Latest Episode
11-11-2013
So much is written about how digital retail is supplanting traditional retail, and there is much data to prove this. However, consumers still spend more time in physical stores than they do on individual websites, they purchase more often, and the opportunity to get to know a customer in a physical setting is better in many ways, potentially forging a stronger and longer-lasting bond with customers.
I recently spoke at an IT conference in Hong Kong. One of my fellow keynote speakers was a Spanish businessman named Ion Cuervas-Mons, who is the CEO of Think Big Factory, a Madrid-based product and strategic design consultancy that creates opportunities at the intersection between digital and physical realities. In his presentation, and in a detailed conversation he and I had later, he described what he refers to as “programmable retail” as a key to unlocking the power of the physical retail experience.
Cuervas-Mons indicates that the term “programmable retail” is “meant to incorporate the characteristics of e-commerce – convenience, efficiency, and personalization – into physical stores, while maintaining certain aspects found in a traditional shop – the ability to generate surprise, discovery and the possibility of touching the products.” Comparable to the changes made in the physical retail format in the 1960s and 1970s with the ascension of big-box retail that was compelling for a couple of decades hence, this represents a great leap forward. The magnitude of change in the physical store space has not been so great since then, and at a time when formidable online competition has arrived in the form of Amazon.com, and other innovative e-channel retailers, it is important for stores with a physical presence to think differently to establish a source of competitive advantage.
Cuervas-Mons describes five steps in the process of developing programmable retail:
1. Identification
Traditionally, it has been difficult to identify customers before payment. As a result, they meander anonymously through the store without any indication of who the biggest potential customer is, who the most loyal customer is, or who proverbial window-shopper is. There is an opportunity to treat the best customers with the best service, but if one only finds out who each person is after he or she has selected what to purchase, an opportunity has been lost.
There are three technologies that are making it easier for customers to gain these essential insights earlier:….
To read the full article, please visit Forbes.com
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Big data, process automation, multidisciplinary R&D: Gary Wimberly, the CIO of this $94 billion enterprise, thinks of the company as a technology firm that happens to be active in the pharmacy benefit management (PBM) space.
by Peter High, published on Forbes.com
07/29/2013
I recently had the opportunity to tour Express Scripts Technology and Innovation Center in St. Louis. Express Scripts is a $94 billion pharmacy benefit management company (PBM), and as the company’s chief information officer, Gary Wimberly, likes to point out, it is a technology business that happens to be focused on the PBM space. The tour reflected that statement, as I had a chance to observe two key components of the company’s Technology and Innovation Center.
At the Express Scripts Pharmacy, one is struck not only be the size of the operation, but the relatively few people who are involved in fulfilling prescriptions. Computers and machines sort drugs into vials, label them, and pack them seamlessly. As Wimberly notes below, the Express Scripts Pharmacy is substantially more efficient and accurate in that fulfillment than traditional pharmaceutical retailers.
In the Research & New Solutions Lab, one witnesses a digital war room of sorts, as a diverse team drawing upon various scientific and business disciplines collaborates to help optimize patient care while reducing costs at the same time. Their insights ensure that this healthcare behemoth can still turn on a dime.
(This is a condensed and edited version of a Forum on World Class IT interview I conducted with Gary. To listen to it, please click on this link.)
Peter High: Gary, let’s start with a bit of background on Express Scripts, and IT’s role in the operation.
Gary Wimberly: Peter, we are a business-to-business company, and we manage the prescription spend for over 100 million Americans. The typical prescription fulfillment process is for customers to visit a pharmacy. In many cases, the pharmacy sends Express Scripts an electronic transaction, and we do 150 safety and eligibility checks on the transaction. Information is sent back to the pharmacy so that the pharmacist knows whether the patient will have an issue with a drug interaction, whether it is OK to fill the prescription ,and what the cost will be, and how much will be reimbursed for that transaction. That is done in about 0.6 seconds between eight and ten million times per day or about 1.4 billion times per year.
To do this, we have to focus on healthcare more generally. We think about behavioral sciences, focusing on actionable data, and how we focus on being able to manage the prescription spend. Technology is integral to this business. I like to say that we are a technology business that happens to focus on the PBM space.
