David G Thomson travels around the globe advising on how companies can be "recession proof", or thrive through the most challenging markets and economic cycles.
Stories by Divina Paredes
Michael Snowden has mined his PhD research – completed 31 years ago – for a cloud service to be deployed by OneNet, of which he is chief executive.
The product, Profit Maximising Software, is a set of software modules which mathematically determines the optimal operational and financial decisions to maximise profits, based on uncertain forecasts of future opportunities and current financial position of an enterprise..
In a background paper on the project, Snowden explains the software uses ‘Monte Carlo methods’ - a reference to thousands of simulations that are run to build an overall ‘roulette wheel’, or probability distribution, of demand.
The uncertain future is tested under thousands of different possible combinations of outcomes to help determine the overall likely future, given the best guesses that can be made today. Future demand is projected with probability estimates for all services and other key variables.
The software calculates the absolute maximum profit that could be obtained, given the assumptions made.
Snowden says his PhD research used simulation and optimisation to gain these results but was hampered by the cost and availability of high performance computing at the time. In the late 1970s, for instance, building a financial model of a firm could cost up to hundreds of thousands of dollars.
He pitched the software to be part of this year’s Infosys 345 Business Project at the University of Auckland. Three senior students from the Department of Information Systems and Operation Management: Michael Hoskins, Kyle Folster and Joshua Monteiro, worked with OneNet to apply it to actual business scenarios.
Avneesh Saxena, group vice president, Domain Research Group, IDC Asia Pacific, predicts the rise of a sourcing specialist who will act as a trusted advisor on the cloud for CIOs.
Todd Humphrey, executive vice president, business development, Kobo, recently visited New Zealand for the local launch of the e-book retailer. During the interview with CIO, he brought with him two devices - Kobo’s touchscreen e-reader and an iPad that became important backdrops to the discussion.
Here are some excerpts from the interview.
CIO: Tell us about Kobo.
Todd Humphrey: The first thing is, we are a technology company that is enabling the consumption of content. We do two things - we build hardware and we build applications for people to consume that content.
Kobo is founded inside of Canada’s largest book and music seller Indigo. We spun out of Indigo about 20 months ago and we have gone from 30 to 300 [staff]. Our user base is approaching 4.5 million users in a hundred countries. It is being run by someone who is very technical and business savvy [Kobo CEO Michael Serbini was CIO of Indigo].
This combination has allowed us to innovate faster than anywhere else in the world. We are the first company to launch a cloud reading service. We have one of the world’s largest digital libraries of two-and-a-half million books. We have applications on our own devices and other platforms like Android and BlackBerry. We are a cloud based service - we allow users to access any piece of their content from any of their devices and they are always updated.
CIO: How do you aim to stand out from other e-book providers?
From the Amazons of the world? There are a couple of things. The device itself is one of the first touch screen devices with an e-ink screen; the second is the form factor. It is an open platform. We use EPUB as our standard and with that have access to 1.7 million free books and allow people to access content from various sources. We believe customers want to have access to that content and want to buy content from various sources and we have developed a platform where you can go and do that.
What is the enterprise use for it?
It is more of a consumer device. Having said that, we are starting to see more of the enterprise start to pick it up as more functionality is added. We have seen it with the iPad. There are a number of companies – large ones – using this as an incentive or giveaway to employees to access content – manuals and analyst reports.
If employees already have tablets, why do they need an e-reader?
They are just different devices in terms of usability… Kobo is a through and through reading device so there is no email, no internet, no Angry Birds.
But some people like online games like Angry Birds.
If you like distractions, this [holding the iPad] will give you a million apps to distract you. Our customers told us one of the things they love about this device [Kobo] is the simplicity of it. You can access your content immediately and give you the ability to do so in a way that is just a little bit easier, simpler than an iPad.
Why should CIOs or other executives check this out?
We are moving to what was half of the publishing industry going from black and white books to digital, so there is a huge evolution, a huge transition to how people are consuming content. If you are in the content business to any degree, this is coming at you.
From a managerial standpoint, if your employees engage with content, this is probably how they are going to engage with half of it. How do you construct or push it [information] out to your employee base in a form that is readable?
New Fonterra chief executive Theo Spierings says information technology is “extremely important” to maintain market competitiveness for the company.
