This article originally appeared on CIO.com. Chris Boyd co-authored the piece.
As technology departments shift from traditional project management frameworks to treating IT as a product, it is triggering a broader re-think about how technology initiatives are funded.
Under the existing “plan, build, run” model, a business unit starts by sending project requirements to IT. The IT team then estimates the project costs, works with the business to agree on a budget, and gets to work.
This setup has several flaws that hamper agility and cause headaches for all involved. Cost estimates often occur before the scope of the project is truly evaluated and understood, and any variations in the plan are subject to an arduous change control process. What’s more, funding for these projects usually is locked in for the fiscal year, regardless of shifting enterprise priorities or changing market dynamics.
To achieve the benefits of a product-centric operating model, the funding model must shift as well. Rather than funding a project for a specific amount of time based on estimated requirements, teams instead are funded on an annual basis (also known as “perpetual funding”). This provides IT product teams with stable funding that can be reallocated as the needs of the business change. It also allows teams to spend time reducing technical debt or improving internal processes as they see fit, improving productivity and quality in the long run.
“We have to adapt with governance, with spending models, with prioritization,” Intuit CIO Atticus Tysen said during a 2019 panel discussion. “The days of fixing the budget at the beginning of the year and then diligently forging ahead and delivering it with business cases are over. That’s very out of date.”
Business unit leaders may be skeptical at first glance: why pay upfront for more services than we know we need right now? A closer look reveals that this model often delivers more value to the business per dollar spent. For example:
Shifting away from old ways and adapting a new funding model can seem like a daunting task, but you can get started by taking the following first steps:
First, establish the baseline to which you will measure the funding shift’s effectiveness. A technology leader must consider all the dimensions of service that will improve when making the shift. Two areas of improvement that have high business impact are service quality and price. To establish the baseline for service quality, it is important to measure things like cycle time, defects, net promotor score, and critical business metrics that are heavily influenced by IT solutions.
The price baseline is a little more difficult to establish. The most straightforward way we have found to do this is to look at the projects completed in the last fiscal year and tally the resources it took to complete them. Start with a breakdown of team members’ total compensation (salary plus benefits), add overhead (cost of hardware/software per employee, licenses, etc.) and then communicate that in terms of business value delivered. For example, “project A cost $1.2M using 6 FTE and improved sales associates productivity by 10%”. When phrased this way, your audience will have a clear picture of what was delivered and how much it cost. This clear baseline of cost per business outcome delivered will serve as a helpful comparison when you shift to perpetual funding and need to demonstrate the impact.
The shift to a new funding model will be highly visible to all business leaders. To create the greatest chance of success, focus on selecting the right teams to trial the shift. The best candidates for early adoption are high-performing teams that know their roles in the product operating model, have strong credibility with business unit stakeholders, and experience continuous demand.
In our work with large organizations piloting this shift, e-commerce teams often fit the mold because they have a clear business stakeholder and have developed the skills and relationships needed to succeed in a product-based model. Customer success teams with direct influence on the growth and longevity of recurring revenue streams are also strong candidates as their solutions (such as customer portals and knowledge bases) directly influence the degree to which a customer adopts, expands, and renews a subscription product.
Estimation in the product-based funding model is different than in the project model. Under the new model, teams are funded annually (or another agreed-upon funding cycle) by business units. As funding shifts to an annual basis, so should cost estimation. Rather than scoping the price of a project and then building a temporary team to execute it (and then disbanding after execution), leaders should determine the size and price of the team that will be needed to support anticipated demand for the year, and then direct that team to initiate an ongoing dialogue with the business to continuously prioritize targeted business outcomes.
When completing a team-based cost estimation, it is important to include the same cost elements ( salary, benefits, hardware, licenses, etc.) that were used to establish your baseline so that you are comparing apples to apples when demonstrating the ROI of product-based funding. Where you will see a difference in the team-based model is resource capacity needed to deliver demand. In a product model, a cross-functional team is perpetually dedicated to a business domain, and there is often zero ramp-up time to acquire needed business and technical knowledge.
Since the teams have been perpetually dedicated to the domain, they are encouraged to take a longitudinal view of the technology estate and are able to quickly identify and make use of reusable components such as APIs and microservices, significantly improving time to market. For these reasons, among others, teams in the product-based operating model with perpetual funding can achieve more business value for less cost.
Pilot teams should work closely with the BU leadership providing the funding. Stakeholders should work together to generate a list of quantitative and qualitative business outcomes for the year (or other funding cycle) that also satisfy any requirements for existing funding processes operating on “project by project” basis.
If you don’t already have a great relationship with finance, start working on it now. Your partnership with finance at the corporate and BU level will be critical to executing your pilot and paving the way to wider enterprise adoption of team-based funding models. Ideally. Leaders should engage with finance before, during, and after the team-based funding model so that everyone is in lockstep with you throughout the pilot. This alignment can help bolster adoption with other areas of the enterprise.
