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“Startup” means risk. It prescribes small teams of individuals committed to an idea to make the world a better place…or to make themselves a little richer. Why not both? Regardless, new business ventures work under pressure to research, refine, and deliver an idea to the market. The alternative is shuttering for good.

But despite the high risk/reward framework, these Victory-or-Bust ventures don’t have the market cornered on agility and innovation.

With names like Innovation Kitchen, Lab126, The Design Lab, and the eponymous Skunk Works, big companies like Nike, Amazon, Apple, and Lockheed Martin have successfully combined small teams of people at the top of their technical game with large company resources to bring ground-breaking products to market.

Cisco sets aside space for an innovative team operating with a startup mindset. More than an experimental group, they hold themselves accountable the same way any startup should. When their efforts succeed, the impact of their innovations is transformative for the industry and customers.

Cisco ET&I: Cisco’s Big Bets for the Future

Several years ago, Cisco founded the Emerging Technologies and Incubation Group (ET&I), charging them with creating and advancing new products and technologies that earn Cisco’s Executive Leadership team backing. This unique division focuses on new solutions, new markets, and innovative problem-solving.

Using rapid ideation, agile methodologies, incubation, and validation, the group employs startup thinking with a venture capital (VC) backing model, which brings together committed, diverse teams of experts at the top of their technical fields. Those teams partner with universities, customers, and the Cisco Design Partner Program to deliver best-in-class research, next-generation solutions and software, plus customer co-innovation.

“This is one of the most exciting times to be an innovator.”
–

Vijoy Pandey, SVP of Emerging Technologies & Incubation

Catalyzing the Startup Mindset

In the startup space, ideas thrive or fail. Goals must be met, investors must be satisfied, and product adoption must grow exponentially. Miss a deadline? You might find yourself shuttering the company. The inherent speed and urgency that accompanies working with those stakes can be crushed by slow-moving parts inside large enterprises.

Cisco embraces the startup model by granting ET&I the freedom to work without complex multi-tiered oversight while keeping the stakes high.

Like any startup, delivering on expectations is job one. The group sets milestone-based targets akin to Series A, B, and C funding. The team operates under an Incubation Board of Directors who take the part of investors, providing a funding perspective and leveraging their business expertise to accelerate new ventures. That Board retains the ability to defund projects that aren’t working, aren’t moving fast enough, or aren’t maintaining their original merit.

Inside-Startup Success: Understanding the Venture Capitalist Mindset

Competition for funding is tight, and embracing the traits that make or break a company in the eyes of a venture capitalist can improve the chances of success. Investors in 2023 aren’t convinced by ideas alone—they want to see they’re working with organizations that are built to bring those ideas to market.

Common Red Flags for VCs:

Lack of a clear understanding of the market

Lack of strong enough teams and experts

Lack of a clear path to adoption and usage

Lack of execution against expected milestones

Cisco’s ET&I group takes these lessons to heart when building new market incubations: Get executive buy-in, identify a clear market need, bring in the right teams, and commit to a time-bound plan to achieve product-market fit.

Leveraging Partnerships to Identify Opportunities

Startups are about solving problems. Successful startups set out to thoroughly understand a problem space. They think critically about how innovation and technology can solve challenges and unanswered difficulties globally.

A common barrier to understanding those problems is the innovation team’s lack of insight, lack of understanding of customers’ pain points, and lack of diversity. Without factoring in how other people, cultures, employees, or even countries think about an issue, startups can rush toward uninformed ideas that won’t survive in the market.

ET&I partners with more than 20 universities to explore the full scope of problems ranging from Generative and Responsible AI to quantum security and quantum networks. In 2022, the Cisco Research team within ET&I funded more than 51 research projects, completed 69 publications, issued, and filed 33 patents, and hosted an AI Summit last August. Active research drives active results.

It is well understood that solving some of the world’s most complex problems requires a deep understanding of what customers’ pain points and challenges are. ET&I relies heavily on customer listening, insights from VC communities, and academic research to build empathy with the practitioner, accelerating Proof of Value, Time to Value, and therefore driving rapid product adoption. Leveraging this innovation ecosystem gives ET&I both a competitive edge at the forefront of new technological advancements while shaping its roadmap of its future in cloud-native spaces. It’s a win-win situation.

Investing in Bleeding-Edge Tech

For tech companies seeking to find an edge in an already hypercompetitive market, finding that competitive advantage is what separates the winners from the laggards.

In addition to researching emerging technologies, one area Cisco ET&I set themselves to create a bleeding-edge solution is cloud-native application security products. By following a startup model and engaging deeply with early adopters, they created Panoptica—Cisco’s Cloud Application Security product that enables businesses to more securely adopt modern application architectures demanded by the market.

Companies are frequently either reluctant or skeptical to immediately jump into nascent technologies such as application security that have yet to prove their viability in the market. However, times have shown that companies willing to invest in disruptive innovations are more likely to survive during times of digital transformation. Those who rise to the occasion benefit from building highly scalable, resilient, and fast innovative solutions. Finally, companies can both attract and retain top talent while also staying ahead of their competition.

