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A practitioner lead thought leadership publication on Big Data, For CIOs From CIOs
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Highlights from Issue Number 2
BIG DATAA Rare Business Leadership
Opportunity for CIOs
STRAIGHT TALKING BIG THINKING TRENDS 2013PAGE 14 PAGE 46 PAGE 51
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SO WHAT DO CIOs WANT?60 global CIOs help us create a CIO wish-list
BIG THINKINGThought provoking interviews with Malcolm Gladwell (on innovation), Nicholas Carr (on the cloud) and
Thomas Davenport and Vivek Ranadive (on business analytics and decision making)
SOLUTION SPOTLIGHT: Enterprise MobilityHow to deliver the connected customer experience and use mobile applications to gain competitive advantage.
Plus a pullout poster, “Raising Enterprise Productivity Through Mobility”
STRAIGHT TALKINGActionable insights from the CIOs of Xerox, Air Canada, Deutsche Bank, Old Mutual
and other forward-looking companies
Read all issues of CIO Straight Talk athttp://magazine.straighttalkonline.com/
Context, Interpretation, Integration. . .and Alligators A Conversation with Bill Inmon
Cover Article
Trends 2013
The Year of the CIOs?Views from members of the CIO Straight Talk LinkedIn group
Big Thinking
Highlights from Issue Number 2
Straight Talking
14Getting IT to “Think Like the Business”Jean-Marc Chicco, CIO, Lafarge
29The Buy-In ChallengeBill Rogers, Former CIO, State of New Hampshire
25How to Get Your IT Budget to 1 Percent of RevenueAndy Nallappan, CIO, Avago Technologies
42The New Model Behind the Music Simon Hollins, CIO, EMI Music
54The Fracturing of Corporate ITRajiv Sodhi
56From Features to Experience . . . to the Heart of the CustomerSandeep Kishore
58Big Data Will Get SmallVikram Duvvoori
60The Year of the Real-Time EnterpriseJames Riley
62Tearing Up the Traditional Outsourcing ContractVinod Chandran
64Mobile Computing: Ground Zero for IT Disruption Naresh Nagarajan
66Optimizing the Old to Enable the New Sadagopan Singam
33The Unexpected Driver of Digital Transformation Ian Cohen, Group CIO, Jardine Lloyd Thompson
20Who Owns What? The Blurring Boundary Between IT and OperationsDavid Harkness, CIO, Xcel Energy
38Using IT to Achieve Business Integration Barry Libenson, CIO, Land O’Lakes
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• Welcome to the Big Data Zoo (pullout poster) • A Very Short History of Big Data
A Rare Business Leadership Opportunity for CIOs06
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CIO Straight Talk is a periodical published by HCL Technologies (HCLT) meant for its existing and prospective clients for information purposes. The information contained in the publication contains general views based on the experiences of technology practitioners and subject matter experts within and outside of HCLT, expressed by them in their individual capacity and in no event shall HCLT (including its affiliates and group companies) be liable for any claim, damages or any other liability arising out of or resulting from this publication. You are advised to seek professional advice before making any decision that may affect your business. All contents are copyright © 2013 by HCL Technologies Ltd. All rights reserved. Excerpts may be reprinted with attribution to HCL Technologies.
Paul HempHCL America, Inc.400 Crown Colony Dr.2nd Floor, Suite 203Quincy, Mass. 02169United StatesTel: +1-408-328-7501
Editor’s Note
As you may know, CIO Straight Talk is more than a magazine.
It’s a webinar series. It’s a website (www.straighttalkonline.com). It’s a YouTube channel (http://www.youtube.com/user/CIOStraightTalk). It’s a Twitter feed (https://twitter.com/CIOStraightTalk).
Perhaps most important, it’s a community (http://partner.linkedin.com/CIOStraighttalk).
The CIO Straight Talk Interactive group on LinkedIn is a community of more than 1,000 CIOs and senior IT executives. The group, sponsored by HCL, offers peer-to-peer learning on current IT issues – particularly those related to the adoption of emerging technologies and the changing role of the CIO – through discussions, interactive webinars, and idea-driven articles and videos. This experience-based perspective (“from CIOs, for CIOs”) is an often-overlooked source of industry insights.
CIO Straight Talk Interactive members (prospective members are screened to ensure they are senior IT practitioners) get early access to CIO Straight Talk magazine content – for example, excerpts from an interview with a CIO or thought leader that will serve as the basis for a magazine article.
But it’s a two-way street: The magazine also “group-sources” content from the community. In this issue, for example, the thinking of community members is featured in the cover article on big data and the Trends 2013 articles about emerging IT developments, in the form of poll results and predictions by individual CIOs.
So join the conversation at CIO Straight Talk Interactive. I think you’ll learn something. I know that we will.
Paul Hemp
Anirban SanyalHCL Technologies2nd floor, A-9, Sector - 3Noida - 201 301, Uttar PradeshIndiaTel: +91-120-4069000
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Editor Paul Hemp
Managing Editor Anirban Sanyal
Contributing Editor Gil Press, Abbie Lundberg, Stephanie Overby
Copy Editor Amy Halliday
Art Director Harsh Khaneja
Community Director Mishtun Chatterjee
Editorial Advisory Board Anant Gupta, Shami Khorana, Krishnan Chatterjee, Abhishek Shankar
Printing Quality Printing, Pittsfield MA Impress Prints, New Delhi
Digital Innoraft Solutions
Acknowledgements
Contact Us
CIO Straight Talk Team
KSR Siddharth, Chris Connors, Alok Roy, Vivek Iyer, Amit Mehrotra, Manu Sharma, Kartik Mehta, Rao Bhavaraju, Alok Mirchandani, Jayabrata Nag, Shimona Chadha, Vittal Devarajan, Asvin Ramesh
Welcome to the third issue of CIO Straight Talk.
Those of you who are new to the publication will see that Straight Talk highlights the professional insights of IT practitioners like yourself. In this issue, we offer this practitioner perspective not only in the “Straight Talking” articles by individual CIOs but also in the cover story on Big Data and in the Trends 2013 section – both of which include observations from members of the CIO Straight Talk Interactive community on LinkedIn.
Trends 2013 also features the predictions of several HCL subject matter experts on topics ranging from mobile computing to customer experience management. Let me briefly add a thought or two on where I see IT headed.
It goes without saying that the industry is facing an unprecedented level of uncertainty and change, both business and technological. Over the last 5 years, with the financial slowdown and the changing economy, companies have been forced to deal with unpredictable demand cycles, increased cost pressure, and uncertain revenue streams.
Meanwhile, the technology landscape is evolving into an ecosystem of partners for disruptive technologies like social, mobility, analytics and cloud. These technologies have become ubiquitous and are changing not only how we connect with others but also how we do business and deliver services.
These developments are changing the very nature of IT outsourcing. The traditional relationship, centered around cost optimization and enhanced efficiency, is being replaced by one in which IT partners help their customers create business value for the enterprise – through enhanced operational flexibility, the adoption of new processes, the opening of new markets, the development of innovative business models.
This new kind of partnership – what I call Generation 2 Outsourcing – will be characterized by flexible engagement models, which are responsive to an organization’s dynamic needs in an ever-changing business environment, and transparent engagement practices, which eschew the “black box” solutions of many traditional outsourcing agreements. That flexibility and transparency result in the kind of trust that makes IT service providers and their customers true strategic partners in the innovative creation of business value.
As this new kind of partnership evolves, CIOs and other IT practitioners will gain valuable insight into how Generation 2 Outsourcing relationships can best succeed. And this brings us back to CIO Straight Talk, which will be an important forum for the exchange of such experience-based, peer-to-peer insights.
We hope you find both this and future issues of the publication both interesting and enlightening.
Anant GuptaCEOHCL Technologies
CIO
Jean-Marc [email protected] data is the buzzword du jour in IT circles, where it appears to have
edged out cloud computing in frequency of appearance on the agendas of industry forums. Despite the hype and even the lack of a clear de�nition big data is indeed an important development, one that presents numerous challenges to companies and their IT organizations. Perhaps the biggest challenge is realizing that “big data” isn’t really about the abundance of data but about the business value that can be extracted from it.
But in the �urry of white papers and conference sessions and blog posts, something important is being overlooked: the unusual opportunity big data presents for CIOs traditionally seen as operational or technology leaders to assume a long-sought business leadership role in their organizations. Rather than contributing to the obsolescence of the CIO and the IT function, as some have predicted, big data actually opens the door for a CIO to lead the transformation of his or her organization into the data-driven, digital enterprise of the future.
After all, the abundance of data, the currency of the information economy, essentially makes every company an information company and should therefore place the chief information o�cer at the center of the organization, or even at the head of the entire enterprise.
A Rare Business Leadership Opportunity for CIOs
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So what’s the big deal about big data? The term “big data” originated in the late 1990s, when scientists at NASA used it to describe the large data sets produced by computer visualization, which were taxing the capacity of the main memories, and even the hard drives, in use at the time. In 2008, a number of promi-nent American computer scientists popularized the term, predicting that “big data computing” would “transform the activities of companies, scientific researchers, medical practitioners, and our nation’s defense and intelligence operations.”
But the concept predated the term. Just about anyone defining big data today refers to its “3Vs”—volume, variety, and velocity. The fact that the 3Vs were first described by industry analyst Doug Laney as “data management challenges” for enterprises as early as 2001 may lead a skeptical executive to conclude that there is nothing new under the sun. In fact, we may see a replay of events that marked previous waves of data growth: growing buzz as business units and depart-ments (especially marketing) adopted new technolo-gies; concern about these technologies’ immaturity, security risks, and noncompliance with corporate IT standards; and finally a restoration of IT organization control over the experimentation with new data sources and new tools.
While there are certain parallels with previous develop-ments that changed the IT landscape, and while many long-established activities, products, and services are being recycled with the big data label slapped on them, there is certainly a lot that is new: technology- and people-related developments that present fresh challenges to any company. Although these develop-ments can be perceived as threats to the IT organization, the challenge of distilling revenue-generating insights from the data potentially puts the CIO in a position of leading rather than following business strategy.
Cloud Computing
Cloud-based platforms provide an easy-to-use and cost-effective sandbox for IT-related experiments by business executives, increasing the presence within many organizations of a “shadow IT function.” Indeed,
testing with a testing cycle taking many months. So, if you are constantly changing you will be constantly testing. As the research and clinical sides converge, we need to figure out the metrics and processes for support-ing these types of evolving applications.”
Many industries, government services, and nonprofit organizations experience a similar culture clash as massive private and public databases need to be mined, often in real time, to provide new insights from a variety of data sources. CIOs can lead by inventing and imple-menting new processes for the IT organization that accommodate rapid change and emerging technologies while providing high-quality, continuous support. Instead of fighting chaos by resisting change, CIOs should work to find ways to create some order out of the chaos, thus neutralizing the conflict between the need to access data instantly and to ensure its quality, stability, and integrity.
External Data IT teams have gotten used to the relentless growth of data generated by their organizations and the practice of building firewalls around it. But big data involves first and foremost the ingestion of data that is created outside the enter-prise. At Land O’Lakes, a member-owned cooperative that offers an extensive line of supplies to agricultural producers and markets branded dairy-based food products to consumers, the growing availability of public data has become a catalyst for business innovation. “Farmers are required to report their yield information to the U.S. regulatory bodies in order to get subsidies,” says Barry Libenson, the company’s CIO. “We can find out for every acre what was planted and the corresponding yields and analyze that information against what would have been achieved in the same scenario with different seed or different chemicals to protect the crop. That’s incredibly powerful — it goes straight to the bottom line and is an effective way to market and sell to the grower commu-nity.”
Rather than resist the use of external data, CIOs can demonstrate how it can be used to develop a new product, deliver a new service to customers, streamline a process, or gain a knowledge advantage over competitors.
Data Privacy External data brings with it a long list of issues the IT department did not have to contend with before, certainly not on such a scale. Are the data sources secure and legitimate? Are they in compliance with the privacy policy of the organization? Has everything been done to avoid a breach of confidentiality?
Even seemingly anonymous data can, when aggregated and subjected to powerful analytical tools, identify individuals and predict their behavior. This is obviously useful to marketers, but it raises privacy issues that may damage a company’s brand. CIOs should respond by taking charge of this increasingly difficult and expanding scope of risk manage-ment, an area of expertise that is increasingly important to the success of any organization.
New Views of Data
The accuracy of the data supplied by IT has been of paramount importance for years. But compa-nies are now realizing the value of data that is directional as well as accurate. “Revenues have to be accurate,” says Venky Rangachari, the Global Head of Technology at Thomson Reuters, “but e-commerce gives you trending data that is perhaps only 60 percent accurate. However, it tells you where you need to spend your money. The ability to look at
unstructured data and make sense of it, even if it’s not 100 percent accurate, is a new maturity that marketing executives are developing within companies today.”
A lot of big data is also unstructured rather than struc-tured — that is, it does not fit into a preconceived design as it does in traditional databases. “With business intelligence and analytics in the 1990s,” says Flavio Villanustre, of LexisNexis, “you had almost
many big data pilots in large companies are the initia-tive of a business unit or a function, such as the market-ing department, and frequently do not involve the IT organization.
But CIOs could embrace, standardize, and lead the use of cloud computing, including the big data experimen-tation taking place in the cloud. Flavio Villanustre,VP, Information Security at LexisNexis Risk Solutions and head of HPCC Systems, the open source initiative of LexisNexis, argues on the basis of many discussions with IT executives that “how IT organizations respond to big data will determine if they are in business in three to five years, or if everything goes to the cloud. This is the time for them to show how the business can [use big data to] become more competitive.” If CIOs are unable to take the lead on this, they’ll find that their business customers bypass them and “go to the cloud to get what they need.”
Open Source Some of the most important big data tools are based on open-source technologies. Many IT executives are just beginning to get over their reluctance to embrace open source and recognize its benefits, such as lower cost and continuous crowdsourced quality assurance and innova-tion. Consequently, the skills, expertise, practices, and processes required to leverage open-source technolo-gies are often lacking in the IT organization, providing another reason to circumvent IT in the adoption of big data. Brent Richter, Director of IT at both Massachusetts General and Brigham and Women’s Hospitals and Director of Enterprise Research Infrastructure and Services at Partners HealthCare, has first-hand experi-ence with both the research and clinical sides of these leading healthcare organizations. Over the last ten years a vast amount of genetic information has been accumulating in research databases. Physicians today can compare a patient’s specific genomic profile to what’s in the database, in order to pinpoint personalized courses of treatment.
Not surprisingly, this is where healthcare organizations see a clash of cultures. “For the IT organization that’s on the clinical side, the metrics are stability and 24x7 support,” says Richter. “On the research side, it’s agility and the speed of developing new applications. The research side relies on open-source tools that are constantly changing, but it’s OK because researchers like to use the latest and greatest and expect change. On the clinical side, each change necessarily requires
Flavio Villanustre Vice President, Infrastructure and Security, LexisNexis Risk Solutions
How IT organizations respond to big data will determine if they are in business in three to �ve years, or if everything goes to the cloud.
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A Very Short History of Big Data1944 Fremont Rider, Wesleyan University Librarian, estimates that American university libraries are doubling in size every 16 years and that in 2040 Yale will require “a cataloging staff of over six thousand persons.”
1981 The Hungarian Central Statistics Office starts a research project, which continues to this day, to account for the country’s information industries, including measuring information volume in bits.
2001 Doug Laney publishes a research note titled “3D Data Management: Controlling Data Volume, Velocity, and Variety.” A decade later, the “3Vs” become the defining dimensions of big data.
2007 IDC estimates that in 2006, the world created 161 exabytes of data and forecasts that between 2006 and 2010, the information added annually to the digital universe will double every 18 months.
2008 Randal E. Bryant, Randy H. Katz, and Edward D. Lazowska state that “just as search engines have transformed how we access information, other forms of big data computing can and will transform the activities of companies, scientific researchers, medical practitioners, and our nation’s defense and intelligence operations….”
2009 Roger E. Bohn and James E. Short find that in 2008 “Americans consumed information for about 1.3 trillion hours, an average of almost 12 hours per day. Consumption totaled 3.6 zettabytes and 10,845 trillion words, corresponding to 100,500 words and 34 gigabytes for an average person on an average day.”
2011 Martin Hilbert and Priscila Lopez estimate that the world’s information storage capacity grew at a compound annual growth rate of 25% per year between 1986 and 2007, and that in 1986, 99.2% of all storage capacity was analog, but in 2007, 94% of storage capacity was digital.
