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IT is no longer perceived as a cost factor or a pure support function at many organizations, according to management consultancy 4C Group’s Markus Matschi. And the digitization push during the pandemic accelerated this. But despite such advances, the question of the value contribution of IT isn’t always clearly answered. “Due to the increasing relevance and added value of IT in companies, it’s essential for CIOs to not think in terms of costs, but value contributions,” says Matschi.

In a joint study with Markus Westner and Tobias Held from the department of computer science and mathematics at the University of Regensburg, the 4C experts examined the topic by focusing on how the IT value proposition is measured, made visible, and communicated. From many discussions with CIOs and current data, they developed a process model for practice.

“To develop a practical approach, it was important for us to understand the current challenges of the CIOs together with scientific findings and then integrate them,” says Martin Stephany, another consultant at 4C. 

Although the discussion has been ongoing for a long time both in science and practice, there’s often disagreement on the basics. “It starts with the fact IT value contribution is defined in various ways and there’s no uniform understanding or definition of it in companies,” adds Westner.

Because the contribution to value and innovation is often unclear, employees from business-related departments perceive IT as a black box and can’t always judge what it does and what added value it entails. This is also why some companies appoint a CDO to close the gap of value contribution between business and IT.

IT must be able to show the departments and the management team their possibilities and the added value, says Heiko Weigelt, CIO of Funke Media Group. But because it’s determined by the respective stakeholders and not by IT itself, transparency and understanding are necessary in both directions.

A challenge for determining the value contribution is the selection of suitable key figures. According to the study, IT departments today primarily use technical and IT-related metrics. That is legitimate, but in this way, there’s no direct connection to the business.

Plus, there’s often a lack of affinity for meaningful KPIs, both in IT and in the specialist departments, says Jürgen Stoffel, CIO at global reinsurer Hannover Re. Therefore, in practice, only a few metrics suitable for both sides would be found, and the result is the IT value proposition is often unseen.

“A consistent portfolio of metrics coordinated with the business would be helpful,” says Thomas Kleine, CIO of Pfizer Germany, and Held from the University of Regensburg adds: “Companies have to get away from purely technical key figures and develop both quantitative and qualitative metrics with a business connection.”

In order to make progress along this path, the consultants developed a process model with several development and evaluation phases, using current scientific findings and speaking to CIOs. They also tested the concept in a German mechanical engineering company. This resulted in a process model consisting of six steps, with which the IT value proposition can be measured and communicated.

1. Analysis of business goals and business environment

The consultants raised concerns that many CIOs start with their own metrics without knowing what’s vital to the business. IT managers should first look at the business goals and the business environment since without knowing goals and market trends, it’s difficult to link added value with IT.

2. Analysis of stakeholders

The next step is thorough analysis of stakeholders with continuous and organized management since it’s key for CIOs to identify and prioritize key stakeholders. Then they should talk to them individually and find out what their goals are and where IT can help. “CIOs should act as stakeholders’ partners in these discussions,” says Stephany, adding that the core question must be: “How can IT create added value so we can become better together?”

3. Modeling the business capabilities

In order to create a common basis for discussion, more transparency is needed at the interface between business and IT, the study authors explain. Business capabilities structured in a business capability map (BCM) can serve as a starting point. It all revolves around what the company is doing today and where does its future potential lie. “The BCM can be the central tool for discussions with stakeholders,” explains Matschi. In this way, companies could find out for themselves which business capabilities are differentiating and how IT can support them.

4. Model the business-IT relationships

Based on the BCM, dependencies and relationships between business and IT can be made visible. CIOs can demonstrate how and where their IT provides concrete support today and in the future. This serves as a starting point for measuring IT value proposition. In this way, maximum transparency is achieved and, according to the authors, the IT black box is solved.

Christian Büchner, CIO of SachsenEnergie, has already gained BCM experience: “At SachsenEnergie, we work with a BCM that’s arranged according to business-related departments and all of our more than 600 applications, or IT capabilities, are assigned to these business capabilities,” he says. 

Christian Graf, CIO at toy manufacturer Schüco, is taking a similar approach. The points of contact with IT are mapped and managed along the digital customer journey.

5. Measure the value proposition

“We’ve learned in our discussions and from scientific findings that there is no general, standardized measurement with definitive key figures,” says Matschi. “Each measurement is individual and dependent on the stakeholder and the business case under consideration.”

Against this background, the consultants developed a 3×3 matrix structured according to IT- and business-oriented key figures. Both quantitative and qualitative measurement approaches are presented in order to measure the value contribution individually for a stakeholder or a business scenario. Depending on the focus of the activity (operation, projects, innovation) and business architecture (IT capabilities, business capabilities, business goals), different types of added value can be derived, behind which there are certain metrics.

Discussions with the CIOs made it clear where the hurdles lie in the measurement. It’s particularly difficult to measure the IT value added, for example, in day-to-day operations, especially in network or workplace ​​commodity IT services, says Holger Blumberg, CIO at mechanical engineering company Krones.

6. Planning the communication

Once the value contribution is identified in its respective forms, the next step is well-planned communication. CIOs should consider what information they want to provide to whom. From 4C’s point of view, the form of presentation is also decisive for success, which must look different for qualitative metrics than for quantitative ones.

In order to get more added-value visibility, and find out where IT can provide even better support, CIOs go different ways. Kleine from Pfizer Germany, for example, introduced IT ambassadors in the departments that support communication. Büchner, CIO of SachsenEnergie, relies on the additional role of “demand managers,” or IT employees with business skills who act as an interface between IT and business, and take care of the communication with the department.

The sum of its parts

Discussions with CIOs have shown that the process model can be used in practice. Krones CIO Blumberg, who helped develop the model with his team as a practical partner, reports on successful piloting and success in cooperation with stakeholders. In addition, the survey revealed other useful results that could help make the IT value contribution more tangible. Matschi and Held add there’s no single value behind it, but a conglomerate of metrics. These can be of a qualitative or quantitative nature that ultimately show how satisfied stakeholders in the departments are with IT. It’s important to connect facts with perceptions, and that metrics are measured in dimensions that are relevant for respective stakeholders. The bottom line is it’s about shared success across departmental boundaries. Both IT and business departments should be able to see how IT affects business performance, so neither can create value on their own. In the end, it’s the combination of IT and organizational skills that counts.

(This post is based on an article from our sister publication CIO Germany.)

