Choice Hotels International’s early and big bet on the cloud has allowed it to glean the many benefits of its digital transformation and devote more energies to a key corporate value — sustainability, its CIO maintains.

That is largely due to the 80-year-old hotel chain’s tight partnership with Amazon Web Services, says Choice CIO Brian Kirkland, who claims his company is enjoying the cost benefits and energy efficiencies of the cloud while exploiting many of 225 related services AWS offers such as analytics and AI to keep advancing on its digital reservations and pricing platform.

Kirkland, a founding member of SustainabilityIT.org, an organization to drive global sustainability through technology leadership, says Choice was the first hospitality company to make a strategic commitment to developing a cloud-native and sustainable platform on AWS.

The cloud platform helped Choice pivot quickly during the pandemic, enabling it to scale on demand as hotel traffic went down. It also helped reduce energy consumption and costs. More importantly, perhaps, pushing all in on the cloud has freed up Choice to be not just a hospitality company and franchisor, but to Kirkland’s considerable pride, a technology company as well, he says.

“I’m not in the business of managing infrastructure,” says Kirkland, whose previous stints at GoDaddy and Intel helped build the technology acumen he parlays in a new type of industry he joined in 2015. “I am in the business of hospitality. Our goal is to deliver business value for our franchisees and our guests by leveraging AWS.” 

With Amazon taking care of infrastructure, patching, and security, Choice’s 650-member Scottsdale, Ariz.-based IT team can focus on building business value using a plethora of AWS services, including Amazon Aurora, Amazon SageMaker, Amazon Elastic Kubernetes, as well as other SaaS tools such as Automation Anywhere and IDeaS for the cloud-based revenue management system Choice built called Choice Max, also on AWS.

This cloud-native strategy is essential to building unique value Choice’s core customers, owners of franchises ranging from Comfort Inn to EconoLodge, Quality Inn, and upper scale Cambria Inn. With its recent acquisition of the Radisson chain, Choice now operates 22 brands and more than 650,000 hotel rooms in 46 nations, including 1 in every 10 hotel rooms in the US.

And his team can do this more sustainably, another “benefit that’s important to us,” Kirkland says. “If you look at Amazon’s journey, and the way they run their data centers, they claim to be five times more energy efficient than an average data center.” 

Choice’s all-in cloud journey

Choice got its digital start building an iOS-based iPhone app for its franchise customers about a decade ago. By 2015, it was redesigning its property management system on the cloud, called Choice Advantage, which is licensed to third-party companies, including rivals.

In 2017, Choice, one of the largest franchisors globally, representing 7,500 franchisees that collectively generate roughly $10 billion in annual revenues, debuted the crown jewel of its digital transformation: a cloud-native central reservation system called ChoiceEdge. The system was built from the ground up using a variety of microservices on AWS to ensure hotel rooms booked by travel agents, SaaS partners such as Travelocity, and wholesalers are queued and synchronized properly — no easy task given that, because of the finite number of hotel rooms available, reservations have to be handled perfectly, Kirkland says.

“It is the brains of everything — our core system. It is a very complex system, and we were the first company to completely rewrite our reservation system for the cloud from scratch,” Kirkland says. “We are using Java applications to build our logic but also AWS middleware technology in many, many ways across our ecosystem to build Choice Edge. All the logic is still in Java hosted on Amazon’s infrastructure.”

Aside from the core cloud services, Choice also uses Amazon RedShift as a front end to its cloud data warehouse, Amazon SageMaker to build machine leaning models, and Amazon Kinesis to collect, process, and analyze real-time data.

To ensure more sustainable operations, the company’s tech staff also relies on Amazon Lambda’s serverless, event-driven compute services to run code without provisioning servers. It is a significant energy saver that enables Choice to pay for only what it uses.

Choice Edge has been operational for more than five years and the technology team is able to make changes and slipstream in new AWS services with no interruption, a requirement for an always-on reservation system, Kirkland says. 

“It’s been out there for a long time on the cloud and a big part of our migration journey to get everything out of the data center and into the cloud,” he says, adding that he plans to migrate the Radisson system to Edge this year as well.

Choice closed one data center last year and plans to close its second data center in 2023. The company is on schedule to be 100% in the cloud by year’s end, the CIO says.

Making sustainability a key priority

At Amazon’s recent re:Invent conference,  Steven M. Elinson, managing director of travel and hospitality at AWS, highlighted not only Choice’s ability to deliver to its franchisees the cost and scalability benefits of the cloud but also the company’s leadership in making sustainability a unique value for the hotel chain, applauding Kirkland and Choice Distinguished Cloud Platform Architect Shawn Seaton for “working to build a more sustainable future for generations that are yet to come.”

Kirkland, whose work with SustainabilityIT.org underscores his passion about driving more sustainable IT operations across the industry, believes IT is entering a critical moment in time when advances in the cloud and services such as Lambda can help make a difference. But he still knows his core job as an IT leader is delivering business value and insists that CIOs and technologists must try to make use of these services — if not for the environment’s survival, then for their own company’s survival.

“The world has never experienced as much data that is available and readily accessible as it is right now with the cloud and with the technology that exists in today’s world. If you are sitting there doing nothing with it, you’re leaving an untapped opportunity on the table,” Kirkland says.

“I don’t have hundreds or thousands of employees out there building the technology. Amazon does,” he says. “I can use all that data and the cloud technology from Amazon and to do something that drives business value where in the past you couldn’t. To me, that’s the untapped opportunity for every business and every company in the world. That really is going to be a differentiator for the ones that do it well versus the ones that don’t.”

Cloud Computing, Green IT, Travel and Hospitality Industry

Imagine an airport that uses computer vision to track errant luggage in real time, or a commercial kitchen able to detect refrigeration conditions and prevent spoilage. Imagine an amusement park outfitting its rides with sensors that can talk directly to operations for upgraded safety and better guest experiences. Imagine a factory or a chain of retailers reducing energy and cutting equipment downtime. 

