Although the IoT is being defined by the business right now, CIOs will end up running it, Frank Gillett, principal analyst serving CIOs at Forrester Research, wrote in a briefing.
It’s a pattern we’ve seen before with PCs, websites, and smartphones, all started as “do-it-yourself” projects by the business but ultimately falling into the CIO’s realm of responsibility, Gillett writes. He predicts this will happen with the IoT as well and CIOs will ultimately be called to manage the growing complexity of connected devices for their company.
But CIOs should prepare now for the challenges that the IoT will inevitably bring— “especially as the business tries to integrate Internet-of-Things data into core business processes running in enterprise applications,” Gillett wrote.
Five challenges IoT brings to the table
Every company will face the challenges (as well as the opportunities) that come with owning and managing connected assets, Gillett wrote. CIOs who are part of companies that sell physical products will face even more challenges, including helping the business design, build and operate connected products, Gillett added.
Whichever category you fall into, Gillett said CIOs will face these five IoT challenges:
1) New technologies, new protocols, new standards: The IoT will require CIOs to manage and integrate a slew of technologies, networks, protocols and data formats, Gillett wrote, as well as force CIOs and companies to come up with new standards in order to try to organize the chaos.
2) Handling data, analytics, and business logic: Sensor devices are often smart enough to do local data filtering, analysis, and store the business logic on the device to enable quick responses. The issue with this is that the data, analysis, and business logic live outside of the core enterprise applications and processes, Gillett wrote.
3) New security challenges: The IoT will bring with it a mixture of familiar and new security issues, Gillett wrote. CIOs will have to figure out how to make sure devices are tamper-proof, figure out which identity, authentication, and encryption technologies work, and “how to ensure the chain of custody all the way through cloud services and back to enterprise apps,” Gillett wrote.
4) New demands on the network: The surge in connected devices will challenge enterprise network admins with a new type of network node that will have widely varied requirements, Gillett wrote. For example, some devices will continuously stream data (like security cameras) while other devices will need low latency and high quality service for “speedy responses to crucial events” (like manufacturing production systems), he wrote.
5) New quantities of time-series data: Current analytics tools will not be able to handle the new amount of time-series data the IoT will bring, Gillett wrote. “Analyzing voluminous time-series data turns out to be hard to do with existing tools, so a new generation of analytics technology is appearing to accelerate time-series analysis, such as those from TempoIQ or Hitachi High Technologies,” he wrote.
Five steps CIOs can take now to avoid a mess later
Though the challenges the IoT brings seem daunting, Gillett believes that it is early enough in the development of the IoT that CIOs have the opportunity to avoid technology messes if they act and get involved now. This means CIOs will have to work with the app development team, the security team, the enterprise architects, and the product line-of-business teams.
Here are five steps CIOs can take:
1) Train your developers in new software skills: The IoT will require a new app dev mindset among developers, Gillett wrote. Typically, developers write code that takes input from humans, he wrote, not from sensors in connected products or assets. In order to use real-time connectivity and sensor data effectively, developers will have to learn new techniques, technologies and approaches in order to manage everything as well as come up with new ideas for enhancing the customer’s experience, Gillett wrote.
2) Integrate silos: As companies buy and use more connected devices, business leaders will start to wonder why they have to use separate vendors for each connected asset, Gillett wrote. He used the example of integrating the X-ray system, the CAT scanner, the gurney tracking system and the electronic pharmaceutical cabinets together in a hospital with other hospital management systems. Gillett advised CIOs assign an enterprise architecture team with the job of building an inventory of connected assets and their characteristics in order to make this integration of assets happen. The team should also plan for a unified console as well as integration with enterprise applications and analytics.
3) Explore IoT platform services: “Building connectivity into new products is not a do-it-yourself (DIY) task for the faint of heart,” Gillett wrote. He urges CIOs to explore services like Axeda, ThingWorx, and Xively to help enable connectivity and manage the CIO’s and company’s products. These platforms include services like support for M2M protocols, device management support, and support of IoT-specific protocols and analytics.