Business IT Alignment, CIO, IT Leadership

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When it comes to predicting the economic future, there are a lot of mixed signals right now, but one thing remains clear: Recession or no recession, cost-cutting initiatives are always a smart idea, particularly given today’s inflation rates. Economic concerns are increasing the pressures on IT to do more with less. Consider that 92% of IT leaders are concerned about budgets and headcount in today’s economic climate, according to a recent Vanson Bourne study. Fiduciary responsibility is essential today given that corporate belt-tightening measures are in sharp contrast with IT growth rates:

Cloud, mobile, and telecom investments are expected to increase by an average of 10-12% over the next couple of years, showing the importance of responsible spending habits.Mobile device counts (78%) and usage (83%) are expected to increase; and with greater use comes more management responsibilities, making it even more important that organizations approach IT investments with sustainability in mind.Now is not the time for hasty decisions, but rather the moment to ensure that digital transformation investments of the past three years continue to afford positive online experiences for near- and long-term business success.

Tangoe

Calm volatility with an IT optimization mindset

IT leaders should confront economic volatility by putting plans in place to optimize technology investments with a strategic focus on realignment and flexibility. With pricing volatility and inflation expected to continue, companies have an opportunity—and fiduciary responsibility—to right-size their IT infrastructure, services, and assets to flex as needed, riding the ups and downs of today’s market. By shifting to an IT optimization mindset, and following these five steps, companies will be positioned to navigate tentative terrain with sure footing.

Step 1: Get clear sight into the cloud for cost optimization

In the beginning, companies migrated to the cloud for simplicity and cost efficiencies, but over time those benefits can lose their luster. For many companies, the cloud has grown complex and costly as they rely on more infrastructure and application services — especially as trends in remote work have taken hold with cloud collaboration and employees located in different corners of the globe. The number of cloud licenses and providers has ballooned, making it ever more difficult for IT to harness the horse as it shot out of the gate. From mid-market to global enterprises, multi-cloud environments are growing rapidly in size, scope, complexity, costs, and security risks.

Having the ability to wrap your head and arms around a company’s complete cloud environment – bringing data out of the shadows and into the light – is a critical next step in making the most of cloud spending, resource allocation, and optimized investments. With the forecast for cloud resources expected to continue to grow, evaluating cloud spending and automating cloud cost optimization makes sense in uncertain times.

3 Ways to Cut Cloud Costs

Consolidate redundant applications acquired as a result of panic-stricken pandemic purchases.Engage long-term discounting strategies to reduce the cost of multi-year contracts.Understand how and when to use pausing features to ensure you’re paying for cloud infrastructure services only when you need them.

Step 2: Reassess shifting IT landscapes for smarter utilization

After accelerated innovation and evolving business models, it’s not uncommon for IT priorities to have changed every year. Company locations are different. The way employees connect to information is different, and with employees moving back and forth for hybrid work and traveling more, communication needs have changed. All the while, pricing has shifted too. Now is the time to reassess IT assets, taking a closer look at what technology is still needed, what resources may be going unused, and the latest trends in IT service pricing.

Shifts in technology usage create new opportunities in IT optimization:

Pandemic purchases have left companies with duplicative applications and services. Companies that consolidate tools can reduce Shadow IT security risks and save money, using the savings to upgrade non-traditional applications to enterprise-level tools.Video conferencing impacts network bandwidth and data usage. Many companies are revisiting their strategies to upgrade to cloud unified communications as a service (UCaaS) and working to modernize and optimize network infrastructure in response.Travel is back, meaning it may be time to revisit international calling plans or any imposed surcharges regarding communications. Connectivity changes across the hybrid workplace have more companies relying on broadband public internet services, 5G fixed wireless, and software-defined wide area networks (SD-WAN), which drives complexity with more vendors and internet services to manage. Now is the time to reevaluate how IT manages a growing number of vendors, as the benefits of innovation can quickly be outweighed by the burdens of management.

Shifts in service pricing create cost-cutting opportunities:

Companies have more options for domestic internet services, and the decrease in price has leveled off making it a good time to lock in low rates.Cloud pricing remains flat. But cloud waste is common, and companies are spending more than they anticipated. It’s time to evaluate unused licenses and investigate spikes in usage to understand when the cloud is burning a hole in your pocket.UCaaS prices have declined as competition has heated up, making now a good time to sign a cloud communications contract.The price of private connectivity (MPLS) services has decreased over the past two years, allowing companies to achieve savings.

Step 3: Rethink mobile strategies to reduce risk and inefficiencies

Mobile and wireless are becoming the experiential engine of every organization. Especially in today’s hybrid workplace, employees are relying ever more on their mobile devices and business apps to get their jobs done. Getting a handle on an organization’s hand-held devices – making sure they are connected for security and performance – is key to any organization’s success, as ransomware and data breaches can cost companies millions of dollars.

Avoiding ransomware and security attacks is even more important in times of uncertainty, which is just one key reason why 81% of IT leaders are rethinking their mobile ownership strategies. While having employees bring their own devices (BYOD) to work was a great solution to keep business running during the pandemic, the approach may now be riskier than it’s worth, especially when it comes to security.

And security isn’t the only reason mobile needs a rethink.

Growing dependence on mobile devices is taking a sizeable toll on IT resources — to the tune of one-third (1/3) of IT team productivity and cost. And with overall staff churn rates at 17%, managing a mobile fleet is challenging for companies of all sizes, particularly when 65% of companies are completely reliant on mobile devices and the average company has thousands of devices (laptops, phones, tablets, wearables, others) in use.

A smarter use of resources may be to outsource mobile device management. Mobility management services and unified endpoint management are becoming a trend as companies recognize the need for tighter mobile security with fewer IT resources to administer it across the entire lifecycle of devices — at deployment, during system and application updates, and during employee on-and off-boarding.

Step 4: Embrace holistic IT automation to accelerate operations

AI is helping companies boost network performance, accelerate security defenses, and make smarter use of their investments, and now is the time for IT leaders to reinvent business processes through automation. With IT professionals on average losing more than one day a week to manual tasks, more than eight in 10 (85%) agree that eliminating manual processes would allow IT to be more flexible in the wake of changing times.

Just as comprehensive data across the IT ecosystem can inform smarter operational outcomes, accelerating workflows can have a cumulative effect. In a shifting business landscape fraught with complexity, uncertainty, and cost constraints, an automated platform that unites the network, security, cloud, and mobile endpoints can provide the complete and clear view needed to chart a smarter course. AI-based automation has proven successful for IT teams in:

Reducing the amount of time and effort needed to identify and mitigate security threatsImproving network performance, predicting outages, and preventing connectivity issuesAutomating processes for IT asset management and service administration, thus diminishing the time it takes to responsibly manage sprawling tools and providers

Step 5: Lean on partners but understand outsourcing best practices

Leveraging more outsourced services is one of the top ways organizations reported that they would respond if there was a recession, so external vendor support is only likely to become even more important as the pressures to do more with fewer increases.

