CIO’s deal with Cloud, Cognitive, and Complexity to bring innovation to their organization
Written by Dr. Sanjay Rishi
Recently, I had the pleasure of delivering a key note address to the Millennium Alliance, a gathering of CIOs and CISOs (Chief Information Security Officers) from many of the world’s most successful organizations.
I am always energized by the interaction with our clients on the magnitude of transformation they are undergoing, and the depth of insights they seek from us. At the same time, their strategies and lessons learned are profoundly instructive.
Three-Cs of Innovation
My keynote was organized across three Cs, the levers and challenges of transformation and innovation: cloud, cognitive, and complexity emerging from the plethora of new and emerging capabilities, such as blockchain and IOT. I challenged them on their role as architects of the future of the enterprise — beyond the technical implications of architecture. Our marquis methodology for cloud enabled transformation, Cloud InnovateTM, found overwhelming resonance with the audience.
Subsequent to my keynote, I moderated a panel of three CIOs/ SVPs of IT: Lorenzo Hines from Citi, Pawan Verma from Footlocker, and Sanjeev Kumar from State Street. I’ve summarized what we learned below.
Cloud adoption paves the way to cognitive capabilities
The journey to the cloud, undoubtedly, is dramatically altering business processes, and driving innovation in business models. What was initially considered an architectural necessity has evolved to become a disruptive business strategy. The relatively new, yet envied airline Etihad, compelled by the promise of a secure infrastructure, reduced IT costs, increased efficiency, and recognized cloud adoption as a critical first step in transformation.
And now organizations like Etihad are implementing the appropriate cloud model for their specific needs, whether it be a public cloud or a hybrid multi-cloud environment. They’re discovering that it is providing them with valuable information that allows the re-imagining of processes and the development of capabilities that had never previously been possible. They are transforming their existing application landscapes to cloud, building microservices to increase agility and resilience, and exposing APIs to achieve ecosystem intimacy that was beyond even aspirational not too long ago.
I framed our beliefs around protection of data and insights, and the risk that democratization of data may lead to commoditization of data. I also expressed the need for judicious disposition of workloads for the right destination clouds. I discussed the magnitude of work we are doing across industries to bring cloud enabled cognitive (artificial/ augmented intelligence) solutions, and the billion people we will have affected by the end of this year. I highlighted the deep substance of our blockchain practices, and clients like Maersk and Walmart that are on the leading edge of innovation. I shared the experience of one of our large pharma clients that improved their drug sales forecasting efficiency by 86%, saving $3 million. They then went well beyond by delivering an additional $100 million in sales for a particular set of drugs by developing a cloud enabled cognitive model to vary prices, promotions, and resources.
And I then used this framing to probe insights from the panel that generously demystified their individual journeys.
Three successful transformations
Lorenzo, Pawan, and Sanjeev saw ever-increasing expectations as the foundational imperative to transformation across their enterprises. Sanjeev classified these expectations across three dimensions for State Street: internal expectations from employees and their ecosystem, external and customer expectations, and regulatory expectations. More things, more real time, and affordable elasticity and agility seemed to dominate the first stream of conversation. All of the participants saw exploitation of any latency in the value chain, and the relentless pursuit of customer-centric innovation, as the source of threat and disruption in their respective industries.
Pawan shared his insights on the influence of the “highly digitally connected” customer segment that Footlocker serves: the 10–25 year-old demographic, and their expectations. He shared an interesting illustrative anecdote of a store opening in New York with Rihanna. Not unlike major brand launches, the physical (and virtual) crowds were beyond imagination. The need to scale up and scale down the multi-channel frictionless experience for a short period of hours before the inventory is exhausted is a unique challenge that Pawan deals with regularly — enabled by cloud.
Both Pawan and Sanjeev were passionate about their belief in understanding and organizing data strategies. The need to have data domains clearly organized: transactional, master data such as inventory, pricing, and product. Sanjeev shared State Street’s comprehensive organization of three clouds: the data cloud, the compute cloud, and the productivity cloud.
The absolute criticality of transforming governance and operating models was highlighted by all of them. Data governance from inception to destruction, the need to establish and conform to a taxonomy, and incorporating attributes such as ownership, access rights, purpose, and distribution rights echoed loudly with me from our thinking about Cloud InnovateTM. They all believe that their resident data can be leveraged with market data, and adjacent data such as social or weather, to obtain new insights into the business. And they are applying these insights, developing microservices and APIs to provide their organizations with new opportunities, make them more competitive and, in many cases, disrupt the existing business environment.
The 4th “C” is caution
Across the board, there was an undertone of caution — the need to see microservices as an integral part of cloud migration and transformation, the need to make sure that workloads were aligned to the right cloud, the need to have clear business outcomes tied to these journeys. As custodians, State Street’s forays into exploiting cloud and cognitive capabilities to inform their holdings with macro events around the globe is nothing short of impressive.
In a fierce competitive environment — one in which organizations will either be the disrupted or the disruptor — the imperative to embrace and exploit all the advantages made possible by these new technologies is apparent.
Three questions to ponder
To meet the challenges of this market, you might want to ask how your organization:
- reflects the key threats of disruption — value chain latency and customer centric innovation — into its strategy?
- incorporates the importance of data and insights into its strategy, and how is that reflected in your cloud adoption strategy?
- systematically integrates technological capabilities that are very real, here and now — microservices, cognitive, blockchain, IOT.
Key takeaways for CIO’s and CISO’s
Cloud, artificial intelligence, and emerging technologies such as blockchain and IOT are helping companies reinvent themselves. People want more things more real time today, and that requires everyone — from banks to retailers to manufacturers — to be quick to respond, and yet do it in an affordable way. Opportunities to succeed have never been more rich. There is a proven path to adopt these capabilities and thereby dominate your market.
To see how others are using cloud migration to transform their enterprises, view ibm.biz/cloudconsulting.
Originally published at www.ibm.com on July 5, 2017.