Each finance department has unique processes, cultures, and relationships with IT, so while you will need to tailor your approach, you should broach the following topics:
You will need to achieve success in the pilot to bolster adoption in other areas of the business. Your success needs to be communicated in terms that resonate with the business. As your pilot comes to an end, gather your baseline data and match it up with the results of your pilot. Put together a “roadshow deck” to show a side-by-side comparison of costs, resources, and business outcomes (Business KPIs, quality metrics, cycle times, NPS, etc.) before and after the shift to team-based funding.
Depending on your organization, it may be prudent to include other observations such as the number of change control meetings required under each funding model, indicators of team morale, and other qualitative benefits such as flexibility. Have conversations with other areas of the business that may benefit from team-based funding (start off with 1-on-1 meetings) and offer to bring in your partners from finance and the product teams as the discussion evolves. The most important part of your story is that the team-based funding model delivers more business impact at a lower cost than the old model.
Establish light and flexible governance mechanisms to monitor performance of the teams operating in the teams-based model. The purpose of these mechanisms is to validate that the increased level of autonomy is leading to high-priority business outcomes, not to review progress on design specs or other paper-based milestones. A $40B global manufacturing client adopting the team-based funding model established quarterly portfolio reviews with BU leadership and the CIO to review results. BU leadership reviews results of the teams and the planned roadmap for the subsequent quarter. BU leadership is then given the opportunity to reallocate investment based on changing business needs or can recommend the team proceed as planned.
It is important to communicate that this process requires constant buy-in from business units. While funds will be allocated annually, demand will need to be analyzed and projected on at least a quarterly basis, and funds should be reallocated accordingly. In cases where investments need to be altered in the middle of a fiscal year, it is important to note that the unit of growth in this model is a new cross-functional team focused on a targeted set of business outcomes. The idea is to create several high-performing, longstanding, cross-functional teams that have the resources needed to achieve targeted business outcomes, rather than throw additional contracted developers at teams as new scope is introduced.
Making the shift from project-based funding to product team-based funding is a major cultural and operational change that requires patience and a willingness to iterate over time. When executed successfully, CIOs often have closer relationships with their business partners, as well as less expensive, more efficient ways to deliver higher-quality products.
11/13/17
By Peter High, published on Forbes
The Chief Information Officer of $100 billion revenue Express Scripts Neal Sample has had unusual breadth and depth of experience for someone who is still in his mid-40s. He has a PhD in Computer Science from Stanford, which allows him to dig into the weeds of the technology his team develops with the best of them. He also spent time professionally as a consultant, giving him an orientation and a toolkit to solve a diverse array of problems. He spent time with legendary digital native companies like Yahoo! (where he was Chief Architect) and eBay (where he was CTO of X.Commerce, eBay’s venture to bring together a comprehensive set of commerce products and capabilities to help merchants and businesses compete in the world of social, local, mobile, and digital-driven commerce). At American Express, he grew from CIO of the Enterprise Growth unit to become president of the unit.
Sample took his current role for the St. Louis-based pharmacy benefits management behemoth nearly two years ago. As he notes in this interview, information is the coin of the realm for Express Scripts, and he has helped tune his team to drive better insights through better gathering and synthesis of information. His team helps lead the innovation agenda for the company, and he has grown leaps and bounds.
Peter High: In the 20 or so months that you have been the CIO of Express Scripts, you have been in the throes of a transformation. What was the state of IT and technology when you joined Express Scripts and what changes have you made?
Neal Sample: For 20 years, Express Scripts had primarily grown inorganically through acquisitions. The enterprise’s growth pattern was fairly consistent, they would purchase another pharmacy benefit management company or a related business, integrate it, capture the synergies from the integration, and then leverage those synergies to acquire the next business. From a technology perspective, this meant that they often did not end up with the systems they would have designed or chosen if they had started with a blank sheet of paper. It was not one plus one equals three, it was more like one plus one equals one. There was a lot of technology debt. There were many systems that would have been upgraded if the focus had been on infrastructure, instead of integrating the next company. There were also a plethora of systems. We had 31 development languages. Any technology stack you could imagine was present. Midrange, mainframe, on premise cloud, off premise cloud, it was all there. We had the opportunity to do some clean up, to enhance our reliability, and to become more agile. From a business process perspective, development had been primarily waterfall, which meant that not only were the cycle times long and fairly expensive, but the processes were rigid in their ability to respond to the market.
We had our work cut out for us. We had to decide to start with people, process, or technology. We picked all three. We began a tech debt retirement program and a move from waterfall to agile. We also focused on attracting and hiring in-house talent. Years of outsourcing had left us a little light for the transformation. In summary, I came into an environment that was target rich in people, processes, and technology, and began chipping away.
High: Part of your purview as CIO is innovation. As you have taken care of the efficiency part of the equation, trying to get to that one plus one equals three equation, what innovative ideas have you pursued?
To read the full article, please visit Forbes
By Peter High, published on Forbes 2/21/17
Jay Rogers is the founder and CEO of Local Motors, a company focused on low-volume manufacturing of open source motor vehicles designed using micro-factories. Local Motors produces its own vehicles, including the Strati, the world’s first 3-D printed electric car, and the Olli, and autonomous, electric powered bus.
