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Despite the best of intentions, CIOs and their organizations often struggle to deliver business outcomes from digital transformation strategies. According to research firm Gartner, 89% of corporate boards say digital is embedded in all business growth strategies, but only 35% of organizations are on track to achieve digital transformation goals. And while KPMG reports that 72% of CEOs have aggressive digital investment strategies, McKinsey details a harsh reality that 70% of transformations fail.

Stats such as these raise the question: How can CIOs and digital transformation leaders better recognize failure signs and proactively address issues?

My experience leading many digital transformations is that failures stem from a series of derailments, many of which are inadvertent. Even if digital transformation leaders avoid outright failure, these derailments delay initiatives, create avoidable organizational stress, and often yield underwhelming business outcomes.

Five years ago, I shared that the No. 1 reason digital transformations fail is that executives fail to recognize that digital initiatives are bottom-up transformations that require change across the organization. Employees must understand the why behind digital strategies and have incentives to participate in transformation initiatives. CIOs like to say, “Digital transformation is a journey,” but I believe leaders must strive to lead transformation as a core organizational competency. 

CIOs can’t be involved in every strategic discussion or dive into every initiative’s details, but there are several high-level signs that indicate a digital transformation may be destined to underperform, especially as CIOs add initiatives. In my experience assessing digital transformations, the following five are the most common. 

1. Prioritize too many initiatives without a shared vision

“One of the most common ways to derail digital transformation efforts is ignoring the importance of a clear strategy and defined goals,” says Arturo Garcia, CEO of DNAMIC.

CIOs must communicate strategy and goals when making investment cases and garnering support from the CEO, executives, and the board. As challenging as it is to get to a yes, it’s what comes next that often derails digital transformations at the very start.

CIOs must facilitate a discussion on priorities. Having too many number-one priorities sets unrealistic expectations with business stakeholders and stresses team leaders. Worse is when prioritized initiatives don’t have a documented shared vision, including a definition of the customer, targeted value propositions, and achievable success criteria.

When I survey transformation leaders and their teams, I privately ask each person three questions: What’s your top priority, why is it important, and how many other initiatives are also taking up your time? The risk of derailments increases as I hear inconsistent answers or too many conflicting priorities.

2. Neglect to set collaboration and communication principles

Digital transformations can start with one initiative, defined goals, and a dedicated team. But CIOs are under pressure to accelerate and find digital transformation force multipliers. That means growing the number of leaders and teams that can plan innovations and deliver transformative impacts.   

“Innovation does not happen in isolation: It occurs when organizations encourage and nurture it, often with processes to enable nontraditional ways of thinking, working, and the space to try out ideas in a safe environment,” says Hasmukh Ranjan, CIO of AMD.

Here’s how I spot derailments: Ask initiative leaders to share access to their roadmaps, agile backlogs, collaboration tools, stakeholder communications, and internal documentation. I seek information completeness, communication consistency, and ease-of-use factors. When CIOs struggle to grow beyond one transformation initiative, the root cause is often gaps in collaboration and communication principles.

3. Customize solutions to meet everyone’s requirements

Many organizations use agile methodologies when planning and executing digital transformation and assign multidisciplinary teams to manage releases, sprints, and backlogs. But are product managers developing market- and customer-driven roadmaps and prioritized backlogs? Unfortunately, many digital transformation initiatives succumb to stakeholders dominating priorities with neverending wishlists and poorly defined requirements.

One recent study shows that only 50% follow a product-centric operating model focusing on customer centricity and delivering delightful customer experiences. “Companies that leverage high-quality data, center their enterprise around responsible risk-taking, and organize around products are the most likely to experience profitable growth from their digital transformation journey,” says Anant Adya, EVP of Infosys Cobalt.

Subject matter experts and internal stakeholders should be contributors to priorities and requirements, not decision-makers or backlog dictators. Digital transformations derail when CIOs miss the opportunity to establish and communicate product management responsibilities for creating and evolving market- and customer-driven roadmaps.

