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Dwayne Allen is an ORBIE-award winning technology executive primed for times like these. Equipped with experiences across a range of industries, a healthy dose of self-awareness, and a passion for learning and people, Allen is redefining the art of the possible as a strategic and innovative CTO. In his current role as senior vice president and CTO at Unisys, he has accountability not just for technology but also solution innovation, architecture and IP, and patents. True to his customer-first, business-focused leadership style, he is actively involved with customer interactions as well.

When we sat down for a recent episode of the Tech Whisperers podcast, Allen opened up about how his career journey, which has spanned seven big brand companies and four industries, has shaped the multidimensional leadership style he operates with today. Afterwards, we spent some more time talking about Allen’s philosophy of IT leadership, some of the key skills and qualities that have enabled his success, and his advice to IT managers, directors, and vice presidents who aspire to have what Allen calls “transcendent impact” and deliver greater value to the business. What follows is that conversation, edited for length and clarity.

Dan Roberts: What do you mean by the ‘transcendent impact’ of IT leadership? And how do we live up to it?

Dwayne Allen: If you look at the definition of transcendence, it means going beyond the limits of all possible experience and knowledge. The reason I emphasize it is that, of all the disciplines on a leadership team, IT sometimes has the richest insight across the workings of a company, but somehow it gets put in a box and doesn’t get out of it. If you’re in marketing, you can move over and run a business unit, or become CFO, or you could possibly become CEO. There are some recent examples of CIOs doing this — Greg Carmichael, who was CIO at Fifth Third when he hired me moved to COO and then CEO. Ted Colbert is another former CIO who became a CEO, and other CIOs are joining boards. In general, though, I think IT executives are still very underutilized in a holistic business mindset.

As I was thinking about my curious career journey, along with that of other colleagues in the industry, it made me think about the concept of transcendent impact. A key ingredient of success is the intersection of capability and opportunity. At Unisys I’m fortunate to have a CEO and COO that have created an environment where I can expand my reach and potential impact, so I’m more than just the typical CTO or CIO. I’ve gone on sales pitches to clients, get to play a role on the process for our execs to engage with client accounts, and I’m heavily engaged with our investment committee. Over time I have also begun to participate in some aspects of our strategy. It’s great to work for leaders that see me as a valuable partner so I can help in any way I can, which actually deepens my commitment to the company.

So sometimes, as IT executives, we have to aim higher, stepping outside of the IT or digital space, to demonstrate more value we can add and resisting the temptation to stay in a box. Again, the work environment and culture acts as an enabler to be able to express ‘I’m not just a CTO’ in order to get involved in sales and get involved in other aspects of learning, leadership, and growth, as well as strategy and marketing and ideas. Why limit yourself to just saying, ‘We need a network upgrade to move to the cloud,’ when you can also make other suggestions? We have to do a better job of telling our story.

Integral to your success as an executive is your ability to deliver what you describe as ‘value without boundaries or limits.’ Can you talk about how aspiring leaders can learn to achieve that?

I see it as multidimensional competence, but it starts with the core. You have to start with our IT expertise, because that’s why we were hired, so you must be good at what you do, and that includes staying current on what’s going on, from cloud to cyber to ChatGPT or whatever the relevant emerging trends are at the time. You must be familiar with your business and how IT can help them meet their strategic goals.

Next comes industry experience. I’ve been in four industries, but while I was at Microsoft, I served several more — healthcare and retail, for example. So that IT expertise gets bundled with a variety of industry experiences, which enables us to really get to understand different ways value can be delivered, because you are leveraging what you’ve learned in one industry as you move to the next. So when I moved from banking to manufacturing to learn the differences in terms of supply chain, inventory, sales, how they go to market, warranties and so forth, I felt a different type of growth.

The next layer is a bit of a strategic orientation. So, it’s not just my IT expertise and the industries I’ve been in, but also how that enables original thought and ideas. Sometimes others in the business won’t expect those ideas from the IT executive, but you now know enough to say, ‘Why don’t we consider doing this?’ Maybe you don’t initially get the credit, but you start to recognize, I’ve got more in this brain than just IT stuff. So, it’s developing the strategic orientation. Again, being in the right environment helps enable this, so I am fortunate to be at Unisys, especially with the energy of our new brand.

The final piece is business acumen, which is where you start speaking the language of the business. You start talking to them in their terms — and it throws them off at first because they will expect you to talk about technical features and performance, but as you start talking sales, profit margin, and customer retention, you are building a deeper connection.

Can you share an example?

One of my favorite stories is when I was at a large manufacturing company. I was the CIO of one of the segments — $6 billion in sales, five businesses, with 75 sites in 13 countries. I did a big ERP presentation at the segment president’s leadership meeting. I covered getting up to a common release version, benefits, costs, and timeline. In the end the president said, in front of everyone, ‘Dwayne, for that amount of money, I could build several manufacturing plants. This doesn’t seem like a good investment at all.’

While disappointing, this was an invaluable lesson. I was not speaking the language of the business; thus it failed. About a year later I came back — this time partnering with one of the business heads — with a manufacturing transformation presentation focusing on advanced supply chain, material management, inventory reduction, quality, etc. It won immediate support. It still required the same upgrade and costs, but now it made more sense because I was talking in business terms not technical terms.

When you do those things and start to realize the greater impact opportunity and better understand the art of the possible, you start to say, ‘Why aren’t we going to market this way?’ It all ties together. Each experience in your journey builds to the next one.

It seems like this also makes a difference in how you’re viewed as a business partner, which goes back to the opportunity IT has for transcendent impact. Can you dig a little deeper on that?

The core is that multidimensional competence. Once you’ve got that core, then there are no boundaries. Typically, that core goes one direction — technical — or sometimes two — technical and industry. It could be, this is great for solutions and industries because you could do more in that bucket and stay true to that. Over time, it could be, you’re good at this, you can develop talent, and you’re good at leveraging a strategic partnership to deliver any deliverable.

So those are two, and people tend to stop there. But guess what? We can also go into the business. As I said, I’m on sales calls. I can talk to someone about our cloud strategy and things of that nature. Even if you’re not in a business unit, you can be such a contributor that if there’s a strategy conversation, they’re going to make sure you’re in the meeting. You’re not ‘just IT.’

The collection of all of that presents a different value proposition. You could then be a candidate for a board of directors or to serve in some advisory capacity because now you’ve got everything covered. You’ve got solutions and industries, talent and partners, business and strategy, and boards and advisory. There are no limits — you transcend.

To get it all done, you have to galvanize people in a multidirectional way. It’s really having a 360-degree people orientation, isn’t it?

I call it the paradox of leadership. In my position right now, I’ve got to engender enough confidence with executive leadership that I can deliver on what they’re expecting of me. At the same time, I have to inspire a staff to deliver that. And you’re only successful with both. If I inspire my staff, but the leadership team doesn’t believe in me, that’s not going to work. And then, if I get the confidence of the business but my staff doesn’t deliver, that doesn’t work. So you’ve got to do both.

How would you sum it all up for an aspiring IT leader who is looking to follow in your footsteps?

Well first, it’s a journey. You’re getting a summary, but this road was paved with bumps, bruises, setbacks, and a few failures. The key is to not let that hold back the aspiration or vision. It will, at times, require some resilience and courage, but IT affords us such a unique vantage point across the company. You’ve got to embrace learning, stay keenly observant and be agile. We can leverage insights that no one else can see and integrate them into the business mindset. While IT is a profession we do, as a business leader and strategic thinker, it’s about what we are.

Speak the language of the business and focus on impacting the business. Ask for business responsibilities in addition to your IT discipline — and ask to lead or heavily contribute, not just participate. Show them the value we can add. It’s possibly so much greater than you and they even realize. Go for it!

For more insights and advice from Dwayne Allen on how to redefine your value proposition, tune in to the Tech Whisperers podcast.

IT Leadership

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While much of the news around tech layoffs has focused on US giants like Amazon, Microsoft, Google, Oracle, Meta and Twitter, dismissals are also happening closer to home.