Embracing an Updated Startup Culture

The world grows more interconnected every day, and businesses increasingly understand that a deeper idea pool comes from a greater diversity of employees. But attracting great talent can be challenging if your company is hanging on to monolithic working models. New visionaries have evolved workplace expectations.

To foster a creative mindset, it’s essential to enable team members to take time away from work to engage in activities that inspire and energize. A growing number of credible studies show that work-life balance is solidly linked to productivity and job satisfaction. Keeping the best talent requires creating standards in a company culture that recognizes that every team member has a life outside the workplace.

By embracing outside activities, providing flexible working hours, and focusing on productivity over facetime, companies looking to foster innovation free their teams to move forward and discover world-changing technologies.

By embracing a state-of-the-art hybrid environment that provides flexible hours, remote work, and an inclusive culture, teams can give their best. This environment encourages teams to focus on Horizon 3 ideas and celebrate both successes and failures. This startup culture also fosters the concept of “flash teams” where individuals and skills come together and work on projects like a movie and then disband when the production is completed. Not to mention that Cisco is adamant about powering an inclusive future for all.

There’s much to get right (and wrong) in embracing and developing a startup mentality. The model of a few committed individuals spending weeks of sleepless nights to achieve a goal isn’t gone, but the market understands those examples aren’t sustainable. 

To keep renewing, to keep creating, and to keep pushing boundaries, Cisco ET&I is creating a new sustainable model for delivering innovation.

Consider checking out more information about ET&I today.

Check out the latest Cisco Research findings and gain a competitive edge.

Learn more about Panoptica Simplified Cloud-Native Application Security.

Cloud Native

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Differentiating your brand in the telecommunications market is hard—just ask Vodafone’s CDIOScott Petty.

Despite the British multinational telco’s continued investments in fibre and 5G, and growing consumption of broadband and cellular services, intense price competition, rising energy prices, market regulation and economic headwinds have made for an industry where single-digit revenue growth is difficult to find.

But with a new insourced operating model and a ‘mixed matrix’ team—which gives autonomy centrally and to local markets—Petty believes Vodafone is on a journey to become a next-gen telco.

Vodafone’s digital transformation strategy

Over the last three years, Vodafone has used digital transformation as a centrepiece for how it unlocks efficiencies and new growth opportunities.

Underpinned by its 2025 tech strategy—which commits to building in-house scaled platforms, launching products and services to market faster, building a talent pipeline, and establishing Vodafone as a gigabit broadband leader—the firm’s digital transformation strategy has three pillars.

Operational efficiency: The company is leveraging automation and observability tools to improve efficiency, as well as data analytics, machine learning (ML) and AI through Google Cloud Platform to make better decisions and find incremental savings. An example of the latter is its use of ML and AI to overlay data—such as customer movements from social media as well as profitability—to find out where to deploy new base stations. Dubbed ‘smart capex’, Petty says Vodafone has found a 15% efficiency and £500m in cost savings through this since 2019.Digital channels: Petty says digital channels enable Vodafone to “sell more, service better and reduce costs”. The company app, chatbots and websites have all driven opportunities to better serve customers, particularly through retail-specific events, such as the launch of Apple’s iPhone 14, where web traffic can grow 500% within an hour.New platform businesses: Created in parallel to its legacy connectivity business, new platform businesses aim to drive revenue growth. Vodafone now has an IoT platform connecting 150 million devices, including connected cars, smart meters and smart home monitoring systems. In Africa, it claims to run the largest payment platform, while it’s adding new financial servicing in Europe—such as handset insurance—to wrap around standard tariffs. Petty says that 10% of total company revenue is now coming from these platform businesses.

New operating model, a mixed matrix team

The key to achieving transformation at scale, and delivering better products and services for customers, has been the creation of a European digital and IT organisation that combines the expertise of local markets with the breadth and scale of centralisation.

Last April, Vodafone Technology created a pan-European digital & IT organisation with nearly 17,000 employees led by Petty, bringing together IT functions from 12 European markets to work as one team.

Formerly CTO for Vodafone UK, Petty says Vodafone previously operated independent sets within countries, so each market was responsible for their region, with shared services for data centres and platforms, such as ERP. But this up and down model made code reuse difficult. Historically, scaling across markets was also complicated, with many overlapping projects, high expenditure and limitations in how many projects Vodafone could run simultaneously.

Vodafone didn’t move to centralisation—a model where you don’t have “proximity to the local market”—but rather to a ‘mixed matrix’ model, where each operational local CIO had a broader technology role for the organisation in addition to their local jurisdiction.

“Our UK CIO runs everything in the UK, but also digital engineering for all of Europe,” says Petty. “Our Spanish CIO runs digital channels and the Spanish technology. That model is replicated down into the organisation, so everyone has an operational function close to the markets they operate in, and a domain function, which is trying to execute our strategy. That creates interlocks between each other.” He also highlights that, for instance, the Italian CIO responsible across Europe for data and analytics needs analytics to run well in the UK, and to have a close working relationship with his UK counterpart to ensure digital engineering operates effectively in Italy.

Insourcing and reuse in engineering

A key component of this strategy was Vodafone’s approach to insourcing. Petty says the telecom provider was previously 30% insourced, and 70% outsourced, with a heavy reliance on system integrators and third parties. He says that model isn’t effective and doesn’t scale, with system integrators not incentivised to build replicable platforms.