4) Work with the security team: Gillett advises CIOs to bring in their security teams to help with the mapping and management of connected devices. The security team should review and report on the inventory of connected assets as well as the associated policies and procedures for installing, monitoring, and updating the connected assets, he wrote. Gillett also advised that CIOs make sure they find, and account for, unknown IoT devices that may be part of facilities, fire protection, manufacturing, warehouse systems, etc.
5) Work with the product managers and business strategists: Gillett said that it is important that the CIO or a CIO representative work closely with product managers and the business side when it comes to dealing with the IoT. The CIO’s involvement with the product managers and the business side should be on an ongoing basis so that the CIO can work with them on things like data formats, security, and enterprise data integration.
Let us know what you think about the story; email Kristen Lee, features writer, or find her on Twitter @Kristen_Lee_34.
NEW YORK CITY — Money laundering is a team sport. “The process of cleaning dirty money involves moving funds through an intricate and interconnected series of accounts,” said Katie Levans, marketing director at Tresata, a predictive analytics software vendor.
It’s a team sport that’s paying off — for criminals, at least. Globally, laundered transactions total more than $2 trillion a year, Levans said. And, in the United States alone, billions are spent each year to curtail those activities — investments that have, for the most part, proved rather fruitless. “When it comes to actual seized money from successful AML [anti-money laundering] convictions, that total is less than 0.2% of all global laundered transactions,” Levans said at Spark Summit East, an event named after the open source big data processing engine that came out of the University of California at Berkeley’s AMPLab.
The current anti-money laundering reality has led some financial intuitions to make decisions that meet government regulations but create unintended — even detrimental — consequences, Levans said. Earlier this year, for example, the Merchants Bank of California was pressured by the U.S. government to stop wire transfers to Somalia, a country that’s been known to funnel funds into the hands of what the United States sees as terrorist organizations.
But the all-or-nothing approach created new problems. By cutting off all wire transfers to Somalia, people who depend on funds coming from relatives in the United States were also cut off. “Somalia is one of the poorest countries in the world, relying heavily on remittances for schooling, food, housing and other humanitarian aid,” Levans said. (It should be noted, Merchants Bank is not alone. Wells Fargo and US Bancorp stopped wire transfers to Somalia years ago, and other banks followed suit.)
Merchants Bank made the decision after it determined it was too hard to document who was actually receiving the wire transfer, according to a report by the LA Times. A lack of visibility also happens to be a problem for even the more advanced money laundering schemes, according to Levans. The investigations are highly manual, which also means they’re slow, expensive and sometimes inaccurate; technology products on the market today only analyze at an entity level (an individual or business) or a transaction level, failing to provide visibility into the relationships that create these intricate money laundering networks.
Tresata is attempting to change that. Partnering with Databricks, a company founded by the creators of Apache Spark, Tresata is rolling out a new tool called Teak, an anti-money laundering application that uses Spark for data processing and is delivered in the Databricks Cloud. The goal is to help financial institutions drill into relationships between entities and networks, giving banks a more comprehensive view of how people, businesses and the transactions between them are linked.
According to Tresata CTO Koert Kuipers, Spark was selected because it helps deliver key characteristics needed to detect patterns of fraud at a network level: Spark’s in-memory capability provides speed; it provides search engine capability that processes all data on the graph; and it’s scalable. Most importantly, Kuipers said, it provides “graph traversal,” which helps users quickly explore how entities are connected.
Having the right talent in your organization is crucial to success. When a company is lagging and just can’t seem to pull ahead of the competition in its marketplace, one solution is to acquire a startup that can do what, so far, your company has not been able to do.
“[It] is becoming a requirement for differentiation,” she added.
And while simply buying a startup in order to get the talent you need is certainly effective, it is not the only way to achieve this. In fact, you may have the IT people necessary to drive innovation already within your organization, but “you kind of have to look at your people and they will tell you where they belong,” Barbara Gomolski, managing vice president for CIO and executive leadership research at Gartner said at the Fusion 2015 conference last week.
Some employees within the IT organization are better suited to what she called “mode one” (the startup mode) and generally are the multi-taskers that like to move quickly, Gomolski said. Others are best suited for “mode two” and are the people who are detail oriented and like digging deeply into a problem.
