Using intelligent systems to drive innovation is an organisational goal in this era of rapid change. Organisations have a raft of tools in this arena - connected devices through the Internet of Things (IoT), predictive analytics, and machine learning systems to automate critical decisions.
A recent CIO roundtable discussion, held in conjunction with Intergen, tackled how this is played out across New Zealand businesses.
It struck me how applicable these technologies are across any sector.
The panellists, representing various industries, were at different stages in the deployment of such tools. While cognisant of opportunities these tools present, an overwhelming theme in the discussion is the cultural change needed, as their organisations open themselves to the new ways of working these sentient systems can bring. The rise in the amount of data and the security around them were also key issues that were raised.
No doubt, these concerns will be in the CIO’s respective business technology agenda in the months ahead. For, as one of the panellists point out, it is better to disrupt your own organisation, rather than be disrupted by others. His strategy? "Plan for it, have the budget, and be ahead of the game.”
Around the table (from left):
James Henderson, editor, Computerworld NZ
Deane Johns, CIO, Co-op Money NZ
Keith Chilek, CIO, Tourism Holdings
Geoff Leigh, CIO, Kordia
Allan Lightbourne, head of ICT, Mighty River Power
Craig Columbus, CIO, Russell McVeagh
Cliff Ashford, director, software development, AUT University
James Knapp, chief technology office and cloud architect, VIFX
Bruce Wilson, chief technology officer, EROAD
Divina Paredes, editor, CIO New Zealand (moderator)
Malcolm Condie, head of IT, ANZ National Bank
Steven Foster, product manager, Dynamics CRM, Intergen
Darren Wilson, CIO, AsureQuality
Anthony Bitossi, information services manager, Stevenson Group
James Dicksinson, CIO, BDO New Zealand
Peter van Dyk, CIO, Best Pacific Institute of Education
James Page, general manager, Dynamics Solutions, Intergen
Dave Pollard, ICT consultant and former GM technology, Fletcher Distribution (PlaceMakers)
Tony Darby, CIO, Auckland Motorway Alliance
Some excerpts from the discussion:
Craig Columbus, Russell McVeagh: My interest in this area is three-fold: How will IoT affect our ability to conduct our business internally; how will we use internet connected devices to improve services for our clients; and, on a more personal note, how the IoT is going to change the way we live, especially considering, so far, very little thought is given to security around the IoT. We are very good at thinking about how we connect things, but we are very far behind the curve in terms of thinking of the long term implications of these connected things.
..It is incumbent upon the modern CIO to step in and be part of the business conversation from the inception. So, it is not a matter of the board giving a CIO guidance [on these issues]. It is about the CIO initiating the conversation and setting the tone with the board about the overall business expectation.
The modern CIO is in an incredibly powerful position, uniquely positioned to leverage emerging technologies and drive business forward.
The modern CIO is in an incredibly powerful position, uniquely positioned to leverage emerging technologies and drive business forward.
Dave Pollard, ICT consultant: With Apple’s HomeKit and Google’s acquisition of Nest, we are on the cusp of some fairly significant changes in home automation.
...We have the role to sell the art of the possible to the rest of the organisation.
We have the role to sell the art of the possible to the rest of the organisation.
EMBRACING DIGITAL AND DISRUPTION
Keith Chilek, Tourism Holdings: We are looking to innovate, to lead the rest of the industry. I am big on the idea of disrupting yourself rather than be disrupted. You can plan for it, have the budget and be ahead of the game. That is what I have always done, pushing the envelope.
We are changing the entire interaction we have with our customers. This includes the content on our websites and how we speak to the customers when they arrive at a branch.
I am big on the idea of disrupting yourself rather than be disrupted.
We are trying to get customers excited about the experience they are about to have and promote the campervan as the tool to enable that experience.
Some of the changes we are introducing are mobile apps and tablets, as part of the experience in all our branches and campervans.
James Dickinson, BDO: Thousands of clients trust us with their financial information and choose to be backed by BDO. So we are looking at using that anonymised data to provide meaningful insights into their business and industry. We treat our customers’ data with the utmost care and responsibility. The security surrounding this data is paramount to us.
With technology we can provide solutions to virtually any business challenge. Driving user adoption and bringing them on this journey to use our new technology is a challenge.
Another focus is internal user adoption of new technology. With technology we can provide solutions to virtually any business challenge. Driving user adoption and bringing them on this journey to use our new technology is a challenge.
Deane Johns, Co-op Money: We are owned by credit unions and mutual building societies, and are the sixth largest financial transactor in terms of volume in New Zealand. How can we bring smart payments technology to the forefront? Everybody is using card (technology), but is there something else that can be done?
How can we bring smart payments technology to the forefront?