“Our belief is you have to have a significant portion of your own engineering,” he told CIO.com. “There will always be a role for systems integrators, but integrating into our platforms and standards, not a free-for-all.”

Petty also says that investing in in-house engineering has an upfront benefit as its cheaper, but that it also gives the organisation the technical and engineering talent to build “horizontal scale”.

Vodafone, which has 13,000 software engineers with ambitions to reach 16,000 by 2025, sees a greater willingness for teams to share and reuse through this same model.

“They are more open to sharing and reusing,” he says. “And as they replicate that model in their teams, you just create the connections. Ultimately, culture is about humans and how they interact.”

Petty says staff across the European markets will volunteer their time for projects, such as building APIs for new cloud platforms, sensing the opportunity to do interesting work and develop their core skills. It’s this collaborative approach that’s also improving efficiency. He contrasts the new approach with how the Vodafone UK team once operated. Spending approximately £80 million each year on digital investments, and with 1,000 engineers developing capabilities in Spotify-style squads, the company experienced more defects, cybersecurity issues and slower business speed as the number of projects increased.

The new operating model and team restructure saw technology squads split into technical functions, such as cloud engineering and economics, with these squads responsible for service maintenance, cybersecurity quality and achieving performance across the various European markets.

“Taking this approach dramatically improved our velocity,” says Petty. “Our biggest supporter of hyper-scaling is our CFO because he sees that the more money he pours into engineering, it comes back as increased velocity and capacity. The business can go faster.”

Petty gives the example of Vodafone’s rewards app. Previously, the mere difference between a latte in the UK and café con leche in Spain would have meant the two regions building separate solutions. Under the new reuse model, the rewards platform was developed 100% in-house in Turkey, then launched in Portugal inside three months. The next market, Germany, took just one sprint to bring it to market.

He says the cost difference is significant too, explaining that while the first market spends 110% of their capacity (10% more to make the platform reusable), the payback comes as each subsequent market adopter spends significantly less.

“You start to get a flywheel effect on creating that reuse across your platforms.”

CDIO becomes CTO

Despite progress, there are hurdles ahead for Petty. He admits the skills shortage remains a critical issue, particularly in data science, and there’s the migration of on-premise platforms to Google Cloud Platform (GCP), through which Vodafone hopes to unlock more data and release new capability. Investment must continue on fibre and 5G through recession, too, while Vodafone has started exploring quantum-safe cybersecurity with IBM.

There are deeper changes in the boardroom as well. In early December, Vodafone announced its CEO of nearly 20 years, Nick Read, would be stepping down with finance director Margherita Della Valle taking over as an interim replacement. And with global CTO Johan Wibergh retiring in December 2022, a new role beckons for Petty, too, as he starts as the new CTO in early 2023. Together with Alberto Ripepi, the new Chief Network Officer, he will join the executive committee and expected to co-lead the Vodafone Technology group.

Petty says the hires were down in part to the success of the insourcing model, and a realisation that technology executives can challenge the business. “When we changed the operating model, we saw benefits for technology to challenge the business a little bit more,” he says. “You can work as a team to try and drive the right outcome.”

CTO, Data Engineering, IT Leadership, IT Operations, IT Skills, Operating Systems

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A bank teller, a marketer, and an operations product owner at TruStone Financial Credit Union each had a knack for technology, but they didn’t think it would lead to a job in the IT department. Yet all three are now on CIO Gary Jeter’s IT team, and not because he’s desperate for bodies. Formal and informal programs at the credit union help Jeter find hidden IT gems inside the 600-person organization.

In the past year alone, six new additions to the IT team have come from other TruStone departments. IT’s “walk in their shoes” job shadowing initiative and the company’s formal leadership training program help employees find career growth inside the company, but Jeter credits the attraction to the IT department, in particular to its well-regarded culture and its career-progression track, which is harder to find in other areas of the midsize company.

Above all, these transfers must be a good culture fit with IT, Jeter says. “I want people who are running to us, not people who are running away from a situation,” he adds.

Finding IT talent inside the organization benefits both the employee and the CIO. Recent layoffs and reigned-in hiring trends at some organizations might make the IT department an appealing option for technology-inclined employees. At the same time, CIOs who are unable or reluctant to hire replacements at salaries that are significantly higher than those who left might be able to transition talent into IT without having to pay big salary bumps, which are estimated at 5-6% above existing levels for new hires, according to Janco and Associates. Plus, these employees already know the business. And of course, organizations benefit by retaining employees.

Here are five ways that companies are finding hidden IT talent inside their own organization.

Hire leaders and train skills

Jeter follows the mantra, hire leaders and train skills, “with leaders being people who have that drive to learn,” he says. In conversations with these interested employees, he’s looking for evidence of a curious mind, so he’ll ask about hobbies, for example. The teller didn’t have a college degree but explained she was on the robotics team in high school and taught herself Python coding.

“When you’re constantly going after [tech interests] outside of work, you’re probably going to come in and do a great job,” Jeter says. Today, the former teller is an IT systems analyst supporting mortgage applications.

