The festive season is coming, and for many CIOs, that means a much-needed break from their busy schedules and a chance to unwind. And for CIOs who aren’t having time off in the next few weeks, it means at least a break from their colleagues who are!

In this quieter season, take the chance to grab that book you wanted to read for a long time, take your loved ones out for dinner, or maybe even start a new hobby.

I hope you have enjoyed our weekly posts this year. Please let me know if there’s anything you’d like to see covered in 2016.
On account of the holiday season, the CIO’s bag of tricks team and I will also be taking time out from our weekly posts.

See you in 2016 with a bag full of new and fresh tricks.

Happy holidays!

Uwe Michael Mueller gives us a sneak peek into what CIOs can expect from technology in 2016.

The New Year is finally here and it’s time to make resolutions, start exciting new projects and find ways to make life easier. With that thought, let me wish you a productive and successful 2016! And speaking of making life easier, there is nothing that has facilitated convenience more than technology, which is, of course, expected to change and disrupt our lives further in 2016.

Here’s a sneak peek into the technological trends and buzzwords for CIOs to watch out for:

• Security will stay on top of the CIO’s priority list: adaptive security architecture that is flexible enough to meet the challenges of the changing threat landscape is what the present – and future – of business might need.
• The emergence of deep neural nets (DNNs), enterprise mobile management and autonomous agents – especially those software-based ones that have more near-term and broader business impact – is also expected.
• Mobile connected smart objects are likely to take over households in mature markets, and advertising will become increasingly virtual – with users themselves not merely acting as spectators but becoming active participants.
• Also look out for a whole new level of location-based marketing, made possible through technologies enabled by leading technology companies.

Had enough of these buzzwords already? Fear not! In the next couple of months, we will start to shed more light on these trends and on how CIOs can navigate the changing technological and business paradigms. Technology is a double-edged sword, and what you have to face, is not always what you to look forward to. But, by using some tricks from our bag, you may be able to generate a real buzz without getting lost in the buzzword jungle.

By Yan Jin, Manager, EY (Coauthors: David Fields, Sharon Long, Kristin Galiano, Vicki Jarvis and Nathan Kurylo)

Successful businesses constantly adopt technology advancements to meet changing needs. For example, the adoption of source-to-pay (S2P) cloud solutions is an increasing trend. Many companies are either considering or making the investment to move their on-premise solutions to the cloud or adding S2P solutions to their enablement portfolio. The cloud is, in other words, the now and the next.

Cloud S2P solutions can help improve spend management, simplify processes through automation, increase transparency and help align organizations’ procurement technology with digital and mobile strategies. They can also provide business users with a more “consumerized” experience, and help connect supply chain networks in a common format to enable collaboration and generation of real-time data. Hosted by the solution provider, the cloud solutions can incur lower costs and allow customers to focus more on their processes than on software maintenance.

As a direct result of this more “consumerized” and networked experience (with the potential for more catalogs, more content hosting, more direct access to suppliers, and more alignment with digital and mobile), this innovation can help deliver significant benefits, including improved savings, higher compliance through a more integrated end-to-end process, and greater options for financial management of the supply chain that can improve working capital, and reduce cost and supply risk.

Managing the change

CIOs can help drive successful and smooth implementation of cloud S2P solutions with a robust change management approach that is based on:

1. Clear communication: The goals and benefits of the cloud solutions should be communicated clearly and consistently across the business. CIOs can work collaboratively with the right stakeholders upfront, and define and communicate a roadmap for supplier enablement and standardized catalogs. And the business needs to understand the future S2P processes and how to work collaboratively with the suppliers.
2. User training: CIOs can help with creating the understanding of human interaction points with the S2P processes more than in the past. The days of customizing the cloud solution significantly to fit business specifications are gone, and an even greater focus may be on how to motivate the business to work within a standard process. A validated user group needs to be trained and made comfortable utilizing the cloud S2P solution. This may mean new procurement skills are required – global interaction, analytics, etc. – to operate effectively on a demanding cloud platform.
3. Supplier integration: Involving suppliers through collaboration and segmented communication to help show them how the processes work. Reaching out to them for feedback and to understand their pain points and challenges.
4. Support model establishment: Establishing a support model after go-live to help sustain the value earned through enablement. Supplier and internal stakeholder support may need to be transitioned to a structure where issues are handled in a methodical way, and intracompany support can be more efficiently obtained to facilitate adoption, alignment and compliance.
5. Learning from the crowd: Underestimating the time required for implementation, focusing solely on technology, poor quality of master and transaction data, and insufficient cross-geographic support are some common implementation errors. Being aware of industry-wide trends and common pitfalls can help CIOs avoid common implementation botches.

As with any implementation, involving the right people is often the key to success. During times of disruption, organizations benefit from leaders who can manage technology and also influence people. The cloud takeover of S2P provides the CIO with an opportunity to come forward as the technology and transformation enablement leader. And for the organizations that succeed, there can be a significant leap in value delivered through their supplier collaborations.

By Hyong Kim, FSO Global Data and Analytics Leader, and Yang Shim, Americas FSO Data and Analytics Leader

Data is the fourth pillar – people, processes and technology being the first three – for financial services companies. And data analytics, as all businesses know, can be a crucial competitive edge. Especially in uncertain environments, the most effective strategies can be the data-driven ones.

Financial services organizations manage huge volumes of data. However, this data is often not being analyzed or turned into insights – they can’t, even if they wanted to. Why? Regulatory issues and privacy concerns, undefined data utilization strategies, dominance of legacy systems, unused unstructured data and, of course, skills shortages prevent the optimal usage of data.

CIOs can help to unlock the power of data

We explore below some of the challenges, as well as some pointers on how CIOs and business leaders can work together to help financial services organizations make the most of their data:

1. Compliance vs. profitable growth: Data and analytics initiatives face risks of serious financial and reputational damage in the event of non-compliance with regulations or violation of data privacy. While compliance and privacy are vital – and the role of the CIO in data privacy compliance is important – to focus exclusively on compliance can mean missing out on opportunities that can deliver growth.
2. Effective, efficient, sustainable control environment: Banks need to demonstrate that the data used in key reports (e.g., for CCAR, Basel III, Board and Management Committee reporting) is accurate. To do this, many have begun programs that collect and monitor data quality. However, this presents several management challenges related to the accuracy of data and in controls over the data that is used. To address these shortcomings, a new approach that establishes an integrated control environment by setting the scope of the data; capturing metadata in consistent formats; and reviewing and testing the metadata, and the design and operating effectiveness of the controls has to be adopted.
3. The hidden potential of data: Several financial services organizations do not have a firm grasp of the potential value of their data. CIOs can contribute to increase awareness of the potential of data and help build capabilities to process the data for more insightful decision-making. Companies are often burning the midnight oil just to manage structured data. As a result, unstructured data from social media inputs and multimedia streams, which are important sources of insights, is often overlooked. CIOs can help create awareness on the importance of analyzing the unstructured data, and help organizations with strategies to accomplish that.
4. Legacy vs. modern: M&A over the years can leave organizations with an assortment of legacy and modern IT systems that don’t communicate with each other and operate independently. Finding a fix for this “IT generation gap” will naturally be the CIO’s responsibility which potentially can be solved by introducing more advanced technology solutions.
5. The skills void: Perhaps the most important question of all is “do we really have the skill sets required to help us analyze the data?” The answer from many organizations would be a firm “no.” Good data analysts are hard to find. And many companies haven’t yet identified the organizational structure that is most suitable for embedding data and analytics capabilities into their processes. CIOs can help businesses identify the right skill sets and be part of deciding how to fit data analytics capabilities into the organization. This could even mean the creation of a CDO role.