Additional topics covered in the article include:
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Filippo Passerini provides an overview of the steps that P&G took to improve its analytic capabilities and harness the power of big data in real-time.
by Peter High, published in CIO Insight
05-03-2013
Filippo Passerini, CIO and Group President of Global Business Services of Procter & Gamble, discusses the approach he and his team have taken to get better, more accurate data analysis into the right executives’ hands in a timely fashion. The result is a remarkable track record of innovation.
IN SUMMARY
WHO: Filippo Passerini, CIO and Group President of Global Business Services of Procter & Gamble
WHAT: Sharing his approach to data analytics, brought to life with the better use of big data and collaboration technology
WHERE: Cincinnati, Ohio and 75 countries worldwide
Filippo Passerini has as broad a purview as any CIO in the world. In fact, he is not just the CIO of P&G, but is also the Group President of Global Business Services. In his role as CIO, he understands the power of IT to deliver insights to the organization. In his role as head of Global Business Services, he has taken this a step further, making a multi-national consumer packaged goods behemoth feel a bit smaller. In the past, it was an assumption that good practices on one continent would not be enacted on another continent for months. This thinking reinforces the traditional geographic and product silos of a huge company like P&G. Passerini realized that if he could get the right information as close to real-time as possible, while packaging it in a way that executives around the world could view together, down to having meeting spaces that facilitated such global collaboration, a cultural change could be fostered. What emerged is one of the most impressive examples of leveraging corporate data with business intelligence and analytics.
In this Q&A, Passerini tells CIO Insight contributor Peter High about the steps he took to launch this real-time, data-based revolution in business practices.
CIO Insight: You have developed one of the most sophisticated examples of data analytics in the world. What was the genesis of this? How did you determine that this was necessary?
We are big on anticipating what’s coming, and saw that being able to run the business in real-time was going to be essential for growth. So, we have been focused on analytics for a few years now. We want to create an environment where we turn data into knowledge, and knowledge into insights and actions. As the world’s largest consumer packaged goods company—with nearly $84 billion in sales, operations in 75 countries, and reaching 4.4 billion consumers—we have a lot of data. The ability to analyze this massive amount of data is critical to running the business in real-time and being responsive to changes in the marketplace.
It is not about what happened last month or last year; it is about being able to move the business from a rear-view to a forward-looking view. To move the business to a forward-looking view, we realized we needed one version of the truth. In the past, decision-makers spent time determining sources of the data or who had the most accurate data. This led to a lot of debate before real decisions could be made. We’ve elevated their discussions from the “what” to “why” and “how.” Meaning, why things are happening and how we can make interventions to change the outcome, if needed. We believe analytics will get us to the “why” as fast as possible.
We recognized the value in having access to the right data, at the right time, and with actionable insights. We also realized the power of visualizing that real-time data in an immersive environment. I believe in a complex world where there is an incredible amount of information, visualization helps distill what really matters, and the results have proven the value of our investment.
To read the full article, please visit CIOInsight.com
To read an additional profile on Filippo Passerini in Forbes, please click here.
Katrina Lane of American Express advanced beyond CIO by focusing her career on the intersection of marketing, data, customers, and technology.
04-01-2013
CIOs take heart: You don’t have to be an experimental physicist to win a promotion from the IT department into a line management role, but it can’t hurt, as the case of American Express executive Katrina Lane shows. Lane has been achieving at a high-level for a long time. She has a Ph.D. in Experimental Physics from Cornell, spent seven years as a consultant at McKinsey & Company, and took on marketing executive roles at multiple companies, ending up as the vice president of Channel Marketing at Caesars Entertainment. During her time in marketing, she collaborated with IT departments in developing data-driven marketing strategies, and implementing sophisticated customer relationship marketing (CRM) and business intelligence systems. She was so knowledgeable, in fact, that she was asked to take over IT as Caesars’ senior vice president and chief technology officer, the senior-most information technology role in the company.
Although this path may seem strange, there are a number of CIOs and CTOs whose first role in IT were as the senior-most position in the department. Lane’s scientific background, her time in consulting, and her deep collaboration with IT made this possible. Her responsibilities were broader than the average CIO, as well, as over time her role expanded and she oversaw innovation, gaming, IT application development, infrastructure, security, support for customer facing systems, all company web sites, as well as key initiatives to develop new technical capabilities for the Total Rewards loyalty program.