Jeter will also evaluate the candidate’s reasoning skills by asking questions like, “How many piano tuners are there in Minneapolis?” Jeter says. “The answer doesn’t matter, it’s the logic that they use,” such as considering how many people play the piano, how many pianos could be in the city, and how many pianos must one tuner service to make a living.

Internal skills marketplaces

Internal skills marketplaces are emerging as a way to retain tech workers while also meeting demands for agile digital environments. Millennial tech workers often report feeling “trapped in the org chart” with a predefined job description that limits their work, says Jonathan Pearce, workforce strategies lead at Deloitte Consulting. The feeling is, “it would be easier to keep growing my career if I look outside the organization rather than inside. There’s no opportunity to put my skill sets out on the table.” Meanwhile, project managers need to connect work that needs to be done with the right set of skills, some that might come from some subfunction of IT. Internal skills marketplaces meet both needs by matching workers’ skill sets, not their job titles, with the work that needs to be done.

Navy Federal Credit Union discovers hidden IT talent with its talent optimization program, which began in 2016. “We knew there was tech talent in the credit union that doesn’t work in IT,” says CIO Tony Gallardy. “The question was how do we find these people?” His team used a talent assessment tool and identified 10 candidates for its pilot program. Each went through nine months of training and then integrated into IT. Today HR runs the talent optimization program and has expanded into other areas, including mission data, which is a subset of IT, and digital labs. More than 30 people have come to IT through the program, Gallardy says.

Some enterprises use AI-driven skills management platforms as a talent assessment tool to match peoples’ skills to IT. Consumer goods company Unilever, for instance, used its AI-driven internal talent marketplace to redeploy more than 8,000 employees during the pandemic. 

An internal talent marketplace can also reduce internal hiring bias and increase networking that promotes diversity. Hiring managers can focus just on skill sets and years of experience rather than education by removing that visible field, for instance. Others use the platform to build mentorship relationships that are senior-to-junior, junior-to-senior, peer-to-peer, and expert-to-novice, which breaks down taboos in relationships, connects people globally, and facilitates meaningful work and retention.

Bootcamps

Training programs like IT bootcamps have become increasingly important tools for creating new opportunities for employees — all while helping to fill key IT roles.

Insurance company Progressive saw an opportunity to fill important roles by investing in its own employees who already have a wealth of knowledge about the organization, while also knocking down some of the eligibility barriers for some tech jobs.

The Progressive IT Bootcamp pilot program launched in 2021 with eight participants from customer support, underwriting and claims departments, who graduated in November and now work as IT apps programmer associates on teams across the company.

The bootcamp team worked with HR to identify certain customer-facing roles and invited members to apply. The team emphasized that employees didn’t need a tech background or a degree in tech — all the experience and background would be provided to them through the bootcamp.

Once bootcamp candidates were identified and accepted, they were taken out of their previous roles and put into the 15-week intensive training program where they learned C#, .NET, and other skills necessary for their new role.

Employees are paid during their training and are aided by a training assistant who is also a full-time Progressive programmer that helps connect the dots of what they are learning to how it would apply in their new roles. Program participants also report directly to an IT manager.

The company is now working on another version of the program, focusing on analyst roles, and plans to include other tech roles in the future.

Career-change programs

Capital One’s dedication to career development has helped motivate employees to stay despite waves of resignations in other organizations. One of its programs, the in-house Capital One Tech College gives employees both inside and outside of IT the opportunity to develop their tech skills. It gives access to thousands of free training and certification courses in subjects such as agile, cloud, cybersecurity, data, machine learning and AI, as well as mobile and software engineering. The Tech College offers both live classes and pre-recorded courses to fit employees’ schedules and learning styles.

Through the Tech College, Capital One can develop the necessary skills in-house, while also giving employees the opportunity to grow and expand their careers and skillsets, according to Mike Eason, senior vice president and CIO of enterprise data and machine learning engineering at Capital One.

Eason himself says that he’s had about 15 different roles at Capital One over the past 20 years and notes that the formal process around career development helps employees find what they’re passionate about without having to leave the company. “We really want to invest in the whole person versus getting them pigeonholed in doing the same thing,” says Eason.

Leveraging internal sources

Nobody knows the hidden IT talents of non-IT employees better than their managers and co-workers.  At TruStone, business leaders and managers are open to recognizing employees with IT potential that could benefit both the employee’s career and the company. “We’re transparent that this would be a great person for [an IT] career progression, so maybe they should come into IT,” Jeter says.

Jeter often discovers talent through his team’s product management consults inside the organization. “With a lot of scaled agile framework, we have product owners that sit outside of IT but within the business in areas like consumer lending, member services, or mortgages. We have technologies to align with them and they orchestrate the backlog” and other supporting duties, Jeter says. “They see what IT does, and we see what they do — and some of them want to come into IT.”

IT scored a new team member recently after a product owner in operations worked with IT on a product management consult. He had been with the company for nine years and worked in training before business operations. Jeter brought him into IT and today he works with consumer lending applications. “He knows the business and now he’s learning the technology.”