“Your people will almost gravitate naturally based on their work style,” Gomolski said. CIOs should observe their employees and see who has the skill sets, the work ethic, the mindset that fits either “mode one” or “mode two”, she said.
Beware a house divided
While having two modes running within your organization has its clear benefits and is even essential to differentiating yourself and getting ahead, analysts said, it also has the potential to pull your team apart.
One thing to be careful about when it comes to utilizing bimodal IT within an organization, Gomolski said, is having the people within “mode one” labeled as “the cool kids” and the people within “mode two” labeled as “everybody else”.
“What I think you really have to be careful [of] is [the mentality that] mode one is hot and sexy and young and fresh and mode two is where you go to die. We don’t want to create that kind of a karma in the IT organization,” Gomolski said.
In fact, her point of view is that both are needed because it’s the two modes working together that, in the end, create success. “Mode one” may be the startup where innovation happens, but “mode two” is “where we actually scale and make it industrial grade,” she said. “So that is really on us to say, ‘Look, they’re equally important’ because, let’s face it, we cannot do everything in mode one nor would we want to.”
In 2007, Apple introduced its first generation iPhone. Yesterday, it announced the launch of its much-anticipated iWatch. It’s just one example of how consumer technology is marching on at an unprecedented rate. But as CIOs well know, the continual hardware upgrades, not to mention the rapid iteration of software development cycles that are the driving force of the Apples and Googles of the world, can be unsettling — or worse — for the enterprise workplace.
The constant evolution of technology has the potential to make an older generation of employees feel even older and, alas, seem even more irrelevant to a company’s Millennial contingent. The good news? There’s an easy solution to the tech generation gap, according to Tom Koulopoulos, chairman at the Delphi Group, a consultancy in Andover, Mass. It’s called reverse mentoring.
“If you walk away with nothing else, walk away with this actionable item: Create a reverse mentoring program within your organization,” Koulopoulos said to the C-suite executives gathered at Fusion 2015, which is hosted by WTN Media in Madison Wis. Reverse mentoring is exactly what it sounds like. “It’s mentoring turned on its head,” Koulopoulos said. It turns senior executives into mentees who learn about the ins and outs of “youth technologies” from the company’s Millennial hires. Mentees are free to ask questions about the benefits of Instagram or how often they should tweet — or why they should be using Twitter at all.
Reverse mentoring is not a new concept. Jack Welch, the legendary CEO at General Electric, was a big proponent of the practice. According to a video interview, Welch introduced reverse mentoring in 1999 after meeting the CEO of a global consumer finance company who relied on younger hires to help him become better acquainted with ecommerce. “That was one of the best ideas I’d heard in a long time,” Welch said. When he returned home, he championed a similar program at GE. While Welch made reverse mentoring mandatory at GE, other companies like Cisco keep the program completely voluntary, Koulopoulos said.
And traditional mentoring doesn’t have to go away; reverse mentoring simply becomes an extension of it, he said. Despite its potential impact, reverse mentoring is nascent, seen at less than 10% of organizations today, Koulopoulos said.
MADISON, WISC. — When Daniel Adamany left EMC in 2007 to build an IT consultancy, his list of startup priorities didn’t include building company culture. “Now it’s pretty much all I think about,” said Adamany, CEO of Ahead LLC, at Fusion 2015, a gathering of C-level executives hosted by WTN Media.
The shift in the pendulum was triggered by his own experience as the leader of his firm. In 2007, Ahead employees all knew each other. They shared the same vision and mindset, which kept the fledgling company’s business goals top of mind. But as the company grew and matured, the culture that seemed such a natural part of the business deteriorated. “It was ugly for a little while,” Adamany said, so much so that at times, even he dreaded going to work.
Initially, he tried to ignore the problem or accept the new reality, but things got worse. He realized he had to reestablish a company culture that lifted rather than dragged the business down — a leadership challenge that required patience on his part and hard work.
Today, the Ahead culture isn’t something he sets and forgets, Adamany said; it’s an ongoing project, which sometimes benefits from bringing in a hell-raiser or two, or what Adamany referred to as “aliens.”