At a press briefing on his first week on the job, Spierings, joined by Fonterra CFO Jonathan Mason, outlined IT’s role in the dairy giant’s supply chain, and providing critical data to staff and customers.
Consumerisation of technology – where workers use their own smartphones, tablets and social media like Facebook and Twitter for work – is accelerating in New Zealand.
But the majority of employers have not yet implemented programmes to proactively manage, support and secure these devices.
If the Arab spring led to the downfall of dictators, so can CEOs – and CIOs - be toppled into an equivalent social revolt by angry users, customers and business partners.
Salesforce CEO Marc Benioff, speaking at Dreamforce 2011 in San Francisco, predicts a ‘corporate or enterprise’ spring for heads of companies that do not take the lead to become a ‘social enterprise’.
“All of us are facing transition from physical to virtual world,” says VMware CEO Paul Maritz. “The whole industry has come to grips to the fact that we are going into more virtualised, cloud-based world.”
Maritz points out more than 50 percent of total workloads are now virtualised and this has implications for the industry. There are now more than 20 million virtual machines ticking away around the globe, a new VM is born every six seconds, he says.
The cloud era represents major interaction between consumerisation of IT on one hand and traditional enterprise IT on the other, working with each other for a new synthesis that will redefine IT over the coming decade, says Maritz. “The question is how to collectively transition between these two areas in a smart orderly way.”
“We need to make things brain dead simple... you have to turn it on and that is it,” says Maritz at the annual VMworld conference being held this week in Las Vegas.
Maritz says the mainframe era was about automated bookkeeping. The client server era on the other hand, saw hundreds of millions of new users through PCs and from this came a new set of technologies.
In the cloud era, millions of new users and devices are coming into play. Just three years ago, he says, over 95 percent of devices connected to the internet were PCs. Three years from now, that number will be less than 20 percent – more than 80 percent of devices connected to the internet will not be Windows-based PCs.
“What you do on your new devices is not the same as your old PC,” he says. “We have to think about the next generation of developers and canonical apps.”
Managing services, not servers
The transition to the post-PC world is about using all the devices and not just desktop, having universal access to apps and data wherever we may be. “It is not just about machines but tools to succeed collaborate in real time in a connected enterprise,” says Steve Herrod, VMware CTO.
We are in one of the biggest transitions of technology – from a focus on individual servers and desktops, to services and people, he says. “We want to manage services, not servers.”
Herrod says the transition to a post PC world is about using all devices and not just the desktop, and universal access to apps and data wherever the user may be. The goal is to succeed and collaborate in real time in a connected enterprise.
Herrod points out the steps that can be taken to simplify management of IT in this type of environment. This involves putting a policy in place that is assigned to a user, not to a device.
“It should just work and it should work well,” says Herrod. The key is to automate. “A truly intelligent infrastructure should automatically respond,” says Herrod.
Kirk Bresniker is a "technical steward", but also fronts up to customers, analysts and development partners all over the world -- "talking about everything from operating system calls to photonic interconnects".
A CIO heads a successful business initiative and gets an industry accolade, then is head-hunted for a similar role in another and, presumably, bigger company. The CIO moves to the new company and leaves six months later, failing to duplicate the earlier success.
The CIO brought the same leadership skills – in business technology and strategy, and more – to the new organisation, but struggled in the new environment. What happened and why does this tale resonate among CIOs across sectors worldwide?
“The benefits of cloud are real,” says Dr Liam Keating, Intel APAC IT director and China IT country manager, as he outlines the lessons learned from the company’s internal cloud deployment.
Intel is now halfway through its five-year cloud journey, and the business sees two main benefits from the move, he says. These are the agility of the IT organisation to rapidly respond to customer requirements, as well as cost savings.
At Discover 2011, HP’s annual user conference being held in Las Vegas, the company launched new software that measures “everything IT does”.
The IT Performance Suite can answer a range of questions such as comparisons of IT capex versus opex, whether service level agreements have been met, the average time for introducing a new service or project, and whether systems are up and running. It can be a powerful tool for CIOs to demonstrate the value of IT.