Since December, Chipper Cash, an African cross-border payments business and one of Africa’s few tech unicorns, has laid off about 150 staff, with the brand’s engineering team taking the biggest hit. Similarly, Wave, a Francophone Africa fintech with services in Senegal and Ivory Coast, laid off roughly 15% of its team in June 2022. And in January this year, Naspers, the South African multinational Internet, technology and multimedia company, announced it would cut around a third of its corporate staff in response to a changing macro environment, according to a spokesperson. The company will also reduce staff across central functions as part of efforts to realign a focus on specific areas of the business.

This instability across the market is also affecting hiring. According to CareerJunction’s latest Employment Insights, which outlines supply and demand trends in the online job market, there was a 6% month-on-month decline in hiring activity from November to December 2022 in several sectors, including tech.

What this means for the tech skills landscape in Africa and globally, according to Arthur Goldstuck, CEO of South African technology research and strategy organisation World Wide Worx, is that the large percentage of layoffs that targeted business support roles, like marketing, sales and middle management, don’t equate to a flood of available tech talent to quell shortages. “What we’re seeing in many organisations is a rebalancing of staff after an exuberance of over-hiring,” he says. “So it’s important we observe any hype around massive layoffs in context.”

In South Africa, and across Africa more broadly, IT skills shortages remain a far bigger concern than broad global layoffs, Goldstuck continues.

Paul Newman, operating director, Michael Page Africa

Michael Page Africa

Furthermore, Paul Newman, operating director for Michael Page Africa, believes that South African businesses were more limited during the pandemic and couldn’t over hire, so as a result, they don’t have teams weighed down with too many people. “The skills shortage in the market prevented over staffed teams,” he explains, which acted as a stabiliser for the local industry. Yet Goldstuck and Walker see there’s still the underlying issue of demand for custom software development, AI, cybersecurity and data science skills.

Root cause of layoffs

Statements issued by household brands and others regarding layoffs may vary in their wording, explaining several natural drivers for layoffs, but according to Goldstuck, two major reasons stand out.

First, tech firms have experienced declining revenue as demand for tech products and services slumps—a by-product of the pandemic causing a lot of over-hiring due to spikes in demand for online services. Mark Walker, associate VP for sub-Saharan Africa at IDC, agrees. What we saw during Covid-19, he says, is many semi-mature technologies were forced to mature fast, and it would be unrealistic to expect this rate of growth to continue. As a result, many tech firms had to hit the breaks.

Google’s CEO, Sundar Pichai, also summarised the harsh realities in his letter informing Googlers about its layoffs: “Over the past two years, we’ve seen periods of dramatic growth. To match and fuel that growth, we hired for a different economic reality than the one we face today.”

Arthur Goldstuck, CEO, World Wide Worx

World Wide Worx

The second reason, according to Goldstuck, has to do with expectations around a coming recession, which will drive further declines in revenue, meaning that some of the industry’s biggest brands are bracing for further belt tightening. While some have blamed artificial intelligence (AI) for the staff downsizing, Goldstuck is sceptical. “One can bet that were profits still climbing and stock market valuations still breaking records, we wouldn’t be seeing these layoffs,” he says. “In fact, we’d be seeing the opposite. More AI engineers would be hired.” He adds that “big bad bets” made on overhyped tech, like Meta going all-in on VR, are also reasons for the need to downscale. In January, for example, Microsoft shut down its industrial metaverse team, leaving nearly 100 employees without jobs. “This doesn’t necessarily mean they don’t have any faith in the metaverse or concepts around the metaverse,” says Walker. “It’s case of over investing. These technologies haven’t matured enough yet to justify the spend. If the global economy was booming, things might be different.”

Layoffs putting DEI efforts at risk

This upswing in retrenchments across technology companies, irrespective of specific roles or skillset, is also hampering the efforts of diversity, equity and inclusion (DEI) departments to boost underrepresented groups like women, certain minority groups and those in their mid-careers, which layoffs disproportionately affect. While DEI should remain important factors in hiring, Walker notes that companies with tight budgets and lean mindsets will look more at skill and ability, and how they can hire the least amount of people to get the job done. “Unfortunately, if you stop making money, things like diversity and inclusion stop being important,” says Walker.

For Pabi Mogosetsi, Universum’s country manager for South Africa, it’s important tech businesses remember that DEI, company culture and corporate values go hand-in-hand as they feed into each other since the worth of the organisation is in its people. “If layoffs disproportionately affect a certain demographic or ethic group, it’s likely there will be some negative ripple effects across the organisation,” she says. So she stresses transparency. There have been a few cases where employees only found out they were retrenched when their emails or access cards stopped working. “You need to remember you’re dealing with people,” she says.

Pabi Mogosetsi, Universum’s country manager for South Africa

Universum

According to Mogosetsi, businesses have to accept there will be a sense of loss, a dip in morale and even apprehension among individuals left behind. So employers need to over communicate with employees, she says, and make sure everyone’s expectations are aligned so teams feel like they can be productive and contribute to the next phase of change.

IT Jobs, IT Skills

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The pandemic accelerated the urgency for reform in health and social care around the world, which strained resources to unprecedented levels. The effects are still being felt and in Northern Ireland specifically, ongoing political instability is further complicating approaches to digital transformation. Although progress is being made that should be recognized and celebrated, Dan West, CDIO for Health and Social Care in Northern Ireland’s Department of Health, understands that the pandemic still casts a lingering shadow over national health and care systems, contributing to continuing rampant fatigue among staff and subsequent strikes over pay.

“From a people perspective, things are pretty strained at the moment,” he says. “All of the capacity and operational challenges that were present in healthcare prior to the pandemic are magnified now. Waiting lists have grown and diagnosis and treatments have been delayed or missed due to some of the burden the pandemic brought on the system. Plus, the absence of a functioning devolved executive, due to an ongoing dispute by the DUP over the Northern Ireland protocol, adds to all of those challenges. It all reduces the ability to arrive at a budget settlement that shifts resources into the health and social care space. So you can see how my job has had to react to all of those stimulants.”

Leaders in the public sector and healthcare might worry about a return of red tape that could slow down innovation, too, but West has a more resilient outlook to progress by, as he says, never wasting a crisis.

“We’ve been able to accelerate the things we knew we needed, but we also had a rate of adoption of collaboration and flexible working tools that we wouldn’t have seen in peacetime, if you like,” he says. “I was doing some work in a trust in the English NHS and we gave everybody tools, laptops and mobile solutions, and redesigned the operating model and how we worked together. There was resistance, though, where people felt they still needed an office, but there was an exponential increase in the use of virtual tools and capabilities to how we interacted with each other as professionals, and with our patients. We need to make sure that how we deliver digital capability to our staff, and how we do digital enablement of services for citizens, is not allow that elasticity in bureaucracy to snap us back to traditional ways of working.”

CIO Leadership Live’s Drinkwater recently spoke with West about how to put people first in a system under increasing pressure to function as it strives to digitally transform amid a backdrop of political and environmental uncertainty. Watch the full video below for more insights.

On balancing efficiencies: To sustain health and social care services into the future, we need to find a way to get more output from the same or maybe even reducing resources. And I don’t think anybody would suggest that digital is some kind of panacea to all of this. The real requirement is in and around staff. But the absence of the money to hire more doctors and nurses, the lead time, and then training them to bring them into the service means that digital has to be part of the jigsaw puzzle to address those challenges. The projects and products we delivered during COVID-19 adopted some of the techniques and technologies that allowed more efficient digitally enabled services.  

On continuing important work: There’s an impact on the experience of citizens, interacting with health and social care services, and leveraging cloud technologies, smart phone apps, and agile delivery methodologies that allowed us to quickly put things in place in a way we haven’t done previously. The COVID Care NI app, for instance, is like a symptom checker and chat bot that provides a personalized package of advice based on personal circumstances and how it related to evolving regulations. Also, the Bluetooth proximity app Stop COVID NI was the first of its kind to launch in the UK, and the first globally to achieve international interoperability, given our shared border with the Republic of Ireland and the Epidemiological Unit of the Island of Ireland. It was important for us to create our sharing capability. A new way of delivering vaccines and vaccine management and convenient booking capabilities was also big. All of those things really changed the paradigm. It moved away from the traditional, matriarchal approach to delivering healthcare services, galvanizing and empowering patients and their families more and how they interacted with services. I’m interested in how we could maintain momentum around those experiences in a post-pandemic world, to leverage technologies and techniques like that, to deliver improved and modernized experiences and services.

