Five Winners of the CIO.Com and Drexel University Analytics 50 Awards Share Details of Their Projects, Lessons Learned and Advice

BUSINESS TECHNOLOGY LEADERSHIP | cio.com NOVEMBER/DECEMBER 2016

A STARTUP GROOMS FOR GROWTH WITH A SHARP IT STRATEGY 5

FROM IDG CUSTOMER EXPERIENCE IS A FIT FOR FOOT LOCKER 7

THE RISE OF DIGITAL TRANS- FORMATION PHOENIXES 30

INNOVATORS REAP RESULTS Five winners of the CIO.com and Drexel University Analytics 50 awards share details of their projects, lessons learned and advice. BY THOR OLAVSRUD contents NOVEMBER/DECEMBER 2016

PUBLISHER IDG COMMUNICATIONS INC. Adam Dennison CEO Michael Friedenberg EDITORIAL EDITOR IN CHIEF IDG ENTERPRISE Dan Muse CEO SENIOR MANAGING EDITOR Peter Longo from the editor Rich Hein CHIEF CONTENT OFFICER 3 The power of a MANAGING EDITORS John Gallant good partnership Amy Bennett (special projects) CHIEF REVENUE OFFICER Bob Rawson (copy + production) from the publisher Brian Glynn Al Sacco 4 IT and CIOs matter INTERNATIONAL DATA GROUP ART DIRECTOR more than ever CHAIRMAN OF THE BOARD Terri Haas Walter Boyd emerging TECH SENIOR ASSOCIATE EDITOR 5 A startup grooms Sheryl Hodge FOUNDER for growth with a Patrick J. McGovern SENIOR WRITERS (1937-2014) sharp IT strategy Clint Boulton transformation NATION Sharon Florentine 7 Customer experience Matt Kapko is a fit for Foot Locker Thor Olavsrud CONTACT US Sarah White WHO COVERS WHAT applying TECH cover story www.cio.com/about/contactus.html CIO EVENTS 27 Microsoft sees EDITOR IN CHIEF EMAIL PHONE AR in the enterprise INNOVATORS REAP RESULTS Maryfran Johnson [email protected] 508-872-0080 FOLLOW US ON . . . leading Five winners of the CIO.com and Drexel University TECH Twitter, Facebook and LinkedIn 30 Digital transforma- Analytics 50 awards share details of their tion phoenixes projects, lessons learned and advice. 10 transcend traditional IT BY THOR OLAVSRUD Copyright © 2016 CIO.com. All rights reserved. Reproduction in whole or in part in any form or medium without express written permission of CIO.com is prohibited. CIO and CIO.com and the respective logos are trademarks of International Data Group Inc.

COVER ART BY STEPHEN WEBSTER NOVEMBER/DECEMBER 2016 | CIO.COM 2 editor’s NOTE

The power of a good partnership

We write a lot about collaboration and partnerships at Analytics 50’s success by bringing vision and commitment CIO.com. After all, it has never been more important for IT to business analytics, but they also showed an unrelenting leaders to partner — whether that means working with the understanding of what makes collaboration work — recogni- growing number of vendors that provide critical competencies tion of shared goals, patience, empathy and a sense of humor. once firmly rooted on-premises or, perhaps more importantly, On Nov. 9, we recognized the Analytics 50 honorees at an event partnering with CMOs and other C-level executives in depart- in Philadelphia at Drexel University’s Gerri C. LeBow Hall, and ments that command their own technology budgets. we further highlight these inspiring business analytics projects While our primary role as technology journalists is to provide in this issue, in “Innovators Reap Results” (page 10). CIO.com information to help you do your jobs better, leverage your exper- Senior Writer Thor Olavsrud, our award-winning reporter of all tise and advance your careers, we sometimes have the opportu- things analytics, dives deep into five winning projects. Choosing nity to practice what we preach. only five of the 50 winners was challenging. But after poring We’re proud of our partnership with Drexel University over the entries, we decided on Children’s Hospital of Philadel- and the LeBow College of Business, and the fruits of that col- phia, Intel, the New Mexico Department of Workforce Solu- “Partnerships laboration: the Analytics 50 awards program. This initiative, tions, the Philadelphia 76ers and The North Face. don’t thrive which we expect to expand in the coming years, is a blend of As you read Olavsrud’s story, you’ll note collaboration and because they academia and media. A lot of partnerships look good on paper. partnership aren’t empty words. For example, Braden Moore, This one certainly did, because Drexel’s Decision Sciences the Philadelphia 76ers’ director of analytics and insights, sums look good on department and CIO.com are both committed to reporting up a sentiment that permeates this year’s honorees. “We didn’t paper” on analytics. It’s a natural fit. But partnerships don’t thrive necessarily have any metrics or KPIs specific to the model. because they look good on paper. Instead, we had the organizational revenue and retention tar- While logistics, criteria and deadlines are always challenges, gets. One of the organization’s core values is ‘Collaboration this project evolved easily from the moment we first discussed Wins.’ Therefore, it wasn’t about the success of this analytics ways we could work together. Diana Jones and Murugan project as much as it was a piece of the overall picture.” Anandarajan from Drexel University not only ensured the — Dan Muse, editor in chief, CIO.com

NOVEMBER/DECEMBER 2016 | CIO.COM 3 publisher’s NOTE

Here we go again

In 2012, Gartner originally made the claim that by 2017 fairly evenly among various business units. CMOs would have larger IT budgets than CIOs. I first learned I think the real news isn’t about which departments are using of this from a webcast hosted by Gartner analyst Laura McLel- more technology or who carries the specific budget. Rather, it’s lan. At the time, it grabbed headlines and brought Nick Carr’s about how technology purchasing decisions are being made and “IT Doesn’t Matter” article from the May 2003 issue of the whether the various business heads are collaborating. Many Harvard Business Review into sharp focus. forward-thinking CIOs who are comfortable in their positions Now, as we inch closer to ringing in 2017, I can confidently and highly respected within their organizations have told me it say that very few, if any, CMOs have larger technology budgets doesn’t matter where the funding for an initiative comes from; than their CIO colleagues. Moreover, I am certain that IT mat- what matters is how and when departments collaborate. ters more today than it ever has. CMOs (and many other executives) don’t think about the Gartner sees things differently. In October the research firm integration, security and risk associated with IT projects; CIOs came out with new findings to back up its CMO/CIO budget pre- still deal with those matters. Additionally, CIOs should have diction. Gartner claims that CIOs spend 3.4 percent of company visibility across the entire enterprise. And from that vantage “Few, if any, revenue on IT and that CMOs spend 3.2 percent of company rev- point, they should be able to identify other parts of the busi- CMOs have enue on IT — and that the number is rising. These figures don’t ness that could benefit from specific technology initiatives. larger IT budgets add up for me, though, and they’re not in line with what I’ve We’re all well aware that this approach can yield efficiencies — learned in conversations with dozens of enterprise CIOs. and possibly better deals from vendors. than their CIO With technology becoming ubiquitous throughout the enter- While I admire Gartner for not backing away from its pre- colleagues.” prise, I don’t understand how spending on marketing technol- diction, I think the real headline news is this: “C-level execu- ogy will surge so far ahead of operations, HR, finance, supply tives increase collaboration to drive business innovation.” It chain, security, etc. combined. A sneak peek at the findings of isn’t very catchy, but I think it more accurately reflects the real CIO.com’s 2017 State of the CIO survey of more than 600 IT shift that’s taking place in enterprises today. executives reveals that 54 percent of all enterprise spending is — Adam Dennison, SVP and publisher, CIO.com through corporate IT and the remaining 46 percent is spread ([email protected])