While CIOs are traditionally responsible for all things IT, some senior executives prefer data initiatives to be driven by business leaders rather than by the IT department. For CIOs who wish to take the lead in data analytics, and gain the trust of senior executives, demonstrating their business acumen through data insights could be an important step in that direction.

Uwe Michael Mueller, EMEIA PI Leader, EY, on why is it important for CIOs and organizations to invest in women’s advancement programs

Investing in women’s advancement programs is vital to building diverse and inclusive teams. As EY research shows, companies with a greater share of women in senior leadership including board roles, can achieve better financial performance.

Women are taking up bigger career roles while balancing work and family life, and are illustriously standing as beacons of success. However, getting to this point, in spite of professional and personal obstacles, is not an easy task.

To help women wade through challenges, organizations have to ensure that their female employees are working in an environment that is productive, conducive to growth and, void of stigma, and promotes equal opportunities for everybody. Businesses have also seen how creating a work space that allows women to meet and work together can translate into strong returns on investment.

In the expanding IT market, it is vital to make the most of the available talent and ensure that leaders are educated on how women can make a difference, supporting changes that make way for successful businesses.

Pave the way, be the role model

For women to progress in their IT careers, they require the right mentoring and encouragement to take up challenging roles.
Here are a few pointers for CIOs on helping the female workforce in their teams perform better:

• Build a supportive environment: By establishing a close-knit female network in the IT organization, women can communicate better with each other and enhance their capabilities to present themselves with confidence. They can also work, meet, share experiences and learn from their peers. By facilitating strategic networking, CIOs can help their female talent raise their chances of being chosen as IT leaders. And to address issues such as conscious and unconscious bias, awareness programs can be sponsored and promoted.
• Promote flexibility and female leadership: Organizations can educate women on opportunities for advancement and encourage them to take on leadership roles. Firms can also promote an office culture that accommodates higher levels of work-life balance and flexibility.
• Provide access to female role models or be one yourself: As women might find it easier to open up in women-only groups, organizing learning and training programs where successful female IT leaders speak of their experiences can be a very useful tool in motivating the female workforce. And if you are a female IT leader, establishing and articulating your personal and leadership brand can not only increase your impact within the organization, but also motivate others by showing them how your personal values have driven your career growth.

For CIOs, the benefits of a women-friendly environment are clear: increased diversity, better chances in finding even more skilled female talent and increased productivity for the IT function as a whole. Women possess a unique skill set and bring fresh ideas to existing challenges. And CIOs can easily tap into this now by making some tweaks to how their departments are structured.

EY is a strong supporter of gender parity. To learn more, visit Women. Fast forward.

Chris Mazzei, Global Chief Analytics Officer, EY, on the upcoming analytics trends that will reframe digital in 2016

Over the past months, we talked to various top level executives to learn more about the challenges, opportunities, and behavioral and social impacts of running a business in the digital world. These conversations uncovered some interesting analytics trends – going well beyond the “usual suspects” related to the volume, speed and variety of data. And we believe these are the trends that will capture the attention of businesses and their leaders over the next year.

Bartering incentives for data

It’s no secret that in our digital world, companies leverage information collected from consumers who use electronic and data-driven services to strategize and deliver personalized services. But consumer behavior regarding the use of their personal data is changing. Based on our experience, consumers are becoming less willing to share their personal information. And these days, laws are being passed in favor of consumers’ control over their personal data.

To counteract this development, companies are piloting, or considering giving, discounts or incentives to consumers who are willing to share – and give permission to use – their information. As a result, we are on the cusp of a new state of sophistication in how companies deliver value to consumers based on various data sharing and permission frameworks. As the year unfolds, we’ll see this discussion accelerate.

The rise of the analytics leaders

Businesses agree that analytics is a key source of competitive differentiation. But analytics programs run by many companies have failed to deliver on ROI. According to a report developed by Forbes Insights, in cooperation with EY, 2015 EY/Forbes Insights Data & Analytics Impact Index: Don’t Forget the Human Element:

• Seventy-eight percent of organizations agree that big data and analytics are changing the nature of competitive advantage.
• Sixty-six percent are investing $US5 million or more in analytics.
• Only 12% describe their analytics maturity as leading.

What firms need is a business strategy that has analytics at the core, rather than just an analytics strategy that makes marginal improvements to existing operations. To move with this plan, organizations will have to find analytics leaders who can envision and design future-state business models, and who have the ability to influence others and get different parts of the organization to work together. Certainly, analytics leaders must possess the right set of technical skills, but it’s equally important that they can build networks and relationships across the business to create change and generate value. We’re going to see more of these leaders rise up, as organizations begin to realize that managing the analytics function and establishing a basis for cooperation is vital to analytics success.

The human element of analytics

Businesses are beginning to realize that the human element of analytics is as important as the technology and data elements. EY has covered this topic in detail (please see past blogpost). Many companies have increased their capacity to ‘”produce” analytics-driven insights – such as customer preferences, operational improvements and risk identification. However, they are still not seeing return on investment from their analytics investments. Why? Because return on investment can be realized only when people make different decisions and change business processes. A company’s culture, organizational processes, skills of the business users and incentives must be considered, and are all part of the equation to “consume” analytics throughout the organization. Despite massive spending on technology and tools, not enough focus has been put on the “consumers.” In the EY and Forbes Insight study mentioned earlier, 89% of organizations said that change management is a barrier to realizing analytics value. In 2016, we will see many organizations shift the emphasis from analytics “production” to analytics “consumption.”

When analytics forms the core of a business, big changes can take place. It’s safe to say that, in 2016, companies that successfully embed analytics into their enterprise-wide business strategy could be among the leaders in the digital arena. For CIOs, in particular, this means not only figuring out how to embed analytics in multiple verticals across the enterprise, but also building a network of influencers who can make that a reality.

Authors: Bala Balakrishnan, Global Advisory Leader for Cable and Satellite Sector, EY, US; Sakshi Trikha, Associate Director, Global Markets — EY Knowledge, India

Several posts in this blog have talked about managing change and achieving goals amid disruption. These are core skills for CIOs – with change in most industries fueled by technological advancements. The telecommunications, and media and entertainment, industries are no exception – they are undergoing a significant transformation driven by rapid improvements in technology, changing consumer habits, the rise of new competitors and changing business models.

In the multichannel video programming distributors (MVPD) sector, technological advancements have improved the capability to deliver vast sets of content; smart devices have reshaped consumer consumption patterns, and technology and telecom players have entered the sector, increasing competition.

MVPDs are increasingly integrating other capabilities into their portfolio and forming deals with players from other sectors to gain new markets. Policy developments and consumer acceptance of net neutrality are also shaping MVPD capabilities and business models.

