Blog

Artificial Intelligence: Legal, ethical, and policy issues

Artificial Intelligence Legal, ethical, and policy issues

Image from Wikimedia

Artificial intelligence has entered mainstream consciousness surrounded by marketing hype, jargon, inflated expectations, and fear. Given the importance of AI, we have started a new series of CXOTALK videos, speaking with experts in areas such as technology, data science, ethics, and public policy.

This series kicks off with episode number 203 of CXOTALK and a conversation between one of the top legal experts in the world on AI ethics and a respected expert on public policy.

Kay Firth-Butterfield is an attorney, author, judge, and public speaker on topics related to AI and ethics. Kay’s experience in this field is quite amazing as you can see on her LinkedIn page. David Bray is a frequent guest on CXOTALK. He is an Eisenhower Fellow, Visiting Executive In-Residence at Harvard, and Chief Information Officer at the Federal Communications Commission.

The conversation offers a fascinating look at the implications of AI for society. It explores issues such as the speed of change due to advances in computing technology; loss of control and privacy; job destruction due to automation; and advice on law and public policy related to technology and AI.

The video embedded below is a summary of the entire 45-minute conversation. You can watch the entire video and read a complete transcript at the CXOTALK site.

Here is an edited version of the transcript taken from this summary video:

Why should we care about the legal, policy, and ethical issues of AI?

Kay Firth-Butterfield: One of the things that stick out in my mind is some research that McKinsey did recently, where they describe AI as a contributing factor to the transformation of society. And I just want to quote what they’re saying about the transformation of our society: that it’s happening ten times faster, and at three hundred times the scale, or roughly three thousand times faster than the impact of the industrial revolution. And you know, a lot of people compare this revolution to the industrial revolution. But, I think it’s the speed and the real, core underpinning that AI is contributing to that transformation of our society that makes these discussions so important.

David Bray: It’s not just about handing over judgment and decisions to a machine that a human would do otherwise. It is about the loss of a locus of control, either a loss of a locus of control for the individual. So, when you’re in an autonomous car, you know, you are not driving; the car is driving unless you have the ability to stop within milliseconds that might not be possible. It’s really about are we handing over control to an entity that we are willing to trust that will be as fair, if not fairer than a human. And that’s where it gets to what Kay said with Europe.

So, I think it’s just the scale at which it may be used, and the scale and the impacts of the decisions. There’s always been the ability to tailor your experience even before the Internet regarding what services were provided to you. People were making sense by hand what things you should receive in the mail regarding ads, or what was called “automated data processing in the 1970’s.

Privacy laws came back in the 1970’s when you started doing automated data processing. And again, these machines were nowhere near as fast as what we have today, but that somehow there could be a correlation of “This person lives at this address; they’re getting this type of heart medication; they also are on this type of insurance.” At what point do you need to say, “Well, those are correlations you shouldn’t draw unless that person is giving consent?” So I think artificial intelligence, much like those things that came before, it’s just the scale and the impact of what this machine might be able to make decisions that will impact your life will be. So you’re right it’s the same trend. But, I think it’s the sheer scope and impact that I think we need to take into consideration.

Are scale and pervasiveness the driving forces?

Kay Firth-Butterfield: Obviously, you know the seminal quote from Stephen Hawking on the first of May, 2014, when he said that this could be the best thing that we’ve ever done or our last. And I think that captured the attention of the media. And where there were lots of us thinking about these things before, it’s become so much part of a more public conversation now.

That’s a really important thing. One of the questions we have been talking about is taking some control for ourselves as individuals. And unless we empower people to do that through education, then people are not going to be able to take back that power. And so, and also I think that there’s an issue with what we’re seeing in social media at the moment. I have seen a lot on Twitter in the last two days that people are saying, “Oh well move. We have to defend our privacy.” And there’s a lot of fear of surveillance ─ switching to Tor and more secure uses of email and things like that. That is not a positive sign for the way that some people in our society are thinking about artificial intelligence.

What about robots, jobs, and the impact on people?

Kay Firth-Butterfield: AI, in my view, is a technology that will benefit mankind or humankind enormously. And, there are some great challenges that we have as humans and for our planet that we really can’t solve without AI. And so, we certainly don’t want to see a groundswell of opinion against AI by people who are losing their jobs to it. We’ve all read the Oxford Martin study, and the Bank of America [Merrill Lynch] study that says that 47% and I think 52% of jobs in America currently done will go to automation in the next 15 or 20 years. But we have to think about the complexity of job loss because we don’t know what the future jobs are going to be. But what we do know is that as people lose their jobs, and some think that hasn’t been done in the past, we need, and can use AI to retool and re-skill those that workforce to create the jobs of the future.

