the right thing, you’re here and here if you build it right, and you’re here and you build it wrong you’re here. And if you build the right thing but not very well, you’re here so you build it badly, slowly and expensively but at least you’re building the right thing and you can fix it eventually. If you build the wrong thing, beautifully, you build what we call the perfect ironing board so beautiful thing but nobody wants it so it’s not useful so you will definitely fail! So user lead service design and service management, minimum viable product is the most important thing and if you build the right thing well, everyone will be happy.

Here are some tools to building right things, things like user research, lab testing and it says GDS. Minimum viable product, lots of beta testing, tight to react to feedback in real time. I mean many – everyone in the room probably knows all that stuff but it’s worthwhile emphasising, that’s the big lever and then building the thing right doing agile development – we’ll come back to that in a second. So the right thing is the key. Start with user lead of their design, development of a viable product.

Then the third thing, I spend a lot of time working on is rightsizing the sourcing of the components and this is quite a journey I went on because when I started at the government in 2011, my job was to promote the government spending more money with small suppliers, SME’s. And then by my second day, the permanent secretary at my department said Steve you have to understand economies of scale and that big suppliers are the way to go. So here I was, promoting small ones and discovered all the big ones with economies that scale was the right answer. That was quite a challenge for me over the next few years to undermine or understand the intellectual foundation of their aggregation economies of scale, big suppliers are the way to go. And actually Toby and I found this last week with a prospect we were talking to, they cut down their supply base from 50 down to 4 in a belief that economies of scale is the way to go. So this is a really live problem for vendor’s persuading big customers to desegregate. And I found that sometimes big is beautiful, sometimes small is beautiful. We have to know when and so the answer I think is rightsizing, you have to be able to articulate which of their breaks are coming down – now I’m gonna tell you more about that at the end.

Building the Thing Right

So that’s about building the right thing and then building the thing right, it’s all about capability which I will talk in a second, lean start-up and agile development and something else which is worth thinking about, viewing this as a product, not a project. That’s a pretty big mind shift for a lot of big customers, so it’s a bit like gardening if you’re gonna build a new garden, you might have a designer to design it, have a contractor to build it but then you’ve got a gardener and that’s forever. A digital service it’s forever, it’s a product, not a project. I see a few people nodding. The mentality inside big customers and governance as well it’s a project though, you build it and off you go and they don’t realise that it’s digital as a product, not a project.

Final thing on this, capability. One thing I discovered is looking at these teams, obviously you can’t do something like your own cooking unless you know how to do it and you can’t do digital projects unless you have the capability and I found you need all these different job titles to do this work and I found the teams didn’t even agree on their names for these job titles so this is a non-trivial thing to explain to customers and prospects the capability they need to do digital transformation.

One of the – before I go on to how to sell to government, I found a really great case study on the impact on digital transformation. I went one day to Manchester to talk by the criminal injuries compensation board. They come down from Edinburgh and talk about how they completely redesigned the way they get compensation and saved I think 40-50% of cost, changed the time for people to log a claim from 2 weeks to 10 minutes and increased their user satisfaction from about 30% to about 95% by doing a complete digital makeover and that was one of the first case studies which quantified the benefits that I came across in digital transformation and that will give you a scale of results you can achieve.

How to Sell to Government

So case studies are really valuable on how to sell to people so I spent a few years hunting for these case studies, it’s worth thinking about the public sector cause the IT spend in the UK 17 billion pounds a year. Think of that! And this is how it’s broken down into, IT outsourcing 5,1 billion, that’s all the outsourcing that’s gonna get insourced when digital transformation that goes on. Communication is kind of the networking space, 4,1 billion. 3,1 billion on staff and 2 billion on services, 1,7 on software and look at hardware, it’s less than 10% of the total. So this is a gigantic market that I was working on. The big spender is the MOD with 2 billion, health is nearly a billion, work and pensions nearly a billion, HMRC a billion, home office 660. So a lot to do.

So how to sell to them? One of the interesting things is this is quite similar to selling generally but it’s a framework down this side which will be common anywhere, get in the conversation, engage in the specification, bid and win and deliver a great service and get references. And this chart shows how in general you will do that then how you do it with the g-cloud. How many of you have you heard about it? Put your hand up! So it’s quite a few. So it’s about 50-50 and I will tell you more about that in a second. The normal route for winning public sector business is called OGU, that’s the official name of the EU, those are public tenders and there’s a specific variant on that called frameworks. The – I will be really quick on this bit. I guess the one difference from selling to government is selling to the normal private sector on a general column is customers want prospects and information – they don’t really want to be sold to. And government policy in the last administration was to encourage people to engage and that’s informally chatting to suppliers.

One of the really weird things I found out was that the public sector was bidding has nothing to do with having a great product, it’s about having the right answer. Public tenders are like exam questions, you could be the best physicist in the world unless you write the answers down, you don’t win. Good work brings home good work but the first time it should take extra. But the only thing I really found that works in the public sector is this thing called the G-Cloud which is a digital catalogue for buying from. And these are the great figures and I think the next year is about 600 million so it’s transacted over a billion, I think this is Europe’s fastest growing internet start-up and it’s really something special. So if you want to know more about selling into the public sector, you should check it. The applications open in a couple weeks so this is live right now.