Figure 2: Which of the following best describes your organization’s approach to the following? [500]

Tangoe

Striking the right balance is key. Outsource too much of the IT work and you can lose responsiveness at times when flexibility is needed most. Insource too much and you will never have time to get to strategic work that can be critical during times of change. Finding the balance point requires understanding the talents on your team, the cost or value of the work being performed, as well as when and where the day-to-day grind is pulling the internal team away from top priorities. Co-managed services help create balance, as can an inquiry into providers to understand their capabilities for providing additional professional services.  

Above all else, the ability to pull an instant, customized report for the CFO and CEO can mean the difference between a strategic cost cut and simply striking through a mathematical line that may cause unintended consequences. Untangling the cacophony of IT service providers is essential in assessing the true costs and opportunities associated with running today’s tech-enabled businesses. Only then can IT leaders share contextualized information helping the C-suite make informed decisions, right-size technology investments, and unleash innovation in uncertain times.

To learn moreabout technology cost optimization, visit us here.

Cloud Management, Cloud Security

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Despite greater emphasis on empathy and inclusivity, toxic behavior is still an issue for many IT organizations. And when toxicity takes root, friendliness, kindness, and basic civility quickly fall by the wayside, replaced by selfishness, harassment, and even outright emotional and physical abuse.

Identifying and neutralizing an emerging toxic IT culture before it can begin damaging team members, projects, and overall organization performance is every CIO’s responsibility. The following eight steps will help you prevent or root out cultural toxicity, keeping your department strong, united, and efficient.

1. Open a confidential pathway

Create a communication channel that allows IT team members to direct their concerns to the CIO anonymously and outside of the normal hierarchical reporting chain.

In a healthy enterprise environment, each manager is committed to the success of everyone within their organization. “Concerns from all employees are communicated upward through the reporting structure to the appropriate level for resolution,” says Andy Sealock, a senior partner at digital at business advisory firm West Monroe. “In a toxic IT culture, you can’t always count on that happening, since the management reporting chain might be part of the problem and, therefore, cannot be part of the solution.” Direct anonymous communication informs the CIO that a problem might exist.

Sealock also advises conducting regularly scheduled anonymous team surveys, designed to reveal a budding toxic culture. The survey should include questions directly related to organizational culture, including morale, personal recognition, compensation, promotion decisions, management leadership quality, and an employees’ likelihood to remain with the organization. Sealock believes that such a survey is “a great way to identify culture issues and to track the effectiveness of remediation efforts to improve culture.”

2. Provide effective leadership and emphasize team goals

An IT leader can’t simply create a positive culture with the wave of a hand. Culture is a function of leadership execution. “Leading by example is the way to start a turnaround,” says Fredrik Hagstroem, CTO of Emergn, a digital business services firm.

A clear vision guides team direction. It’s like a compass that reliably points everyone in the correct direction. Even when things are complex or changing, having a goal helps everyone become aligned, Hagstroem says. “Good leadership that drives collaboration and trust will be evident in frequent use of collective and inclusive pronouns, such as ‘we,’ ‘us,’ and ‘ours’ — meaning everyone in the company.”

Strong leadership ensures that vision, strategy, and goals aren’t just clearly understood, but attractive and motivating. “Leaders must demonstrate that collaboration and contributions to common goals are more important than individual performance,” Hagstroem says. He advises changing professional relationships from urging team members to reach personal objectives and responsibilities to achieving team goals. “Evaluating individuals’ performance in terms of impact to team goals is also an important pivot point,” he adds.

Most important of all is removing the fear of failure, Hagstroem says. “Each IT professional should have the ability to share their forward-thinking ideas with little risk of being made to feel inferior or wrong.”

3. Encourage friendly competition

While unhealthy competition often leads to a toxic IT culture, healthy competition can be a positive motivating force. “Encourage your team members to compete against each other in a healthy way by setting goals and providing rewards for meeting those goals,” suggests Boris Jabes, CEO of data integration platform provider Census.

Like all successful IT leaders, Jabes believes that it’s essential to foster a positive IT department environment. “This means creating an atmosphere where employees feel valued and appreciated,” he says. “You can do this by recognizing and rewarding employees for their good work, encouraging open communication, and providing opportunities for professional development.” Satisfaction and productivity are powerful toxic environment antidotes, Jabes adds.

4. Raise awareness

It’s impossible to eliminate a toxic culture without first acknowledging its existence. “Start talking about it,” advises Kimberley Tyler-Smith, a former McKinsey & Co. analyst who is now a strategist at career tech service company Resume Worded. “It’s essential that everyone knows what’s going on and that they understand how everyone else feels about it — especially if one group of employees seems to be more affected than others by the toxic environment.”

Team members need to feel safe when talking about what’s happening at work. “No one should feel like they can’t tell anyone else how they’re feeling without risking their careers — that can make things much worse,” Tyler-Smith says.

5. Encourage openness

Champion an environment in which team members feel free to share their mistakes with the understanding that they will be supported and helped to do better.

When there’s a free and open environment, people tend to feel safe and respected, says Thomas R. Harris, founder of The Exceptional Skills, a leadership training course provider. “They’re able to focus and work on making the vision happen instead of worrying about someone stabbing them in the back, or whether they will be supported by leadership.”

A staff that’s united and reaching toward specific goals can see how their efforts are leading to success. “It’s no longer ‘me versus you’ — it becomes ‘we’ working together,” Harris says. An open approach is generally effective because culture and team effectiveness comes from the top, he notes.

When leaders allow a toxic environment to fester, they will likely lose good people, Harris warns. The organization then becomes less efficient and productive. In a toxic setting, “people aren’t focused on the enterprise or its goals, but on themselves, protecting themselves, and making themselves look good,” he adds.

6. Promote collaboration

IT culture is likely to turn toxic when team members believe that it’s the best way to exert autonomy or authority. “They can say ‘no’ and feel in control,” says Aviv Ben-Yosef, head of Aviv Ben-Yosef Consulting and the author of The Tech Executive Operating System.

An effective approach to collaboration is immersing the organization with a teamwork culture in which all team members view their colleagues as peers, not rivals. “Everyone wants to feel that what they do means something,” Ben-Yosef says. “Give them a better way to achieve that goal by changing the culture and you will carve a new path of least resistance, one that fosters cooperation.”