These scenarios are not imaginary. They are playing out across industries with the help of edge computing, Internet of Things (IoT) devices and an innovative approach known as Business Outcomes-as-a-Service.[1]

In each case, the company has volumes of streaming data and needs a way to quickly analyze it for outcomes such as greater asset availability, improved site safety and enhanced sustainability. In each case, they are taking strategic advantage of data generated at the edge, using artificial intelligence and cloud architecture. And they’re achieving significant wins.[2]

Here, we explore the demands and opportunities of edge computing and how an approach to Business Outcomes-as-a-Service can provide end-to-end analytics with lowered operational risk.

From the Edge to the Cloud and Back

Computing at the edge and the far edge allows for data to be processed near the point where it’s generated. The speed and volume of data flowing, often in real time, from sensors and other IoT devices, comes with potential for enormous gains in business and operational intelligence. But this advancement also adds complexity. 

Most organizations still need methods for analyzing data at the point of conception so it can be acted upon immediately. Some have managed to derive meaningful, rapid and repeatable business outcomes from their IoT data streams and analytics using Business Outcomes-as-a-Service (Atos BOaaS), developed by Atos, an international leader in digital transformation. Already, Atos customers have reported positive experiences.

“For a retail customer, we’re talking about 66,000 hours saved in maintenance and compliance for maintaining the edge environment, which translates into about 480 metric tons of CO2 saved every year — thanks to automation and end-to-end monitoring,” said Arnaud Langer, Global Edge and IoT Senior Product Director at Atos.

Four Key Benefits of an End-to-End Analytics Service

As many tech and industry leaders are noting,[3] businesses are now prioritizing value and speed to deployment. Outcome-based solutions delivered in an as-a-service model allow companies to realize this rapid time-to-value. 

Those using a turnkey, scalable BOaaS platform are quickly able to manage an entire AI and IoT ecosystem from one dashboard, across the cloud, edge and far edge.[4] The solution allows them to generate value from real-time data using a platform for ingesting, storing and analyzing continuously streaming data. It’s bringing advanced analytics and AI capabilities where they’re needed most – the edge. Already deployed in commercial kitchens and retail chains, on factory floors and at amusement parks, the solution has shown the following benefits.

Value: Increased uptime of critical assets with predictive maintenanceSustainability: Reduced onsite support and carbon footprint with touchless operationsSafety: AI-enhanced computer vision for safer, efficient operationsCost-effectiveness: Full operational expense (OpEx) as-a-service pricing and operational model

For a manufacturer or retailer, for instance, an equipment or IT interruption would typically impact employees, customers and revenue due to the traditionally painful restoration process. But the monitoring BOaaS system reduces downtime by detecting interruptions before they occur so that remediation can happen before the equipment fails, while it is still running, and before any downtime is experienced – and the problem can often be resolved remotely. If immediate remedies are not possible, the system will alert staff then procure and ship a replacement part to arrive on site. Employees can securely connect to the platform and deploy the applications they need via the cloud, minimizing impact to business operations. 

Across industries, data streams often surpass the ability to capture and analyze information. By tapping into hundreds of untapped endpoints and millions of data points that were previously underutilized, the Atos system allows real-time innovations. For example, AI based predictive maintenance and computer vision to monitor all hardware—lowering support costs, decreasing IT complexity and driving decarbonization.

The Technology Behind Business Outcomes

It was a tall order for Atos: Harness the power of data by bringing together hardware, software, and AI in one OpEx solution. 

To most effectively develop BOaaS as a touchless, end-to-end managed service, Atos leveraged the compute and storage power of Dell Technologies. Atos chose Dell Technologies’ Streaming Data Platform[5] for its ability to deliver reliable, fast and secure data pipelines from edge to cloud.

“Using Dell Technologies solutions, we’ve already achieved a 10% reduction in downtime. This can save up to millions of dollars annually,” Langer said. In the future, we expect to triple that to 30% lower downtime, saving untold millions per customer, per location.”

Watch this video to learn more about how Atos and Dell are enabling game-changing innovation at the edge. 

[1] https://atos.net/en/2022/press-release_2022_05_04/atos-launches-innovative-edge-to-cloud-5g-and-ai-enabled-solution

[2] https://atos.net/en/portfolio/accelerate-decisions-with-data-for-better-business-outcomes

[3] https://www.enterprisetimes.co.uk/2022/12/30/business-and-technology-trends-for-professional-services-in-2023/

[4] https://www.engineering.com/story/bring-ai-and-automation-to-the-far-edge-of-the-factory-floor

[5] https://www.dell.com/en-us/dt/storage/streaming-data-platform.htm

IT Leadership

Recently, chief information officers, chief data officers, and other leaders got together to discuss how data analytics programs can help organizations achieve transformation, as well as how to measure that value contribution. We shared our insights at this CIO Online virtual roundtable event, which included leaders from organizations in healthcare, financial services, utilities, communications, and more.

The discussion focused mostly on data management issues and opportunities around “supply” — its quality, ownership, access, and other matters. Supply and consumption are symbiotic principles that together maximize the value of the enterprise data asset. While “consumption” matters are just as critical, getting data supply right is essential to ensuring that data — and the insights it drives — are available and trustworthy.

Our participants report encountering the view that data analytics programs don’t justify the effort to implement and operate them — even as companies spend more on big data and analytics every year. These leaders also struggle to set up metrics that demonstrate their programs’ achievements of transformation objectives.

These two challenges are closely linked: Better metrics on data analytics program value would go a long way toward dispelling the perception that these programs are not worthwhile. In our conversation, we acknowledged that doubts about their worth is a symptom that the business is not equipped to derive full value from the program. It’s a situation that calls for empowering the business to read, analyze, work, and even argue with data — effectively and confidently.

This post summarizes our conversation and describes some strategies we discussed to derive and demonstrate data analytics program value.

A community of teams

Organizations can support data analytics program effectiveness by ensuring that all impacted stakeholders (e.g., business, IT, data management, security, risk and compliance etc.) are engaged appropriately in sustained development and management of trusted data and insights. In other words, treating data and the insights it provides like any other critical corporate asset.

Mark Carson, Managing Director – Data & Analytics Leader at Protiviti, described this sustained engagement model as “a holistic, cross-functional approach that starts, and ends, with business value”; a way of looking at modern data and analytics that resonated with our participants.