So I was hired by the government to promote SME sales into government and this is the only thing I found that worked, anything else I tried didn’t make any difference so I learned a lot in my 5 years in government about what works and doesn’t and it was pretty surprising. If you’ve got the impression that government doesn’t make much difference, that can often be true and I can explain now sort of the summary of why that is.

So first they’re solving very complicated problems like poverty or homelessness and not easy things so they are solving a really tough problem but then what they do is when the civil servants are asked to solve a problem, they actually make up the answer over the weekend rather than spending 6 months studying it and figuring out what to do and they will generally come up with an answer that looks good in a press release, its called announceablility, I’m not kidding! The third thing that happens is they’re promoted based on promoted skills, not delivery. And Gus who was the secretary, until a few years ago, actually had a mantra which is policy not delivery. So they’re working on a hard problem and come up with an answer that doesn’t work and then they put on it people that don’t know how to deliver anything, that’s not what they do. Fourth, were these things they’re trying to change, quite hard to design metrics for and therefore to measure progress. They have hard problems, rubbish solutions. They don’t know how to deliver and don’t know if it’s working or not. So when they find it doesn’t deliver, they sort of tend to make up numbers. And the most excitement I had recently is when they published their report on stuff that went on in my SME area. They concluded they couldn’t verify whether the government published figures were true or not. I’m not kidding! They just changed the people who were in charge of the project area within a year and they never delete old initiative and just get more and more things to do. So those are some of the things – it’s why I’m delighted that the G-Cloud worked.

A Surprising Thing I Found Out

Then I found out this surprising thing, you remember I mentioned aggregation to begin with and this puzzle everyone was telling me Steve, you will fail because economies that scale with big companies are the way to go! So in desperation I googled this economy is scale and found a fantastic Wikipedia article which explained where do I – we’re actually more relevant than economies at scale and I spent – and this is a bit like someone mentioned earlier the Tesco weekly shop where everyone used to shop together and there was a bit of a trend here that breaking stuff up might be the right answer.

So I spent 3-4 years trying to understand where were the aggregationists going wrong? And one day I had an intuition and said it feels like someone has taken something from the car industry and transferred it into public sector procurement, in fact into all procurement. One thing I ended up doing was and companies about their procurement policies and found this pretty much universal in top 50 companies, they just aggregate their spending with a small number of suppliers and that’s really death to smaller vendors, it was the people in the room here. So this was a pretty important topic so I was thinking and mentioning to a friend of mine, Conor Kehoe – great Irishman as it turns out – about this feeling and I said that I feel like people are taking ideas from the car industry in procurement and apply them in other areas and he said yeah I know the guy who did that, he’s called Peter Kraljic.

It turns out – I will skip this slide, this is the aggradation policy that was announced in 2013 saying they will centralise and aggregate procurement. And this is what the prime minister said when I was appointed “Wherever possible, we’re going to break up large contracts into smaller elements.” That’s quite a contradiction, so this feeling I had aggregation by default was wrong, I had to find out Peter Kraljic published an HBR article in 1983, documenting the best practices in the car industry and what then happened was quite extraordinary. I think Accenture mainly and I don’t want to offend anyone who is from there, but they were heavily were responsible for taking the ideas of aggregation to the car industry and applying them everywhere else, including places they shouldn’t have gone. And what emerged is Peter aggregation ideas are for fixed specification production parts but not for tooling. And what that means is if you’re building an aero engine for a Rolls Royce or Jaguar, the part you buy to put it in the engine area it’s fixed, you cannot change it. But if you’re buying tooling, a PC or building or desk, you can. And the procurement specialists all grew up in the car industry or aviation where they’re buying production parts and they took that and applied it in to the purchase of tooling. And when I gave speeches on this, the way I illustrated this is I asked people would have they advised the Royal Navy in 1939 to aggregate demand for battleships across the commonwealth and get a few quid off or whatever they’re advised to buy aircraft carriers, maybe we have a vote in the room? Who would have gone for battleship aggregation? Not many of you. Yeah, because what happened in 1941 at the battle of Singapore is that Japanese aircraft carriers sank our battleships and that was the end of the battleship era and what that illustrates is innovation can be more powerful than getting a few quid off what you’re buying. I go by the buy the new stuff, not the old stuff cheap.

Innovation Impact

So come back to this, the impact of innovation, and this is important to you, the innovation suppliers. Buying the right thing with the latest tooling is at a bigger lever than buying the thing right which means getting a deal. And all these procurement consultants were operating in this dimension, trying to get people to aggregate and get a few quid of a few copying paper and not how you get innovation from new innovative suppliers? So what’s a bigger level, getting an iPhone which would be in the right thing or getting a deal on Blackberry’s? And you won’t believe this but in 2011, they were actually negotiating with Blackberry for a deal to equip every single servant with a Blackberry and that would have ruled out getting the iPhone. So this turned out to be the end of my puzzle about whether economy’s scale were right or buying from smaller vendors who are cheaper were right. It turns out you’re buying tools or parts and nobody seemed to know the answer to this but then I ran into this professor, Andrew Cox, who had written a paper on this and we jointly had the answer. And that solved to me this sort of 5 year intellectual inquiries to where they gone wrong and were the place for smaller vendors in the world? And it’s about supplying innovation. The related thing is whether about buying the right thing or cheap is people think a top developer can be 10 times more productive than a mediocre one. You know that in your world and that just illustrates the point of buying the right thing is often the biggest lever.

