In interviews with more than 100 digital leaders on the Technovation podcast in 2021, executives noted artificial intelligence, cloud, and analytics among the technologies that show the most potential inside their organizations. Executives also noted the need to defend their organizations from increasingly sophisticated cyberattacks and efforts to scale automation efforts.
Below is a list of the top 10 technology trends on technology leaders’ minds in 2021, as well as a glimpse of topics rising in importance in the year ahead.
AI, cloud, and analytics remain top of mind
During an unprecedented year of digital acceleration, Technovation guests described the ways in which technology has become even further ingrained in the fabric of business operations, transforming the way customers consume products and services. “Every decision we make as executives has a fundamental aspect of technology in the discussion,” said Greg Carmichael, Chief Executive Officer at Fifth Third Bancorp, after seeing a sustained 20% increase in digital channel usage since the start of the pandemic. To navigate the operational changes required in an increasingly digital world, AI and data analytics have enabled organizations to deliver deeper insights with greater speed than ever before.
Alongside AI and analytics efforts, technology executives increased their focus on cloud. At Whirlpool, CIO Danielle Brown is taking a cloud-first approach for critical systems and data. “You are able to leverage data not just in functional silos, but across multiple functions within the business (and) across regions in a more easy and accessible way,” she said. Leveraging cloud analytics and productivity solutions has enabled Whirlpool to deliver systems and applications crucial to business on highly elastic infrastructure, which allows the company to grow and adapt quickly as business conditions change.
The shift to cloud has also created new opportunities for AI to transform business insights and operations. During a December conference, Target CIO Mike McNamara said he views AI and analytics as the key to his company’s success. AI “has been a really exciting avenue of discovery for the future and a great source of competitive advantage for the business,” he said. Applications across Target include demand forecasting, ordering, workload planning, pricing and promotions, among other tasks.
Looking to the year ahead, CommScope CIO Praveen Jonnala shared his plans to continue adopting AI and ML capabilities “to provide deeper insights that really unleash opportunities within the company and for our customers.”
The cybersecurity landscape grows more complex
The transition to remote and hybrid work presented many CIOs with an alarming increase in cybersecurity threats. As Pacific Life CIO Mike Shadle noted: “With the pandemic and with the hybrid workforce, you now have to be secure everywhere,” including well beyond the traditional four walls of a corporate HQ. The price for not being prepared is high. In 2021 alone, average data breach costs increased from $3.86 million to $4.24 million, a historic high, according to an IBM Cost of Data Breach Report.
In response to an increasingly sophisticated threat landscape, including steady reports of ransomware and awareness of new vulnerabilities across software supply chains, many companies accelerated their investments in security to protect valuable data and mitigate risk across distributed work environments.
We expect more investment in the year ahead, and anticipate that technology leaders will double down on efforts to make cybersecurity a key part of ongoing transformation initiatives. “Cybersecurity is not only the technology, the process, the detection prevention mechanisms, or the response recovery mechanisms,” said Ameren Chief Digital Information Officer Bhavani Amirthalingam. “Creating a culture of cybersecurity is extremely important.”
RPA accelerates automation opportunities
Robotic Process Automation (RPA) gained a foothold in many organizations over the past few years and has continued to scale in 2021. As organizations seek to automate a broader range of processes, tools like RPA are enabling employees to take on higher-order work. At Guardian Life, a program called “Automation for Good” seeks to do just that, with software taking over transaction-heavy tasks and freeing up technologists to tackle more complex issues. “Why not allow them to be able to self-automate and identify those tasks that they wish they did not have to do in the first place, and then create a much more fulfilling job for themselves,” said Dean Del Vecchio, Guardian Life’s CIO and Chief of Operations.
Beyond RPA, automakers like Toyota have taken advantage of automation on the factory floor. In an interview, Toyota Financial Services CIO Vipin Gupta said he believes “we will see a series of innovative techniques used by large enterprises to define these new workflows for IT that will become highly automated. So, for example, today in our Toyota factories over 90% of tasks to assemble a car are automated. IT will mature to the same levels this decade.”
Manufacturing companies like Advance Auto Parts have begun implementing RPA to drive automation efforts forward. While RPA is not a new trend, CIO Sri Donthi said, “it is a trend that we are really focused on, given we are building a lot of common platforms. Now, I can really apply more RPA as a capability to drive this hyper-automation that is really needed.”
Quantum computing cracks the list for the first time
Quantum computing, while still in its nascent stages, continues to catch the attention of CIOs. Recent developments from companies such as Intel Corporation suggest quantum may be closer to entering the mainstream conversation. For example, Intel Labs’s Senior Fellow and Managing Director Rich Uhlig said the company is exploring post-quantum cryptography and its implications for cybersecurity and data protection. “We are improving the algorithms, improving the accelerators for these algorithms and making them resilient against a quantum attack,” he said.
Another driver behind quantum’s growing recognition is its concrete use cases, particularly for analyzing large data sets. When considering use cases in pharmaceuticals, Merck Chief Information and Digital Officer Dave Williams says he thinks quantum could provide value by surmounting complex issues such as weather prediction, human biology, accelerating drug discovery and development, and encryption. He notes that use cases may be five to 10 years from the mainstream, but that quantum nevertheless “is going to be one to watch and really keep an eye on.” Blue Shield of California CIO Lisa Davis noted that it stands to fundamentally change the ways in which organizations solve problems and could allow organizations to find new ways to model and prepare for future crisis events.
Trends likely to rise in 2022
In addition to the topics noted above, other trends show signs of gaining traction in 2022:
As the world enters year three of the COVID-19 pandemic, technology leaders continue to adapt to new ways of working while managing a fast-growing digital agenda. Much of that work involves developing people, processes, and technologies that allow their organizations to adapt and pivot quickly as new challenges and opportunities arise. Stay tuned to Technovation in 2022 for more discussions about the transformative technologies driving organizations forward.