On progressing the digital conversation: The fail fast mentality to get product out there that can help us change the way people work and live is one of the key focuses for all technologists in parallel to public scrutiny. People will be more risk-averse than they were during the pandemic, so let’s not allow those big public processes to push us back into traditional ways of working. What we saw was the digital tail wagging the clinical dog. Historically, we tried to avoid that. We tried to have the operational care model and service design drive out technology requirements. I’m not suggesting that shouldn’t be how the world works, but during COVID, the technologists could go beyond the current operating environment where we were trying to build the pandemic response, and look around the world and see the pockets of innovation and best practice—like building a new vaccine management platform with a publicly accessible appointment booking service. That didn’t come from an operational or clinical policy discussion. It was something a colleague in Scotland introduced me to, and I then took it as a digital reader to the Public Health Operational and Clinical Response to say, “We need to start thinking about this.” We can bring digital upstream in the policy conversation and collaborate differently with clinicians who have a better understanding of the benefit and potential impact that digital can have, as well as the way they form relationships and transactions with citizens. All those considerations that allow us to alter the dynamic and accelerate how we can transform services is an environment that’s resistant to change.

On grassroots involvement: I had never done startup stage work in technology, but it’s something I’m interested in to build my own experiences. I’m also quite passionate about the local technology sector. So I’m helping a young reg-tech and insure-tech business to create an initial suite of products that will work within governments, the insurance industry, and home and business owners to address the fact that one in five properties in the UK can’t secure risk-reflective and affordable insurance against flood damage. That’s not sustainable for us, as a society. So technology has a part to play in the information relationship between governments, the insurance industry, and those businesses and homeowners, so that as we increase resilience of our properties through flood risk interventions, we can build that body of evidence that drives us toward a risk-reflected market in insurance. It’s a really interesting opportunity and a different environment to work in compared to the health and care day job. Belfast is getting a good reputation now for technology, so getting involved in a startup and taking it through a launch was quite an interesting opportunity.

On the value of people: To continue delivering and working through priorities for our trusts, and make the digital journey achievable is we have to recognize that projects and programs are just a means to an end. The technology itself is not what we’re all about. It’s about the people being able to deliver better healthcare services, our staff being able to do their jobs better, and our citizens interacting with safer, modern and more convenient healthcare experiences. It’s the opportunity to shift health and social care from being an economic burden for society in Northern Ireland to a real opportunity for growth and innovation. And those people aspects of that technology portfolio must be our focus over the next few years as we carry on this digitization journey in health and care. In a resource constrained environment, we have to evidence that all of these technology investments are delivering a real change for people in the region.

CIO, Digital Transformation, Healthcare Industry, IT Leadership

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Dimension Data is widely known for bold innovations and stalwart cloud solutions and services that enable enterprises to dramatically improve their businesses; now it is on mission to benefit the planet – and in the process, the communities it services and the economies it influences.

Whether it is using the Internet of Things (IoT) to help prevent poaching with its Connected Conversation initiative or using excess heat from its data center in Berlin to help heat the surrounding community, Dimension Data is well-known for innovation. Using cutting-edge technologies and its robust portfolio of multi-cloud solutions relied on by the world’s largest enterprises, the Johannesburg, South Africa-based company has a track record of taking on big challenges.

Now Dimension Data is in the midst of an aggressive effort to achieve net-zero emissions across all of its operations by 2030. It is an effort that is also intentionally focused on helping customers dramatically accelerate their own sustainability efforts, as well. And in keeping with its can-do history, Dimension Data’s efforts extend far beyond goals to only address the sustainability of IT operations.

Specifically, the company – part of the NTT Group – conducted an assessment to identify which of the United Nation’s Sustainable Development Goals its people, operations and solutions can impact the most. Ultimately, it identified three themes and committed to achieving numerous goals to bring about positive change in each.

Alan Turnley-Jones, CEO, Dimension Data

Dimension Data

We recently connected with Alan Turnley-Jones, CEO of Dimension Data, to find out more about these efforts. We also took the opportunity learn what prompted Dimension Data to join the VMware Zero Carbon Committed Initiative, and what comes next.

“A year ago, we set out our sustainability ambitions which put us on the path to achieve operational and net zero emissions by 2030,” says Turnley-Jones. “Our approach, guided by the U.N.’s Sustainable Development Goals and scientific targets, focuses on connected planet, connected economy, and connected communities. And I am proud to say that we are already making an impact. Over the past 12 months, through commitment, determination, and our passion to make a difference, NTT and the technology we deploy helped to created better outcomes for our clients, partners and society.”

He notes that after providing employees with three extra days of leave they can use for volunteer efforts, more 1,500 members of the Dimension Data team have already used them to back up the company’s commitment to connected communities. And in its efforts for a connected planet, the company achieved 1 million kWh of renewable energy – putting it right on track achieve its target of using 100% renewable energy by 2030.

It is an effort that he stresses cannot be done alone.

“We have a long and wonderful relationship with VMware, and the Zero Carbon Committed initiative is a perfect example of how leading technology companies can bring about change,” he says. “As VMware has shown, it is imperative to reduce the carbon footprint of data centers, and in that way enable us to use the applications and technologies they make possible to make a real difference in the fight against climate change.”

Notably, Dimension Data launched two technology initiatives designed specifically to further sustainability efforts. Introduced last May, its Internet Of Things for Sustainability uses connected 5G devices and sensors to help enterprises better understand their carbon footprint and manage their energy consumption.

And the company’s Net Zero Climate Action solution, unveiled at Mobile World Congress in Barcelona in 2022, is a full-stack Sustainability-as-a-Service offering that builds on those capabilities and features connected IoT devices, a private 5G network, digital twins and machine learning that lets organizations closely monitor, measure and report on their emissions at a very granular level. Bridgestone America is already using the solution to gain real-time visibility into its carbon footprint.

Notably, Turnley-Jones also stresses that sustainability at now at the heart of Dimension Data’s strategy. This strategy will be overseen by the company’s recently appointed Chief Risk and Sustainability Officer Zellah Fuphe.

“We are very proud of what we have achieved so far, but it is just the beginning,” adds Turnley-Jones. “We are committed to doing more and to having an even greater impact by connecting data, things and people in ways that transform business, society and the planet for the better.”

Immediate goals include reducing 200 million tons of greenhouse gas emissions across Dimension Data’s value chain. It is an effort that includes engaging partners to embed sustainability impact data into their purchasing decisions while also embracing circular IT strategies that optimize the use of existing hardware while minimizing waste. Employees will also play a very different role, regardless of what position they hold.

Among the many additional goals Dimension Data has committed to achieving are establishing a Sustainability Innovation Fund and mentorship program for climate technology and smart solutions, introducing solutions for biodiversity on every continent the company operates in by 2025, providing 5 million young people from underprivileged areas with digital access and educational opportunities, and doubling the diversity of Dimension Data’s executive leadership team by 2025.

“It was Ellen Johnson Sirleaf who said, ‘The future belongs to us, because we have taken charge of it. We have the commitment, we have the resourcefulness, and we have the strength of our people to share the dream across Africa,’” says Turnley-Jones. “I believe that at NTT and Dimension Data we are doing things today that will change all our collective futures for the better. Our best is yet to come. That is certainly the case in the fight against climate change.”

Learn more about Dimension Data and its partnership with VMware here.

Cloud Management, Green IT, IT Leadership

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Companies across industries are committing to maximizing sustainability within their operations — and IT is at the heart of most of these efforts.

In its Worldwide Sustainability/ESG 2023 Predictions, analyst firm IDC sees digital and sustainability transformations converging. “Decision makers are realizing that technology is essential for reaching their ESG goals,” noted Bjoern Stengel, IDC global sustainability research lead, in the report.

As such, CIOs are taking center stage in sustainability efforts, working closely with business partners on enterprise sustainability initiatives, while tackling the carbon footprint of IT itself —all new territory with few established best practices, frameworks, or standards. And the opportunities for tech-enabled sustainability solutions are wide ranging.