NOVEMBER/DECEMBER 2016 | CIO.COM 4 emerging TECH

A startup grooms for growth with a sharp IT strategy With tailor-made apps running in the AWS cloud, Dollar Shave Club cut a fashionable figure as it emerged from obscurity and caught the eye of a suitor with deep pockets. BY CLINT BOULTON

If you asked a CIO to sketch the to sound branding furthered by type of IT environment CIOs say COO and interim CTO. “Those ideal modern IT architecture on memorable YouTube clips. they would build if they had a are the ones that we chose to start a few cocktail napkins, the result Running its systems in a public green field devoid of legacy archi- internalizing and building in- might resemble the system fash- cloud, the startup uses 22 cus- tecture and technical debt. house, both to handle the scale and ioned by the Dollar Shave Club tom applications to support sales “Our strategy as we grow has to handle the complexity and the (DSC), a direct-to-consumer and marketing campaigns and been to determine which com- different customer services.” vendor of men’s grooming prod- customer service, as well as a rec- ponents of technology can be That strategy has paid off. Since ucts that ascended from relative ommendation engine. The custom- customized and be strategic differ- launching out of Marina del Rey, obscurity to prominence thanks cloud combination embodies the entiators,” says Kevin Datoo, DSC’s Calif., in 2012, DSC has gained

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 5 emerging TECH

more than 3.2 million subscribers of engineers to swap out failed hard “ Our strategy as Datoo says. “Even if we can save 10 and is on pace to top $200 million disks and failed network gear, we seconds . . . that’s a big win for us.” in sales in 2016. It’s the latest in choose to focus on leveraging what we grow has been The Arm is the order fulfillment a line of thriving digital services, AWS has already taken care of for to determine system that employees consult as including Uber and Airbnb, that us and build on top of that.” which compo- they pick products from warehouse enable people to buy products and As DSC builds “on top” of AWS, nents of tech- shelves and put them in boxes for services via computers and smart- its application profile has evolved shipping. It decides what ware- phones rather than brick-and- from third-party systems to home- nology can be house will handle each order and mortar stores. Consumer products grown apps that run customer customized and be what SKUs go into each box — in giant Unilever took note of DSC’s service, marketing, supply chain strategic differ- addition to the products ordered, it success and bought the company and other operations, Datoo says. may, for example, determine that a for a reported $1 billion in a deal DSC engineers use human body entiators.” given shipment should contain sam- that closed in October. analogs to classify the core apps: — KEVIN DATOO, ples and promotional postcards. Voice, Brain, Arm and Ear. COO AND INTERIM CTO, DSC The Ear is a telephony system Voice, Brain, Arm and Ear A cross-channel marketing that routes incoming calls to cus- keep the business running automation app, Voice manages tomer service reps and shows them DSC uses several Amazon Web pretty much any outbound com- staff to do things like update mem- information about the callers. The Services tools, including EC2 communications to customers, includ- ber details or track packages, an Ear is a key source of customer pute, S3 storage, Redshift database ing emails and push notifications activity that previously involved feedback — it records and analyzes services and Kinesis analytics. It to smartphones. Datoo says Voice logging in to four systems. The calls, tagging those that have rel- also hosts in AWS the recommen- gives the marketing team “every- Brain pulls all of those activities evant information. Bosco says the dation engine that prompts mem- thing they need to plan and create together in a single dashboard and Ear will eventually support intel- bers to “toss” more products into marketing and communication includes email and live chat to help ligent call routing, so it can direct their shipping boxes. experiences with members.” It make the experience efficient. “If calls to specific agents based on “We’ve bought into the AWS eco- sends some 16 million emails to someone is asking about shave their skills and specialties. ♦ system,” says Jason Bosco, DSC’s members each month. butter, we can look at the order director of back-end engineering. The Brain is a customer resource history and be smart about how Clint Boulton is a senior writer “Instead of hiring teams and teams management system that allows we talk to them about products,” for CIO.com.

NOVEMBER/DECEMBER 2016 | CIO.COM 6 transformation NATION

Customer experience is a fit for Foot Locker The retailer’s CIO says product and price are table stakes. Creating memorable experiences is the new measure of success. BY BRENDAN McGOWAN

“Product is absolutely everything,” says Pawan Verma, global CIO and CTO at Foot Locker. “But it’s also table stakes.” Verma sits at the heart of one of the foremost sportswear and footwear retailers in the world. And he is focused on the retail industry’s ongoing transformation, which is propelled and informed by technology. Thriving in retail, he

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 7 transformation NATION

asserts, means going beyond the praise across channels. “I’m a huge fore played a major role in Foot through a “constant refresh,” table stakes of product and even believer in listening more than Locker’s continued transforma- becoming ever more focused on price to pursue a meaningful con- telling because today’s customer is tion, and a majority of IT projects customer experience thanks in versation with customers. Success very vocal about telling you what employ the agile methodology. part to “the constant feedback we means surpassing the transac- he or she likes,” he says. “When Agile’s scope has broad and posi- are hearing from our users as well tional and routine in order to someone is calling the call center, I tive implications for the ways in as our internal partners.” A par- embrace “consistent, authentic and actually spend a lot of time listen- which divisions collaborate. “Busi- ticular focus, he adds, is “making memorable experiences,” he says. ing to the calls. Our goal is that we ness, marketing and merchan- sure that the content gets refreshed quickly and that it is more relevant for the frequent introduction of hot new or exclusive products.” “ I think it is really rewarding for us now that agile Product launches for popular conversations are going beyond IT projects.” items from vendor partners, such as Nike or Adidas, he says, used to — PAWAN VERMA, GLOBAL CIO AND CTO, FOOT LOCKER involve a “manual process where people line up in the store and . . . we only have a limited quantity, “Retail is about experience,” he listen to every voice, because every dising folks need to understand and the first [customer] comes in adds. “How do you provide more voice counts for us.” equally what customer needs are,” to get it and it just becomes a con- engaging storytelling, connecting Verma says. “I think it is really venience issue as well as a safety experiences across different touch A ‘culture of rewarding for us now that agile issue.” To improve that model, points for your customer base? How constant change’ conversations are going beyond IT Foot Locker has added “release do you make sure the same story is The typical Foot Locker customer, projects. There are conversations calendar” and “launch locator” fea- available no matter where they are Verma says, is a digital native aged that I have where the merchandis- tures to its app. in their shopping journey?” 12 to 25. This young and dynamic ing team is trying to do agile.” Augmented reality (AR) and To help ensure this consistency, customer profile has necessitated Mobile is also driving Foot virtual reality (VR) are alluring to Verma insists on capturing cus- “a culture of constant change” at Locker’s transformation. Verma Verma. “For one of our venues,” he tomer expectations, problems and the organization. Agile has there- says the Foot Locker app is going says, “we have started to embark

NOVEMBER/DECEMBER 2016 | CIO.COM 8 transformation NATION

on a journey of what augmented use an AR system to “see” how that from New York to Paris, or vice effort, authentic and empathetic reality will bring to the table, and shoe would look on their feet. versa. Now, Verma says, “there is conversation, and an absolute we are always experimenting with On a more fundamental techno- no time, because this young cus- focus on technological and organi- that.” The technologies represent logical level, Verma says connec- tomer is so connected around the zational innovation. potential new conduits for con- tivity has transformed retail since globe that anything that happens “We’ll try 30 things and 10 versation, new opportunities to the rise of ecommerce and will in one city doesn’t take more than a might work,” Verma says. “But that engage with increasingly savvy continue to do so. These days, peo- few minutes or a few seconds to be doesn’t mean we need not try the but distracted customers. ple are connected “anytime, any- recognized in other cities.” 30 things. I’m a huge believer in