Staying ahead in a changing sector

To stay relevant in this dynamic industry, MVPDs have the option of both commoditizing their services and focusing on continually optimizing their cost structure – or reinventing themselves with a reimagined set of product portfolio and service capabilities. Adding new businesses, revenue and operating models and technology are key enablers of any reinvention. So the CIO can be a critical player in this transformation:

• Reimagining products and services: With the changing landscape, a number of future products and services could be technology-based, including those connected by the internet of things (IoT), such as smart home and tele-health for example. MVPDs may also need to augment their top line with new revenue streams, such as personalized service bundles or targeted advertising. Technology and the CIO can to be at the center of all this change. To provide services that are beyond the core portfolio of MVPDs, CIOs can leverage partnerships to co-develop customer offerings. This opens the door for MVPDs to be super-integrators of all content, seamlessly delivering services across entertainment, communication, and home and life management.
• Creating agile business models: Agile business models can help MVPDs to compete effectively and CIOs must prepare and develop their organizations for change. This can include instituting technology capabilities that enable MVPDs to offer more flexibility to customers, e.g. by allowing them to design and modify their own bundles, watch preferred advertisements and manage spend across the various services they consume. CIOs can help by building robust big data and analytics tools to gain relevant insights about customer choices and behaviors. These insights can be used to customize offerings to micro-segmented consumer bases, to enable customer acquisition, retention, value and profitability management.
• Transforming customer experience through appropriate interface and design: Effective customer management can differentiate the leaders from the followers. MVPDs may have to evolve from providing customer care in silos to a more integrated customer experience management approach. CIOs can help deliver more value to customers through enabling a relevant and smooth customer interface. Segmenting customers to identify the brand promise of each segment and establishing the right capabilities for effective value exchange, facilitates the customer experience at each touch point.

What can determine success in times of change is the ability to evolve with the change. CIOs have an important contribution to make to assist MVPDs to not only face the change, but also to evolve and grow with it.

Dr. Aleksander Poniewierski, Partner, IT Advisory Leader Central and Southeast Europe, EY, writes about OT, IoT and other Industry 4.0 buzzwords that CIOs will be dealing with in the near future.

“The limits of my language,” said Philosopher Ludwig Wittgenstein “are the limits of my mind. All I know is what I have words for.”

As companies and governments come up with fancy names for existing technologies, people like you and me, whose jobs revolve around technology, are left in the middle of buzzword jungle. Industrie 4.0, OT, M2M, IoT – to name just a few – are creating a buzz that leaves many in awe and confusion.

The internet of things (IoT) is a network of dedicated physical objects, or things, that interact with their internal state or the external environment. Operational technology (OT) is a part of it, referring to specific IoT offerings that target the industrial customer base. The graphic below gives a good overview, even though it does not include Industrie 4.0, which is the world of automation and information exchange enabled by IoT and OT.

This blogpost, and those following over the next couple of weeks, will give you an introduction to the world of IoT and, in particular, the enterprise side of it.

An opportunity like never before

IoT can connect millions of devices, making the sharing of massive amounts of data possible. Software companies are developing platforms that make this easy and painless.

This network of devices also opens up different ways of using data to make life easier, to make production cheaper and to make existing processes more efficient.

For example, sensors on a product can give the manufacturer information about what features are being used and how. This information can then be used in new product design. It also gives companies a new way to stay connected with customers around the clock.

The dilemma of the smart fridge

But there are not only upsides attached to these developments. Privacy and security are often the first risks associated with IoT that come to mind, but there is also another serious risk, that of false identification. Especially in machine-to-machine (M2M) – versus machine-to-human: it’s up to a machine to decide whether another is out of order or is idle simply because it doesn’t have anything to communicate.

So would the computer in the supermarket suspect a communication failure if my smart fridge isn’t reordering milk? Or will it just assume I haven’t run out of milk yet? Solving this problem will be one of the biggest challenges.

There are other challenges too:

• Reducing costs is high on companies’ agendas. Using cheap technology for critical infrastructure jeopardizes parameters such as accuracy and timeliness, but higher-quality sensors and chips are priced at a premium. Companies have to balance their need to reduce costs and their tolerance for errors.
• The more complex IoT architectures and systems become, the more companies depend on their vendor. And, with many vendors having a wide array of offerings in the market, it gets ever more complicated to choose the right technology for a specific need. Getting the right independent advice is critical.
• IoT technology is changing rapidly. By the time companies have finished implementing a new system, the technology they use can potentially be outdated, particularly if they rely on a single vendor’s advice. Again, an independent point of view can help to make the most of today’s new technology offerings, helping make new systems as future-proof as possible.

The CIO in an IoT world

In a world where companies compete to move toward IoT, the CIO can expect to be involved in:

• Finding effective techniques to choose the right IoT system for the organisation, one that helps improve the bottom line and reduce cost, and is as future-proof as it can be
• Working with business leaders to develop IoT road maps, screen different vendors and select the right technology
• Managing costs while taking independent advice from vendor-agnostic parties
• Helping make implementation of IoT minimally disruptive, but also designing it so it is adaptable to future requirements
• Assessing the cybersecurity risks that IoT presents and protect the company’s network

In the next couple of weeks, we will dig deeper into the topic of M2M, giving you further food for thought from the perspectives of technology providers, scientists and technology experts.

Sagi Leizerov, Executive Director, Global Privacy Leader, EY, on the drivers of privacy management that CIOs can use to help the organization improve the level of privacy accountability

Data privacy and the need to protect it has been a concern for users and organizations since the inception of digitization. Robust data governance programs and systems can help users make privacy protection a reality, but they have a long way to go. In 2016, we are hoping to see substantial development in this area and, in this post, I will talk about a few action points that can help companies improve their accountability and privacy policies.

One of the biggest concerns for organizations and individuals alike is being unclear about where personal information is stored or what the processes are outside their main systems and servers. Furthermore, the lines of separation between financial reporting, cybercrime, national security and the use of personal information — that were once viewed as distinct – are thinning day by day. Organizations need to be mindful of the impact these overlaps have and how to address the associated privacy risks.

Drivers of privacy management

While addressing the privacy risks associated with digitization, there are three drivers that can help CIOs improve the level of privacy accountability as expected by all stakeholders. The first is governance — providing a robust structure of roles and responsibilities, which demonstrates accountability and interacts with other parts of the organization that process personal information.

The second is by meeting the rigors of verification, wherein auditors, especially external auditors, are not only serving as independent verifiers of financial reporting, but are increasingly verifying the design and effectiveness of privacy related controls in cybersecurity reporting (e.g., Reports on Controls at a Service Organization Relevant to Security, Availability, Confidentiality, Processing Integrity and Privacy, commonly referred to as SOC 2 reports).

And finally, organizations can enhance their level of privacy accountability by relying on trusted third-party service providers who have verified advanced cybersecurity programs to prevent sophisticated attacks. In today’s environment, where organizations are increasingly relying on third parties (e.g., cloud service providers) to process and protect their data, verified trust in third-party service providers will be the critical foundation upon which organizations build their businesses for a digital era.

