by Brendan McGowan

Driving digital strategy at Agero

Sep 11, 2018
AnalyticsCIODigital Transformation

Bernie Gracy, chief digital officer at Agero, reveals his team’s journey from digitization to digital transformation.

abstract tunnel showing speed and motion and connectivity
Credit: thinkstock

Coming to an unexpected halt can make drivers tense, frustrated, and scared — whether the mechanical failure occurs on a rural avenue or a busy interstate. Agero, a Massachusetts-based provider of connected vehicle, roadside assistance and accident and claims management services, responds to more than 12 million such incidents annually.

Bernie Gracy joined the firm in early 2017 and serves as its first-ever chief digital officer (CDO). He notes the pride and seriousness with which his colleagues approach their time-sensitive work, emphasizing that the nature of the company’s services places it firmly in the “safety business.”

The CDO’s digital maturity model

When forming and informing strategy, Gracy relies in part upon a personal digital maturity model. He believes that companies must undergo an evolution of their digital faculties characterized by three discrete and disparate stages: digitization, digitalization, and ultimately, digital transformation.

Digitization occurs when analog information is converted into digital. Gracy provides the example of the fax machine, which crops up rather frequently in his business-to-business-to-consumer (B2B2C) business, as many of Agero’s thousands of towing partners still rely upon the technology.

According to Gracy, “Digitization [makes us ask], ‘How do I take this analog process called a fax and then turn that into an electronic fax, and then how can I extract and build business processes around that fax to be able to drive some automation?’”

Digitalization, by contrast, hinges upon automating and transforming digitalized business processes.

Such efforts, Gracy explains, become elements of the third and most mature component of his model: digital transformation. Digital transformation cuts across every function and every budget, radically transforming a business’s ability to deliver value.

Gracy explains: “It’s a complete, top-down, CEO-and-board-driven mandate that basically says, ‘You are going to completely redesign aspects of your business from the stakeholder end, whether it be for your clients or your clients’ customers in a multisided platforms. You’re completely transforming your process.’”

Agero’s ascent to the cloud 

Agero’s move to the cloud is reflective of Gracy’s model. Agero, founded in 1972, initially reached clients through what telecommunications firms called Plain Old Telephone Service, or POTS. The company’s migration to a cloud-first environment was a complete transformation of the company’s digital future, breaking open legacy applications into what Gracy terms “microservices,” complementary elements of a top-down digital customer experience.

bernie gracy cdo agero Agero

Bernie Gracy, CDO, Agero

“Eighteen months ago when I came in, we were an on-prem company with a legacy platform [and] legacy processes,” Gracy says. “A very successful business, by the way. Some companies digitally transform when they’re in trouble. I give this company a lot of credit because we’ve been continuing to grow, [adapting] as the demands of our clients change.”

Gracy credits the caliber of his team, as well as the forward-thinking nature of his CEO, Dave Ferrick, in the drive to the cloud.

“The team had already gone through its own internal assessment and basically said, ‘We need to move to the cloud,’” Gracy explains. “‘We need to break the monolith. We need to be able to become an agile operation. We need to build a portfolio of microservices, and we will unlock the value of this asset to be able to change the clock speed of this company and to enable some of the transformations within our core.’”

Gracy and his management colleagues needed to make a choice. Should Agero undergo a “rapid personnel takeout,” and swap in external people with the relevant skills? Or should the company invest heavily in its current staff, resulting in an undoubtedly slower but inarguably more organic transformation?

For Ferrick and Gracy, the choice was clear: an in-house, ground-up initiative that drew upon Agero’s extant strengths. The company underwent a major learning and development (L&D) initiative that provided incentives and training.

“We created a very disciplined program to not only bring the competencies of people up [to speed], but also to ensure our success in moving from a dual-data-center platform into an active-active, multi-region, highly available, cloud-first platform at our core,” Gracy says.

The team learned some powerful lessons along the way. Because Agero primarily focuses on drivetime in the eastern United States, the team sometimes stayed up all night to achieve a certain objective before the “driving day.”

During the team’s first attempt at creating a cloud environment, they discovered there were certain connections that had not been severed to the on-prem environment. The team called time at 3 a.m., executing multiple scripts before failing back to on-prem.

Gracy explains: “There were members of my team [who] were depressed and saying, ‘Oh my goodness, Bernie. We failed.’ I’m like, ‘Are you crazy? This was the greatest thing ever. We went up to the cloud. We learned something. We went back to on-prem, and we fulfilled the operation with no impact to the client or the customer. This was awesome.’”

Gracy’s enthusiasm — and the fact that he takes the long view — helped motivate the team. Ultimately, right after the 2017 holiday season, Gracy relates that the team was able to “punch through” to the cloud, operating in the East Coast region and across multiple availability zones. Soon after, Agero set up a second region using the same process.

“We had a senior manager on my team [who] basically led that cloud transformation,” Gracy relates. “I was so proud. It was like Apollo 11 where we’re in this auditorium, and he is calling the ball of all these functions about the readiness, the monitoring, the telemetry. It’s like, ‘all right, we are going,’ and away we went.”