2011 The McKinsey Global Institute estimates that 7.4 exabytes of new data were stored by U.S. enterprises and 6.8 exabytes by U.S. consumers in 2010.
2012 Neuman, Park, and Panek (following the methodology used by Japan’s MPT and Pool, above) estimate that the total media supply to U.S. homes has risen from around 50,000 minutes per day in 1960 to close to 900,000 in 2005. And they estimate that people in the U.S. are “approaching a thousand minutes of mediated content available for every minute available for consumption.” Bounie and Gille (following Lyman and Varian, above) estimate that the world produced 14.7 exabytes of new information in 2008, nearly triple the volume of information in 2003.
1983 Ithiel de Sola Pool, looking at growth trends in 17 communications media from 1960 to 1977, concludes that “words made available to Americans (over the age of 10) through these media grew at a rate of 8.9 percent per year… words actually attended to from those media grew at just 2.9 percent per year.”
1997 Michael Cox and David Ellsworth publish an article that begins, “Visualization provides an interesting challenge for computer systems: data sets are generally quite large, taxing the capacities of main memory, local disk, and even remote disk. We call this the problem of big data.” It is the first academic article to use the term “big data.”
1997 Michael Lesk concludes that “in only a few years, (a) we will be able [to] save everything – no information will have to be thrown out, and (b) the typical piece of information will never be looked at by a human being.”
1998 K.G. Coffman and Andrew Odlyzko argue that if the 100% growth rate of Internet traffic continues, “data traffic in the U.S. will overtake voice traffic around the year 2002 and will be dominated by the Internet.”
2000 Peter Lyman and Hal R. Varian publish the first study to quantify, in computer storage terms, the total amount of new and original information (not counting copies) created in the world annually and stored in four physical media: paper, film, optical (CDs and DVDs), and magnetic. The study finds that in 1999, the world produced about 1.5 exabytes of unique information.
1949 Claude Shannon (later known as “the father of information theory”) records estimates of the “bit storage capacity” of items such as a punch card, “genetic constitution of man,” and phonograph records. The largest item on Shannon’s list, at 100 trillion bits, is the Library of Congress.
1961 Derek Price concludes that the number of new scientific journals has been doubling every 15 years.
1971 Arthur Miller writes in The Assault on Privacy that “too many information handlers seem to measure a man by the number of bits of storage capacity his dossier will occupy.”
1975 Japan’s Ministry of Posts and Telecommunications introduces “amount of words” as the unifying unit of measurement across all media and finds that information supply is increasing much faster than information consumption.
1980 I.A. Tjomsland asserts at a symposium on mass storage systems: “Those associated with storage devices long ago realized that Parkinson’s First Law may be paraphrased to describe our industry — ‘Data expands to fill the space available.’”
(Condensed from “A Very Short History of Big Data,” by CIO Straight Talk Contributing Editor Gil Press, which can be found at http://whatsthebigdata.com/2012/06/06/a-very-short-history-of-big data/.)
You’ll find a wide variety of colorful big data technologies
and tools, including the Hadoop, the Oozie, and the Sqoop.
Zookeeper: A centralized service for maintaining configuration information, naming, providing distributed synchroni-zation, and providing group services for distributed applications.
Mahout: A library of Hadoop implementations of common analytical computations.
Pig: A platform for analyzing large data sets that consists of a high-level language (Pig Latin) for expressing data analysis programs, coupled with infrastructure for evaluating these programs.
Hadoop: A batch-oriented programming framework that supports the processing of large data sets in a distrib-uted computing environment. Hadoop is written in the Java programming language and is a top-level Apache project (Apache is a decentralized community of developers supporting open-source software).
Hive: A data warehouse infrastructure built on top of Hadoop, providing data summarization, query, and analysis. It permits queries over the data using a familiar SQL-like syntax.
Flume: A tool for collecting, aggregat-ing, and moving large amounts of log data from applications to Hadoop.
HDFS: A distributed, scalable, and portable file system written in Java for the Hadoop framework.
Sqoop: A tool facilitating the transfer of data from relational databases into Hadoop.
Oozie: A workflow scheduler system developed to manage Hadoop jobs.
HBase: A non-relational, column-oriented distributed database written in Java. A column-oriented database stores data tables as sections of columns of data rather than as rows of data, as in most relational databases, providing fast aggregation and computation of large numbers of similar data items.
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total control over the data inputs and you knew what to expect, given how the data was formatted. A row with a company ID could be joined with the company’s IDs in some other table. Big data comes from external sources, and even the internal data sources do not necessarily have the structure that you were expecting. Big data doesn’t fit standard methodologies.”
Finally, there’s a shift in attitude about what to do with the data collected, toward preserving rather than discarding data of no apparent use. In the past, the bias ran the other way. “For too long, IT organizations have been giving themselves a pat on the back about how little they let the data grow,” says Sanjay Mirchandani, Executive Vice President and the former CIO of EMC Corporation. “The growth of data has always been considered a bad thing. Today, companies that under-stand big data see it as an incred-ible asset that may provide a competitive advantage.” The onus is on CIOs and their teams to make sure that the enter-prise does not discard potentially useful data just because it’s unstructured or hasn’t been used before or takes too much storage space. With this comes the responsibility to make sure the organization understands the value to be realized from mining such data and to create guidelines for recognizing and handling data that has specific value to the organization.
Data Science
To mine the data and demonstrate its value to the organization, we have a new profession – that of data scientist. Part software engineer, part statistician, the role is a mix of skills and expertise that’s hard to find. In a May 2011 report that was the first compre-hensive study of big data, the McKinsey Global Institute predicted that, in the United States, “demand for deep analytical positions in a big data world” could exceed supply by 140,000 to 190,000 positions. The study also projected a need for 1.5 million additional managers and analysts “who can ask the right questions and consume the results of the analysis of big data effectively.”
The demand for upgrading traditional IT skills and for the services of data scientists presents a career-development opportunity for IT staff and a potential budget expansion to accommodate new training and hiring. But the IT organization may end up becoming less relevant if data scientists are hired and trained elsewhere in the organization. In a Fall 2012 article in MIT Sloan Management Review, “How ‘Big Data’ Is Different,” analytics guru Tom Davenport and his coauthors provided an early warning to IT with their recommendation to move analytics “from IT into core business and operational functions.” They argued that “the traditional role of IT — automating business processes — imposes precise requirements, adherence to standards and controls on changes,” whereas the advantages of big data and data science are based on “discovery and agility — the ability to mine existing
and new data sources continuously for patterns, events and opportuni-ties.” CIOs can use big data as an opportu-nity to update IT’s role to include discovery and agility, and add a new functionality and service — data science, the uncovering of important new insights — to their offerings.
Internal Competition The direst predictions concerning big data portray it not merely as a challenge for the IT organization but as a tidal wave that will actually sweep the function out of existence. The marketing department is frequently the champion of big data, eager as it is to uncover new insights about customers and prospects. Indeed, Gartner has predicted that by 2017, the CMO will spend more on IT than the CIO, part of a general trend of IT responsibility and spend-ing moving out of the IT organization and into business units and functions.
Indeed, when it comes to big data, the IT function often appears to be trying to make itself irrelevant. An executive in the CTO’s office of a large company, who is responsible for testing and certifying new technolo-gies, says that he had to battle for nearly a year with the IT governance committee to get permission to introduce Hadoop (a programming framework that supports the processing of large data sets in a distrib-uted computing environment). He got it only after the
committee ascertained that Hadoop would be “insu-lated and isolated.” The executive added that Hadoop provided the company with new and useful insights from the kind of data the company had discarded in the past.
So are CIOs doomed to become as dispensable within organizations as the light switch they are supposed to keep turned on? Avoiding irrelevance will require rethinking their role and even their title. There is increasing talk of companies designating “chief digital officers,” who will oversee the digitiza-tion of different parts of the business, from marketing to customer service. “The chief digital officer will prove to be the most exciting strategic role in the decade ahead,” Gartner’s David Willis said at a recent Gartner Symposium, “and IT leaders have the oppor-tunity to be the leaders who will define it.” Although many envision CDOs residing in the business units, CIOs could take on this strategic role for the entire enterprise if they are able to transform IT into a function that thrives on agility, adaptability, and speed. To lead rather than follow, CIOs should cultivate an IT organization that is able to master constant and rapid change and whose hallmark is an entrepreneurial culture of “fail fast.” IT should be perceived and managed as an evolving organism rather than a well-oiled machine. While management of various IT activities may migrate to the business units, responsibility for digital strategy should remain with the successor of today’s IT function.
How can CIOs respond to big data?To ensure that their enterprises acquire the capabilities that big data demands, CIOs can demonstrate leader-ship in at least three ways — each of which redefines their role. The three approaches are not necessarily mutually exclusive and may even serve as stepping stones on the way to a full embrace of data as the essence of the enterprise’s mission and strategy.
Chief Integration Officer
The first approach is data transformation, in which data governance and the creation of a unified “data platform” for the enterprise become the main occupa-tion of the CIO. He or she works to ensure a complete breakdown of data silos across the organization; full integration with all new external data sources; the delivery of a constantly updated and timely “single version of the truth”; and the provision of full support to data-driven decision making. Bill Rogers, until recently the CIO of the State of New Hampshire, saw clearly the need to transform the data set that existed in his organization: “There are 68 state agencies with business data and citizen data in isolated pockets, with no master data plan. So we got a pilot going to pull that data together using a big data solution like Hadoop in order to make it easier for citizens and businesses to do business with the state. And instead of trying to go to a single unique identi-fier, we were looking at a big data solution that would be able to tell that Joe’s Diner is this number for this agency and that identifier for that agency and still be able to join all these records together.” Although this data integration work is crucial to the success of most organizations, many are still working to get a single view of their data — and the CIO is well positioned to achieve that. This role involves determin-ing what data to focus on, how to define it, and how to ensure everybody in the organization — not just those at the top — looks at the same version of a clean, updated data set. The CIO works closely with business and functional executives to uncover new data needs and requirements, continuously update data govern-ance processes and procedures, and provide a stable but agile infrastructure supporting the work of data scien-tists based in the business units and departments.
Chief Insights Officer
The second approach is IT transformation, in which the CIO leads the transformation of the IT organiza-tion into a big-data-as-a-service function, working with the business to ensure that the best insights are derived from the available data. In this approach, there is complete alignment between IT and the business, and the IT team is the glue that connects all the strategic thrusts of the organization, coordinating and optimizing data-driven decisions. The CIO is well positioned to do this. “IT sees the
Sanjay MirchandaniExecutive Vice President and former CIO, EMC.
For too long, IT organizations have been giving themselves a pat on the back about how little they let the data grow. Today, companies that understand big data see it as an incredible asset.
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bigger picture and sometimes is more knowledgeable than the business about business processes,” according to Jay Vaughn, the CIO of Advanstar, an international business media and events company, speaking during a webinar he recently gave as part of a CIO Straight Talk webinar series. Jeanne Ross, the Director of MIT’s Center for Information Systems Research, made the same point in an article that appeared in Issue 1 of this publication: “IT often has a far better understanding of a process — whether existing or proposed — than people on the business side, because IT people see the entire process from end to end and thus can wrap their minds around the whole thing.” Adds Sanjay Mirchandani of EMC: “Only IT has a complete picture of all the data in the enterprise. At the same time, IT today cannot have a monopoly on information. That changes the role and responsibilities of IT and the business.”
According to Simon Hollins, Consultant CIO of EMI Music: “Big data changes the way the technology team needs to engage with the parts of the business that use that kind of data and who are themselves very well informed and insightful — not just about the data but about the technologies that support it. We try to encourage that. They — the business — have become the experts and we have to align with them and support them and encourage them.” With this approach, IT itself becomes a business, focused on delighting its internal and external customers. Filippo Passerini, the CIO and Presi-dent of Global Business Services (GBS) at Procter & Gamble, brought IT into GBS and changed its name from IT to Information and Decision Solutions to highlight its transformed role. Similarly, Peter Dew, the CIO at CEVA Logistics, changed the name of the IT organization to Information Services and Solutions, reinforcing the goal of focusing on internal and external customers. For Sanjay Mirchandani of EMC, this transformation is a must for IT given today’s realities: “I know that when I speak to my peers, other CIOs, we are all focused on transforming IT. The essence of this trans-formation is changing our go-to-market model. That’s because the traditional tool sets and competencies are
no longer our monopoly; they are readily available to the business.” CIOs, he adds, must think like CEOs: “If you want to run IT as a business, you’ve got to look at the ‘competitive’ forces. Anyone with a corporate credit card can buy whatever IT resources they need; they can buy IT as a service. We understand that the transformation in how we go to market is our number one priority.”
Chief Innovation Officer The third approach is enterprise transformation, in which IT becomes the business of the organization. This will require the transformation of business
models and management practices, and that transforma-tion will be driven by innovation — new products, services, business models, public sector initiatives — based on the power of digitization and its offspring, big data.
In “Big Data: The Management Revolution” (Harvard Business Review, October 2012), Andrew McAfee and Erik Brynjolfsson argue that big data will transform all businesses, not just web-based businesses: “The familiar-ity of the Amazon story almost masks its power. We expect companies that were born digital to accomplish things that business executives could only dream of a generation ago. But in fact the use of big data has the potential to transform traditional businesses as well. It may offer them even greater opportunities for competitive advantage.”
Because data has been the business of IT, the CIO has an opportunity to lead this enterprise-transforming innova-
tion, giving him or her once and for all a seat near the head of the C-suite table. “CIOs are being asked by their CEOs to help develop new offerings for custom-ers,” said Ronald Blahnik, a former CIO and senior IT executive at retailers the Hudson’s Bay Company and Lowe’s, in an article in Issue 1 of CIO Straight Talk. “That means the ‘I’ in CIO now stands for innovation, not information.”
Venky RangachariGlobal Head of Technology, Thomson Reuters
Digitization has made data an indispensable resource for any enterprise, second only to people. Big data is about applying this resource in the most optimal way. This shift in emphasis may well mean a significant change in how IT is managed, developed, sold, and bought.
Business transformation in the digital economy The discussion of big data tends to start — and often to stay with — “volume,” the “big” in big data. But the volume of data has been rapidly increasing for years. “I don’t think of big data as just the increasing volume of data,” says David Harkness, the CIO of Xcel Energy. “To me, big data is where you’re drawing connections between data that was previously not connected, extracting new knowledge out of these large data sources.”
Indeed, each of the 3Vs that are supposedly the defin-ing characteristics of the big data phenomenon — volume, variety (new data formats), and velocity (the speed with which it is available) — are familiar to anyone managing IT over the past two or three decades. Even the new big-data-related challenges described above — such as cloud computing, open-source technologies, and external data — while presenting new and important dimensions to the CIO’s role, are just another stage in the ever-changing work of IT.
What is truly new is the context of these changes, a qualitatively different business environment and entirely new requirements. It was a new business environment that gave rise about eight years ago to what we today call big data technologies. These initially addressed new problems associated with processing large amounts of data. The most fundamental was that although the storage capacities of hard drives had increased, the rate at which data could be read from drives hadn’t kept up. This created a bottleneck that engineers at a start-up
called Google had to address without simply buying more hardware as their Web search operations grew rapidly.
Google’s solution was to break the data into smaller pieces and process it in parallel over a cluster of commodity computing and storage devices and to develop software that combines the data and makes it available for analysis. But Google’s engineers came up with the solution not only because the data they dealt with was of a type and scale that couldn’t be cost effectively addressed with traditional IT tools. Their solution was also a response to the new requirements of the new business environment. Google was a new type of business based on the analy-sis of Web data, which allowed it to provide users with fast and accurate search results and to support this free service with relevant and targeted advertising. Google showed how big data could become a big business. Less than a decade later, this new business environ-ment is spreading fast to all businesses and to the public sector. While the amount of data created and consumed continues the rapid growth that we have been seeing for decades, data is now becoming the most important aspect of virtually any organization. Call it the Googlization of business. Instead of becom-ing overwhelmed by volume, companies must pay close attention to the most relevant sources of data, which now are frequently outside the organization, and to the best ways to analyze that data. Instead of becoming overwhelmed by variety, companies must analyze data that in the past was discarded — for example, text-based data — in search of new insights on such business imperatives as how to retain and satisfy customers. Instead of becoming overwhelmed by velocity, companies must make decisions in real time in order to match competitors’ moves or target their customers.