Rogers has entrepreneurship in his DNA. His grandfather was an entrepreneur from whom Rogers drew inspiration. He headed down an academic and professional route that seemed appropriate for a future entrepreneur, having graduated from Princeton and Harvard Business School, and having spent time in consulting and in banking. Among the aspects of his experience that he believes to have had the most profound impact on his career was a seven year stint in the United States Marine Corps. He learned about leading in precarious situations with imperfect information.
Peter High: Jay, you founded and run Local Motors. It is a business that combines several leading trends: open source technology; micro-manufacturing; 3-D printing; self-driving automobiles; “pretail”; co-creation. How would you describe Local Motors business?
Jay Rogers: Local Motors drives the commercialization of high technology products, using co-creation and micro manufacturing. When you drive the commercialization of technology products, which we do for own accounts and some other large businesses that have similarly complex high technology products, it is about changing a hundred-year paradigm in mass manufacturing. We are now using the crowd. We are using a bespoke community that we build with suppliers and customers. Then we are changing the way we think about manufacturing. We have a mass oriented way of thinking about product commercialization. In our business, our most successful product is a self-driving shuttle, Olli, and it is where we eat our own dog food. It is a new area and it is one where there is strong customer interest and user interests for a lot of reasons. To get the products out, companies that are more traditional in the industry have a much longer timeline because of the way their processes are set up.
High: You mentioned the bespoke community ecosystem that you have developed. Much of the creation depends upon that strong collaboration with the community. How do you foster that? How do you select them and how do they select you?
Rogers: This is something that we are passionate about. We have moved into what Steve Case calls “a third wave” of internet enabled businesses. We think about community not as numbers but as relevance. Our community is something that is a breeding entity and nothing is more real in this age of questions about re-shoring jobs, of constant upheaval in union memberships, and of micro degrees where a college degree is under attack. When we think about a community, we are looking for businesses and individuals to join in an effort that has relevance to something they know. We stand up that community around what is, at best, a project, and we scope carefully what is needed in that project. If we are looking at something that needs metallurgy or material science or integration or controls or flight experience or knowledge of unmanned systems, those are the kinds of things where there is a cognitive surplus of people out there that simply are never going to work for you. You need them more than they need you. You can strike a transaction around a project if you can be open about what you are doing. The way we build a bespoke community is by being clear about what you are looking for and open about the projects you are working on. That has been a big shift. One of the first things that large companies learn about the way we do things is that open development allows them to build a breeding team.
High: You have worked with several leading brands such as General Electric, Lego, Domino’s, and Airbus Group. What are some of the specifics of these partnerships? What are the ways you engage with large enterprises? How do they think of you relative to their traditional manufacturing?
by Peter High, published on Forbes
11-2-15
Vanguard is an investment management company with more than $3 trillion in assets. It is the largest provider of mutual funds in the world. It is a company that believes in developing breadth and depth in its leaders, and as such, potential executives are likely to do “tours of duty” of sorts in multiple parts of the enterprise in order to get a better sense of all that the company does for individual and institutional investors. IT is no different. In fact, multiple executives outside of IT once held the chief information officer role.
The incumbent, John Marcante, has been the CIO since 2012. As someone who has held leadership roles outside of IT during his 22 years with the company, he thinks about IT in some non-traditional ways. He believes that CIOs have to have technology acumen as a foundation, but that they also need to have business acumen. There is no replacement for having spent time in the business and for interacting with customers. Lastly, he says that CIOs need to build a leadership competency centered on the ability to influence the leadership team through strong analysis and clear communications. He believes that these three competencies need to be shared by leaders of other functions, including the need to be technology savvy, as technology becomes more pervasive in all industries.
In this interview, Marcante describes his own career journey, the way in which he thinks about the value that IT can create, the ways in which he benchmarks start-ups for new ideas and methods, the methods he has used to gain insights from customers, the methods he uses in ensuring that his IT staff (who are also customers of Vanguard) leverage their insights as customers to make IT better, and a variety of other topics.
(To listen to an unabridged audio version of this interview, please visit this link. To read future articles like this one, please click the “Follow” link in the upper right hand side of this page.)
Peter High: You are the Chief Information Officer of Vanguard, and in that role you oversee technology to serve clients and manage investments. Can you take a moment to talk about how you work with your colleagues and customers to develop ideas in both of those categories?
John Marcante: The answer to that varies a little bit by business line at Vanguard. We have a long history of getting technology ideas from our Institutional clients – most of the clients that we manage 401(k) plans for, for example. If I remember correctly, in the early ‘90s, the idea for the creation of our first website came from a prospective Institutional client. Today, our tech clients, especially in the Institutional area, like to partner with us on the technology front. This allows us to gain their input, leading to things like custom analytics and data visualization tools. As an example, we just rolled out a new plan manager (My Plan Manager) for our Institutional customers. Getting that feedback, understanding what plan sponsors really want to see, and bringing technology to the forefront is a partnership with our clients. It is a lot less of a service provider mentality. I think the dynamics of the world are changing. It is much more of a true partnership.