If the AR fits . . . Verma is especially keen on AR and says Footlocker has a “limited” Transformation is defined by the fickle affections of a AR pilot underway for one of its vigorous and empowered customer base, and companies “banner” brands — Eastbay or can maintain transformation only through constant Footaction, for example. “We just had some members of our team effort, authentic and empathetic conversation, and do some internal work from the an absolute focus on innovation. pilot level,” he says. “I think that for 2017 and ’18, we will learn from what that AR and VR experiment brings — I think it’s more AR than where, all the time,” Verma says. “I The challenge that Foot Locker progress over perfection because VR in my mind for us — and then think it’s going to transform how — and all retailers — face is the customers are moving so fast and how we can parlay that into the we look at personalization, how we need for constant reinvention. we need to innovate faster to meet chainwide rollout.” look at individualization, how we Transformation is defined by the them where they are going.” ♦ Explaining how Footlocker might look at localization, how we look at fickle affections of a vigorous and use AR technology, he says a store globalization,” empowered customer base, and Brendan McGowan is global media that doesn’t have a particular color In the fashion world, it used to companies can maintain trans- bureau and client research manager of shoe in stock could let customers take time for trends to migrate formation only through constant at the CIO Executive Council.

NOVEMBER/DECEMBER 2016 | CIO.COM 9 cover story | Analytics 50

INNOVATORS REAP RESULTS Five winners of the CIO.com and Drexel University Analytics 50 awards share details of their projects, lessons learned and advice. BY THOR OLAVSRUD

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 10 cover story | TOPICAnalytics 50

ATA AND ANALYTICS ARE RESHAPING organizations and business processes, giving organizations the capability to interrogate internal and external data to better understand their customers and drive transformative efficiencies. Worldwide revenues for big data and business analytics clocked in at nearly $122 billion in 2015 and will grow to $187 billion in 2019, according to a five-year forecast from research firm IDC.

D“Organizations able to take advantage of the new generation of The picture isn’t entirely rosy, however. That same Forrester study business analytics solutions can leverage digital transforma- found that many organizations are struggling to adjust their tion to adapt to disruptive changes and create competi- cultures to a world in which data and analytics play a cen- tive differentiation in their markets,” said IDC analyst tral role, and many business executives mistrust the Dan Vesset in a statement issued in conjunction Worldwide insights generated by data and analytics. with the release of IDC’s Worldwide Semiannual revenues for big Other organizations, however, have taken natu- Big Data and Analytics Spending Guide earlier data and business rally to data and analytics and are using new tools this year. “These organizations don’t just auto- to better understand customers, develop new mate existing processes — they treat data as analytics clocked products and optimize business processes. they would any valued asset by using a focused in at nearly To honor those organizations, CIO.com and approach to extracting and developing the value Drexel University’s LeBow College of Business of information.” $122 billion recently announced the first Analytics 50 awards. Additionally, a recent Forrester Research study, in 2015. The winners represent a broad spectrum of indus- commissioned by the global data and analytics team tries, from pharmaceuticals and healthcare to sports —IDC at KPMG, found that 50 percent of businesses now use and media. data and analytics tools to analyze their existing custom- In the following profiles, five of the winners explain how ers, while 48 percent use them to find new customers and their projects are delivering measurable outcomes and offer 47 percent use them to develop new products and services. advice to other IT leaders who are planning analytics initiatives.

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 11 cover story | TOPICAnalytics 50

CHILDREN’S HOSPITAL OF PHILADELPHIA Detecting and preventing venous thromboembolism Children’s Hospital of Philadelphia (CHOP) has been on a mission to use data and advanced analytics to improve the quality of its care and patient outcomes. To that end, it has launched an initiative to improve detection of venous thromboembolism (VTE) by using text analytics tools to glean insights from unstructured data in physicians’ reports.

“We’ve actually been blood clots within a deep were recently hospital- executing a road map and vein (deep vein thrombo- ized, and about 300,000 strategy that we started in sis) that break loose and of them die each year. 2008,” says John Martin, travel to the lungs (pulmo- senior director of enter- nary embolism). CHILDREN AT RISK prise analytics at CHOP. According to the U.S. Martin notes that hospi- “It started pretty typically Department of Health tal-acquired VTE is cur- with ‘Let’s build a data and Human Services, rently the second-most warehouse based on use there are about 350,000 common cause of harm cases, with a long-term to 600,000 new cases of to hospitalized pediatric ciated with pediatric JOHN MARTIN vision of precision medi- VTE in the U.S. annually; patients, after central line- VTE is estimated SENIOR DIRECTOR OF ENTERPRISE ANALYTICS cine and analytics.’ We recurrent cases bring that associated bloodstream at 2.2 percent, Mar- CHILDREN’S HOSPITAL OF PHILADELPHIA started with nothing. We number up to about 1 mil- infections. It’s currently tin says. Addition- had to build up to it.” lion. Nearly two-thirds of the focus of a nationwide ally, pediatric patients hospital an average of 8.1 VTE is a condition that the people who experience prevention campaign. The diagnosed with hospital- days longer than other involves the formation of VTE are hospitalized or overall mortality rate asso- acquired VTE stay in the children and cost $25,000

PHOTO COURTESY OF CHILDREN’S HOSPITAL OF PHILADELPHIA NOVEMBER/DECEMBER 2016 | CIO.COM 12 cover story | TOPICAnalytics 50

more to treat. ologists’ reports, creating reports are transferred “Technology only does identifies patients with As dangerous as VTE a fully automated solu- to the NLP engine via a one thing,” Martin says. “It VTE with a high degree is, preventive measures, tion that quickly analyzes secure cloud service. The only automates and sim- of sensitivity and specific- including early detec- complex batches of phy- NLP engine produces plifies things that a human ity, and it has uncovered tion, can dramatically sician notes and offers a results in an XML docu- could do — but maybe VTE sufferers who were reduce the incidence of the high level of accuracy in ment that includes both not as quickly or as accu- overlooked by CHOP’s malady. And much of the data needed for that sort of prevention can be found in physicians’ notes. The “Technology only does one thing. It only automates and simplifies things that a current mechanisms used human could do — but maybe not as quickly or as accurately. It’s a tool. to identify VTE events — JOHN MARTIN, SENIOR DIRECTOR OF ENTERPRISE ANALYTICS, CHOP depend on manually generated clinical lists and a post-discharge review. identifying and tracking a semantic translation of rately. It’s a tool. We were existing VTE screening Martin says both pro- patients with hospital- the notes into discrete data able to apply that tool, that process. cesses are time-consum- acquired VTE. and application of a clas- technology, to automate a The NLP engine is now ing and error-prone and Clinical documentation sification model created process that wasn’t previ- an important component don’t result in immediate stored in the electronic by CHOP for deep vein ously automated, while of CHOP’s VTE preven- detection. health records (EHR) is thrombosis. The document increasing its accuracy. tion improvement efforts, backed up to a reporting then goes to the data ware- Then we can get valuable according to Martin, A FASTER PROCESS database on a daily basis house and the patient’s human time focused on who adds that his team To speed up the process, and then transferred to the identification is restored. the right cases.” is exploring other ways CHOP decided to create a CHOP data warehouse. The data is then con- to use NLP applications decision support tool for When the backup is verted to Hadoop struc- THE PAYOFF and hopes to develop physicians. The hospital done, identifying infor- tured data, where the CHOP’s VTE analytics methodologies that can be applies natural language mation is removed from rules engine assigns the effort has paid dividends, adopted at other health- processing (NLP) to radi- radiology reports and the VTE label to each study. Martin says. The NLP tool care institutions. ♦