“Many CIOs don’t know where to start,” says Brian Kirkland, CIO at Choice Hotels and founding board member for SustainableIT.org, a nonprofit launched to help create frameworks and standards around sustainability.

Now is no time for sideline sitting, however. If sustainability isn’t already on the IT agenda, it will be soon, says Bryan Muehlberger, CIO at Vuori Clothing. “It’s coming — and anyone not already in the game is going to be left behind.”

Leading CIOs are making strides — individually and in collaboration — by identifying key areas where technology can make a difference today and create a foundation for more sustainable operations moving forward. Following are several ways CIOs can move the needle on sustainability initiatives.

Secure executive support

There are some non-negotiables when it comes to taking on the mantle of sustainability as a CIO, says Kirkland.

“You need a leadership team that is supportive, and a board that will back them up. You need a champion and leader who has the job of driving ESG within your company. You need engineers and technology team members passionate about innovation and change,” he says. “Without any of those three, you will face an uphill battle.”

Most business leaders understand the importance of sustainability, but that may not translate to buy-in when it comes to IT’s role. To secure executive support, CIO’s must first demonstrate value and need.

“The big thing we need to do as CIOs is to show the business value [of sustainability] and give our business partners information to help them understand the levers they have as well,” says Morgan Stanley CIO Katherine Wetmur. “This should not just be a discussion about costs; sustainability should be considered as a business outcome.”

Maximize the cloud

IT has a significant impact on greenhouse gas emissions. A team of researchers from Lancaster University, along with sustainability consultancy Small World Consulting, published a 2021 report indicating that IT contributes to as much as 1.2% to 3.9% of global greenhouse emissions — much higher than previously estimated and greater than the aviation industry. That has the potential to increase dramatically as organizations embrace AI, the internet of things, blockchain, and other resource-intensive emerging technologies. Thus, most CIOs see the greatest benefit focusing on their own function’s contribution to improving sustainability.

Cloud migrations have been on the rise in recent years for a host of business reasons, but CIOs serious about sustainability are pulling out all the stops. On-prem data centers have an outsized impact on carbon emissions and waste. Public cloud data centers, by contrast, are 93% more energy-efficient and produce 98% lower GHG emissions than on-premises datacenters, according to Microsoft and WSP Global. Analysis performed by 451 Research for the Amazon Web Services Institute found that moving IT workloads from on-premises data centers to the cloud could reduce energy consumption and associated carbon emissions by nearly 80%.

At Vuori, everything is in the cloud. Muehlberger is also investing in a serverless environment whereby cloud providers allocate resources on demand to further eliminate computing waste.

Choice Hotels’ Kirkland, who will close the company’s last data centers next year, insists any CIO focused on sustainability should go all-in on cloud. “There’s no way any smaller company can compete with the sustainability impact of the big cloud providers,” Kirkland says. “Let them do the job of efficiently running data centers.”

Minimize consumption

Greater cloud use addresses some of the supply side impact of IT on sustainability, but controlling demand for compute is equally important for CIOs seeking to reduce technology’s carbon footprint.

“When you are in the cloud, you can adopt technologies and approaches that minimize consumption,” Kirkland says. “This will drive down your cost and have a positive impact on sustainability at the same time.”

CIO Wetmur is taking things a step further at Morgan Stanley with a more sustainable approach to application development. How IT organizations build applications impacts their usage, power consumption, and overall impact on sustainability. Traditionally software development has focused on functional requirements, and few IT organizations have a culture in which developers consider the environmental impact of their code. Wetmur leverages her role as CIO to integrate sustainability throughout the development process.

“This will help us address the carbon footprint of our applications as part of the software development lifecycle, by improving measurability and transparency, reducing unnecessary or excess cycles, and better leveraging our hardware,” she says.

Pursue small wins as well

The opportunities for technology-enabled sustainability improvements are vast. That can be daunting for CIOs just starting to explore IT’s role in furthering sustainability goals. The key, say CIOs who have been doing this a while, is to begin with some easy wins and to not ignore these opportunities even as your ambitions grow.

“Everything doesn’t have to be big. Small decision make a difference and they add up,” says Wetmur, noting that helping a business partner make the case for moving from paper cups to reusable containers, for example, can have a significant impact.

“Think about the small baby steps you can take now to play a part,” advises Muehlberger. “That could be as simple as pledging to move a certain percentage of infrastructure to the cloud over the next six months or committing to writing new code that can be leveraged in a serverless manner.”

Harness data for ESG transparency

As a recent Deloitte Insights article points out: “Investors, regulators, customers, and supply chain partners are demanding greater transparency into climate and sustainability reporting and results. So, too, are business leaders. They are looking for data quality and accuracy to measure carbon footprint, supply chain optimization, and green revenue in real time.”

CIOs can help the business find, collect, validate, and analyze the appropriate data and help develop a sustainability reporting platform. Lesley Salmon, senior vice president and global chief information officer at global food manufacturer Kellogg, is one such CIO doing just that.

“Data management, automation, analytics is critical to reviewing our progress in ESG,” she says. “As data is a key pillar in IT, we play a significant role in influencing what we can report and how we report it. Through data governance and analytics, we can also improve the timeliness and accuracy of information reported by all functions.”

Empower business users to uncover opportunities with data

Beyond reporting, CIOs can also employ data and analytics to help the business uncover new opportunities to reduce the organization’s carbon footprint. Here, IT can become a critical partner to the business, providing data and insight to illuminate opportunities for change.

“The advice I give to everyone in IT is the most important thing to do is give people information to make better decisions,” says Morgan Stanley’s Wetmur. “The biggest thing we need to do as CIOs is help our business partners understand the levers they have available to make change.”

Look beyond organizational borders

An organization’s impact on sustainability extends beyond its four walls — and there may be opportunities to improve sustainability beyond the confines of the business.

For example, IT leaders could provide expertise and insight to help suppliers or other business partners in their sustainability efforts. Morgan Stanley’s IT department, for example, is helping nonprofits as part of its Technology Change Makers program. While not all of these organizations have an environmental sustainability focus — the IT organization helped the Child Mind Institute deploy machine learning to examine the impact of COVID on children’s mental health, for example — some do. Morgan Stanley’s IT employees built a digital platform to manage the restoration of oyster beds and to speed oyster growth in New York Harbor.

Pro bono efforts such as these can give nonprofit organizations digital tools to increase their impact and also give the company’s IT professionals additional experience using technology to increase environmental impact in a tangible way.

Learn from vendors

Technology providers are equally focused on mitigating their environmental impact and improving sustainability. Working closely with key vendors can give IT organizations great insight and data for sustainability efforts.

“A lot of our tech partners are very helpful, from hardware vendors who are focused on e-waste, to cloud computing providers,” says Wetmur. “There’s a lot of information we can get from companies in this space.”

Collaborate with peers

While the big tech players take sustainability seriously and have stated goals for carbon neutrality, there may be limits to what they can share for competitive reasons. Other IT leaders can play a key role in sharing acquired insight and coming up with new solutions.

For example, many high-profile CIOs this year signed on as founding board members for SustainbleIT.org. The nonprofit organization, led by technology executives, seeks to define sustainable transformation programs, create best practices and frameworks, set standards and certifications, and provide education and training for IT leaders focused on sustainability.

“It’s not about competition,” says Muehlberger, adding that the goal is to come up with common solutions to help all IT leaders better manage and advance their sustainability efforts.

Green IT

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Seemingly since the beginning of time, CIOs have been working to change their IT organizations from “order takers” into “business partners.” They have established business relationship management functions, developed “we are the business” rallying cries, and built leadership development programs emphasizing influence, courage, and business acumen.

These efforts have had a positive impact, but an incremental one. Yes, most IT leadership teams have stronger relationships with their business partners than, say, five years ago, but there is still a long way to go. “Raise the credibility of the IT organization” continues to appear at the top of the wish list that our clients give to our firm when we launch a new CIO search.

Encouraging technologists, often introverts who have spent their careers mastering complex skills, to deepen their understanding of marketing, commercial operations, supply chain, and finance is a slow march. But with the movement of software into the heart of most organizations’ products, services, and growth strategies, a slow march is not sufficient.