On the Retail side, we have millions of clients, so it is more difficult to partner. I think, traditionally, we used to use focus groups, where we could get people in, track eyeballs, create heat maps for our websites, and even solicit feedback from clients by creating virtual labs and having early adopters join those labs to look at their own data. Today, it is much different, with the introduction of big data and the introduction of “continuous delivery.” Today, technology allows our business to have a hypothesis, create a test, experiment with multiple clients seeing multiple experiences, and quickly implement one of those experiences that produces the best business outcome or client experience. Today with data analytics and continuous delivery, we can test, fail, fail fast, fail cheap, learn, and iterate to the best design. That is where we are at on the retail side.
High: What traits do you believe CIOs need in order to be successful today?
Peter High
11-5-2014
Excerpt from the Article:
Jay Vijayan, CIO for Tesla Motors, is responsible for the company’s business applications, infrastructure, network, systems operations and security. Learn how he helped IT evolve into a global organization that is a key enabler supporting the growth and success of the company’s business.
CIO Insight: Jay, you’ve been the CIO of Tesla for two years, and you’ve been with the company for nearly three. Can you please highlight the evolution of the IT function during that time?
Jay Vijayan: The IT function in Tesla has been evolving extremely fast with the evolution of the company. The company had quarterly revenue of $39.5M in Q4 2011, but in the last quarter (Q2 2014), we reported quarterly revenue of $769.35M. Our exponential growth is not in revenue alone, but in all areas—from production volume to global sales.
We have produced a car [Tesla Model S] that won all the prestigious awards in the automotive industry in its first year of production. We are continuing to grow and move faster than ever to achieve our goal of accelerating the world’s transition to electric mobility, with a full range of increasingly affordable electric cars.
As part of this exciting and continuing journey, the IT team built Tesla’s entire global systems network and data center infrastructure; software applications for the factory, corporate and retail network; and the necessary information security infrastructure and tools. We continue to ensure that everything we do in IT is aligned with a larger business goal. IT has evolved to a global organization and a key enabler to the global growth and success of our growing business.
CIO Insight: I’ve been fascinated by the fact that during a time when most IT departments chose to buy technology rather than build it, you have a bias toward building your solutions. Why is that?
To read the full article, please visit CIO Insight
CIO.com discusses how many CIOs find it exhilarating to take on business functions outside of IT. But CIO-plus roles require a new mindset and trusted deputies.
Julia King
08-31-15
Excerpt from the article:
…This expansion of duties has its benefits and practical challenges. IT already is tied to every single part of a business. As a result, technology executives have a keen horizontal perspective of all of a company’s business processes. From that unique perch, they can more readily identify business stumbling blocks and innovate process improvements that increase business value.
“The CIO is one of the few people in an organization who sees all the processes from cradle to grave and truly has an expansive point of view. That lends itself to leading other parts of the organization,” says Peter High, president of CIO advisory firm Metis Strategy and author of the book Implementing World Class IT.
It’s also economically advantageous, especially for small and midsize companies. “Having people do two jobs and not paying them double seems like a good idea to a lot of organizations,” High says.
…
But at the same time, dual-role IT executives need to deeply immerse themselves in additional parts of the business where a whole new set of challenges lie in wait. Incumbent managers and staffers may resist the insertion of an outsider who didn’t grow up in that business function. CIO-plus executives also need to adapt their management and leadership styles to their broader, non-IT constituency.
Not all CIOs are up to these challenges. “Only an executive who is ambitious takes this on,” says High. “This is such a complex set of responsibilities. If they don’t have a desire for additional responsibilities, or haven’t been active enough to suggest that they could do it, it’s not likely that [expanded titles and duties] will be suggested to a passive CIO.”
To read the remainder of the article, please visit CIO.com
I would like to introduce a new series, which I refer to as “Education Technology Innovation.” It will includes interviews and strategy discussions with some of the leading names in the field:
In the kick-off article to the series, I set the stage for some of the questions that will be explored in the interviews in the series:
“What does the future hold for these innovative companies, and how will it change the way in which our children and their children are educated? Will it serve to lower the costs of education? Will it create pressure on high cost private universities with less prestigious brands, as one can spend much less and learn from the top professors from Ivy Leagues schools?“
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Mike Feerick leads a company that has been credited as being the first ever massive open online course or MOOC. He founded ALISON in 2007. Unlike other prominent MOOCs such as Udacity, Coursera, and edX, ALISON’s content is not drawn from elite US-based universities. Rather, the Galway, Ireland based company focuses on practical workplace skills that can be tested by employers to gauge growing competencies. Since I last spoke with Feerick, the company registered its five millionth user, and much of the growth has been in the developing world. India, for instance, is the company’s fastest growing market. ALISON has thrived on serving traditionally underserved education marketplaces.