Today, Agero is still partly a call center company. But thanks to its efforts in the cloud, it is also an omnichannel company. Clients can access agents through a mobile application, invoking the company’s application programming interface (API.) Further, Gracy relates that the company is focusing on the developer experience, through natural language interactive voice response (IVR) and through the telematics screen. Gracy says he can request a tow right from his car’s screen.

Gracy views this shift as a key element in Agero’s continuing transition from “phase two” (digitalization) to “phase three” (digital transformation.)

“We see omnichannel and maintaining that context, and that experience of going from phase two to phase three,” Gracy says. “And we would never been able to do that unless we had gone through the cloud in our core.” 

Changing the ‘clock speed’ of the company

Agero’s shift from phase two to phase three is reflective of a much larger trend: the increasing rapidity of technological change, coupled with pressure to maintain innovative processes. This is especially critical at stage three of Gracy’s model — digital transformation — which is defined by near-constant adjustments and updates to bolster the experiences of customers and employees alike.

“In the digital world that we are in, if you think about the Industrial Age, you would think about things in terms of releases on an annual basis or every 18 months,” he explains. “I would say that when I got here, you’re talking about doing monthly releases. Then you move to releases every two weeks. Now you look at best-in-class companies when you’re doing multiple releases per day. When you’re at stage three, that’s where you’re operating.”

To illustrate, Gracy recalls working with an automotive client who was emphatic about a concept they wanted to see to fruition. The client emphasized that this implementation would be critical for their business. When Gracy and his team heard the concept, they asked about timelines — and the client said they wanted a completed deliverable the next day.

Through intense rounds of conceptualization and multiple internal sprints — sprints that took mere hours — Agero consulted with client services, met with stakeholders, and deployed the project in less than 24 hours. The team pulled together to surprise and delight the client — and the project was reflective of the exigencies that all companies face in working to get to stage three.

In such an agile environment, Gracy thinks a lot about the definition of “done-done” when a project is truly complete. Conventional legacy systems are inherently bounded. Yet open platforms, Continuous Integration, Continuous Delivery (CI/CD) and DevOps have changed the key performance indicator (KPI) from “completion” to “scale.”

He relates that his colleague Christina DeRosa, who serves as chief product and marketing officer, faced this firsthand upon the launch of Agero’s MileUp mobile application. The app leverages mobile telemetry and machine learning algorithms to detect crashes and shorten response time, while simultaneously providing drivers with a personalized driver dashboard, documenting behaviors such as speeding and in-car mobile phone use.

Accidents account for 1 million of the 12 million roadside events Agero responds to annually. Because Agero is in the life safety business, Gracy says, the company’s research and development (R&D) data science group and its product organization teamed up — combining big data, mobile, cloud, machine learning, and serverless computing abilities to change the way drivers thought about safety on the road.

The company anticipated modest initial adoption. When 300,000 users adopted the app, however, Gracy and his colleagues realized that scale eliminates the possibility of one-off successes.

“You had to learn what ‘done-done’ meant really quick when you have one estimate of success and then it far exceeds what you thought,” Gracy says.

Gearing up a culture of innovation 

“Data becomes the grease of digital transformation,” Gracy says. “When you’re going through that digital transformation, the amount of data you’re collecting is exploding. Now companies at the board level and at the client level are saying, ‘How do we unlock a competitive advantage through data?’”

Data’s impact is enhanced or tempered by culture. Gracy says that at Agero, where time and data are both such precious commodities, a cross-functional team is key. The CDO has personally done $800 million in mergers and acquisitions (M&A) over the course of his career, and he has repeatedly seen buyers and sellers and executives align, but M&A activity start to break down at that critical director level. That is because culturally speaking, there is not enough collaboration across the enterprise for a shared vision and joint execution. In other words, leaders need to be cross-functional and flexible for M&A activity to be successful. The same is true for digital transformation, he says.

“You can almost look at [digital transformation] as an internal M&A because [executives] are going to need this change management,” he says. “And it will only work if it’s done in that cross-functional manner.”

That flexibility and adaptability is woven into the fabric of Agero’s culture, he relates. It is not only desirable, but it is a survival mechanism meant to guide the employees on the front lines who are helping drivers through some of their most anxiety-inducing moments.

“When these 12 million events happen, it’s not someone calling to buy something or say hi,” he says. “It’s an extremely stressful moment. We are a helpful company. We are a company that cares about people. We don’t want to leave anyone beside the road, and people recognize that every part that they play is helping the person in trouble.”

Historically, the company has been understandably conservative with its technology stack. Stability and platform uptime have always been Agero’s first priority. But the ability to take on calculated risk — what Gracy calls moving from “phase zero” to “phase one” (digitization) — has become a critical part of the company’s focus and strategy. This is illustrated through Agero’s cloud migration, as well as its focus on a host of other practices and frameworks, such as CI/CD and agile development.

During this move up Gracy’s digital transformation model, there are some things that will never change, he says. Chief among them is the sense of ownership and dedication with which his colleagues approach their work.

“I remember when I went to visit our call center in Tucson to basically jack into some calls with our call center agents,” Gracy says. “I sent a text message to my boss. I said, ‘I love my job. I love my team. But today I fell in love with Agero.’ You can see how everyone is just totally focused on providing an experience and care for that person on the side of the road.”