Getting these transfers up to speed and fully operational takes time, Jeter says. “Some learn the technical aspects of the business at different rates than others.” Jeter’s VPs and managers must pivot from “being a doer to being a coach,” he says. “We also spend a lot of time on performance management sessions and making sure we have development plans.” But the effort is worth it, he says.

“Showing that you invest in employees attracts talent internally,” Jeter says. “You’re giving them those skill sets to launch their career.”

Hiring, IT Training 

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Over the past several years, IT has undergone a profound shift in which a formerly support-oriented organization has taken on a much more prominent customer-centric role. Much of this has occurred thanks to the power of data to drive decisions and digital transformation’s impact in enabling companies to create new service- and data-based offerings around their core products.    

After hearing recently that Art Hu’s CIO role at Lenovo had been significantly expanded to incorporate customer solutions, I was eager to talk to him and learn more about how he has approached this shift to a “CIO-plus,” customer-centric IT leadership position. Our conversation touched on how this new opportunity evolved, the central role that data plays for CIOs today, and how his new CTO duties differ from those of his CIO post. What follows is an edited version of our interview.

Martha Heller: In addition to Lenovo CIO, this past April you became CTO of Lenovo Solutions and Services Group. What is that new business?

Art Hu: Last year, Lenovo stood up our Solutions and Services Group (SSG) as a part of our pivot from hardware sales to solutions, including offering our products as a service. Device-as-a-service (DaaS), for example, is our fastest growing business. It allows customers to avoid making large hardware capital expenditures and move to a “consume as you go” model where we manage, configure, and deploy their devices for them. 

Think of SSG as a high-growth startup. Last year, Lenovo earned more than $70 billion in revenue, of which SSG contributed a little more than $5 billion. Our goal is to double our revenue in the next few years.

What does SSG’s rapid growth indicate about the evolving world of business and technology?

The first point is the shift from delivery to outcomes. It is no longer our goal to simply manufacture and ship a piece of hardware. Our goal is to deliver value through business outcomes. But you can only pivot to a customer-outcomes mindset if you have customer intimacy and understand the context in which your technology is being used.

One example is Lenovo’s AIOps service, where we analyze a customer’s data about hybrid cloud service and make recommendations to optimize it for stability and performance. The rapid growth of SSG points to the fact that today, you need more than the right technology: The technology needs to make your data visible, accessible, and actionable.

What lessons learned can you offer CIOs on generating actionable data?

The first lesson is to create clear data standards. We learned that some data needs to be common (the definition of a ‘shipment,’ for example), but we also learned that we cannot standardize everything. We need to allow for some variation in how people operate, even within a global model.

The second is to start building guardrails around the data. When we told our business partners what they could and could not do with the data, they just went off on their own and did it anyway. We realized that we needed to strike the right balance between standards, guardrails, and flexibility. It took us a couple of iterations to get it right.

The third lesson is all about education. You cannot assume that your business partners know what to do with the data. Early adopters will know exactly what they want, but others may not. As an example, we had significantly upgraded our ability to gather feedback on social media, and we started to send customer comments from Twitter and LinkedIn back to our product development teams. We assumed those teams would love all that data, but we were wrong. Someone actually said, “Please stop sending me all of this data. I don’t know what to do with it.” We learned that delivering data is not enough. We need to help our business partners understand it and then use it, to take advantage of these marketplace insights.

What does the SGG CTO role entail?

The first part of my job is to choose the technology investments that will enhance our customer offerings. Where can RPA (robotic process automation) complement our solutions portfolio? How will AR and VR extend our capabilities? The second is to expand the solutions portfolio to bring more choices to our customers. And the third is to leverage SSG as a platform for innovation that drives the future of our solutions and services strategy.

How is that job different from your CIO role?

In both roles, I am continuously scanning the technology landscape to identify opportunities and building a strong engineering team and culture to deliver. But there are differences as well.

For example, my level of external engagement. A CIO’s stakeholders are typically the business users within the company. As Lenovo’s CIO, I build our core business applications, social media and e-commerce sites, and spend time thinking about business scenarios, deployment, and ways to capture value. As CTO, I spend more time in the market, understanding emerging trends and the competitive landscape. Those give me a strong perspective of customer insights, which are then sharpened in discussions with our business leaders and the sales teams. The result is a better-informed offering development process.

My perspective on budgets and investments is also different. As CIO, you typically have a budget against which you prioritize investments and initiatives. But as the CTO in a new P&L, if I cannot articulate a clear value proposition for my technology investment roadmap, my development budget is zero. The conversation shifts from “your budget needs to decrease by 10%, so you can do some but not all of your priorities” to “your budget is zero because we don’t believe your technology strategy will grow our P&L.” (That hasn’t happened yet, fortunately.)

Finally, there is the difference of working in a startup versus working at global scale. As CIO of Lenovo, I manage the teams that support a multibillion-dollar business. The SSG CTO role, on the other hand, has required me to get into the nitty-gritty of incubating a business. Being a leader in a $70 billion business is very different than supporting a new line of business in the “from-zero-to-one” stage of maturity. 

How did you wind up in the role?  

I was asked to take on both roles for several reasons. The first is that for years, industry trends have indicated that the future would be increasingly software-defined, so we have been building up our software capability within IT for quite a while. 