As Feerick probed for opportunity to serve additional groups of people that have been underserved, perhaps the most marginalized group of all became a target: the population of formerly incarcerated people. In the US alone, 20 million people are among the formerly incarcerated, and one of the triggers of recidivism is a lack of solid job opportunity. As Feerick describes in this interview, he believes ALISON is perfectly suited to serve this often marginalized population while reducing the rates of recidivism in the process.
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Stanford and MIT receive well deserved recognition as hotbeds of entrepreneurship, but neither of those is as singularly influential in the US as the Israel Insitute of Technology, better known as the Technion. Since the university’s founding over one hundred years ago, a quarter of the university’s graduates have started businesses. Since 2004, graduates of the Technion have won four Nobel Prizes, and a remarkable two-thirds of Israeli companies listed on NASDAQ have been founded by graduates of the Technion. Israel is often referred to as “start-up nation”, and the Technion has contributed more than any other institution to that reputation.
Since 2009, Peretz Lavie has served as President of the Technion. During that time, he has hired faculty who are experts across traditional academic silos, encouraged more professors and students to get involved in starting businesses, and in the process has bolstered the university’s reputation as a hot-house for new businesses.
In decades past, companies derived value from deep knowledge and discipline within specific functional areas. They were strong at operations or in finance or in service, etc. Companies were often strong at multiple of those, but the organization structure that owes tremendously to Alfred Sloan and General Motors was almost militaristic in its hierarchy and in its silos. Just as the military has had to think creatively about how breaking down these silos, promoting people who have breadth of experience as well as depth, companies too have derived great value at thinking about value derived at the nexus of disciplines.
Harrah’s Entertainment (now Caesars Entertainment) leap-frogged the competition in the casino gaming industry by virtue of the insights derived by Gary Loveman, a Harvard Business School professor whose specialty was at the intersection of marketing and technology, together with an extremely talented team in his Marketing and IT departments at Harrah’s, the company was an early winner with customer relationship management (CRM).
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Shai Reshef is an Israeli-born entrepreneur who now lives in Pasadena, California. Although his master’s degree is in Chinese politics, he has made his name professionally in private education. He served as chairman and CEO of the Kidum Group, an Israeli test preparation which he sold to Kaplan, Inc. in 2005. He also led KIT eLearning, a subsidiary of Kidum and the eLearning partner of the University of Liverpool. KIT provided MBAs and Master in IT degrees, and was eventually acquired by Laureate Online Education.
In 2009, Reshef founded the University of the People, which in February 2014 received accreditation from the Distance and Education Training Council, a U.S. Department of Education authorized accrediting agency. This made it the world’s first non-profit, tuition-Free, accredited, online university.
This is the tenth article in the Education Technology Innovation series, and it is fair to say that Nic Borg’s background is unlike any of the other entrepreneurs featured in the series. Like others, he comes from academe, but rather than being a former Stanford professor like Sebastian Thrun or Daphne Koller, or an MIT professor like Anant Agarwal, Borg spent seven years at Kaneland High School in Maple Park, Illinois building web-based tools and learning management solutions. The small-scale innovation that he introduced proved to be a pilot for something bigger to come.
Armed with his practical experience at a Kaneland High School, Borg co-founded Edmodo five and a half years ago. Edmodo is the largest K-12 social learning network, which provides teachers and students a safe and easy way to connect and collaborate; it has been called “the Facebook of education.” It is used heavily in the classroom, but also extends that classroom environment. The mission of the organization is to help all learners reach their full potential, and he believes that by connecting them to the resources and concepts they need, they achieve that goal. It has already had profound implications on students, teachers, parents, and content providers, as he explains herein. He was recently honored by this publication as “30 Under 30” winner.
Umar Saif has done a lot in his 35 years. A Pakistani, he earned his PhD in computer science from the University of Cambridge at 22. He began a post doctorate degree at MIT at an age when most of his peers – age wise – had not completed their bachelor’s degrees. He worked at the MIT Computer Science and Artificial Intelligence Laboratory where he was part of the core team that developed system technologies for the $50 million Project Oxygen. He collaborated with Anant Agarwal, now the president of edX, among other legendary computer science and artificial intelligence professors. After spending years away from his native Pakistan, he found that he enjoyed the entrepreneurial spirit of MIT and of the US more generally. However, it was a conversation with a colleague about what he wanted to achieve in his life that got him to rethink his plans for the future. He decided that he wanted to help establish a comparable entrepreneurial hot-bed like the one he found at MIT back in Pakistan.
He returned to the Lahore University of Management Sciences (LUMS), where he found that his top students were the equivalent of the top students at MIT, but they did not realize the potential they had. His own story became an inspiration for a series of entrepreneurs, many of whom he has started businesses with. He was named a Young Global Leader by the World Economic Forum in 2010, selected as one of top 35 young innovators in the world by MIT Technology Review in 2011 and received a Google faculty research award in 2011.
In late 2010, New York Mayor Michael Bloomberg’s administration put out a request for proposal for a new kind of university program. Recognizing the importance of establishing New York City as a technology hub, he hoped to attract a leading university to establish a graduate school in engineering and computer science in Manhattan, and proposed that it be built on Roosevelt Island.