7. Build trust

Building an open, collaborative environment requires a leader who is transparent and honest with team members. “Share information and be candid about the challenges your team is facing,” advises Leon Bierhals, CTO of WREI.org, an organization that distributes information related to women’s health, well-being, and empowerment.

Observe and listen to team members. “Take their concerns seriously and be open to their suggestions,” Bierhals suggests. Also reward team members for their efforts, both large and small. “Thank them for their contributions and give them recognition when they do a good job,” he suggests.

Bierhals says that exhibiting trust shows team members that management genuinely cares about them and, in the event a business or personal problem arises, is willing to work with them to address or resolve the issue. “It also demonstrates that you’re willing to put your faith in them,” he says. “It sends the message that you’re willing to work together to achieve common goals.”

8. Foster unity

Give team members the ability to freely communicate and innovate with each other, advises Tim Flower, vice president of Nexthink, a digital employee experience platform provider. Use the customary collaboration tools, such as Teams, Slack, and Zoom, then combine them with platform analytics to meet enterprise needs and allow multiple teams to work within the same view of information.

Flower suggests uniting teams by deploying compelling programs. “Turn the lights on to the unknown and give them challenges … versus just sending a mandate to ‘work smarter.’” He also recommends supporting collaboration with praise and encouragement. “Call out business results that would not have been achieved had it not been for the collaborative approach.”

IT Leadership, Staff Management

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Like its predecessors, COP27 offered mixed results. As the conference’s detractors have long lamented, if COPs were truly effective, we wouldn’t have needed 27 of them. Still, there are some genuine marks of progress to celebrate. A landmark “loss and damage” fund will come as welcome news for the many vulnerable countries that have been disproportionately affected by climate change. But compensating for damage isn’t the same as preventing it, and the continued reluctance of major nations to outlaw or even cut back on fossil fuel projects suggests there will be no shortage of fresh damage in the future.

Welcome as public discussions around climate change like COP may be, words alone are insufficient. Until leaders start turning promises into actionable policies, each conference will be marred by the sense that more could have been done. One of the great frustrations is that tangible solutions exist. They are fully formed, just waiting for forward-thinking leaders to put them into practice. City and business decision makers serious about demonstrating their sustainable credentials have an obligation – and an opportunity – to turn the tide.

One of those tangible solutions is LED lighting conversion. It’s also one of the easiest and most overlooked means of making measurable progress toward climate goals quickly. For example, if a mid-sized industrial town upgraded all of its approximately 1,000,000 conventional light points to LED, carbon emissions could potentially be reduced by over 18,000 tons of CO2 per year—equivalent to the amount of CO2 saved by taking 7,000 fossil-fueled cars off the road.

The good

The new “loss and damage” fund is by a distance the most important development to emerge from this year’s COP. It ensures that countries from the developing world that have borne the brunt of climate change, despite being only minor contributors to it, will receive help from many of the world’s largest emitters.

There was skepticism going into the conference as to whether such a bill really stood a chance of being accepted by the power players. The United States was expected to oppose any measures that might leave it financially liable for its enormous historical emissions, but after the EU pivoted toward supporting the measure, the US followed suit – a win that should not be overlooked.

However, it’s worth tempering any tendency to celebrate by pointing out there’s still the crucial matter of deciding exactly who will be paying what to whom, a task reserved for future COPs. Strong but so-called transition economies like China and India may be reluctant to agree they owe as much as more established superpowers like the US. Also, while these measures will have a huge positive impact in dealing with climate change’s effects, they do nothing to halt its causes.

Another less reported win is the commitment to deliver the trillions of dollars needed to drastically cut emissions and help societies adapt to the increasingly severe impacts of climate disruption. Suggested reforms within multilateral development banks (MDBs) and international financial institutions like the IMF and World Bank would see more investment in green initiatives and renewable energy, as opposed to funneling further funding into detrimental fossil fuel endeavors.

The bad

The mood in general was low heading into COP27. The triumphalism that coloured some aspects of COP26 had long since faded in the glare of the 2022 energy crisis. Prices soared, citizens felt the squeeze, and leaders from around the world who had proudly preached the need for sustainable solutions in simpler times were quick to walk back their promises.

So too did COP27 walk back pledges made in Glasgow a year earlier. New wording added to that conference’s final agreement calls for the accelerated development of “low-emission” energy systems. Experts warn this diluted language is a very intentional way of leaving the door open to further natural gas development.

Agreements around phasing down coal were made at COP26, but no further progress was made at COP27. The burning of fossil fuels remains the heel on our planet’s throat, and leaders seem reluctant to alleviate the pressure. As noted by Dave Reay, policy director at ClimateXChange and executive director at Edinburgh Climate Change Institute, “COP27 seems to have been more a case of trying to prevent backsliding on what was agreed at COP26 in Glasgow a year ago, rather than getting new and stronger ambition and action on reducing emissions.”

The ugly

Leaders continue to talk about their commitment to the Paris Agreement’s main goal of limiting global heating to no more than 1.5° C above pre-industrial levels by the end of the century. But this increasingly feels like a pipe dream. Even limiting warming to a 2° C rise seems more unlikely with each passing year. Keeping the promises made in Paris would require a 43% cut in global greenhouse emissions by 2030. Current policies are on track to cut only around 0.3% by that date.

The results of further inaction are clear. They can be seen everywhere from Bangladesh and Pakistan to Australia and California. So, what can be done now that will make a difference?

The things we can control

Lighting accounts for 13% of all electricity usage worldwide and 4% of global greenhouse gas emissions. Cities account for about 78% of global energy consumption, and lighting accounts for around 40% of that. Too often lighting is overlooked as a sustainable solution but transitioning to connected LED is a sure-fire way to reduce emissions and benefit from immediate energy savings – as much as 80% over conventional non-connected lighting.

If the EU switched all the existing conventional light points in its 27 member countries to LED, it would save around €65 billion per year — money that could be spent on developing sustainable energy and other initiatives while also relieving the burden on citizens struggling to pay their energy bills.

What about on a bigger scale? A global switch to LED could see energy consumption drop by 5% globally by 2030, even while the total number of light points continues to rise.

Relying on an annual climate conference isn’t enough to stave off catastrophe. Action is needed now, by all of those with the power to enact change. Connected LED technology is here and available today — it’s proven, cost-effective, and relatively easy to deploy. Buildings and cities simply can’t achieve net zero or energy-neutral targets without it.

The barriers to switching connected LED lighting are low, especially with funding available from programmes such as the EU Green Deal and the IIJA in the US. It’s time to pick up the pace.

Learn more about the advantages of switching to public LED lighting here.

