Achieving digital advantage in high trust sectors

Posted on 15 Aug 2022 by Joe Bush

At the start of the year, BAE Systems brought together the digital, cyber, intelligence and data capabilities from around the organisation, to form BAE Systems Digital Intelligence, an arm of the business dedicated to digital advantage and transformation.

Achieving digital advantage in manufacturing is more important than ever, with factors including climate change, the COVID-19 crisis and Brexit accelerating digital strategies. One of BAE Systems Digital Intelligence’s initial tasks has been to produce a report looking at how digital advantage is critical to protecting UK society and maintaining the public’s trust.

The report, Unlocking Digital Advantage in High Trust Sectors, looked at the challenges faced by over 120 senior IT and business decision-makers within the UK’s aerospace, government and defence organisations when it comes to using technology to gain an advantage. We speak to BAE Systems Digital Intelligence’s Chief Digital Officer, James Hatch, about the findings of the report and how a digital advantage is mission critical to high trust organisations.

digital transformation

Why is digital capability so key to mitigating threats and increasing innovation?

JH: Fundamentally it comes down to speed, either in terms of speed of change, and the ability to take on new capabilities to adjust to new threats and demands. But also the speed of processing and the speed of action.

The data is all there; we’re not starting with a blank sheet of paper, and there is a huge amount of digital infrastructure already in place. If you’re trying to navigate challenges using outdated methods and processes, it will take too long, use a huge amount of manpower and won’t achieve the desired results. The shift in speed and action needs to change accordingly, be able to adjust to new threats as they emerge and deal with them efficiently.

Can you discuss the various barriers to gaining digital advantage?

The numbers are quite stark; 97% of UK government, defence and aerospace organisations face barriers to achieving digital advantage.

These include:

  • Organisations are struggling to attract and retain talent. Decision-makers said the Great Resignation (38%), changes resulting from the COVID-19 pandemic (36%) and changes to working patterns (36%) are key threats facing their organisation.
  • There is a lack of confidence around current digital capabilities. Over two-thirds (70%) of respondents said they need to ‘completely overhaul’ or ‘significantly improve’ their ability to innovate, their agility (68%) and their security savviness (67%).
  • Nearly half (46%) of decision-makers dealing with secret or top secret data, said the nature of this highly sensitive information makes it harder to advance their digital capabilities.
  • Over half (53%) of respondents said that using data ineffectively would prevent their ability to solve challenges within society.
  • A third (33%) cited more sophisticated threats from external vectors / enemy states as a key data barrier preventing them from becoming more digitally mature.

Fundamentally, there is a greater challenge of achieving digital advantage and digital transformation in high trust organisations compared with others. The Silicon Valley start-up model is proven to be the fastest way to introduce new digital capability – the ethos of trying something, failing fast, learning and moving on. However, that model can’t be applied to critical societal functions.

High trust organisations are responsible for handling the country’s most sensitive and secret data, delivering services to citizens and safeguarding democracy. Society fundamentally needs, and expects, to be able to have faith in these organisations. They therefore have the double challenge of accelerating their digital advantage while continuing to deliver critical value to society, reliably and responsibly.

Therefore, a second key challenge is around how you do that. Survey respondents in the report talked about people, data and technology challenges. If we unpick the comments that came through, the people challenge and the issue of skills and culture is pretty clear and obvious.

Most individuals working in high trust sectors haven’t been through the digital transformation journey. However, we do have the advantage of having examples of people and businesses who have been through those changes that we can rely on.

There are further challenges around data, particularly information security, classification and dealing with data that is more sensitive. Fundamentally that’s part of the change we’re trying to make – it’s integral to achieving digital transformation in high trust sectors; sensitive data has to be protected.

Finally, and what is conceptually difficult, is the issue around confidence in technology, and the use of cloud services etc, which has been slower in high trust sectors for understandable reasons. And this is quite hard for people to deal with because it’s a conceptual change. It’s not a case of one technology being better than another; the way of working with digital technology and digital practices is fundamentally different.

In our organisation, for example, we have several thousand people in our business who have experience in being DevOps professionals, developing digital development software and other digital capability in a rapid pipeline-based approach. But of course, there’s very few people at the top of the organisation who have experience in that, because it has only become a common way of developing software in the last five to ten years.

Therefore, it tends to be the junior and middle levels of individual who have the experience. So, we have to find ways to give people at the top the experience without sending them back to the shopfloor. How do you show people what’s possible and make it real?

That then changes the relationship between the organisation and technology – achieving digital advantage means that your information technology and digital capability is an integral part of your business rather than a back office, IT function, which is quite a significant change.

How can these barriers be broken down?

The key is incremental change, but change that is deliberately pushed forward and moving at pace; testing, improving and always working on a bigger scope. The challenges of how to rely on digital technology are easier to overcome if people can see, touch and feel it.