Our first Digital Symposium of the year is just around the corner. Join us on February 24 as technology leaders share their perspectives on scaling data and analytics initiatives, creating cultures of continuous learning, and the state of digital strategy in 2022, among other topics.
CIOs and other technology leaders, register here to reserve your spot today. We look forward to seeing you!
(Click here for highlights from our last Digital Symposium, and stay tuned to our YouTube channel for videos of our panel discussions.)
Noon
Welcome and Introductions
Welcome and introduction to the Metis Strategy team.
Peter High, President, Metis Strategy
12:05 – 12:20 p.m.
Fireside Chat: Bill Pappas, MetLife
Bill Pappas, EVP & Head of Technology and Operations, MetLife
12:20 – 12:40 p.m.
Panel: Creating a World-Class Digital Customer Experience
Charu Jain, SVP Merchandising & Innovation, Alaska Airlines
Sanjib Sahoo, EVP and Chief Digital Officer, Ingram Micro
Moderated by Chris Davis, Vice President and West Coast Office Lead, Metis Strategy
12:40 – 12:55 p.m.
Entrepreneur Spotlight: Rakesh Loonkar, Transmit Security
Rakesh Loonkar, President & Co-Founder, Transmit Security
12:55 – 1:15 p.m.
Panel: How Talent and Culture Enable High Performance and Enterprise Agility
Raghu Sagi, Chief Information Officer, Inspire Brands
Onyeka Nchege, SVP and Chief Information Officer, Novant Health
Moderated by Peter High, President, Metis Strategy
1:15 – 1:30 p.m.
Entrepreneur Spotlight: Sunny Gupta, Apptio
Sunny Gupta, CEO & Co-Founder, Apptio
1:30 – 1:50 p.m.
Panel: Building Resilient Digital Supply Chains
Gurmeet Singh, EVP, CTO and CIO, Big Lots Stores
Gary Desai, Chief Information Officer, Discount Tire
Moderated by Michael Bertha, Vice President and Central Office Lead, Metis Strategy
1:50 – 2:10 p.m.
Panel: How Data and Digital Capabilities are Shaping the Future of Work
Vince Campisi, SVP Enterprise Services and Chief Digital Officer, Raytheon Technologies
Edward Wagoner, Chief Information Officer, JLL
Moderated by Steven Norton, Co-Head Executive Networks, Research, and Media, Metis Strategy
Click here for highlights from our last Digital Symposium, or view the panel discussions on YouTube.
The fifth and final Metis Strategy Digital Symposium of 2021 is in the books. Thank you to the global CIOs, CEOs, and entrepreneurs who joined the conversation.
Looking to 2022, technology leaders said developing and maintaining strong cultures, motivating teams, and providing continuous learning and development opportunities are among their continued priorities. Also on the CIO agenda: maintaining agility and momentum following a period of significant digital acceleration. Additional highlights from the event are below. Check out our YouTube channel and the Technovation podcast in the coming weeks for recordings of individual panel discussions.
New ways of working enable agility and speed to market. CIOs noted that a continued shift to product-based operating models, paired with advanced applications of data and analytics, has led to greater enterprise agility. More nimble technology architectures also support more nimble operations.
Increased customer adoption of digital channels during the pandemic accelerated the shift to new team structures, roles and responsibilities and reinforced the need to deliver products and services to customers faster and with less friction. Michael Ruttledge, CIO at Citizens Financial, noted a 30% increase in the use of digital channels. Over the past year, his team has introduced more than 900 features in its mobile app. Citizens has leveraged advanced technology in those efforts, Ruttledge said, “but at the same time we’ve had to get that to market very quickly, and we’ve done that by changing our agile culture.”
Pairing new ways of working with agile, scalable technology architectures has helped the IT organization at Target move faster and deliver more value across the organization, CIO Mike McNamara said. Today, Target has hundreds of products across the business that can release updates daily or weekly. “The rate limiter is how quickly our business and our guests can absorb change rather than how quickly we can produce it,” McNamara said. “That speed and agility has just been a phenomenal benefit to the business.”
Fostering a strong culture is more critical than ever. As the war for talent intensifies and organizations embrace more flexible working arrangements, technology leaders are thinking about how best to foster a sense of connectivity and maintain innovative cultures as teams collaborate in new ways, both in the office and remotely.
Asurion CIO Casey Santos noted that her team is telling the company’s story in a more personal way, emphasizing the strength of their culture and technology, becoming more flexible, and relying on less formal recruiting techniques. Santos’ team is also training leaders at the company to be better coaches and sponsors so that they can help employees through their journey at the company. Asurion is also bulking up its internship, internal mobility, and rotational programs.
Underpinning many of those actions is a push to create learning and development opportunities for talent across the organization. As the pace of change continues to accelerate, “lifelong learning isn’t optional anymore,” said Sri Donthi, Chief Technology Officer at Advance Auto Parts. He shared the guiding principles he has followed while developing an engineering culture: creating a comfortable environment for employees to challenge themselves and excel; starting with the customer in mind while looking at the big picture; and keeping innovation top of mind. Donthi emphasized the need to lead with empathy and care, and encouraged fellow leaders to develop skills including crisis leadership, virtual leadership, and inspirational leadership.
Companies double down on upskilling and talent initiatives. Creating learning and development opportunities remains top of mind for CIOs in the year ahead, with 35% of participants noting reskilling or upskilling as their talent development priority in 2022, followed by enhancing employee experience.
Toptal Co-Founder and CEO Taso Du Val predicts that there will be a plethora of online courses that will allow employees to earn certifications. More meaningful content and a better user experience, among other factors, will make these programs more impactful than traditional education programs, he said.