In addition to consistent cross-functional engagement, senior leadership buy-in and support is paramount to ensure the organization’s corporate strategy and its data and analytics strategy remain symbiotic in realizing business value. This alignment is essential to any data analytics program because it focuses program efforts on mission-critical transformation.

Arguing with the data

In successful data analytics programs, business users absorb, assess, and act on the data by reading, working, analyzing, and arguing with it.

… Arguing with data? When data owners achieve maximum comfort with analytical tools, when they attain maximum literacy with the data itself, then they will use data “to support a larger narrative intended to communicate some message to a particular audience,” in the words of a formative early paper on data literacy. This is when data analytics programs deliver their greatest value. Empowering the business to argue with data is the highest goal.

Measuring data analytics’ value

Participants shared questions about how to measure data analytics program value. Metrics fall within the governance domain, which is the purview of owners and stewards together.

Lucas Lau, Senior Director – Machine Learning & AI Practice Leader at Protiviti, outlined a list of categories to simplify metrics. Considering only these four dimensions can help leaders simplify the seemingly complex problem of demonstrating value:

How does our use of data analytics increase revenue?How does the data analytics program reduce losses for the business?How is data analytics helping us drive down capital expenditure and operating costs?How are we using data analytics to manage enterprise risk?

Measuring along these dimensions dispels doubts that data analytics programs don’t deliver value. The answers to these four questions help program leaders gain traction: in the absence of doubt, more gets done. The questions offer an additional benefit when they generate new ideas about further advantages a data analytics program could deliver.

Gaining momentum through early wins

Early wins provide momentum as well as a foundation from which teams build a sense of community and confidence. As organizations acknowledge that business transformation is not a project, but an ongoing process, the confidence-boosting, competence-building experience gained via early wins provide the basis for ongoing tracking of achievements and corrections to data-driven decisions as needed.

The power of the roundtable

Leaders can help their data analytics programs deliver value by articulating the data ownership role for the business community. Then, they can measure program value along the lines of increased revenue, reduced losses, lower costs, and better-managed risk. They can focus on early wins that build team confidence and competence as the foundation for ongoing program effectiveness.

The ideas we generated together highlight what can happen when a community of leaders discusses barriers to success in a confidential environment. We thank CIO Online for the opportunity to meet with and advise the leaders who joined us for this roundtable.

Connect with the authors:

Mark Carson

Managing Director – Data & Analytics Leader at Protiviti

Lucas Lau

Senior Director – Machine Learning & AI Practice Leader at Protiviti

Analytics, Business Intelligence

By Hock Tan, Broadcom President & CEO

In October I shared my thoughts about what a combined Broadcom and VMware will mean for customers. I wrote about the conversations I’ve had to date, the future of multi-cloud, and our philosophy on pricing, and I reiterated Broadcom’s commitment to keeping customers at the center of our business.

Nonetheless, I’ve continued to see questions in press reports about whether we intend to raise prices on VMware products. The answer is simple: No.

Given the continued interest, I wanted to expand on my thoughts about the pending transaction and share more on how Broadcom will support VMware customers and innovate VMware products once the transaction closes.

Building on Our Commitment

It’s important to remember that Broadcom is an engineering-first company. Our commitment to innovating leading-edge technology, ensuring successful deployments of our solutions, and delivering value for our customers is what drives our growth.

The addition of VMware will further Broadcom’s commitment in each of these three areas.

Our business model is predicated on adding long-term value to our products and improving them over time. Following the transaction’s close, we’re going to focus on making VMware’s products better for all of our customers, including enterprise customers who want products that are even easier to use. And, to be clear, we intend to continue serving customers of all sizes. VMware has a robust partner ecosystem that we will build upon to help us serve even the smallest companies. In short, we plan to take a “no customer left behind” approach.

Innovating for Success

How will we spur higher growth and drive customers of all sizes to buy more VMware products than ever before? We’ll do it the way we’ve always done it: through our laser-focus on execution and innovation.

Broadcom has the scale and capacity to invest major resources in R&D innovation and build on VMware’s talented team by recruiting the best engineers — an advantage that has historically allowed us to develop better technology and product solutions than the competition, whether it’s in broadband, ethernet switching, or endpoint protection.

By investing and innovating in infrastructure software and VMware’s broad portfolio — including multi-cloud and cloud-native capabilities — we will bring our customers greater flexibility and deliver new solutions to help them connect, scale and protect their IT infrastructure. 

Post-close, we intend to apply this formula for success by investing in and operating VMware with a concerted focus on growth and innovation, while furthering our track record of delivering consistent, justifiable value with our fairly priced solutions.

Greater Customer Choice

As we look to our shared future, we know what goes into successful customer relationships. We also know that if customers don’t find consistent value in the solutions we deploy, they’ll go elsewhere.

Don’t just take my word for it. IDC highlighted in a recent report that any vendor looking to cultivate successful customer partnerships has to first offer products, support and services that translate into real value.

In the report, IDC shared a comment from a CIO of a large, global financial services company who noted that, “This acquisition is unique, and it makes sense for [Broadcom and VMware] to form one organization that can increase productivity and deliver a more complete customer experience. Together, Broadcom and VMware will give us [customers] more power to modernize and transform our IT infrastructure to meet the needs of an ever-evolving world, ensuring secure, reliable, and flexible, choices.”

This CIO is exactly right. As workloads continue to grow rapidly across environments and multi-cloud options expand, a combined Broadcom and VMware will be focused on giving customers greater choice and flexibility over where and how they run their critical operations. We will invest in and innovate VMware’s products to create the next generation of technology that solves customers’ most complex IT challenges.

To stay updated on the news about the transaction, click here.