Green IT

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This article was co-authored by Katherine Kennedy, an Associate at Metis Strategy.

For years, ESG has been little more than a sub-bullet or appendix slide in most CIOs’ strategy decks. But changing consumer sensibilities and heightened investor scrutiny have swept ESG, and technology’s role in it, to the top of the agenda. Corporate strategies hinge on it.

ESG is new territory for many technology leaders and getting up to speed quickly is essential. In a recent survey conducted by Lenovo, 45% of respondents said the CIO should play a critical role in executing the enterprise’s ESG mission. While the scope of ESG is of course much broader than environmental sustainability, the need for speed here is particularly heightened as the SEC moves to enact rules that will require publicly traded companies to disclose their emissions data as early as 2024. For many CIOs today, the first question often is: Where do I start?

Nick Colisto, SVP & CIO, Avery Dennison

Avery Dennison

Nick Colisto, SVP & CIO of Avery Dennison Corporation, has some ideas. ESG has been a priority for him since he joined the company, which designs and manufactures a variety of labeling and functional materials, like tapes and bonding solutions. Over the past several years alone, his team launched a web application that powers AD Circular, a program for recycling used paper and filmic label liners. The team also developed an enterprise-wide system for tracking ESG metrics, like Scope 1 and 2 GHG emissions. Insights from that system are highlighted regularly in the company’s sustainability reports.

Below, Nick suggests a few areas CIOs can start on the journey to creating a proactive ESG agenda that anticipates compliance requirements:

Dedicate a sustainability leader to the CIO organization

A dedicated sustainability expert focused on how data can drive the enterprise agenda while satisfying relevant ESG policies and guidelines is essential, Nick says. “Data is essential to a modern ESG strategy, and you won’t make strides of any respectable length if you’re constantly fighting for the time of the company’s shared ESG resource.”

If your search comes down to hiring someone with ESG policy knowledge versus technical expertise, prioritize the former, Nick says. That way, the person can narrow the scope of ESG use cases to those that will drive the most meaningful results before involving the technical talent responsible for delivery.

Of course, finding the right person is only half the battle. CIOs must set sustainability leads up for success. That means giving them visibility and access. Nick’s leader sits on Avery Dennison’s sustainability council, where he has visibility into the enterprise ESG agenda. He also has a mandate to engage business leaders to collect requirements for any initiative the council pursues, which he then translates into technical specifications and tracks from start to finish.

Focus on data governance

Data governance is vital to ESG initiatives. At minimum, it will form the backbone of your ESG reports, which will command much of your focus at the start of your ESG journey. In addition to ensuring compliance, data will also inform which goals your organization pursues and how it tracks them. Thus, the quality of your data must be exemplary.

Securing that high-quality data, Nick says, starts with establishing a single source of truth. This has been on many a CIO’s docket for a while, but the work often is not prioritized because the value of the data was relatively low, used mostly for historical reporting to support brand positioning and annual sustainability reports. “As investors demand increasingly detailed data to assess climate-related risk, data quality is critical,” Nick says.  “Disparate data will not work for ESG as it’s too difficult to analyze and report on. Also, consolidated ESG data has increased operational and strategic value.”

Once a single source of truth has been established, it must be maintained with robust data governance and management policies. These policies will become especially critical once the scope of regulatory reporting expands to include Scope 3 emissions, those a company generates indirectly, through its supply chain, products, and partners, which are particularly hard to track, says Nick.

Drive accessibility and transparency

Once a lead has been established and a clear governance process put in place, the next step is to make your data accessible and transparent. That means making sure anyone who needs the data can get their hands on it and, once they do, easily understand it. That task is harder than it sounds, but it’s worth your while. ESG programs are unlikely to gain momentum if every routine compliance report requires employees to endure a scavenger hunt for the necessary data. More importantly, people are less likely to invest themselves in a cause that is opaque or poorly understood. Knowing your ESG goals, who they involve, what data they rely on, and what activities will move the needle will make your employees feel they are part of the process. Our team sees four key ways to do this:

Publish a dashboard of the ESG metrics your organization values most: It might include metrics such as carbon offset, DEI ratings, or aggregate scores published by a third-party ESG rating provider. To drive adoption, involve leaders from various departments early in the dashboard design process.Contextualize ESG data and share it with the enterprise: ESG metrics are frequently affected by operational decisions. Yet, the people making those decisions often lack the skills to analyze and interpret ESG data effectively. Provide employees access to low/no-code analytics tools such as PowerBI and Tableau to help them understand their impact on each metric.Incentivize teams to make ESG-smart decisions: Moving the needle on ESG goals requires leaders and their teams to change the way they work. To do that, they need a reason. Give leaders incentives to get smart on the company’s ESG vision, the core metrics, and the role each team plays in realizing the future. For instance, Bank of America’s My Environment® employee program offers, among many incentives, to reimburse a portion of the cost of an employee’s electric vehicle or charger.

The principles above, when applied in earnest, can do much more for companies than simply earn them a sticker for compliance. Nick’s focus on ESG at Avery Dennison demonstrates the central role CIOs can play in asserting IT’s role not only as a service provider, but also an active contributor to an organization’s ESG mission and, ultimately, its growth.

CIO, Green IT, IT Strategy

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The contact center market is growing at a rapid pace. As the key business hub for sales and service, contact centers have long served an important role for customer experience (CX). During the pandemic, they became even more critical.

Today’s contact center agents handle 7.2 more calls per day than they did pre-pandemic. The contact center software market is expected to grow at a 21% compound annual growth rate (CAGR) from 2022 to 2030. But, with all this growth comes new potential costs. New market conditions demand new technological solutions, and increasing service demands put new financial pressures on contact centers.

Amid a fast-changing landscape, contact center executives have a critical task: Keep pace and grow while also reducing costs and driving efficiency. In many ways, this comes down to choosing the right technology. Let’s look at four key decisions that can fuel effective cost management in contact centers.

Reduce reliance on brick-and-mortar by going remote with the cloud

Legacy on-premises contact centers are quickly becoming outdated. According to research from Deloitte, only 32% of contact centers had migrated to the cloud as of 2021, yet 75% of survey participants planned to complete the journey by mid-2023. As a whole, Market Research Futures reports that the global market for cloud contact center technology will reach $45.5 billion by 2030, a CAGR of 24.8%.

Why the sudden aggressive shift away from legacy brick-and-mortar contact centers? There are a host of reasons, many centered on the cloud’s ability to enable more flexible, omnichannel service delivery and enhanced CX solutions. But it also has much to offer from a cost-savings perspective.