Don’t beg, borrow or steal culture
Part of the difficulty in moving the pendulum back to a more productive environment was that Adamany was unsure where to start. “It was something I wanted to change, but I didn’t know how to change it,” Adamany said. He tried borrowing cultural strategies from other companies — like Netflix’s nine behaviors and skills — and grafting it onto Ahead, but “it didn’t work because it wasn’t us,” he said. So, rather than stew or ruminate about what caused the culture to disintegrate, he began considering the company’s strengths.
It wasn’t an exercise for the CEO alone. “We surveyed the company,” Adamany said, asking employees to list three characteristics that made Ahead special as a company. Together, he and the team landed on three traits: Ahead’s ability to collaborate, innovate and drive (aka execute).
After the surveys were tabulated and the word clouds constructed, Adamany didn’t let the idea of collaborate, innovate, drive recede into the background. “We had to get people to believe,” he said. He held a kickoff where the characteristics were discussed, and he introduced the company’s CID — collaborate, innovate, drive — awards, a peer-nominated recognition system that comes with a $50 gift card. Award winners are eligible for quarterly CID awards; and quarterly winners are eligible for the annual CID award. The recognition program took a little while for employees to warm to, but, Adamany said, it eventually picked up steam.
CID now plays such a significant role at Ahead that Adamany uses it as a guide during annual reviews or when considering potential hires. And it isn’t for internal use only. Click on the “About Us” tab on the company website, and there it is — collaborate, innovate, drive — below a block of text that reads How Ahead stays Ahead.
“It’s bigger than words,” Adamany said. “It’s a mode of operation. And it’s working.” Last year, Ahead grew 33%, which outpaced company growth for the last four years.
The appropriate use of aliens
But growing — and maintaining — a company culture isn’t all employee surveys and awards programs. Once the input is gathered and the culture is defined, it also has to be enforced. “When people go against the grain of your culture, you’ve got to do something,” Adamany said. “You cannot allow that to persist.”
It won’t be easy, but bad behavior left unchecked could have significant long-term repercussions leaders will want to avoid. That’s if the culture is working. If it isn’t, Adamany suggested introducing an alien to the mix, i.e., a strong personality who challenges the established norms. Sometimes an alien can shake things up by providing such a different view, it causes the bad culture to crack.
Not only can aliens help neutralize bad behavior, Adamany said, they can also be used to stretch the culture in good ways — by injecting fresh, creative thinking into a situation. “For instance, we’ve been building up our cloud practice, and we knew that we needed a different approach,” he said. “So we hired somebody that fit really well into our culture but thought totally differently when it came to approaching the topic.”
In other words, he told the C-level executives in the audience, figure out how to “use aliens appropriately.”
The responsibility of securing the enterprise has been pushed onto the CIO, Linda Ban, the Global C-suite study director at IBM, said at the Fusion 2015 Conference of CEOs and CIOs in Madison, Wisconsin. The trend was one of the findings of IBM’s recent Global C-suite Study, which surveyed over 4,000 people from all C-level positions.
Ban was not the only one at Fusion who addressed this issue of the CIO taking charge of security. Asif Naseem, President and CEO at PDS, an IT services, solutions and technologies provider, also spoke about how security now dominates the CIO’s agenda because of unavoidable emerging technology trends and because cyberattacks are increasingly malicious.
Naseem added that each emerging technology trend brings more and new vulnerabilities and risks that the CIO has to address within his or her own organization.
IoRT (Internet of Right Things)
Of the ever-increasing number of mobile apps and devices being used by employees, for example, “no more than half of these devices entering the network are secure,” he said.
Furthermore, the rise of Internet of Things (IoT) brings new security concerns with it, Naseem said, adding that “99% of the devices that can be connected, aren’t.” Yet.
But the statistic begs the question, Naseem said: “If a device can be connected should it be?”
Having hundreds of millions, even billions, of devices connected to the Internet creates a larger surface for attack, Naseem said.
He urged the audience to instead think of IoT as IoRT, or “Internet of Right Things”, and only connect devices that will bring value from being connected to the Internet.
