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How new IT operating models stave off digital disruption

Companies are facing a digital imperative to revamp business operations to better serve customers. To accommodate these shifts, CIOs are making sweeping organizational changes, adding new key roles, setting up innovation labs and tapping modern technologies to meet strategic mandates issued by their CEOs and boards.

Social, mobile, analytics and cloud (SMAC) forms the primary digital fuel for most IT organizations. But CIOs who are eager to stay atop trends are also testing artificial intelligence, machine learning, internet of things and blockchain. Collectively, such technologies have the potential to help companies transform their business processes.

The share of organizations committing to enterprise-wise digital strategies has climbed from 25 percent in 2015 to 41 percent in 2017, according to the Harvey Nash/KPMG CIO Survey 2017.

As Victor Fetter, chief digital officer of Vertiv, puts it: « The leading CIOs are finding the right spots in their organization to make strategic hires to drive transformation. And they’re creating an environment where it’s OK to innovate and use that to see how it shapes the agenda. They’re doing all of that in a space that’s wrapped around the customer experience you want to deliver.”

While CIOs know to avoid the trap of employing technology for technology’s sake, the new tools must be harnessed as part of an « unbounded IT » operating model in which CIOs better align their IT departments with the business strategy.

Jim Swanson, CIO of Monsanto

When Jim Swanson arrived at seed company Monsanto four years ago he saw “pockets of amazing digital data science technology” but no formal structure with which to harness it. He hosted hackathons, such as on a tool to improve data around seed returns, to make some of these innovations more transparent to the business. “Then we looked at how to scale that and we decided we had to pivot the organization pretty aggressively,” Swanson says.

With big data analytics playing an increasingly prevalent role in agriculture — an industry not known for technological change since its Industrial Age transformation — Swanson created a global product and engineering team overseeing platforms for data and analytics, operations and labs, customers, finance, and workforce. Atop these platforms, Monsanto creates software product roadmaps and offers digital agronomic advice services. Swanson says it’s fair to view Monsanto’s IT department as a software development company. “We had to reorganize to be able to offer all of that,” Swanson says.

Instituting that new digital operating model has given Monsanto a foundation on which to tackle machine learning projects, Swanson says. In one scenario machine learning algorithms analyze plant genotypes and phenotypes to determine whether they have good leaf and root structure, suggesting they could produce a better harvest. Monsanto also uses machine learning to analyze plant and leave structures for diseases. “For us, that’s really important because then we can provide a diagnosis and treatment,” Swanson says.

Victor Fetter, CDO of Vertiv

As CIO of LPL Financial, Fetter, who joined infrastructure management concern Vertiv in June, established a customer experience center where members interact with financial advisor clients to learn how to improve their workflow and processes. The team reports its findings to LPL’s business groups, which can adjust customer experiences, optimize workflows, enhance data insights and implement other customer-facing tools.

Fetter also appointed a DevOps point person whose role is to shrink time to market and hired a “data lead,” whose job is normalizing, extracting and using data in different ways and making it available to the business and clients. « It’s about finding those key roles that you want to have in your organization to really drive change,” Fetter says.

Cultural change also extends to competitions and events, including hackathons and guest speakers, such as Constellation Research’s Ray Wang, who Fetter says brought a broad view of emerging technologies and their role in markets. When LPL moved to a new facility in Fort Mill, S.C., Fetter created an innovation lab where engineers test emerging technologies, such as how to use Amazon.com’s Alexa and other virtual assistants to check balance inquiries, trades and other transactions. Fetter says such experiments force engineers to think about how to rewire service layers to integrate voice into LPL’s back-end systems.

LPL is also prototyping a digital dashboard intended to serve as a virtual assistant for customer service representatives. When a call comes in, the rep can see who is calling, conduct a sentiment analysis to gauge the caller’s tone and pull up content pertaining to their recent transaction history to prep the rep. « I think that has the potential to be a game-changer in freeing up time by using information in different ways to provide better service,” Fetter says.

Yousuf Khan, CIO of Pure Storage

While most CIOs long to build deep benches in a tech talent-strapped world, Pure Storage CIO Yousuf Khan believes he can keep the flash storage outfit running lean thanks to cloud software and automation. Only about 30 workers provide IT for 1,700 employees. Khan runs the business largely on applications from Salesforce.com, Workday, NetSuite and Marketo. He’s also operating a data warehouse and other infrastructure based on Pure’s own technology.

Rather than hire software programmers — a hard task in the competitive Silicon Valley — Khan works with venture capitalists to learn about software startups that automate IT operations. For instance, he is exploring how employees might create and resolve help desk tickets using chatbots in Slack. Automation will enable his small team to focus on data analytics to bolster the business. « CIOs are business enablers more than ever before,” Khan says.

Khan is also prioritizing cybersecurity, mulling how to defend against social engineering risks, such as phishing threats, an attack vector he says was hardly an issue as recently as two years ago. Part of his challenge is determining which of the many hundreds of tools available will best help him protect Pure. But he also needs cyber staff that can work with the tools to identify and neutralize threats, a tall task at a time when cyber talent remains scarce. Khan is offering to train up IT staff to more sophisticated cyber roles, including new certifications.

« The people are not there,” Khan says. “The challenges that CIOs have includes building out security thinking within your organization and using that to build out that team. Security is one of those areas where every CIO wants to build up their skill set.”

Kevin Murray, CIO of Cincinnati Bell

Upgrading IT for a telecommunications carrier, particularly one running legacy ordering, billing and provisioning systems is no easy chore. Yet that’s exactly what Cincinnati Bell CIO Kevin Murray has been focused on in recent years.

As part of a software modernization strategy to help the company work better with its partners and customers, Cincinnati Bell has been replacing or augmenting custom software with cloud applications from Salesforce.com, TOA, Callidus, Microsoft and Xactly, among others.

Last July, the company moved roughly 1,100 employees in its professional services organization onto FinancialForce, an ERP product hosted on and feeding data to Salesforce.com. The migration from custom software to FinancialForce took about four months, a much shorter timeframe than the roughly 12 to 24 months it typically takes to move to on-premises ERP solutions. Cincinnati Bell also benefits from periodic upgrades and the software’s ease of use from smartphones.

“It’s a lot faster to implement,” Murray says. « We’ve essentially said SaaS is our preferred path.”

InnoValeur | Data Science | Smart Data | Machine Learning | AI

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