In May of 2012, after more than eight years at Caesars Entertainment, Lane left to become the Executive Vice President of Consumer Cards & Experiences at American Express. In this role, she manages the consumer card products portfolio and customer experiences. She and her team develop new offerings to enhance the card member experience and oversee customer segmentation, retention and advocacy. This is a logical step up based on her past experiences, as she makes clear below.
This is the first interview in the “Beyond CIO” series. Please check out this link to read the introduction to the series. To read other interviews with executives from companies like T.D. Ameritrade, United Airlines, Schneider National, Fifth Third Bank, and HP, please click here.
Peter High: Katrina, you had an interesting path to head of IT. You have a Ph.D. in physics, you were a consultant, and then a marketing executive before being asked to lead Caesars IT department as its chief technology officer. You are now the EVP of Consumer Card and Experiences at American Express. What is the thread that runs through this journey?
Katrina Lane: I have focused my career on the intersection of marketing, data, customers and technology. This intersection is the place where businesses can best leverage what they know about their customers to create compelling products, services and experiences that are also personalized – if appropriate. The physics degree was good training in overall problem solving. Because I wanted to have broad impact, I intended to find a position in applied science rather than stay in academic, although I do love teaching. But what I learned is that your focus becomes narrower as you work toward a graduate degree, and I started to look for opportunities to continue to do problem solving against a broader set of issues. I moved to a role as a management consultant, where I was able to use analytic skills while expanding my business knowledge. I started to focus on B2C businesses and in particular the areas where data could be leveraged to provide a better experience for the customer (at that point the field of CRM was just emerging). This focus area led to my next role in marketing.
To explore the full collection of Beyond CIO Series articles, please click here.
A reflection on technology thought leadership in 2012.
As 2012 draws to a close, I have gathered what I believe to be the best technology writing and interviews from the year. I have divided the articles into the categories of people, organizations, and ideas. As you put your feet up in front of the fire this holiday season, consider giving these articles and interviews a look and listen.
People:
Elon Musk has been called the reincarnation of Thomas Edison. One of his companies is shooting for the stars (or at least for Mars), and another hopes to revolutionize the auto industry. In this Bloomberg Businessweek profile entitled “Elon Musk, the 21st Century Industrialist“, Ashlee Vance provides a solid snapshot of this dynamic leader. (To get an insider’s perspective on Tesla Motors, listen to my interview with Tesla IT head, Jay Vijayan.)
I am admittedly a devotee of Charlie Rose, and there are three tech-centric interviews of his from the past year that are worth watching:
Mary Meeker was an early advocate for and investor in the dot-com companies of the late ‘90s. She is back, and this Forbes profile by Eric Savitz entitled “Meeker: new Job, But Still Queen of the Net” provides interesting insights into where she sees the next big things emerging from her perch at Kleiner Perkins Caufield & Byers.
Organizations:
With all of the articles written about big data, Charles Duhigg’s New York Times Magazine article “How Companies Learn Your Secrets” does an outstanding job at digging deep into the methods used by Target regarding its approach to data analytics to make better decisions.
(…)
Ideas:
I have been interested to see a number of business and IT executives who I counsel gaining a better appreciation for culture. This is not a technology piece per se, but is especially relevant for the department of the company that is most vulnerable to having great people leave for greener pastures. In this Fast Company article, Shawn Parr argues that “Culture Eats Strategy for Lunch.”
by Kalhan Koul May 2012
Please click here to download the PDF of this article
As the pace of technology progresses rapidly, it has become vital for CIOs and IT leaders to keep an eye out for transformative technologies that help increase efficiency, drive revenue, and more. Thus, since 2010, we have asked interviewees on Metis Strategy’s Forum on World Class IT podcast series to provide their thoughts on upcoming trends in IT; our team has tracked the results and elucidated several interesting patterns, some of which will be highlighted in this paper.
Overall, 51 individuals, ranging from active CIOs, CTOs, CEOs, CFOs, CAOs, professors in IT-related fields, among others, provided their input concerning future trends. The graphs in this article demonstrate which areas IT thought leaders believed to be most compelling in the near future.