David Bray: As jobs are lost because they can be automated, what do we as society owe those people whose jobs have been displaced, to help them retool, retrain as best as possible for something else. And the jury is out as to whether more jobs will be created vs. destroyed as a result of artificial intelligence. So, we need to monitor them and be aware of it. We must also be aware of there is what’s called the “unemployment effect” on people’s health, which is we humans need to have a purpose. And so, a future in which we don’t need to work because artificial intelligence is doing everything may not be a nirvana as it sounds like because we won’t find purposes. Or we may find purposes in avocations as opposed to vocations. But that’s a collective conversation we need to have, which is, “Where are we going together as a society? How can we make sure we bring as many people along?” As Kay said, ideally make it so they’re not as fearful of artificial intelligence.

Kay Firth-Butterfield: As a historian by background, I worry about the analogies with the industrial revolution because the industrial revolution hurt a lot of people over a long period. And yes, we came through it and we developed something better. But, it looks as if this industrial revolution will be much faster, and we need to prepare not to hurt as many people very quickly.

David Bray: So Kay’s right. It’s going to happen in a much shorter period. It may be as big if not bigger change. And so, having again that conversation about what do we, as a society, owe each other is key to have now because we don’t know! And none of us know if the job we’re currently doing today in two or three years will be done better by machines.

What advice do you have for people writing laws?

Kay Firth-Butterfield: Well I think the advice to lawyers is that very soon, you will be receiving… You will see those cases coming across your desk, and you need to get up to speed around artificial intelligence. And, what’s going on in artificial intelligence now, I think just going back to that job creation thing, there are going to be a lot of jobs around, so we’re not going to kill all the lawyers by automating them just yet because we are going to see experts needed in court. For example, instead of cross-examining a driver, we might have to cross-examine an algorithm, a.k.a. an expert on the system. If you are in any business, you need to be looking at what AI can do for you, and what the impact of AI will be on your business. So there are two pieces of that because I genuinely believe that AI will change everything. And if you don’t start looking now, you will be too far behind.

How about advice for policymakers?

David Bray: Cloud computing in some respects is the appetizer, artificial intelligence and the Internet of Everything is going to be the main course that we’re going to be consuming over the next five years. And, I don’t know if I can necessarily give advice necessarily to policymakers, but I’ll say what Kay said. Any organization and any entity should recognize that this will disrupt how you operate and it’s a question of whether or not you are very intentional about it. Or, someone else is going to do it to you. So, start on that journey now. Start having conversations.

There’s one thing I want call out, looking at the OpenAI effort and other efforts that are trying to make this open and available to people. Try to either begin experimenting or if you don’t have the time to experiment, maybe have some of your employees begin to experiment with what’s possible. Because we’re only going to get the expertise we need to know in this era through the experiments that we need to do with artificial intelligence.

Please see the list of upcoming CXOTALK episodes. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)

Digital experience and white glove customer service at Brooks Brothers

 

The Brooks Brothers clothing brand is an iconic name in American business. Founded in 1818, the company has outfitted 39 US presidents and prides itself on offering white glove service to its customers.

How does a 200-year old brand translate and deliver high-end service in the digital age, especially when in a price-sensitive consumer environment?

To explore this question, we invited Brooks Brothers Executive Vice President and Chief Information Officer, Sahal Laher, to be my guest on episode 200 of the CXOTALK series of conversations with innovators shaping the world.

The short video above was taken from a lengthy, in-depth discussion that you can watch on the CXOTALK site.

As CIO, Laher is responsible for implementing technology that enables a high-touch, seamless customer experience extending across all channels including brick-and-mortar stores, e-commerce, and mobile.

During our conversation, Laher emphasized three primary goals:

  • Deliver a consistent customer experience across all of Brooks Brothers sales channels
  • Make the customer experience simple and easy
  • Understand every Brooks Brothers customer and personalize the consumer experience to their specific needs

In the video embedded above, Laher explains the technologies and business goals that underlie Brooks Brothers ability to achieve these customer experience goals. He describes how the company put in place a strong “digital core,” which is now central to creating a 360-degree view of the customer.

Here is a transcript of the short video embedded at the top of this post.