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 13 cover story | TOPICAnalytics 50

of dollars by, for example, MANI JANAKIRAM avoiding purchases of capi- DIRECTOR, SUPPLY CHAIN STRATEGY AND ANALYTICS tal equipment, reducing INTEL inventory levels and identifying opportunities for “Intel, by nature of being systemwide optimization, the leading semiconduc- Janakiram adds. tor-producing firm, is a capital-intensive and high FINANCIAL UPSIDE fixed-asset-based company, Advanced analytics tools and our capital expen- also helped Intel capture ditures attain a level of millions (and potentially approximately $10 billion billions) of dollars of rev- per year,” Janakiram says. enue through improved “Critical capital equipment customer satisfaction, INTEL used in our factories may increased agility and Mastering supply chain analytics cost anywhere from $30 faster time-to-market, million to $100 million or Janakiram says. Getting Intel’s chips and other products to market is a highly complex more per tool. And a new In many cases, capital affair. The company’s supply chain is a capital-intensive global net- semiconductor plant can planning and contract- cost upwards of $4 billion.” ing has to happen more work that requires many specialized materials and complex manu- Developing and master- than two years before Intel facturing processes with long lead times and short product life cycles. ing the analytical tech- starts producing prod- niques for forecasting, ucts — well before those The semiconductor giant has developed advanced supply chain ana- planning and aligning products are finalized. lytics and saved millions in the process, says Mani Janakiram, Intel’s cross-functional supply Manufacturing lead time chain metrics enabled the is measured in months, director of supply chain strategy and analytics. company to save millions Janakiram says, while cus-

PHOTO COURTESY OF INTEL NOVEMBER/DECEMBER 2016 | CIO.COM 14 cover story | TOPICAnalytics 50

tomers expect changes in their orders to be accom- modated in a matter of “ We nurtured highly skilled data scientists with an appropriate blend of business days. and analytics skills.”— MANI JANAKIRAM, DIRECTOR OF SUPPLY CHAIN STRATEGY AND ANALYTICS, INTEL DATA-DRIVEN Intel is a data-driven deci- skilled data scientists with more effective decisions.” that the project was neces- can participate in the pro- sion-making company, an appropriate blend of “We regularly evaluated sary, but that’s not always cess and get other users on and analytics play a role in business and analytics and employed advances the case. board. everything it does, Janaki- skills,” Janakiram says. in technology such as big “Sometimes it’s not an Janakiram has three tips ram says. When it realized “Our data scientists have data, cognitive computing, easy sell,” he says. “In for other executives plan- that its supply chain met- expertise in operations text mining, agent-based some cases, where the ning analytics projects: rics weren’t well-aligned research, computer sci- modeling and simulation,” solution is new or evolv- with the APICS Supply ence, mathematics, statis- he says. “We also part- ing, we have to define what Engage the right Chain Council’s Supply tics, data mining, finance nered with leading univer- it means for the business. 1people. Chain Operations Refer- and business,” and they sities to apply advanced We have to show a future ence (SCOR) model, Jana- drew on their combination analytical techniques to value add. We do a proof Ask the right ques- kiram and his team turned of business and technical our metrics, as well as of concept. We go through 2tions. You need to to advanced analytics and analytical acumen to iden- other complementary sup- that process to get man- learn about users’ pain modeling to solve the prob- tify, solve and align the ply chain needs, includ- agement buy-in.” points and priorities to lem. They tracked, aligned key metrics. ing advanced production And having that buy-in understand the problem. and improved the key Through those efforts, planning, supply chain in place is important, he “Tier 1” metrics that steered he adds, the analytics team gaming, inventory strate- says, because it helps get Don’t get seduced operational excellence in showed how it gives Intel a gies, procurement and end users to overcome 3 by the elegance of an the core business and pro- competitive advantage “by simulation modeling.” their resistance to change. analytics system. Instead, vided insight into future providing advanced data Janakiram says it wasn’t With stakeholders and focus on how you can lines of business. models to help our supply too hard to convince Intel’s management engaged, key improve the experience of “We nurtured highly chain to make better and executive leadership team decision-makers and users your customers and stake-

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 15 cover story | TOPICAnalytics 50

holders with the NEW MEXICO DEPARTMENT right analytics and OF WORKFORCE SOLUTIONS applications. Predicting bogus payments DO YOUR HOMEWORK The New Mexico Department of What Janakiram and his team learned from Workforce Solutions (DWS) has the project was, first, to struggled for years with erroneous “do your homework” so you can understand unemployment insurance (UI) pay- the problem and, sec- ments. It isn’t alone — government ond, to learn from what others have done. agencies across the country face the “Look at similar, same problem. In 2014, more than $4 like-minded compa- NEW MEXICO DWS TEAM nies or groups,” he billion in erroneous payments were made in the United States. The ACCEPTING AS AN ORGANIZATION says, then ask, “What DWS has applied predictive analytics and behavioral science tech- are the things they had to learn that we can niques to curb the problem. fast-track?” Also, make sure you In 2014, nearly one tity theft and similar results in improper pay- collections team. can build your system dollar out of every eight criminal schemes have ments, the DWS set some “We needed to really piecemeal and earn distributed under UI pro- grabbed headlines, they goals: Enhance program understand the realities of credibility along the grams in the U.S. went to actually account for less integrity, reduce overpay- our improper payments,” way, he says, adding, someone who was ineli- than 5 percent of the total ments without hurting says cabinet secretary “You need to keep gible, says Joy Forehand, cost, Forehand says. In an eligible claimants, and Celina Bussey. She adds feeding the beast to deputy cabinet secretary effort to tackle the other increase collection efforts that the department has have the feast.” ♦ of the DWS. While iden- 95 percent of activity that without expanding the taken steps to combat

NOVEMBER/DECEMBER 2016 | CIO.COM 16 cover story | TOPICAnalytics 50

criminal fraud schemes, Improper Payment Pre- pleteness at three critical payment to isolate situa- nudge techniques: certi- “but, under the surface, vention Initiative (IPPI). moments: filing the initial tions at the highest risk of fication boxes, enhanced there are the core issues Working with Deloitte, application, reporting overpayment. As a team, screens and pop-up that cause the overwhelm- the DWS developed a pre- work and earnings, and we knew that we could messaging.” ing majority of improper dictive model based on making plans to seek new possibly prevent improper To ensure that the combi- payments.” patterns of past overpay- employment. payments if we nudged nation of predictive analyt- In collaboration with ments. It identifies indi- “We wanted an innova- the individual to change ics and behavioral science Deloitte Consulting, the viduals at a higher risk for tive approach to prevent behavior and provide accu- would be effective, Bussey DWS found that improper overpayment. Behavioral improper payments from rate information upfront.” says the state set up a ran- payments are generally the science and “nudge” tech- happening in the first Moreover, Bussey adds, domized trial to test hun-