The proposal submitted by Cornell University was the winner, and though the permanent campus will not be ready until 2017, Cornell NYC Tech has set up shop in Google’s Manhattan offices in Chelsea. Daniel Huttenlocher is dean of the program, and he has an ambitious vision that befits an academic who has experience in the business world. He has hired a Chief Entrepreneurial Officer, and the school has already established deep ties with the start-up community in New York. Huttenlocher measures the success of his program on the number of people who start and who join high growth organizations. Establishing a program with ready access to major corporations, start-ups, and even City Hall means that Cornell NYC Tech is in an enviable position, and will likely be a key player in pushing New York to be the tech start-up hub that has longed to be for some time.
MIT Electrical Engineering and Computer Science Professor Anant Agarwal has personified the educator-entrepreneur, as he has had a foot in academe and a foot in new ventures for more than a decade. He has led CSAIL, MIT’s Computer Science and Artificial Intelligence Laboratory, just as he was a founder of Tilera Corporation, which created the Tile multicore processor. He led the development of Raw, an early tiled multicore processor, Sparcle, an early multi-threaded microprocessor, and Alewife, a scalable multiprocessor. He also led the VirtualWires project at MIT and was the founder of Virtual Machine Works. His start-ups have largely been focused on his areas of research and areas of interest, but he had not focused on the education space itself until late 2011.
It was at that point that Agarwal taught what would become MITX’s first massive open online course (MOOC) on circuits and electronics, which drew 155,000 students from 162 countries. This overwhelming response showed the promise of having his academic and his entrepreneurial pursuits coincide. Agarwal developed a partnership between MIT and nearby Harvard to establish edX. Unlike rivals Coursera and Udacity, edX is a not-for-profit. Therefore, when Agarwal thinks about the competitive landscape among the MOOCs, his perspective is “the more the merrier.” In fact, in June of last year, edX became open sourced, and the source code, OpenedX, has led to interesting collaborations with Google, Stanford University, and even with countries such as France and China.
Much time and attention has been given to the MOOCs started in the US, but as I have mentioned in my interview with Mike Feerick of ALISON, the phenomenon actually first emerged in Europe. Another more recent entry to the MOOC field out of the United Kingdom is FutureLearn. Unlike other prominent MOOCs like Udacity, Coursera, and edX that feature university content, FutureLearn is not led by a former academic. Simon Nelson is a businessman, but he was a logical choice to head FutureLearn given his experience working in a variety of media fields that have been threatened and transformed by technology. As a result, Nelson has been programmed to see opportunity in the chaos.
FutureLearn also has the advantage of a 44 year old pre-cursor to the MOOCs: Open University. The university has many things in common with the MOOCs — it has an open entry policy, and the majority of courses are taken off-campus anywhere in the world. As such, Nelson has been able to work with Open University Vice Chancellor Martin Bean to learn from the decades of experiences and experiments forged, and many of them have translated well to the new format. Therefore, while FutureLearn is a new entrant to this marketplace, it stands to become a formidable one.
I have had the a good fortune of speaking with good number of the leaders in education technology today. Since so many of these players have emerged from academe, the competition between companies is fierce certainly, but there is also a collegial willingness to acknowledge the successes of other companies. In the case of non-profits like edX, CEO Anant Agarawal says, the more companies that enter this space, the merrier. (Stay tuned for my interview with Agarwal on January 20th.) Several of these leaders acknowledge that the most influential person to the MOOC landscape has been Salman Khan. As Agarwal lists the genesis of the MOOCs, he lists Khan and his Khan Academy first among the major players. Sebastian Thrun acknowledged in my interview with him that “I stumbled into this after listening to a gentleman named Sal Khan of Khan Academy. In his speech he noted that he had tens of millions of students in his classes. I was teaching at Stanford at the time and had tens of dozens of students in my classes, and I felt I should try something different and see if we could do what I do and scale it to many people.” In fact, in my podcast interview with Thrun, as he listed those who had been most influential to him over the course of his career, he listed Khan on the short list.
There has been much press for the massive open online courses or MOOCs, including in my series of interviews to date with Sebastian Thrun and Daphne Koller, CEOs of Udacity and Coursera respectively. If one is new to these companies, one might be under the impression that the MOOC phenomenon is less than two years old. That is not the case. The company that many credit as being the first ever MOOC is Advance Learning Interactive Systems ONline, better known as ALISON. Irish-American entrepreneur, Mike Feerick founded that company in 2007, and whereas many other companies in this industry are still trying to determine the business models, Feerick has nearly seven years of testing, experimenting, and succeeding behind him. In this interview, Feerick talks about the genesis of the idea, his rationale for focusing on vocational training, and his vision for the future of the company.
