How best to harness big data and achieve business innovation took centre stage at a recent CIO roundtable. The event brought together IT leaders from an array of Australian organisations for a business lunch at Aria restaurant in Sydney.
Many new technology and business trends were discussed throughout the lunch, from strategising for mobile, to the challenges of collecting and utilising data, driving the shift to digital, and embracing an innovative culture.
Godfrey Sullivan, CEO of Splunk, kicked off the discussion by noting how the move to digital has had a major impact on the overall application development and IT spend of companies and customers.
“Smartphones are the new client. Ultimately, businesses want to get a more comprehensive view of their customers in a digital world, and new mobile platforms have been a window to achieving this,” he said.
Customers are relying on mobile more than any other channel, whether it is to do their shopping, surfing the Web, or accessing their bank accounts.
“Mobile is the first place customers have a relationship with a company,” Sullivan said. “Today, applications are designed to run on a mobile platform and the service that’s connecting it can be a custom application back in your shop. The [mobile] device is the new consolidation point for everything we look at.”
But this array of devices and telecommunication carriers poses huge challenges to operational efficiency, said Genea CIO, Peter Nevin.
“The support challenges are similar to those of some 20 years ago with lots of different end-device types, each requiring different software and different support,” he said.
“I was wondering if the next evolution is to make the different device technology solutions more standardised so we have a more universal client.”
Another common challenge is the end customers’ zero tolerance for latency, with the onus on the business entirely for ensuring streamlined processes. “[Users] want great advanced solutions that do not rely on the technical capability of the consumer,” said Nevin.
Another attendee said a key pain point was achieving full integration and flow through of data to the back-end. This was made even more difficult by the customer’s expectations outgrowing their capabilities. Meanwhile, ageing infrastructure, traditional operating methods and enhanced security are also seen as roadblocks to agility.
“From a capability perspective, it’s not just about the front-end presentation layer; digital needs to include a deeper range of capabilities. You need an IT architecture that can support straight-through processing,” said Tony Ritchie, GM for digital, technology and operations at Virgin Money.
“Getting more visibility about what the customer experience is like is even more important than ever,” added Sullivan. “User experience, from both a design and interface perspective, is critical in responding to this need.” Utilising data.
Data collection and analysis was widely heralded as a means of maintaining competitive edge, as well as achieving innovation.
“As the Internet of Things takes off, there’s going to be a lot more data available that we will need to contextualise and use effectively,” Ritchie said.
An example of data tracked in real time to generate revenue and insights is at the 49ers stadium in San Francisco. Data technology was implemented from the ground up during construction, allowing the venue to track crowd activity – what food they buy, where they go, and what team they support.
“The stadium can then use this data for a number of different applications, from allocation of supply and resources through to crowd management and customer loyalty,” Sullivan said. “Everything done from when a fan steps into the stadium helps the business create a full picture of their experience within the building.”
The desire for real-time user monitoring to create a personalised and predictive experience being driven by the marketing team. As an example, Ritchie pointed to his search for European cities on his laptop online while planning a vacation.
“I then switched to Facebook on my mobile phone, and there were ads for hotels in those locations showing up – that’s the benchmark for the sort of speed and level of granularity you need in real-time marketing,” said Ritchie.
Sullivan described how Comcast, a digital cable TV provider in the US, has set top boxes in customers’ homes to collect machine-generated data tracking the activity of viewers in real time. This helps Comcast gauge the preferences of its viewers, so that broadcast shows can be correlated with particular advertising those consumers will accept.
“The connectedness you can create with customers is in the moment,” Sullivan said. “With this type data, what should we do differently? Can you perhaps use it to manage an account on an app for the consumer to create loyalty and engagement?
“The truth is in the data. However, it’s all about the context of this data and how it’s used to determine whether it will deliver true value.”
Paul Kennedy, CIO for Apparel Group, noted that most retailers don’t currently treat physical store activity in the same way they treat an online store when it comes to collecting, analysing and acting on certain data.
“We could use new technologies to make better use of physical customer data, but there is also a lot of hype around beacons, Wi-Fi tracking and ‘big data’. I’m keen to hear of real examples where retailers are making good use of in-store data to improve customer experience and business performance,” he said.
Kennedy noted the mining industry has making great strides thanks to sensorised trucks first used to monitor the state of driving. The data was then utilised to instruct drivers to slow down and minimise wear-and-tear or fuel cost.
“This technology has subsequently developed into semi-autonomous and autonomous vehicle control from companies like CAT Minestar. It will be interesting to see how other industries adopt similar computer-guided performance and make use of machine learning in real-world contexts,” said Kennedy.
The mining industry has also lifted its efficiency by relying on new technology to map the geology of particular areas in order to show what blasts will look like before they occur, according to Ravi Ranade, IT director for Orica. But connectivity remains a key challenge in the rural mining regions, where wireless infrastructure remains deficient.