200 years of white glove service

Michael Krigsman: White glove service as you described it, has been a centerpiece of Brook Brothers approach for 200 years. It sounds like what you’re doing is translating that into a multi-channel, or omnichannel, approach.

Sahal Laher:

That’s exactly right. I think that manifests itself in many different ways.

It requires that we have a consistent customer experience across channels, and that doesn’t apply just to personalization, but it really applies in general, where every company now needs to break down the silos between channels. Traditionally, retailers have thought in channels, and they’ve been organized in channels and had separate business units for online versus brick and mortar, versus factory, and what is very evident is that the customer doesn’t see it that way. The customer doesn’t think of channels. They think of it as Brooks Brothers.

Most importantly, I think people are looking at retailers and companies: they’re not easy to do business with. It has to be simple; it has to be intuitive. You know, you can’t have a very complex aggregation on your website, you can’t have extremely long and tedious checkout process, because we’ve all been to those websites, and lost motivation to complete the checkout.

If it’s not simple and you’re not easy to do business with, and you don’t have a supply chain that can fulfill in a fashion that is geared to give the people the product they want, when they want it, then you’re really going to be at a big disadvantage, and you really are going to go to another site where it’s easier to do business.

Michael Krigsman: How do you maintain that customer experience, especially going across multiple channels?

Sahal Laher:

The reality of the world we live in now is that it’s just not like it used to be in that, now we travel more. We may want to go to the store, not in our hometown, but where we work, or we might be on business at a conference, and we might want to go to a store.

What we’ve really been working really hard on in the last couple years is trying to figure out: If John Smith comes to the store, and he’s never been into that store before, but he’s been a customer for 10 years, we are missing the mark if we don’t give him personalized service based on the information we already know about him.

We will have turned data that we have into actual, actionable insights that you, the store associate, can use to have a more personalized conversation, as opposed to talking to everyone who walks into the store that you don’t know about the same five products in the Fall collection.

So that’s a very important piece of who we are, and, obviously replicating that requires a lot of translation of this data into insights. Everyone talks about “big data,” everyone talks about these buzzwords of “big data” and “machine learning” and so on, but this is really a case study where it’s the differentiator, and really in all industries, I think, can be a differentiator not just for personalization but for many different parts of your supply chain and the way that you go to market.

And, the way that the machine learning works, is we can do that on the fly, and we can do that for terabytes and terabytes of data, which, in the old days obviously was just not possible, right?

Even if we took every single black book, every single store associate’s black book from the old days, where they had customer service and all of that done in paper books, that’s already a lot of data. And now, you multiply it by, you know, everything like your online clickstream, right? So every time you go online and you’re navigating the website there’s a trail of breadcrumbs that every customer leaves behind regarding what have they browsed, what have they put in their cart and not bought, how much time have they spent looking at a particular item.

All of this information, when you aggregate it together, and you have a true big data strategy, that utilizes some of these next generation tools like machine learning and in-memory databases. And, we have the ability to replicate that service, and now, you can also make that available online, and you can make more thoughtful recommendations for you online, as opposed to showing everyone the same five products that have just come out as things that the might be interested in.

Building the 360-degree customer view

Michael Krigsman: Can you talk about the relationship between service, engagement, customer experience, this machine learning project, because it’s all part of a broader perspective?

Sahal Laher:

Absolutely. So, you know, I think, again, customers don’t think in channels, right? And so, regardless of what channel they are interacting with you on, they expect that you know… So if I went onto the website and I made a purchase, and I come into the store two weeks later, and you don’t have any information on my order, or don’t even have any information on what’s in my wardrobe, then you’re missing the mark.

So, you know, one of the first things we did a couple years ago was really working on creating this 360-degree view of the customer, which sounds fairly obvious and it sounds fairly intuitive. But the reality is very few people have that all in one place, because over time, it doesn’t matter how long you’ve been in business, and obviously, the longer you’ve been in business, you’re likely to have more silos of data. But even if you haven’t been in business for decades, and you’ve only been in business for a few years, nobody has just one sales system, right?

You always have at a very minimum have a point of sale system, and then you have a website. And then you need some kind of system for customer service, you may need some kind of system for your store associate, be it clienteling or looking at alterations, or made to measure, or whatever the case may be.

So, what we try to do is all of those systems that I named was one or more different databases when we started, and what we’ve worked to do is really bring all of this into a single database.