Citizens Financial introduced academy programs that allow engineers to spend 10 days learning skills such as React, Java, Python, or learning APIs, CIO Michael Ruttledge said. The company also developed 38 different badging and certification programs across a range of technologies. At Discover Financial, the Discover Technology Academy runs a series of courses while also serving as a hub for multidisciplinary teams to share their knowledge and experience with others, encouraging collaboration and allowing innovation to scale more effectively.
Target CIO Mike McNamara said engineers at the company are expected to spend 20% of their time on learning and development, part of the framework Target has built to recruit, develop, and provide continued learning experiences for teams. He’s also proud that many leaders who have worked under his leadership have taken on CIO or senior executive roles at large companies around the world.
Common platforms enable data-driven customer experience at scale. Heading into 2022, leaders across industries continue to develop and refine platforms that allow their organizations to leverage analytics and AI across a broader range of products and services, deliver sufficient governance, and scale new solutions quickly.
At Experian, EVP & Global Head of Analytics and AI Shri Santhanam is leveraging a technical and commercial platform, along with the company’s vast troves of data, to develop more products powered by AI and machine learning. Common platforms allow Experian to bring in new data sets more easily and create more sophisticated models that give individuals, particularly those whose experiences may not have been reflected in traditional models, access to credit.
Anjana Harve, Global Chief Information Officer at Fresenius Medical Care, has focused on developing a platform that helps patients manage their care effectively and provides continuous insights throughout the user journey from early care to dialysis treatment. Through connected platforms, Fresenius can drive standardization, bring innovation and speed to end users, and guide workflows while providing the most relevant and personalized information for patients and clinicians.
Leaders continue to unlock new capabilities with data and analytics. Nearly 40% of attendees noted that they expect to see the most technology investment in data and analytics in the year ahead, and 71% noted that advanced AI is the emerging technology that holds the most promise for their organizations in 2022.
Discover Financial CIO Amir Arooni emphasized the importance of advanced AI in giving customers “actionable data that empowers them.” Applications of AI at Discover include real-time fraud detection and analyzing past spending data to advise customers on what to purchase and when, providing guidance on how to save more money and earn rewards.
Advanced analytics techniques are also making strides in the construction industry, which has begun to embrace technology as more digital tools, accessible via the cloud, went mobile. Turner Construction CIO Warren Kudman said the industry is “waking up to the value of data” and has used digital tools to visualize and manipulate environments virtually, reducing the likelihood of costly mistakes. Turner is also using data and ML to track and assess safety conditions at job sites, proactively identify interventions, conduct remote inspections, and track materials as they arrive on job sites.
Dean Del Vecchio, CIO and Chief of Operations at Guardian Life, discussed how the company is using data and AI to develop insurance products faster, easier, and with less friction for customers. Thanks to new tools and new ways of working, some processes that used to take 45 days have been cut to 30 seconds, he said.
General Motors today named two new technology leaders and said it would split its information technology organization into two groups, one focused on global IT and the other on software product development for customers.
Fred Killeen was named VP of global information technology and Chief Information Officer, reporting to CEO Mary Barra. He will lead the Global IT team, which is responsible for back-office IT support and using software to support growth across the company. Killeen most recently was GM’s Chief Information Security Officer and CTO, where he oversaw the automaker’s global information security and IT risk management programs.
Stacy Lynett will run the Digital Business Software group. Reporting to newly appointed Chief Digital Officer Edward Kummer, her team will be responsible for technology strategy and software product development that is geared toward delivering enhanced products and experiences for customers. She will also support global customer and dealer systems.
Lynett most recently was executive director and CIO of Global Product Development and Quality for GM IT, as well as CIO for Global Corporate Functions. In that role, she focused on the company’s Workday solution and supporting IT for the legal and communications functions.
Both Killeen and Lynett previously reported to CIO Randy Mott, who last week announced plans to retire.
The Global IT and Digital Business Software groups will be a critical part of GM’s plan to deliver $20 billion to $25 billion in software-enabled services revenue annually by 2030. In a press release, GM noted that both groups “will continue to collaborate on driving innovation, providing the best software and technology solutions to support the company, attracting and retaining talent, professional development, and more.”
“The new structure and dual operating model will enable GM to fully leverage its strong foundation in IT capability, talent and resources, as well as reduce complexity and improve speed,” Barra said in the statement. “Stacy and Fred bring unique backgrounds and experiences to help us seize the opportunities software plays in our business as we move from automaker to platform innovator.”
Vinny Hoxha, deputy CISO at GM, will take over as Chief Information Security Officer, reporting to Killeen.
PSteven Norton is co-head of CIO networks, research and media at Metis Strategy, a business and IT strategy firm. He previously was a reporter for The Wall Street Journal’s CIO Journal, where he covered the changing role of the chief information officer and the rise of emerging technologies including artificial intelligence and blockchain. At Forbes, he covers new CIO appointments as well as the ways in which technology executives are developing the workforce of the future.
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Our final Digital Symposium of the year is just around the corner. Join us on December 9 as technology leaders across industries share their insights on talent strategy and upskilling, creating new pathways to innovation, and the trends and priorities guiding CIOs’ efforts in the year ahead.