Certainly, the IT organization and CIOs may become irrelevant in the digital economy. But the digital economy offers the chance to rise with and ride the big data wave, to lead the digital transformation of their businesses, nonprofits, or government agencies. CIOs should see this as an opportunity to demonstrate leadership that is based on deep experience with and understanding of what data, big or small, is all about — its management, its analysis, and its use in the service of innovation, the driving force of any enter-prise.
The ability to look at unstructured data and make sense of it, even if it’s not 100% accurate, is a new maturity that marketing executives are developing within companies today.
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Jean-Marc [email protected]
Jean-Marc Chicco, CIO, Lafarge
Getting IT to “Think Like the Business”A career managing businesses provides a �rst-time CIO with a fresh view of IT challenges.
When I was asked to take over the CIO job at Lafarge, I said, “Guys, I’m not your man. I have spent my career managing companies, business functions, geographic regions. What do I know about managing IT?” (I didn’t say that I also had some apprehension about seeking support for IT initiatives from former colleagues on the business side. Would they tune me out just as I had tuned out IT people when I was heading up a business division?)
The company had an answer to my misgivings: “You know Lafarge and the business, and that will make a big di�erence.” So I decided to test the water what seemed likely to be very cold water. Today, I’m having lots of fun. The IT function is little by little changing the operations at Lafarge. I believe it’s mostly because IT now thinks like the business does.
The Seonyu “Footbridge of Peace,” Seoul, constructed using a lighter and stronger Lafarge building material called Ductal.
Jean-Marc [email protected]
PositionChief Group ERP Program and Information Officer
CompanyLafarge SA
Works fromParis
Professional Background Before being named CIO of Lafarge, in 2010, Chicco spent nine years as the Chief Operating Officer of the company’s €1.6 billion roofing division and two years leading an initiative to reduce the company’s working capital. Before joining Lafarge, he served in various market-ing and general management roles at the auto parts manufacturer Valeo and at TRW Semiconductors. In 1983, he founded a company that specialized in the design, production, and distribution of power electronic systems.
EducationMBA, University of Texas at AustinMasters in Engineering, École Supérieure d'Électricité
Personal PassionsTrekking, philosophy, social change
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Standardizing Applications
Lafarge is the worldwide leader in building materials – number one in cement and number two in aggregates and concrete. The company operates in 78 countries and owns nearly 2,000 industrial sites.
When I started as CIO, I realized that my experience managing a working capital initiative at Lafarge would help me demonstrate the value of a business perspective to the IT group. My assignment to lead that earlier initiative was as much of a surprise as being offered the CIO job. Traditionally, a Finance guy was responsible for managing working capital. But after seeing little headway in reducing working capital, senior manage-ment asked me to bring my business perspective to the task.
As it turned out, we were able to free up €1 billion in cash; improving the management of spare parts was one avenue for achieving this. A cement plant is like a big machine, with a lot of equipment and lots and lots of spare parts. In early 2009, when I took over the program, we had about €650 million of spare parts in inventory. Working closely with the factories, we reduced that to about €400 million.
So when I became CIO, I immediately said, “Let’s ask the factories how IT is helping them manage their spare parts.” I discovered that across the organization Lafarge had several ERP templates talking to about seven Maximo (IBM’s asset management software) templates and about 20 different types of application interfaces. Even worse, only half of the plants had Maximo. The other half was waiting for it.
We launched a major program to upgrade and roll out a common standard for Maximo to more than 160 plants over the next three years. When the program is complete, those plants will all work with the same version of the application, driving further savings and efficiencies. The situation with Maximo was typical of the way we had been going about developing applications. Once we developed an application, we let anyone at Lafarge tweak it. The result was many different versions of the same application. Every time we upgraded an applica-tion, we spent a lot of unnecessary time and money on the effort. So we decided to mandate standardization for many key applications, including those for CRM and sales force effectiveness, HR, and e-purchasing, to mention a few.
data centers were operating at a small portion of their capacity. Clearly we had to do better than that.
The consolidation of these data centers will end up taking about three years. In 2011, we consolidated four of them: one in Spain, two in Paris, and one in Germany. We’re now in the process of consolidating an additional three or four. A few of the smallest of the existing 15 data centers will be excluded from this initiative – the economics of migration simply aren’t there for them. But by the end 2014, most countries in Europe, the Middle East, and Africa (the EMEA region) will be served from a dual-site data center in Paris (an active-active configuration of two data centers).
Be Prepared
Data-center consolidation is no small task, and I have some advice to anyone starting out on such an adven-ture: Do not underestimate the amount of comprehen-sive and detailed preparation required to succeed. Initially, we did not budget enough time for the prepara-tion phase and discovered when we were about to start the project that we were not ready. So we added six months of preparation time.
During the preparation stage, it’s crucial to make sure that the business side – its concerns, work patterns, processes, anything that could impact the success of migration and consolidation – is taken into account. This also includes risk assessment, identifying the best time for migration, and understanding the applications used by the business, how old they are, and what problems could arise with each one at the time of migra-tion. Ultimately, you need to have a business model that will help you understand the implications of the ongo-ing changes to your infrastructure and adjust your plans accordingly. Your IT assets at the beginning of the project will not be the same six or twelve months later. As a result of the European data-center-consolidation initiative, we believe we will see a reduction of 25 percent in operating costs in about two years. It’s more difficult to quantify the gains from standardization, but it is obvious that this will make it a lot easier for the business and a lot cheaper for IT to use and manage key applications.
Data-center consolidation is no small task, and I have some advice to anyone starting out on such an adventure: Do not underestimate the amount of comprehensive and detailed preparation required to succeed.
Getting Business to Think Like (Or, at Least, About) IT
One of the big challenges facing a CIO is getting top managers to pay attention to — no, be curious about — IT. If they aren’t curious (just as I wasn’t three years or four years ago, when I was running Lafarge’s roofing business) then it’s very difficult to launch big programs that will really change business performance. Having a CEO and execu-tive board who are curious about technology means that they will work with the CIO – not on all the details, of course, but on the CIO’s major programs. The more attention they pay to IT, the better they will understand how IT can help the overall business.
One of my challenges has been to explain how a social collaboration platform can change the way we work together and share knowledge in the company. Today our platform, called Lafarge Online Village, is used by close to 5,000 managers, engineers, commercial staff, and even by the entire executive committee. Several hundred thematic groups, such as cement kiln best practices, fuel mix optimization, and new concrete usages, are active, fostering intensive lateral teamwork. Explaining the potential benefits of new technologies like enter-prise social media is not easy, yet it will make a step change in many companies’ culture effectiveness.
Jean-Marc Chicco on. . .
What IT People Already Know about Business
We run a large program at Lafarge called Customer One, which aims to review and improve our customer relations. As part of this program, all IT employees spend a lot of time with customers, something they haven’t been used to doing. This experience helps IT people connect with the marketing and commercial teams and design better customer-reaching strategies. The business executives are often surprised how much the IT professionals know about our customers and what services they’d like.
How IT People Can Become Even More Business Savvy
A program like Customer One is great, but how do you institutionalize the IT function’s adoption of a more-sophisticated business perspective? One way is to create career bridges between IT and the rest of the business. We’re currently taking a couple of our most promising IT executives and moving them into business jobs. One of them, for example, has become a country general manager. When they return to IT, they’ll understand the business, like I did when I became CIO — not just strategy and operations, but the business executive’s mind-set and perspective. I’d like to see the successor of my successor be a young executive – say, 35 years old – who had already spent at least part of his career on the business side. I should add that it’s equally important for people on the business side to do a stint in IT so that they will be sophisticated consumers of IT services, with an awareness of technology’s potential to transform how business is done.
Consolidating Data Centers
But standardization, even when mandated from above, cannot really work well in a decentralized IT structure. This was one of the major reasons we embarked on a very large initiative to consolidate our European data centers. A limited number of data centers ensures that there will be a limited number of versions of a given application.
Lafarge was founded in France in 1833, and it expanded first to other countries in Europe. In the Americas and Asia, we have centralized IT operations. But in Europe, there’s a long history of decentralized operations, and we have never made a concerted effort to upgrade and update the way we run IT. As a result, Lafarge has been operating 15 data centers across Europe.
It’s difficult when you are spread out this way to have good governance and optimize costs. As of 2010, these
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Keep in mind, though, that any medal has two sides, and with the benefits come increased responsibility for the organization in operating such a concentrated hub.
For example, several countries in several time zones (from the UK to Russia), each with many diverse applications (from order entry to ticketing at the weighbridge, or from plant maintenance inspection to spare parts reordering), are all dependent on the data center and its surrounding network. In our EMEA data center, we now have more than 1,000 concurrent users. So service level agreements, disaster recovery plans, and business continuity scenarios have to be drasti-cally challenged and regularly tested.
The Trends Supporting Our Vision
I think that a confluence of business and IT trends supports what we are trying to do at Lafarge. From a technology perspective, the advent of virtualization and commodity servers helps a lot with any consolida-tion effort. From the business point of view, globaliza-tion drives centralization and uncovers opportunities for consolidation, standardization, and large-scale cost efficiencies. The structure of the business makes a big difference in how the business and IT relate to each other. When I talk to CIOs at other large international and industrial companies, I find that some still work in a fully decentralized business structure. Each business unit does what it wants – and doesn’t want to be told what to do. It’s practically impossi-ble in this kind of environment to standardize and consolidate.
At Lafarge, we made sure that the trade-offs between country ownership and group owner-ship were clear to everybody. Working with the business leaders, we got everybody to understand how the business units would continue to maintain important aspects of their autonomy while enjoying the benefits of standardization and consolidation.
In about three years, we hope to operate only three data centers: one for the Americas, one for Asia, and one for EMEA. The only way to make this vision a reality is to get IT thinking like the business.
�e Takeaways
• Even if standardization of key applications is mandated from above, it can’t work well in a
decentralized IT structure.
• In preparing to consolidate data centers, pay attention to the many issues on the business side that
could make or break the effort.
• With the benefits of consolidation comes the requirement of regularly testing your disaster
recovery plans and business continuity scenarios.
The Absolute City Centre development in Mississauga, Ontario, known colloquially as the "Marilyn Monroe Towers" for its sinuous curves, was constructed using Lafarge's highly fluid and flowable Agilia concrete.
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Keep in mind, though, that any medal has two sides, and with the benefits come increased responsibility for the organization in operating such a concentrated hub. So service level agreements, disaster recovery plans, and business continuity scenarios have to be drastically challenged and regularly tested.
David Harkness, CIO, Xcel Energy
Who Owns What?The Blurring Boundary Between
IT and OperationsAs the power industry is transformed, the evolving role of
IT foreshadows changes soon to a�ect other types of businesses.
In the face of changing energy needs, the utility industry is undergoing a massive transformation. Embedding information technology into a utility’s
operating equipment — transformers, capacitors, meters, etc. — is creating new opportunities for power companies to transmit electricity more e�ciently,
restore power more quickly, and help customers reduce costs by directing demand to o�-peak hours, among other things.
The so-called Smart Grid (see sidebar, page 22) is creating new challenges as well. Because it’s so new, it can be di�cult to demonstrate the bene�ts to
regulators and customers during the necessary period of up-front investment.
It’s also di�cult to sort through who inside the company owns which technology and data, and how all that should be governed. To bene�t the
most from this new way of operating, our business leaders must become more conversant with technology and data analytics, and our technologists need to
learn more about how the utility business runs — a challenge facing IT executives in many industries.
David [email protected]
PositionVice President and Chief Information Officer
CompanyXcel Energy
Works fromMinneapolis, Minnesota
Professional Background David Harkness joined Xcel Energy in 2009. As CIO, he drives innovation and transformation in the company by leveraging technology to create business value. He is also responsi-ble for all IT development, operations and governance, cybersecurity functions, and the company’s busi-ness continuity program. Harkness was previously at PNM Resources, where he was Vice President and CIO. He held a number of key leadership positions at PNM Resources, including Executive Director of Business Transformation and Executive Aide to the CEO. Harkness also held a variety of IT leadership roles at MCI, McLeodUSA, and Rockwell International.
EducationBS, University of Iowa
Personal PassionsIowa Hawkeye sports; boating; and basketball, football, and lacrosse with his two sons
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Xcel Energy is a pioneer in "smart grid" technology, having piloted the world's first adoption of smart grid tools in a real-world urban setting in Boulder, Colorado.
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CIOs also have to exert leadership beyond their own teams. My director at MCI used to tell me, “Anybody can get people to follow them if they work for them. A real leader is someone who can get the people who don’t work for them to follow them.” That has stuck with me.
Now intelligent devices in the network provide that information, and it’s very precise. We can restore power more quickly because we have better information about what equipment actually failed. We also prevent a lot of outages by using real-time monitoring to predict equip-ment failure and make repairs before an outage even occurs. This also helps us anticipate when equipment is about to reach the end of its life, which lets us do a better job with inventory planning and warehouse management. But demonstrating the value of these capabilities can be a challenge. All that consumers really see is the new meter on their houses or their new in-home displays.
The Disruptive Force of IT/OT Con-vergence
As IT and OT converge, utilities are wrestling with the question of who owns what. It’s pretty clear that an e-mail server is IT’s, but a capacitor bank on a pole has always belonged to distribution. Who owns it now? Is it an IT device? IT doesn’t necessarily understand all the analytics that are being extracted from it. That’s still got to be part of the operating group. Regardless of who owns the device, there has to be closer collaboration.
Whatever industry you’re in, as OT and IT converge you’ve got to break down the walls between IT and the operating groups. Currently IT is saying to the operating group, “You tell me what devices you’re going to have, tell me what data you’re going to pull off those devices, and I’ll make the data accessible in this manner so that you can monitor the performance of those particular assets.” But IT has to be pulled in early enough so that we can plan storage and connectivity requirements. It’s the same in the rest of the business. As we move to more mobility and to deeper customer engagement, IT and the customer care groups have to be closer together.
David Harkness on. . .
IT Insularity
IT groups can get lost in their own world – ‘Look at this awesome data center. I’m the king of this domain.’ But it’s good to remember what you’re there for. Don’t lose sight of what your company does for a living. Your IT organization needs to do things that help the company do that better. You also need to develop the relationships and transparency with the business that get you out of the order-taker mode. And not just the CIO — it’s something your directors and individual contributors need to be good at, too.
What is a “Smart Grid”?
A smart grid uses controls, computers, automation, and new technologies and equipment to monitor what’s happening throughout the power grid, diagnose and respond quickly to problems, and accommodate changing demand. It does all this through sensing capability along transmission lines; high-speed two-way communication between utilities and consumers; analytics to solve problems and maximize efficiency; and smart meters and in-home controls.
Managing Remotely, Proving Value
In 2008, Xcel Energy launched SmartGridCity, a technology pilot in Boulder, Colorado, to explore the use of fully integrated smart-grid tools. We’ve already learned a lot from this experiment about customer engagement, in-house devices, different rate options, and other things that you just can’t know without making them real. For example, not all customers want or need a device inside their homes to monitor energy use, while others will spend hours each week studying the data. We also learned a considerable amount about the security needs for such a connected grid. The results are going to have value throughout our service territory in eight states.
Integrating IT into the technology that runs the utility both allows us and requires us to do things differently. For example, we used to put a capacitor bank up on a pole and then not think much about it for 30 years. Now that capacitor bank is a computing device, and so we have to figure out how to load security patches, get remote access, and pull the analytics. These things are easy when you’re talking about a data center, where all the equipment is in the same location, but we’ve got these devices out on poles across our grid. So we need to put more thought into that infrastructure in order to keep the network secure.
We also need to have a different kind of conversation with customers and regulators. You can’t necessarily see the value of one of these new capacitor banks or the data that you can pull off of a transformer – things that help with outage management and power restoration. Prior to the smart grid, in order to determine the boundaries of an area affected by an outage, many utilities relied on customers calling in. It was like playing pin the tail on the donkey.
In recent years, about 15 percent of Xcel Energy's power supply has come
from wind, solar, hydro and biomass resources.
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Leading Through Influence
To be a good IT leader, you don’t have to know the bits and bytes; you have to know how to drive engagement. You must know how to give your employees what they need to connect with your company and department, align them with the mission, and get the information you need from them.
CIOs also have to exert leadership beyond their own teams. My director at MCI used to tell me, “Anybody can get people to follow them if they work for them. A real leader is someone who can get the people who don’t work for them to follow them.” That has stuck with me.