The cloud frees your contact center from the constraints of physical infrastructure and allows you to rely more heavily on a remote workforce. This makes it easier to scale your business seasonally or in response to demand. It also allows you to optimize your service delivery — Talkdesk reports that cloud-based contact centers experience 35% less downtime than on-premises sites.

With the right cloud solutions, these cost savings can prove substantial. According to a report from Forrester, for instance, the average contact center that moved to Genesys PureCloud saves more than $800,000 and gains a net total benefit of more than $5 million over three years.

If you truly want to improve cost management in your contact center, cloud migration is essential.

 Leverage your data

Across the board, today’s contact center managers and agents have more data at their fingertips than ever. The combination of more personalized customer experiences with advanced technology has made this possible. The only question is: Are you putting all that data to use?

You can access far more than the standard surface-level metrics, such as average handle times or wait times. With modern contact center software, AI-powered features, like sentiment analysis or in-depth transactional data, give you deep insights into customer satisfaction and behavior. And the best tools offer real-time access to these metrics.

Fully integrated contact centers are poised to make this data accessible and useful for anyone who can leverage it to improve customer experience. With access to real-time insights and the ability to share them across customer-facing departments, agents can direct the customer journey more effectively and efficiently.

Consider how much more quickly a data-empowered agent can respond to a customer calling in for the second or third time — or how a supervisor can use analytics to provide better coaching for that agent. When you leverage the data you have, your resources stretch farther.

Enhance self-service options

Customers want more self-service options. They’ve been shouting this for a while now, but many companies have been slow to listen. In NICE’s “2022 Digital-First Customer Experience Report,” 81% of customers said they expect more self-service options from businesses than they were getting. Yet 40% of companies think they offer enough.

That’s not to say that customers only want to deal with chatbots or automated IVR systems. But when it comes to simple issues — think checking your bank balance — customers would far rather resolve it on their own than wait to speak with an agent.

The good news for contact centers is that self-service options, when done well, can bring significant cost savings. With advances in conversational AI, chatbots and IVRs have taken huge leaps in their ability to understand and address many customer concerns. Plus, bots can handle far more customer inquiries than human agents. This ultimately lowers call volume for agents, allowing you to reduce staffing for minor customer service issues and focus on improving CX.

Automate as much as possible

Automation enables self-service, but it’s capable of creating far more efficiency for contact centers. Besides automating many of your customer interactions with AI-powered bots and IVR technology, you can automate many other mission-critical processes.

In fact, automation should touch every aspect of the contact center. From simplifying marketing workflows to handling staff scheduling to managing callbacks, automation can drive efficiency in every area.

And, in a contact center that relies so heavily on technology to shape customer experience, one type of automation may prove more important than any other: continuous testing.  The software that powers your contact center must be continuously tested, monitored, and updated to ensure quality CX at all times. Continuously testing performance identifies and resolves issues across the development process before they become too complex and costly to fix. As you scale your business, manual testing processes will struggle keep up with the demand. Automated continuous testing gives you ongoing feedback and helps identify defects so you can resolve issues in real time, rather than executing load tests or larger annual testing. This not only reduces labor costs but also prevents costly downtime and CX failures.

Scale Your Business Efficiently

Thanks to technology advancements, today’s contact centers face near-limitless possibilities for growing rapidly and improving customer experiences. But only the contact centers that scale efficiently, control their costs, and maximize their returns will earn the biggest benefits. By leveraging their data, moving to the cloud, expanding self-service, and relying on automation, contact center leaders can keep costs under control and set the stage for future success.

Learn more about the cost savings and business benefits enabled by Cyara’s CX Assurance platform.

Digital Transformation

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David Vidoni wants to be sure that workers throughout his company know “how IT can transform the business.”

Vidoni, vice president of IT at tech company Pegasystems, gets the word out using various channels, from reports on metrics to easily accessible dashboards.

He also launched a quarterly newsletter that — in addition to sharing tech tips, information about available technology tools, and new initiatives — showcases how IT is improving company operations.

“It’s about making sure there’s universal awareness of the work we’re doing, how IT impacts individual employees and departments, and how IT helps us operate better as a company,” Vidoni says.

“It’s another level of engagement, to put IT stories into context and make them available for all employees in terms that are meaningful to them,” he adds. “We want this newsletter to bring more visibility to what we’re doing, how IT helps the business and how IT aligns to our [corporate] strategy. It helps raise awareness on the value we’re delivering to them.”

Vidoni’s actions get at a longstanding challenge for CIOs: How to effectively demonstrate the value of IT.

And it’s a pervasive issue. Research firm Gartner found 63% of surveyed CIOs struggle to communicate IT’s value; 14% of them said they’ve rarely succeeded in the task.

Similarly, Info-Tech Research Group’s CEO-CIO Alignment Diagnostic survey found that 80% of CIOs and CEOs experience frustration with IT’s failure to deliver value, even as C-suite leaders rank delivering benefits as the most important goal for IT.

Vidoni says a newsletter helps him escape being part of such statistics, noting that while that approach is working for him, other strategies can prove to be just as effective for CIOs.

Indeed, researchers, CIO advisors, and experienced IT executives say CIOs need a multipronged strategy to demonstrate the business value of IT and show how much IT positively impacts business outcomes.

“CIOs are finding out what value actually means, they’re tracking it consistently and they’re directly linking back to improvements, to the various initiatives and tasks, and they’re saying, ‘Here are the numbers to prove it,’” says Info-Tech Research Group principal research director Ross Armstrong.

Here are some steps IT leaders can take to ensure IT gets the business cred it deserves.

First, ensure business-IT alignment

Multiple experts say CIOs who want to more effectively communicate how IT brings value to the business must first actually deliver that value.

“It’s much more powerful to deliver value, not talk about it,” says Andy Sealock, a senior partner at consulting firm West Monroe.

That, though, remains a challenge for many. Info-Tech Research Group, for example, has found that two-thirds of CIOs are misaligned with their CEOs when it comes to the target role for IT.

“The role of an IT leader is not to provide technology but to enable the delivery of business value and benefits through technology,” Armstrong says. “So the challenge is for the CIO to understand what the business actually needs when it says, ‘You need to deliver value.’”

CIOs have been getting that message for a while now, Armstrong says, but many have yet to live it. He points to Info-Tech data that shows only 25% of business leaders in struggling IT organizations believe IT has an effective understanding of business goals, whereas 72% of leaders in expanding and transforming organizations believe IT understands goals effectively.

Larry Wolff, who as founder and CEO of the consulting firm Wolff Strategy Partners has long focused on what he terms “the IT value journey,” says CIOs who want to leap into that latter category of transformative IT departments must do so by first building credibility among their business-unit colleagues and earning their trust and respect.