Avoiding these new trends, emerging digital technologies, and the risks that they bring with them is impossible, said Sean Wessman, senior manager for Ernst & Young (EY) Cyber Security, during his presentation on building new and competitive business models securely. This is especially the case as millennials increasingly enter the workforce.
To prove his point he cited Gartner’s statistic that 30% of millennials would rather have an iPhone than a raise. In addition, Gartner also found that 46% of vehicle drivers aged 18 to 24 would choose Internet access over owning a car.
As C-suite leaders are forced to embrace digital technologies, Wessman said, they have to think about “systems of trust.” That’s really the challenge that’s upon us as the CIOs and the leaders of IT… in our organizations, is how do we establish systems of trust?” he told the Fusion audience. One way is to think about security is in phases, he said.
The three phases of cybersecurity maturity
In a survey of CIOs and IT leaders EY Cyber Security has done for the past 18 years called the Global Information Security survey, the Ernst & Young security practice has found there are three phases of cyber security maturity companies must go through:
Activation is the first phase, Wessman said. “If we’re doing secure software development, activation is defining a policy or standard for… secure application development. That’s the early phases. It establishes the governance in the organization that allows us to do something of this nature.”
Adaptation is the second phase. “How do we adapt our software development lifecycle to apply to the new areas where we may do software development?” Wessman said.
For example, the risks that come with development on a mobile device are different from the risks when developing for a on a web-enabled device or for an internal financial control system and so on, he said.
The challenge then is: “How do we adapt our policies and our standards to apply to these different environments that have clearly different requirements and different threat vectors and different threat outcomes?” Wessman said.
Anticipate is the final phase of cyber security maturity.
“If we have trouble managing thousands of devices today, how are we going to manage millions of devices?” Wessman said. “If we have to anticipate then all of a sudden maybe we can think about things differently.”
Wessman used the example of James Roth, CISO at Aetna, a healthcare benefits company, and how Roth recognized it would be impossible to manage defects in his software development cycle on the backend. So Roth studied the way code was developed in his company and it turned out that “across all platforms, 90% of the code redevelopment was from open source code repositories and libraries because coders don’t want to do the same thing twice,” Wessman said.
Roth’s innovation approach to solving the problem? Rather than focusing on managing defects on the backend, Roth decided to secure the base of code on the front end, namely: “Only allow [their]developers to leverage code that has been through security process so that at the backend [they] have far fewer defects to manage across the lifecycle of these many devices, bringing the cost down.”
Wessman cited this as a prime example of how being forced to anticipate what will come next can help IT leaders to think differently and solve potential problems.
Let us know what you think about the story; email Kristen Lee, features writer, or find her on Twitter @Kristen_Lee_34.
Myer, Australia’s largest department store chain, said Monday that it has replaced its CEO of nine years, Bernie Brookes, with Richard Umbers, 48, who joined Myer as CIO and supply chain officer last September. The changing of the guard was characterized in the company’s announcement as a fresh start intended to help the struggling retail chain reposition itself in a retail environment where shopping habits are increasingly shaped by technology.
“It has become clear that to thrive in a modern retail environment, Myer must adapt more quickly and be closer to its customers,” Chairman Paul McClintock said, noting that Umbers will lead a “significant program of change” and calling out the former CIO’s “success in leading business transformation.”
Umbers, who prior to joining Myer held senior roles at Aldi in Europe and Woolworths in Australia and New Zealand, addressed the impact of technology directly. “The customer we’ve got is changing, and online and digital are creating new opportunities for us all the time,” he said, describing the new strategy as “taking a blank sheet of paper and looking at the nature of people who shop with us.”
The appointment, coming two weeks before the department store chain releases its first half-year results, got “a tough welcome from investors,” as a Sydney Morning Herald headline put it, with shares down double-digits. Whether Umbers can turn around a company whose profits have reportedly plunged 40% over the past four years remains to be seen.
CIOs: Ideal gene pool for next-gen CEOs?
At SearchCIO, however, the appointment of Umbers points to a question I’ve recently explored with IT and business leaders on panels at SIMposium, the annual CIO event hosted by the Society for Information Management, and at last month’s CIO conference in San Francisco hosted by Global Business Events: Do CIOs represent the ideal gene pool for the next generation of CEOs?