12:00 – 12:05
12:05 – 12:20
Fireside Chat: Jim McKelvey, Square
Jim McKelvey, Co-Founder, Square; Founder, Invisibly; Author, The Innovation Stack
12:20 – 12:40
Panel: Scaling AI to Deliver New Customer Experiences
Amir Arooni, Chief Information Officer, Discover Financial
Dean Del Vecchio, CIO and Chief of Operations, Guardian Life
12:40 – 12:55
Entrepreneur Spotlight: Taso Du Val, Toptal
Taso Du Val, Co-Founder & CEO, Toptal
12:55 – 1:15
Panel: Fostering Agility Across the Enterprise
Warren Kudman, Chief Information Officer, Turner Construction
Michael Ruttledge, CIO and Head of Technology Services, Citizens Financial
Moderated by Alex Kraus, Vice President and East Coast Office Lead, Metis Strategy
1:15 – 1:35
Panel: Rethinking Talent Strategy for the Next Normal
Casey Santos, Chief Information Officer, Asurion
Sri Donthi, Chief Technology Officer, Advance Auto Parts
1:35 – 1:50
Digital Spotlight: Anand Birje, HCL Technologies
Anand Birje, Senior Corporate VP & Head of Digital Business, HCL Technologies
1:50 – 2:10
Panel: Digital Platforms as Strategic Growth Drivers
Shri Santhanam, EVP & Global Head of Analytics and AI, Experian
Anjana Harve, Global Chief Information Officer, Fresenius Medical Care
2:10 – 2:25
Fireside Chat: Mike McNamara, Target
Mike McNamara, Chief Information Officer, Target
Gartner, Inc. announced its top 12 strategic technology trends for 2022 and beyond. Analysts presented their findings at the Gartner IT Symposium/Xpo 2021, held virtually for the second year in a row, due to the pandemic. Gartner Research Vice President David Groombridge emphasized that just as 2020 and parts of 2021 found companies focused on survival, the future will focus on a return to the path toward growth. Just as survival required more creative use of technology, the path to growth will also emphasize creative use of technology, not so surprisingly. Gartner’s strategic technology trends for 2022 and beyond are:
Hyperautomation
Automation is a critical ingredient for digital transformation. Hyperautomation suggests a faster path to identifying, vetting, and automating processes across the enterprise. Gartner noted that areas to focus on in order to best accomplish this include improving work quality, hastening the pace of business processes, and fostering nimbleness in decision making.
Generative Artificial Intelligence (AI)
Gartner notes an increase in interest and investment in generative AI in the past year. Generative AI references algorithms that enable using existing content like audio files, images, or text to create new content. Gartner predicts that in the next three and a half years, generative AI will account for 10% of all data produce compared to less than 1% at present. Case examples offered included supporting software development more generally, assisting companies in finding candidates to fill talent shortfalls, and identifying drug candidates more readily.
Data Fabric
Gartner defines data fabric as a design concept that serves as an integrated layer (fabric) of data and connecting processes. This fosters resilient and flexible integration of data across business users and platforms. The upshot is that it can reduce data management efforts substantially while dramatically improving time to value.
AI Engineering
The staying power and lasting value from AI investments have been mixed across many companies. An issue is that some companies deploy an AI model once and expect that value will accrue in perpetuity, Gartner notes that sustained efforts and model evolution must be driven to gain more from these investments. Groombridge noted that AI engineering adoption should lead to three times more value for AI efforts.
Autonomic Systems
Although it is early days in the life of autonomic systems, the next half-decade should yield increased value from it. “Autonomic systems with in-built self-learning can dynamically optimize performance, protect [companies] in hostile environments, and make sure that they’re constantly dealing with new challenges,” Groombridge noted. This trend anticipates greater levels of self-management of software.
Decision Intelligence (DI)
Decision intelligence aims to model decisions in a repeatable way to make them more efficient and to hasten the speed to value. It anticipates doing so through automation that enhances human intelligence. Gartner predicts that in the next two years, one-third of large enterprises will use DI for better and more structured decision-making.
Composable applications
The idea of composable applications highlights that the functional blocks of an application can be decoupled from the overall applications. The component parts can be more finely tuned to create a new application that is of greater value than its monolithic predecessor. Gartner notes that companies that leverage composable applications can outpace their competition by 80% regarding new feature implementation.
Cloud-native platforms (CNPs)
Gartner believes that cloud-native platforms, which leverage cloud technology’s essence to offer IT-related capabilities as a service for technologists, will provide the foundation for most new digital initiatives by mid-decade.
Privacy-enhancing computation (PEC)
Privacy has been an increasingly important concern and priority across the business landscape. Privacy-enhancing computation can protect a company’s and its customers’ sensitive data, protecting the confidentiality of data. Gartner hypothesizes that this is a pathway to maintain customer loyalty by decreasing privacy-related issues and cybersecurity events, and it believes that roughly 60% of large enterprises will leverage these practices by 2025.
Cybersecurity mesh
Cybersecurity mesh is a form of architecture that provides an integrated approach to security IT assets no matter their location. It provides a more standardized and responsive approach to cybersecurity by redefining the perimeters of cybersecurity to the identity of a person or a thing. This is a pathway to reduce the financial implications of cyber incidents by 90% in less than two years, according to Gartner.
Distributed enterprise
Gartner is a believer in the value of the hybrid approach to work, believing that those who enable it fully will achieve 25% faster revenue growth than peer companies who do not. This model allows employees to work in a geographically distributed fashion, opening up new pathways for talent acquisition.
Total experience (TX)
The pandemic has certainly led to an evolution, and in some cases a revolution in customer and employee experience, especially as it pertains to the digital versions of each. By managing each effectively, enterprises should drive better outcomes. Gartner suggests that natural silos relative to innovating around the customer, employee, and user experiences must be broken down so that a more holistic approach might be achieved.
Peter High is President of Metis Strategy, a business and IT advisory firm. He has written two bestselling books, and his third, Getting to Nimble, was recently released. He also moderates the Technovation podcast series and speaks at conferences around the world. Follow him on Twitter @PeterAHigh.