“ We chose to test three types of behavioral nudge techniques: certification boxes, enhanced screens and pop-up messaging.” — CELINA BUSSEY, CABINET SECRETARY, NEW MEXICO DEPARTMENT OF WORKFORCE SOLUTIONS result of claimants doing niques are then used to place,” Bussey says. “Indi- “we needed to not only dreds of combinations of one or more of the follow- prevent overpayments by viduals have to submit understand the analytics, message layouts, wording ing things: not looking reminding claimants to required information on but then also understand and more. for new jobs, not properly follow the rules. a weekly basis in order why our customers make reporting income they earn receive unemployment certain decisions.” Armed SUCCESSFUL ROLLOUT while collecting benefits POP-UP REMINDERS benefits. We were able with that data, the agency The IPPI project launched and incorrectly reporting The department uses mes- to determine who is at a turned to “the science of smoothly in May 2015, the reason for the separa- saging, including certifica- higher risk for reporting behavioral nudges” to and Bussey says claimants tion from their employer. tion boxes and pop-ups, inaccurate information. encourage claimants to who see the reminders are With that data in hand, to remind claimants to The predictive algorithms make the right decisions, 40 percent less likely to the agency launched a review their information were developed and tuned she says. “We chose to test file improper claims. The project that it called the for accuracy and com- to historical cases of over- three types of behavioral tools have helped state

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 17 cover story | TOPICAnalytics 50

investigators find 28 per- BRADEN MOORE cent more overpayments DIRECTOR OF ANALYTICS AND INSIGHTS with the same level of PHILADELPHIA 76ERS staffing. They also detect overpayments an aver- Despite the team’s age of eight weeks faster. struggles, fans have Agency officials say the remained loyal. The Six- approach is expected to ers earned a No. 5 rank- reduce earnings fraud by ing in NBA season ticket 35 percent, amounting to sales for the 2014-15 and $1.9 million in savings for 2015-16 seasons, and New Mexico annually. they’re currently No. 2 in “The best advice I could the NBA for new season offer for other organiza- ticket sales. tions, particularly gov- But the organization ernment agencies, is to was concerned that sea- not feel overwhelmed by son ticket holders who the concepts of predic- had already spent three PHILADELPHIA 76ERS tive analytics and behav- years waiting for “next ioral science,” Bussey Winning fans without winning year” would begin to lose says. “While they will patience. And by sports challenge you to rethink In the 2015-16 NBA season, the Philadelphia 76ers earned the dubi- industry standards, the many internal processes, ous distinction of having one of the worst seasons in NBA history, Sixers have a relatively procedures and cur- small service and reten- rent ways of thinking, with a 10-72 record. The franchise also set the record for the longest tion team, with only the potential benefits of losing streak in professional sports, at 28 games. And all that followed six account executives projects such as this are responsible for more worth the effort.” ♦ two other very poor seasons. than 8,000 season tick-

PHOTO COURTESY OF DREXEL UNIVERSITY LEBOW COLLEGE OF BUSINESS NOVEMBER/DECEMBER 2016 | CIO.COM 18 cover story | TOPICAnalytics 50

and retention targets. One “ We didn’t necessarily have any metrics or KPIs specific to the model. Instead, we had of the organization’s core the organizational revenue and retention targets.” values is ‘Collaboration —BRADEN MOORE, PHILADELPHIA 76ERS DIRECTOR OF ANALYTICS AND INSIGHTS Wins.’ Therefore, it wasn’t about the success of this ets. During the renewal filled with a passionate machine learning pro- identified which types of analytics project as much period, it took the six-per- season ticket holder for cesses (including logistic interventions and levers as it was a piece of the son team more than four all 41 games. And it’s even regression, support vector yielded the most success. overall picture.” weeks to work through more important to make machines, random forests “The Philadelphia 76ers With the full support of their accounts and contact sure the seats are filled for and decision trees) and service and retention team the executive leadership all the fans on their lists seasons to come.” developed a two-pronged is the best in the business team, the project included individually. Hoping to To start, Moore, who model that incorporated — they are ranked No. 2 an individualized attack make the process more previously worked in the following: in the NBA in customer plan for each account efficient, the organization quantitative risk man- service — and they have executive based on the charged its analytics team agement at the Federal Logistic regression been my greatest resource value and tenure of their with finding a way to use Reserve, and the analyt- 1 to predict each pros- in determining where the accounts. This, Moore data to help account exec- ics team gathered all the pect’s likelihood of renewal. information gaps were that says, enabled the sales- utives prioritize their time demographic and psy- This was used to set a base would help the team hit people to better under- so they could maximize chographic information forecast and to determine its goals for the season,” stand the intricacies of the the renewal rate. they could get their hands overall priorities. Moore says. “I definitely retention process, their on — tenure, location, wanted to make a model client value and chances FILL THOSE SEATS purchase and attendance A decision tree that was useful and deliv- of renewals so they could “Season ticket members histories, demographic 2to gain insights on ered insights.” better focus their time. are the lifeblood of our data in the team’s Acx- breaking points of con- “We didn’t necessarily Moore says the changes organization,” says Braden iom system, CRM touch sumer behavior. This was have any metrics or KPIs instantly increased the Moore, the team’s director points, email marketing used to tell the story to specific to the model,” he speed and impact of initial of analytics and insights. behavior and more. They the account executives in adds. “Instead, we had the sales. In the first week, “We want each seat to be then ran the data through a digestible way. It also organizational revenue accounts renewed, seats

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 19 cover story | TOPICAnalytics 50

renewed and overall strategy when organiz- revenue improved by 3 ing their time in the hectic percent to 4 percent. The renewal season.” service and retention team exceeded the NBA’s pro- DON’T GIVE UP jections by 8 percent, and Moore’s advice to execu- the current renewal rate tives planning an analyt- is second among all non- ics project is simple (and playoff teams (19 percent- applies to the Sixers on age points ahead of the the court as well): Don’t be next non-playoff team). discouraged by failure. “The team was excited “Keep trying,” he says. for the results, but as with “Not every project will any new process, it took lead to a robust model a little time to put into with clear takeaways, but perspective why the new you’ll learn something process was important,” from each iteration.” Moore says. “On the “Take time and do your THE NORTH FACE IAN DEWAR surface, listing off coeffi- homework,” Moore adds. SENIOR MANAGER, CONSUMER LIFECYCLE THE NORTH FACE cients and regression “I’ve stumbled across Customers for all seasons statistics doesn’t seem to numerous new methods help service season ticket or algorithms that I’ve California-based apparel company The North Face has built members more effectively, used in subsequent proj- a highly recognizable global brand focused primarily on cold- but taking time to explain ects just from continuing the information allowed to research and learn. weather gear — winter coats, ski jackets and warm fleeces. But that the team to utilize key The field is continuously strong association has had a downside: Customers primarily pur- takeaways from the model evolving, so we as profes- to add an extra level of sionals have to as well.” ♦ chase once a year and don’t buy much in spring or summer.