So, how do CIOs expedite the business partnership skills of their teams? They adopt what is clearly becoming the gold standard of IT and business team integration: a capabilities (or product) management model.

Carissa Rollins, who became the CIO of Illumina in April of this year, strongly believes in the capabilities management model. With the $5 billion biotech company expanding from R&D and manufacturing into clinical-based genomic health, Rollins sees IT playing an increasingly critical role in business growth and patient care.

“Traditionally, Illumina has focused on the lab, but we are now moving out of the lab and into personalized patient care,” says Rollins. “We are working with physicians and payers on ways to help people understand their genomic health.”

One area where IT can make its business impact felt is around Illumina’s recently announced the NovaSeq X Series, a powerful set of sequencers that promises to advance the real-world impact of genomic sequencing.

“NovaSeq X is an amazing machine,” Rollins says. “Now we need to surround it with a great customer experience that helps providers and patients understand the impact of data on patient health.”

Refocusing IT for business impact

Illumina’s shift from the lab to the patient necessitates Rollins’ IT team to have a more acute focus on customer data and experience. It also requires IT to take initiative to be a co-creator of business solutions.

“In IT, we are too focused on doing what the business wants us to do, so we don’t take the time to invest and learn about the business,” she says. “So, when they tell us what system they want, we don’t have enough knowledge to say, ‘Here is a better idea.’”

Rollins believes a capabilities model is essential, and it starts by establishing standards and reigning in shadow IT.

“It is important to strike the right balance between standards and citizen development,” she says. “In our complex world, IT cannot control everything, but we need standards, especially in our regulated environment. At the same time, we have to allow for citizen development, which will only grow as we hire young tech-savvy people who will work with RPA [robotic process automation] and ML [machine learning] on their own. They won’t wait for IT.”

RPA presents an excellent opportunity for citizen development, but not without the right foundation, as Rollins learned in a previous role. “Our business partners had created more than 300 bots without IT’s knowledge,” she says. “When we upgraded the system, we broke all of them.”

With standards and governance in place, the next step is defining the company’s target capabilities. On which capabilities does the company need to spend more time and money? On customer self-service to ensure a seamless experience? On IoT to be more efficient in device manufacturing?

“The good news is that most industries have a standard capability map to start with,” says Rollins. “Once we have that map, we need to socialize it with our business partners to make sure we all agree that these are Illumina’s target capabilities. This process never ends. The map is always evolving.”

With an agreed-upon capabilities map in hand, the next step is to assess how the current investment strategy aligns to it. “Once IT understands what we are investing in each capability, they become much more focused on our overall business strategy,” says Rollins. “They start to ask why we are spending so much on transportation management and so little on customer self-service, for example. The IT team starts to think like investors, not order-takers.” 

Down to execution

The next chapter in the capabilities story is, of course, delivery. “As CIO, my job is to build a model that that gives IT and our business partners a roadmap that ties into our business strategy,” she says. “At that point, my role in capabilities management recedes, and the CTO position becomes more important.”

The CTO role has many different definitions in the market. Still, for Rollins and Illumina, that person is the lead architect and engineer of the platforms that support the capabilities roadmap. The CTO makes sure the platforms integrate, through APIs, into partner and customer platforms. “The CTO sets the standards for reusable platforms, while the capability manager knows what functions we need to deliver,” says Rollins.

Once you have a capability model that defines your investment strategy, and a CTO to build your platforms, now it is all about building the product teams to execute the capabilities map. “The temptation is to jump right in and build all of your capability teams at once,” says Rollins. “But my advice is to pick a few pilot areas, because how the capabilities teams will work together is very different from how work was done in the past.”

Let’s take customer self-service. The capability manager for the customer self-service team would likely be a very senior person from the customer service organization. That person listens to customer feedback to determine a features roadmap with sub-capabilities. The capability manager brings onto the team a lead engineer, responsible for architecture and design all the way through to testing. “These roles are no longer separate, which is a big shift for IT,” says Rollins. “Before, you had solution architects, developers, and testers. But in the capability model, the engineers are responsible for all those activities, which gives them greater responsibility for delivering the right capability.”

Rollins points out that each step toward a capability model is not linear, but should be run in parallel, and that not all capabilities, like those running on packaged software, will move into the new model right away. 

But regardless of the approach, it is important for CIOs to move to the new model. “In a capability model, IT is no longer accountable just for delivering a new website in China; they are accountable for delivering the customer experience and the sales around that website,” she says. “CIOs cannot build technology-forward businesses with a traditional IT delivery model. We have to shift from delivering IT to delivering capabilities.”

IT Leadership, IT Strategy

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Florida-based Apogee Executive Advisors consultancy specializes in corporate governance, technology risk management, and public & private board service, among other areas, and when Myrna Soto, the company’s founder and CEO, offers insight on how best to communicate with, and present to, the board of directors, people, especially technology leaders, tend to benefit, especially if the ambition is to ultimately become board members themselves.

“I have presented in the boardroom many times as the reigning executive in a variety of roles, and now I have the opportunity to be on the other side of the table to assist technology leaders like CIOs and CTOs who may be invited into the board to present,” says Soto, who has had many distinctions as a founder, CEO, board member, investor, former CIO and former CISO, among others. “The boardroom is becoming savvier to the impact that technology has on the business’ strategic outcomes, so CIOs and other tech leaders have the opportunity to demonstrate how impactful their work is to lead the technology, strategy, implementation, and execution for the company. And board members will want to understand the priorities, needs to endorse certain investments, and strategic advantages, whether it’s reinventing the delivery of a product or a service, or how data is used analytically for marketing purposes. At a macro level, board members also understand it’s hard for any industry or company not to be reliant on technology, and that gives a superior platform for technology leaders to be innovative and influential members of the management team in the boardroom.”

Building on that, as the expression goes, “Those who fail to prepare, prepare to fail.” Not only do those presenting to the board need to glean from previous presentations what level of detail the board understands about the technology landscape for the company, but boards expect CIOs to be up to date and aware of what technology initiatives are underway at competing companies, so any presentation has to thoroughly account for that as well. More often than not, says Soto, members serve on other boards so they’ll have many perspectives of different companies and different industries. “More often than not, they may make comparisons, so it’s important to be able to be in a position to respond,” she says. “It’s important to project confidence to not only know what is pertinent to your company, but how to be best positioned to succeed and execute differently than the competition.”

Soto recently spoke with John Gallant, enterprise consulting director with Foundry, about the evolving nature of how CIOs and technology leaders engage with the board of directors, and the tools needed to achieve best outcomes.

Here are some edited excerpts of that conversation. Watch the full video below for more insights.

On leveraging the board: Every boardroom is not equal. And when we say they are more tech-savvy, that comes with gradients. There are still board members, however, who aren’t technology experts or have the experience or depth to understand some challenges when it comes to technology adoption and changes. That’s not a criticism, but this is where CIOs and other technology leaders invited in the boardroom need to hone in on a skill to be able to present technical concepts in a very strategically placed business acumen so board members can make those connections. In some cases, the leader has an opportunity to either validate an assumption a board member has or change a perspective of how impactful a certain technology may or may not be. One of my favorites is being able to educate the board at the right level, whether they’re evolving an innovative platform or doing a large-scale refresh.

On preparing to present to the board: Study your board members. Get to know their backgrounds. It’s important to make certain connections to their experience and the content you’re providing so it allows them to connect the dots. So if you have a board member who used to be a leader in technology, that would be a great opportunity to build a relationship and a rapport. Be careful not to alienate board members either. Sometimes I’ve seen people who focus on one or two because they have a comfort level with the topic, or they believe their experience will allow them to understand it better, forgetting that some others may not follow as closely. That is a strong recipe for not getting invited back. You want to be a frequent presenter. And as a CIO, you’re running your own technology organization within an organization, which has many different functional components. Chances are you’re managing a balance sheet, so think of the financially related terms that will be important. Board member focus is about generating shareholder value, growth, and preserving the position of an organization, so you want to make those connections when you present. Put it all in highly strategic business terms.