Most companies of consequence have a chief information officer. Many others have chief technology officers, who might be the heads of product and engineering for a tech-centric company, or, for some non-tech sector companies, might be the heads of infrastructure or tech-savvy leaders reporting to less technical chief information officers. A growing number of companies have chief digital officers, as well, often signaling the need to have an executive oversee digital transformation efforts exclusively. There are examples where the top tech and digital chief has one or a combination of these titles. The combination of all three roles for three separate executives occurs less frequently, needless to say, but less frequent still are examples of companies with execs with these three titles each of whom report to the chief executive officer. One such company is Johnson Controls.
Johnson Controls is a 136-year-old, Milwaukee-based company that develops products and services that enhance the intelligence of buildings to the tune of nearly $30 billion in annual revenue. Mike Ellis is the company’s chief customer and digital officer, adding customer responsibilities to the CDO title. He joined Johnson Controls in October 2019. Diane Schwarz is the company’s chief information officer, who joined the company in August of 2020. Finally, Vijay Sankaran is the company’s chief technology officer, and he joined the company in May 2021.
Ellis describes his role as chief customer and digital officer as deciphering the impact of the company’s efforts on customers, engaging them to understand what is most important to them. The goal is to innovate in collaboration with them, identifying ideas that will make a difference in their operations. Additionally, Ellis is responsible for digital product innovation and enterprise marketing, as the CMO reports through to him.
Schwarz has been a CIO multiple times over at companies like Hunt Consolidated and Textron. She has what she refers to as the traditional CIO purview of infrastructure, applications, and websites. Beyond that, she owns the customer experience, including “how our employee operates with all of our applications, how they get the day-to-day job done,” she noted. Schwarz added, “Mike owns the customer’s experience with our products, but then when you have the overlap of the Venn diagram, as the customers interact with portals, billing and how to schedule a ticket for field service; that’s where it goes back into the CIO responsibilities. It’s not, black and white to say that everything the customer interacts with Johnson Controls is under Mike’s umbrella. We have to navigate what really is the product experience versus the application experience.”
Sankaran has also been a CIO previously at TD Ameritrade, where he also ran an innovation program for the company. He oversees products for Johnson Controls. “When we think about product, it’s really the game-changing part of what’s going on in our industry right now – the software part of that product,” he said. “[We work on building] the right thing and build the thing right. My focus is all around building the thing right and building out a world-class digital software engineering organization at Johnson Controls.” His team’s focus is on edge Internet of Things (IoT) through a software and data platform called Open Blue. It is a platform that allows Johnson Controls’ customers to drive energy efficiency and sustainability by managing their spaces, smart buildings and then applying artificial intelligence [AI] and machine learning [ML] to be able to generate those insights. This creates a closed-loop so that we fully get to the smart autonomous buildings.
“We’re building the software and all the connectors and the data structures and the AI models in my new organization to support that and work closely with Mike around the customer needs and experiences, and closely with Diane’s organization around the broader ecosystem of service and support and infrastructure and cybersecurity to make sure that the pieces that overlap in that Venn diagram come together seamlessly,” noted Sankaran.
The group that now reports to Sankaran to bring this to life used to partially report to Ellis, who recognized the value in unifying the edge software engineering capabilities together with the integrated Open Blue platform. This has proven to be a strategic differentiator for the company. Sankaran has accelerated Ellis’ vision by implementing the scaled agile framework across the group to accelerate speed to market.
Schwarz noted that a key to determining where one’s responsibilities begin and the next one’s ends boils down to solid communications both informal and formal. “We absolutely get that we need to work productively on figuring out the handoffs and providing clarity to our teams,” said Schwarz. “[We are] a company going through a huge transformational shift to become digital to the core. The kinds of problems that we’re solving are new to the organization.”
When asked about the formal structures in place to facilitate the forging of strong bonds across the company, Schwarz offered the example of cybersecurity. There is an enterprise cybersecurity group, which reports to her, and there is a product cybersecurity team that reports to Sankaran. Though there is some overlap between what they do, they are distinct disciplines. Schwarz and her enterprise chief information security officer (CISO) attend Sankaran’s product cybersecurity briefings, and likewise, Sankaran and his CISO attend Schwarz’s enterprise cybersecurity briefings. This is indicative of a broader desire to keep each other informed especially in the areas where roles overlap.
Ellis notes that the approach Johnson Controls has taken in defining these roles and responsibilities has facilitated the 136-year-old company moving from industrial speed to the speed of a software company. It speaks volumes as to the company’s commitment to a digital future that it has three leaders of such consequence reporting to the CEO of the company. To have that degree of digital sophistication represented at the executive level bodes well for the company to accomplish its goal of becoming digital to the core.
Agile has become the most prevalent software development methodology, with 95% of companies noting they use Agile in some form, according to the latest State of Agile report. As Agile enters its third decade, it is not a question of whether to use Agile, but which flavor of Agile to use.
In our work with companies of all sizes over the years, we have found that while many organizations purport to “do Agile,” they do not necessarily deliver the higher quality, appropriately prioritized software that Agile promises.
Cultural barriers and organizational misalignment often get in the way of realizing the true value of Agile. Indeed, respondents to the survey above cited resistance to change, lack of leadership participation, and organizational culture at odds with Agile values among the top challenges to adopting Agile practices.
In this article, we will provide a brief overview of the Agile methodology and discuss five characteristics that have helped leaders address common challenges and realize greater value from their Agile implementations.
Why Agile?
Agile methodology prioritizes delivering software in an incremental and iterative way. The way we define Agile today has its roots in 2001, when a group of software practitioners formulated the Agile Manifesto. Unlike prior approaches, in which software was developed in silos with little input from customers or business partners, Agile methodology prioritized an iterative development process that emphasized collaboration and adaptability.
Why do so many organizations choose Agile? Those familiar with linear “waterfall” software development lifecycles will remember how slow, counterintuitive, and frustrating it could be to complete a project. Project managers spent most of their time making plans and adjusting them daily, while engineers found themselves torn between actually developing software and re-estimating months of work based on changing requirements. Users were rarely happy with the end product, and despite lots of negotiation it rarely felt like anyone was “winning.”