NOVEMBER/DECEMBER 2016 | CIO.COM 20 cover story | TOPICAnalytics 50

Moreover, though loyal, market. To do that, it had launched a second-phase tunities that could arise pany focused on enhanc- its customers don’t neces- to identify other activities pilot in 2014. Those two as the company gleaned ing direct customer sarily come back every its customers enjoyed and sets of results formed insights from its analytics engagement via a loyalty year to buy new products. other brands of products the basis for our recom- initiative. program, hoping to trans- “Customers were not they used. mendation to incorporate late that into a higher returning; not due to dis- Whereas traditional advanced analytics into TEST AND LEARN level of engagement and satisfaction, but because segmentation focuses our 2016 plan.” “We identified over 25 increased sales across all the quality of the brand’s on finding the products Both pilots focused on unique opportunities retail channels over time. products was too high,” people buy the most and using transactional data, across ecommerce, direct- Its loyalty program, says Ian Dewar, senior then marketing additional social data and data on to-consumer retail, brand VIPeak Rewards, allows manager of The North options, The North Face spending behavior to pre- marketing, sources, pro- members to earn redeem-

“ Customers were not returning; not due to dissatisfaction, but because the quality of the brand’s products was too high.” —IAN DEWAR, SENIOR MANAGER, CONSUMER LIFECYCLE, THE NORTH FACE

Face’s Consumer Lifecycle needed to find the category dict future purchases. “We curement and product able “PeakPoints” for unit. “The level of ongoing of products its custom- have incorporated that development,” Dewar every dollar spent and engagement with customers use the most, not just learning into our current says. “For 2016, we estab- for participating in local ers was not strong beyond those they purchase the program in partnership lished a short list of six activities — endurance the first major purchase.” most. with Tibco and SAS,” key use cases we wanted challenges, mountain ath- “We began working Dewar says. to test and incorporate letics training sessions, FOCUS ON ACTIVITIES on big data in 2013 with From there, the com- into our plans. As we test skiing and snowboarding The company realized that a pilot project proposed pany had a consulting and learn from each use competitions and even to build repeat business, it as an innovation experi- firm pull together a collec- case, we know we have lectures by athletes. Data needed to push beyond the ment,” Dewar says. “We tion of teams at The North more to go back to.” from sales, web searches, winter jacket and fleece had great results, so we Face to identify oppor- In this case, the com- event registrations, com-

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“ We initially thought we would be spending a lot of time looking for additional data sources — a.k.a. the big data question — but we have been pleasantly surprised at how much transaction and behavioral data we already have.” —IAN DEWAR, SENIOR MANAGER, CONSUMER LIFECYCLE, THE NORTH FACE

petitions, surveys and high-quality, long-lasting prospecting initiative.” has been able to increase Get executive and other sources is analyzed outdoor products. The North Face’s efforts both the annual frequency 1 cross-functional buy- using platforms such as “There is so much data resulted in a dramatic of purchases and the year- in prior to committing to Tibco’s Spotfire and SAS available,” Dewar says. increase in cross-category over-year return purchase the project. and IBM analytics tools. “We initially thought we sales, with the same behavior of the VIPeak The company examines would be spending a lot of customers making pur- customers,” Dewar says. Use your own data that data to understand time looking for additional chases more than once, “In addition, the lessons 2 first; maximize the the sporting categories data sources — a.k.a. the Dewar says. The VIPeak learned with the top loy- opportunity to get more customers show the most big data question — but program gives the com- alty members are now from your existing cus- interest in. we have been pleasantly pany the ability to build being applied to non- tomers. surprised at how much a 360-degree view of its members to identify top A WEALTH OF DATA transaction and behav- customers while also prospects across the whole Make sure data Standard RFM (recency, ioral data we already have. strengthening customer direct-to-consumer base.” 3 analytics projects frequency and monetary) A key lesson for us has and brand engagement Asked about advice he have the same KPIs as the analysis of past transac- been to maximize use of and increasing online might have for other IT overall business, so key tions is applied to identify what we already have, shopping activity. leaders planning analytics wins can be celebrated top potential customers, data- and customer-wise, “By identifying the key initiatives, Dewar offers across departments and while predictive analytics before chasing too much product categories cus- these tips, drawn from the key results from a test and take into account the com- external data or expand- tomers are most likely to three keys to the success of learn protocol can be inte- pany’s model for selling ing to a broad customer buy next, The North Face the North Face project: grated immediately. ♦

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 22 cover story | TOPICAnalytics 50

ANALYZING the ANALYTICS 50 A breakdown of the winning projects in the Analytics 50 awards program reveals that the majority of honorees used predictive, prescriptive and/or cognitive analytics to address business challenges. BY MURUGAN ANANDARAJAN AND DIANA JONES

HE ORGANIZATIONS hon- reduction (12 percent) and decision-making For example, 360i’s technology suite uses ored in the first year of the support (16 percent). natural language processing to put keywords Analytics 50 awards program A breakdown of the Analytics 50 honorees together with the right ad copy and landing are a testament to the need reveals that 62 percent of them used predic- pages in order to maximize relevance to the for and importance of ana- tive, prescriptive and/or cognitive analytics to consumer. And IOMICS, which specializes in lytics in the industries they address business challenges. Interestingly, 27 analytics for the science and healthcare sectors, represent — 21 industries, to percent of the organizations used cognitive developed what it calls the Fusion Analytics be exact. Each winning orga- technologies, including machine learning, nat- Platform to support multiple artificial intel- nization innovatively used ural language processing and visual analytics. ligence strategies, and the initiative has led to analytics to transform data into meaningful It’s clear that these honorees felt that cogni- the democratization of science by allowing more action that yielded results such as cost or time tive technologies could help improve the core academics to pursue biochemical research. tsavings (34 percent), revenue generation (14 functionality of their products, generate insight In the government sector, the office of the percent), market growth (26 percent), risk for customers or improve business operations. Comptroller of Maryland used an ensemble of

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 23 cover story | TOPICAnalytics 50

learning analytical models, including machine surveys identifying operational analytics as an learning, to identify $38 million in fraudulent PROJECT BREAKDOWN emerging application market. Of the strategy- tax returns in the last tax year. related business challenges that honorees

It’s not just the analytical techniques that Impact of Analytics Projects dealt with, more than half involved customer were impressive. The honorees demonstrated n Cost/time savings or front-end analytics. n Revenue generation the capability to sift through mountains of n Customer satisfaction One thing is clear: From cancer research information and to combine data from mul- n Risk reduction to fraud protection, the projects recognized n Market growth tiple sources for a more comprehensive view in the inaugural Analytics 50 awards proof their businesses. For example, to bet- gram were significant undertakings. And Analytics Used ter manage the supply of highly perishable their accomplishments may provide clues rattlesnake antivenom, H.D. Smith developed about future trends in analytics. Among Descriptive Predictive Prescriptive Cognitive a system it calls FusionOps to integrate data other things, they suggest that there will from multiple sources, including subsidiaries, be an increase in spending on back-end or Operational Challenges Strategic Challenges in a timely manner, resulting in an 18 percent n Reduce downtime n Increase market share operational analytics platforms, cognitive reduction in wasted antivenom. And Trust- n Improve productivity n Target marketing computing systems and the integration of n Minimize risk n Cultural alignment mark Insurance improved decision-making by n Capacity utilization n Achieve an enterprise unstructured and structured data sources for n Align processes view with analytics developing an approach for comprehensively decision-making. analyzing data that was previously siloed As we gear up for next year’s awards pro- across multiple functional departments. A summary of the business challenges faced by Analytics 50 gram, we’re looking forward to seeing more honorees, and the types of technologies they used to solve A small percentage of honorees — less than problems and deliver results. examples of how analytics are being used to 5 percent — used unstructured data in their impact the future of organizations. And that initiatives. When combined with other sources The result? Customer conversion rates for future looks pretty exciting. ♦ to reveal new insights, seemingly unimport- targeted groups that are 250 to 350 percent ant data can prove crucial. For example, Citrix higher than those for nontargeted groups. Murugan Anandarajan, Ph.D., is department head of developed a cloud-based analytics platform It’s also interesting to note that 64 percent Decision Sciences and MIS at Drexel University. Diana that matches its customer database with of the projects addressing business challenges Jones is the assistant director of the Dornsife Office external data from blogs, websites, news involved operational or back-end analytics. for Experiential Learning at Drexel University’s LeBow reports, press releases and social networks. That figure is in line with the findings of recent College of Business.