Last week, I kicked off a series on education technology with an interview with Sebastian Thrun, CEO of Udacity. Daphne Koller who co-founded and is the co-CEO of Coursera, by some measures the largest of the for-profit educational technology companies offering massive open online courses or MOOCs with over five million students across most countries, has much in common with Thrun. They both were foreign-born Stanford professors with backgrounds in artificial intelligence when they started the companies they currently lead. Each has also taken a leave of absence from Stanford in order to pursue their current opportunities.
Though their companies compete, they have chosen very different areas of focus. Udacity, like several other companies that provide MOOCs has chosen to focus on science, technology, engineering, and mathematics (STEM) courses. Coursera has chosen a much broader offering, including many disciplines in the humanities. This breadth of offering has been a strength of the company in building a broad student-base, and it has signed up over 60 universities as partners. That said, it has required particularly creative approaches both process and technology-wise in order to facilitate learning, collaboration, and grading.
There are few entrepreneurs who can compete with Sebastian Thrun in terms of creativity and breadth of innovation. He led the development of Stanley, a robotic vehicle on the 2005 DARPA Grand Challenge. He was a founder of the Google X Lab, and parlayed his earlier success with Stanley into the Google driverless car system. He also was among the leaders who developed Google Glass. All the while he was a professor first at Carnegie Mellon and then at Stanford.
In early 2012, based on inspiration from Salman Khan of Khan Academy, he co-founded Udacity, a for-profit education company offering massive open online courses, or MOOCs. Thrun’s Stanford course “CS 373: Programming a Robotic Car” was among the first couple of courses offered through Udacity, and it attracted 160,000 students in 190 countries. The youngest was ten and the oldest was 70. Moreover, none of the top-400 students were Stanford students. He was so excited about what he learned, that he gave up his post at Stanford to focus on Udacity full-time.
Education Technology is in its Infancy, but it is Growing-up FastMuch has been written of late about the need for healthcare reform in our country. Whether one is a fan of the Affordable Care Act or not, the case for change is quite clear. The fact that healthcare makes up such a high proportion of our gross domestic product (north of 17 percent), and has grown at such a fast clip relative to the consumer-price index (one and a half times) underscores the need for change. However, there is an industry the fundamentals of which have not dramatically changed in hundreds of years, and yet its costs have risen at a rate three times as fast as the consumer-price index. That field is education.
The classroom setting with a professor standing at the head of a class talking at a roomful of students is largely the same model that existed when the first universities were established in the United States. It is no wonder that some creative people have stepped forward with truly innovative ideas in the education space to attempt to turn the traditional model upside down.
7-20-2015
As chief information officer of Microsoft, Jim Dubois has one of the largest CIO roles in the world. A long-time veteran of the company, he held a wide array of positions around the world, and was the company’s chief information security officer prior to being asked to become CIO. When he was promoted, initially it was as the interim-CIO. The company sought candidates externally while giving Dubois a shot at the permanent role. As he notes herein, he did not believe he would get the permanent role, but he chose not to operate as though he was an interim. He charged ahead, focusing on revamping IT’s processes to help the enterprise increase productivity and business velocity. In doing so more readily than even he believed was possible, first he proved to himself that he could be the permanent CIO, and then he proved it to the company.
Dubois operates IT as customer one for Microsoft, leveraging the company’s products and services at scale, providing feedback to colleagues on what works well and what could be improved in the offering, and acting as an advocate for CIO customers of the company.
(To listen to an unabridged audio version of this interview, please visit this link. This is the 24th interview in the CIO’s First 100 Days series. To read past interviews with the CIOs of Intel, AmerisourceBergen, GE, Deutsche Bank, and CVS Caremark among others, please visit this link. To read future interviews in the series, please click the “Follow” link above.)
Peter High: Jim, I thought we would begin with your role. You are the Chief Information Officer of Microsoft. You were promoted into that role. You have been with Microsoft for over 20 years. How did you organize yourself upon receiving the promotion? How much of your vision was one of continuity versus fundamentally new strategies?
Jim Dubois: The whole tech industry is changing at a phenomenal pace right now, and Microsoft obviously needed to do the same to accelerate a lot of what we were doing as a company. That drove the need in IT to change the pace at which we worked. We needed to enable a faster pace within the company.
That was balanced on top of keeping everything going while we set out on this new mission to transform us into a platform and productivity company in a cloud-first, mobile-first world. We had a mission in IT that was “Create tomorrow. Deliver today”. That helped focus the team on what we were doing to enable this new transformation for the company, but also make sure that we continued to keep everything running and continue to execute on all that was happening across the business to begin with.
High: As someone who has been a part of the organization for some time, it was not as though you were joining a new company. I am curious how you prepared for your new role, and what sorts of steps you took as you prepared to ascend to the role of CIO?
06-17-2015
Excerpt from the Article: Mentor Graphics is a $1.2 billion multinational company, based in Wilsonville, Ore. It is a leader in supporting electronic design automation, which enables companies to develop better electronic products faster and more cost-effectively. The company’s engineers conquer design challenges in the increasingly complex worlds of board and chip design.