Cautionary Statement Regarding Forward-Looking Statements

This communication relates to a proposed business combination transaction between Broadcom Inc. (“Broadcom”) and VMware, Inc. (“VMware”).  This communication includes forward-looking statements within the meaning of Section 21E of the U.S. Securities Exchange Act of 1934, as amended, and Section 27A of the U.S. Securities Act of 1933, as amended.  These forward-looking statements include but are not limited to statements that relate to the expected future business and financial performance, the anticipated benefits of the proposed transaction, the anticipated impact of the proposed transaction on the combined business, the expected amount and timing of the synergies from the proposed transaction, and the anticipated closing date of the proposed transaction.  These forward-looking statements are identified by words such as “will,” “expect,” “believe,” “anticipate,” “estimate,” “should,” “intend,” “plan,” “potential,” “predict,” “project,” “aim,” and similar words or phrases.  These forward-looking statements are based on current expectations and beliefs of Broadcom management and current market trends and conditions. 

These forward-looking statements involve risks and uncertainties that are outside Broadcom’s control and may cause actual results to differ materially from those contained in forward-looking statements, including but not limited to: the effect of the proposed transaction on our ability to maintain relationships with customers, suppliers and other business partners or operating results and business; the ability to implement plans, achieve forecasts and meet other expectations with respect to the business after the completion of the proposed transaction and realize expected synergies; business disruption following the proposed transaction; difficulties in retaining and hiring key personnel and employees due to the proposed transaction and business combination; the diversion of management time on transaction-related issues; the satisfaction of the conditions precedent to consummation of the proposed transaction, including the ability to secure regulatory approvals on the terms expected, at all or in a timely manner; significant indebtedness, including indebtedness incurred in connection with the proposed transaction, and the need to generate sufficient cash flows to service and repay such debt; the disruption of current plans and operations; the outcome of legal proceedings related to the transaction; the ability to consummate the proposed transaction on a timely basis or at all; the ability to successfully integrate VMware’s operations; cyber-attacks, information security and data privacy; global political and economic conditions, including cyclicality in the semiconductor industry and in Broadcom’s other target markets, rising interest rates, the impact of inflation and challenges in manufacturing and the global supply chain; the impact of public health crises, such as pandemics (including COVID-19) and epidemics and any related company or government policies and actions to protect the health and safety of individuals or government policies or actions to maintain the functioning of national or global economies and markets; and events and trends on a national, regional and global scale, including those of a political, economic, business, competitive and regulatory nature.

These risks, as well as other risks related to the proposed transaction, are included in the registration statement on Form S-4 and proxy statement/prospectus that has been filed with the Securities and Exchange Commission (“SEC”) in connection with the proposed transaction.  While the list of factors presented here is, and the list of factors presented in the registration statement on Form S-4 are, considered representative, no such list should be considered to be a complete statement of all potential risks and uncertainties.  For additional information about other factors that could cause actual results to differ materially from those described in the forward-looking statements, please refer to Broadcom’s and VMware’s respective periodic reports and other filings with the SEC, including the risk factors identified in Broadcom’s and VMware’s most recent Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K.  The forward-looking statements included in this communication are made only as of the date hereof.  Neither Broadcom nor VMware undertakes any obligation to update any forward-looking statements to reflect subsequent events or circumstances, except as required by law.

No Offer or Solicitation

This communication is not intended to and shall not constitute an offer to buy or sell or the solicitation of an offer to buy or sell any securities, or a solicitation of any vote or approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  No offering of securities shall be made, except by means of a prospectus meeting the requirements of Section 10 of the U.S. Securities Act of 1933, as amended.  

Additional Information about the Transaction and Where to Find It

In connection with the proposed transaction, Broadcom has filed with the SEC a registration statement on Form S-4 that includes a proxy statement of VMware and that also constitutes a prospectus of Broadcom.  Each of Broadcom and VMware may also file other relevant documents with the SEC regarding the proposed transaction.  The registration statement  was declared effective by the SEC on October 3, 2022 and the definitive proxy statement/prospectus has been mailed to VMware’s stockholders. This document is not a substitute for the proxy statement/prospectus or registration statement or any other document that Broadcom or VMware may file with the SEC.   INVESTORS AND SECURITY HOLDERS ARE URGED TO READ THE REGISTRATION STATEMENT, PROXY STATEMENT/PROSPECTUS AND ANY OTHER RELEVANT DOCUMENTS THAT MAY BE FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THESE DOCUMENTS, CAREFULLY AND IN THEIR ENTIRETY IF AND WHEN THEY BECOME AVAILABLE BECAUSE THEY CONTAIN OR WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.  Investors and security holders may obtain free copies of the registration statement and proxy statement/prospectus and other documents containing important information about Broadcom, VMware and the proposed transaction, once such documents are filed with the SEC through the website maintained by the SEC at http://www.sec.gov.  Copies of the documents filed with the SEC by Broadcom may be obtained free of charge on Broadcom’s website at https://investors.broadcom.com.  Copies of the documents filed with the SEC by VMware may be obtained free of charge on VMware’s website at ir.vmware.com.

Participants in the Solicitation

Broadcom, VMware and certain of their respective directors and executive officers may be deemed to be participants in the solicitation of proxies in respect of the proposed transaction.  Information about the directors and executive officers of Broadcom, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in Broadcom’s proxy statement for its 2022 Annual Meeting of Stockholders, which was filed with the SEC on February 18, 2022, and Broadcom’s Annual Report on Form 10-K for the fiscal year ended October 31, 2021, which was filed with the SEC on December 17, 2021.  Information about the directors and executive officers of VMware, including a description of their direct or indirect interests, by security holdings or otherwise, is set forth in VMware’s proxy statement for its 2022 Annual Meeting of Stockholders, which was filed with the SEC on May 27, 2022, VMware’s Annual Report on Form 10-K for the fiscal year ended January 28, 2022, which was filed with the SEC on March 24, 2022, a Form 8-K filed by VMware on April 22, 2022 and a Form 8-K filed by VMware on May 2, 2022.  Other information regarding the participants in the proxy solicitations and a description of their direct and indirect interests, by security holdings or otherwise, are or will be contained in the proxy statement/prospectus and other relevant materials to be filed with the SEC regarding the proposed transaction when such materials become available.  Investors should read the proxy statement/prospectus carefully before making any voting or investment decisions.  You may obtain free copies of these documents from Broadcom or VMware using the sources indicated above.