Read more: Four best practices to kickstart advanced analytics: Gartner
Cliff Ashford, AUT University: We do a lot of BI stuff in the university to understand the students, the teaching, the destinations students to go, and the research we should be doing. Collaboration is the key platform (for sharing and interpreting the analysis). We are fairly mature in that part right now, we have data mining/machine learning included. We have got a fairly rich set of data we can always put more stuff in. I am always looking for bright ideas about other things we can possibly do with data.
There is a habit of building data warehouses and making them monolithic and huge...It does not have to be like that.
There is a habit of building data warehouses and making them monolithic and huge and they take a long time to change it. It does not have to be like that. Single system stuff is just reporting. But there are surprising associations from different types of data when you put them all together.
We are interested in student success and the traditional model of doing that was static indicators of what you socioeconomic background, where you got your school qualifications. But we knew there was behavioural stuff some of which were interesting. One of the key things was if students regularly attended class, they would do better. But all we had was paper records where you come and sign in. That was it.
As a side project, we got data from IT, and pulled it in with other electronic systems. Four weeks into the semester we can tell (with a high level of confidence) if the student is going to pass because we have all this data. The value is the interventions for the student, to enable them to seek assistance independently.
MACHINE LEARNING GOES MAINSTREAM
Steven Foster, Intergen: At the recent Ignite event, Trade Me discussed how they challenged their internal team to use machine learning in the business, deliver an outcome which could be collectively delivered to customers. One of the things they trialled was looking at a particular category and see if different machine learning techniques can predict whether that object can sell or not. They could then tell the consumer, if you add this to your auction it will more likely sell than if you don’t.
What amazed me was the technology was really not hard to do. It was drop and drop, you apply some data, some algorithms and it gave the results.
It seemed incredibly easy which made me think, in my business, how could I look at it from an opportunity perspective? How can I apply the same machine learning down to my data that we have captured in the last nine years?
In the investments industry, the trend is to use digital or robo-type innovation to keep up with your competitors.
Malcolm Condie, ANZ Bank: In the wealth management space we are exploring quite smart technologies to give informed advise to the mass affluent in a digital way. In the investments industry, the trend is to use digital or robo-type innovation to keep up with your competitors.
James Page, Intergen: The pace of technology change has picked up, it is exciting, a worry and frightening. But the opportunity for us is really interesting. It struck me how applicable these technologies are across any sector. There are no boundaries.
A friend of mine is thinking of bringing in drone technology [into the farm]and he is asking my views on how he can make sense of the data he is going to collect, using machine learning and how to commercialise that data. For instance, with weather patterns, getting into predictive analytics to understand the behaviour of the soil, the behaviour of farm growth and come up with suggested treatments even before the event happens. Then mash that up with predictive analytics and come out with patterns for suggested treatments before the events happen.
Geoff Leigh, Kordia: As we are a B2B telco, a vast amount of data traverses our networks at any point in time. Gaining insights into traffic types, usage patterns, prioritisation, etc. is extremely important to be able to dynamically 'tune' the network service to a customer’s needs. Moving this from 'human intelligence' to 'machine intelligence' is the challenge.
Gaining innovation funding is always a challenge. One way is to agree on a small percentage of overall annual savings on EBIT, to be used for innovation projects as we see fit.
FOCUS ON THE CUSTOMER
Bruce Wilson, EROAD: We are growing rapidly at the moment and as a transport technology company, we help the transport sector make sense of the valuable data that is coming from all of their vehicles. We are a highly scalable early adopter of the Internet of Things due to all our connected devices in our customers’ trucks.
We have the capability to empower our customers using our devices and especially [with] our recently launched second generation platform. We now have over 25,000 people using these products and a lot of data is coming off all these devices. The products and services we offer are around making sense of all of this data. As an example, we recently launched our driver insight product and instead of just providing where your vehicle went yesterday or the day before, we actually give valuable insights for fleet managers to pass onto their drivers. Instead of saying he is speeding, or how much time he is speeding, we will say, ‘hey we notice that you are typically speeding at night time in Albany and if you reduce your speed in this area, you would become a five star-driver.’ It is providing real information presented in a contextual form.
We are a highly scalable early adopter of the Internet of Things due to all our connected devices in our customers’ trucks.
Read more: Gartner reveals the 2016 CIO Agenda: Shift to platform thinking
Peter van Dyk, Best Pacific Institute of Education: We are a private tertiary offering a range of programs predominantly to the Pacific Community. How do we use technology to make ourselves more relevant to students and provide our students the opportunities they are not going to get from home? How do you build capabilities to think innovatively? Innovative does not necessarily mean new technologies. It can mean using what you have to in more innovative ways to achieve different outcomes and that whole area is of interest to me.