We try to talk about our projects as business projects. We really need that ownership and leadership by the business. But we can’t just say, “Hey, this is not my project; this is your project. I’m just the provider of the service.” You’ve got to get company leaders and teams outside IT to believe it and act on that ownership.
We start by making sure that all parts of the business have more information about what’s going on in IT. A lot of IT shops, especially in big corporations, operate like a black box — the rest of the organization doesn’t really know what’s going on. It’s important to share all the projects in your portfolio in order to give business leaders a perspective beyond their own projects. You don’t need to spend hours and hours on this. But you can give them a little bit of visibility and say, “I spend 20 percent of my budget on customer care applications, and I spend 15 percent on these types of applications, and these are the capabilities we’re delivering for other parts of the business.”
As you increase that transparency, it’s amazing how everybody starts to agree on priorities. You can probably get 75 percent to 80 percent alignment. I don’t know that we’re there yet, but that’s what we have to strive for.
How to Get Your IT Budget to 1 Percent of RevenueMeeting an audacious goal such as this requires intelligent outsourcing, aggressive migration to the cloud, and savvy management of change.
Andy Nallappan , CIO, Avago Technologies
Andy [email protected]
PositionVice President, Chief Information Officer
CompanyAvago Technologies
Works fromSan Jose, California
Professional Background Andy Nallappan has served as Vice President and CIO of Avago’s Global Information Services Division since 2012. He is responsible for the continuous improvement of Avago’s business processes through cost-effective IT. In his long career with Hewlett-Packard, Agilent, and Avago, he has held a variety of positions overseeing enterprise applications, enterprise infrastructure, and RandD computing. He has been a pioneer in deploying cloud solutions and helped transform Avago’s IT function into an industry leader.
EducationMS, University of Texas at El PasoBachelor of Engineering, University of Madras
Personal PassionsHiking in high-altitude area such as Mount Kilimanjaro, MountWhitney, and Machu Picchu; running
�e Takeaways
• As IT becomes embedded in all corners of the business, business leaders need to become conversant with
technology and data analytics. Technologists, for their part, need to learn how the business runs.
• As IT and operations converge, many wonder who owns what. But what’s really important is closer collaboration and
involving IT in ways to improve the customer experience.
• Providing even a little bit of transparency about IT budgets and projects can help align the entire organization around IT — and business —
priorities.
Prior to the smart grid, in order to determine the boundaries of an area affected by an outage, many utilities relied on customers calling in. It was like playing pin the tail on the donkey. Now intelligent devices in the network provide that information, and it’s very precise. We can restore power more quickly because we have better information about what equipment actually failed.
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Avago Technologies semiconductor products are used in wireless
communications, wired infrastructure, industrial and automotive electronics, and
consumer and computing peripherals.
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As a semiconductor company, Avago has thin margins, and the market changes from one year to the next. Our IT cost structure has to be flexible enough to go up and down with revenue, but with traditional IT, your costs don’t flex.
We were fortunate to have the opportunity to build IT from the ground up when Avago was spun out from Agilent, in 2005. First we outsourced the whole infrastructure and all of our applications. That gave us flexibility and scalability. But our CEO set some extremely tough goals for lowering the IT budget. That’s when we began to get serious about moving applications to the cloud.
These two moves have allowed us to drastically reduce our spending. In fact, with support from our CEO and CFO, we changed the whole cost structure. Today I’m proud to say that Avago’s IT budget is 1.34 percent of revenue – no one in our industry has that. It wasn’t hard to go from 4.5 percent to 3 or 2.5. But from 2.5 to 1.25 – that is hard.
And now I’ve set a goal that some might call crazy: bring IT costs down to 1 percent of revenue in the next two years. I think we can do it. We will have to look at our fixed costs — which mostly come from ERP software giants, server and storage — and make them variable costs through SaaS and other cloud offerings. We are considering cloud for server and storage, at least for development, testing, and disaster recovery. We will also continue to look at more cloud applications as they become relevant to Avago.
Making Multi-Vendor Outsourcing Work
Our first big step in reducing costs was outsourcing our noncore IT functions. We didn’t want to have too many vendors because we wanted end-to-end service level agreements (SLAs). But we used to have just one vendor, and that had its drawbacks, too. We lost our power to negotiate and influence, and the flexibility was not there. So we changed our model quickly. Now we have three strategic outsourcers: Wipro for applications, HCL for infrastructure, and Orange for our voice and data networking. Using a few vendors really works well.
The biggest challenge with multi-vendor outsourcing is avoiding finger-pointing when there are problems. So from the beginning we established a one-team concept that our vendors had to buy in to and use as the frame-work for working together. Each vendor signs an Opera-tional Level Agreement, or OLA, that runs through the whole process and spells out how the vendors engage
with each other and resolve conflict. Everybody who works with Avago has to pass a test that confirms that they understand this.
We have monthly reviews and give recognitions and awards to any vendor team that helps another vendor resolve an issue. That sends a message that when you work for Avago, it doesn’t matter what badge you wear; you’re an Avago employee, and we’re all one team.
It took us about a year and a half to get this model work-ing well. Since then, there have been no issues. I haven’t heard anybody complain about our vendors in the past three years.
Of course, outsourcing is not cheap. But you end up spending more if you keep IT in-house. That’s because people on the business side think the service is free, so they ask for features and functions they don’t really need. They say, “I don’t like the color. I don’t like the comma here. I don’t like this or that.” This is human nature.
Not only does business ask for more — we give it to them. Our people are not able to push back because someone always comes up with a business case. They keep on tweaking. The system becomes more custom-ized, more complicated. It has a higher maintenance cost.
Andy Nallappan on. . .
Working with Cloud Vendors
Avago’s cloud-based solutions include Google for mail, contacts, calendar, sites, and IM; Workday for HR and employee expenses; Taleo for recruitment; SumTotal for learning management; Box for document storage. We just signed on with Okta for single sign-on identity management. We’re also deploying a service called Kyriba for treasury management. And we use Enlighta for ITIL management in the cloud. It’s really important to do the right due diligence when working with cloud vendors. We are evaluating DocuSign for contract management and e-signatures. There are a lot of mom-and-pop companies out there. The risk is not only around data privacy and security, but also the vendors’ financial stability. So we scrutinize them. We talk to the architect and the security team. And we look at who’s investing in them, what type of support they have.
What to Outsource
“IT leaders should find outside solutions for all the operational, non-critical, non-value-adding parts of IT. There are companies where IT is core, but in our industry, it’s the RandD, marketing, and sales that are core. I want to move up in the value chain and enable those teams to bring in more revenue and get higher margins. The revenue is important, but the margin is more important. When you liberate your IT team to move up in the value chain, you get closer to the core of your company.”
It’s really important to do the right due diligence when working with cloud vendors... The risk is not only around data privacy and security, but also the vendors’ financial stability. So we scrutinize them, talk to the architect and the security team. And we look at who’s investing in them, what type of support they have.
Key Technologies at Avago
Google: Mail, contacts, calendar, sites, and IM
Workday: HR and employee expenses
Taleo: Recruitment
SumTotal: Learning management
Box: Document storage
Okta: Single sign-on identity management
Kyriba: Treasury management
Enlighta: ITIL management in the cloud
DocuSign: Contract management and e-signatures
Avago is a pioneer in optical sensing for mouse technology and holds more than 5,000 patents.
When you’re paying an outside vendor, you think twice. You make sure that what you’re asking for is something that you really need. The business people have to justify what they’re asking for. Moreover, you don’t have the whole governance nightmare of who gets priority. If I’m using my own people, projects are in a queue and have to be prioritized by the governance council – which business gets their project done first, which one gets it second. With outsourcing there’s no queue. As long as a business leader brings money to the table, I’ll get the people. Scalability is not an issue. I go to Wipro and HCL and Orange, and they love to do more work.
I have unlimited capability now, but people aren’t asking for everything they want. They only ask for what is necessary.
Cutting the Cord with Microsoft
We’ve also realized significant cost savings by moving applications to the cloud. In perhaps our boldest move, in 2009, we moved employees’ e-mail, calendar, and contact applications to the cloud, making a complete switch from Microsoft Exchange to Google. It was a big deal: We were the first $1 billion company to go live using Google’s personal organizer tools instead of Microsoft Outlook. We did it for two reasons: cost and productivity. Cost-wise, the savings are black and white — about $1.5 million a year for a product that suits us much better. With Exchange, I was giving people only 100 megs of storage for their inboxes. Then I increased it to 200. I increased it to 400. Nothing was enough. I was not able to catch up with the demand. With every increase, we needed to add more disc space and backup-and-restore and high-availability. Also, people
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were saving their e-mail onto their local drives. When the hard drive fails, it becomes a critical issue. It was a nightmare. And it was a productivity killer because everyone in the company had to clean out their inboxes at least once a week. They couldn’t get e-mail on their personal phones or home computers, which was a problem because we are a global company, and the work schedule is 24/7. We had multiple instances of Exchange Server 2003, all locally hosted in each region. Providing web access to e-mail through Exchange at the time would have cost much more, with higher risks. When we went to Google, it liberated our employees. They can now access e-mail through their smartphones wherever they are, more securely, and at lower cost.
Making the switch wasn’t hard from a technology standpoint, but the change management was really
challenging. We spent about three months making sure everyone in IT understood it well and was
prepared to manage it. We made sure that the CEO and the CFO supported it. There were some concerns from legal. And so we had a lot of discussions with the Google architect and the Google security team. We did a lot of preparation and planning.
Initially we were only focusing on e-mail, calendar, contact, and IM. We knew that Microsoft Office was much better than
Google Docs, so we left that alone. But a lot of people – even the COO – are using Google
Docs for collaboration in staff meetings and project meetings. They can see the meeting
minutes as people type them. They’re using the spreadsheet to work on numbers together. We didn't
anticipate this because we knew Google Docs doesn’t have all the bells and whistles that Microsoft Office has. So that was a surprise.
When we first made the e-mail switch and proved that it was more effective and improved productivity and brought costs down, we got a lot more support. The productivity has increased multiple times – especially now that everyone has smartphones. Now nobody would let me take Google mail out of our model.
The Buy-In ChallengeServing as CIO of the State of New Hampshire means selling your ideas to a particularly wary group of users, which generates lessons on buy-in relevant to CIOs in almost any setting.
Bill Rogers, former CIO, State of New Hampshire
Today I’m proud to say that Avago’s IT budget is 1.34 percent of revenue – no one in our industry has that. It wasn’t hard to go from 4.5 percent to 3 or 2.5. But from 2.5 to 1.25 – that is hard.
Bill [email protected]
PositionFormer Chief Information Officer and Commissioner
OrganizationState of New Hampshire
Works fromConcord, New Hampshire
Professional Background As the CIO and Commissioner of New Hampshire, Rogers was responsible for managing and coordinating the state’s technology resources and developing and implementing strategies to enhance services and create statewide efficien-cies. During his tenure, Harvard Univer-sity honored the New Hampshire state government with the Bright Idea Award for the implementation of the country’s first statewide Geospatial Information System (GIS). Prior to his role in govern-ment, Rogers spent more than three decades in global companies including Goss International, AlixPartners, Johnson Controls, Deloitte Consulting, and Honeywell. He held corporate senior executive positions and has leadership experience in information technology, finance, operations, strategic planning, business development, and consulting.
EducationMS, Central Michigan UniversityBS, University of Maryland
Personal PassionsFamily and outdoor activities with his two grown sons and two dogs, and cooking. “I don’t bake because you have to follow a process. When it says a teaspoon of this you can’t put in a tablespoon.”
�e Takeaways
• Outsourcing isn’t cheap, but you spend more keeping noncore IT functions in-house. People on the business side
ask for features they don’t need. And IT says yes.
• To make multi-vendor outsourcing work, establish rules for how the vendors must work with one another and resolve
differences.
• In terms of cost and productivity, moving applications such as e-mail and calendar to the cloud is a no-brainer. But beware the change management challenge: give people
lots of time to prepare for the switch.
CONCORD, NEW HAMPSHIRE
Straight Talking
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For the past 25 years, as I’ve led technology and business organizations, I’ve always been a business person first and a technologist second. Part of this has come naturally from my career path – I’ve worked in engineering, procurement, operations, quality control, sales and marketing, and IT. I’ve worked for for-profit companies, a nonprofit, a private equity firm, a consult-ing firm, and state government. And I’ve learned from all these experiences that to be a successful CIO in any realm, you have to understand how and why the business operates as it does and what the organization and its people are trying to accomplish. It’s a lot easier to “sell” your ideas and innovation if you understand the problems that people are trying to solve. The CIO role is also about selling new ideas, so it’s important to understand your organization’s appetite for change and innovation, and what motivates different groups of stakeholders.
From Global Restructuring to Public Service
In 2005 I was recruited by a Wall Street private equity firm that was merging two leading manufacturers of printing machinery: Goss International and Heidelberg AG. Goss makes the printing presses that produce the Wall Street Journal, the New York Times, the Boston Globe, Time Warner magazines, and many other publi-cations. The Goss press that we put in for the New York Times on Long Island cost millions of dollars and was four stories high and the length of a football field. These are behemoths of machinery that have to be laser accurate.
Goss International was highly decentralized. Each plant had its own systems, its own part numbers – everything was discrete. My charge was to create a single global platform that would encompass the 15 or so manufac-turing and engineering sites the two companies had in Europe, North America, and Asia. The enterprise trans-formation was supported by the implementation of SAP. It allowed us to bring everything together, creating the capability to get an order in from anywhere around the globe, source that to any one of our factories or suppli-ers, produce the press in sections, and then ship those to the customer to be installed on-site. We not only reduced our costs but also dramatically cut the time to deliver, which increased customer satisfaction. The combined company was much more globally focused
and profitable when we sold it to Shanghai Electric, in China. Being a CIO in the public sector has been a totally different sort of experience. For starters, decisions aren’t based on profit or ROI but on statute or politics or other things. Plus, everything takes so much longer because of the multiple levels of approval. New Hamp-shire has 400 representatives, 24 senators, and an executive council that works side by side with the governor and is basically the CIO’s board of directors. The budget is determined by the legislature and is set for two years. Ninety-eight percent of state government employees are unionized. What the CIO can do on his own is very, very limited.
The Art of Getting Buy-In
Getting things done in this kind of environment takes a lot of salesmanship and socializing of your ideas – something familiar, in varying degrees, to any CIO. I learned a lot about how to do this through my experi-ence in the nonprofit world. For almost seven years I served as Chairman of the Board for the Red Cross here in New Hampshire. During that time, I worked to consolidate the number of individual chapters, modern-ize IT, and establish as many best practices as possible that allowed us to fulfill our mission, which was service delivery.
We had a workforce of 1,500 volunteers and only around 20 paid staffers. Anyone at any time could say they didn’t want to do this anymore. Getting things done required a lot of cajoling. We needed to sell the vision and the strategy and then work with people. That helped prepare me for the government role.
My takeaway from those two roles, both of which had acute buy-in challenges, is that if you want people to buy in to your ideas, first you have to listen a lot. You have to find out what their goals and objectives are and what problems they have, and then come back with proposed solutions.
For example, I worked with the New Hampshire state police to develop an e-ticketing system. Every state has a significant problem with police officers on the shoul-der of the road or in the breakdown lane when they pull someone over to write a ticket. I listened to that problem and went on some ride-alongs. When you are sitting there and a tractor trailer goes by, a foot or two away, you feel the car rock back and forth. That’s a problem. It was taking 10 to 40 minutes for a police officer to issue a citation. When the officer and the citizen are on the side of the road, it’s a very dangerous situation. We came up with a laptop-based system with a thermal printer and scanner in the police car. The officer gets out, gets the driver’s license and registration, brings it back, scans it, and right away on the screen it says whether this person is wanted or is okay. He or she clicks what the violation was and hits a button, and the thermal printer spits out a ticket. Then the officer walks it back to the citizen and says, “Have a good day.”
That new approach reduced the time it takes to issue a citation to three to five minutes, which has greatly increased safety. And because we also instituted an online ticket paying system, most people are now paying their tickets online. This has improved cash flow, because instead of taking 90 days to pay a ticket, they pay it in a day or two.
Mobile Opportunities and Chal-lenges
Being the CIO of New Hampshire didn’t only school me in the art of buy-in. It also immersed me in the opportunities and challenges of mobile computing. With over 1,000 mobile state workers, the opportunities are huge. A lot of workers still use paper forms. Proba-tion and parole officers keep files and maps and other things in a metal storage clipboard – that is what they use to do their jobs. Inspectors for everything from boilers to elevators to restaurants travel the state and fill out a piece of paper and then take that back to an office and type it into their computers. Going to direct data entry from the field on a mobile device saves time and increases accuracy, whether the state employee is a
Bill Rogers on. . .