Figures 1 and 2 illustrate the top trends identified over the course of the podcast series, and consist of some of the “usual suspects” such as cloud computing, mobility, etc. Figure 3 provides a breakdown of trends identified in 2010 vs. 2011, and Figure 4 takes the data a step further to demonstrate the change in percentage of identified trends. Together, these charts convey some interesting revelations, such as the emergence of trends like the consumerization of IT, the increased role of IT in the business, and the power of computing, as well as the decline or stagnation of trends such as social media. Although the identification of prominent and emerging trends provides interesting food for thought in itself, simply identifying trends without a broader context does not do the insights justice; thus, this article will further build upon these insights and present context concerning the emergence, decline, or persistence of specific trends in order to provide IT leaders greater visibility into what technologies will gain a foothold and should be considered sooner rather than later.
Figure 1: Top Trends Identified by Interviewees N = 51
Where the chart above provides the number of interviewees identifying trends, the chart below demonstrates trends identified as a percentage of interviewees.
Figure 2: Top Trends Identified – Percentage of Interviewees N = 51
The top few trends identified by the podcast interviewees, as shown in Figure 1 and Figure 2, have been prominent in the IT realm for some time, and for good reason. Cloud computing, which essentially provides shared resources, software, and information on demand, enables increased flexibility in IT spend, as it entails not only a significant reduction in fixed costs, but the ability to focus time and resources on better supporting the business and aligning to their objectives, a proposition tantalizing to many CIOs. For example, Curt Edge, CIO of The First Church of Christ, Scientist, states that “about 4-5 years ago [prior to moving to the cloud], we spent about 80% of our time working on maintenance …today we spend anywhere from 60-65% of our time working with the businesses.[1] ” It should be noted that some of the identified trends, such as Software-as-a-Service (SaaS) and virtualization remain closely linked to cloud computing: virtualization enables the movement of major infrastructure components to the cloud, and SaaS essentially acts as a subset of cloud computing, with software and associated data being centrally hosted in the cloud. For the purposes of this paper, these trends will be treated as distinct entities despite their linkage.
As mobile technologies improve at a rapid pace, employees have the ability to utilize mobile devices to conduct business and access internal networks, so that they may be productive anywhere. For instance, David McCue, CIO of Computer Sciences Corporation, states that “we’re all beginning to appreciate what the convergence of the last few years of ubiquitous available bandwidth, thick pipes, and powerful handheld devices means…we’ve learned that being able to do anything, anytime, anywhere is the direction we’re going.[2] ” Furthermore, what has partially enabled the advent of mobility has been the consumerization of IT, where a plethora of ever-improving mobile computing devices such as smartphones and tablets have begun to permeate the business world.
Taken together, these trends do not seem surprising at all, as they have been widely recognized in a variety of publications and numerous companies have begun implementing projects in relation to them; however, further delving into the data provides significant insights into the shifting priorities of IT leaders (see Figure 3 and Figure 4).
Figure 3: Trends Identified in 2010 and 2011 N = 48
Evidently, the data illustrates significant changes in trends identified between 2010 and 2011. Figure 4 provides the difference in percentage from 2010 to 2011, and reveals several interesting details concerning trend trajectories.
Figure 4: Change in Trend Identification from 2010 to 2011 – Percentage of Interviewees N = 48
First, the number of interviewees identifying social media and collaboration technologies (both internally and externally facing) as a major IT trend decreased dramatically; over the past two years, this trend dropped from first to fourth overall (see Figure 1).
So, what has caused this dramatic decrease in recognition? Some plausible explanations include the increased awareness of social media platforms, such as Facebook, that were more front-of-mind due to their exponential growth in use by the general population, or by the significant level of media exposure these platforms received. Another explanation could be that organizations recognized the potential of these platforms early and sought to implement technologies to take advantage of them. For instance, Microsoft witnessed a significant increase in sales of SharePoint [3] (which enables collaboration), indicating that more companies have sought this type of solution, and have addressed this trend. On the flipside, however, as detailed in a recent InformationWeek article, numerous internal social networking initiatives have faced lackluster adoption [4] ; one possible consequence could be that IT leaders have shifted focus elsewhere. Whatever the explanation, this precipitous decline in focus on social media remains an interesting topic that merits further monitoring.