On the dos and don’ts for CIOs: We live and breathe our profession and sometimes we have to stop using acronyms and technical terms, which are part of our day-to-day language managing technology teams. But be careful not to bring that into the boardroom. If you catch yourself, offer a nugget of knowledge. If you say, “ERP,” what does ERP really mean? You get an opportunity to educate the board without sounding condescending. Don’t assume your audience has the layer of detail that would make some of the concepts you present obvious. A lot of times, board members will just ask, “What did you mean by that?” and you have the opportunity to course correct. But if you have a chance to do it naturally, and provide that layer of perspective, it goes a long way. Also, if your corporate culture allows, it’s always wonderful to build relationships with board members outside the boardroom. If you have an opportunity, maybe one or two presentations in, have a sidebar conversation. Take advantage and what you’ll find is they end up becoming a good sounding board as you prepare for future presentations.

On becoming board members: What is important for CIOs to get an understanding about is the function of the board, why it exists, and its practices and principles of governance. It may sound obvious, but being able to execute on consent actions and formulate a consensus around decisions being made is important to understand. When you serve in the boardroom, you don’t work for the company, you’re not an employee of the company, but you represent the interests of shareholders and investors in the boardroom. Obviously, their goal is to help with strategic vision, to opine and lean on strategies and to approve large-scale investments and changes for the company. That all comes with a ton of governance principles.

CIO, IT Leadership

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The headlines read “Artificial Intelligence (AI) will completely transform your business.” But does the hype match the reality? We have been seeing these exclamations for two decades, but where are the examples? Where are the success stories? Is AI really a game changer, and does it actually apply to my business?

Every ten years it seems there is a new technology that is going to change the world, but all too often only leads to disappointment when adopting it becomes too challenging. For several decades this has been the story behind Artificial Intelligence and Machine Learning.

However, we have now reached a tipping point with AI where the compute capacity, ubiquitous connectivity, and wealth of data can match the moment and assist business leaders to create unique competitive advantages by better serving customers, improving processes, enhancing employee experience, or reducing costs. As Andy Jassy, CEO of Amazon, said, “Most applications, in the fullness of time, will be infused in some way with machine learning and artificial intelligence.”

As I advise in my presentation “Building a Smarter Organization Powered by Machine Learning” there are three key focus areas successful organizations master to get value from AI: Mindset, Skillset, Toolset. This creates a flywheel we call The Data Network Effect, where you acquire more data, which helps create better algorithms, which drives better engagement, ultimately leading to happier customers, which then generates more data, and so on, and so on. This process then repeats, improving and generating more value with each cycle.

While some companies are already benefiting from this transformative impact of AI, we see others struggling. There is often confusion at the management level about the applicability and impact of AI, leaving business leaders to struggle to find the right use cases to prioritize. Additionally, navigating existing AI resources reveals a great deal of highly technical information but little in the way of business impact examples and guidance. Until now, a comprehensive list of AI and ML use cases that serve as meaningful references for business leaders simply did not exist.

The bottom line: Most companies know they need AI but have not found the answer to “where do I start?” In this blog post, I will share five actions you can take to move beyond the buzzwords and make your AI-driven digital transformation a reality that will shape your organization’s future.

Be clear on the “why”

Do not just implement AI so you can check it off your list. AI should be used to support your business strategy not be your business strategy. Do not fall victim to the analogy of “a hammer in search of a nail, that only winds up pounding in screws everywhere.” Instead evaluate your business opportunities or problems and then determine if AI is the right tool for the job.

Get alignment from your stakeholders

I always told my team and customers that long-term success with AI solutions is driven by people, not technology. As you begin to work with various stakeholders on your initiative, ensure you are effectively and continuously collaborating with them. Structure your strategy discussions around the four key areas: business, finance, technology, and science, and encourage stakeholders in those areas to weigh in on your AI project decisions.

It is also important to develop an organizational culture that empowers people across business and technical roles to become involved with your AI. Our customers who have successfully rolled out these initiatives have one thing in common: they embraced the culture of continuous process evolution and had champions who brought teams across the organization together. Creating a culture that excels in change management, celebrates failure as learning, promotes new skills acquisition, and fosters collaboration is a great way to propel your organization in this direction.

Explore what is possible with AI and get started

To help you get started, AWS has just launched the AI Use Case Explorer, a complimentary, interactive guide for business leaders and AI practitioners to conceptualize and build their applications.

With over 100 use cases and sub use cases and 400 customer success stories, this tool can help you quickly identify the right use case to get started based on your industry, function, and desired business outcome. Once you have identified your use cases, you can read about success stories from around the world and kickstart your deployment, from proof-of-concept to full production, by following an expert-curated action plan provided for your specific use case.

Do not boil the ocean … we tried that … it did not work

As an industry, we have learned hard lessons from trying to deploy monolithic data warehouses, business intelligence implementations, and analytics solutions by gathering, cleaning, and preparing tremendous swaths of data from across the entire enterprise. This delayed value, increased cost, raised complexity, and ultimately failed to deliver. Instead, focus on gathering the data specific to the use case you are implementing, and drive quickly through proof-of-concept to production and value. Then move on to the next use case and do the same thing again, expanding your data assets as needed.

Technology is not the objective, it is the enabler

True value does not come from just using a new technology, but rather from using new technology to reimagine existing processes. As you look to implement your AI project go beyond just creating an AI-enabled twin of your existing process, and instead reimagine the process using the new capabilities of AI.

As AI transforms the way we live and work, from optimizing business processes to personalizing content for consumers, I am excited about all of the innovative and impactful AI applications that can assist businesses as well as individuals in the coming years. The possibilities are endless! I invite you to check out the AI Use Case Explorer site and explore your organization’s unique path to AI success.

ABOUT THE AUTHOR:

Tom Godden is an Enterprise Strategist and Evangelist at Amazon Web Services (AWS). Prior to AWS, Tom was the Chief Information Officer for Foundation Medicine where he helped build the world’s leading, FDA regulated, cancer genomics diagnostic, research, and patient outcomes platform to improve outcomes and inform next-generation precision medicine. Previously, Tom held multiple senior technology leadership roles at Wolters Kluwer in Alphen aan den Rijn Netherlands and has over 17 years in the healthcare and life sciences industry. Tom has a Bachelor’s degree from Arizona State University.

Artificial Intelligence

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Artificial intelligence is in transition, both as a technology and in how it’s being used. Companies are increasingly bringing AI pilots out of the test labs and deploying them at scale, and some are seeing significant benefits as a result. Regardless of any uncertainty surrounding AI, ignoring its potential poses the risk that companies doing business the old way will go under.

For many organizations, however, deriving value from AI may be elusive. Their models might not be tuned. Their training data sets might not be big enough. Customers may be leery. There are also concerns about bias, ethics, and transparency. Pushing an AI initiative into production before it’s ready, or expanding an AI strategy beyond an initial phase before properly vetting its results can cost a company money, or worse, send it in a direction detrimental to the business.

So how do you know whether an AI project will transform or sabotage your company? Without hard ROI numbers, companies have to get creative with ways to know for certain. Here’s a look at how IT leaders and industry insiders gauge value of AI.

Mature vs. groundbreaking technologies

Measuring the business value of any initiative or technology isn’t always a linear calculation. AI is certainly no exception, especially when degrees of maturity and business potential are taken into consideration. Proven and predictive variables — like data mining, cost and training savings, investment and the ability to facilitate new uses — influence decisions when it comes to acceptable ROI, but putting a degree of trust in the technology, no matter how new or established, is essential.

At NASA’s Jet Propulsion Laboratory, for instance, the key factor to measure an AI project’s ROI is technology maturity.

Some AI use cases are at a high level of maturity, says Chris Mattmann, chief technology and innovation officer at NASA JPL. Take for example automating business processes.

“The boring stuff that every company has, we have too,” he says. “So we automate a lot of things like ticket processing, search, data mining, looking at contracts and subcontracts using AI.”

JPL uses commercially available technologies to do this, including DataRobot and Google Cloud. To determine whether a particular technology is worth investing in, the organization looks at whether it will save costs, time, and resources, Mattmann says. “It’s mature, so you should be able to show this.”

