by Peter High, published on Forbes
3-22-2016
From the beginning of her tenure as Intel’s CIO, Kim Stevenson has pushed IT to be a source of innovation for the company. One of my favorite stories from Implementing World Class IT Strategy was a vignette that described how Stevenson polled her new peers in the leadership team about IT’s performance upon taking the job. She discovered that they were largely satisfied. When she dug into the details more deeply, however, she discovered that IT was not being judged accurately. She had the gumption (it would be proven to be foresight) to note that the company needed to set the bar higher in its evaluation of the IT department.
Since then, Stevenson has ensured that the bar has remained high. One of the most ambitious projects that her team has led has been a big data analytics platform that has changed the way in which the company markets and sells its products. Greg Pearson, Senior Vice President, General Manager, Sales & Marketing at Intel confirms as he notes, “We have truly moved beyond looking at big data analytics as a technical project, it is essential to how we run our business.”
Stevenson estimates that it has already produced $1 billion in revenue and productivity gains to date. For this reason, she is the winner of Forbes CIO Innovation Award for 2016. (For an overview of the award and its criteria, please visit this link.)
Peter High: Please describe the big data analytics platform that your team developed.
Kim Stevenson: This project changed the way Intel markets and sells, delivering USD $1 billion from incremental revenue and productivity gains. The solution delivered a personalized customer experience by translating big data analytics from sales and marketing engagements into new revenue opportunities. It leverages visibility into multiple stages of marketing-to-sales pipeline improving sales closure rates. This platform has driven better decision-making in pricing and demand forecasting for manufacturing. This project has changed business processes for multiple groups at Intel; it has changed the way sales, marketing, distribution and demand forecasting teams work together.
High: Is this idea new to Intel and the industry?
Stevenson: Yes. The project started with a proof of concept in 2014. We used a three-phase approach to build the platform solution.
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Agriculture is perhaps the world’s oldest industry, and from an innovation perspective for a long time, it reflected that age. Recently a number of leading companies have recognized the tremendous value that data analytics can provide to help improve the analysis of weather, soil, equipment, among other things, all in the service of ensuring that agricultural yields are better.
Michael Macrie has been with Land O’ Lakes for six years, and nearly half of that time has been spent as the chief information officer of the company. He realized early on the power to harness data. Recently his team has worked on a product called the R7 Tool, which facilitates land analysis for farmers from an iPad.
Land O’ Lakes CEO Chris Policinski noted that these ideas “demonstrate Land O ’Lakes’ leadership in helping to build the farm of the future with cutting-edge concepts and technologies”. Additionally, Policinski went on to describe how the technology allows the company to “tell a farmer what is happening with their crop during the season.” This technology provides “a great way to optimize the crop, the yield, and the economics, because you are only putting on what is needed, when it is needed to produce the highest yields in the most sustainable way possible.”
Peter High: What opportunity or issue to be resolved led to this IT-led innovation?
Michael Macrie: Over the past 10 years, a third revolution in technology is occurring with the introduction of mobile, cloud, and AI based technologies. Generally speaking, American agriculture has been slow to adopt, if not absent from, participating in benefiting from IT innovations over the last 30 years. These new technologies allow IT to be applied in American agriculture, at the farm level, in new and innovative ways that were not possible just ten years ago. Land O’ Lakes seeks to be a leader in the modernization of American agriculture.
High: Please describe the innovative idea that you and your team in IT pursued.
Macrie: When we originally approached the problem, we looked at a farmer’s daily life and identified all of challenges he or she may face. We then analyzed all of the risk they take on related to weather, commodity, and costs. From there we broke down their annual and daily decision making processes and the risks associated with each decision to determine which were decision that could be enabled, improved, or managed better through the leverage of information technology and big data. We then laid out a ten-year plan to develop, partner, or buy the technologies necessary to ensure that each and every farmer can maximize their yields, while minimizing their risks in the most sustainable way possible.
Federico Florez joined $7 billion Spanish infrastructure company, Ferrovial, as Chief Information Officer roughly seven years ago, and for the first two years, he and his team rationalized IT and looked for synergies across the group. At that time, he was asked to lead innovation across the company. He implemented an innovation methodology based in three pillars:
Currently his team launches 100 projects of innovation every year based on 400 submissions from employees. Examples include energy efficiency, drones in construction, augmented reality, software for lighting, smart cities technologies for cleaning, and waste management. Ferrovial CEO Inigo Meiras Amusco has said, “Our company was founded because of an innovation idea. Innovation is part of our culture. Innovation is critical to our business and a way to differentiate from our competitors.”
The idea that he described in his award submission was a technology that flexible tolling on highways based on traffic. Based on this idea, Federico Flores has won the Forbes CIO Innovation Award for 2016. (For an overview of the award and its criteria, please visit this link.)