It comes as no surprise that consumerization of IT, which concerns the impact that consumer-originated technologies have on enterprises, has witnessed the greatest increase in being identified as a trend from 2010 to 2011. The rise of tablet technologies likely acts as one of the primary drivers for this increase, particularly the release of the Apple iPad. Although consumerization of IT has been increasing in prominence as consumer technology becomes more sophisticated, it appears that the release and the widespread adoption of the iPad (approximately 55 million sold to date [5] ) has opened the floodgates and has caused this topic to considerably rise in prominence. In fact, Metis Strategy has advised several clients who have sought to implement tablets within their own organization in recent years; overall, despite concerns of security of information in adopting tablets and other consumer originated technologies, the majority of organizations have found benefits through a combination of increased productivity, employee satisfaction, and reduced cost. Furthermore, as the capabilities of consumer technologies expand, we have also seen an increase in organizations employing “Bring Your Own Device” programs, which leverage not only the familiarity employees have with their own devices, but the reduction in support necessary for these devices. For instance, Bruce Leidal, CIO of CareStream Health, states that “people own their own devices and they would just as soon use those for work…and we’re putting in the right infrastructure so that we can make sure that that happens. I think the benefits [are that] we have basically eliminated all of the support costs…it reduces our call volume and also takes a lot of noise out of our support environment. [6] ” Thus, overall, the rise in consumerization of IT makes sense given the parallel advancements and capabilities of consumer technology.
An additional trend that is rising in prominence includes an increased IT role in the business. In numerous organizations Metis Strategy has advised, IT has historically been regarded as an “order-taker”, and not seen as integral to driving the business; however, as technology becomes vital in how business operates in contemporary times, we have begun to see a shift towards increasing IT involvement in the business. Although this trend has yet to become pervasive, it appears to be a logical successor to other prominent trends. For instance, we have seen several of our clients try to unburden their resources by adopting cloud computing solutions, significantly increase virtualization, or leverage consumerization of IT programs such as ‘Bring Your Own Device’; not only do these initiatives decrease fixed costs related to hardware, but they drastically reduce ongoing maintenance and support of the hardware. Consequently, IT employees have increased opportunity to partner with the business so as to focus on value-oriented and revenue driving initiatives. For example, Jim Knight, EVP and Global CIO of Chubb & Son, states that “what we have found the last couple of years is not only are we the fuel for managing expenses…we’re also the engine for the business…because technology can get us there…there are absolutely expectations of us that our operations will be streamlined and [as] cost-effective as possible, but they are also investing in programs to bolster up the business. [7]” In addition, as the general consumer of technology becomes more tech savvy, it becomes necessary for businesses to connect with these consumers utilizing the same technology; as a result, IT can naturally team with other functions to drive business’ strategy through leveraging new tech-enabled customer touch points.
When explaining the power of computing and analytics as a rising trend, it makes sense to take a step back and assess the progress of technology as a whole. For instance, Moore’s Law, one measure of technology progress, states that the number of transistors that can affordably be placed on an integrated chip doubles approximately every two years (and is hence associated with growth in processing speed, memory, etc.), and illustrates the dramatic pace at which computing improves. Furthermore, recent developments where research teams have taken significant strides in quantum computing (e.g., IBM physicists at the Watson Research Center advancing superconducting qubits [8]) indicate that a new era in the scale of computing power may not be too far off. However, the real appeal lies in what can be done with this computing power, and how it can be utilized to drive business. June Drewry, former CIO of Chubb Insurance and Aon Corporation, states that “over the years…we’ve collected so much data that we’re not sure we know how to make information out of it in some cases; well, now we’re learning, and now there’s a thirst for it in the business. [9]”
The ability to process and analyze massive amounts of data, currently referred to as Big Data in IT circles, to form conclusions that can be acted upon will be invaluable, allowing businesses to discern customer behavior and other patterns. One of the reasons why this capability will be so valuable derives from the fact that many correlations that can be discovered through this type of analytics are not intuitive in nature. For instance, the New York Times recently published an article detailing how Target was able to utilize statistical correlations to predict which of its consumers were pregnant, and thus create tailored promotions to that demographic; other correlations included finding that newly-married individuals are more likely to begin purchasing a new type of coffee, or when individuals divorce, they tend to change brands of beer [10]. These behaviors do not appear to have inherently intuitive explanations, yet they exist and can be discovered and leveraged through analytics as enabled by computing power. Thus, the rise in the power of computing, and the correlated capability to conduct extensive analysis to discover valuable insights, will become a source of competitive advantage in the future, and likely explains why this trend has been increasing in prominence.