And that single database now has John Smith’s customer record, it has all his personal preferences, it has his e-commerce transactions, it has his in-store purchases, it has his alterations and measure information, and it also has any interaction that he’s had with our call center is all logged in one central place.

What that allows us to do is obviously elevate the level of service that we can provide, because regardless, again, of what channel is your preference to interact with us on any given day, we will be able to have a consistent view of who you are as a customer, and therefore we’ll be able to better service whatever needs you have on that particular day, and they won’t be these handoffs or, “Let me transfer you to the place you ordered that, let me transfer you to the call center or the e-commerce fulfillment team to look at where your order is in the fulfillment process.” It needs to be, again, simple, right? If it’s not simple and intuitive, people are going to get frustrated and go elsewhere.

The digital core

Michael Krigsman: We have another question from Twitter, and this is from Arsalan Khan, who’s wondering, as the technologies change, and as the environment around you, the customer environment, the competitive environment is changing, how do you plan? How do you go forward and consider this ongoing change in your business strategy?

Sahal Laher:

That’s a great question, and I’m glad that it was asked because one of the things we haven’t touched on so far is the need for a strong, what I call “digital core,” right?

What that entails is, do you have a strong supply chain that can allow you to fulfill orders any time, any way? That’s the bottom line, right? The customers want their stuff. They don’t care where it’s being shipped from, they don’t care how it’s being shipped, as long as you can honor your commitment to getting that particular merchandise to the customer on a date that’s promised, then you’re meeting the customer expectations.

So, that’s obviously very difficult, and when we talk about omnichannel, right? And we talked about the 360-degree view of the customer.

But another extremely important piece that we touched on very briefly was the silos across channels coming down. And as those silos come down, you know, this digital core becomes more and more important, because in the old days it was fine for you to have a website, and a website only having inventory to your e-commerce warehouse merchandise. But now, you need to make sure that you have, you know, it’s almost another 360-degree view, it’s also a 360-degree view of product and inventory. And looking at that across all of your channels.

So, you know, there’s obviously tools that allow you to allocate product, and to come up with these assortments, but there’s always going to be times when someone comes in and we don’t have that product, and how do we get you that product? We have fifty of those units in the warehouse that are available for e-comm orders, but it’s a shame if that inventory’s not available to in the store, or vice-versa.

That’s digital core and this is kind of, a little long-winded response to the question, but it’s an important context that I think needs to be provided, and if you don’t have that supply chain that’s dynamic and nimble, and you as a company are unable to react dynamically and real-time to customer demand, then you’ve missed the mark.

This excerpt is part of episode 200 of CXOTALK, which offers in-depth conversations with people shaping technology and the world. Check out the list of upcoming episodes.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)

​FinTech and Blockchain: Are banks dead?

 

Banking and financial services are under threat from a combination of technology innovations, a difficult economic environment, and changing consumer expectations.

During a recent CXOTALK conversation with banking technology leader, Oliver Bussmann, we explored the dynamics underlying these challenges to financial services. Oliver was Group CIO for UBS, largest private bank in the world with $1.74 trillion under management. At UBS, he was known as the firm’s “blockchain guru.

Also read:

Banco Sabadell: Fintech and platforms in transition

My conversation with Oliver to explore issues such as challenges posed by FinTech startups, why blockchain matters, the CIO role, and advice to startups that want to work with established financial services companies.

A summary video of that conversation is embedded above; you can read a transcript of the short video below. You can also watch the entire 45-minute episode.

Why blockchain matters

Michael Krigsman: Now, some of the technologies you mentioned, but we all hear about blockchain. And, of course, that’s not the only technology that’s changing banking and financial services. But, tell us about blockchain, for those of us who don’t know, just give us a very brief introduction. What is blockchain, and why is it so important?

Oliver Bussmann: Yeah, for me, it’s a great experience in discovering the blockchain technology in an early stage. Remember, Michael, we’ve been through the mobile enterprise maybe 6-7 years ago, that consumer advisors in the mobile space came up, and then at that time, SAP realized that it would have a significant play in the enterprise too. So you learn over time to discover those megatrends and see in an early-stage the potential, and then put the best team on that: a small team to explore, to understand, and then become a leader in those trends. I can say that from my time at SAP, very successful, and mobile advisors tapped the early stages, and also applications.