About Hock Tan:

Broadcom Software

Hock Tan is Broadcom President, Chief Executive Officer and Director. He has held this position since March 2006. From September 2005 to January 2008, he served as chairman of the board of Integrated Device Technology. Prior to becoming chairman of IDT, Mr. Tan was the President and Chief Executive Officer of Integrated Circuit Systems from June 1999 to September 2005. Prior to ICS, Mr. Tan was Vice President of Finance with Commodore International from 1992 to 1994, and previously held senior management positions with PepsiCo and General Motors. Mr. Tan served as managing director of Pacven Investment, a venture capital fund in Singapore from 1988 to 1992, and served as managing director for Hume Industries in Malaysia from 1983 to 1988.

IT Leadership

If you’re looking to accelerate your organization’s digital transformation, the good news is that there are some proven principles you can apply. By employing Value Stream Management (VSM), some top enterprises are now better positioned to speed their transformation—and seeing multimillion-dollar savings as well.

If you’re not familiar with this concept, the basic premise is this: Through VSM, executives gain the visibility to align teams, workflows, and investments around one key aspect: customer value. In the process, they can break down the silos that stifle digital transformation. Following are a couple of real-world examples of what this means for leading enterprises.

Here are some highlights from a new Harvard Business Review Analytic Services Report, sponsored by Broadcom.

The Boeing Company

One of the world’s largest aerospace companies, The Boeing Company has been employing VSM for several years now. Through VSM, they optimized resource utilization and reduced waste.

“We always thought we were doing a good job of producing value until we started to work through this,” explained Lynda Van Vleet, Boeing’s portfolio management systems product manager. “In our first two years, we saved hundreds of millions of dollars. But that wasn’t our goal. I think a lot of organizations look at this as a way of saving money because you usually do, but if you start out looking at it as a way of creating value, that just comes along with it.”

The organization changed legacy approaches to product management and project investment. This enabled them to speed up their ability to innovate and pursue digital transformation. They created cross-functional teams that empowered employees to spend more time and effort on delivering customer value.

By establishing cross-team visibility, leaders were able to spot redundancies. For example, they saw how different IT organizations had their own analytics teams. “We had people in every organization doing the same thing,” explained Van Vleet. Boeing’s executives established a single analytics team to realign the work more efficiently and improve consistency.

Verizon

A multinational telecommunications company, Verizon offers another example of the power of VSM. Through their VSM implementation, they also gained advantages that translated to multimillion-dollar cost savings.

As Jason Newman, senior manager, systems engineering, Connected Solutions Group strategy and operations at Verizon, revealed to HBR, “We had some siloed organizations, and everything worked great within the silo, but as the company introduced products that crossed boundaries—the method of everyone focused on their own space wasn’t cutting it.”

By implementing VSM, the team has been able to foster the free flow of information across teams and gain dramatically improved visibility into value streams. Leaders have acquired deep information that has fueled more accurate, data-driven decisions about governance and staffing. 

VSM equips executives with the information needed to understand the impact of strategy shifts, including who is affected and which strategic goals might be jeopardized. Now, when executives are contemplating strategic changes, VSM gives them the information to quickly understand “who is impacted and which strategic goals might be jeopardized,” Newman stated. “Just the efficiencies gained from governing and staffing were multimillion-dollar cost savings.”

Conclusion

By employing VSM theories and tools, teams around the world are realizing massive benefits. To learn more about how some top enterprises have made VSM work in practice, be sure to read the briefing paper from Harvard Business Review Analytic Services, “Using Value Stream Management to Speed Digital Transformation and Eliminate the Silos.” Sponsored by Broadcom, this report features the insights of industry analysts and expert VSM practitioners, who share some of the key lessons drawn from successful VSM initiatives. You can also visit ValueOps by Broadcom to learn more about the benefits and how to get started with VSM.

_________________

Explore ValueOps Value Stream Management, built to manage what you value most. 

Digital Transformation

The cloud offers limitless scalability and flexibility, powering digital transformation across every industry. But when not managed strategically in the long run, cloud spending can quickly escalate and impact margins, cost of goods sold (COGS), and cost of revenue (COR).

To optimize cloud investments, C-level executives are increasingly adopting cloud financial operations (FinOps). This framework positions organizations to manage their cloud investments more effectively, driving increased accountability to maximize business value. In this article, I’ll explore common cloud optimization and FinOps challenges and strategies for overcoming them.

1. Cloud usage & costs

Most enterprise companies have shared infrastructure, and managing cost allocation across marketing, HR, accounting, and other departments can be tricky. How they handle this depends upon the business-unit driver and the organization’s culture, typically defined at the C-level.

The business unit must tie back to the key performance indicators (KPIs) associated with the domain and the objectives and key results (OKRs). Managing and aligning cost allocation to the business unit requires real-time visibility and reporting around cloud costs and usage, with cost allocation constructs aligned to departmental needs. Organizations must examine shared resources, storage costs, network costs, platform services, monitoring, logging, and licensing. Then they must choose a financial model, whether an even split, fixed, or proportional model.

From a strategic perspective, some organizations set up executive sponsorship focusing on the FinOps maturity model and decision framework. Others start with a FinOps maturity assessment, establishing an actionable roadmap that defines the FinOps domain and organization roles and objectives, all aligned to business spending, efficiency, transparency, and compliance.

2. Performance tracking and benchmarking

When it comes to performance tracking and benchmarking, organizations frequently face challenges around resource utilization and efficiency. Utilization and efficiency provide vital insights for understanding the business value of expenses incurred. However, it can be challenging to measure the business value associated with each type of cloud resource based on performance, availability, and other factors.

Overcoming these challenges goes back to KPIs and OKRs. Organizations must define and track KPIs that meet efficiency and utilization objectives and deliver value-creation. For example, if the goal is to reduce hot storage, a KPI must be defined to meet the efficiency objective and deliver value creation—and it must be measured. This requires adopting the right FinOps tools, processes, and people.

3. Real-time decision making

A framework and accountability structure form the foundation for real-time decisions around usage, costs, and performance to meet organizational goals. However, establishing a FinOps decision framework and accountability structure can pose a challenge, particularly for those organizations with low FinOps maturity.