Paving the way ahead
There are eight action plans created from these drivers of privacy management that CIOs and Chief Privacy Officers (CPOs) can use to help companies improve their accountability and become trend leaders:

• Develop KPIs for privacy – adopting KPIs helps to develop a robust privacy program that zeros in on accountability, within and outside the organization
• Build privacy impact assessments (PIAs) into the development system life cycle – to analyze personal information, as well as identifying and mitigating privacy risks within projects and across the enterprise
• Get ready to respond – develop a robust incident response plan that outlines the concrete steps needed to be taken during a cybersecurity and/or privacy related breach
• Monitor for insider threats – use techniques such as partitioning, guest networks or sandboxes to better balance the need to monitor for insider threats and respect privacy and regulatory requirements with the need to monitor for insider threats
• Know the reporting options– consider whether an independent assessment of the organizations privacy and data security practices using reports such as the SOC 2 report that can help with customer transparency
• Implement identity and access management for data – to reduce vulnerability related to insider threats and increase rigor for organizational accountability
• Consider right-on-time notice of privacy policy to consumers – make consent more detailed and relevant, explaining to the consumer the specific use that the organization has for the data and what options consumers have with regard to that use
• Define the organization’s approach to de-identification – use techniques like anonymization, pseudonymization and encryption for de-identification, which involves removing the individual’s identity from the data and making it safe from a privacy perspective, but also useful from a big data or data analytics standpoint

The digital future is very close, and organizations should not wait for governments to come out with laws that address the myriad privacy issues. With the CIO’s help, organisation privacy programs will see rapid growth and maturity in 2016.

If you would like to learn more please read our latest report Privacy Trends 2016 – Can privacy really be protected anymore?

By Robert Holston, Global Consumer Products & Retail Analytics Leader, EY

Consumer products (CP) companies are heavily investing in data and commercial analytics to pursue a competitive advantage in the industry. Commercial analytics refers to the analytics of the commercial teams – namely, pricing analysis, trade spend optimization, forecasting, commercial investment and marketing optimization, and assortment. It supports activities across planning, retail partner collaboration, and execution. Executives understand the importance of turning those insights into action, but as yet they have not been able to fully realize its benefits. The pertinent questions industries face these days are: why isn’t analytics delivering more value and why is the ROI on data still so low?

We have found that many companies in the CP sector are neither prioritizing on their investment for today’s challenges nor are they changing their working practices to create a competitive advantage. Many engage in a macro-level analysis of consumer behavior, which will not give them any useful insights, let alone help to influence them. Essentially, we believe there are three reasons why consumer products companies are not yet getting their expected ROI from commercial analytics and data:

• Incorrect prioritization of the investment areas
• Unsophisticated execution that doesn’t provide relevant, personalized offers and trusted experiences to consumers
• Lack of omnichannels to activate and engage consumers, and deliver an integrated consumer experience

Right insights to the right people

To help enhance market performance, CP companies should synthesize new data sources, apply advanced analytics and use those analytics for decision-making. As one of the information experts in an organization, the CIO can help achieve this. CP CIOs can work on these five essential steps to help transform the way in which their organizations use commercial analytics and data:

• Integrate data and insight: CIOs can encourage the right investments to combine structured and unstructured data from various sources. While classic point-of-sale data is fine for reporting market share, syndicated data users are realizing the cost-savings benefits that can be used to build new execution capabilities, driving data investment ROI..
• Scale analysis and insight development: To help derive real value from analytics, CIOs should consider creating a consistent analytics approach and capability that can grow across the organization. Setting up a common analytics “language” in the organization will help promote clarity that can drive adoption and accountability. .
• Create insights while you sleep: CIOs can help organizations identify changes in market sentiment and consumer behavior, and even predict them in advance. Invest in commercial analytics that are “always on”— always looking for and identifying opportunities for immediate action. “Calling up the data” every month or quarter may not yield the real value of commercial analytics.
• Translate insight into action: Organizations should consider creating a central commercial analytics team that can address common business issues and CIOs would be well-placed to assist in this initiative. Organizations often underinvest in the skills they need to move from insights to real-world commercial decisions. Investing in training and knowledge management to support these teams will give a core commercial analytics capability that combines data expertise with a detailed awareness of all the decision points.
• Build analytics for consumption: It’s often in the gap between insight and action that the battle for consumer spends is won or lost. CIOs can encourage investments in commercial analytics to help deliver the right insights to the right people in the way that works best for them. Decision-makers must be able to access analytics-driven insights anywhere and anytime.

Almost all automated processes require a human to make a business decision, but organizations without behavioral barriers can be more likely to achieve full value from analytics investments. Every new initiative requires a trusted leader to drive the firm from chaos and uncertainty — to realizing its true long-term value. CIOs’ capabilities can help transform the ability of CP organizations to create, consume and scale commercial analytics in ways that will help unlock growth and improve their business performance.

Uwe Michael Mueller, EMEIA Advisory Performance Improvement Leader at EY, on the role of the CIO in crafting strategies that drive customer-centricity

As we all know, digital is changing the decisions that corporate leaders are making and the roles they are playing. Digital businesses drive results from new combinations of resources and enterprises are evaluating how they need to build a plan for the digital future.

That said, a business strategy that works in the digital world might be the answer. As enterprises change business models to adapt to new market realities, they are increasingly establishing new business strategies as the way forward. These new strategies need to include a digital component which helps to maximize business benefits by investing in digital initiatives and programs.

But crafting such strategy is not easy. The rapid pace at which e-commerce has been evolving makes it difficult for businesses to plan for the long term with respect to both demand as well as investments. Frequent change in consumer behavior is also a challenge.

Kick-starting the drive toward digital success

Digital has shifted more control to the consumer and is driving the evolution of value chains, especially in the consumer products sector. Digital considerations are fast catching up and should no longer be something that is limited to e-commerce only. The graphic below shows how digital can affect all areas of the organization, from product development to sourcing, to manufacturing, but also the marketing and sales organization.

So what can CIOs do to help their organisation develop growth-oriented business strategies that are effective and in the digital world?

• Personalizing consumer experiences through mobile: Establishing mobile as an effective marketing platform to help expand the organizations reach to new customers and increase awareness about products and promotional offers. Location-based promotions, personalized hyper-targeted marketing and virtual stores are some of the ways through which this can be achieved.
• Using data from social media to derive insights: Using analytics for insights from consumer data on social networking websites to help understand consumer taste and preference across all age groups; and to help generate value-added insights to drive e-commerce sales.
• Leveraging digital to build brand loyalty: A business model that helps ensure constant connectivity with the consumer will not only contribute to financial growth, but also to loyalty and advocacy. An effective strategy can help businesses move their consumers from being brand-aware and brand-loyal to being brand advocates. Strategies that help build brand loyalty can include brand-specific digital offerings, such as mobile apps and platforms, digital loyalty programs and e-coupons.
• Driving digital in product development: Digital can also be used for new product development as digital product lifecycle management has sometimes been found to be more effective than traditional models. CIOs can help their organizations in setting up in-house digital labs to help promote innovation and experiment with insights. Using the wisdom of the crowd is one way of innovating a company’s products and services, which we have covered in a previous post.

The path to a great business strategy that works in the digital era starts with a business understanding its objectives, and developing short- and long-term approaches that align with its vision through investment in digital capabilities. Most importantly, the digital strategy components of a company should align with its customer strategy. Only this alignment can help companies acquire consumers, address markets, define tactical activities and meet its bottom-line goals.

Stefano Ciminelli, Executive Director, EY, writes why cybersecurity is a mindset rather than an activity.

“How can I add security?” Until a decade ago, it was quite normal for executives to ask this sort of question. At that time, security was often thought of as a bunch of hardware appliances (firewalls, routers, etc.). It was considered as yet another line in the yearly budget, a cost of doing business – something to keep auditors satisfied.