And then also here, let me share the story that happened to me also, that I discovered, or we discovered that blockchain is simply ignored, because we got it pushed by an entrepreneur in Switzerland that […] is saying we can do FX trading, foreign exchange trading online, settle everything in real time. And usually, if you do stock trading, it takes at least 2-3 days to first settle, the exchange of cash and security takes time, and this immediately bold statement that we can do this in a few seconds, everything is settled, the cost of doing business would be low, plus the real-time execution would reduce operational risk, risk capital would come down, and we said, “Hmm, that’s hard to believe.”

Blockchain is a game-changer that will have major impact on the financial service industry.

— Oliver Bussmann

And then we discovered that you know, that the underlying technology of Bitcoin, the blockchain, is the key driver, because it’s so normal for most of the banks, and still with Bitcoin with the reputation to even discover that, and to discuss that. And then we discover that the blockchain technology, based on Bitcoin, at the end is a major simplification of our business.

And let me explain a comparison: today, if you do a trade, it goes to different parties. You sell something, they have the buyer, there are different banks in place, stock exchange, clearinghouses, I would say between at least almost ten parties involved, and they have to reconcile the investment business. They have to exchange messages, raise my cash, raise my security the right way; they have to reconcile; it’s a major effort to do that. And, blockchain at the end, in a very simple way, you store information over the internet that both parties can point to. It’s almost a reference, a database reference that you can point to. And there is a mechanism in that if you do a transaction, it’s first of all locked, it’s recorded, you cannot manipulate that. Plus, there is a software at the end, making sure that this transaction only is unique, verifies it. So you don’t need a third party to verify your transaction, but the software is doing that.

So that business logic is part of that ledger, and at the end, the whole messaging goes away, you have a direct impact, a third party is not necessary anymore, and so complexity goes away.

The low speed of doing business is going away, plus the accessibility of blockchain and Bitcoin is public ledger at the end, it makes it easier to access that information from anywhere because it isn’t stored anymore behind firewalls, it’s accessible for the different marketplace, and there’s encryption in place to make sure only the relevant parties have access. So it’s a game-changer from my perspective, and game changer not only for the financial services industry, for insurance, for trade finance, you see this also for the internet of things.

You have a lot of information, send some information, and what do you do? There must be certain events to happen, and there should be like a smart contract that you can act on that. It’s like, you have sensors in your fridge and your fridge is empty, what do you do then? And, there should be a clear definition if those kind of events are happening and triggered, then you buy something online immediately, right? So that technology, this is why certain high-tech firms like IBM, for example, and other firms see this combination from dedicated business to make it happen.

So what I’m saying is, it is like the internet 20 years ago, a game-changer that has a major impact on the financial service industry, and I also believe in government, healthcare, supply chain management. Every time you have multiple projects involved and they need to be synchronized; that is the way going forward.

Michael Krigsman: Are there examples of banks or other large organizations that are using blockchain in a meaningful way today? Or is it too early yet?

Oliver Bussmann: No, I think you see the first use cases coming up. Use cases like in general, the FinTech area, the payment area; it’s a target section because of payment, the business is profitable, there’s a lot of profitability, there’s a need to simplify that from a user access perspective.

And the uses that I think will come through in all their stages is the cross-border payment. It’s complicated because you have to go through a lot of central banks to do those cross-border business for retail and institutional finance, it takes time, and it’s on average roughly you pay $25 for each additional transaction. And parts like Ripple, for example, other ledger providers, they will simplify that, and there’s a collection of six banks already working on that. They are using the technology for their cross-border business within the bank. The next step is they build a network to exchange those transactions, and the infrastructure will be simplified for that, speed is different, and then also the cost to market because the projection is that a transaction that will cost today $25 will come down to less than a dollar.

Michael Krigsman: Wow. Amazing.

Oliver Bussmann: That’s exactly what is a major change that will drive that, because if you’re an institution or corporation doing international business, and you sit on stage with your corresponding bank and say, “You know, I’m paying $25 on average, domestically I’m paying less than a dollar,” that is a clear amount to bring it down below that. But then, you understand the revenue is coming down, the banks that are able in moving earlier and adopting it will have a change to get more market share. So if you’re not part of the train, it could hurt you significantly.

Disruption in financial services

Michael Krigsman: And, what are the changes that are taking place in financial services right now?

Oliver Bussmann: Yeah, it’s multiple dimensions that the financial institute has to cope with right now. It’s after the financial crisis of 2008-2009, the amount of regulation is significant, I would say.