CIO Success Factors
Successful CIOs put business before technology. They focus on their organizations’ goals and operations. Before proposing solutions, they seek to understand what people are trying to accomplish and what their reality is like. They calibrate their proposals to the organization’s appetite for innovation and change. Getting things done requires earning the buy-in of various stakeholders, so good CIOs are also effective listeners, salespeople, and influencers.
Learning from Peers
No CIO should try to go it alone. None of us is as smart as all of us are together. That’s why I created the New England State CIO Collaboratorium, which brings the region’s six state CIOs together quarterly to work on common problems, share ideas, and get to know each other. It turns out there is a lot you can learn from someone in a similar situation.
Getting things done in this kind of environment takes a lot of salesmanship and socializing of your ideas – something familiar, in varying degrees, to any CIO.
It’s a lot easier to “sell” your ideas and innovation if you understand the problems that people are trying to solve. The CIO role is also about selling new ideas, so it’s important to understand your organization’s appetite for change and innovation, and what motivates different groups of stakeholders.
child abuse investigator or someone on a mountain search-and-rescue team.Probably 20 percent of the state’s mobile workers already have some kind of mobile data device, and pilots are under way that will take that to 50 percent in the next six months. The challenges are around connec-tivity. About one-third of the northern part of our state doesn’t have good cell reception. So in some extraordi-nary cases, you actually need to bring in mobile cell towers to the area. Now the state is piloting a device from a company called Global Relief Technologies that lets you input data when you’re out of range and holds the data until you get a cell signal or can connect through satellite.
The technology exists today to do all sorts of things better. The hardest part – and this is true for private enterprise as well as the public sector – is getting to a clear and commonly agreed upon understanding of the problems the organization is trying to solve and then finding the simplest, most effective way to achieve that. That’s the CIO’s challenge.
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The technology exists today to do all sorts of things better. The hardest part – and this is true for private enterprise as well as the public sector – is getting to a clear and commonly agreed upon understanding of the problems the organization is trying to solve and then finding the simplest, most effective way to achieve that. That’s the CIO’s challenge.
“OPEN SOURCE FIRST”
Cost is a huge consideration in a state that doesn’t have an income tax or a broad-based sales tax, and that was one of the drivers behind New Hampshire’s “open source first” law. This law requires that state agencies consider the use of open
source before buying new commercial off-the-shelf, or COTS, software. This doesn’t mean that we are going to replace our ERP system or our Oracle database or our GIS systems. It means that when new requirements come up, we are going to
consider open source first. This may not save us a lot today, but we believe it will over time.
The law also requires the open-data format. That doesn’t mean that we can’t use a COTS product, but we do have to save the material or make it available to citizens as an open data format. There are states that have open source policies – Vermont has a policy. But no one else has a law requiring it. What this really was meant to do was to memorialize the
decision so that 20 years from now, unless the law is changed, New Hampshire will still be required to consider open source.
New Hampshire is the first American state to mandate thatstate agencies consider the use of open-source software.
The UnexpectedDriver of Digital Transformation
Ian Cohen [email protected]
PositionGroup Chief Information Officer
CompanyJardine Lloyd Thompson Group
Works fromLondon
Professional Background As Group CIO, Ian Cohen is responsible for JLT’s global technology strategy as well as the development and delivery of all IT services and systems used within the company. He also has accountability for procurement and purchasing in the UK. Most recently, he has been the driving force behind JLT’s global digital transformation program, focused primarily on enabling corporate strategy through the adoption of social-enterprise tools and techniques. Before his role at JLT, he spent several years as CIO at Associated Newspapers and was group IT Director for the Financial Times after holding the position of CTO for FT.com in 2001. Cohen has a strong financial services background, having held a variety of leadership roles at Lloyds TSB in the 1990s.
Personal PassionsSocial media, his family (he’s married with three daughters), music (he was a session musician in a previous life), and Chelsea FC (a team he has followed since 1967)
Technology contributes to success but is much less important than how people use IT to achieve business outcomes.
Ian Cohen , Group CIO, Jardine Lloyd �ompson
Straight Talking
Jardine Lloyd Thompson provides insurance brokerage and risk management services to sectors ranging from utilities to cargo to construction to financial services.
�e Takeaways
• To sell new ideas, especially in the public sector, the CIO must have a clear sense of the
organization’s appetite for change and innovation.
• Gaining buy-in starts with a lot of listening. Find out what people’s goals and problems are before you
propose any new ideas.
• The opportunities to do things more efficiently through mobile technology are huge. The hard
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Business transformations today are being driven by the convergence of digital and traditional operations. But most companies don’t need more technology to be successful; more often than not, they already have all the tech they need. Like any journey, you need to under-stand what and where you are, be clear about what and where you want to be, and then figure out how to get there.
At JLT – a leading global insurance, reinsurance, and employee benefits business – the heart of our strategy is a commitment to be client-first and knowledge-led, bringing the very best of JLT to every client engage-ment and relationship. The challenge is how to make this real. If you want to be something, you have to do something to get there.
To be client-first, we need to know our clients better than anyone else does. We need to get closer to them so that we truly understand their needs. It’s not enough to just go see clients once a year at renewal time. We must think about them differently and look to build relation-ships that add genuine value to their business.
To be knowledge-led, we need to harness the expertise that resides within our global specialties, to empower our colleagues to better serve their clients. However, JLT is a not a big company – we have only some 7,500 employees worldwide – and so to compete with the big guns we also need to be better connected and highly collaborative.
It was these ideas and discussions that drove the creation of our Insight program. The original questions had focused on what technology we would need. But this quickly changed to how we could use the technolo-gies we already had more effectively. We were already using Salesforce, had taken our early steps into the world of in-memory analytics with QlikView, and were an existing Microsoft shop. We already had all the tools. The challenge in becoming a different kind of JLT was to change people’s behavior around the use of and outcomes from technology. Most business transforma-tion is about changing behavior and culture – technol-ogy is just the enabler.
Becoming a Social Enterprise
When describing our client-first, knowledge-led, connected, and collaborative journey, we sometimes refer to it as “JLT becoming a social enterprise,” because the underlying behavior we are creating
through this program is about being more social. Such a journey requires focus. You can’t boil the ocean, so we decided to focus on four key themes: Understanding our clients. If we’re going to know more about our clients and how to meet and consistently exceed their expectations, then we have to understand their business, markets, and challenges better than the competition. And that’s not just a past-tense view – what business they did with us – it also has to be a current-tense and future-tense view: what they are doing with us now and what they might do in the future. Our technology challenge here was to make better use of Salesforce and all its capabilities. It’s a great solution, but very few companies use it to its full potential. We realized there was a lot more we could do with our implementation through greater training and awareness so that our colleagues understood its capabilities and how to use them more effectively. Again, the challenge was not just about the technology but about changing people’s perception of the solution and demonstrating its value to their daily business lives. Once clients see the data and the opportunities to deepen their relation-ships, they are hooked.
Interpreting business information. We chose the word interpret rather than analyze intentionally. There’s a real gap between the people who analyze the minutiae of data until they’re blue in the face and the people who have to base their actions on the information. In many cases the Business Intelligence industry has become a self-fulfilling black art, often creating complex solutions that generate more questions than there were to start with. That is very different from interpreting data so that executives, employees, or clients can act on it quickly and efficiently. Very often, actionable infor-mation is just a small subset of the whole. You need to analyze the rest, but if you can identify and interpret that subset, you can actually make some decisions. Like many in our industry, we have numerous systems around the globe, all at varying levels of maturity, and traditional BI or data warehouse techniques would be an
expensive route to find the data we need. The new class of in-memory analytics solutions – applications like QlikView that store queries and data in a server’s RAM – allow us to see the vital trends in our data right from our source systems and get that “insight” out to our colleagues and clients in a fraction of the time and at a fraction of the cost. Thinking like a publisher. The way that publishers connect with readers has changed radically in recent years. Traditional publishing was a “tell” medium, but that changed with the rise of citizen journalism and the growth in social media in the mid- to late-2000s. Collaborate, share, engage became the new verbs for information and knowledge. Today, the challenge is for businesses to start thinking like modern-day publishers both inside the enterprise and with customers and clients. Anyone can fulfill a transaction, handle a claim, or whatever — that’s just the cost of entry — but if you can offer genuine business insight, then your client is more likely to stay loyal. We have recognized experts across all our business sectors, yet we were relying on traditional print and web publishing techniques to engage with our clients, partners, and colleagues. Our current focus is on finding the best ways to use our content to deepen client relationships as well as inform-ing and engaging our colleagues. And that hasn’t meant huge investment in publishing technologies — we simply make better use of our existing Microsoft suite of products — but it has required us to think differently about content, to think like a publisher. Collaborate, collaborate, collaborate. So, if we just got better at capturing information about our clients and partners to better understand their needs, found new ways to interpret that information alongside the data that already exists in our source systems, and then published that in a personalized and targeted way along-side timely and relevant content, we’d already have
Ian Cohen on. . .
“Big Data” Marketing Hype
There aren’t that many businesses that need these new big data capabilities to drive value. In most cases, companies have more data than they know what to do with and would be better served making the most of what they already have rather than looking for yet more.
Technology as a Transformative Force
We’re trying to change the behavior of people around the use of and outcomes from technology. Most business transformation is about changing behavior and culture — technology is just the enabler.
Business transformations today are being driven by the convergence of digital and traditional operations. But most companies don't need more technology to be successful. . . [Y]ou need to understand what and where you are, be clear about what and where you want to be, and then figure out how to get there.
In many cases, the Business Intellegence industry . . . [creates] complex solutions that generate more questions than there were to start with.
something special. That would be enough for any of our operating companies, divisions, or regions alone, but what if we brought it all together? What if collaboration was at the center of all this? Then the value would be multiplied many times over. That is the very essence of social enterprise — the “special sauce” that occurs when clients, colleagues, and partners work together to make the whole greater than the sum of its parts, when that one nugget of information shared can make the difference in closing a deal or delighting a customer. Collaboration doesn’t just happen, though. It’s not like throwing a switch. While we do use specific technolo-gies like Salesforce Chatter and Microsoft Lync to enable our “global conversations,” the key has been to champion collaboration as a change activity in itself.
Finding the Value in Big Data
It’s really disappointing that so much of the “big data” debate is just marketing hype (much the same as where cloud computing was back in 2009 and 2010). I’ve actually grown to hate the term. For me, there is no “big data”; there’s just data — always was and always will be. I try to think in simple terms, and there are basically three categories when it comes to data:
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• Stuff that you have, and you know where it is, but you want to know more about it.
• Stuff you think you have or believe you should have, but you’re not quite sure where it is.
• Stuff you know you don’t have and may not even have considered but might find if you only knew where to look and looked long and hard enough.
The first two are easy with today’s search and data management tools. If you organize your data more effectively, you’ll find more stuff. When all I owned was a filing cabinet, and the document I wanted was buried in a sea of unfiled papers just thrown into the cabinet, did I have a big data problem? I certainly had a retrieval problem that was quickly sorted by indexing and structure. And as storage requirements have grown, so have the “retrieval” technologies, with increasingly sophisticated structured and unstructured search techniques.
The last category is interesting, however: this idea that if you analyze huge amounts of data you would find things out that you wouldn’t have otherwise known. I’m not saying that doesn’t happen, because it clearly does. In the UK, you only have to look at the way the police are analyzing crime data or globally the way the aerospace industry correlates aircraft data to see that. And certainly, there are a growing number of data sources where information about your brand, products, or services could reside, and new tools are required to “mine” data from these diverse sources. However, I would argue that this is just an extension of looking for things you already know about.
A lot of companies have leapt into social media conversations about their brand only to make the situation worse.
That is the very essence of social enterprise — the “special sauce” that occurs when clients, colleagues, and partners work together to make the whole greater than the sum of its parts, when that one nugget of information shared can make the difference in closing a deal or delighting a customer.
Key Technologies at JLT
Salesforce.com: CRM
Qlickview: In-memory analytics solution
Microsoft: Publishing Technologies
Salesforce Chatter, Microsoft Lync: Collaboration
�e Takeaways
• Business transformation doesn’t necessarily require new technology; sometimes it requires figuring out how
to use what you already have more effectively.
• Traditional BI techniques are expensive. The new in-memory analytics solutions can be a faster and less
expensive way to find the valuable nugget of information in a sea of data.
• The publishing industry has moved from “telling” to “engaging” and “sharing.” Other businesses
must make that same shift to deepen relationships with clients.
Commercial aviation insurance is one of JLT’s many lines of business.
The thing is, there aren’t that many businesses that need the level of serendipity often used to hype up “big data” in order to drive value. Indeed, it would be good if some organizations came to grips with the data they already have and know they have. The arguments people often make are around social media — that if they could mine Facebook and Twitter and pull all that conversational information together with buying patterns, they would get a better view of the customer. Maybe they would. But the real skill is working out what to do at that point — when you actually hear that nugget of information. That’s a people skill. That’s a business skill. “Big data systems” aren’t going to help you with that. A lot of companies have leapt into social media conversations about their brand only to make the situation worse. And frankly, is this serendipitous search even necessary? One of the big parts of social media is the conversation, and consumers are more open than ever about their views on your brand, products, goods, or services. Perhaps we should focus more on “big listening” and smart responding.
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When I became the CIO of Land O’Lakes, in 2010, with a mandate to shift from a holding company model to a centralized one, everything seemed to be in place for me to succeed. The CEO was driving the change. The senior executive team was on board. The technology had been chosen.
But never underestimate the challenges of major organi-zational change. I knew from experience how difficult it can be. As the CIO of Ingersoll Rand, I oversaw the shift from a highly decentralized model to a federated one, implementing an international shared-services organization. We were done by the time I left the company — eight years after we’d started.
The move to centralize IT and business processes at Land O’Lakes began as a revolution not just in technol-ogy but in mind-set — in IT as well as in marketing and sales, supply chain, and operations. The goal is to get as much efficiency as possible across our three lines of business: dairy, animal feed, and seed and crop protec-tion.
Each is a huge business in its own right. We produce a million pounds of butter a day during the holiday season and four million tons of feed a year. But there is reciprocity in our customer base. A dairy farmer we buy milk from may buy seed and crop protection from us as well as feed. There’s an incredible opportunity to harness those synergies.
The Benefits of an IT Partnership
We run a fairly lean technology organization, yet we have a complex systems footprint that’s growing significantly each year: more and more mobile apps, more supply-chain technology, new financial systems, a new Oracle footprint. With those come increased support requirements.
Like any partnership, it takes two to make the relationship work. It doesn’t matter how many times you’ve done it or how ironclad your contract is — it takes work. It takes time to figure out how best to work together and get the relationship operating at maximum efficiency.
Barry Libenson, CIO, Land O’Lakes
Butter and cheese are among the well-known consumer products of Land O'Lakes' dairy foods business.
Using IT to Achieve Business Integration A robust IT function that intelligently outsources and invests in new technology can lead the transformation to a centralized business model.
Barry [email protected]
PositionSenior Vice President and Chief Information Officer
CompanyLand O’Lakes
Works fromArden Hills, Minnesota
Professional Background Barry Libenson joined Land O’Lakes in January 2010. In addition to his role as CIO, he is a member of the company’s senior strategy team. Prior to joining Land O’Lakes, Libenson was a Vice President and the CIO at Ingersoll Rand, leading the IT staff through strategy development, signifi-cant improvements in company-wide efficiency and effectiveness, the IT integration of a major acquisition, and the successful implementation of ERP. During the 1980s, Libenson joined Oracle as its 90th employee.
EducationMBA, Duke University’s Fuqua School of Business BA, Colgate University
Personal PassionsPhysical fitness and creating the perfect New York-style pizza dough
We made a conscious decision that our internal resources — people with a high degree of subject matter expertise — would not spend a lot of time on support. Instead, we launched a large-scale procurement project to find the best partner to support our legacy systems as well as our new systems after they go live. That search led us to HCL.
Everyone still associates the use of an offshore partner with reduced head count. But that is not the case here. We are growing and need all our internal resources to focus on new projects.