The landscape has totally changed since then. Security is now commonly known as cybersecurity, and cyber attacks are making the headlines in newspapers every day. As a result, cybersecurity risks are at the top of the C-suites agenda. Even governments and regulators are building cybersecurity capabilities – in some cases, not only to protect and oversee, but also as a means to attack and defeat.

However, even in this new landscape, there are still executives who believe that security is something that can be “plugged into” the organization. Let’s be clear – security is not an app. It’s not something that can be purchased, downloaded, installed on your phone and then you are all set up. Security is a process; it is about adopting the right risk culture – and having access to security resources should encourage organizations to stop doing security and start doing business securely.

In this cyber world, CIOs are in a good position to push for change – transforming security from just a function in the organization to something actually embedded across all existing organizational processes. Here are two questions for organizations to consider:

Question 1: Are you protecting your confidential data?

Looking at the hundreds of publicly disclosed data breaches in 2015 and before, common themes can be identified:

• A significant amount of data poorly protected
• Poor security awareness through employees
• A general lack of response and recovery capabilities in a timely manner

The combination of these three factors often results in a worst case scenario, regardless of how much the organization has invested in other security controls.

Many organizations apply some level of security controls around their CRM platform (Identify Access Management, security system hardening, etc.). However, some of the same organizations also allow employees to export data in bulk (e.g., the full list of customers in a specific business line, with their financial statements and other sensitive data). Unfortunately, those employees may send the exported Excel file to their private email address, upload it to the cloud or even print it out to work on it while commuting back home by train – and lose the precious documents.

So CIOs should think how to stop adding layers over layers of security controls and start focusing on protecting confidential data end to end (starting with security awareness for employees).

Question 2: What’s most important for you – being compliant or being secure?

Eventually, in the security industry, we ended up in a paradox: security controls actually became part of the problem. For example, today, it is unthinkable to provide employees with a laptop without antivirus software installed, or leave a corporate network without a firewall.

However, when an attacker wants to get into an organization’s network, one of the easiest ways is to exploit outdated security software, such as antivirus programs or badly configured firewalls.

Why and how did this happen? Often organizations focus on being compliant with regulations, best practices, standards, certifications requirements, etc. – rather than keeping a strong security posture. They end up deploying a significant number of tools that are hard to maintain. And this is not a technical problem, but a security culture problem.

CIOs can help by embedding the security into the end-to-end organizational processes. Security is not an app, but a process. So organizations should stop doing security and start doing business securely.

By Andrea Bassanino, Partner, Strategy at EY and Antonio Maresca, Senior Manager, Strategy at EY

Under increasing price pressure from a competitive market, telecom firms are seeing a decline in traditional revenues from phone calls and mobile data. And, as a result, they are on the lookout for new sources of revenue — particularly from their extensive customer bases. The digital signage (DS) market is one high-potential yet underexplored area. DS uses multimedia screens to present advertising, promotion and information, usually in shops and other sales locations. With only a small outlay of manpower and money, opening or expanding a DS offering could lead telecom businesses into markets with potential for increased revenue.

So far, however, potential revenues do not provide a sufficient return on investment (ROI) for large businesses. Hence, DS is not yet a priority for the C-suite, so why should telecom firms be interested in it?

Exploiting the DS boom

As businesses progress from basic to interactive services, DS can help enable and support more sophisticated functionalities and reach customers better. DS can be used by telecom firms to offer advertisers targeted “proximity marketing” (i.e., promotions and advertising) directly to their customers’ mobile phones — for example, receiving offers via text for stores that they are just passing.

Telecom businesses are paid a fee for every communication sent to their customers’ mobile phones. Some telecom companies are already providing services along these lines, and most are aware of the possibility of proximity marketing. However, this is a small market for big firms, with low margins and little potential for growth, and the majority are hesitant to invest. So what other, more profitable, opportunities are being investigated?

Turning DS and proximity marketing into a profitable business model

Proximity marketing and DS services involve a tight cooperation of three main directors within a telecommunications organization: CTOs, CIOs, and sales and marketing directors. In particular, CIOs of telecom businesses are well placed, given their technical expertise and knowledge of current industry trends, to help their companies exploit this new development. Considering the following could help:

• Data monetizing: One of the biggest benefits that proximity marketing offers telecom companies is the potential revenue from their customer databases. Where CIOs can help their firms is by harnessing the power of existing customer information and knowledge – a valuable resource for advertisers.
• Gaining market insights: Though the income generated from proximity marketing is still modest, the real ROI could be gaining new insights into market trends. CIOs in the telecom sector could help their businesses understand what messages clients want to distribute to their customers, the value of these messages and how telecom customer bases will react to them.
• Exploiting tangible experiences: Telecom companies need to build a body of real-life case studies that show the objectives and results from their work in proximity marketing. This could provide them with metrics to help support their proposition when approaching potential clients for broader targeted marketing. CIOs in telecom businesses can also use their capabilities to help demonstrate how proximity marketing can yield good results. For example, they could assist in developing the technology infrastructure that would support more sophisticated marketing to target customer bases. This infrastructure could certainly ensure the necessary administrative tasks are executed efficiently, but it could also monitor messages and marketing feedback, and track relevant measures, such as ROI.

The key challenge for CIOs when trying to kick-start proximity marketing in their businesses will be convincing leadership to invest in it. To address this, in discussions with the board, they should emphasize two key factors. The initiative requires minimal financial outlay, and it provides the ability to build credentials based on real-life case studies.

Michelle Dennedy, Vice President and Chief Privacy Officer at Cisco, on the four dimensions of the internet of things and the parts they play in data privacy

When I think about the internet of things (IoT), I actually refer to it as the ‟internet of everything”: fifty billion sensors, devices and information gathering technology that are becoming increasingly integrated into our world.

The internet of things is made up of four components. I call them the ‟four e’s”: everything, everyone, ethics and experiences. These are facets of the IoT that have qualitatively and quantitatively changed how companies look at privacy these days:

• Internet of everything: The internet of everything basically describes the IoT as a whole. This includes factory sensors, global positioning systems, wearable devices and smart technology that can tell you when it’s time to reorder groceries or how healthy you are. There is a need now to connect everyday things to the internet, and to add content that will make these connections meaningful.
• Internet of everyone: The people dimension of IoT is where privacy, as a notion of the authorized processing of personalized identifiable information according to fair legal and moral principles, lives. In the process of the internet of everything gathering and transferring information, everyone must have a say. If the internet of everything, and the data associated with it, offers a quantitative distinction, the internet of everyone makes a qualitative difference. We need to be designing the internet of everything so that everyone can feel as though they have the right level of control and management over their data.
• Internet of ethics: The question we’d have to ask ourselves is how can we make a network of devices ethical? Devices, after all, do not understand ethics or recognize cultural barriers. Cultural norming varies vastly from household to household, and we need to have a really robust, cross-cultural and cross-generational discussion around the ethical dimension of the internet of everything that considers all kinds of different perspectives, as well as the quantitative and qualitative differences when we think about exponential data flow.
• Internet of experience: People like the experience of being able to communicate via their smart devices. However, the experiential dimension isn’t only about what technology can do for us, but also what experience we want to have, and who gets to control them. We also need to consider whether all of these billions of individual experiences need to be recorded, tracked and saved. We need to do a better job of documenting what’s important and deleting the rest.