The organization must first perform a maturity assessment to understand the role of FinOps within the context of the overall organization. Once in place, the organization can develop and assign a repeatable process that enables real-time decision-making to a center of excellence, steering committee, or governance structure, depending upon the organization.

4. Cloud rate optimization

In this domain, organizations define and adjust pricing model goals based on historical data and make purchase decisions based on goals and discounts being offered—all to optimize cloud spending. Cloud service providers provide slightly different offerings with unique embedded discounts – some providers have computer unit discounts, and some have utilization-based pricing.

As a result, organizations often face challenges around data analysis, show-back, and managing commitment-based discounts. To address this, many enterprises use a KPI-driven, hybrid-cloud purchasing strategy to align their commitment period with infrastructure workload characteristics and lifecycle. This strategy aligns well with the concept of a smart cloud.

5. Cloud usage optimization

Dynamically matching cloud resources to demand to optimize cloud usage and ensure sufficient business value can also pose challenges.

That’s why organizations increasingly implement automated workload management solutions that match running resources to workload demand, scaling, de-scaling, and even turning off unused resources in real-time to maximize ROI while minimizing the TCO. Business-driven KPIs and OKRs help organizations define outliers and set the thresholds that inform alerts and actions.

6. Organizational alignment

FinOps capabilities are embedded within organizational processes and units, and often, this is where companies fail at FinOps. Unfortunately, many start with technology (tools) instead of organizational alignment, creating conflicts and challenges around policies, governance, and areas of responsibility.

Organizations must establish a FinOps framework at the C-level, complete with policies, processes, best practices, and a playbook that help ensure organizational alignment and buy-in. Once aligned, organizations can harvest the benefits of FinOps including:

Centralized smart-cloud cost managementAlignment to and accountability of cloud roles and usersImproved confidence and accuracy around budgets and forecastsAdvanced communication throughout the organization, creating a FinOps culture

Improve cloud optimization and FinOps maturity

As data volumes and usage grow, cloud FinOps enables organizations to manage cloud investments more strategically, efficiently, and cost-effectively. Understanding FinOps maturity can help organizations identify and resolve trouble areas to improve cloud optimization and accelerate business outcomes.

GDT can help your organization improve cloud optimization and FinOps maturity. By engaging with GDT, you’ll get a portfolio-level analysis of your FinOps maturity, along with cloud service optimization opportunities and recommendations to help you maximize spend efficiency, reduce cloud costs, and develop strategies for proactively and dynamically managing future expenses and utilization.

Contact the experts at GDT to learn more about improving cloud optimization and FinOps maturity.

Cloud Management

Sanjib Sahoo left his small hometown in India as a young man to pursue a career in transforming businesses. It’s a journey that took him across the globe and across industries, ultimately leading him to his current role as the award-winning chief digital officer and executive vice president of Ingram Micro, a $54 billion Fortune 100 company operating in 200 countries.

When we spoke for an episode of the Tech Whisperers podcast, Sahoo opened up about his fascinating leadership path and experiences, the highs and lows, and how he’s persevered by “seeing the opportunity in the possible, not the obstacle in the impossible.” He also discussed the backstory of Ingram Micro Xvantage, the industry-disrupting AI digital experience platform his organization had recently launched, and what it took to go from big, bold vision to launch in just 15 months.

Afterwards, we unpacked more of the skills, thinking, and attributes that have enabled Sahoo to build a remarkable career as a transformative and inspiring technology executive and business leader who consistently creates and delivers tangible value. What follows is that conversation, edited for length and clarity.

Dan Roberts: You advise people to follow the mantra, be your own CEO, and also to have the lens of a ‘chief value officer.’ What do you mean by that, and why is it important?

Sanjib Sahoo: Being your own CEO means taking accountability, holistically, for everything you do. It can be a piece of code. It can be multiple programs. It can be anything. Wake up every morning and think, I am the CEO of this. Do not wait for others for your success. Take accountability, take charge, reduce all obstacles.

When you do that, regardless of your title, your responsibility will keep increasing. If you are a really good ‘CEO’ of A, however small A might be, you will become the CEO of A plus B, and eventually of A plus B plus C. This will take your career higher, but you have to start by doing A well, taking that full accountability, before you can get there.

I believe in taking accountability for actions. Title doesn’t matter. CEOs take action. The results are not always in their hands — the market changes, everything happens — but the best CEOs have a bias for action. Each one of us can be our own CEO, take accountability, take action, and do not wait for the result.

And then, when you put all of this in the lens of a chief value officer to focus everything on value — tangible value, intangible value — that’s when technology is valuable. Because shiny technology without value is completely pointless. Technology keeps changing all the time. We cannot run behind technology. Focus on problem solving and solutions. That’s what being a chief value officer and your own CEO will teach you.

Today, the lines have blurred. Everybody has to be a full-stack professional. So you have to have the emotional and cultural intelligence as well as the business acumen and technology prowess. When you match them all together, you will become a true value-generating CEO. It doesn’t matter what title or scope you have. If you keep doing it every single day, you’ll be tremendously successful.

What’s your secret for communicating the art of the possible and getting a diverse set of stakeholders to take these big journeys with you?

Communication is very important in today’s world of leadership. It has to be situational. You cannot have the same tone of communication in every single meeting or situation. You need to figure out your communication between push and pull. Sometimes you have to push; sometimes you have to pull the spirit out.

I also like to say that you have to communicate with compassion but execute with passion. We need to focus on relentless execution, that is a given. But when you communicate, communicate with compassion: Understand perspectives, use the art of storytelling, focus on why, keep the customer first, understand how you can make your peers successful. Those are all very important, and people will listen to you.

What would you say to someone who’s more introverted and not as comfortable in this area? How can they build up their communication confidence?

I was an introvert. Many years ago, I was too shy to even talk to people. Was I a natural at this? Absolutely not. But it’s all in the mindset. These are taboos within our mind: I am like this. I cannot do this. It’s not possible. That’s where the art of possibility comes in. Don’t focus on limiting your challenges; challenge your limits. Because there’s only one difference between extraordinary people with extraordinary results and ordinary people with ordinary results: mindset.