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 24 cover story | TOPICAnalytics 50

HONOREES2 0 1 6

360i Children’s Hospital Comptroller of Farmers Insurance GlobalHealth Independence Blue Jared Belsky of Philadelphia Maryland Chris Ciccarello Dave Thompson Cross President John Martin Andrew Schaufele Senior Director, SVP, COO Ashley Masterson ARI Fleet Senior Director, Director, Bureau of Marketing Analytics Greater Philadelphia Manager, Medical Cost Steve Haindl Enterprise Analytics Revenue Estimates FICO Cultural Alliance and Business Analytics Executive VP, Technology Citrix Conservation Scott Zoldi John McInerney Intel Corp. and Innovation March Liao International Chief Analytics Officer VP, Research and Mani Janakiram AstraZeneca Director of Advanced Jorge Ahumada Foursquare Communications Director, Supply Chain Per Alfredsson Marketing Analytics and Executive Director, Steven Rosenblatt HD Smith Strategy and Analytics VP, Global Supply Chain Business Intelligence TEAM Network President Kyle Pudenz IOMICS and Strategy City of Boston Data RPM GE Senior Director, Joseph Gormley Bexar County Jascha Franklin-Hodge Sundeep Saghavi Beena Ammanath Purchasing CTO and Senior Government CIO CEO Executive Director, Health Care Service Software Architect Catherine Maras City of Los Angeles Eurpac Service Inc. Predix Data Science Corp. Daniel Corkill CIO Eric Garcetti Shelley Rohlik Gary Stanford CSO and Senior General Dynamics Data Scientist BNY Mellon Mayor Director of Business Mission Systems VP, Actuarial and Provider Kevin Fedigan Comcast Analytics Philippe Wiener Network Strategy Major League Soccer Divisional CEO, Dan Keir Director, HR Systems and Charlie Shin Broker Dealer Services Senior Director, Analytics Senior Director, Direct Marketing Strategic Planning

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HONOREES2 (continued)0 1 6 Methodology

Matson Inc. Philadelphia 76ers University of Nominees for the inaugural Analytics 50 awards submitted Peter Weis Braden Moore Colorado Health entries between May and August 2016. A five-judge panel VP, CIO Director, Analytics and Steve Hess evaluated the projects based on the following criteria: Mercy Health Insights CIO Curtis Dudley SquareTwo Financial University of complexity of challenge, project innovation, impact on the VP, Performance Trevor Giampietro Mississippi organization and the metrics used to evaluate that impact. Solutions VP, Velocity and Medical Center Navis Inventory Management John Showalter Dave McCandless The North Face Chief Health VP, IT Ian Dewar Information Officer Navistar Senior Manager, UPS Dan Pikelny Consumer Lifecycle Jack Levis VP, Analytics Thomson Reuters, IP Senior Director of Process Management New Mexico and science business Judges Department of Christine McKay USAA Workforce Solutions Director, Marketing Christina Holleman PRAMOD ABICHANDANI Accepting as a team Analytics AVP, Marketing and Strategic Insight Delivery Assistant clinical professor, decision sciences, Oak Labs Toyota Financial LeBow College of Business, Drexel University Healey Cypher Services Wunderman CEO, Founder Jim Bander Yanni Kotziagkiaouridis National Manager, Global Chief Analytics ELEA McDONNELL FEIT Oberweis Dairy Decision Science Officer Assistant professor of marketing, Bruce Bedford LeBow College of Business, Drexel University VP, Marketing Trustmark Insurance Xerox (Xerox Legal Eshwar Pastapur Business Services) Oklahoma DHS VP and CIO, Trustmark Rob Hellewell KERI HETTEL Ed Lake Voluntary Benefit VP, Data Analytics Vice president, group director of analytics, Razorfish Health Director Solution Karl Sobylak Senior Director, Owens Corning U.S. Army MATTHEW HOFFMAN Malavika Melkote Data Analytics Communications Vice president of learning analytics, CorpU Leader, Analytics Center Electronics Command of Excellence Liz Miranda Pershing LLC Acting Director, CECOM DAN MUSE Ram Nagappan Integrated Logistics Editor in chief, CIO.com and CIO digital magazine CIO Support Center

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 26 appyling TECH

Microsoft sees AR in the enterprise The company is positioning its HoloLens augmented reality headset system as a business tool, but analysts say it has to clear a few hurdles. BY CLINT BOULTON

Microsoft has enlisted the likes of Volvo, Lowe’s, Japan Airlines (JAL) and ThyssenKrupp to test its HoloLens augmented reality (AR) headset, under- scoring the software giant’s early success in wooing enterprises. But Gartner analyst Brian Blau, who tracks the market for augmented- and virtual-reality systems, is taking a cautious view. He acknowledges

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 27 applying TECH

that Microsoft’s clout in business service visits, and to get remote software gives it an advantage but guidance when they’re on says it’s too early to proclaim an site. Technicians use Skype on AR leader. Microsoft’s HoloLens HoloLens to call subject matter system, currently available to experts and share holographic developers and businesses, costs instructions. ThyssenKrupp $3,000, has some technical limita- says that, in trials, HoloLens has tions and competes with offerings reduced the average length of from a number of tech heavy- service calls by a factor of four. weights, including Oculus Rift, n Volvo Cars: The automaker parts, says Koji Hayamizu, senior Samsung Gear, Sony PlayStation envisions people using HoloLens to director of the planning group for Lowe’s VR and dozens of others. choose features for cars they plan JAL’s products and service admin- customers HoloLens uses cameras, air to purchase. “Imagine using mixed istration department. gestures, gaze, voice and sound to reality to choose the type of car you n Lowe’s: The home improve- can use navigate holograms that adapt to want — to explore the colors, rims, ment retailer has set up a system HoloLens the user’s physical surroundings. or get a better understanding of the that enables customers to use features, services and options avail- HoloLens to view holographic rep- to view Business interest able,” says Björn Annwall, Volvo’s resentations of home remodeling holographic Attracted by the opportunity senior vice president of marketing, options. Users can share designs to enable employees to access sales and service. online so that others, such as depictions information and complete tasks n Japan Airlines: JAL has devel- Lowe’s design professionals and of home hands-free, several companies are oped proof-of-concept training friends, can see what they’re see- building HoloLens applications. programs. Thanks to the 3D capa- ing in real time via a Surface tablet. remodeling Here’s a rundown of projects: bilities in HoloLens, mechanics n Other HoloLens projects: options. n ThyssenKrupp: Technicians “can study and be trained just as Microsoft is also working with who maintain the German com- if they were working on the actual AECOM and Trimble Navigation pany’s elevators use HoloLens to engine or cockpit,” placing their on systems that allow architects triage repair requests ahead of hands on virtual engines and and engineers to use HoloLens