When Ananthan Thandri joined the company eight years ago, IT was a regional player in the company, and it largely had an order-taking role. In this interview by CIO Insight contributor Peter High, Thandri discusses the cultural and technical changes that he has made to change IT’s culture, improving user satisfaction and aggrandizing his own portfolio of responsibilities in the process.
CIO Insight: When you joined Mentor Graphics eight and a half years ago, the department was a classic “order-taking” function. What steps did you undertake to change the culture of IT to be proactive and involved in innovation?
Ananthan Thandri: First and foremost, we focused on bringing the IT talent to the forefront. We had abundant IT talent when I started at Mentor and with some changes in middle management that brought talent from the outside, we have encouraged the culture to become more innovative. For example, we changed the organization to be a global function rather than regional, which helped create a global perspective in IT solutions. We also made IT an objective-driven organization, with every IT employee’s objective directly connected to the overall organization’s objective. We increased communication within IT and between IT and the rest of the business and invested in new technologies to help increase productivity, while bringing quantitative (metrics-driven) data into decision making. By empowering our IT leaders and employees, we gave them opportunities to come up with innovative ideas to solve business problems. The overall result has been to transform IT into a partner, not just a naysayer, making customer satisfaction the responsibility of everyone, not just the CIO.
CIO Insight: You are a customer-facing CIO, can you speak about the ways in which you and your team engage external customers?
Thandri: Mentor IT has been involved with external customers for quite some time with Emulation Hardware Field Support and providing a secured collaborative environment between Mentor and its customers.
Emulation Hardware support involves Mentor IT system administrators located around the world who provide first-level support (diagnosis of problem, replacement hardware) at customer locations. As our emulation business grew significantly over the last several years, the need arose for more manpower and expertise around the globe to support our external customers. IT stepped in with the full support and confidence of the president of the company and designed and built a scalable support organization and practice. This model is instrumental in providing support turnaround times quickly for our customers. Mentor IT also helps with emulation benchmark activity with customers and helps qualify new emulation servers and systems.
Customer Collaborative Environment (CCE) is a secure workspace that provides remote access technologies for secure collaboration between Mentor and its customers. Today’s complex designs require the ability for designers to collaborate in secure and easily accessible development environments. Mentor’s secure collaborative workspace allows real-time interaction between Mentor and its customers. This significantly reduces the time for test case development as well as provisioning of same design data while protecting both Mentor and customers’ IP. This also helps Mentor better leverage our key talent around the world to help customers be successful. There are several engagements happening at any given time.
To read the remainder of the article, please visit CIO Insight
Amtrak’s CIO Changes The IT Culture In First 100 Days
by Peter High, published on Forbes.com
03-31-2014
In 2012, Jason Molfetas joined the Amtrak family as the Chief Information Officer (CIO). Prior to joining Amtrak, Mr. Molfetas had no direct experience in this particular industry, but he was very much familiar with the complexities of running IT in a diverse business environment. Mr. Molfetas’ was able to quickly get up to speed by reviewing the company’s corporate strategy, studying the Amtrak organization charts, reviewing information about his staff and more importantly, meeting with key business leader to learn the Amtrak business practices. In his first 100 days, he did as much listening as he did talking; recognizing that the path to a new strategy would come through insights garnered from his colleagues both within and outside of IT as well as from vendor partners and Amtrak customers. He has made transparent communications the hallmark of his leadership, and has since changed the IT culture to one that is more empowered, accountable, and transparent, while also ensuring that it is closely aligned to the needs of Amtrak customers.
(This is the 12th article in the “CIO’s First 100 Days” series. To read the prior 11, including interviews with the CIOs of Intel, Caterpillar, Time Warner, Johnson & Johnson, and J. Crew, please click this link. To receive notifications regarding future articles in the series, including interviews with the CIOs of AmerisourceBergen and Viacom, please click the “Follow” link above.)
Peter High: Jason, you joined Amtrak as its CIO in June of last year. You came to Amtrak with logistics experience but without transportation industry experience. How did you prepare for the job prior to joining?
Jason Molfetas: This is the ninth company that I have worked for, so I have had a number of new beginnings in new industries. As a result, I am pretty comfortable with change. The key to a successful transition is recognizing that you are only one part of the overall business and the culture of the company that you are joining. It is important to respect the organization you are joining, the individuals who are now your co-workers and to learn about them and determine how you will fit in with them. To be a successful CIO, you have to be a change agent. You can only attempt to drive change if you have a strong understanding of the company, the culture, the dynamics, and how and when to push for change.
My focus prior to joining was to learn as much as I could about all of the components of the business, its history, and what prior changes were successful or were not successful. It was also important to understand the external factors such as customer viewpoints, market conditions, competitors, the governing board, and other critical stakeholders that shape the company’s forward direction. A tremendous amount of this information is available either directly from the company or from external sources such as annual reports.
You are correct that I had not worked in the rail business before, but I had been a customer of Amtrak, and the interview process was a great opportunity to learn more about those plans, and to begin to understand the company and the culture from within. I very much admired what I found and accepted the position.
Additional topics covered in the article include:
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