Leadership used to be all about being perfect. Today, leadership is about being vulnerable. It’s about admitting your mistakes, asking for help, asking for your team to bail you out of situations, collaborating together. That makes you a better leader, to your team, to your peers, because that makes it more real.

So don’t try to be perfect. Try to be practical. Try to be humble. Try to have a perspective. And all of this should be in how you communicate. I believe in leading through your ears more than through your mouth. I learn from listening to people and I learn from employees. Many times, we tell them what to do versus listening and then making a judgment.

What are some of the other skills required to be successful as a top IT leader today?

Number one is clarity of vision and understanding business models. You have to really understand how the business works, how our customers interact, how the company makes money, how to read a balance sheet. Business acumen is extremely important.

You shouldn’t be in your cubicle doing coding or technology only. You need to become a business leader, not only a technology leader. Today, technology is the business. So you need to know how to connect with your stakeholders and your employees, how to disrupt and have the mindset to take some risks, and how to transform your business.

Number two is communication and those emotional intelligence elements, like collaboration and social skills. You have to build relationships. Every company has an informal communication network. The first thing I did here was to understand, what is the informal communication network and who are the influencers in the company that drive change. Build relationships with them. Be friends with them, understand what connects with them. When your communication connects with the heart of employees, that’s how you drive change, not by new cloud technology.

Number three is bias for action. The world is moving at a very high speed. Many times, we have a plan, but we don’t challenge ourselves enough. Having this bias for action and embracing challenges is very important to keep your team driving ahead. Combine this with always focusing on the art of possible versus impossible.

Number four is a balance between pushing and pulling — how much you push your team versus how much you pull. You have to find that fine balance of being pragmatic but also being aggressive.

You also need to be a talent magnet. To do that, you need to have what I call the CxO ‘X factor,’ where you create professional intimacy in a way that gravitates people towards you. They want to work with you and believe in you, trust you. That pull is very important to drive technology digital transformation.

And you should know how to roll up your sleeves and go into the details, because if you cannot do a job, you cannot expect your employees to do it. To earn respect, you need to show them the way and be in the details.

Lastly, always focus on connecting all the dots, keeping the business and customer in mind.

Given how fast things move today, what should technology leaders be doing to make sure their businesses capture new opportunities and stay innovative?

You cannot wait to be transformative. You have to look at opportunity gaps. If you don’t have bias for action — constantly, ongoing — then there’s a risk of disruption. So many companies have disappeared from the Fortune 500 list. What works today will not work tomorrow.

Before, risk was bad. Today, calculated risk is innovation. And calculated risk comes from bias for action. Try out things in small pieces, through that lens of the chief value officer, as I noted earlier. If you fail, you fail fast and then you keep on repeating.

I use the term shrink wrapping for value creation. If you have a lot of time, you can execute a program, but the market might change. So you’re always paranoid about waking up one day to find out somebody has disrupted your business. Either you can live in the paranoia, or you can start disrupting your own business every day. And that is the bias for action. You need to start disrupting your own company, every single day.

For more business and technology leadership insights from Sanjib Sahoo, tune in to the Tech Whisperers Podcast.

CIO, IT Leadership

For many of today’s IT teams, there’s a common, recurring question that keeps being posed: Why are we doing this?

This question is fundamental, some may say basic, but it is often one that teams don’t get good, solid answers to. Further, this speaks to a broader lack of visibility and insight. Among the many potential initiatives considered, why was the current one selected? At a higher level, what’s the reasoning behind the relative staffing and budgeting priorities across products, support, and operations? Why do some teams have ample resources, while others are running lean? Even worse, what if teams find out that they’ve been wasting significant time on a “zombie” project, that is, one that’s lost executive sponsorship? For example, weeks after an executive departed, teams may find out there’s no longer support for an initiative they’ve dedicated significant effort to, and that it is going to be shelved before it ever sees the light of day.

When teams are wasting time focusing on zombie projects or they’re operating in the dark in terms of how their efforts map to business priorities, their productivity, morale, and results can all suffer.

This underscores why instituting Value Stream Management (VSM) is such a vital endeavor.

Simply put, VSM is about maximizing the delivery of value to customers. Through VSM, teams seek to ensure they’re properly funding, defining, aligning, measuring, and optimizing value streams.

VSM can provide leaders with transparency into the work that’s being done and how that aligns with their investments. Further, VSM is about bridging the gap between business and IT.

Through VSM, development teams and their management can gain better insight into the purpose of their work, and how it translates into value for customers and the organization.

VSM platforms can be integral in realizing this potential. VSM platforms can help teams manage work and investments across the enterprise. Not only can work be seen from a top-down view but also from a bottom-up perspective. This is beneficial for many different reasons. At the most basic level, teams that understand why they are being asked to work on a particular initiative will have a higher level of engagement and commitment to making that initiative a success.

More practically, the understanding of how work aligns with the organization’s strategic goals allows project teams to make more informed decisions on the approach to use, the way to overcome problems, and so on. In an agile environment, where success is dependent on empowered teams, that level of transparency is critical.

Transparency isn’t just important to the teams doing the work either. PMOs and related support functions have to ensure the effective use of resources, and that means delivering the best possible combination of business outcomes. Only when they can view the end-to-end integration of work — from goal, to investment decision, to work plan — can they intelligently make those prioritization and scheduling choices. The same holds true for product owners. Their focus is different than the PMO, but they must translate business vision into technical priorities, and that can only happen with end-to-end transparency.

Advanced VSM platforms can represent a solution for teams across the enterprise. From IT to business executives, these platforms can support planning, decision making, investment, and resources management. Through VSM platforms, teams can stop operating in the dark, and they can avoid having to waste time on zombie projects.

To learn more about ValueOps, the VSM platform from Broadcom, be sure to visit our ValueOps VSM page. Find out how you can deliver more value to your customers and gain increased visibility and alignment in your organization.

Explore ValueOps Value Stream Management, built to manage what you value most.

Collaboration Software

While the benefits of Value Stream Management (VSM) are significant, many organizations are struggling to realize its full potential. 