Most of the time, we tend to see the IoT as technology that gathers data for the purpose of making our lives easier. What’s missing in this quantitative equation – what acts as the qualitative differentiator by understanding and explaining what the data can’t – is the human element. In a world of connected devices and networks, the most important thing we need to do is remember to be what we are – human.

Mike Kanazawa, Partner – Innovation and Digital Enterprise Strategy, Ernst & Young LLP, on how you can disrupt your business and delight your customers in new ways by becoming a smart connected business

Organizations and businesses in all regions, sectors and stages of growth are shifting toward strategies centered on making them smart connected businesses. Technology trends have created a capability to reinvent how we live and work through smarter, more connected, predictive and massively more efficient means.

The key question for every business leader is: “How can I disrupt my industry and delight my customers in new ways by becoming a smart connected business?”. Though the strategic transformation will be a difficult move for some, those who don’t adapt to this change might be made irrelevant in their own markets.

Smart connected businesses can develop an information advantage regarding customer needs, make faster and more accurate decisions, and can become innovative disruptors rather than competitive prey. Many businesses are approaching this change by acquiring start-ups, partnering with, or co-investing in new companies, or creating their own innovation centers to push the disruptive edge.

As technology leaders, CIOs can advise and inform their organizations on how designing new end-to-end customer experiences, monetizing, marketing and selling in a totally new way, can help scale up business.

This blog post will discuss the three key areas that can help in the transformation:

• The go-to-market ecosystem: Smart connected businesses have moved from traditional forms of marketing to personalized marketing methods. CIOs can help their organizations know every customer properly, enabling multiple touch points and interactions throughout the customer journey, monitoring usage and eventually selling additional features and services. Software-enabled services and analytics are the foundation of any smart connected customer offering delivered through cloud or software as a service (SaaS) platforms. Businesses can realize more value from smart connected businesses by maintaining close engagement with customers, analyzing product telemetry data, monitoring customer usage and taking proactive steps to reduce churn.
• The instrumented product: Businesses are moving toward real-time development of products that integrate across marketing, development, engineering and support in a closed-loop cycle. Development of an instrumented product — embedded with telemetry and intelligence —can monitor customer usage, automatically up-sell, cross-sell, troubleshoot, anticipate needs and make recommendations. The product becomes an autonomous marketing, selling and support engine that also creates a certain level of personal value to customers. This level of personal value creation can generate ongoing and ever-increasing customer delight with a product or service, which helps to maintain the loyalty of customers in the fast-paced innovative realm of smart connected business.
• The smart connected operating platform: Many businesses are approaching the challenge of becoming a smart connected business by acquiring start-ups, partnering with, or co-investing in new companies. However, problems occur when they try to scale the acquired start-up on a platform that was never intended to sustain a smart connected business. The key challenge is running conflicting operating platforms together — one to run the existing business and continue generating profits, and the other to grow and fuel a smart connected business line. CIOs are well placed to help with this challenge, by supporting the business to explore the cost-benefit of the two options – performing a flash cutover to the new model to accelerate the change; or a more conservative option to run both platforms on a more slowly converging path.

The necessity of transforming to smart connected businesses is growing by the day and affects all industries. It is a change that places IT at the center of driving customer value and growth. CIOs already understand the impact of this change and can help lead the transformation initiative. The ability of companies to make this shift can determine who disrupts the market and who will be extinct in the next 10 years.

Scott Gelber, EMEIA Cybersecurity leader, EY, on cyber threat intelligence and the CIOs role in an effective cybersecurity strategy

Organizations frequently do not fully understand what to ask of Cyber Threat Intelligence (CTI). It can be complex and understandably it is outside the sphere of many CIO’s experience. This means that many organizations are potentially missing out on a powerful opportunity — the chance to get ahead of the cybercriminal before they commit the cybercrime.

CTI manages the collection, analysis, integration and production of previously disjointed information to identify evidence-based insights into an organization’s unique threat landscape. This intelligence can make a significant difference to the organization’s ability to anticipate breaches before they occur, and its ability to respond effectively to breaches when they occur. It helps businesses answer critical questions, to which the Board are increasingly seeking answers:

• What are the most significant threats facing our organization today?
• What assets are being targeted and by whom?
• How can our organization protect against these cyberthreats today?
• How can our organization use intelligence to augment and improve our security and business operations?

A holistic CTI program consists of processes for collecting, producing and disseminating tactical and strategic intelligence, continually topped up with timely situational awareness updates (also known as “current intelligence”). Some of this intelligence can be easy to accumulate: Open Source is available to anyone; information on attack surfaces can be generated from activity on your own network; intelligence gathered from the Deep and Dark Web can be purchased. It doesn’t have to be an impenetrable topic for anyone with an IT background, but what it is, is not optional. CTI is not something your organization can do without.

CTI is best implemented incrementally, allowing small investments to improve and mature other areas of cyber threat management in a way that maximizes return on investment. Looking into the future, CTI discussions surrounding business risk rather than just security risk will become more and more common. Understanding cyber threat risks to the business’s finances, reputation, information and operations will take the conversation to the C-suite level, and the CIO will need to have an input in that.

The six-step path to effective CTI

• Build a robust operational framework: this ensures that security operations are mature enough to absorb relevant intelligence and enable timely action. Operational frameworks should include not just technological maturity, but also processes and governance that are addressed when an organization invests in an indigenous intelligence capability, rather than only purchasing external intelligence mechanisms. Overlooking these framework considerations might not be ideal in an ever-changing threat landscape. CIOs and CISOs should examine the IT and cybersecurity frameworks they have for gaps in people, process and technology.
• Conduct CTI programs and assessments: organizations should develop CTI programs and also conduct periodic assessments of how the threat landscape might affect them. A CTI program will help enable the capability within an organization’s security operations structure to collect, analyze, produce and integrate external with its own intelligence. Tailored assessments gather the pertinent facts and organize the pros and cons of various program attributes to promote a process-oriented approach, providing immediate insights and an evaluated look at where organizations can start integrating CTI into their technology.
• Collect both internal and external intelligence: data can be sourced both internally (from network event data or vulnerability scan data) or externally data (from deep and dark web activity, social media and forum discussions, and geopolitical news). By predefining intelligence requirements, an organization can focus its efforts and determine the most relevant cross-section of collected sources.
• Use data to get the big picture: it is not enough simply to collect the data — it must be used to paint the bigger picture of the threat landscape. Data, therefore, must be monitored, analyzed, trended, quantified into metrics and then delivered to the appropriate audience for action. This takes a particular analytical capability that may or may not already exist in the IT or analytics function.
• Integrate CTI into the system: CTI must be integrated through processes designed to support both decision makers and security operations. The input processes and output products of a CTI program should be designed with the goal of improving cyber threat awareness across the entire organization at a variety of levels. CIOs and CISOs can work together to make this a reality.
• Learn to share: with your data and analysis in place it is then important to collaborate with your industry peers. Otherwise your organization’s efforts will be siloed in a world that is vastly interconnected and where the cybercriminals themselves collaborate and share information. If this represents a major cultural shift for your organization you need to work with the CISO on how you present this argument alongside the business case for investment in CTI, and how you execute on sharing this information in a structured and timely manner.