James Knapp, VIFX: I come from a very traditional background of running and maintaining and building good infrastructure on-premises. And now the sources for servicing these requirements come from different and varied locations, so hybrid is the future for sure. It is really about what components are compatible with the customer requirements.
Data and information are central but maybe the question is, how are we going to integrate the new services with the legacy systems?
Anthony Bitossi, Stevenson: There is also the culture change aspect. That side of it is a challenge, not so much the technology itself. For instance, we have a mix of white and blue collar environment. Our CEO is always pushing for the business to improve and embrace new technologies and four years ago, it was just in the too hard basket to do. A lot changed since then and we are asking, why can’t we do this on tablets, use digital signatures? I have seen a huge shift in the area.
CREATING 'SAFE HAVENS' FOR INNOVATION
Geoff Leigh, Kordia: Gaining innovation funding is always a challenge. One way is to agree on a small percentage (say 10 per cent) of overall annual savings on EBIT, to be used in the following year for innovation projects as we see fit. Using the analogy of tankers (BAU) and speedboats (Innovation), fund short term projects (that might fail fast) without affecting your financial targets. Make sure your speedboats do not end up inside a tanker though.
Allan Lightbourne, Mighty River Power: As one of New Zealand’s leading energy companies, we are seeing a huge evolution in the sector with the emergence of new energy technology and fast changing expectations of customers.
The biggest challenge and opportunity is in building on the tremendous foundation that New Zealand has in renewable electricity, and increasingly putting customers at the forefront of our thinking – much of which is based on data and technology.
Read more: Challenges arise as big data becomes the ‘new normal’
We operate in a culture where innovation and curiosity are embraced.
As we focus on energy solutions for the future, our ICT team works across every aspect – from smart meter-enabled technology (including our pre-pay service GLOBUG and energy management tool GEM) to modelling the fluid dynamics of our geothermal fields. At a corporate level our input goes well beyond providing technical support to investigating how technology is changing the world we live in.
Within Mighty River Power, information technology has very much moved from a support service to an essential enabler in moving our business forward and creating opportunity for growth. We operate in a culture where innovation and curiosity are embraced, which has empowered us to bring real value to the business.
The innovation comes from all parts of the organisation, not just the IT group.
Tony Darby, Auckland Motorway Alliance: We have 100 innovations a year. we are getting innovations out, making sure the sector benefits. It is core to what we try to do to lift the core standard of transport.
A safe haven, it sounds like it needs to be done. It is not a formal process. The innovation comes from all parts of the organisation, not just the IT group. The supervisors are all trained to recognise innovation.
Innovation is something that makes the boat go fast. We have different metrics around that. We have whiteboards across the organisation, people write down their ideas.
Peter van Dyk, Best Pacific Institute of Education: We have essentially finite resources and infinite possibilities. Even if you are going down the innovative track, there still needs to be a qualification of which opportunities you take to the next steps, and which ones you don’t, because you do not have the resources to progress everything. How do you take your innovation stream to that part of it?
We have essentially finite resources and infinite possibilities.
What about the human factor? All ideas are created equal, they all go through the same funnel, get evaluated against the same criteria. If an idea has a lot of merit you want to do that very quickly and explore whether you want to take it to the next step. It is a voyage of discovery, each step along the way of unfolding this idea if it gets past stage one, which needs to be a robust type of evaluation. I agree with the person who said that you are uncovering more and more details. It does need to be a gated approach.
But no matter how big or small the idea is, it has to go through the same process. For most of us, it is the same resources we are also going to apply to keeping the current systems running at the same time.
Darren Wilson, AsureQuality: Innovation for us is just part of AsureQuality’s business. We have an innovation team that helps steer or champion ideas through our stage gates. From an IT perspective, we are joined at the hip with marketing and make sure all our transformation projects have them involved. The rest of the executive team are fully on board with this approach. We talk about having a balanced approach to projects making sure we do our best to invest in transformation and not just invest in sustaining initiatives which, in the end, could mean we sustain ourselves into relevance.
From an IT perspective, we are joined at the hip with marketing and make sure all our transformation projects have them involved.
We have a strong and supportive board who say we need to take a punt, but success rests on a robust process to take your ideas through the commercialisation process.
We talk about how we can create value for our customers, and then we can bring the technology in. That is how we add value. If you are not having a wider conversation with marketing and with the board, then IT is innovating by itself and is of limited value.
James Knapp, VIFX: The way I avoid overinvestment (in innovation projects) is to take the Dragon’s Den concept. We bring the idea pitcher and the decision makers together and everyone understands what the KPIs, the key number and the strategic goals are. If you are passionate about it your idea and clear about the objectives, you can pitch it in the right way.
The CIO roundtable on 'How intelligent systems are driving innovation’ was held in conjunction with Intergen.
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