Peter High: Please describe the innovation behind flexible tolling.
Federico Florez: The innovation centers around the use big data to manage the lanes on a highway. We developed a software of tolling systems to manage new highways. They had to be flexible to be changed frequently, so we developed a mathematical model to support it. We wanted to use big data, because we needed to know the public and private traffic of both highways, and also the accidents and weather of both in order to know how much time drivers would spend in both ways, and know the savings of time that would result. So we use big data technologies and software to estimate that.
High: Please describe the genesis of the idea.
Florez: We work in the infrastructure business and we think we are one of the leaders in innovation in our sector. Many of the projects such as software for lighting, waste management intelligent process, and intelligent routing from our vehicles are leading solutions in the market. The most recent highways that we have built in the USA leverage our managed lane and flexible tolling concept. You can use our private highways instead of the public highways by paying a toll. But this toll is flexible and it changes every five minutes based in the traffic and the time savings one can obtain. We designed it with big data technologies, where we can estimate the traffic on our highway and the non-tolled public highway taking into consideration traffic, weather, etc. This is a new idea and it will mean new business opportunities.
3-21-2016
Cars.com is a web 1.0 company, having launched in 1998. It receives roughly thirty million visits per month, and it focuses on the merchandising of new and used vehicles. Kevin Steele leads IT and product for the company, and as such has typical CIO responsibilities, but also is responsible for the Cars.com website, the products the company sells to dealers, the features the company presents to consumers. Therefore, he has an unusually strategic set of responsibilities. Within the past three and a half years, Steele has shepherded in the rise of Cars.com’s mobile presence to reflect the fact that customers increasingly wish to access the site on their smartphones.
In being a customer-centric IT executive, Steele and his team must bear in mind two sets of constituents, both dealers and those who purchase cars. In this interview, Steele describes the methods he uses to stay on top of the needs of each, the sanctity of having a solid strategic planning process, and the need to develop in an agile fashion, among other topics.
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Peter High: Kevin, you are the Vice President of Technology at Cars.com, and I wonder if we could begin with a description of Cars.com’s business. I know you are one of the older of the dot com companies, actually having emerged during the internet 1.0 period. This is an organization I would imagine that has gone through a variety of iterations, changes, evolutions, perhaps some pivots through time. I would love to get your high level overview of the business itself as it stands today.
Kevin Steele: Cars.com is essentially a web platform that enables the connection of consumers that are looking to buy vehicles, both new and used, with dealers that are looking to sell vehicles, both new and used. We are a website that gets approximately thirty million visits per month and we focus on the merchandising of new and used vehicles.
High: When you think about the website and your customer you are in between a couple of different parties— both the dealers and the people who are purchasing cars. How do you think about the experience for each of those sets of constituents? And as you are iterating around the development of products, for instance, when you are reaching out to customers does it tend to be a cross-section between those two different sets of constituents?
Steele: Yes, it is. Our objective is to try to strike a balance between the two. Certainly our site is structured and focused on being a consumer-centric site. We look to create features and content and search capabilities that favor the ways that consumers want to engage with vehicle shopping, in particular engage with dealers from a connections standpoint—whether that be viewing a map and how to reach a dealer through a mobile device, or sending a dealer an email and seeking a quote on a vehicle they are interested in. On the dealer side, we look to make sure that we are leveraging our large audience to the best of our abilities to merchandise dealers in a positive light, make sure that they have the largest exposure to consumers for their inventory, and provide them with products to merchandise, attract, and build brand for their dealerships.
I have had the privilege of being a judge on a number of awards bestowed upon leading chief information officers. Many of them have an innovation theme of one sort or another. I have also had the opportunity to speak with a great number of CIOs, and for those who have an innovation mandate, I have had a chance to speak with them about what constitutes innovation.
For many of these executives, innovations have been centered around cost savings initiatives. It should be noted that cost savings initiatives can be tremendously innovative, so these CIOs should be proud of their teams’ efforts.
There are also a small but growing cadre of CIOs who help drive top-line growth. These revenue generators are the alpha CIOs. They recognizing that in running IT, there is gold in the “I” – information is king, and if that can be synthesized in the right way to provide new insights on how to better serve customers, or if it can be used to help develop a new, innovative product or service, tremendous rewards can be reaped for the enterprise.
In preparation for this month’s Forbes CIO Summit, we asked CIOs to apply for a newly minted award, which we call the Forbes CIO Innovation award. Revenue augmentation was a key criteria used to judge the many applicants who applied. The four winners of the award are:
3-15-2016
Flex is a $26 billion provider of global supply chain solutions. Flex has long been in the business of designing, building, shipping, and serving packaged electronic products for original equipment manufacturers (OEMs). Flex works in collaboration with companies large and small, and the company’s CIO Gus Shahin’s team has been an integral player in creating the tools and the environment to allow innovation to sprout.