At the same time, SSG’s approach to developing our offerings has been to tap into the best of Lenovo’s assets from across the enterprise and integrate them into a single offering, with software being part of the “glue” that ties it together. The requirements to execute this type of exercise were a natural fit with IT’s software capabilities, especially the engineering methodologies, processes, and platforms that were needed to build SSG’s R&D platform.

Second is our “Lenovo powers Lenovo” concept. Over the years, our customers have wanted to know how we, at Lenovo, run our business: Supply chain planning, warehouse operations, and globalization are good examples. They also wanted to know more about the hybrid cloud solution we built in-house. They said, ‘Can’t we just buy what you’re doing?’ So, we took some of the solutions we had developed internally to run Lenovo, productized them, and began offering those to our customers. Although I didn’t know it then, I was incubating a small business within IT, and that was one of the seeds that ultimately led to my taking on the CTO role.

What advice do you have for CIOs who would like to take on a CTO position?

Don’t wait. If you are developing software solutions internally that could be valuable to your customers, start thinking about those solutions as the beginning of a business. As CIO, you are perfectly positioned to do this, since so many ingredients of a software-enabled solutions business are already sitting within your purview. My advice to CIOs who are looking to do more would be to look at the assets they already have.

IT Leadership

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What’s in a name? For Chris Bedi, who joined ServiceNow as CIO in September 2015, a lot: the company recently gave him a new title, chief digital information officer, and rebranded his IT team as “digital technology.”

“The rebranding is an acknowledgement of how the role has changed,” he says, but is also intended to reinforce various mindsets that he wants the whole team to adopt.

When Bedi joined the company, his primary mission was to enable “scale-for-growth.” Back then, he says, the company had around 2,800 employees, a quarter of the headcount today, and was still seen as an IT solutions company as its other workflow management products hadn’t yet taken off.

His role included the familiar responsibilities for IT infrastructure, network connectivity, cybersecurity, delivering collaboration and communication tools for existing staff, and provisioning them for new employees so they have what they need to be productive from day one.

Another big component of the job back then, he says, was keeping the information needed to run the business “at our fingertips.” These analytics tools were basic apps, but not trivial, he says.

AI and machine learning were only just beginning to creep into discussion of analytics in 2015, and the ServiceNow team devoted to the technology was tiny.

“At the time, we had a team of three people focused on AI and ML who were largely — this is 2015, you have to remember — just running experiments on AI and ML,” Bedi says. “Nobody knew what the heck to do with it; nobody had really bought into it. But these were data scientists tinkering with data, producing some insights.”

That’s changed in the intervening years, of course.

Digital brain

One milestone for the analytics organization came in late 2018, with a shift in focus away from dashboards and KPIs and toward becoming a digital brain. “We toyed around with the name: digital brain, central nervous system — for the organization,” he says. “We said our mission should become making sure anything that has a rating, recommendation or forecast in our organization is enabled by an AI and ML recommendation.”

That mission soon evolved again, into helping every persona make more effective decisions, and now results in over 3 million recommendations per day, he says. “Surfacing AI and ML recommendations is great, but unless we’re also prescriptive in terms of the actions we want people to take, and give them a closed loop, a human in the loop, to tell us whether those suggestions were useful, we’re missing the mark.”

The way the analytics team analyses its own performance has also evolved, from a count of monthly active users of the analytics products to a focus on their satisfaction with the recommendations they are receiving. “It has to be, ‘What’s the percentage of actions recommended versus actions taken?’ That was a big shift,” he says.

Bedi’s responsibilities have grown in other ways too. While his team isn’t responsible for the Now Platform infrastructure on which the company’s SaaS offering runs, it does maintain the Now Learning training platform and  ServiceNow Impact, a customer success app for helping clients track their digital transformations.

Cybersecurity is no longer just about protecting corporate IT infrastructure, but also the company’s revenue-generating cloud, and even ensuring that customers are using the company’s services securely to mitigate reputational risk.

And scaling the company has moved from simply supporting more employees to getting the most from existing staff. “The purpose of this is to drive an incredible employee experience that helps our employees be more engaged and productive,” he says. “If I zoom out, the role has evolved from largely internal, scale and risk mitigation, to very externally focused, critical to driving our strategy, critical to driving growth, and looked at as a lot more strategic than in 2015.”

Embracing citizen developers

Bedi says he’s a voracious reader, but also has a strong bias for action when it comes to picking up new skills. “Let’s go do it and figure it out as we go,” he says. “People use the term ‘fail fast’ but I like the term ‘learn fast’ better.”

That was his approach when it came to the adoption of low-code development tools internally at ServiceNow.

“We were having one of those debates with no finish line around citizen development,” he says. Those in favor wanted to see the benefits right away; those against feared an accumulation of technology debt in the organization.

In situations like these, he says, there are three choices as CIOs. “You can try to block it — but you’re never going to win that battle,” he says. “You can ignore it. That’s what you’re doing today, whether you know it or not, because people are out there already with point solutions. The only logical choice left, and this is a conversation I had with my team, is to embrace it. So, we embraced it.”