4. Underinvest in developing digital trailblazers

In its 2023 State of Digital Transformation report, TEKSystems found that 48% of tech and business decision-makers report needing to revise the nature of their organization’s talent base, and another 34% acknowledge needing new types of talent. “Organizations can derail their digital transformation journey by failing to map out goals, objectives, and tactics prior to launch and not valuing the right mix of IT and business stakeholders in the planning stages,” says Ricardo Madan, senior vice president at TEKSystems.

CIOs invest in skills development, and HR usually offers leadership development programs, but these approaches often don’t address the knowledge and skills needed to lead digital transformation initiatives.

Digital trailblazers, including product managers, program managers, architects, agile delivery managers, and data scientists, need specialized learning programs and coaching to build their confidence in handling transformation responsibilities. Derailments can happen when transformation leaders seize up when negotiating priorities, fail to facilitate decisions on requirements, or struggle when handling conflicts or blow-up moments. Digital trailblazers face many people challenges when guiding employees through a transformation, and CIOs should identify coaches and development programs to prepare their leaders.

5. Drive KPIs and data-driven decisions without a data strategy

Building digital products, improving customer experiences, developing the future of work, and encouraging a data-driven culture are all common digital transformation themes. Leaders should define new KPIs and OKRs that help people understand the objectives and recognize how their work contributes to the organization’s transformation goals.

But there are common pitfalls, such as selecting the wrong KPIs, monitoring too many metrics, or not addressing poor data quality. “Having bad data, or an inability to realize the value and take action from data, is a surefire way for a digital transformation project to go south quickly, says Dwaine Plauche, senior manager of product marketing at AspenTech. “Without useful, contextual data that can be scaled and used throughout the organization, digital transformation efforts may simply become one-off  projects that get stalled at the pilot phase, leading C-suite leaders to believe the technology was a failure or the investment was a waste.”

This derailment stems from having no defined data strategy or having one not aligned with digital transformation objectives.

Consider how it looks to nontechnical executives when every digital transformation initiative has customized dashboards, different KPIs, and metrics with underlying data quality issues. Instead of initiatives telling a cohesive story, it leaves results open to interpretation and challenges. The data strategy should include guidelines on the types of KPIs, standards for dashboarding metrics, and responsibilities for improving data quality.

The five derailments I focus on here fall within the CIO’s responsibilities to address. They are important for CIOs leading multiple transformation initiatives to deliver against several business strategies. The practices that worked when digital transformations started small with one initiative must evolve into a digital culture and a transformation operating model. It’s in this transition where increasing derailments can lead to digital transformation failures.

Digital Transformation

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Taiwan’s semiconductor factories, the source of many of the chips used in the world’s PCs, servers, and mobile phones, operate under a constant threat of disruption.

The threats are both geological (earthquakes frequently force high-tech plants to shut down despite them being built to withstand seismic shocks) and geopolitical: China considers Taiwan to be part of its territory and has repeatedly said it aspires to the “complete reunification of the motherland.” It regularly illustrates its seriousness about reunification by holding military exercises in the seas around Taiwan, including a mock blockade and land bombardment earlier this month.

The US doesn’t have official diplomatic ties with Taiwan, but its Taiwan Relations Act requires it to provide the island with the means of self-defense. The day after China’s exercises concluded, the US began a series of joint military exercises with the Philippines. The drills, running through April 28, include a live-fire attack on a ship and maneuvers in the South China Sea opposite Taiwan.

Against this backdrop of preparation for conflict, a new study by the Center for European Policy Analysis (CEPA) highlights how the world’s reliance on Taiwan’s semiconductor manufacturing capabilities exposes it to critical supply-chain vulnerabilities.

In “Confronting China and Catching Up on Chips,” the Washington, DC, think tank notes that, while the US may be the source of many of the most advanced chip designs, the bulk of the manufacturing happens in Taiwan.