That means delivering the fundamentals flawlessly, identifying opportunities to enhance business operations, and developing programs that transform them.

“If you’re all in [the] maintaining [category], then you’re not delivering value. So boost that by enhancing IT services — for example, by delivering better services at a lower cost or getting to software and infrastructure upgrades. And then partner with business leaders to build transformational projects that will put dollars on the top or bottom line,” Wolff says. “IT will always be doing some maintenance and enhancement but also hopefully doing some level of transformation. So what you’re talking about here is a shift in the balance, where you’re able to continually do more transformation that has a positive ROI.”

Deliver business outcomes, not IT projects

Bobby Cameron, vice president and principal analyst at research firm Forrester, says the majority of organizations still talk about funding IT projects. He advises funding specific business outcomes instead.

That, however, requires CIOs and their IT teams “to plan, manage, and report in business terms,” Cameron explains. And it requires business function leaders to become and remain engaged with the initiative, too.

Cameron says this approach means executives — including the CIO — must identify and articulate how exactly the technology supports a business objective. That in turn helps everyone involved understand the raison d’être for the technology, and it allows everyone to identify whether and by how much the endeavor succeeded.

He cites the case of a CIO at a b-to-b property casualty company who unsuccessfully lobbied for money to upgrade her tech stack to increase resiliency and speed. The CEO denied the request because he felt the legacy technology still worked. But the CIO got the CEO’s approval and executive suite backing when she shifted the project’s focus, saying it was designed to support sales and marketing objectives that could demonstratively improve revenue and profitability.

Thomas Phelps, CIO and senior vice president of corporate strategy at software maker Laserfiche, has a similar take.

“Where CIOs may struggle is communicating how a new digital initiative creates business value in a way that resonates with the C-suite and board,” he says. “Similar to a Shark Tank pitch, put yourself in an investors’ shoes and speak in the language that the C-suite will respond to. Be ready to explain in a few minutes — and with the right set of visuals and compelling storytelling — how a digital initiative could increase revenue, reduce costs, mitigate risks or otherwise lead to a desired business outcome,” he says, noting that even something technical like a containerization initiative, which typically doesn’t garner interest in the C-suite, could gain traction when it’s positioned as key to a specific business outcome such as cost reduction.

Identify IT metrics that demonstrate business success

IT has conventionally used metrics that measure how well technology performs but do little to show how much it supports business outcomes, so Cameron and others advise CIOs to find more business-oriented ways to quantify how technology delivers.

Cameron says he believes objectives and key results (OKRs) are effective for demonstrating how technology delivers business outcomes.

Benjamin Rehberg, a managing director with Boston Consulting Group and leader of its Technology Advantage practice in North America, also endorses the use of OKRs.

Rehberg explains that OKRs describe what CIOs are trying to do and enable them to measure whether IT achieved its goals, by how much, and the impact of those achievements. For example, one objective could be to reduce the time required to run a transaction by a certain percentage, with the OKRs showing how close IT came to hitting or exceeding the target and what its performance is worth.

Mark Taylor, CEO of the Society for Information Management (SIM), a professional association for CIOs and IT leaders, says return on investment (ROI) and other financial measures of a technology initiative’s success — such as how much it boosts revenue, increases profitability, or decreases costs — are just the start.

He says CIOs can and should now quantify how technology initiatives impact other business functions — for example, how much it speeds up closing a deal and how much additional “stickiness” it creates in customer relationships. CIOs can even use business-outcome metrics such as days sales outstanding (DSO) to show the value of back-end technology like an enterprise resource planning (ERP) system, Taylor says.

“Those are all measurements that technology can impact, and it’s incumbent on the tech leader to know them,” Taylor says, noting that systems today actually enable CIOs and business-unit heads to collect the data for a much more expansive list of metrics. “You have to demonstrate the value of IT in a way that’s measurable, and the technology will help you measure some of the things we’re talking about.”

Juan Perez, CIO at Salesforce, also believes it’s important to identify and use metrics that quantify IT’s successful impact on business objectives.

“Justifications for IT investments should be closely aligned with business objectives, and IT strategies should line up with business strategies in order to maximize the return on such investments,” he says. “For CIOs, it’s important that both IT and business professionals agree on the metrics that define a successful investment and work together to jointly act and monitor for results.”

He points, as an example, to business interest in using automation to reduce low-value manual tasks so that workers can spend more time on customer-focused activities that drive growth and revenue. So CIOs here can quantify how many hours of work automation saves and the value of that.

Share the story of IT’s impact

Using metrics to quantify IT’s value is just half the equation, experts say. The other half is using them to tell IT’s story — another area that has traditionally been a struggle for tech leaders.

“The value of tech investments hasn’t been communicated properly, and that’s a big pain point for IT as well as for the business, even as there has been a shift away from viewing IT as a cost center and seeing IT instead as a value center,” Armstrong says. “IT still misses out on being seen as a strategic partner to the business because it’s not measuring properly and it’s not communicating. So there is a misalignment about what value actually means both to IT and the business.”

To be clear, CIOs don’t need a full-scale marketing campaign, or even a newsletter — although, as Vidoni attests, it can be helpful. Rather experts say it’s about CIOs sharing details on IT’s successes and putting them in business context; they should not assume that their business-unit colleagues can see for themselves how technology delivers business value.

“There’s not enough focus on storytelling in IT,” Armstrong says. “So remember, words matter; don’t be too technical. Second thing, know your audience. And third, know who’s your protagonist and what conflict they’re trying to resolve. Telling how you’ve helped them overcome that conflict is what creates the great story.”

Business IT Alignment, ROI and Metrics

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Organizations with lagging supply chain maturity are at a disadvantage. They lack digitization – and therefore have more manual work. Plus, there’s little visibility into their operations, often resulting in poor planning and collaboration.

An enterprise can’t help but be inefficient and operate with low resilience and little agility in this environment. Inevitably, the organization will face higher costs, more risk, and deliver subpar services to other enterprises and customers. Moreover, in today’s highly disruptive and competitive environment, competitors will easily surpass them.

To improve both efficiency and resiliency in the supply chain, companies must pay attention and address the gaps and misalignment throughout their supply chains.

The best way to accomplish that, and increase supply chain maturity, is with supply chain convergence. This approach involves aligning systems, data, and processes from across an organization so all departments can successfully collaborate and seamlessly share data.

Yet, supply-chain convergence can seem overwhelming for enterprises with lower supply-chain maturity. Luckily, today’s technology can help companies leap their maturity, and there are specific steps to take to get started.