The analysis of the data obtained from the Forum on World Class IT podcast series reveals interesting insights concerning the trends that are front of mind for IT thought leaders. Not only does the data point to top trends such as cloud computing and mobility, but it also demonstrates trends rising in prominence such as consumerization of IT, the power of computing, and the increased IT role in the business, as well as trends on the decline such as social media.
From Metis Strategy’s perspective, we feel that IT’s increased role in the business, as well as the power of computing and analytics, will continue to be pertinent for business leaders, and will rise in prominence in the coming years. As many resource-consuming aspects of IT move to the cloud, such as purchasing and maintaining servers, network equipment, data center space, business applications, etc., IT organizations will thus be able to focus more on driving business strategy. One method of IT supporting the business, as we have seen in several organizations, entails enabling a strong business intelligence function, which is closely associated with the power of computing and analytics. As the amount of consumer information gathered and analyzed continues to grow, it will become essential for IT to develop methods to effectively consume and utilize this information to influence business decisions.
We feel that consumerization of IT, although experiencing a drastic increase in recognition in recent times, will level out somewhat. This is not to say that this trend has been ‘over-hyped’, but that the advantages of consumer-originated technology entering the business landscape have become much clearer recently, and many of our clients actively pursue opportunities to incorporate these technologies in their businesses. Similarly, when considering cloud computing, we feel this trend will begin to even out in the near future; cloud computing has been a topic of discussion among IT leaders for several years now, and we have begun to observe numerous companies moving ‘to the cloud’. In the coming years, cloud computing will be in essence ubiquitous, less of a consideration and more of a necessity, and will be intrinsic in how IT operates.
Overall, these insights bolster the notion that the landscape of IT continuously shifts and progresses at a rapid pace, and it becomes ever more important to keep our fingers on the pulse of IT and understand how these constantly emerging innovative technologies can be harnessed to propel business to a new level. Furthermore, what is truly exciting about all of these mentioned trends is that the majority of them provide tremendous opportunities for CIOs to collaborate with peers across the company, putting IT in the center of interesting conversations that could determine business direction. These trends have deep-seated business implications that should be taken advantage of to increase the curiosity and enthusiasm about how IT can help drive the business as opposed to merely supporting it.
[1] Peter High, “Metis Strategy’s Forum on World Class IT,” podcast interview with Curt Edge, March 26, 2012. [2] Peter High, “Metis Strategy’s Forum on World Class IT,” podcast interview with David McCue, April 9, 2012. [3] Mary Jo Foley, “Microsoft: We’re adding 20,000 new SharePoint users a day.” March 24, 2011. http://www.zdnet.com/blog/microsoft/microsoft-were-adding-20000-new-sharepoint-users-a-day/9011 [4] Healey, Mike. “Enterprise Social Networks: Dislike,” InformationWeek, February 2, 2012. [5] Sam Gustin, “How Many iPads Can Apple Sell?” Time Business, March 16, 2012. [6] Peter High, “Metis Strategy’s Forum on World Class IT,” podcast interview with Bruce Leidal, November 21, 2011. [7] Peter High, “Metis Strategy’s Forum on World Class IT,” podcast interview with Jim Knight, January 3, 2012. [8] Cade Metz, “IBM Busts Record for ‘Superconducting’ Quantum Computer,” Wired Enterprise, February 28, 2012. [9] Peter High, “Metis Strategy’s Forum on World Class IT,” podcast interview with June Drewry, December 5, 2011. [10] Charles Duhigg, “How Companies Learn Your Secrets,” The New York Times, February 16, 2012.
Please visit The Forum on World Class IT to listen to the podcasts and trends mentioned in this article.