Like any partnership, it takes two to make the relation-ship work. It doesn’t matter how many times you’ve done it or how ironclad your contract is — it takes work. It takes time to figure out how best to work together and get the relationship operating at maximum efficiency. Today, we’re expanding our partnership in ways we never would have expected. The business units work directly with HCL. For example, our farm seed business has hired HCL to monitor electronic data interchange transactions. Being able to outsource tasks such as these to a trusted partner — HCL, which initially was supporting just a handful of applications but now supports more than 200 — frees up my resources to work on new projects that transform the business.
We made a conscious decision that our internal resources — people with a high degree of subject matter expertise — would not spend a lot of time on support. Instead, we launched a large-scale procurement project to find the best partner to support our legacy systems as well as our new systems after they go live. That search led us to HCL.
Everyone still associates the use of an offshore partner with reduced head count. But that is not the case here. We are growing and need all our internal resources to focus on new projects.
Like any partnership, it takes two to make the relation-ship work. It doesn’t matter how many times you’ve done it or how ironclad your contract is — it takes work. It takes time to figure out how best to work together and get the relationship operating at maximum efficiency. Today, we’re expanding our partnership in ways we never would have expected. The business units work directly with HCL. For example, our farm seed business has hired HCL to monitor electronic data interchange transactions. Being able to outsource tasks such as these to a trusted partner — HCL, which initially was supporting just a handful of applications but now supports more than 200 — frees up my resources to work on new projects that transform the business.
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Barry Libenson on. . .
The CIO’s Role
It’s table stakes for a good CIO to be a part of the business, looking for ways to work with the leadership team to meet long-term objectives by leveraging technology as efficiently as possible.
Vendors Versus Partners
Every company I work with is either a vendor or a partner. A vendor wants to sell me something. A partner has a genuine interest in my organization’s success. The key is to figure out who is who and treat them accordingly.
Global Outsourcing
It’s a business imperative to find cost-effective ways to work globally. Offshore outsourcing will expand.
A Change in Priorities
Like IT departments at most companies, in recent years we had paid a lot of attention to managing costs. But we realized that in order to lead our industry we also had to actively embrace and invest in new technology.
Our CEO, who came up through the dairy business, is very open-minded. My job is to help him and the rest of the senior management team visualize how technology could be a business enabler, whether it’s 4G out in the field or business intelligence to drive insight and operate more efficiently. And it’s been the CEO’s job to drive those changes from the top. For example, using technology to change the way people do their jobs asks a lot of them. Change management training as we rolled out the new technology and applications helped ease the transition. But having the CEO support this significant shift in IT tools, approach, and business process was critical.
As a result, we were the first customer to go live, in October 2011, with Oracle Fusion Procurement to run our source-to-pay process. We weren’t even supposed to be the first to launch this, but we had a great team
working aggressively on the project, so we leapfrogged everyone else. We rolled out a suite of Oracle solutions in our farm seed business — JD Edwards for financials and manufacturing, Deman-tra for demand planning, and Oracle Transportation Management for logistics — on time and on budget in 2011. We implemented Oracle Business Intelli-gence Enterprise Edition across the company.
We have also moved early into mobility. We rolled out a suite of mobile apps to help businesses, including one that 400 of our sales professionals can access on their tablets in the middle of a corn field to show a grower what he could have planted to maximize his yield. That directly impacts our bottom line, most notably in our farm seed business, which has grown significantly over the past year.
Three years ago, we had nothing in the cloud. Now we’re running Fusion, our service desk, Oracle CRM, and SuccessFactors (SAP’s HR performance management software) in the cloud, and we plan to move more applications to the hosted model so we can focus internal resources on core competencies.
We partnered with our marketing organization to develop a social media strategy to leverage Facebook, YouTube, and Twitter and embrace them as properly branded customer-facing systems.
To do all this, we made organizational changes — aligning the IT leadership team with lines of business, introducing better project management discipline, and bringing in new thought leaders. But the IT rank and file is largely unchanged. They are tremendously loyal and have such deep subject matter expertise that we couldn’t afford to lose them.
Even with all this change, the reliability of our systems, thanks to partners like HCL, has gone up dramatically. I have a fundamental philosophy about dealing with third parties. Every company I work with is either a vendor or a partner. The key is to figure out who is who and treat them accordingly.
A vendor just wants to sell me something; they don’t care about our success. So I want to pay the lowest price possible for their product or service. A partner has a genuine interest in my organization’s success, so it’s important that we support them, as well. As the success of IT depends increasingly on strong partnerships, managing those relationships is more important than ever.
Even with all this change, the reliability of our systems, thanks to partners like HCL, has gone up dramatically. I have a fundamental philosophy about dealing with third parties. Every company I work with is either a vendor or a partner. The key is to figure out who is who and treat them accordingly.
�e Takeaways
• An IT partnership frees up your internal resources to work on projects that can transform the business.
• It’s crucial to find a balance between managing costs and investing in new technology.
• The CIO helps senior managers visualize how technology enables innovation and efficiency. The
CEO drives those changes from the top.
Land O’Lakes’ WinField business is a leading distributor of agricultural seed and crop
protection products. The company’s Purina Animal Nutrition business is a leading provider
of feed for livestock and other animals.
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The New ModelBehind the Music IT is central to the transformation of the music supply chain, from recording to distribution to consumption.Simon Hollins, CIO, EMI Music
The opportunity to innovate and change the way a business — or an industry — operates has always appealed to me. The first major transformation I led as CIO was at the advertising agency J. Walter Thompson. There was no industry more dynamic than advertising during the late 1980s and early 1990s. The digital production revolution was just beginning, and JWT evolved from a network of international offices to an international business capable of servicing global clients.
Collaboration, communication, and standardization became essential, but we did not want to stifle local creativity. So we put in a single global network, e-mail, and intranet system but ensured that it fostered cross-border creative and media planning among our employ-ees and clients. We also created a common platform for analysis and planning tools, one that has developed into the much more sophisticated systems in use today.
I came into my role as CIO of EMI Music in 2010 — a tumultuous time for the company and the music indus-try itself. As everyone knows, CD sales are plummet-ing, while downloads and streaming are exploding. The ways for fans to consume music and interact with artists are multiplying. In fact, the whole business model and music business supply chain are changing. And we had to figure out how to be part of this revolution and then take it to the next stage.
Our strategy is to create lasting success for all of our artists — not just the top sellers — by uncovering new sources of revenue for them, connecting them to fans in ways we never could have in the past, and embracing innovation and agility in a quickly changing market-place.
When I joined EMI Music, the company’s private equity owner had brought in a new management team to turn the company around. All the major music labels were facing challenges, but EMI was the smallest, and our owners were strongly encouraging us to capitalize on that by innovating faster than the competition. But what I’ve found is that transformation is not just about trying to do something new. Lots of clever people can come up with great ideas to change the way an industry works. The key is making innovation sustainable so that you can drive it through to reality. You have to have the right people, processes, and suppliers all working together to make transformation stick.
A Fundamental IT Shift: Seeking Better Business Outcomes
Every music company wants to achieve better outcomes for artists, but we are taking a broader view of what that means. It would be nice for every artist to have a hit single, but not everyone can. You can still
As CDs and other hard copies of recorded music are replaced by digital downloads, EMI —
whose Abbey Road recording studio was made famous by the Beatles — has reinvented itself.
We are correlating information about individual fans who have registered on artists’ websites and Facebook pages with broader listening preferences and demographic information collected through fan surveys, then relating the insights to buying and listening patterns derived from sales and other data.
Simon [email protected]
PositionConsultant Chief Information Officer
CompanyEMI Music
Works fromLondon
Professional Background Simon Hollins joined EMI Music as Consultant Chief Information Officer in 2010. Prior to joining EMI, he held a number of senior IT positions at BT Group, including CIO of BT Syntegra and member of the BT Wales Advisory Board. Hollins previously held CIO roles at J. Walter Thompson and PA Consulting Group. He is also a Director of Red Raven Consulting and a Non-Executive Director of DCV Technologies. He began his career in software engineering.
EducationBS, University of Birmingham
Personal PassionsFootball (season ticket holder at Arsenal), motorsports (mainly watching but a bit of driving), and art (some favorite venues: the Uffizi in Florence, the Museo Reina Sofía in Madrid, the Summer Exhibition at the Royal Academy in London)
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have a successful career, though, if you take a larger view about how people consume music. EMI is approaching artist development in new ways, focusing on how to connect fans to artists — be it through social media, downloads, or one of the 400 streaming services we work with. We’re also looking at areas like music licensing for television programs, commercials, and video games — once a marginal area that’s now grow-ing fast.
For IT, that new business strategy requires a fundamen-tal shift, from being a reactive team to a strategic business partner, from spending most of our time supporting legacy systems to spending the majority of our time on new projects. I had to change the way the IT function operated, get an awful lot more out of our suppliers by partnering with a few that gave us the firepower we needed, and inspire my team to become world-class innovators. Before we could partner with the business side of EMI on any strategic transformation, we had to address three major IT problems: Service levels were in decline, the rate of project delivery was low, and there was no real technology architecture.
Once HCL took responsibility for our central systems and we strengthened our own service operations management, service levels rose. Our incident rate is less than half of what it was two years ago, and we continue to focus on what we can do tomorrow to improve service levels.
Our low project-delivery rate was caused by a lack of discipline and standardization, which we addressed early on by introducing project management practices and enlisting our business partners in prioritization and delivery. With the support of the CEO, we cancelled more than half of the projects in the pipeline. And I appointed transformation directors and embedded them in the business. Now, we’re running at twice the pace we were eighteen months ago. When a new business initiative is kicked off, IT is involved from the start.
To address the lack of architecture, we built a complete picture of the application portfolio using HCL’s applica-tion portfolio optimization service. We then identified which applications were already being used across the enterprise (making them good candidates for global capabilities), which were necessarily geography-specific, and which needed to be retired.
We hired experienced enterprise architects to create a platform view of the systems and processes necessary to run the business, taking into account the future evolu-tion of operations, particularly in regards to innovation, agility, and the supply chain. We built application closure targets into every transformation delivery project so that rationalization was locked into the strategy rather than being an afterthought. We have continued that application decommissioning approach as we have pursued our integration with Universal Music Group, which completed its acquisition of EMI in September 2012.
Learning to Get out of the Way
Today, IT is delivering transformative systems faster than ever. A good example is our global rights manage-ment system. In the music industry, it typically takes 28 days to deliver a digital product for download. By implementing a single database of all music assets, along with the associated and extremely complex rights information, EMI is now able to do that in half an hour. We delivered the prototype for the global rights management system in 90 days, and it took seven months from the planning stages to delivering the first single to iTunes.
We are also taking a leadership position in digital marketing. Our job from an IT point of view is to support that work without getting in the way. That is, our role is to show the business the transformation that is possible and partner with it to make those changes, rather than pushing new systems and processes onto the business. Business ownership of the change is the key to lasting transformation. For example, we aligned our tech team around the business units driving this change. One result is our unique CRM system for fans. It’s easy for a music company to collect e-mail addresses of people interested in a particular band or kind of music. But there’s an awful lot more information available.
Our Digital Marketing and Consumer Insight teams have developed more-effective ways to connect artists with fans who like — or might like — their music. We are correlating information about individual fans who have registered on artists’ websites and Facebook pages with broader listening preferences and demographic information collected through fan surveys, then relating the insights to buying and listening patterns derived from sales and other data. We have put in place a portfolio of systems and tools on a single global campaign platform to gather this infor-mation, one that allows us to tailor our marketing efforts to maximize the outcome for the artist. Since putting in place this platform and new processes, response rates and fan engagement have increased dramatically.
Simon Hollins on. . .
IT’s Role in the Business
In many ways, the role of the CIO now is to find ways to connect the business to customers – and then to get out of the way. Good discipline, strong supplier partnerships, and good design are critical. It’s our obligation as an IT team to provide that to the business. But we cannot let that become governance for governance’s sake, because that can stifle creativity. You do enough to make sure the solutions you offer are innovative and sustainable, and then you get out of the way.
Poaching Good Ideas from Elsewhere
Don’t be afraid to adopt best practices from other industries. The music industry is unique, but it can benefit from best practices and forward thinking in areas like outsourcing, enterprise architecture, and technology delivery. People always told me that you couldn’t use IT approaches from other industries in advertising. But you can and you should. Those are the things that will help your business succeed.
The ways for fans to consume music and interact with artists are multiplying. In fact, the whole business model and music business supply chain are changing. And we had to figure out how to be part of this revolution and then take it to the next stage.
With the support of the CEO, we cancelled more than half of the projects in the pipeline. And I appointed transformation directors and embedded them in the business. Now, we’re running at twice the pace we were eighteen months ago.
We don’t have a huge IT organization — there are 130 of us. But we have at least that many professionals supporting us in our supplier universe. We get to lever-age the standards and insights of companies like HCL that have done this in other industries and can bring that knowledge to bear on the music industry. Music is a global industry, but it’s a small community. Our partner-ships give us a reach we wouldn’t otherwise have, bringing us innovative ideas and technical capabilities that we can mash up to create something unique and lasting.
�e Takeaways
• Transformation isn’t just about doing something new; it’s about making innovation
sustainable.
• Before IT can partner with the business on any strategic initiative, it must make sure it has excellent service levels, project delivery rates,
and technology architecture.
• The role of IT is to show the business what’s possible instead
of pushing new systems and processes.
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ill Inmon is a sought-after speaker and author on data warehousing. In fact, he wrote the first book, held the first conference,
wrote the first column in a magazine, and was the first to offer classes on this subject, which in the late 1980s earned him the moniker the “father of data warehousing.” With over 35 years of experience in database technology management and data warehouse design, he understands the parallels between the successful adoption of data warehousing and the promise — and challenges — of big data, as you will see in this edited conversation with CIO Straight Talk Editor Paul Hemp and Contributing Editor Gil Press.
Context, Interpretation, Integration. . . and AlligatorsA conversation about big data with Bill Inmon, the “father of data warehousing”
Bill Inmon has a tuna on the line, not an alligator – but he knows the problems that ‘gators can cause for CIOs.
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Is big data more than a quickly passing buzz phrase?There’s no question that it’s real, that big data is not just a bunch of hype. There are at least three reasons why it’s here to stay: new technology, new sources of useful data, and real business value. New technologies such as Hadoop allow you to capture data from entirely new sources. This leads to the analysis of useful data that you couldn’t lay your hands on before, analysis that results in real business value.
But there are also some serious challenges. The biggest one from a CIO’s standpoint is getting from big data to business value. The vendors [of big data software and tools] have done a good job of hyping it and telling people about the promise of big data. In most cases, there’s this underlying assumption that you go and build it and then the business value will suddenly appear. That is a genuine problem, because everything in big data is unstructured.
Why is unstructured data problematic? You see, organizations are used to dealing with structured data, with nice, neat little tables and attributes and metadata and structure. But that’s not there in big data. In big data, you have nothing but unstructured data.
To understand what unstructured data means and to be able to use it in any way for business decision making, you’ve got to understand context. That’s the first challenge of taking unstructured information and starting to do anything with it. Let me give you a simple example: Suppose we see the number seven in the data. What does seven mean? The answer is that seven by itself means nothing. Are we talking about seven dollars? Seven days of the week? Seven seas? Until you can tell me the context, it remains pretty meaningless.
A second major challenge in taking raw text and turning it into business value is interpretation. For example, have you ever tried to look at a log record and understand what it’s saying? To use a cryptic log
record, you’ve got to have a lot of intelligence about how to interpret what that log record means. I have to say that the big data vendors don’t understand this. They vaguely understand that “Oh yeah, there are some challenges with unstructured data.” But in terms of actually understanding what those are, the vendors are much more concerned with how they interface with Hadoop, how they use MongoDB, how they use HBase, how they use Hive. They’re concerned with the technology of big data. They just assume that once the organization gets its hands on big data and the new technologies, it’s going to automatically be able to understand how to turn that big data into business value. To be honest with you, the big data vendors just don’t get it.
The advice I would give companies considering investing in big data is that once they’ve got a handle on the technologies they should address the challenges of context and interpretation in order to unlock business value from unstructured data.
Could you give an example of unlocking business value from unstructured data? I was talking to a major auto manufacturer just the other day about doing warranty claims analysis. Do you know how they do warranty claims analysis? They have individuals who sit in this huge building and look at a warranty claim and say, “Well, is this company responsible for it? Are we going to honor the claim? If we aren’t, why not?” They process over eight million warranty claims a year. They do them all manually because they can’t figure out how to take the raw text and treat it in an analytical fashion. I asked them, “When you finish processing the claim, do you enter it in a database?” The answer was, “Heavens, no. We have a hard enough time processing eight million of these warranty claims manually.” But a database built from warranty claims could be incredibly valuable to automobile manufacturers because it would relate directly to the quality of the manufacturing process.