ServiceNow’s employees have embraced it too, with over 400 of them active as citizen developers, 100 applications in service, and another 100 applications due to go live in the next couple of months, Bedi says.

As progress gains momentum, he has some advice for other CIOs getting ready to embrace citizen development in their enterprise. First, he says, keep governance lightweight yet sufficient. One way to do this is to provide trusted data sets for things citizen developers are sure to want, which must be done properly to avoid things breaking — something like an organization hierarchy and an employee directory for apps involving approvals, for example, or a cost-center hierarchy for anything involving spending.

Second, he says, avoid discouraging new developers by limiting the reasons for refusal of a project: no duplicate apps (although replacing an app with a better one is allowed); no getting in over your head (so if an interesting idea looks likely to be too complex for the citizen developer, his team members may step in to help); and no handling of overly sensitive data (but if the idea is good, his team may take on the project).

His third recommendation is to make it easy for people to get started. His team did this by providing an introductory class — “It was short enough where people wouldn’t be discouraged,” he says — and holding office hours where citizen developers can call in for help.

Finally, he advises, amplify success by celebrating the citizen developers’ applications. “I have a selfish interest in this program taking off,” he says, “because they’re helping with one of my core missions: digitize the enterprise.”

If citizen development is handled correctly, and if CIOs, CDIOs, and CTOs can embrace all these people, Bedi says, then we can do away with the term shadow IT and its negative connotations.

And perhaps this will help with another problem he and CIOs like him face: the shortage of skilled software developers. “I can never get enough of them,” Bedi says.

Analytics, Application Management, Artificial Intelligence, CIO, Digital Transformation, IT Skills, Machine Learning

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US Army CIO Dr. Raj Iyer is virtually on the front lines of the Russian-Ukrainian war — and it is not an exercise.

As part of NATO’s commitment to support Ukraine, a democracy Russia invaded in February, Iyer and his CIO colleagues across all branches of the US military, along with the US Department of Defense CIO and officials at the Pentagon and US intelligence agencies, are feeding near real-time data to Ukrainian commanders on the ground and to its besieged government.

“Data is now the new ammunition,” says Iyer, who is a civilian and the first US Army CIO, a new position that reports to Secretary of the Army Christine Wormuth. “At the end of the day, the business of the army is to fight and win wars. We’re here to serve our national security interests, and for us, that meant making our cloud become a warfighting capability.”

Intense pressure is on the nation’s military IT chiefs to either deter or engage and win what Iyer calls “Future Fights,” given that the technical acumen of the nation’s major “peer adversaries” — Russia and China — is more sophisticated than past combatants such as Afghanistan and Iraq, he says.

To build a digital infrastructure capable of fulfilling this remit, Iyer, who previously worked at Deloitte and the private industry, has had to work hard and fast. When he assumed the CIO role two years ago, the US Army did not have a cloud up and running.

First, Iyer tapped into the $500 million budgeted for the army’s digital transformation over a five-year period and “productized” it by building a secure cloud infrastructure based on AWS and Microsoft Azure. His second priority involved making an aggressive push to move the Army’s most mission-critical SAP ERP systems to the cloud.

“We were just in the infancy of developing a strategy of how we were going to adopt the cloud. The Air Force has gotten a little ahead of us, but we set aside [the funds] to build capacity, have the right architecture and the right level of security controls in place to make sure we could leverage the commercial cloud,” he says. “Then the most important part for us was to decide how to operationalize this cloud infrastructure.”

The cloud’s impact on the war in Ukraine

It did not take long. The conflict between Ukraine and Russia began just two years into Iyer’s tenure and the US Army’s adoption of the cloud. As an ally of Ukraine, the US Army is applying its war-fighting platform — its cloud, data, analytics, and AI — to help Ukraine’s logistics and battlefield strategy.

“Our 82nd Airborne [Division] was the first to land on the ground. In support of our current operations in the Ukraine, we’re actually able to leverage the cloud to support their operations,” the US Army CIO says.

“It’s the first time in Army history in which we’ve had an army unit support a current operation with the cloud, leveraging commercial satellite assets,” he adds. “Low Earth orbiting satellites gave us access to intelligence data at the point of need at a scale we were not used to …. in near real-time.”

The amount of data incoming from satellites, ground intelligence, and social media — from soldiers and civilians on the ground, as well as fake video from enemies — is staggering, he says.

Yet Iyer is encouraged that the digital infrastructure has been a critical asset in this conflict and in protecting the homeland.

“We are able to quickly integrate intelligence coming from our national intelligence and from the intelligence assets of our partners, go through and validate the data sources, and then very quickly come up with the right assets to target and send that information out,” he notes. “As much as we rely on our weapons systems platforms, the ‘Future Fight’ depends on how quickly we are to enable commanders in the field to make decisions in an uncertain environment.”

The strategy is already having an impact. The more data the US Army can source and validate quickly, the better positioned it has been to uncover “the right assets to target” and send that information to the Ukrainians, he says, citing Ukraine’s use of the M142 Himars, an advanced rocket launcher, on specific targets. It has been reported that, with Himars, Ukraine has been able to cut supply lines to Russian troops and strike Russian ammunition depots.

