CIO100 2017 #19: Duncan Ritchie of Xero
Duncan Ritchie led the global effort by Xero to transition to the public cloud a massive two-year long exercise that was completed before the yearend.
“This has been an incredible challenge for our team as we migrated more than 1.4 petabytes of data, 3000 server apps, 120 databases and 59 billion records to the AWS platform,” says Ritchie, the chief platform officer at Xero.
Over that time, Xero added nearly half a million new customers.
“This year, we’ll start to share with our customers, the full power of machine learning and AI features, and a whole lot of new things we have been working on.”
Ritchie says the end of the project marks one of the largest data migrations to the AWS cloud infrastructure environment across Australia and New Zealand.
With more than 862,000 subscribers globally, Xero recorded more than $1 trillion over 450 million ingoing and outgoing transactions in 12 months, signifying just how large the Xero data set has become.
He points out while completing the move to AWS, Xero has shipped thousands of product features and updates, and continues to drive the innovation agenda in the accounting industry and small business sector.
“It is a huge achievement to get through this massive transition,” says Ritchie, who initially joined Xero as GM operations.
“It sets us up to deliver fast-paced innovation, leverage machine learning technology, increase uptime and security, and drive better business outcomes to help small businesses flourish.
“We expect all business software vendors to re-platform over the next few years so they too may take advantage of the commoditised innovation services in the larger public cloud platforms,” he states.
He says the most important innovations did not just speed up business opportunities, but protect them too.
Xero has implemented a number of new systems on AWS that make it easier for customers to protect their account, like two-step authentication and user login history.
“Our systems on AWS will now actively identify strange login behaviours, and notify the customer directly,” he says.
An upside of moving to public cloud is having their apps scale to meet customer demands even on the busiest days of the month.
“It’s not that surprising that our systems are busiest on the 1st, 20th and in the days leading up to tax filing deadlines,” he states.
“The elasticity available to us within AWS allows our servers to meet those times of high user demand, delivering more consistent performance to our customers.”
Ritchie says some of the major projects they have rolled out include Xero Signals.
Xero Signals aggregates data from almost 10,000 New Zealand small businesses and uses survey data of approximately 500 nationally representative small businesses and 1,300 Xero customers.
It identifies small business macro-economic trends and uses them to offer insights into how small business owners can streamline their business.
“Small businesses are the backbone of the New Zealand economy and we want them to thrive,” he says on the importance of the programme,” says Ritchie.
“Insights from Signals will highlight effective business management strategies to help drive profitability which we hope in turn will help save business owners time and money.”
He says one of the key strategies of Xero over the past year is ramping up the use of marketing automation to increase engagement with customers and enable them to scale beyond a million customers.
“By doing this, we have been able to drive an automated, always-on program that uses data to identify segments within our customer base where our marketing efforts would be most effective,” he says.
We continuously challenge ourselves with the question of ‘how can we do better?'
Shaping the future with AI
Over the past 12 months, Xero has shipped more than 1,400 product features and updates.
“Our goal is to automate repetitive tasks, make sure that Xero learns from its users and predicts their actions, and help them to navigate through the tools that help small businesses become more efficient. We want to make the user experience totally seamless, fun, and beautiful.”
He says one innovative product they released in the past year is Hey Xero, a Facebook messenger chatbot for their newly-enhanced Advisor Directory.
Hey Xero connects millions of small businesses to Xero’s global network of tens of thousands of accountants and bookkeepers, and also allows Xero users the flexibility to instantly chat with Xero through Facebook Messenger to gain quick and accurate information about their own account.
“It’s a tool we’re constantly developing to deliver new capabilities for our customers,” he says.
Ritchie says the idea for Hey Xero came from one of their global Xplore hackathons. Xero holds these hackathons twice a year. “Developers are given the chance to drop what they are doing for two days and explore new ideas, experiment, and unleash their creativity.”
The concept produced from these hackathons are used both internally and externally. “Hey Xero is just one example of the great work and tools we can build using artificial intelligence and machine learning now that Xero has fully migrated to AWS,” he says.
Robots at work
This month, Xero released a new machine learning system that tackles a common problem among their small business subscribers: correctly coding their accounts. There are more than 10.1 million unique account codes in Xero created by small businesses, meaning items are often entered incorrectly, creating hours of work for the accountants who need to correct them.
But this new machine learning system (developed in-house by a specialist team of engineers working full-time for a year across three different locations) will track invoice coding behaviours and learn from it, to automatically suggest codes for invoices for those subscribers (and help to cut down on the millions of invoices incorrectly coded).
"Built off the back of our recent migration to Amazon Web Services, this is the first specialist, personalised machine learning in a small business cloud accounting system," says Ritchie.
"For every second we shave off double-entry accounting, we're collectively saving small businesses and their advisors hours and hours of time from doing this menial task."
Finding and retaining IT talent
Ritchie says a key issue facing Xero as it grows is finding talent.
“When it becomes more difficult to hire experienced seniors, it becomes a competitive advantage to be able to build a talented workforce from within,” he states.
Thus, the leadership team at Xero has a strategic remit to build an internal talent pipeline of highly skilled, multi-faceted people.
He says Xero has a graduate programme that ensures a consistent flow of talent into the business from a junior level.
“Because we decide the design of our graduate development program, we can mould and train our own internal talent pipeline of highly skilled, agile, multi faceted workforce of future technical and people leaders. A grad program allows us to create efficiencies by providing a slick framework to work with.:
Competitors from NZ and overseas are becoming more active in this space, which is impacting Xero’s ability to attract high calibre talent, he says.
He says Xero also works closely with communities such as SheSharp and Shadow Tech to support their vision of addressing the gender diversity problem that the entire industry faces.
“We continuously challenge ourselves with the question of ‘how can we do better?’”