To protect consumers after 2008-2009, a lot of new regulations in all jurisdictions, put a lot of effort into controls, risk management, compliance, to avoid any misconduct in the future. And, to give you data points, today, usually large players invest between 50% and 60% of their IT investment change [in] the bank just to stay in line with the regulatory requirements. That is significantly higher over the last 3-4 years and a lot of the potential investments that you need for new services, new products to implement, improve certain customer services, that is now absorbed by the regulatory requirements. And, there is also then a push for certain software. If you run a global business, you have to stay in line with local requirements, regulatory requirements. So the regulation is a piece which will stay, I don’t see that amount of investment requirements will come down.

The second is consumer behaviors. Everybody has different preferences now to access information, making decisions. There’s definite patterns, the generation that is now becoming highly networked, they don’t go to the front anymore, they want to talk to their financial advisor over the phone or video, they want to have automated information. The decision-making process is different. So, the consumer preference, how they like to be served in the middle of a big change.

The third dimension is new technology. We are going to another major change even bigger than the first one, 2000-2002. There’s significant venture capital and resources coming into the whole innovation, the startup community. You know, I saw at UBS a few years ago, the VC spending was at that time $3 billion US dollars. That number is from 2013 up to 2015 up to $20 billion. And the projection for this year is going to be up maybe to $24-25 billion. And so that should be enough time, and if you compare that with the internet investments 20 years ago, there was $500 million in 1995 spent on innovation in the Internet-related companies. You see the amount of resources and capital coming into the environment.

And then, from a macroeconomic perspective, there is significant pressure on banks, especially European banks, because there are limited growth opportunities. If you cannot go because interest rates are low, and the transaction volume is also because in the market of uncertainty, is low. So, there’s a revenue pressure, the pressure even on the cost side is going up significantly. Cost side meaning your cost-income ratio is under pressure compared to US banks. US banks are at 55% of your cost vs. revenue; most European banks are at over 70%. So there is significant pressure on those banks to be very careful to reduce your operating expenses, which also has an impact on potential investments going forward. So it is a constrained and stressed environment, and the new technology is even triggering, from my perspective, even bigger, significant change.

This excerpt is part of episode 202 of CXOTALK, a video show that offers in-depth conversations with people shaping technology and the world. Check out the list of upcoming episodes.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)

CIO view: Inside the World Health Organization

CIO view: Inside the World Health Organization

Photo from NPR

The World Health Organization was founded in 1948 as a part of the United Nations. WHO works within the UN system in these focus areas:

  • Health systems
  • Promoting health through the life-course
  • Noncommunicable diseases
  • Communicable diseases
  • Corporate services
  • Preparedness, surveillance, and response

I spoke with WHO’s Chief Information Officer, Marc Touitou as part of the CXOTALK series of interviews with innovative leaders who are shaping our modern world.

 

During that conversation, Marc explained his priorities as CIO inside WHO. Among his key activities are serving as a change agent, helping shape processes and expectations about how technology can support the core mission of WHO. Touitou explains:

We are a complex organization with different regions and different needs, but we have to identify the things that bring us together, When you face a Grade 3 emergency, your corporate processes have to allow you to find the right people, find the right skills, and the roster of skills. Recruit, onboard, dispatch, manage, bring back and do again. If this sounds like it’s trivial, it’s not. Same thing with managing your supplies, your vaccines, your boots, your gallons of disinfectant. You need to start there for an emergency.

WHO created a visual, global command center as an important part of its technology infrastructure. The United Nations recommends such a command center in a 2016 report called, “Protecting Humanity from Future Health Crises.” According to The Guardian:

The center “must have real command and control capacity,” says the report, and it should have the best technology available to identify, track and respond to an emerging threat.

The command center helps WHO manage disease outbreaks around the world by bringing in data feeds from what Touitou calls “natural partners.”

 

WHO command center

These partners are organizations with which WHO collaborates along with suppliers and contributors to relief efforts. Ideally, every relevant player contributes a feed into the command center:

I want to see all my warehouses worldwide. I want to see how many of that item I have left there, and superimpose all the water points here, and tell me how many medical centers I have in a radius of 25 miles, or tell me, what helmets are here. You have the streams from the media center, and you have the maps that you can superimpose, you’ve got all the infrastructure information that you need at your fingertips in near real time.

Although no one today has such a complete command center, WHO is actively working toward this goal. It’s a challenging environment because it’s ultimately centered on rapid response to outbreaks of disease such Ebola or Zika.