Sometimes the approach of starting small is seen as a bad thing, because the commercial sector talks about failing fast, experimenting etc. In high trust sectors, however, you need to make it work, you need that cover and commitment to overcome whatever initial setbacks there are and get to a stage where it is working. It can then spread from there.

Don’t try and apply change to everything at the same time. Partly because the problem is just too big, but also because the risk of things going significantly wrong is more likely on a larger scale rather than starting small and growing.

Digital transformation in general, never mind in manufacturing, doesn’t have a great track record of programmes being categorised as successes; they often struggle to achieve their goals, because they can become too theoretical and not real enough.

Is it harder for high trust sectors to deploy digital strategies?

Within digital communities, phrases such as fail fast are so commonplace they almost go unchallenged. However, for a safety critical function or a critical role within government, integrity needs to be maintained. Therefore, there’s a fundamental tension between digital approaches, which are about changing things faster – the safety critical approach – and having a known good state, and then not changing it unless it’s necessary.

The way you get around it is by having procedures in place and creating the capability to make the change in a controlled way. And that actually takes more commitment. If you’re going to create a capability to deliver digital technology to change something in a safety or nationally critical context, you need to be committed.

It can’t just be an experiment. Rather than just doing one thing, you need to build a pipeline of change where you know the approach works and produces the results that meet expectations, certifications, accreditations and legal constraints.

A key element is that it needs to be repeatable. You can then add variants and special cases etc. If you’ve got a trusted core that’s repeatable, efficient and fast, then that’s really valuable; and that’s the thing that will lead to meaningful change.

How security savvy are manufacturers in general and how much of an issue is cyber security becoming within manufacturing?

This relates to the tension between change and integrity, which is particularly prominent in cyber security. The number one rule in cyber security is to use up to date software. But that quite often means software providers releasing patches and new technology very regularly.

Therefore, as soon as a patch is released, it gives away factors of vulnerability to cyber criminals, if they didn’t already know. After that there is a race on (in days and weeks), between those adversaries. So that patch will need to be in place before those vulnerabilities can be weaponised against you. In the IT and enterprise IoT world, we’re used to implementing patches very quickly and running change processes.

However, when digital technology is embedded into manufacturing equipment, it can sometimes be less obvious where the digital component is. So, maintaining that convergence of digital technology to produce new benefits while at the same time, tackling any newly identified security problems, is a challenge.

I have dealt with people in safety critical industries who are reluctant to change anything, and even if they do it’s likely to be a six month process. Fundamentally, however, these people are engineers; people who like solving problems with technology.

So, it is the responsibility of those of us who are pushing greater use of digital capabilities in manufacturing and in other high trust sectors to take those who are holding up the bar of safety, reliability and trust, and work with them on the advantages that you can deliver – I’ve seen good results when this collaboration happens.

What are the consequences of not being digitally ready?

To go back to the very beginning, the main objective here is about speed. The implications of not embracing digital mean we will be slower than our adversaries and competitors.

If you’re slower than your adversaries, then there’s more risk. If you’re slower than your competitors, then you become uncompetitive over time. And I think this applies both in terms of individual organisations and nationally. There is a great focus on productivity in the UK, and how we can ensure that our economy is competitive in a rapidly transforming market.

For me, a key part of that is to maximise and exploit the speed and productivity that comes from digital technology and practices. If our competitors, either corporately or nationally, are exploiting that and we are not, then that fundamentally puts us at a disadvantage that’s going to count big in the long-term.

Some key finding from the report can be seen below. Alternatively click the link for access to the full Unlocking Digital Advantage in High Trust Sectors report.

To read other articles around Digital Transformation click here.

Aerospace sector-specific stats

Aerospace sector-specific stats Aug2022 BAE Systems

Benefits of achieving digital advantage

Benefits of achieving digital advantage_BAE Systems

Compromising UK Security

Compromising UK Security Chart_BAE Systems

Defence sector-specific stats

Defence sector-specific stats Aug2022 BAE Systems

Digital maturity levels

Digital maturity levels_BAE Systems

Geopolitical factors impacting digital change

Geopolitical factors impacting digital change_BAE Systems

Government sector-specific stats

Government sector-specific stats Aug2022 BAE Systems

Impact of failing to implement digital

Impact of failing to implement digital_BAE Systems

The story of the report in numbers

Story in numbers_BAE Systems

What organisations can improve for digital maturity

What organisations can improve for digital maturity_BAE Systems

James Hatch

James Hatch is Chief Digital Officer for BAE Systems Digital Intelligence and leads the digital agenda – both for customers and our own digital transformation. Prior to this role, he led cyber security services for nearly a decade. James also chairs The Intelligence Network, a cross-industry initiative focussed on achieving a safer society in the digital age. An established leader in strategic cyber and digital roles for high trust sectors, he has a background in technology-enabled business transformation, including establishing information security for an online bank and restructuring a state owned financial institution after the 2008 financial crisis. James is passionate about using digital technology to improve organisational outcomes and deliver change for society.