So that’s me finished and it illustrates my journey to climb this mountain and trying to prove that conventional wisdom over the past few years is wrong and there is a place for innovative small suppliers but it is a challenge for you to go to these big companies and explain why is it wrong for them to concentrate all their buying from HP and why should they open up to smaller suppliers? Cause buying the right new stuff can be a much bigger lever than getting a few quid off buying a bigger vendor. So I will leave you now to go on to dinner, thank you very much!

. I’m actually completely overwhelmed by the challenge of getting that message over. For some reason in my life I’ve always ended up being the person who had to attack and overturn conventional wisdom, I don’t know why I ended up in this position but this is such a massive I don’t know where to start. I co-authored this paper with professor Andrew Cox which is publishes and it’s on one of my websites which should have documented some of the key intellectual underpinning of why aggregation can often be a mistake. I think we have to find the small business community has to go out there and sell it because if you’re a small – I imagine most of you in the room are small firms, you’ve got to go out there, research the material and explain to prospects why it’s ok for them to buy from smaller vendors but if you go to the procurement department you will lose because they jobs are founded on the idea of aggregation and that’s partly because the bigger vendors have cunningly things called volume discount table. Back in the day when I worked in sun microsystem, we went to a vendor and said you’ve done more stuff we’ll give you a bigger discount. The buyer department will become their sales people, hunting around in the organisation to stop them from buying from other vendors and just buy from Sun. IBM are the masters of this so they in fact enrol the procurement departments in the quest to snuff out smaller vendors and it’s a misconceived quest. You’ll be amazed to find the biggest saving I found in government from buying from a big vendor and small one was a web posting with 98%, that’s your money! Think about that! They were buying web postings for years from this supplier and we got it from a new entry called Skyscape for 98% off so this is a very, very long term quest over term it’s conventional wisdom is so deeply rooted, the more intelligent the person I spoke to over the last few years, the more convinced that economies will scale always won but this was totally contradictory to my experience where you will find smaller vendors with 50-75% off. End of rant, I don’t know how we do this, but the small business communities have got to take the lead.

Audience Question: I was gonna ask you about the move on digital government which is fantastic for people like us who have iPads and decent technical knowledge but there’s a large group who are the people who are the most pedant on government services, for example people who are old or who come from poor background or whose English and literary skills are not as good as they could be. I wondered how in your experience, they’re gonna be impacted by the government policy and how you actually cope with keeping them on-board so they don’t lose out.

Stephen Allott: I think in the UK it’s about 20% of the population, they set up an agency called go on UK to help get older people like your mother-in-law and stuff like that online. I don’t think that’s been very successful yet, I think the main way that older people are digitally excluded to get online is to get a friend or child or someone like that to help them. There was quite a lot of controversy about whether they should be rigid about digital by default and say older people have to get with it or get help or whether to make exceptions and that was still an on-going political question recently. I think obviously over time, the number of people who are digitally excluded will diminish as they move on as it were. But I think the – what I think would have been really nice is I once interviewed someone younger civil servant about how they would tackle the problem with digital exclusive and I said how would you solve that problem in a week? And they sort of looked pretty blank and if you think about it, 20% of the population is digitally excluded so the 80% are not so that’s 4 to 1. If you take every old person in the country there’s 4 people could train them in a week how to use an iPad and I think we could use the empty school in the summer, take them in there, look after them and if it was the will of the country to bring them online, I think we could do it pretty quickly.

Audience Question: Hello! Throughout my software career I witnessed people like Logica being awarded huge contracts and royally mess it up and that’s a form of aggregation that you’re talking about. Don’t they keep statistics on every success and failure of their contract that they award? Cause it would be blatantly obvious that you should be going with the smaller people.

Stephen Allott: They absolutely do keep statistics on the IT disasters, and everyone knows about them but I think the point I land on and lesson to take away is the reason the big vendors keep winning is their sales ability. Even at that product is not that good and in fact it’s disastrous in many cases, they keep winning because they’re better at sales. That’s the main thing to take away!

Mark Littlewood: That’s a great point to finish to thank you very much indeed, Stephen! Thank you!

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Stephen Allott.

Stephen Allott is a business and social entrepreneur, Venture Partner at Seedcamp, author of Sales Tales, chairman of Aspirant Analytics and Founder of the Cambridge University Computer Lab Ring, with 272 graduate founded companies in its Hall of Fame.

Stephen also set up a non-profit called Cambridge Ring to back companies started by Cambridge University Computer Science and Technology graduates. He spent three years setting this up pro bono as a passion project. Some of its greatest successes include DeepMind Technologies, which was bought by Google, Raspberry Pi, and ARM, which is the most common chip architecture in the world.

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