MICROSOFT SWEDEN/WIKIMEDIA NOVEMBER/DECEMBER 2016 | CIO.COM 28 applying TECH

to view building construction and engineering schemas in 3D. “ HoloLens is on a multiyear journey, and we are currently AECOM says engineers and focused on developers and enterprise scenarios.” designers in London, Hong Kong — SCOTT ERICKSON, GENERAL MANAGER, MICROSOFT HOLOLENS and Denver use the technology to explore 3D buildings as if they were physical models on a table. expects Microsoft’s Windows future of HoloLens — if HoloLens Holographic platform to eventu- gets merged into whatever Project Skepticism abounds ally yield new form factors. “I Alloy is,” Blau says. Microsoft is Such scenarios underscore why would be looking to new Windows expected to unveil more details Microsoft is confident of its ability Holographic devices from Micro- about its collaboration with Intel, to make HoloLens the AR stan- soft’s partners that solve those as well as OEM partnerships, at dard for business use. And the problems,” Gownder says. WinHEC events in December. currently modest market for AR Gartner’s Blau says a new col- Blau says he expects a number and VR devices is set to boom. For- laboration between Microsoft and of tech giants to join Microsoft in rester Research estimates that U.S. Intel raises questions about the the AR/VR vanguard. Other likely enterprises and individuals will be future of HoloLens. In August, the contenders include Apple, Google, using 52 million units of VR head- chip maker unveiled Project Alloy, Facebook and Samsung. mounted displays by 2020. an initiative whose goal is to cre- Still, Microsoft is confident. But analysts aren’t ready to ate an all-in-one VR display that’s “HoloLens is on a multiyear jour- proclaim HoloLens the go-to similar to HoloLens. Microsoft ney, and we are currently focused AR system for enterprises. has agreed to optimize Windows on developers and enterprise sce- Forrester analyst J.P. Gownder content and experiences in Intel’s narios,” Scott Erickson, general says that while HoloLens is an Alloy device, and the two compa- manager of Microsoft HoloLens, important product, it has several nies will help foster a range of AR said via email. ♦ limitations, including its $3,000 and VR devices for business and price tag. consumer markets. Clint Boulton is a senior writer However, Gownder says he “We don’t know if that is the for CIO.com.

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 29 leading TECH

The rise of digital transformation phoenixes CIOs who adopt new ways of thinking and working will rise from the ashes of traditional IT to become transformation accelerators. BY SERGE FINDLING AND JOSEPH PUCCIARELLI

IDC’s research has chronicled the traditional IT to become digital IT organizations and their enter- ding business processes, and a rise of digital transformation and transformation phoenixes. These prises are dividing into two camps: lack of digitally fueled vision for the disruptions and opportunities individuals will serve as transfor- those that are leveraging digital the future. The former are pulling it poses for traditional businesses. mation accelerators by providing technologies, new business models away from the pack. This year we are finding CIOs and the services and foundational tech- and entrepreneurial cultures to What does IDC see coming? IT organizations that are adopt- nologies, and by promoting the gain competitive advantage, and By 2019, 80 percent of bimodal ing new ways of thinking and culture and practices, that spring- those that are stuck in second gear, IT organizations will accumulate working, rising from the ashes of board business innovation. saddled by technical debt, plod- a crippling technical debt result-

THINKSTOCK NOVEMBER/DECEMBER 2016 | CIO.COM 30 leading TECH

ing in spiraling complexity, higher nizations and customers. If you’re costs and lost credibility. leading a bimodal organization, In IT, you mortgage your future rethink your leadership strategy, By 2019, 40 percent of IT every time you take shortcuts or rebuild your image and your IT fail to finish a task. That’s techni- organization, and take control of projects will create new digital cal debt. Taking a shortcut to save the future. $1 at the start of a project could By 2019, 40 percent of IT projects services and revenue streams end up adding $10 or $100 to the will create new digital services and cost down the road. If it isn’t proac- revenue streams that monetize data. that monetize data. tively managed, technical debt will Organizations that have gone keep growing until it bankrupts down the digital transformation your digital transformation. path are now poised to transform straightforward way. Organiza- struggled with the consumeriza- their IT organizations from back- tions that take advantage of the idea tion of IT and user demand for sys- Bimodal IT is costly office operations to revenue-gener- of data conglomeration can marry tems with easy-to-use interfaces. Bimodal IT and two-speed ating teams. Successful IT leaders previously disparate data sources As more employees and consumers approaches have institutional- will take their existing systems to create new revenue streams. seek self-serve, on-demand capabil- ized the accumulation of technical to new levels, leveraging the vast ities, IT organizations are having to debt, and many companies are data stores flowing through them Impact of consumerization shift from all-inclusive comprehen- starting to pay a steep price. These to create new products and rev- Another of IDC’s predictions sive interfaces to task-oriented user two-pronged approaches have enue streams in cooperation with reflects the lasting impact of user- modules. To facilitate this shift, encouraged a myopic vision that their business counterparts. friendly smartphones and tablets. successful CIOs are changing their contradicts what is needed. CIOs Consider the real-estate market: By 2018, 65 percent of IT organiza- IT cultures to focus on the needs must take a holistic, 360-degree Not long ago, if you wanted to know tions will create new customer- of the business and the end user view of digital transformation the value of your house, you would facing and ecosystem-facing ser- when developing and implement- and choreograph an optimized look at comparable properties in vices to meet the business’s digital ing new systems. This is leading a response. They need to motivate the newspaper or get an appraisal. transformation needs. number of organizations to create and unify; they need to partner Now, companies like Zillow Since the introduction of the centers of excellence around user more closely with business orga- offer real-estate data in a simple, iPhone in 2007, IT shops have experience, creating strategies that

31 leading TECH

SECURITY TM

By 2018, 65 percent of IT organizations will create new customer- facing and ecosystem-facing SmarNEWSLETTERt services to meet the business’s SAFEGUARDING YOUR SECURITY AND PRIVACY AT WORK AND AT HOME

digital transformation needs. From the editors of CSO magazine, Security Smart is a quarterly newsletter ready for distribution to your employees—saving you precious time on employee education! The compelling content combines shift IT systems to what IDC calls ship model that takes a strategic personal and organization safety tips, making it “Third Platform” technologies with approach to fostering innovation, applicable to many facets of employees’ lives. enhanced self-service capabilities infusing innovation in a holistic, and integration across different lasting manner into the enterprise, Security Smart has an easy-to-read design and clear, engaging and entertaining articles so you are assured technology categories. and rethinking legacy systems. that your intended audience of employees—your In 2016, we have seen digital n Develop a digital foundation organization’s most valuable assets—will read and transformation accelerating every- with platformatization. retain the information. Sign up today to start having where and creating unprecedented At this early stage of the digital this newsletter distributed as a key tool in raising levels of growth and change. CIOs economy, CIOs and IT teams must security awareness within your organization. who want to lead rather than fol- play a decisive new role that will Subscribe today! ■ Most security breaches happen due to human error low should take time every day to help their enterprises thrive. ♦ To view a sample issue of ■ 4 out of every 5 data breaches caused by human do the following: the newsletter, learn about error are unintentional the delivery options and n Enable digital revenues and busi- Serge Findling is IDC’s vice president ■ 4 out of every 5 security events caused by insiders to subscribe visit: ness services within the enterprise. of research for digital transformation. have a negative impact on their enterprise organi- WWW.SECURITYSMART.COM n Expand the CIO’s role by Joseph Pucciarelli is IDC’s group vice zation (including loss of confidential information, critical system disruptions, reputational harm, adopting a full-spectrum leader- president and IT executive adviser. lost customers and more)