“A Chinese naval blockade of the island, or an outright invasion, would immediately cut off supply of nearly all current production SoCs (systems on chips) designed by the likes of Qualcomm, Broadcom, and Nvidia and supplied by them to Apple, Samsung, Dell, HP, etc.,” the study says. 

Taiwan inside

Even US chip firm Intel could be affected. It’s a rarity among the big semiconductor brands in that it has its own fabs, as chip factories are called, to make the chips it designs—but it also outsources some of its most advanced production jobs to fabs in Taiwan.

South Korea’s Samsung, too, has its own fabs, although the Exynos chips it makes for mobile phones use designs from Arm, but AMD sold its fabs a decade ago and AMD, Nvidia, and Qualcomm have no fabs of their own. Instead, they rely on contract manufacturers known as foundries to make their chips.

The largest foundry is Taiwan Semiconductor Manufacturing Co. (TSMC), which had a 58.5% share of the contract manufacturing market at the end of 2022, according to data from TrendForce. Samsung, too, does contract manufacturing, and has a 15.8% share of the market. Intel’s fledgling foundry business, launched in 2021, has barely a 1% share.

Overall, TrendForce credited Taiwan with 66.9% of the world’s chip foundry business at the end of 2022, with South Korea at 16.7% and China at 7.3%.

But at the top end of the market, Taiwan wields even greater influence: According to the CEPA report, it makes over 90% of the world’s most advanced microchips, those made with a highly sophisticated process technology of less than 10 nanometers.

Network analysis

CIOs need to work closely with chief supply-chain officers to understand their risk exposure in the Asia-Pacific region, says Koray Köse, Gartner’s senior director analyst for supply chain research.

If your organization doesn’t yet have the necessary analytical tools, now is an excellent time to talk CEOs and CFOs into increasing investment in supply-chain risk management, he says.

Those tools will help organizations understand whether they or their network of suppliers are reliant on raw materials, production capacity, or shipping routes in any potential conflict region.

Start with your own organization and Tier 1 partners, and then, says Köse, “Determine the critical lower tiers’ vulnerabilities as effectively as possible using both supplier relations and technologies, like graph technology to uncover key chokepoints.”

Chain reaction

A lack of supply-chain visibility hampered organizational responses to disruptions caused by the COVID-19 lockdowns in March 2020, as well as the blockage of the Suez Canal when the container ship Ever Given ran aground in March 2021.

The Suez incident highlighted the importance of knowing where the goods you rely on originally come from, and how they reach you. Each year around $1 trillion in freight passes through the Suez Canal, but the Taiwan Strait, between mainland China and Taiwan, is the most important transportation route globally, says Köse, with over $5.3 trillion in freight passing through it annually.

Gartner’s 2021 Supply Chain Risk and Resilience Survey found that 70% of enterprises (and 83% of those with revenue above $1 billion) listed improving visibility among their top three priorities to manage risk in the supply chain. Barely half of companies had 90% visibility of even their Tier 1 suppliers; for Tier 2 and beyond, fewer than 4% of companies had such visibility.

Looking beyond visibility

Gaining visibility as far up the supply chain as possible is a key first step, says Köse, but it’s not the only action CIOs should take.

Committing to key suppliers to secure needed volume can help, but he warns against irrational buying. “While safety stock could be nice to have, it’s largely wishful thinking when it comes to the semiconductor space,” and could needlessly tie up critical capital, he says.

And Christopher Cytera, author of the CEPA report that highlighted the geopolitical risks to the semiconductor supply chain, says, “I do not think hoarding is the answer.”

If you do buy up stocks, adds Köse, then it’s important to keep them close to where you want to use them: “Goods bought but left in the region may still be exposed to logistics bottlenecks.”

He says CIOs should consider diversifying their suppliers to different geographic regions, but acknowledges this can be challenging when it comes to semiconductors since many products IT departments rely on contain chips that started their life in Taiwan.

None of these tactics will eliminate supply-chain risk, though, Köse says. Ultimately, it’s about incrementally increasing the time you can keep things running and finding alternatives to concentrated sources of risk.