It’s not enough, however, to build a database of warranty claims. You must understand the context for all the data in the claim. If you fail to understand or manage the context properly, you’re going to be making incorrect decisions on how the warranty claim is to be handled. And so the consumer is going to be mad and even have grounds for a lawsuit.
Have you seen any examples of companies that seem to be somewhat ahead of the curve? The answer is no, but there’s a good reason. The whole world of unstructured data and taking business value out of it is brand new. It’s like the big data vendors. They just assumed that since the data is there, it could be done. They assumed that if one or two companies have done it, then everybody can do it. That’s simply not true. It’s like going into a bear’s den in the month of March and poking the bear with a stick. The bear is in hibernation and very soon is going to come out of hibernation and be hungry. The world and the marketplace are just now waking up to the fact that they’re going to have to deal with unstructured data, and how you deal with it is not how you dealt with the structured data of the past. The techniques and approaches are completely different. Is that understood by either the vendors or the marketplace now? No. There are a few people who are awakening to it, but it’s generally so early in the life of the technology and the marketplace that the world is still asleep, in a state of hibernation.
Are there parallels between people’s perception of big data today – including their ability to extract value from it – and people’s perception of data warehousing when you were first talking to them about this in the late 1980s? Actually, yes, very much so. In the early days of data warehousing, people thought a data warehouse was merely where you stack together a bunch of data like
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The Year of the CIOs?
cordwood. I — and other people — said from the beginning, no, a data warehouse is how you integrate data, and integration of data is very different from gathering and capturing it. I’ll never forget Sybase standing in front of a group of people and saying, “Well, you take your operational systems and you copy them into a file. That’s your data warehouse.” I was in the back of the room just cringing, saying, “Boy, these people really don’t understand what a data warehouse is all about.” They missed the major point that in order to build a data warehouse, you need to integrate the data coming from all those different systems. Yes, there’s very much a parallel there.
What’s the first step companies should take to unlock the promise of big data?They should turn unstructured data into a form and structure that can be integrated with their existing structured data. Right now when you start to mix structured and unstructured data, it’s as fundamental a disconnect as trying to mix electricity that is from England and electricity that’s from the United States. You’ve got to do something to bridge that gap.
There’s a new technology called textual ETL that puts unstructured data into the form where context, interpretation, standardization, and a whole lot of other things are done so that there is compatibility. That is the path of least resistance for most organizations and corporations. We call this textual disambiguation, which allows you to read in raw text and do all of the things that are necessary to turn it into structured information so you can understand its context and analyze it.
Do you see CIOs leading the organization toward capturing all the value that is latent in unstructured data? When I think of Chief Information Officers, I think of the old saying about draining the swamp when you
have six alligators snapping at your face. Most CIOs I talk to are in a position of fighting the immediate issues and battles so vigorously that they don’t have time for vision. They spend their time dodging the next alligator that wants to take a piece of their flesh. CIOs are beleaguered. They are so consumed with day-to-day problems that most of them don’t really have any energy or enthusiasm for looking at the future.
What made the alligators go away so that data warehousing could succeed? The strategic momentum for data warehousing came from the business person, because of business opportunities and the need to be competitive. I think the same thing is going to happen with big data. In order to unlock the promise of big data, two or three companies are going to need some really good success stories and then everybody under the sun is going to come along and say, “If they can do it, we can do it, or we can do it even better.”
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than widely discussed – likely to appear on the horizon, whether they involve an emerging technology or the role of the CIO.
This magazine aims to showcase the insights of IT practitioners for the benefit of their peers – as you can see in much of the rest of this issue. So we also wanted to find out what changes are anticipated by people working on the front lines of IT.
We turned to CIO Straight Talk Interactive, a group of more than 1,000 CIOs and other senior IT practitioners that meets on LinkedIn. The group, sponsored by HCL, offers community discussions, interactive webinars, and idea-driven articles and videos, all by and for senior IT leaders. Discussions range widely, from technology to IT-driven business transformation to the reinvention of the CIO role. Go to http://partner.linkedin.com/CIOStraighttalk)if you're interested in joining.
Straight Talk Interactive members get an early look at articles that appear in this magazine, and they reciprocate by providing “group-sourced” content. So we sought their opinions on emerging trends through a variety of polls - on topics ranging from mobility to platform-as-a-service, or PaaS - as well as through individual contributions to discussion threads. We have included several comments from the discussion threads on the following pages, under the label “Voice of the Community.”
One survey of IT executives in the broader LinkedIn population asked which emerging technology their organizations were most likely to invest in over the coming year. Nearly 40 percent of the 747 respondents chose cloud computing, more than big data and real-time analytics combined – a sign that the cloud continues to surge as an area of interest and concern for businesses.
One emerging technology that generated considerable discussion among Straight Talk Interactive members was PaaS. They saw numerous benefits – not just cost reduction but the speeding up of application delivery and the freeing up of time for an IT staff to focus on innovation.“Most companies generate revenue via the products and services atop the platform,” commented Richard Robinson, VP, Business Technology and CIO at SunPower, a global manufacturer of high-performance solar electric systems. “PaaS allows you to focus your most precious resources on creation and enhancement of these products and services. And if your PaaS is true cloud (meaning it autoscales), your developers can move from concept to production with little to no friction. . . IaaS and PasS are key enablers for DevOps,” the collaborative software development method.
Of course, technology is only one area in which IT trends emerge and – as several of our HCL experts note in the following essays – can be an area of secondary importance.
“Technology, technology – don't you love it? Are we asking CIOs the wrong question?” Dino Russo - the CTO, Consumer Packaged Goods Sector, at BT Global Services - commented in a pointed response to a survey on emerging technologies. Instead of running a poll on emerging technologies, he said, “How about, ‘What are key business problems you are solving, or key opportunities you are enabling with your IT investments?’ Trying to expand your market? Maybe BI [business intelligence] and analytics would help. The company is pushing hard on new product development? Perhaps advance collaboration technologies are part of the answer.”
Point taken, Dino. As CIOs everywhere are learning – or not, at their peril – IT exists not as an end in itself but as the means to achieve a spectacular experience for customers and strongly positive business outcomes.
If that realization sweeps the profession, changing CIOs' approach to everything they do, it will ensure the continued relevance and value provided by IT professionals – and will truly make 2013 the Year of the CIOs.
A senior executive at HCL describes his unusual medical condition this way: As he imagines a word in his head, he sees both the word and its mirror image. So, for example, “2013” displayed in, say, the font of a digital clock. . .
. . .conveys to him not just the current year but, in reverse, the letters “C-I-O-S.”
Or so he claims. Whether that second meaning even suggests itself to you – go ahead, look at this in a mirror – this savvy industry observer is convinced his vision has significance: 2013 is an auspicious time for IT professionals, the Year of the CIOs.
Scoff, if you will. But you don’t need to see things in reverse to realize that the IT profession is facing unprecedented technological and professional upheaval. And while this disruption threatens the very existence of the CIO role, it also poses interesting opportunities for reinvention.
Given that, we felt it worth examining some of the changes that lie ahead. We asked seven HCL subject matter experts to share their views on developments they foresee taking shape in the next 12 months or so. We weren’t looking to showcase the “Top Trends of 2013.” And we already knew that some of the most sweeping developments will be directly related to “social-mobility-analytics-cloud,” or SMAC.
We were simply looking for the articulation of interesting trends – significant if not earthshaking, somewhat surprising rather
We asked HCL experts – and IT practitioners like you – to predict IT-related developments we’re likely to see in the coming months. We got some interesting responses – and not all of them had to do with SMAC!
Which emerging technology is your organization most likely
to invest in this year?
Based on 747 responses to a survey of IT professionals on LinkedIn
38%
Cloud Computing
Big Data (including real-time analytics)
32%
Virtualization
15%
Enterprise Mobility
15%
Trends 2013
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These new relationships will be more symbiotic and strategic than the term “outsourcing” implies, requiring a master supplier to ensure alignment and agility. That will spur the remaking of IT service providers themselves. Those who fail to adapt will be out of work. And customers who fail to change will fall behind their rivals.
To get an idea of how this transformation will affect businesses, just take a look at a successful software company: It is asset light. It carries little inventory. It’s agile. It’s prepared to change tools or processes on a dime. It operates as every successful business soon will — as part of a well-oiled digital ecosystem. Ultimately, this new model will be welcomed by traditional enterprise IT organizations currently struggling to meet demands for cloud computing, analytics, mobility, and social media. IT can let go of the old way of doing business — being responsible for everything end-to-end — and embrace this new digital ecosystem of strategic partners, increased agility, and lower costs. The business will dream up its vision, IT will offer technology options in support of that vision, and a team of vendors will deliver it effectively. The relationship will evolve from partnership to co-creation to co-innovation. This transformation will not happen tomorrow, but we’re already seeing the signs. Businesses that are early adopters will reap the benefits while the others wait and see.
ne of the biggest threats to corporate competitiveness on the horizon is a shortage of key skills, and nowhere is that risk more acute than in the corporate IT organization. By 2015, less than 25% of the current IT workforce is estimated to remain in standalone IT roles, according to analysis by the Corporate Executive Board. And top tech talent will migrate to the best opportunities, more likely working for a technology-centric organization than an enterprise IT organization. As a result, we will soon witness the beginning of the end of the IT organization as we know it — but not the end of the modern enterprise’s IT demands. Businesses will need more highly skilled technical talent in the future than ever before, as corporate systems grow even more complex and critical. Consumption of data — structured and unstructured, internal and publicly available — will increase. Employees will demand access from anywhere on any device. And real-time and actionable analysis of that data will become a requirement. Meanwhile, IT organizations once built on the foundation of servers and mainframes and software and human resources will reduce their dependence on all classes of technology assets. The skills of the average corporate IT professional are already becoming redundant or obsolete. We are about to see the IT organization morph into a business operations group dominated by intimate domain knowledge, internal customer management, and business change. As a result, the internal IT organization of the future will forge relationships with a consortium of suppliers that have the talent and assets it no longer possesses in-house.
The Fracturing ofCorporate ITThe traditional IT organization is disintegrating but will reemerge as the domain-smart and customer-focused manager of an IT ecosystem. B Y R A J I V S O D H I
Rajiv Sodhi is a Senior Corporate Vice
President and the Chief Customer
Officer at HCL Technologies. He blogs
regularly about business technology
issues at www.rajivsodhi.com and can
be reached at [email protected].
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know if its fan belt is likely to break in the next 50 miles. Using its 4G or LTE communication chip, it will check the inventory at the nearest repair center, tell you that they have the part, book an appointment for you, and order a replacement part to replenish the repair center’s inventory.
One less obvious but crucial aspect of automobile user experience is safe travel, and software-centric technology is central to achieving this. For example, many in-vehicle amenities related to telecommunica-tions, entertainment, and gaming will have to be redesigned so they don’t create a distraction for drivers — known in the industry as “distraction-free convergence.” Next-generation “connected cars” will talk to each other and provide drivers with such safety enhancers as parking assistance and lane departure warnings. The ultimate software-driven customer experience, of course, will be the driverless vehicle — now being tested in several states in the U.S. — which will make the issue of driver distraction irrelevant.
In fact, an automobile is no longer simply an automo-bile; it’s an automobile with an overlay of telecommuni-cations, consumer electronics, and other elements of the driver and passenger experience. This conver-gence of industries in a single product is leading many companies to ask what business they’re in. It may not be the company’s traditional business or in fact any of the traditional industries. Companies in today’s automotive industry instead will need to look at what value they can create for customers and what partner ecosystem they must develop to make that happen.
Automobiles are just one of numerous products and services in which user experience is becoming paramount. Smart lighting in commercial airliners is reducing the jet lag of long-haul passengers. Sensors in homes and assisted living facilities are improving the quality of life for elderly residents by monitoring their well-being. Mobile telephones, with a penetration in emerging markets that is many times higher than that of credit or bank debit cards, are serving as payment portals that bring financial services to traditionally underserved populations.
Creating such experiences requires complex online platforms that can analyze vast amounts of data to facilitate decision making. And this is an area that’s in the CIO’s area of expertise. But if the IT function is to aggressively adopt a product development — and thus business-crucial — role, it will have to think beyond software applications and become more focused on consumers. Collaboration between CTOs and CIOs will have to significantly increase. And for both the CIO and the CTO, technology will be only a means to an end — that is, an experience that will delight the users of their products.
n recent years, the success of a consumer product has depended less on whether it has the latest technology and more on whether it offers the coolest overall customer experi-ence. The iPhone is, of course, the iconic example of this trend. People came to love the iPhone not just for its features but for the whole experience of using it – the way it looks and feels, the means by which they control the device, how they acquire and use apps, and so on.
We are about to see experience-centric products driving new behavior not only in consumer goods but also in the B2B space. And as information technology becomes more enmeshed in the overall product experience and hence the product’s technology footprint, CIOs will play an increasingly important role in the development of this crucial driver of business success. However, this can happen only if CIOs expand their horizon to encompass the entire customer experience.
Creating a product that delivers a great end-to-end user experience requires a much more integrated approach to engineering, one in which information technology is embedded in a product ecosystem from the initial design stage. Take the automobile. Increasingly, a buyer’s choice of car is based on the software on board and its ability to manage the overall driver and passenger experience through multiple systems — entertainment and communications, remote diagnostics, driver and passenger safety. This will become increasingly true as traditional products become more like services. For example, an intelligent car will
From Features to Experience . . . to the Heart of the CustomerIT will move beyond applications and software and help product managers ride a major shift in business focus – from products and services to the way a customer feels when using them. B Y S A N D E E P K I S H O R E
Sandeep Kishore is an Executive Vice
President and the Global Head of Sales and
Practice for Engineering and R&D Services
at HCL Technologies. He blogs at
www.sandeepkishore.com. and tweets
regularly @skishore. He can be reached at
Convergence of industries in a single product is leading many companies to ask what business they’re in. It may not be the company’s traditional business or in fact any of the traditional industries.
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t the dawn of the big data era, business leaders are being bombarded with a virtual shock and awe campaign. The 1.8 zetta-bytes — that’s 1.8 trillion gigabytes — of information generated in 2011 will grow by a factor of nine over the next five years, according to IDC. Gartner predicts that the big data market, now valued at $5 billion in revenues annually, will explode to $53 billion by 2016.
The initial reaction, and rightfully so, is how in the world are we going to deal with all this?
But while much of the attention has been on the three Vs of big data — volume, velocity, and variety — the most important aspect has been on the back burner: the actual value to the business.
What will separate the winners from the losers will be the ability to sift through the mounds of new and emerging data to uncover the few precious nuggets with significant business value. And that will require something that few, if any, compa-nies have today: the ability to make big data seem small.
As we all know, there is more — and more valuable — data available to the enterprise than ever before. But it’s all over the place and in all kinds of formats. Figuring out how to efficiently capture, process, and analyze all that information is daunting and, at the moment, virtually impossible — which is why companies shouldn’t even try.
The enormous scale of big data will keep many businesses from realizing the tremendous value embedded in it – a task that will require bringing big data down to a manageable size.
B Y V I K R A M D U V V O O R I
Vikram Duvvoori is a Corporate Vice President
and the Global Head of Transformation Services
at HCL Technologies. He can be reached at
Instead, we’re going to see sophisticated companies creating methods for discerning which types of incoming data are likely to have business value. They won’t form a dozen executive committees, hold endless meetings, and develop five-year plans. They will instead create agile but relevant and actionable data blueprints that, overlaid onto their business objectives, will clarify their big data analytics initiatives. If a priority is to enhance customer experience, for example, they will focus only on information that can improve the supply chain or time to market or customer service as appropriate. This data blueprint will be mapped to a subset of new IT capabilities that quickly deliver value to the business.
Big data focus will be different for every enterprise. But one thing is clear: Without that blueprint and frequent iterations to test for business value, there will be some big big data disasters. Enterprises that continue to be absorbed by the enormity of the task will overspend on data warehousing and capacity. The computing power required to keep pace with the explosion of data will skyrocket.
Meanwhile, these companies will have to eat the opportunity costs associated with spinning their wheels on the wrong priorities. Big data spending may not only consume the IT budget but also become one of the business’s biggest costs. For a look at what’s ahead for those that refuse to focus their efforts and iterate rapidly, just look back at the multimillion-dollar ERP failures, when companies overspent without a value compass.