For technologies at a medium level of maturity, JPL looks at whether the technology has the ability to enable new use cases, and at what cost. “For example, we’re going to Mars, and we have a thin pipe for deep space telecom,” he says, and today, there’s enough bandwidth to send about 200 pictures a day from Mars to Earth.

“Those brilliant Mars rovers we send have pea-sized brains in them,”  he says. “They’re running iPhone 1 processors. We only put things in space that are radiation-hardened, where we’re confident they can withstand the deep space environment. The chips that we know perform well are those older chips so we don’t do advanced AI or ML on the rovers.”

But the Ingenuity helicopter, which was originally intended simply as a technology demonstration and wasn’t core to the mission, had a Qualcomm Snapdragon processor on board, an AI chip. “That demonstrated to us that it was possible to have newer chips and do more AI,” he says.

Here, the AI will enable new use cases not currently possible. For example, instead of sending back 200 images a day, the rover could analyze the images itself using AI and send a million text captions back to earth to describe, for example, that there was a dry lakebed in a particular direction. “We could get more visibility with text than we do with images today,” Mattmann says.

Finally, for the most cutting-edge, experimental AI technologies, the measure of success is whether they allow for new science to be done, and new papers to be written and published.

“There’s a cost to training and building models,” he says.

Companies like Google and Microsoft have ready access to giant volumes of training data, but at JPL, the data sets are hard to acquire and require PhD-level experts to analyze and label.

“At NASA, our costs to train a new AI model are 10 to 20 times that of commercial industry,” says Mattmann.

Here, new technologies are coming along that could allow NASA to create AI models with less manual labeling. For example, generative networks could be used to create synthetic training data, he says. Deep fakes, but for the benefit of science.

AI measurement and its spheres of influence

When there’s no direct way to measure the business impact of an AI project, companies will mine data from related key performance indicators (KPIs) instead. These proxy variables typically relate to business goals and can include customer satisfaction, time to market, or employee retention rates.

Case in point is Atlantic Health System, where patients are at the heart of every decision, says Sunil Dadlani, its senior vice president and CIO. So, in many ways, the return of investment in AI is measured by looking at the improvements to patient care. These patient-focused metrics include reduced length of stay, faster time to treatment, faster insurance eligibility verifications, and faster prior insurance authorizations, he says.

Another project involves using AI to support radiologists in examining scans. A KPI is how often radiologists are alerted to potentially abnormal findings. “As of April 2022, 99% of our radiologists have reported using AI to analyze more than 12,000 studies,” Dadlani says, adding this has triggered nearly 600 alerts. “So physicians can address potentially serious issues as quickly as possible.”

At RSM, the fifth-largest accounting firm in the US, AI investments follow two closely connected paths: one is of productivity and analyst tools that help employees to be better at their jobs. The other is those same or similar tools but used by customers, says Richard Davis, a partner in the company’s management consulting, business, and technology transformation team.

For example, when working with customers, RSM might be called on to pull in data from multiple systems — accounting, sales and marketing, HR, logistics — and bring everything together into a single pane. AI can help speed up this process, says Davis. Then, AI can be used to identify how work moves through these systems, and where the underlying challenges and barriers might be.

So how does the company know whether its AI is headed in the right direction?

“Number one, we can very clearly measure the usage of the tools,” says Davis, who declined to provide details of RSM’s investment in AI initiatives or ROI. “What we want to see over time is a more efficiently delivered engagement.”

That increased engagement, Davis says, should then lead to increased productivity. “So if something used to take us a week to do, the goal might be to bring it down to a day,” he says.

Focus on business benefits

Measuring the success of AI can be subjective as well. Evaluating an AI project is an art as much as developing the AI itself, says Eugenio Zuccarelli, an AI research scientist at MIT who also works as a data scientist in the retail industry.

Still, it’s important to be able to explain the impact AI is having on business, Zuccarelli says. “KPIs should not be set around the model itself,” he says, “but on the business and people metrics, which should be the end objectives of the project.” Otherwise, it can be too easy to pick a technical metric that seems to show success, but in reality wouldn’t translate to effective impact on the company.

Zuccarelli, who also held data science positions at BMW and Telstra, also warns against measuring progress in isolation. For example, if an AI project was designed to improve something that was already improving for other reasons, then a control group is needed to determine how much of the improvement is actually due to the AI.

Other valuable KPIs for AI projects could be, for example, a reduction of false alerts or automatic removal of excessive privileges, says Vladislav Shapiro, who has years of experience in the financial services industry and is founder of Costidity, an advisory group specializing in IT security and identity governance and administration.

In a recent AI-powered security deployment Shapiro worked at, the false positive alert rate was reduced by three-fold, he says, and many previously manual processes were automated.

“When you show these numbers to C-level management, they understand that all of the above reduce risk of being breached and increase accountability and governance,” he says.

Measuring success incrementally

Automation leading to cost reduction is the easiest and clearest way to show economic benefits of AI, says Sanjay Srivastava, chief digital strategist at Genpact, a global professional services firm. But AI can also facilitate new revenue streams, or even completely transform a company’s business model.

For example, with AI, an aircraft engine manufacturer saw it could get better at predicting failures and improving logistics so it could start offering engines as a service. “For the ultimate consumer, it’s better to buy miles flown than the engine itself,” he says. “That’s a new business model. It changes the way a company operates because the AI enables it.”

And the business impact is immediately obvious as well, he says.

So, to justify the investments in AI within that time, this particular manufacturer needed that long-term goal, but translated it into short-term projects that were measurable in other ways.

“Instead of saying, ‘In ten years, we’ll change the industry,’ say, ‘In year one, we’ll start looking at which parts we need to stock,’” he says. “You’re not yet changing the industry to air miles flown. You’re just saying, ‘We’ll need the right parts in the right quantities.’ It’s a one-year project to optimize your warehouse systems and reduce the amount you’re investing in inventory.”

In addition to supply chain optimization, other short-term measures of progress can include client satisfaction.

“If the airplane is stuck in Mumbai for five days waiting for a part, for instance, the client is going to feel that,” he says.

Alignment with strategic vision

Then there’s the reality that in the short term, some AI projects can hurt the bottom line, but still be important and transformative in the long term. For example, a company that rolls out a customer service chatbot can eliminate mundane tasks. “But chatbots can be harmful because some people are good at upselling and want to engage with people,” says Gartner analyst Whit Andrews. “So the organization might not want that.”

It goes back to what kind of company you want to be, he says. “At some point, you have to ask if you’re the kind of company that if a delivery gets screwed up, for instance, customers can call to ask where it is and you engage with them and then try to sell them on getting the product once a month.”

If the organization is committed to both AI-powered transformation with measured ROI to back it up, and has a vision of being customer-focused, then it might look past the immediate hit to the bottom line toward other potentially more meaningful indicators.

“A more fully automated organization may be more successful because it’s increasing market share,” Andrews says. “But you can develop your data so you’re able to reach out to someone at a time that’s more relevant to them. If there’s something you can point to and say, logic just tells us that this will make our customer happier and our workers more successful, then chase it.”

Artificial Intelligence, Machine Learning

Posted on Posted in Digital transformation, General topics Tagged with , , , ,

Artificial intelligence is in transition, both in the technology itself and how it’s being used. Companies are increasingly bringing AI pilots out of the test labs and deploying them at scale, and some are seeing significant transformations as a result. But regardless of the uncertainty surrounding AI, ignoring its potential poses the risk that companies doing business the old way will go under.

For many organizations, however, AI value may be elusive. Their models might not be tuned. Their training data sets aren’t big enough. Customers are leery. There are also concerns about bias, ethics, and transparency. Pushing an AI initiative into production before it’s ready, or expanding an AI strategy beyond an initial phase before properly vetting its results, can cost a company money, or worse, send it in a direction detrimental to the business.

So how do you know whether an AI project will transform or sabotage your company? Without hard ROI numbers, companies have to get creative with ways to know for certain. Here’s a look at how IT leaders and industry insiders gauge value of AI.