The argument in favor goes something like this: Every business, big and small, has in essence become digital. At the small end, the corner pizza shop, the local cab company, your local bank — businesses that used to be human-to-human have become digital machine-to-digital machine. At the big end, the customers and business processes at all of your companies are becoming big data repositories.
So, who knows enough to lead in the digital age?
Is it the CFO, who crunches numbers and plots financial strategy? Is it the CMO, who knows all about marketing? It would seem that CIOs understand, almost certainly better than any other member of the traditional C-suite, how their companies operate in the digital domain.
It also can be argued that CIOs are best-poised to anticipate the impact that information technology will have on the organizations moving forward. Many CIOs believe that’s so: In a recent Gartner survey of 2,810 IT leaders, 47% see digital leadership as their responsibility. And CIOs are not the only ones who think so. A Harvard Business Review survey of 750 business executives found that 41% said they’re looking to the CIO to lead their company’s digital transformation, versus just 20% who think the CEO could do the job.
I posed the question of CIO as CEO heir apparent to Dave Aron of Gartner, who specializes in IT strategy and the CIO role and has written about the new breed of “digital CIOs.”
“I guess the truth of the matter is, it seems to be very much a bifurcation. There are some CIOs — my guess is it would be the majority — who are much more tied to the discipline of IT than to being a C-leader,” Aron told me. “It’s a little cheesy, but you could almost look at who’s more tied to the C in CIO and who’s more tied to the I.”
CIOs constitutionally unsuited to be CEOs?
As for the naysayers? The arguments against such a transition, as you might imagine, tend to focus on the personality types that gravitate toward the CIO role — or at least the stereotypical CIO. A recent ZDNet article entitled “From CIO to CEO: Why it’s time to give up the impossible dream” captured the sentiment in the following anonymous quote by an IT leader:
“By and large, CIOs are not entrepreneurial. Most CIOs are analysts — and the first four letters of that word pretty much sum up the skills of many CIOs today.”
The job of the CIO has always been a big topic for us on SearchCIO. Over the years we’ve kept close tabs on what the CIO job entails and read the tea leaves on where it is headed, examining, among other parameters: reporting structures (Remember when it was considered the kiss of death to report to the CFO?); salaries; bonuses; C-suite alliances (e.g, the current notion that CMOs and CIOs should be best friends); potential rivals for the top IT job (chief data officer, chief digital officer); career blunders (talking about uptime using the numeral 9).
In recent months, chatter about the role of the CIO has reached fever pitch, and not just in industry publications like ours where you’d expect such discussions but in the mainstream business press as well. I think this is because it has dawned on many of us how really difficult (maybe impossible?) the role of chief information officer has become. The traditional purview of the CIO — to ensure reliable, secure, efficient and cost-effective IT systems — is still a requirement of the job (“table stakes,” as the hotshot CIOs like to say), but with the digitization of businesses (and that’s every business, from the corner pizza shop to the industry giants) many new responsibilities now come with the job. How are CIOs dealing with their ever-expanding set of duties?
One trend that IT consultancy Gartner Inc. is seeing is an approach it’s dubbed bi-modal IT: on the one side, the safe, industrialized IT that delivers services and enables the business; and on the other, the fast, experimental, exploratory IT that helps the business compete in the digital domain.
“More and more of our clients are moving in that direction,” Dave Aron, a Gartner fellow and VP specializing in IT strategy, told me.
Under this structure, the CIO typically has put in place a deputy of IT. “The title very much varies, but what we’re talking about is a chief operating officer of IT. And the relationship is very much like a CEO-COO relationship,” Aron said. The CIO is freed up to look at digital business and the COO of IT, or deputy, “runs everything, the whole show, day to day.”
In Gartner’s recent CIO survey of some 2800 IT leaders, 47% said they have that “kind of COO under them,” Aron said, but added that the survey result strikes him as high. “Anecdotally, I feel like it’s a smaller number, maybe a third of CIOs who have this arrangement,” he said.