The video embedded above presents a rare glimpse inside the World Health Organization. You can also watch the complete 45-minute conversation and read a full transcript.

This conversation was pulled from episode 197 of CXOTALK, which offers an extensive library of executive interviews on digital disruption.

CXOTALK offers in-depth conversations with people shaping technology and the world. Please see the list of upcoming episodes.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)

CIO leadership: Two female role models

cio-leadership-two-female-role-models.jpg

Image from Istockphoto

In part one of my conversation with Kim Stevenson and Adriana Karaboutis, we discussed the challenges and opportunities facing women in technology

Also read:

Women in technology: Advice from Intel and Biogen

This second post offers advice from Andi and Kim on how CIOs can add value to their organizations. Both women have years of CIO experience; Kim was CIO at Intel and Andi worked in that role at Dell. Having been in the role and then left to take on business positions, they are each highly qualified to offer advice to CIOs.

 

Kim is currently Chief Operating Officer for the Client, IoT and System Architecture Group at Intel and Adriana is Executive Vice President Technology, Business Solutions & Corporate Affairs at Biogen. Both women are on the boards of public companies.

Once a CIO, always a CIO.

— Kim Stevenson, Intel

Among the themes we discussed, understanding the business and being able to communicate well are primary qualifications of a modern CIO. While perhaps an obvious point, there are degrees of sophistication and subtlety regarding understanding how the business operates, why leaders make decisions, and possessing the judgment to balance trade-offs among conflicting goals and objectives.

CIOs are in a unique position to understand and collaborate with the business. Unlike colleagues in other departments, IT possesses a horizontal view that goes across virtually all areas of a company. Because all departments rely on shared resources and services, such as infrastructure and security, IT typically has relationships across every part of the company.

“Seat at the table” is code for understanding the business: objectives, mission, and enablers.

— Adriana Karaboutis, Biogen

This unique, cross-sectional view creates the opportunity for CIOs to develop a unique understanding of how all parts of the business fit together.

The video embedded above offers a view inside the minds of two successful business people who held CIO positions earlier in their careers. The have fought the battles and paid their dues.

This conversation was pulled from episode 199 of CXOTALK, which has perhaps the largest library of executive interviews on digital disruption anywhere. You can also watch the complete 45-minute conversation and read a full transcript.

Please see the list of upcoming CXOTALK episodes. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)

Secrets of a successful enterprise software startup founder

Enterprise sales complexity

It seems every entrepreneur wants to start an enterprise software company. However, many of these founders do not possess a realistic understanding of what selling to the enterprise actually means.

While it is true that enterprise budgets can be large, convincing managers to buy your products is often difficult, complex, and time-consuming. Enterprise buyers tend to be risk averse and have a carefully defined process for evaluating products and vendors. Thus, enterprise selling can be a slow and expensive trap for startups that are unprepared.

On the other hand, for startups that get it right, enterprise buyers offer a great way to gain product feedback, references, and revenue.

Although CXOTALK usually highlights stories about digital transformation and innovation in large organizations, now and then a startup catches our eye. I became interested in Helpshift because they have cracked the code on enterprise selling.

Helpshift has raised $36.2 million and counts companies such as Zynga, Target, and Virgin Media among its customers. Microsoft is also a customer and Helpshift provides the chat support infrastructure for mobile apps such as Outlook and Office.

When founder, Abinash Tripathy, started the company, he envisioned a future in which software companies and app developers would need to provide direct methods to offer in-app support on mobile devices. Solving this problem required Helpshift to build an infrastructure that can handle millions of help transactions every day.

I asked Abinash to be a guest on CXOTALK and explain how Helpshift entered the enterprise and managed to build relationships that companies such as Microsoft consider mission-critical.

We spoke for 45-minutes, creating a treasure trove of information valuable to both enterprise buyers and founders. Among the key points:

  • Startups that want to compete in the enterprise must endure long sales cycles and an extended investment horizon
  • There are benefits of being an enterprise company from the start, but it requires patience and founders who have expertise in the large enterprise segment

You can see a summary of our discussion in the short video embedded above and read a transcript here. Of course, watch the entire show and read the full transcript at the CXOTALK site.

Michael Krigsman: What about the sales cycle? As a startup, how did you manage that aspect of it?

Abinash Tripathy: If you’re selling to the enterprise, and you’re consciously building an enterprise to sell to the enterprise, all of those things are a given. You have to do those things to be able to sell to an enterprise, including the long sales cycles.