Mature vs. groundbreaking technologies

Measuring the business value of any initiative or technology isn’t always a linear calculation. AI is certainly no exception, especially when degrees of maturity and business potential are taken into consideration. Proven and predictive variables — like data mining, cost and training savings, investment and the ability to facilitate new uses — influence decisions when it comes to acceptable ROI, but putting a degree of trust in the technology, no matter how new or established, is essential.

At NASA’s Jet Propulsion Laboratory, for instance, the key factor to measure an AI project’s ROI is technology maturity.

Some are at a high level of maturity, says Chris Mattmann, chief technology and innovation officer at NASA JPL. Take for example automating business processes.

“The boring stuff that every company has, we have too,” he says. “So we automate a lot of things like ticket processing, search, data mining, looking at contracts and subcontracts using AI.”

JPL uses commercially available technologies to do this, including DataRobot and Google Cloud, and to determine whether a particular technology is worth investing in, the organization looks at whether it will save costs, time, and resources, he says. “It’s mature, so you should be able to show this.”

For technologies at a medium level of maturity, JPL looks at whether the technology has the ability to enable new use cases, and at what cost.

“For example, we’re going to Mars, and we have a thin pipe for deep space telecom,” he says, and today, there’s enough bandwidth to send about 200 pictures a day from Mars to Earth.

“Those brilliant Mars rovers we send have pea-sized brains in them,”  he says. “They’re running iPhone 1 processors. We only put things in space that are radiation-hardened, where we’re confident they can withstand the deep space environment. The chips that we know perform well are those older chips so we don’t do advanced AI or ML on the rovers.”

But the Ingenuity helicopter, which was originally intended simply as a technology demonstration and wasn’t core to the mission, had a Qualcomm Snapdragon processor on board, an AI chip.

“That demonstrated to us that it was possible to have newer chips and do more AI,” he says.

Here, the AI will enable new use cases not currently possible. For example, instead of sending back 200 images a day, the rover could analyze the images itself using AI and send a million text captions back to earth to describe, for example, there was a dry lakebed in a particular direction.

“We could get more visibility with text than we do with images today,” he says.

Finally, for the most cutting-edge, experimental AI technologies, the measure of success is whether they allow for new science to be done, and new papers to be written and published.

“There’s a cost to training and building models,” he says.

Companies like Google and Microsoft have ready access to giant volumes of training data. At JPL, the data sets are hard to acquire and require PhD-level experts to analyze and label.

“At NASA, our costs to train a new AI model are 10 to 20 times that of commercial industry,” says Mattmann.

Here, new technologies are coming along that could allow NASA to create AI models with less manual labeling. For example, generative networks could be used to create synthetic training data, he says. Deep fakes, but for the benefit of science.

AI measurement and its spheres of influence

When there’s no direct way to measure the business impact of an AI project, companies will mine data from other related key performance indicators (KPIs) instead. These proxy variables typically relate to business goals and can include customer satisfaction, time to market, or employee retention rates.

At Atlantic Health System, for instance, patients are at the heart of every decision, says Sunil Dadlani, its senior vice president and CIO. So, in many ways, the return of investment in AI is measured by looking at the improvements to patient care.

These patient-focused metrics include reduced length of stay, faster time to treatment, faster insurance eligibility verifications, and faster prior insurance authorizations, he says.

Another project involves using AI to support radiologists in examining scans. A KPI is how often radiologists are alerted to potentially abnormal findings.

“As of April 2022, 99% of our radiologists have reported using AI to analyze more than 12,000 studies,” Dadlani says, adding this has triggered nearly 600 alerts. “So physicians can address potentially serious issues as quickly as possible.”

Another is RSM, the fifth-largest accounting firm in the US and the leading firm focusing on middle-market companies.

The company’s AI investments are following two closely connected paths: one is of productivity and analyst tools that help RSM employees better do their jobs. The other is those same or similar tools but used by customers, says Richard Davis, a partner in the company’s management consulting, business and technology transformation team.

For example, when working with customers, RSM might be called on to pull in data from multiple systems — accounting, sales and marketing, HR, logistics — and bring everything together into a single pane. AI can help speed up this process, says Davis. Then, AI can be used to identify how work moves through these systems, and where the underlying challenges and barriers might be.

So how does the company know whether its AI is headed in the right direction?

“Number one, we can very clearly measure the usage of the tools,” says Davis, who declined to provide details of RSM’s investment in AI initiatives or ROI. “What we want to see over time is a more efficiently delivered engagement.”

That increased engagement, Davis says, should then lead to increased productivity. “So if something used to take us a week to do, the goal might be to bring it down to a day,” he says.

Focus on business benefits

But measuring the success of AI can be subjective as well. Evaluating an AI project is an art as much as developing the AI itself, says Eugenio Zuccarelli, an AI research scientist at MIT who also works as a data scientist in the retail industry[1] .

Still, it’s important to be able to explain the impact AI is having on business, Zuccarelli says. “KPIs should not be set around the model itself,” he says, “but on the business and people metrics, which should be the end objectives of the project.” Otherwise, it can be too easy to pick a technical metric that seems to show success, but in reality wouldn’t translate to effective impact on the company.

Zuccarelli, who has held data science positions at BMW and Telstra in the past, also warns against measuring progress in isolation. For example, if an AI project was designed to improve something that was already improving for other reasons, then a control group is needed to determine how much of the improvement is actually due to the AI.

Other valuable KPIs for AI projects could be, for example, a reduction of false alerts or automatic removal of excessive privileges, says Vladislav Shapiro, who has years of experience in the financial services industry and is founder of Costidity, an advisory group specializing in IT security and identity governance and administration.

In a recent AI-powered security deployment Shapiro worked at, the false positive alert rate was reduced by three-fold, he says, and many previously manual processes were automated.

“When you show these numbers to C-level management, they understand that all of the above reduce risk of being breached and increase accountability and governance,” he says.

Measuring success incrementally

Automation leading to cost reduction is the easiest and clearest way to show economic benefits of AI, says Sanjay Srivastava, chief digital strategist at Genpact, a global professional services firm. But AI can also facilitate new revenue streams, or even completely transform a company’s business model.

For example, with AI, an aircraft engine manufacturer can get better at predicting failures and improve logistics so they can start offering engines as a service.

“For the ultimate consumer, it’s better to buy miles flown than the engine itself,” he says. “That’s a new business model. It changes the way a company operates because the AI enables it.”

And the business impact is immediately obvious, he says. The industry has changed, and you’re either in the business or you’re not. But the change isn’t immediate, and the aircraft industry is a decade into a transition.

So, to justify the investments in AI within that time, this particular manufacturer needed that long-term goal, but translated it into short-term projects that were measurable in other ways.

“Instead of saying, ‘In ten years, we’ll change the industry,’ say, ‘In year one, we’ll start looking at which parts we need to stock,’” he says. “You’re not yet changing the industry to air miles flown. You’re just saying, ‘We’ll need the right parts in the right quantities.’ It’s a one-year project to optimize your warehouse systems and reduce the amount you’re investing in inventory.”

In addition to supply chain optimization, other short-term measures of progress can include client satisfaction.

“If the airplane is stuck in Mumbai for five days waiting for a part, for instance, the client is going to feel that,” he says.

Alignment with strategic vision

Then there’s the reality that in the short term, some AI projects can hurt the bottom line, but still be important and transformative in the long term. For example, a company that rolls out a customer service chatbot can eliminate mundane tasks. “But chatbots can be harmful because some people are good at upselling and want to engage with people,” says Gartner analyst Whit Andrews. “So the organization might not want that.”

It goes back to what kind of company you want to be, he says. “At some point, you have to ask if you’re the kind of company that if a delivery gets screwed up, for instance, customers can call to ask where it is and you engage with them and then try to sell them on getting the product once a month.”

If the organization is committed to both AI-powered transformation with measured ROI to back it up, and a vision of being customer-focused, then it might look past the immediate hit to the bottom line toward other potentially more meaningful indicators. “A more fully automated organization may be more successful because it’s increasing market share,” he says. “But you can develop your data so you’re able to reach out to someone at a time that’s more relevant to them. If there’s something you can point to and say, logic just tells us that this will make our customer happier and our workers more successful, then chase it.”

Artificial Intelligence