Three components of the digital CIO role
So what does the digital CIO actually do? Gartner breaks the role down into three components: outside-in thinking; inside-out thinking; and IT integration.
Outside-in: In this role, the digital CIO is not thinking about the current business, Aron said, but about what is happening in the digital world and the risks and opportunities it represents for the business. This is the kind of thinking that often results in “very unusual business extensions,” Aron said, such as mobile phone operators becoming banks, or drugstore chains becoming large healthcare providers. In this aspect of their jobs, digital CIOs might ponder, for example, what Bitcoin means for financial transactions or 3-D printing means for supply chains.
Inside-out: While these digital CIOs are busy figuring out where the digital world is taking their companies, they simultaneously must be thinking about what this digital evolution means for their companies’ internal capabilities. Aron gave me the example of a large bank whose infrastructure was designed for a few million customers who used to visit their branch banks maybe once a month to conduct business. Today, any one of those millions could be transacting with their bank 10 times a day from their smart phones. Part of accommodating this new business paradigm may involve hiring for new skill sets, for example, and using the cloud and other new IT infrastructure, Aron said. Digital CIOs need to be on top of this.
Digital integration role: “This is making sure that as the world gets digital, and we are using all sorts of omnichannels, we don’t make a big mess,” Aron said.
Beware the CSO (chief strategy officer)
For the record, I asked Aron which of these three aspects of the new CIO job are today’s CIOs best prepared for. Not surprisingly, he said the second and third aspects of the role (inside-out and integration) are probably more in the traditional CIO’s wheelhouse than that “outside-in” role.
“That aspect of the role feels more like an extension of the chief strategy officer role than the CIO role,” Aron said.
My questions for you: Have you hired a deputy CIO? Do you consider yourself a digital CIO?
The CIO conferences put on by Global Business Events (GBE) are closed-door affairs intended to give IT leaders an opportunity to hear how their peers are solving problems and breaking new ground with IT. These are peer-to-peer forums where the emphasis is on a candid exchange of ideas. As a condition of listening in, SearchCIO doesn’t name names but does report back to our readers on the issues. IT business transformation, for example, was a hot topic at GBE’s October event in Chicago.
At GBE’s most recent CIO event in San Francisco, the T-word again loomed large. Transformation — of the business, IT organizations, of security strategies, and of a personal nature (the panel I moderated explored whether CIOs are next in line to be CEOs) — was the theme, if not the title, of just about every session on the agenda. One talk, in particular, hit me hard, because it suggested that for CIOs to use technology to drive real change they may well have to fire a large portion of their IT workforces.
The case study involved a large healthcare company that depends heavily on technology. It has the largest EMR implementation outside of the U.S. government. In recent years — thanks in large part to technology — this company has seen a 57% reduction in medical errors, 26% fewer office visits, made 37.4 million test results available online to its patients and helped drive a 27% increase in patient self-management of chronic diseases. When the now SVP of infrastructure joined the company six years ago, however, he said he and fellow executives “faced a difficult decision.”
“We decided that IT could not improve quickly enough … and implemented a large-scale IBM outsourcing,” he told the audience.
Business agility no matter what
For the first two years post-IBM outsourcing the internal IT focus was “all foundational,” he said. He brought in ITIL best practices to improve IT availability and reliability. The “next frontier” was speed and service, with the lofty vision of one day being able make technology provisioning “as easy as Amazon does.”
So, with the help of its outsourcing partner, IT embarked on a major private cloud initiative that automates a lot of IT infrastructure provisioning — “Computers can build computers much better than people can,” as he put it — and this private cloud is already transforming the healthcare’s business processes. He said he’s now looking to do the same for app dev by implementing Agile methodologies.
So, a great story and triumph for an IT leader — that also required a massive shakeup of the internal IT organization, the loss of hundreds of IT jobs and some fierce maneuvering to transform IT services.
In order to pull off the cloud provisioning, for example, he built a small team of people — half from IBM and half from internal IT — and said he made sure he had their backs. “I walled this team off and protected them all the way up to implementation,” he said.