Under Shahin’s guidance, the company ahs developed what it refers to as a Pulse Center, which allows the company to monitor its incredibly complex supply chain, and make better decisions based on up-to-the moment data. This work has led to better inventory management, which is a source of tremendous value for a company like Flex.
Shahin has also helped develop an innovation lab “to allow people in the Bay Area who have ideas, to help them bring those ideas to reality as quickly as possible, as cheaply as possible, and in an effective way,” as he notes in this interview. The combination of these creative outlets have lent insights back to Shahin and his team to ensure that the company remains on the cutting edge.
(To listen to an unabridged audio version of this interview, please visit this link. To read future interviews like this one, please click the “Follow” link above.)
Peter High: Gus, please take a moment to describe the Pulse Center at your offices in Milpitas, California?
Gus Shahin: Flex is a supply chain sketch to scale company, and basically everything we do is around supply chain. The only way we can make money is if we manage supply chains for customers effectively and in a efficient way. The pulse center is basically flex digitizing, if you will, the supply chain globally. We have about one hundred factories in forty countries. We manufacture products for companies, from the largest OEMs, like Cisco and others, to startups. And we not only built the products for them but we also manage their entire supply chain: we procure on their behalf, we manufacture, we distribute, we repair, and so on. The Pulse Center gives us a real-time view of our supply chain at any given point in time, in real-time, and it tells us all kinds of information. We get alerts immediately – geopolitical alerts, updates from factories, weather alerts, anything that is happening around the world that could potentially disrupt the supply chain or disrupt the material flowing in the supply chain that could affect our – and just by looking at the screens, we see what is going on in real-time and can alter things and move things around so that we do not disrupt the supply chain for our customers. That is basically the description in a nutshell, but there is a lot in there.
High: One of the fascinating things about digital, generally speaking, is the extent to which it requires cross functional collaboration in ways that are new and more substantial than in the past. There is a new kind of collaboration emerging. Can you talk about the role that IT plays in collaborating across the enterprise?
As I have interviewed IT leaders at many companies, there are a handful of companies that seem to have the biggest family trees in producing CIO talent. Few can match Ford Motor Company’s family tree. The CIOs at Boeing and Nike and executives above the CIO rank at Biogen and Deutsche Bank have each spent time in the IT department at Ford. I was curious about this phenomenon, but especially curious to hear from Marcy Klevorn, who for some time had been groomed to become the global CIO of Ford. Her highly regarded predecessor, Nick Smither identified her as a successor and then provided the kinds of opportunities for her in multiple units and geographies to ensure she would have depth and breadth of experience.
Since ascending to the top role in IT a bit more than a year ago, Klevorn has bolstered the IT strategy process and content, she has helped weave IT further into the narrative of customer experience and IoT trends that are important to the industry. All the while, she has used her love of cars as inspiration for new ideas on how IT can make Ford continue to improve.
(To listen to an unabridged audio version of this interview, please visit this link. This is the 34th article in the CIO’s First 100 Days series. To read the prior 33 with the CIOs of companies like Intel, GE, P&G, Kaiser Permanente, and AARP, among many others, please visit this link. To read future articles in the series, please click the “Follow” link above.)
Peter High: You have spent a little more than a year in role as Chief Information Officer of Ford. You followed a leader who was deemed successful and was retiring. You had been with the organization for a while. I do not imagine it was a surprise as you transitioned to the role of CIO. I imagine this was a smoother transition than coming in from the outside. I would love to understand how you prepared yourself for the role prior to assuming the position, and the sorts of things you did in the early stages of your tenure to set you and your team up for success.
Marcy Klevorn: One thing that we think about at Ford is succession planning, and making sure we have a smooth transition to provide a stable environment for our team to continue to operate. The company continues to change and evolve, so we all need to change and evolve as well. I was conscious of making sure that we had a smooth transition in the handoff.
I worked with Nick Smither, my predecessor, and I did a live interview about the transition, and he offered feedback on why he thought I would be a good candidate and then asked me about what was important to me going forward in the role. Then that was broadcast to the entire company. That was one thing that set this was going to be a smooth handoff. We were aligned on the succession, and we were going to continue to work together until the final days. That was the public way we did that.
The transition happened at a time where Ford was changing, and disrupting itself, going from an automotive manufacturing company to a technology-led company, and a mobility/transportation company. Obviously, IT plays a big part in that. At the same time that this was happening, IT had to re-invent itself as well in response to the direction the company was taking.
Before Nick left, I asked him to participate in a video with me and my IT leadership team that we sent to the employees their first day back at work in 2015 – my first official day in the job – to talk about this transformation. I wanted to include Nick because I thought it was important to give that signal that we were not going to flip the switch and everything was going to change. It is a journey and evolution, and we were going to continue to support Ford as we change the company. Nick was involved in those conversations, so it was going to be orderly and smooth.