If your organization is not yet talking about CTI, then perhaps this is a conversation you can start. Your IT responsibilities would be severely impacted by a cyber breach, and if you have a seat on the Board, you along with your C-suite colleagues are increasingly being seen as liable for damage to third parties resulting from a cyber attack. It is still true that it is a matter of when, not if, a cyberattack occurs. Don’t let a lack of CTI be a major cause of regret.

By Amy Burke, Principal, Ernst & Young LLP and Jeff Lewis, Senior Manager, Ernst & Young LLP

The landscape of the procurement function is changing. Gone are the days when the procurement function was just an order taker, a tactical buyer looking for the lowest cost. Today, thanks to unprecedented global interconnectivity, advances in big data and analytics and the comprehensive internal and external viewpoint that is required by procurement, the function has the potential to be an information powerhouse, generating knowledge to serve all functions of the enterprise.

Procurement professionals have access to both internal and external data the C-suite would find useful – data about third parties, markets, commodity strategies, geopolitical risks, operations and trade flows. As a direct result, the function is uniquely positioned to leverage these data sources and to act as an information hub delivering insights that will enable the organization to improve performance.

At the same time, the procurement function is also the face of the organization to external parties including suppliers, regulators and government agencies. As expectations of transparency in business continue to rise, procurement will not only be a focal point for the insights it brings to the enterprise but also for the insights it delivers to the market.

So why should this compel the CIO to become close allies with the procurement function?

• Firstly, procurement is heavily reliant upon the IT department to achieve the transformation – for cloud-based systems, data sources, data integrity, data security, and advanced analytic tools and capabilities. As allies, the collaboration will result in competitive advantage to the enterprise.
• Any transformation needs to be enabled in a way that protects the enterprise – requiring experience and services to address data privacy and cybersecurity concerns, and the increasing push for transparency inside and outside the enterprise.

Key factors to a successful CIO-CPO collaboration to deliver new insights

• Walk in each other’s shoes: CIOs need to understand the challenges and priorities of the procurement function and how technology can positively influence procurement performance. The IT function can serve as a valued business partner to procurement by finding the balance between the risk of new technologies and the value of deploying them to help the company optimize, grow and innovate.
• Respect each other’s capabilities: Collaborations are successful when both parties respect each other’s contributions. In this case, IT should respect the procurement function’s business requirements and procurement should respect the technological expertise IT brings to the table. In order for IT and Procurement to successfully collaborate, their respective leaders should define an operating model to establish how this can work and serve as a role model to their respective organizations. Ultimately, it will go a long way when procurement and IT leaders take a more collaborative – rather than a competitive approach.
• Capitalize on big data and the cloud: Most functions are moving from on-premise to the cloud; and procurement is part of this migration. Therefore, data privacy, authorization, compliance, data management, standardization, legal liability are all items that move up on the CIO’s agenda. Leveraging cloud-based technologies and big data for improved insights and business enablement while protecting the business from risks will be key.
• Integrate mobile and IoT into your strategy: The CIO should consider both how to deliver new and critical insights to the enterprise through collaboration with procurement and how professionals in the organization will consume the insights. Integrating mobile and IoT early into your strategy will allow you to optimize the design efforts while mitigating potential risks. CIOs need to understand how data is being accessed to assess the risk associated with unauthorized access to confidential data and other privacy related challenges that come with mobile and IoT technology such as wearable devices. Again, through collaboration and partnership, the business can enable the consumption of insights to drive improved performance without introducing unnecessary risks.

With the amount of information housed in the procurement function and the rapid pace of technological innovation happening in IT, closer collaboration will open up new possibilities for both these functions and the organization as a whole. For CIOs, taking advantage of this convergence of the procurement function’s unique position and recent digital technology advances translates into an opportunity to collaborate more and deliver benefits for the business as a whole.

Power and utilities (P&U) companies, and their CIOs, should act; and they should act now – a post on things P&Us can do to deal with change. By Dr. Cornelius Anger, Partner, Power & Utilities Customer Leader, EY

The rapid pace of change in the power and utilities sector is often grossly underestimated. Faced with change in every aspect, P&U companies can’t afford to wait and see how things unfold and take decisions slowly; the sector is changing too quickly and P&Us must move fast. But unsure of what exactly to do, companies sometimes respond to change by going into an overdrive of kicking off multiple initiatives without a clear road map, which can create confusion among employees on priorities and decrease efficiency.

Moving quickly isn’t always moving forward. What P&Us should start doing is prioritize – and prioritize ruthlessly. Focus on the most promising ideas at the outset, improve data and analytics capabilities, build customer loyalty and, when – and only when – they have mastered all front-office capabilities, start to innovate.

So, what exactly should P&Us do and how can their CIOs play a role in that?

Optimize costs: P&Us need to advance customer operations to reduce costs and improve customer experience. This can be initiated, for example, by overhauling legacy IT systems to support the sales and billing of new products and services across multiple channels. The CIO will be at the center of this development, being charged with creating the business case for the selection and implementation of upgrades to old or completely new systems.

Gain customer insights: P&U companies are very rich in customer data, but some are still poor in customer insights. CIOs need to help drive gaining customer insights from the data they have to understand what different customer groups need, want and buy; what product and customer segments are most profitable; the cost involved in acquiring different customer groups, etc. This will enable P&Us to embark on innovation with greater confidence.

Increase customer engagement: The brand-building techniques of the past — coupons, loyalty cards and the like — have undergone a digital revamp. The leaders in the sector, with the help of their CIOs, have developed robust online platforms that offer value-added services such as product information, free moderated online chat forums, and online games and contests. In other words, companies that manage to integrate community elements into their business models are much better equipped to respond successfully to the invasion of new, technology-backed entrants than those who don’t.

Go omni-channel: Today’s consumers want to interact with their service providers via the channels of their choosing. So, utilities are forced to provide omni-channel experiences to customers. The amount of data and insights companies can get through smart technologies can help them create effective omni-channels. But not all channels are digital, so companies can also explore non-digital (offline) channels. It will be the CIO’s task to ensure digital and non-digital channels are aligned and that the company can create the best value out of the data they are collecting.

Only after P&Us master the front-office basics listed above should they move to product and pricing innovation. New products and the right partnerships will define success in this area. And innovation should be based on the results from data analytics that help P&Us uncover opportunities; ideas should be first tested in the marketplace; and only the profitable ones should be encouraged.

The key to survival and success is adopting an agile, customer-focused, risk-embracing mindset. P&Us and their CIOs need to evaluate ideas quickly and put aside what isn’t working. This is a big shift for the slow-moving, risk-averse IT function of traditional P&U. Dealing with it will be struggle. But, as American social reformer Frederick Douglas said, “if there is no struggle, there is no progress.”

An introduction to robotic process automation (RPA) by Martin Weis, Finance Performance Improvement Leader Switzerland, Robotic Process Automation Champion EMEIA, EY

Contrary to many people’s belief, robotic process automation (RPA) has hardly anything to do with human-lookalike robots walking around in the office fetching things for you. RPA is more about intelligent software robots that simplify processes and eliminate repetitive manual tasks or, in other words, RPAs can help us take the robotic tasks out of us humans.