To examine why, we’ve collaborated with the VSM Consortium on a new report, “The State of Value Stream Management 2022.” This report draws on an extensive survey to reveal where organizations are in their VSM journeys and some of the hurdles they face. According to the report, two-thirds of organizations have been actively engaged in earlier phases of the journey, but only one-third have made it to the latter stages of the process. What’s holding them back? In the sections below, I’ll take a look at a few of the top obstacles confronting teams today, and offer some strategies for overcoming these impediments.

Obstacle 1: Resource constraints

When asked about barriers to VSM adoption, “No resources for this” was the top-rated answer, receiving about 20% of responses. Teams making this comment were referring to skills, budget, and time.

Like any strategic initiative, VSM requires time and money to be invested. However, through these investments, teams can see near-term gains and establish the optimization that yields compounding benefits over time. 

Obstacle 2: Lack of focus

Eighteen percent of respondents said their VSM barrier was that “we have too many other active change programs.” This is understandable. VSM follows on the heels of other large-scale changes, particularly moves to adopt lean, agile, and DevOps.

The reality is that VSM shouldn’t be seen as additive, as yet another initiative that needs to be supported, detracting from these other priorities. Instead, VSM needs to be viewed as an enabler, an approach that fuels more effective alignment around strategic endeavors and attainment of better business outcomes. 

Obstacle 3: Lack of leadership

When asked about obstacles they were confronting, a significant percentage of respondents indicated that “We don’t have leadership buy-in” (15%) and “We don’t have anyone to lead the effort” (11%). This is a logical symptom of the lack of resources many teams are wrestling with.

The lack of executive buy-in leaves teams without the resources they need and that includes leaders who can help direct VSM efforts.

To combat these obstacles, leaders need to be engaged and educated about VSM and why it’s an imperative, including: opportunities, steps required, and payoffs. Only after this happens can leadership be brought to bear in terms of the investments and prioritization required.  

Obstacle 4: Tool proliferation

In the survey, 9% of respondents said tool proliferation is an obstacle to VSM adoption. Rather than being viewed as another tool that compounds these existing problems, VSM platforms can be the integral solution that enables teams to optimize the investments that have already been made. By effectively implementing VSM platforms, teams can create a common language and leverage trusted data to fuel cross-team visibility and insights.

That’s why there’s such momentum behind the move to adopt VSM platforms. The survey found that, between 2021 and 2022, the percentage of respondents piloting, implementing, or considering VSM platforms increased from 6% to 36%.

Conclusion

Although there are undoubtedly obstacles, the reality is that many teams are making major strides. For example, the survey found that 70% of respondents are now connecting flow metrics to business results, which is an integral part of building alignment between business and technology teams.

Visit ValueOps VSM to find out how you can begin to deliver more value to your customers and gain increased visibility and alignment in your organization. 

Digital Transformation

The Keys to Become a Data-Driven Organization

Only 26.5% of organizations say they’ve reached their goals of becoming a data-driven organization, according to NewVantage Partners’ Data and AI Leadership Executive Survey 2022. Astonishingly, this leaves three-quarters of those surveyed indicating they’ve not met their goals in this area.

Fortunately, there are some bright points on the horizon. A recent Gartner survey says 78% of CFOs will increase or maintain enterprise digital investments. And Gartner forecasts worldwide IT spending will grow 3% in 2022. Further, a Gartner CDO survey indicated top-performing CDOs are significantly more likely to have projects with the CEO, and they engage in value delivery rather than enablement.

While this is great progress, perhaps one of the most important points of agreement is how to balance business value creation with risk and compliance mandates.

Business value creation vs. risk, security, privacy, and compliance

For many organizations, the conversation of balancing business value and security is cast through industry regulations. But it remains important for organizations to truly understand and agree on how and where you define your stance.

The crux is there’s no one size that fits all. But there are universal ways to mitigate risks and meet compliance mandates. For instance, if the use of PII data in certain analytical scenarios isn’t allowed, that doesn’t imply you should scrap the analytical project. You can mask or remove PII-related information and continue with your analytical projects.

Defining the value created from data is fairly nuanced. Many companies struggle to agree on a unified lens through which to view their data’s value. To simplify, your organization can view your data through the filter of four categories:

Direct attributed revenueIndirect attributed revenueCost savings and optimizationRisk and compliance failure avoidance

Balance data democratization and security at scale

Once your organization has defined guidelines and policies on how to treat regulated data, the biggest challenge is to enforce those policies at scale. A comprehensive data security and access governance framework can go a long way to help you frame your approach.

Perimeter-based security: In an on-premises world, your network is the gateway to the kingdom. If you lock that down, you may have the pretense of safety from the outside world. Internally, though, there’s still full access. The challenge is even larger in the cloud.Application security: The next level of defense is to provide authentication for accessing applications. In this model, getting access to the network only gets you so far unless your credentials allow you access to the application you’re trying to use.Data security: The last mile of your defense is data security. If someone gets through all the security layers, for example, you can still ensure access. Privacy is defined at the data level, so only authorized data is visible. Making sure fine-grained data access policies—as well as data masking and encryption—are applied down to the file, column, row, and cell is one of the most powerful ways to strengthen your security posture.

Enforcing these security protocols across your entire data estate is a massive challenge. And you can’t scale if executed in a siloed piecemeal fashion.

Universal data security platform

One of the emerging patterns for modern data infrastructure is that data governance and security processes need to become a horizontal competency across your entire data estate. This requires one of the most important C-suite dialogues between the CISO, CDAO, and CIO, since co-ownership across these groups is essential.

Universal data security platforms provide a central policy control plane that natively synchronizes policies into each distinct data service. Policies are created once and deployed everywhere. In addition, it provides a single view into your data estate, sensitive data locations, policies applied, and access events. Privacera works with Fortune 100 and 500 companies to reach their data security goals, including federal agencies and myriad types of enterprises across sectors. For example, Sun Life Financial teamed up with Privacera to secure and streamline their cloud-migration process, while seamlessly leveraging existing investments thanks to the open-standards framework. For more information on how to start or continue your data security journey, contact Privacera’s Center of Excellence.

Data and Information Security