“Hearing about the capabilities out there thanks to data mining and analysis is music to my ears, because we at Orica are data hungry and always looking for ways to gather and capture data,” said Ranade.
“Our main challenge is we are often working in rural settings; we have a database on a device that will cache data until it can find a connection. This is a challenge for rural settings without Wi-Fi.”
The value of cloud-based applications in rural communities is evident in smart farming and agriculture, said Sullivan, where devices are being leveraged to provide contextualised data.
“The number of devices towed behind a tractor to test and monitor soil, check humidity, measure seeds – all of these elements now provide a much broader picture for farmers looking to further automate in their sector,” he said.
Privacy and regulation are additional challenges for data collection, and several attendees believed the industry would need to find a way to overcome regulatory challenges disrupting the flow of data. There were also concerns regarding a lack of appropriate skillsets in data that has led to high demand for data scientists, which, when found, were often demanding a salary premium.
Sullivan encouraged attendees not to seek out expensive titles with extensive training in the fields of analytics and contextualisation, but to see true value in younger employees.
“We should be speaking to young IT workers to discover how to get value from data. Young people may not have the experience but they have the passion. You can teach a university IT program to cover this new era of information, but there is really no substitute for passion,” said Sullivan.
One attendee from the education sector agreed “the talent is in the young”, and said he’d observed school children expressing excitement at the prospect of data as a career base. The bigger issue raised was the high churn rate of employees within the millennial and Gen Y bracket.
Sullivan advised that while young people have a short attention span, they can be kept engaged by providing the right kind of tools. “To capture millennials’ attention, you need to give them tools to map to a fast consumption rate of data and information to get the most from them. And that’s just for an interested kid, not the $200,000 a year data scientist,” he said.
“You need trouble makers with good tools, and to start at a foundation and build those skills rather than trying to find the perfect person.”
As digital technology becomes more disruptive, a number of roles are set to evolve. Jason Wong, head of digital, online and ICT for the Australian Museum, said he planned to shake up system administration to deliver IT-as-a-service.
“I’m developing our systems administrators at the museum into IT service brokers – they’re spending less time on operational tasks and more time dedicated to understanding the organisation and co-ordinating external IT service providers in order to deliver technological solutions that meet business need,” Wong said.
However, he cautioned the industry to be wary about over-saturating audiences with digital.
“People want to experience things that they don’t regularly experience,” he said. “For example, digital is a constant in my kids’ lives but they love experiencing non-digital activities like visiting museums, playing sports and going for walks – away from their digital devices.
"There’s a danger of doing digital for digital’s sake without first trying to understand what our audiences actually want.”
Ritchie claimed digital investment was generally a response to customers’ changing demands.
“How much [of children’s] time is spent playing Minecraft versus the time kids spend playing Lego? From my observations, Minecraft is getting a lot more traction,” he said. “For us, digital is primarily the way we interact with customers.
“A large part of our customer experience is delivered through the website, via a secure portal, through social media and by email.”
Stephen Phillips, chief executive of business services with Transfield Services, asked where the focus of IT investment should be in each business in order to garner the best results.
“Where do you spread the Vegemite - evenly across the board, or just in specific areas?” he asked.
Another attendee suggested that when it came to decisions about IT spend, companies should take more of an R&D approach to data and innovation, rather than an ROI one, particularly for innovations to benefit the company internally.
Phillips also said an enterprise-wide culture change was necessary so non-IT workers better understand the journey and can play a more critical role in business transformation.
“In some companies, there’s still an element of ‘why haven’t the IT guys solved this?’ But IT projects can’t just happen just because IT is there. They have to work with us to drive innovation and value,” he said. Culture can also be transformed as part of a team effort, said Sullivan, adding that organisations must slowly transition away from being risk averse.
“As a leader facing digital disruption, I would recommend getting rid of habits formed over the years. This would enable you to approach and embrace new technology and the new data-led generation. There are huge amounts of data and learning and you have to do things differently, evolve and change, and enable others to do the same,” he said.
“Today, if people are afraid of taking risks or making decisions, we communicate with them better. I ask them: What was it that kept you from making that decision? And then we can tackle it.”
Sullivan also recommended giving employees free time to brainstorm and create new things, which can be a fruitful way of innovating, while also helping IT workers not to “feel like it’s just a factory”.
“We have one day a year [at Splunk] where we let our people create whatever they want… At the end of the day, they show us their ideas for products, and we judge the most innovative,” he said.
“Last time Splunk did this I would have productised all of the ideas we were presented with…Free competition such as this helps foster innovation in groups – and the internal credit and the element of reward helps to spur that activity into real applications.”