While waterfall development has a role to play in some IT projects, much of the corporate world has embraced Agile to jump-start software development and delivery efforts. When implemented well, Agile can lead to high-quality software delivered frequently and built with the end-user in mind.
In our work with Agile teams across large companies, we have observed the following five characteristics of successful implementations:
1. Executive buy-in and commitment
Any organization that wants to start on an Agile path or improve its existing Agile practice must begin with a real commitment from executive leadership. For an Agile initiative to be successful, leaders need to possess the Agile mindset and be determined to lead and support their employees through the transition.
Most organizations that fail at their Agile initiatives miss this first step. We frequently see that leaders fall at two extreme ends of the spectrum: they are either micromanagers or they are absent. The best Agile leaders, on the other hand, give teams the autonomy to do their work while removing roadblocks and acting as a guide to ensure that goals are clear and the work contributes to the broader vision. Effective Agile leaders allow their employees to fail while creating mechanisms to learn from failures so that they are not repeated.
We see most successful implementations of Agile in organizations where leaders guide and inspire, establish the right framework, and empower their teams to do their best work. Leaders do this best by listening to their teams and trusting their judgement in the way they do their work.
2. Choosing the right process
As mentioned earlier, these days it is not a matter of whether to use Agile, but rather what flavor of Agile to use. Below are a few common approaches your teams might choose:
Scrum is the most commonly used Agile methodology for organizations that want to develop products incrementally in short iterations, with more than 75% of respondents to the Agile survey noting they use some version of it. Scrum is frequently used interchangeably with Agile, and most Agile teams today will use basic pillars of Scrum such as Sprint Planning and Daily Standups. Those whose projects involve high levels of uncertainty may select Scrum because it allows teams to share progress frequently and pivot as needed.
Many mature Agile teams favor Kanban, an Agile framework for continuous work with limited throughput, or scenarios in which teams may be working on only a handful of tasks at one time. A typical Kanban team will have work requests coming in regularly, and the team will release on a continuous basis. This approach tends to work well for teams with work that is more operational or “keep-the-lights on” in nature, such as minor feature updates or bug fixes.
Organizations that want to expand their Agile practices to large programs or portfolios often select a scaled Agile framework. SAFe®, as it is known, is the most prevalent framework for enterprise-level implementations of Agile. This is often the choice for large programs with multiple teams and intricate dependencies. These large programs are typically a combination of Scrum and Kanban teams.
The best way to select the right flavor for your organization is to first observe and listen. Experienced Agile Transformation leaders will assess existing teams, tools, and processes to understand the current state of existing Agile practices. They will then pair those findings with the strategic goals of the business to choose the most appropriate implementation.
3. Team structures that fit the company’s goals and culture
Once leadership commits to the process and an appropriate Agile methodology has been selected, it is time to begin the “practice” of Agile.
Regardless which methodology you choose, two things are critical to a successful implementation: team structures, and the roles and responsibilities within those teams.
The Agile methodology has clearly defined roles with very specific responsibilities. The Product Owner owns the vision of the ultimate goal and is responsible for setting priorities to bring value to the customers quickly. Scrum Masters are servant-leaders, responsible for removing impediments and ensuring that the team adheres to Agile principles. Delivery Teams, which can include team members with different areas of expertise depending on the project, are responsible for producing high-quality products.
Clear roles and responsibilities prevent confusion. Without them, things fall through the cracks and there may be friction between team members with overlapping roles or reporting relationships. For example, some organizations may choose to appoint someone’s direct manager as a Product Owner. As work commences, the direct report working on the team may find it difficult to know when they are hearing from their boss, who can mandate how and when certain work gets done (and makes compensation and promotion decisions), or from the Product Owner, who does not dictate how the work gets done. Having a boss as a Product Owner can also diminish the sense of ownership a person has about their project.
The second most common mistake we find occurs during the formation of teams. Whatever Agile methodology an organization chooses, there are common aspects of successful Agile teams:
Teams with these qualities often will be better prepared to produce their best work while also adapting to changes in technology or customer demands. When teams continuously deliver products that meet customers’ needs, trust will continue to develop between teams and management.
Two of the most common and easy-to-fix mistakes we see involve team size and skillset. Teams that are too large often lead to longer meetings and time to align. Teams lacking cross-functional skillsets are more dependent on other teams. In both cases, teams risk increased complexity and potential for errors.
4. A true commitment to continuous learning
Implementing Agile at scale requires a commitment to continuous learning. Rather than conducting a post-mortem analysis at the conclusion of a project and filing away the findings, Agile puts specific emphasis on Kaizen, which means continuous improvement. The concept, which comes from the Toyota Manufacturing System, aims to eliminate waste by looking for product and process quality improvements throughout the entire development cycle.
In Agile, work is broken down into smaller increments so that learning from each increment can be applied to the following increment. Agile teams will conduct Sprint Retrospectives at the end of each one-to-four-week increment where they discuss and document what went well and what could be done better going forward. They then take these learnings to make the next increment more effective.
The importance of continuous learning is often overlooked. Leaders should allow their teams to fail and learn from those failures, while providing appropriate guardrails to ensure the team is not taking on undue risk. It is critical that teams not only hold regular and honest retrospectives, but that they also act on those findings and track progress. Too often, these retrospectives can become a routine activity that does not add value. By checking in frequently to discuss lessons learned, teams can quickly determine whether a product is meeting customer needs or changes they can make to their internal processes to ensure smooth delivery.
5. The right metrics
When measuring Agile maturity, teams should consider both hard and soft metrics.