If you don’t have that experience in the Valley and you’re trying to build an enterprise company, you won’t see the value of working with these companies, being patient, and investing up-front to go work with companies of that size, and you’ll always go after what’s easy. So you see a lot of these B2B companies in the Valley, they do what’s easy. They’ll go after small companies – five, ten person companies – that don’t have a lot of complex requirements and build for them. Then they find that it’s really hard to move upstream, and sell to the enterprise.

And, you know, there’s a reason why Salesforce is Salesforce, and Zendesk is Zendesk. They’re two different-sized companies, from a revenue and size standpoint, and they probably have an equal number of customers, right? The revenue difference is 5 – 10x, right? Because one sells to very large enterprises, and the other one sells to sort of, you know the long tail.

Michael Krigsman: What is the advice that you have towards startups who want to sell to the enterprise, but they look at these long sales cycles; in many cases, getting introductions is hard. But once they have an introduction and the sales cycle, the need to invest is very, very difficult. It’s just that delay, that time, is so expensive for a startup and it’s cash that they don’t necessarily have and time that they don’t necessarily have.

Abinash Tripathy: Yeah, so for companies that sell to the enterprise, the scaling and the growth is slower than those selling to the SMB, initially. So, let’s say you take two companies: one selling to the SMBs and the other selling to the enterprise-sized companies, and they start their journey at the same time. Chances are the SMB-focused company will scale much faster than the enterprise-focused company in the initial years, right?

And, so after the three-four year mark, it looks like the SMB company is ahead. But then, once that market starts to peak out, or, you know, bottom out, and it happens very rapidly in those sort of SMB segments where you run out of all the SMB that company can sell to, and then you make the decision to go up-market, and then your product is nowhere near close to being up-market at that point. Any company… I haven’t seen a single SMB-focused company become a successful enterprise company. I haven’t seen any examples of that. Nor have I seen examples in the reverse where you see enterprise-focused companies being really good at selling to SMB. I think they’re two separate markets, they’re two separate needs or requirements, and different types of companies will cater to those segments.

That’s really…So, the biggest thing, coming back to your question, which is “What do you really need to do to be an enterprise-class company?” The first thing you need to do is you need to know that you are building a long company or a long-term company. You need to find patient investors, investors who have the patience to build a longer-term, enterprise-class company and are not looking for that SMB, fast-growth kind of model. So, it starts with picking the right investor. In the Valley, there are those investors that really want the rocket ship, B2C-style, no-sales kind of companies. They basically tell a founder, “Oh, you should not have any salespeople at all; it should only be inbound marketing,” so there are investors that prefer that. And then there are investors that believe that “You should start working with large enterprises. It’s going to be slower. Build an outbound team.”

And the two types of companies are very different. If you’re looking at the SMB companies, they’re investing a lot of dollars in marketing, in digital marketing, and not as much in sales. And you look at enterprise-focused companies: fewer dollars in marketing, more dollars in BDR [business development resources], outbound, inbound, having account reps and inside sales. Very different models, right?

Now, the other thing I’d like to add is if you think about how we grew as a company before we built our sales, the BDR, SDR machinery, the first thing we invested in was customer support and customer success. Because, when you work with enterprise customers, they are big brands, and you don’t want to fail them, so you want to make sure you have the best customer support and customer success teams in place to handle these big accounts and make them successful, and they become case studies. They go around to the world telling them how good you are as a solution provider, and then companies in their class come in, inbound. And when that engine starts to work, it’s very powerful.

Abinash Tripathy: My biggest advice is if you don’t have a co-founder that has worked in the enterprise category or space, selling or in BD [business development], then get one. You need a person that understands what it takes to work with enterprise companies. That’s the first and foremost requirement.

And, the second one is to find patient money. If you want to build a long-term enterprise company, you going to want a VC that is patient and knows what you’re going to be doing, and it’s going to take some time and is willing to work with you and help build the company. And so, patient money is really important.

I think those two things, if you’ve got people who have the experience that you need for enterprise, and you have patient capital, then I think you’re on your way. It’s not that those problems can’t be overcome, it’s that those are the two things, the foundational elements.

To see the list of upcoming CXOTALK episodes, click here. Thank you to my colleague, Lisbeth Shaw, for assistance with this post.

(Cross-posted @ ZDNet | Beyond IT Failure Blog)