“It’s been a game changer just in the last three months of the war and it would not have been possible without the cloud,” Iyer says.

Analytics, AI, and the rise of cyberwarfare

The US Army has migrated 250 of its most significant applications to the cloud, including one of the world’s largest SAP ERP systems, Iyer says, adding that he opted to migrate the toughest application challenges up front and that “gave us a lot of lessons learned.”

The US Army has 200 data centers and is aiming at a 50% reduction in “rent” by 2027. Rather “lift and shift” all applications to the cloud, itself a non-trivial task, the army will be “killing” some of the 3,000 legacy systems that are antiquated or non-native to the cloud.

In recent years, the US military has reorganized its operations to leverage new types of data at scale “in ways not used before,” Iyer says, especially as space and cyberspace have been added to the multi-domain list of traditional warfighting domains: land, air, and sea. Doing so necessitates tremendous innovation in native-cloud application development.

Cyberattacks within the US and in hotspots such as Ukraine are a top priority for the current US administration and Department of Defense. There are many more sophisticated forms of attacks that experienced hackers in Eastern Europe are waging every day.

“We’re going to be dealing with an adversary that is technologically savvy and is able to disrupt communications on the battlefield through jamming and electronic warfare,” Iyer says. “It’s very clear the enemy will go after cyberwarfare first to decrease some of our capabilities and our power projection platforms. It all comes down to leveraging data at a scale and operationalizing it in way we’re not used to.”

Since Russia’s invasion of Ukraine seven months ago, the US military has collected an abundance of data about troop movements and traffic flow from Google Maps and other Internet services and social media websites in real-time. This would be impossible without the cloud, Iyer notes.

The US military has also used its offensive cyber capabilities in its operation in Ukraine in “hunt forward” missions to prevent cyberattacks. “When you’re able to synthesize and bring all this data together, we want to allow commanders the option of non-kinetic effects because using fire is probably the last thing we want to do,” he says.

The CIO points out that the US military is exploiting AI and machine learning to ensure the data collected is valid and to identify disinformation and misinformation intentionally leaked by opponents. The sheer volume of incoming data exceeds the ability of humans to process it without AI and supercomputers. “That’s where the power of the cloud comes in,” Iyer says. “If the cloud and some of these newer technologies become the common denominator across the battlefield, then the question [of success or failure] becomes how well we’re able to take advantage of AI and machine learning algorithms in creative ways.”

But making decisions on the battlefield can get tricky when AI is involved, he says. Automation is efficient in the enterprise but not permissible in weapons systems that result in human collateral.

“In our doctrine, we never allow machines to fire automatically, even in conventional warfare,” Iyer points out. “Where cloud and AI can help us is to give our commanders options, kinetic and non-kinetic, but we’ve never [fought] machine to machine.”

Protecting democracy and the homeland

The US Army is also deploying AI and the cloud to protect the nation’s election infrastructure and to prevent any electronic attack or misinformation distribution that would “undermine our democratic processes,” Iyer says, noting that the cybersecurity executive order put in place by President Biden requires protecting the homeland and ensuring there is no risk of the US critical infrastructure being compromised.

“But our enemy only needs to get it right one time, and if you look at the numbers of attempts to penetrate our networks, it’s literally in the tens of thousands of times per day,” Iyer says. “I would say we are in a much better position than we were two years ago, but our weakest link is the one about which we’re always concerned.”

There’s still more work to do but the US Army has come a very long way in two years and its roster of data scientists — which numbers in the low thousands — continues to grow through its training program with Carnegie Mellon University. Of course, one of the Army’s greatest challenges — and that of the entire Department of Defense as well — is attracting top talent for “a fraction” of the salaries they can earn in the private sector, Iyer says.

The US military as a whole is highly focused on targeting, collecting, weaponizing, and protecting data at edge devices such as IoT and ground sensors and drones in addition to large-scale data combat platforms. “We’re shifting rapidly towards low-cost, high-volume, easily perishable types of data collection devices, from drones up to space assets, open source, and social media” Iyer says.

Even as the armed forces fight battles overseas and domestically, they are preparing for the future by expanding the cloud infrastructure’s capabilities and educating the chain of command at the Pentagon about the opportunities afforded by data and the cloud — the modern war-fighting platform.

“We need to integrate this even more into our warfighting capabilities by getting all commanders to understand the potential of the cloud and how it has already started to change the future of war fighting,” Iyer notes. “They need to start integrating these digital technologies in warfighting exercises and experimentation. It’s a whole different operating model for us.”

The CIO and his counterparts are engaged in a digital transformation campaign to educate the military brass about how the data should be distributed and used in decision-making at “the edge and how we take advantage of all of these cloud assets,” the CIO says.

“We expect the US Army of 2030 to be fully multi-domain capable, fully leveraging all these technologies in ways we have not in the past,” he adds, noting that this includes the bevy of digital imaging, target recognition, and advanced AI assets in space. “Every one of these exercises we conduct in the field we will have lessons learned and apply them in an agile way to refine our architecture, determine what data we need, and continue to refine our AI algorithms, our tactics, and our doctrine in the field.”

Analytics, Artificial Intelligence, Cloud Computing, Data Management, Government IT