3-14-2016
I am in Hannover, Germany at the CeBIT conference, the largest technology conference in the world. Among the most impressive things I have seen is the result of a joint venture between Hewlett Packard Enterprise (HPE), German-based scanning and 3D printing company, DOOB, Hong Kong-based Quantum Matrix’s Quantum Human product, and South Korea-based digital clothing developer, Physan. These companies have worked together to develop a sophisticated avatar-based experience. I test drove it myself, stepping into a room the size of a closet and holding a pose for a few second while 64 cameras simultaneously took my picture. Within a few minutes, a lifelike avatar of mine was dancing in a field with the avatars of other conference goers. My avatar was also used in two different video games that I controlled, as well as a workout scenario. These represent a few different real world applications that HPE foresees for this technology. (Had I realized my avatar would be doing so much working out, I might have skipped the tie.)
HPE sees the biggest market opportunity in the near-term in global online clothing and footwear retail, a category that it reckons will yield $300 billion by 2018. Today, 30 percent of all clothing that is purchased online is returned, driving up costs to retailers. Most of the returns are due to issues of size and color. If the return rate can be reduced to 10 percent, that equates to a savings of $36 billion. Contrast that to the in-store experience, where 80 percent of garments are tried on in the storeand where most people like to shop with friends and family members. HPE is rethinking customer experience by bringing the in-store experience to the online world. Here is how it works:
I interviewed Ben Fried, CIO of Google, on stage at the Forbes CIO Summit last week, and he offered a number of keen pieces of advice for his fellow CIOs.
He noted the following first principles that he operates under: people are creatures of habit, and yet technology has never moved as quickly as it is today. As a result, CIOs need to make change a core competency. The ability to change is essential to stay competitive. Google is so worried about practices becoming ossified that they hold what are referred to as bureaucracy buster days. Employees from across the company identify areas where bureaucracy has seeped into the company, note them, and projects are devised to destroy them.
Fried said, “IT sits in middle of some hard realities. On the one hand, people are creatures of habit. On the other hand, computing is arguably the fastest moving discipline in the history of the enterprise. Realizing the advantages that come from computing’s rate of innovation means we have to force people out of their technology habits.” He notes that this will not happen without a push because of the strength of inertia. He said, “Plan on making changes every year, and on building an end-to-end technology team that flourishes in change. For example, if you think of the help desk as being about reading FAQs and recipes, that’s a cognitive dissonance — you’re acting as if change is bad.” He said that although many companies have outsourced the help desk, by so doing, they are not equipping the enterprise with the ability to change, as the help desk is a key weapon in any change management program.
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Ted Colbert has one of the largest roles in IT, that of CIO of $96 billion aerospace and defense giant Boeing. Still in his early 40s, Colbert’s rise has been like a 787 Dreamliner taking flight. He has balanced an innovation and digital transformation agenda while pushing the diverse businesses to do more commonly. In so doing, he has been a driver of both top and bottom line value for the enterprise. At the same time that he has helped the company become more innovative, he has also stewarded in a sophisticated security program. As a reward for his team’s great work, last week, Colbert added the title of SVP of Information and Analytics to his responsibilities as CIO.
(To listen to an unabridged audio version of this interview, please visit this link. This is the 28th interview in the CIO-plus series. To read the prior 27 with CIO-pluses from the likes of Verizon, Mondelez International, P&G, and Walgreens, among others, please click this link. To read future articles in the series, please click the “Follow” link above.)
Peter High: Ted, I thought we would begin with the transformation that you have been leading as chief information officer. Could you give us a brief overview of some of the activities that you’ve been leading?
Ted Colbert: The business we are in is growing, challenging, super diverse, very complex, and change happens at a pace that sometimes is fast and sometimes slow.
Last year, we launched a program around geographic diversification. We have a significant presence down in South Carolina. Two years ago, there might have been 10 IT employees there. Now, we have almost 700 IT employees in South Carolina. We have several hundred additional employees in St. Louis. We balance our workforce around the country to get access to different types of talent, to have diversity, to be connected with our business, and to fit the business around the US. We are spread across the country and that has offered us some other opportunities from the people perspective.
High: IT has created the laudable goal of becoming more aligned with the strategic plans of the different parts of the organization. How do you do that organizationally?
Colbert: We are an engineering company, so innovation is everywhere. You do not have to go the IT team to find innovation. We have engineers and software designers and developers in all the parts of organization.
I also lead the CIO strategy council which is a group of senior executives. It is probably two or three degrees from the CEO. We meet every other month or so, and go through what we are doing to drive operational excellence in the organization. Then we pick some specific topics from a strategic perspective to ensure we are aligned on them.