Hard metrics are often quantitative data that can be obtained from the tools that teams use. They include:
It is important to evaluate hard metrics over a defined period of time in order to measure continuous improvement. After collecting data for at least four to six weeks, leaders will begin to see whether a team is improving or remaining stagnant. Generally, teams that embrace Agile values deliver what they commit to and increase their velocity over time.
Soft metrics are more qualitative in nature and are usually obtained using surveys and observations. We find that high-functioning Agile teams often have:
An effective Scrum Master, for example, will regularly check in with the team to ask for their level of satisfaction with the project and process. High-functioning teams respect each other’s feedback, are open to discussing difficult issues, and support one another throughout the process. From the outside, a mature Agile team will look like a well-oiled machine. Teams will be producing high-quality, innovative work that is validated in increments, and they likely will have fun doing it!
As companies continue to deploy Agile practices across their organizations, it is important to remember that it is a journey of continuous improvement. Agile is a way of thinking, and it best serves organizations when it grows and evolves with the organization’s needs. By choosing the right flavor of Agile, building cross-functional teams with clear roles and responsibilities, and practicing strong leadership from the top, companies will be better positioned to ensure that they can deliver the value that Agile promises.
Another Metis Strategy Digital Symposium is in the books. Thank you to all of you who joined the session and to the global CIOs, CEOs, and entrepreneurs who shared their insights. More than ever, it is critical for leaders to tap into their ecosystem of peers and advisors for information, wisdom, and support as organizations navigate this complex and uncertain environment.
Below are a few takeaways from the event. Check out our YouTube channel and the Technovation podcast in the coming weeks for recordings of individual panel discussions.
Culture is key in the transition to hybrid work. Nearly 60% of attendees noted cultivating a strong culture among teams as the greatest risk to operating in a hybrid work environment. With many return-to-office plans in flux and a new wave of employees joining firms without stepping inside an office, executives continue to place a strong emphasis on employee experience, creating new norms around equity, inclusivity, and productivity, and creating new ways for teams to engage in a hybrid setting. For technology leaders, that also includes managing a growing ecosystem of collaboration tools and emerging technologies to find the mix that works best for their organizations.
Just as CIOs helped pave the way for remote work, they also will have a role to play in helping peers understand the art of the possible regarding the future of work. The road ahead is far from clear, but today’s technology leaders are adapting people, processes, and technologies to help create organizations that can pivot quickly in the face of change and seize new opportunities as they arise.
Innovation comes from empowered teams. The ability to innovate at scale continues to rise in importance as organizations work to future-proof their operations and drive enterprise agility. To do so, a number of executives said they are exploring how to democratize innovation capabilities across their companies and unlock the full potential of their teams. Debra King, SVP, Chief Information Officer and Chief Transformation Officer at Corteva Agriscience, discussed how she and her executive team developed a culture of ownership across the organization in which team members at any level in the company were empowered to come up with an idea and execute it. The leadership team then focused on removing roadblocks and providing resources where needed.
Similarly, Tim Dickson, Chief Information Officer at Generac, discussed how the company’s first hackathon spurred new ideas while revealing pent up demand for employee upskilling. Sixteen teams participated, and over half of the ideas presented have been implemented as production deployments, Dickson said. Generac also launched a digital center of excellence that helped scale the internal capability to bring new ideas to life quickly. These new ways of working made employees feel as if their voices were being heard, while providing an avenue to develop those ideas into new products and services for the company.
Security is critical to creating strong customer experiences. Technology leaders are taking greater responsibility for the ways their organizations’ products and services impact the customer experience, and security is an increasingly critical element of that. Mickey Boodaei, CEO of Transmit Security, which received the largest-ever Series A funding round for a cybersecurity company, shared his perspective on the move toward a passwordless future, the evolution of identity and authentication, and the fine balance between security and user experience.
For consumers, identity is critical to processes such as account opening and credential validation. Too little focus on security and vulnerabilities or compliance risks may arise. Too many security measures and the user experience becomes an obstacle. As authentication technology advances and passwords continue to pose a security threat to consumer accounts, Boodaei anticipates organizations will make a concerted effort to go passwordless.
Companies scale up AI efforts. As companies continue to refine their data strategies and identify opportunities to turn data into actionable insight, significant analytics and AI deployments are only expected to grow. Nearly 40% of respondents said they expect analytics to be their greatest area of investment in the year ahead.
Machine learning and AI, paired with an increasingly sophisticated understanding of customer needs, is powering new waves of innovation across industries. Barbara Lavernos, Deputy CEO for Research, Innovation, and Technology at L’Oréal, described an experience that crunches data to provide customers with personalized advice on their beauty routines. The company is also using AI to mine its extensive store of historical data as well as real-time consumer information to deliver cutting-edge products. For example, L’Oréal has trained an AI algorithm to read the thousands of online customer ratings and reviews of the company’s makeup products. With real-time insight, research and innovation teams can then make relevant product changes and target advertising more effectively.
At Johnson & Johnson, new technologies have enabled the company to reimagine consumer health and deliver care for patients in new ways. Augmented reality and virtual reality, paired with AI, have helped train surgeons eight times faster by combining digital imagery with insights about how to perform the best surgical procedures. AI and digital twins have helped Johnson & Johnson accelerate enrollment in COVID-19 vaccine trials and improve batch production of vaccines, from one batch every two weeks to two batches every half week.
Embracing change and becoming nimble is more important than ever. Of the tips IT leaders shared about sustaining a competitive advantage in the current environment, the most common was the ability to be nimble. That means being able to pivot quickly when the market changes, seize opportunities as they present themselves and stave off issues as they arise. Indeed, more than 75% of attendees said creating a culture that embraces uncertainty, as well as the ability to pivot quickly, would have the greatest business impact over the next six to 12 months.
Companies are making a number of changes to make their organizations more nimble, including transforming their operating model, adopting new technologies, upskilling employees and bringing in new talent, and driving innovation through partnerships.