The ripple effects on IT jobs of this IT business transformation continue to this day. For example, the move to the cloud and agile software development is proving to be the death knell for project managers. “The projects go right through and we do not need project managers,” he said.
But without these personnel and process changes, IT departments cannot possibly compete against the big public IT providers, he told his peers. “If we don’t provide that level of service, IT departments will be out of business.”
So, as CIOs and business leaders, are you facing the same difficult decision? Can your IT team improve fast enough to drive IT business transformation, or are layoffs in the offing? I would like to know — and understand that this is confidential information.
As of yet, no company has cracked the mobile wallet space. But that doesn’t mean it won’t happen eventually. The tipping point, according to Forrester Research Inc., hinges on seeing mobile wallets as a marketing platform. In a new report, “The Future of Mobile Wallets Lies Beyond Payments,” the Cambridge, Mass.-based research and consulting firm argues that companies that can successfully build a mobile wallet that also doubles as a marketing platform will “win” because they actually will be giving consumers what we want: a better, more personalized shopping experience.
The thesis resonated with me. I first heard of this concept of mobile wallets being about more than just payments when I visited Paydiant, a Boston-based startup which provides the technology behind the mobile pay app CurrentC. I was there to film for my Startup Spotlight series (check out Paydiant’s video here). Paydiant’s co-founder and head of products and marketing, Chris Gardner, in fact, said this is one of his company’s big missions: “We have to prove what we’ve been saying for the last three or four years. [And that] is that mobile’s a marketing platform; it’s a very powerful way to interact with your consumers and it’s not just about payment.”
Companies like PayPal, Apple, and Google have seen the light, according to the Forrester report.
“Apple Pay is critical in that it offers consumers a more secure and convenient checkout experience. However, the key to Apple’s wallet lies in the central role of Passbook, where consumers can easily save and organize branded content,” the report said, referring to the content that blurs conventional advertising content with editorial content, or other content, making it difficult to differentiate what is advertising and what is not.
Google, for its part, is not focusing on payments but instead is more interested in the transaction data in order to use that information to strengthen its advertising business.
Forrester predicts that brand name companies will have to figure out how to partner up with mobile wallets if they want to keep their marketing messaging front and center with the mobile device-carrying-hoards.
How companies can take advantage of mobile wallets
Forrester advises marketing leaders to take advantage of this emerging opportunity regardless of who wins the mobile wallet war.
“Marketing leaders will benefit from mobile wallets if they tie together loyalty programs, coupons, product discovery, gift cards, and promotions to create powerful and new brand experiences in the mobile moments of their customers,” the report said.
Here’s Forrester’s advice for marketing leaders to make the most out of what mobile wallets have to offer:
- Test existing mobile wallets’ marketing capabilities. Players like Urban Airship, Passkit, Passworks, and Vibes, all mobile marketing solution companies, can help marketers manage mobile wallet campaigns by driving foot traffic, and updating content and offers, the report said. These campaigns are valuable because they “will let marketers know the most efficient distribution channels (e.g., SMS, email, direct mail, or mobile ads) to engage customers within mobile wallets,” the report said.
- Plan for relevant, location-based, real-time offerings. To make the most of mobile wallets, the report said, marketers will need to strike a balance of adding location and time-sensitive offers to their approach without being too invasive or intrusive. Unfortunately, more often than not, brands tend to have imprecise location information about their stores, the report said. Marketing leaders need to be very precise and know what notifications to send when and based on the customer’s location. For example, sending push notifications once a consumer is at the entrance to the mall, the front door of the store itself, or even in specific areas of the store. The report said that some startups, like Tapcentive, can help marketers achieve this.
- Mobilize loyalty program and regularly update branded content. Marketers should pay attention to how mobile is changing customer loyalty, the report said. This is because access to loyalty rewards is in high demand from consumers and happens to be the one that is the least integrated in mobile wallets today. The report said that third-party mobile wallets will offer the opportunity and can help to integrate basic rewards features for frequent shoppers. A key success driver, the report said, is the ability to update brand content and make it socially available.
Let us know what you think about the story; email Kristen Lee, features writer, or find her on Twitter @Kristen_Lee_34.