“This will provide an incredibly powerful communication mechanism [for IT], rather than running around with spreadsheets and creating another PowerPoint that you then put before the board,” says Piet Loubser, senior director product marketing at HP.
The software measures the business value that IT generates, he says. The goal is to provide “a seamless, secure, context-aware experience for the connected ICT executive”.
Loubser says the report generated by the software may not be “the best publicity for the IT organisation”, but business executives already know when IT service has been dropping because they are experiencing it.
The first release of the CIO edition of the software contains more than 50 KPIs and a scorecard for financial planning and analysis, project and portfolio management, along with asset management.
“We can bring data from different areas, but bring performance data to the top,” says Loubser. “When you start correlating data from different silos is when you strike gold.”
He says this is a better way to communicate the value of IT with the business executives. “We have to be transparent and open, and provide people with insight. It is far better for us to communicate the truth in a common language,” he says. “If people disagree with it, we can go back and analyse the data and we can agree that the KPI or the goal needs to be measured differently.”
“IT can no longer withhold the transparency from the business,” he says. “Business wants it, business is going to get it. If we don’t give it to them, they will find another way to do this.”
He cites a scenario where the CIO goes to a meeting with a spreadsheet and the business executives have their own spreadsheet with the number of calls logged and outages. “That is the worst thing that can happen to an organisation, when business and IT are fighting each other instead of working together.”
Divina Paredes attended the Discover 2011 in Las Vegas as a guest of HP.
Hewlett-Packard CEO Leo Apotheker, in his keynote speech at Discover 2011 in Las Vegas, shared the stage with a gadget that he says will respond to the needs of the increasingly mobile and connected population.
The old paradigm of one person as a separate consumer and professional is no longer true, he told the company’s annual user conference.
He showed the audience a TouchPad, a “cool” device, which will be made available “shortly”.
Apotheker says the TouchPad will deliver a “fantastic web experience”, allows the user to synch email and other data from multiple sources, and provides an “awesome game platform” while also acting as a “serious business device”.
It is HP’s response to the iPad, which to date has more than 70 percent of market share in the tablet PC market. The gadget will be based on the webOS platform that HP acquired when it bought Palm last year.
This year’s event at Las Vegas has more than 10,000 attendees as HP has merged its hardware and software conferences.
In his keynote Apotheker reported on the challenges enterprises face, which includes protecting the privacy of customers and employees in a “fully connected cloud based world” and how to translate vast data, both structured and unstructured, into insights to drive growth.
He says the CEO, a CIO, an IT director, a procurement manager, a developer, a project manager have a “collective challenge” – how to make technology a competitive advantage by spending less on keeping the lights on and developing an innovative system that is agile and dynamic and meet what he calls the needs of the ‘instant on enterprise’.
“Agility comes from leveraging you have already made, while taking advantage of the cloud in all of its forms,” says Apotheker.
Bill McDermott, SAP co-CEO, who also was a speaker, sums up the challenges enterprise face today: mobility, ‘big data’ and ‘big cloud’.
The structured and unstructured data collected from customers is growing exponentially as well as the devices they use he says. There are terabytes of customer data in corporate vaults that have never even been analysed.
He says in a number of industries, up to 70 percent of employees never even meet the customer.
“Customer intimacy can not be ad hoc,” he says, “How do you engage with your customers to change the status quo and grow your business?”
At the start of the conference on Monday, HP unveiled what it says are industry-first “converged infrastructure” solutions that aim to improve enterprise agility by simplifying deployment and speed up IT delivery.
· Converged Systems, new portfolio hardware, software, tailored consulting and HP Solution Support services that enable clients to be up and running with new applications in hours. They include real-time data analytics, database consolidation and data warehouse.
The CIO post is evolving, together with the perception of their role within the business.
IBM’s Global CIO Surveyhas identified the four distinct ‘mandates’ or approaches CIOs are taking as they implement ICT strategy.
Two major ICT executive positions have been announced – Johan Vendrig as the GM information services for healthAlliance, and Roy Goldsmith, chief technology officer for Bank of New Zealand.
Vendrig moves to his current role from the Auckland District Health Board where he was CIO. The ADHB is one of four Northern Region District Health Boards that have formed a shared service for their merging their non-clinical services covering finance, procurement, supply chain, internal audit and Information Services.