Nimbleness is at the heart of many of today’s technology transformations, including the shift to embrace cloud, APIs, and other technologies, said Bernadette Nixon, the CEO of Algolia. These modern software architectures ultimately allow organizations to move more quickly and evolve their systems to support market shifts, further empowering teams to become more efficient and nimbler in their processes.
We hope you’ll join us for our next Metis Strategy Digital Symposium on December 9, 2021. Stay tuned to our website for more details.
Toyota Financial Services (TFS) is a 35-year-old, wholly-owned subsidiary of Toyota Motor Corporation and is the largest auto finance company in the U.S. with $125 billion in managed assets. The company’s offering includes lending payments, banking, and fleet financing, as well as insurance and protection products to consumers and dealers of Toyota, Lexus, and through private-label partner brands. The emergence of private-label partnerships has been a new part of the company’s operating model, but it was enabled through a radical transformation led by the company’s CIO, Vipin Gupta.
When Gupta joined TFS nearly three and a half years ago, he found a well-run IT organization, though he recognized that it was quite traditional. He was worried the IT department was not ready for the digital transformation necessary to be a bigger, strategic contributor to the company. Gupta faced a choice as to how best to proceed. “[I could] either fix the IT organization or redesign the next version of Toyota Financial Services in a grander way and use technology as a catalyst to design a new business model for Toyota Financial Services.” He chose the latter. Gupta continued, “The question that I used to ask was, ‘How would we design TFS if we were born today?’ If you were born in this digital world, the version of TFS [would] look very different, and the idea was, instead of trying to fix IT, let’s try to design that version, try to realize that [digital] vision of TFS.”
Gupta saw the opportunity to leapfrog the current standard and to make TFS into a platform for other brands to run their captive financial services on. “To do this, we needed to build a completely new technology chassis from the ground up with a multi-tenant architecture that allows us to run multiple brands on a shared infrastructure, but still keeps the data separate,” noted Gupta. The key in his mind was to transform behaviors before transforming technology. By first changing the way the team worked, the technology modernization pathway was clearer. The change required rethinking the way in which the company collaborated, the way new solutions were designed. “The best of strategies will fail without a culture that complements that aspiration,” said Gupta. “On the technology front, our vision is clear. We will use the cloud, and we will design a multi-tenant platform to deliver mobility finance as a service.”
When asked how the culture change was facilitated, Gupta noted how addressing three main points formed his gameplan, each using speed as the key performance indicator. First, there was a need to change the speed of decision-making. Second, there was a need to increase the speed of collaboration. Third, the team needed to increase the speed of engineering.
Speed of decision-making was the lynchpin according to Gupta. “Decision-making is the biggest barrier to speed and flexibility in an organization,” he noted. “The largest waste in IT projects is not in engineering. It is in decision-making and the lack of clarity. If you make decisions quickly supported by data and communicate decisions clearly, the team will consistently deliver with high quality and efficiency.” The key is to start this change from the top of the organization. Leaders needed to become more agile. Gupta facilitated the creation of new scrum-based routines for TFS’s executive team.
To facilitate the speed of collaboration, the digital organization needed to operate as a single ecosystem rather than separate silos. “Any business is a perpetual machine,” said Gupta. “It’s not a collection of time-bound projects. It needs durable teams led by subject matter experts, not by project managers only. These teams need to follow repeatable routines to maintain a continuous dialogue and prioritization.” Gupta developed a product orientation to the company, bringing together skills and teams from across the company aligned with the products that were defined. This common means of operating across product teams created greater output, but it also created greater levels of understanding and empathy across teams. Team members from across product teams shared information and learnings in ways that had not been the norm previously.
Changing the speed of engineering started with an acknowledgment that software is TFS’s product. As such, the company needed to become masters of its own technology. “We need to be as good at software engineering as [Toyota is] at automotive engineering,” said Gupta. “Inspired by our automotive factories, we built digital factories using the lean manufacturing practices of Toyota that have long been admired [the world over]. Just like automotive factories, the new digital factories were formed. They’re founded on consistency and standardization of behaviors, practices, and routines. We developed a new software engineering methodology that combines Toyota manufacturing practices with agile and scrum practice of software development.”
By increasing speed across these three vectors, the company was able to transform in months when years was the going-in assumption of what was possible. The key was to begin with the behavioral transformation. Gupta underscored that the focus on transforming habits before transforming the platform was a game-changer for TFS.
In order to ensure that the entire company and not just the technology employees raised their digital acumen, two years ago Gupta founded the TFS Digital Academy. “Harnessing the power of software is not just IT’s job; it is everyone’s job in a digital company,” noted Gupta. “The idea was not to just to train IT, but to train everyone across the organization, and whether they are employees or consultants, everyone will be trained in the new practices, new methods, new approaches, new behaviors.” This leveled the playing field and ensured that that level was much higher than in the past.
All of these changes have enabled the IT department to grow its contribution to the company’s success without growing costs. The new way of working has “reduced waste dramatically,” according to Gupta. “We’ve been managing our expenses in a very disciplined way, and we are now open to partner with any automaker, mobility provider or services provider, who wants to offer high quality, captive financial services for their brand to their customers and dealers.” As such IT’s transformation has been critical in developing the new private-label business. Mazda was the first partner to engage through Mazda Financial Services. Mazda gains mightily through the partnership by focusing on its products while leveraging the capabilities, talent, and quality of TFS.
The future will include adding more brands to this model, but Gupta also sees the possibility of additional products and services. These will include insurance and payments in the used car business, for example.
Gupta has achieved a tremendous amount in less than three and a half years in his role. With the digital innovation engine that he has created with speed as the metric, no doubt this is just the beginning of what he and the team can accomplish for TFS.