These robots are intelligent enough to mimic human behavior and automate replications, without altering the infrastructure. The benefits? Improved productivity, decreased cyber-attacks, better security and better compliance.

RPAs can effectively imitate human tasks

Currently there are three RPA types: those executing basic transactions by processing structured data, those that can handle unstructured data as well, and lastly cognitive platforms that are able to execute tasks that — as traditionally assumed — can only be executed by humans, like customer service. An example for the latter would be the tasks of a clerk at the bank’s back-office that feeds credit card application data into the computer, does background checks and sends an update of the application status to the customer. All this can be automated by a software robot – including the background check and the mail about the status of the application.

But where there is change, there is resistance

The new technology described above can lead to a dramatic shift in the employment situation. And it is usually the functional teams that are reluctant to the idea of automation, which makes change management very important. Without gaining the trust of the concerned teams and a clear change management strategy, organizations won’t be able to move forward successfully with RPA.

How companies make sure RPAs are leveraged to their fullest potential

Having mentioned the downside of RPAs, there are a few thoughts companies need to bear in mind when considering to implement them, to make sure the potential is used and any negative aspect is avoided:

• Don’t just do anything, do the right thing: Many employees in today’s organizations spend a good amount of time doing repetitive tasks. Employees even quit, being fed up with the boring nature of their jobs. When the repetitive tasks are automated, employees can focus on what matters to the company and what’s good for their careers — reporting, analytics, interpretation of data, etc. This increases efficiency, improves employee satisfaction and, ultimately, retention rates. The change management process needs to touch on this point, making sure employees understand their new role and how they will be able to add value in the future. CIOs can clearly contribute helping employees to focus on what matters by defining a company-wide automation strategy.
• Robots can get better with time: With RPA, accuracy is very high and errors are few; every step is documented. And when an error occurs, it is usually because the robot has encountered a situation for which a rule has not yet been defined. When this happens, the exception handling team would have to step in by adding a rule for handling a new scenario. In other words, we are training the robot on how to handle this new exception. And the error will never occur again. Hence, there is no need to kick-off with a perfect RPA implementation. The CIO’s task will be to facilitate the RPA implementation by enabling the functional teams to improve the robots in the course of time with their input regarding automation expertise and methodology.
• Still, your robot won’t outsmart you: Exception handling teams in RPA should consist of the most experienced resources in the team – the ones well-versed in the actual process that shall be automated. Since this means employees moving from execution to control, some amount of investment in upskilling might be required. Today’s education system produces generalists more than specialists. In the coming decades, with the increase in the number of jobs related to RPA, the need for specialist employees will be on the rise. Bridging this demand-supply gap requires collaboration between industry leaders and educational institutions. CIOs will advise on training needs and will play a key role in upskilling people. In addition to this, the CIO function can act as an RPA center of competence.

There is gold at the end of the journey

For RPA and everything associated that can automate human tasks, the future is bright. What will be high on the radars of the leaders of the future, including CIOs, will be managing the transition to automation and those affected by the change responsibly.

By Markus Heinen, EMEIA SAP Leader, EY

When we talk about the need for agility and the related role of the CIO, people often see a paradox. After all, CIOs are used to planning 5- and 10-year strategies for designing and implementing major IT programs. For more than a decade, CIOs and their teams have been supporting businesses by standardizing, streamlining and harmonizing systems and processes – delivering greater operational efficiencies on time and on quality, but within stagnant or declining budgets.

In many respects, CIOs have been among the unsung heroes who have made businesses more competitive. Their methods for delivery have been deliberate and methodically driven. Yet this kind of approach takes time that, due to speed of change and increased complexity, they no longer have.

Today, digital disruption, the sharing economy and the unending quest for innovation, in an environment of phenomenal change, has businesses demanding that the IT function delivers outcomes on programs in 12-month time frames, or faster. And instead of planning 5 or 10 years down the road, strategies need to be thought of in 3-year spans, or shorter, with a tangible business outcome within 1 year.

CIOs are also facing a perception issue. Thinking that they are unable to adapt to the changing times, CEOs and other business executives are considering adding the role of chief digital officer (CDO) at the C-suite level to give the business the innovation spark they are looking for. This puts CIOs in a tough spot. Even in an era where agility and flexibility are the keys to survival, CIOs cannot abandon their traditional mandate — organizations still need standardized processes and harmonized IT systems. Yet, they need to serve as an innovative and agile partner to the business rather than a barrier.

The balancing act between execution and innovation
The trick for the smart CIO is to find the right balance between execution and innovation — or, in IT parlance, between ‟waterfall” and ‟agile”. A two-speed approach enables IT to support and maintain the slower-paced stability of core IT systems, while simultaneously developing an innovation layer that can deliver outcome-based results in the time frame the business needs.

Through this innovation layer, CIOs need to be thinking about using agility to address the business’s unmet needs. These aren’t always articulated. Sometimes, it may be something the business hasn’t thought of before. For example, if Henry Ford had asked prospective customers what they wanted in a mode of transportation, they would have said faster horses. Instead, he conjured up the automobile, addressing consumers’ unmet needs. Within the IT world, businesses may come to the CIO demanding a shared service center without knowing that there may be a new better option, such as robotics, that would make a shared service center setup different, and also affect supporting technology.

Addressing unmet needs often means a culture shift
To address unmet needs, CIOs must gain a better understanding of the issues — not what they want or think they need, but the challenges that are hampering their ability to compete. The CIO and their IT departments then need to be able to take the issues and innovate solutions. CIOs need to think beyond how to enable the business. They need to be able to chart new courses for the business to follow.

This, of course, is a tall order for an IT function that has been used to performing its tasks in a certain way. Being able to pivot from stability to agility often requires a strong cultural shift across the function — and sometimes across the enterprise. Unfortunately, not everyone may be able to make the shift. It’s therefore imperative that CIOs take stock of the resources they have, identify what they need, and then set about filling the gap and adjusting talents where required.

The importance of measuring transformational change
In making these kinds of transformational changes, CIOs will need a means to measure their progress. They’ll need to determine the right operating model based on the level of maturity of the IT function and the organization. The operating model will determine how the IT function can maintain the core while innovating new strategies, and who they will need to do it. CIOs may find that they’ll want to set up a protected space within the function to drive alignment in a way that IT hasn’t done in the past. In some cases, depending on the level of maturity, this protected space may need to be a separate department, and even a separate environment in which to operate.

Ultimately, CIOs need to form an environment that creates an experience by being a part of, and questioning, the “why” journey — the organization’s purpose — and defining the “what” by executing the “how,” or value, the organization can deliver in fulfilling its purpose. In this way, by facilitating conversations and becoming an integral part of the organization’s innovation engine, the CIO and the IT function can play a pivotal, if indirect, role in changing the organization’s culture and engaging its workforce to ignite passion for what is being created. In many ways, it’s about adopting a start-up philosophy, even if your organization is a multinational conglomerate.

It’s innovate or die
In today’s climate of disruption and change, innovation is a prerequisite for survival. CIOs need to make sure they are part of their organization’s innovation journey. Otherwise, the business will move around them and then forward, leaving CIOs to consider their fate as relics rather than the prophets they once were. In conclusion, CIOs need to become ambassadors and role models for innovation, powered by digital.

To learn more about how technology can help you turn the art of the possible into the science of the achievable, visit us at SAPPHIRE.