Six steps enterprises with lower supply-chain maturity can take right now toward supply-chain convergence include:

Understand the silos, gaps, and misalignment in your supply chain. Then, take a thorough inventory and include company leaders and managers from across departments to get a complete picture of the gaps across your organization.Prioritize what gaps need to be reduced. After compiling a thorough list of the gaps and misalignments, choose one or two to address first. Then, consider the ones that, by correcting, would result in the biggest impact on customer service and the bottom line.Simplify processes. Set a goal to eliminate any outdated, redundant systems you might have as well as elaborate processes. Simplification is an important strategic process to keep businesses lean and agile. Find technology and a platform that can make your supply chain more seamless.Outsource non-core functions when feasible. Find an external service provider to help with non-core functions. This is an important step in the simplification process and will allow you to focus on core and competitive functions.Build alignment and synchronization. Encourage alignment across the end-to-end supply chain. Having the right technology in place will help foster synchronization and collaboration.Continue to expand visibility and collaboration throughout the supply chain. Building up your supply chain maturity is a process that takes time. Continue to assess your operations and set achievable goals as you go.

Companies that bolster supply chain maturity through supply chain convergence should expect improvement in several areas, including supplier collaboration, cost management, and new product development.

Strong supplier collaboration helps build supply chain efficiency, resiliency, and sustainability. In addition, strong cost management is a powerful tool to create a competitive advantage jointly with suppliers.

Often, new product development is run inefficiently because of silos in the organization, which impacts time-to-market and business opportunities. However, the business can derive significant value when good collaborative processes and alignment are established between procurement, supply chain, engineering and suppliers.

While, at first, supply-chain convergence might seem daunting for organizations just getting started, by committing to specific steps, you’ll be well on your way to building a resilient, sustainable, and profitable supply chain.

At GEP, we help companies with transformative, holistic supply chain solutions so they can become more agile and resilient. Our end-to-end comprehensive, unified solutions harness technology to change organizations for the better. To find out more, visit GEP.

Supply Chain

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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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Due to Nigeria’s fintech boom borne out of its open banking framework, the Central Bank of Nigeria (CBN) has published a much-awaited regulation draft to govern open banking procedures. And at its core is the need to secure customer data through a robust set of requirements.

The regulations streamline how entities who handle customer banking information will secure their systems and share details within protected application program interfaces. They’ll also seek to standardize policies for all open banking participants, and come at a time when the country is enjoying a boom of fintech and banking services that have attracted international funding in the startup space.

According to the Africa Funding Startup 2021 report, Nigerian fintech has brought in more than half of the US$4.6 billion of total African startups, which underpins the growing need for more financial products, and facilitates greater data sharing across banking and payments systems that open banking provides.

For Emmanuel Morka, CIO at Access Bank Ghana, open banking is the future and enterprises should seize on the opportunity.

“Traditional banking is fading away,” he says. “Open banking is the only way you can set systems like agency banking, mobile banking and use dollars.”

He notes that fintech has been at the forefront of the open banking system in the region and believes it will spread across the continent. But wherever there’s money, there’s insecurity and the free exchange of application programming interface (API) across banking platforms has opened opportunities and risks as well. Unsecured systems and API channels can be a point of vulnerability.

Securing customer data

“One of my headaches as a CIO is no one is fully protected,” Morka said, adding that open banking has to ensure that customer data and assets aren’t compromised, so all endpoints in his organization must be fortified. The Operational Guidelines for Open Banking in Nigeria published by the CBN stress that customer data security is critical for the safety of the open banking model. The preliminary draft will guide the industry discussion before the final guidelines are put in place by the end of the year.

The foremost thing to secure data, according to Morka, is to expose fit-for-purpose data for consumption. This means that CIOs need to limit data accessibility to what is requested and can be used.

“I see open banking as an exposure of some data over a secured standardized channel to third parties for consumer banking,” he said. “I am the bridge between business and technology.”

He also says that it’s not only the core banking products that need protection but also tools on CRM and other software that centers on customer data.

The framework provided by the CBN also considers constant monitoring of systems of third-party API users in the open banking system. TeamApt, a Nigeria-based fintech startup, has helped over 300,000 businesses use its digital banking platform and is anchored in open banking.

The company sees legislation such as the Nigeria Data Protection Regulation (NDPR) as a big consideration for companies dealing with personal data.

“Due to the sheer size of personally identifiable information being shared, in the hands of bad actors, this data can be used to pilfer bank accounts, erode credit ratings, and conduct identity theft on a large scale,” said Tosin Eniolorunda, founder and CEO of TeamApt.

Organizations like banks also suffer using resources to recover stolen data, losing customer trust in the process, he said.

“These regulations ensure that customers have some sort of control over how their data is collected, processed and shared,” he says.

The Central Bank’s regulation has also factored in the NDPR requirements to craft how financial institutions manage customer data, and the regulations outline that consent is needed for use of customer data in open banking to avail them of financial products and services.

Six steps to achieve a secure open data platform

There are several steps IT experts can take to make sure customer data are in line with privacy laws, and that security across all systems is in place to shield these data points from leakage.

1. Technology leaders must have their systems and processes adhere to privacy laws and the final guidelines to be published by the CBN. “It’s important that executive teams work closely with lawyers who have the necessary data experience to advise on the requirements and implications of applicable regulations and guidelines like those released by the CBN on open banking,” says Eniolorunda.

2. Morka suggests that only a customer’s information that’s relevant to a transaction should be used—something he calls fit-for-purpose data. Not all data points need to be exposed during transactions. CIOs need to ascertain what type of data can be enough for transactions to securely take place.

3. Eniolorunda encourages the use of technology in know your customer (KYC) processes. Morka also says that the use of artificial intelligence (AI) should be implemented to make the process of KYC easier on financial institutions while making it accurate and efficient.

4. There needs to be constant evaluation of banking systems and APIs used in transactions, according to Morka. In terms of supply chains, Eniolorunda adds that companies must ensure that third-party vendors they use have the highest possible security standards, and the security programs of these vendors must be routinely audited and validated.

5. Customer education is key. Morka agrees that some technologies like smartphones and internet access have not reached most rural regions in African countries. This hinders the appropriate use of banking technology and slows down its adoption. For those who have embraced digital banking, constant education on how to keep their accounts secure is essential.

6. The collaboration between stakeholders will make the banking ecosystem robust and guide its growth. The CBN, through its Open Banking Guidelines, seeks to ensure that its oversight affords more collaboration for superior digital banking products for customers.

Banking, Data and Information Security