The distinction between wasted investment and effective transformation — the ability to convert this big data opportunity into value — will be focus and agility. That’s what will make big data small.
While much of the attention has been on the three Vs of big data — volume, velocity, and variety — the most important aspect has been on the back burner: the actual value to the business.
This doesn’t mean that a tight, central group will oversee an enterprise’s big data strategy and operations. To the contrary, the owners and stakeholders of big data efforts will expand and change over time — the CIO or CMO one day, the COO or line of business leader the next. Companies will collect, process, and analyze big data in different places throughout the organization. But in each place, they will maintain a single-minded focus on business alignment and value so that even the largest amounts of information can be made relevant.
Big data success won’t be a big bang for the enterprise. Those who succeed will take an incremental, iterative approach to unlocking its value over time. Not every company will trans-form itself into the next Amazon or Google overnight or ever – nor should they.
But a health insurance company will be able to reduce fraudulent claims. A pharmaceutical company will be able to improve drug efficacy and safety. Manufacturers will create predictive supply chains. Financial service firms will manage risk more effectively. Telecom compa-nies will reduce customer churn. Retailers will master real-time inventory and pricing.
Big data can effect big transformation, but one focused step at a time.
Big Data Will Get Small
One way to deal with the deluge of data ---
Lars Wikstrom, Director, Enterprise Architect Finance IT, HSBC
In-memory database (IMDB) technology allows you to, on the fly, calculate group figures in seconds based upon transactions and seamlessly drill all the way down to each individual transaction to eliminate any doubts. IMDB moves the discussion from technology to logic: How was the data derived and what was the definition? To exemplify the performance of IMDB, the best-performing IMDB technology I know processes 1 billion records per server and also scales horizontally and with linear performance. Twenty servers process 20 billion records in 1 second. How many of your report-ing systems can do that?
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owerful forces are exerting pressure on CIOs and IT departments today. Companies compete in markets where structural constraints — such as the cost of entry and geographic location — are greatly diminished. Their success depends on an ability to continually differenti-ate their product and service offerings from those of increasingly agile global competitors.
A new breed of truly disruptive technologies — in-memory databases, mobile computing, cloud computing, and social media — presents possibilities that simply didn’t exist before. For the first time, business is looking to IT to drive the transformation agenda, not simply to implement it.
These technologies will fundamentally change the way we do business. Event-driven supply chain optimization, predictive maintenance, dynamic price optimization, and product and service differentiation based on a “segment of one” are all within reach. The value of histori-cal data will be unlocked, revealing retrospective insights that will form the foundation of increasingly sophisticated predictive models. These models, when augmented with a constant flow of increasingly granular current data, will transform us all into real-time organizations.
IT will finally make the shift from business enabler to business differentiator.B Y J A M E S R I L E Y
James Riley is a Senior Vice President
and the Global Head of Innovation for
HCL Technologies. He blogs regularly
at www.hcltech.com/blogs. He can be
reached at [email protected].
The Year of the Real-Time Enterprise
For example, in the past, companies leasing and maintaining equipment at customer locations collected large volumes of data across a variety of systems about equipment failures and the cost of resolving them. Now these companies can detect and predict failures before they happen by analyzing historical data, identifying likely symptoms of impending failure, and by combining all this with real-time, machine-to-machine diagnostics. The impact: reduced downtime and improved customer service, avoidance of costly failures, and greater productivity for field service technicians.
There isn’t a single industry in which the potential of these technologies cannot be realized. The challenge we face is defining but not limiting the
There isn't a single industry in which the potential of
these technologies cannot be realized. The challenge
we face is defining – but not limiting – the “art of the
possible.”
Coming disruptions for the CIO ---
Evan Quinn, Senior Principal Analyst (Data Management, Analytics, Big Data, and PaaS), Enterprise Strategy Group
It’s a combined trend: For the first time in computing history, we are experiencing revolution on three fronts simultaneously – the user experience (mobile), where processing takes place (cloud), and what processing is taking place (big data). That is why it seems like we are in the midst of so much disruption, and opportunity, in IT.
“art of the possible.” Historically, we have used technology to deliver incremental changes to well-defined business processes. It is no longer about incremental change; it is about creating brand-new business processes and models. CIOs and their business partners, aware of the potential, are feeling the pressure to leverage these technolo-gies before their competitors do — yet in many cases they don’t know where to begin. For example, according to IDG Research, 71% of senior IT leaders see mobile computing as transformational or strategic to their business, yet only 18% have developed a comprehensive mobile strategy.
Defining the art of the possible is a team sport, requiring participation from the CIO, business leaders, and, more often than not, a partner to act as the catalyst. The right partner will bring domain expertise allied to technical know-how and a new perspective to help identify, prioritize, and ultimately realize the use cases that can genuinely transform the business.
Venturing into such new territory is not without risk. These technologies have a high cost of entry, there are many competing and often overlapping options to choose from, and the skills to deploy them effectively are scarce. Furthermore, transforma-tional change will require effective change manage-ment to ensure a smooth transition to new organi-zational structures, business processes, and more. But these risks can be managed.
The greatest risk will be to do nothing at all.
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ompanies today find themselves in an almost untenable position. Business cycles are much shorter, making long-range planning a thing of the past. Changes in technology and consumer expectations are driving companies to adapt, innovate, and transform at an unprecedented pace. Simultaneously, the global economy continues to languish, so there is little easy money to fund the necessary innovation.
Outsourcing may not at first blush seem to solve this conundrum, and certainly the current IT outsourcing model has little to offer in this regard. That’s why we’ll see CIOs completely rethinking their relationships with suppliers, starting with the contract.
The recession was a wake-up call for the industry. A lot of outsourcing contracts signed before 2006 did not allow for the dramatically changing revenue profile that many Fortune 1000 companies experienced during the 2008 downturn. Nor did those agreements anticipate other critical developments: shorter business cycles; the evolving business models spawned by the rise and conflu-ence of social media, mobile and cloud computing, and business analytics; and the consumerization of IT, as employees dumped company BlackBerrys in favor of their own iPhones. Trapped in rigid, traditional sourcing arrangements, CIOs have become increasingly frustrated by their inability — and the unwillingness of incumbent IT providers — to respond swiftly to these changes.
Consequently, CIOs will increasingly demand sourcing contracts that allow for flexibility and agility. In addition to provisions for contingencies and variable conditions, they will require greater transparency and alignment between the service provider and the customer. The five- or ten-year fixed, “black-box” contract will become an artifact of the past. Contract language will shift from “no” to “now,” as CIOs reject inflexible providers and monolithic contracts in favor of partners willing and able to respond to new situations on the fly.
Next-generation contracts will eschew fixed-cost arrangements and instead provide for utility-style, pay-per-use services, allowing companies to scale up or down almost on demand. Service agreements will move away from an exclusive
Fed up with agreements that put them in a straitjacket while the world changes, companies will increasingly demand supplier contracts that are flexible and focus on collaboration rather than SLAs. B Y V I N O D C H A N D R A N
Vinod Chandran is a Senior Vice President
of HCL America and the Head of
Infrastructure for HCL Technologies’ North
America region. He can be reached at
Tearing Up the Traditional Outsourcing Contract
focus on Service Level Agreements, or SLAs, to a requirement that providers deliver business value, innovation, and a high-quality customer experience. More and more CIOs will expect their partners to help them not only control expenses but also invest the realized savings in the creation of new capabilities.
The changing nature of the outsourcing contract has structural implica-tions for CIOs and their internal organizations. Under “SLA only” agree-ments, outsourcing governance focused almost exclusively on whether delivered services were operating smoothly. The new agreements will require a deeper, more collaborative relationship between CIOs and their service providers, as well as between IT and the rest of the business. But collaboration doesn’t just happen, and many IT functions aren’t equipped to capitalize on it. So enterprises will restructure their IT organizations to better encompass this shift from managing SLAs to enabling service providers to drive innovation and value creation. We are already witness-ing customers investing in “innovation councils” that bring together the business, the IT organization, and the service provider to drive a business-focused innovation agenda.
Ultimately, CIOs will have to reenvision not only their outsourcing relation-ships and the contracts that govern them but also their own role. We’ll see CIOs focusing less on the nitty-gritty of IT operations and more on the core business issues of delighting customers and generating revenue. As technology becomes increasingly ingrained in every aspect of business operations, CIOs will be the catalysts of this shift. They’ll orchestrate the many moving parts of new collaborative relationships. In this role, the CIO will need a dependable partner who can rapidly execute plans that will drive business change.
Trapped in rigid, traditional sourcing
arrangements, CIOs have become
increasingly frustrated by their inability — and the
unwillingness of incumbent IT
providers — to respond swiftly to
these changes. CIOs will
increasingly demand sourcing
contracts that allow for flexibility
and agility.
The move toward flexible outsourcing relationships
Ronald Blahnik, Managing Partner, Blahnik Consulting Services; former SVP/CIO, Hudson’s Bay Company
With [a supplier’s] familiarity [with your business] comes speed. I like to ensure that elasticity is increased as the engagement progresses from year to year. Something like a 10% YOY improvement in service levels to be filled by new requirements without increased costs over, say, the first three years of the engagement. It only stands to reason that you will not have thought of everything when first engaging outsourcing. Rather than each newly identified opportunity becoming a change order for additional costs, I have had great success having them absorbed by the increased efficiencies the outsourcer is to provide YOY. Of course not all new work can be absorbed, but the elasticity of your business should be accommodated by your outsourcer without increased cost at every turn.
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Mobile devices will accelerate the proliferation of disruptive technologies and create – for businesses able to stay ahead of the changes – big revenue opportunities. B Y N A R E S H N A G A R A J A N
Naresh Nagarajan is a Senior Vice President
and the Global Head of Customer Experience
Management and Enterprise Mobility at HCL
Technologies. He can be reached at
Mobile ComputingGround Zero for IT Disruption
But as we dug into the potential business case, we found that the project would be expensive — $15 million to achieve savings of perhaps $500,000. And then there were all the regulatory require-ments and divergent business processes to address across the region. A better option was to consider mobility. By mobilizing support staff throughout the region, the company could save more than 30 percent and increase efficiency. The company now plans to introduce the mobile project first and then use those savings to consider cloud-enabling the back end.
In another example, the CEO of a large hospital specializing in oncology knew he wanted to apply technology to improve the business but didn’t know where to start. What he did know was that breast cancer was the most common disease his employ-ees were treating. Ultimately, they deployed a genetic test that would determine if a patient would benefit from chemotherapy; developed a mobile field force application for healthcare advisors with back-end workflow integration, graphics, and real-time content to educate and alleviate fear among new patients; and rolled out a program based on FaceTime — a video-calling application for Apple products — that enabled patients to discuss concerns with their caregivers and oncologists. All three initiatives were rolled out for use on mobile devices that were tied into the hospital’s ERP system. Revenues from that part of the business have since grown 12 percent through an increase in referrals.
Mobility-enabled IT changes like these, while having a business impact similar to that of the major ERP implementations of the past, will need to occur many times faster. If they don’t, a company’s new mobile capabilities will be a step behind competi-tors’, even as they are launched. For instance, we’ll see companies demanding that their IT partners develop, in as little as 90 days, a business case for how such an initiative would fuel top-line growth. This will allow them to quickly move forward with the project or move on. Business leaders will continue to be enamored with social media, cloud computing, and big data because it’s cool stuff. But what’s really cool is increasing customer wallet share without burning through capital budgets. Companies will need to stay focused on the business value generated by mobility initiatives and not the technology itself. Mobile technology will be increasingly amazing — but only to the extent that it allows a company to give its customers something that will create value for them and for the business.
oday, you’re using it to talk to a friend about vacation plans. Tonight, you’ll be using it to post a Facebook update about the house you’re buying upstate. Tomorrow, you’ll use it to reach a call center with a complaint about your credit card. A single device — the mobile phone in your hand — makes all that possible. It has structured data. It has unstructured data. But more important, it provides an instantaneous connection that opens up a myriad of opportunities for businesses (both B2B and B2C) to add to their top lines.
Because mobility will provide the central thread connecting businesses to end customers, some of the major currents of IT investment today — social media, business analytics and big data, cloud computing — will converge around mobile devices. Mobility may not make billions for any one company, but it will be the capability that jump-starts billion-dollar transfor-mations.
I recently met with the head of the Asia-Pacific region for a leading global food service and facilities management corporation. He came into the meeting with one goal: to move IT to a private cloud in Singapore that would support IT operations in 40 countries, including challenging environ-ments in remote locations, on the assumption that the move would cut costs and increase efficiency.
Mobility may not make billions for any one company, but it will be the
capability that jump-starts billion-dollar transformations.
Will tablets replace company PCs and laptops? ---
Steven Stell, Director of IT-Americas, IMI Cornelius
This is a growing trend, but for the foreseeable future PCs and laptops for non-mobile business users will still be the logical tool of choice. Physical security of the devices, and the ability to have/add more power and computing peripherals, will keep the PC and laptops in business for at least the next four to six years.
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Rather than immediately joining the rush to invest in emerging technologies, smart companies will stop and assess how their existing systems can help them ride the new-technology wave.
B Y S A D A G O P A N S I N G A M
Sadagopan Singam is a Global Vice
President for Enterprise Transformation
Services at HCL Technologies. He blogs
regularly at http://123suds.blogspot.com
and tweets @suds. He can be reached at
Optimizing the Old to
Smart companies will take a different approach, looking back before leaping ahead to ensure that their existing infrastructure is optimized to exploit the new technologies. Transformation will not take place by implementing the latest analytics software or social media platform. That’s a fairy tale. Real transformation will not take place in a vacuum; it will be built on existing systems. Those systems will have to provide a foundation that ensures cost-effective operation and can accommodate and enable speed, agility, and scale. No matter how forward-looking the IT industry is, it cannot afford to ignore the past.
At the most basic level, optimizing your IT infrastructure will generate savings and unlock value that can be redirected toward new technology initiatives and innovation. A major obstacle for a company trying to transform itself into a customer-centric organization is flat or reduced technology budgets. By optimizing its current operations, the average company should be able to cut its infrastructure budget signifi-cantly, freeing up funds for the new initiatives. One characteristic of an optimized IT infrastruc-ture is its alignment with business processes. Such alignment will, among other benefits, increase a company’s speed to market. A retail chain that wants to open ten stores in a quarter might face a nine-month wait in terms of IT planning and readiness. With a more flexible infrastructure, it will be able to get there in three months or less.
here’s no question we’re entering a brave new corporate world, in which customer experience will be the only differentiator between which enter-prise succeeds and which fails — no matter the size of the company, the industry it operates in, or the market it sells to. Customers will have greater power than ever before, and they won’t hesitate to assert it.
That customer power will be the driving force behind a digital revolution, one in which mobility, social media, big data, and cloud computing converge to anticipate and meet customer needs in a hyperconnected and personal way. The customer-driven digitization of the economy will generate information at far greater levels of personalization, across a wider variety of activities, and around more customer touch points than ever before. Social networks, mobile check-ins, engagement apps, online and offline sales transactions, customer support interactions — the entire customer experience, from brand awareness to after-market upselling, will be digital, creating an unprecedented volume of new data.
It’s no wonder that businesses will be inclined to jump headfirst into emerging technology initiatives that promise to help them take advantage of this new information and prepare for the customer-driven future. But companies making such moves risk falling flat on their faces rather than gaining a head start.
Transformation will not take place by implementing the latest analytics
software or social media platform.
That’s a fairy tale. Real transformation
will not take place in a vacuum; it will be built on existing systems.
An optimized infrastructure will also enable enterprise IT to scale vertically and horizontally depending on demand, making it a better foundation for the new customer-centric technologies that will drive corporate competi-tiveness in the future. There’s no CEO in the world who isn’t demanding that IT address big data analytics. Everyone is excited about in-memory processing. But the potential benefits won’t be realized if a robust infrastructure isn’t in place that can be ramped up or down at will.
In the coming years, companies will be able to detect changing customer needs in near real time, interact with customers consistently, and change product offerings on the basis of this feedback. Cloud computing, mobility, and big data will present IT organizations with new options for rapidly deploying and scaling online applications and business services. What will separate the corporate winners from the losers will not be whether they’re big or small but whether they’re fast or slow.
But first, the savviest IT organizations will pause and take the time to look back, rethink their existing infrastructure, and rebuild it for the customer-driven future.
Enable the New
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