CIO, ICT Partners, Supply Chain

Posted on Posted in Digital transformation, General topics Tagged with , , , , , , , ,

Antonio Taylor landed his first IT job in 1999, having decided to leave his pre-law studies at college and get into tech instead.

He earned a Novell certification, believing it was a quick, effective way to get into a well-paying field with growth potential. Plus, he liked technology, saying, “Computers were always easy to me.”

Taylor’s gambit paid off: He has worked in IT ever since, earning a dozen or so certifications and multiple promotions during his career.

Now a hiring manager himself, Taylor still believes candidates don’t need a four-year degree to enter and advance in the IT profession. He says he has removed “degree required” and even “degree preferred” from many job postings, noting that IT pros can — and do — often develop the needed skills through certification programs, bootcamps, and even self-directed studies.

“A degree may not mean you have the experience and expertise needed for the tech job,” he says, adding he looks for candidates who can demonstrate they have the technical capabilities required for the positions being filled. “My questions in the interview are strictly around their abilities to do their job.”

Taylor is among a growing number of managers and executives dropping degree requirements from job descriptions.

Figures from the 2022 study The Emerging Degree Reset from The Burning Glass Institute quantify the trend, reporting that 46% of middle-skill and 31% of high-skill occupations experienced material degree resets between 2017 and 2019.

Moreover, researchers calculated that 63% of those changes appear to be “‘structural resets’ representing a measured and potentially permanent shift in hiring practices” that could make an additional 1.4 million jobs open to workers without college degrees over the next five years.

Despite such statistics and testimony from Taylor and other IT leaders, the debate around whether a college education is needed in IT isn’t settled. Some say there’s no need for degrees; others say degrees are still preferred or required.

Bob Dutile, a former CIO now serving as chief commercial officer at digital transformation solutions company UST, sums it up: “There are some who still prefer a college degree, seeing it — rightly or wrongly — as shorthand for showing that candidates have conscientiousness and the capacity to learn. But we and others have not found that it’s necessary.”

The argument for dropping degree requirements

CIOs, other tech leaders, and hiring managers from multiple organizations and industries say a good proportion of IT positions require competency in specific skills and not the academic breadth provided by a baccalaureate.

They list help desk roles, programmers, developers, designers, engineers, architects, analysts, and even some management positions as relying on technical skills, not a degree.

That’s not to say those positions don’t need people who can communicate effectively or think critically, they add. But they believe those skills as well as the needed technical competencies can be developed in myriad ways.

Moreover, they say the move to skills-based hiring brings several key benefits to both their organization and to workers. For the company, a skills-based hiring approach increases the number of qualified candidates applying and increases the gender, racial, ethnic, and economic diversity of the applicant pool. Meanwhile, workers have opportunities that they’re qualified to handle but otherwise would be shut out of, giving them not just a job but also a broader career path.

Broader talent pool

IBM is among the companies whose leaders have moved away from degree requirements; Big Blue is also one of the earliest, largest, and most prominent proponents of the move, introducing the term “new collar jobs” for the growing number of positions that require specific skills but not a bachelor’s degree.

Kelli Jordan, vice president of IBMer Growth and Development, says IBM has long taken that approach but became more deliberate about the strategy since 2016. It was then that the company started examining job descriptions and removing degree requirements when deemed unnecessary.

“We really focus on skills,” Jordan explains, adding that company leaders recognize that professionals can build skills through certifications, massive open online courses (MOOCs) and other such avenues.

Now more than half of the job openings posted by IBM no longer require degrees, Jordan says. And company managers and human resources teams continue to review position requirements, so an increasing number of jobs are falling into that no-degrees-needed category.

The hiring of people without degrees increased 35% since IBM started removing the four-year degree requirements.

Jordan says IBM’s approach helps the company compete for talent, a particularly important benefit while unemployment hovers around 4% and unemployment for technical occupations remains around 2%. She points out that by requiring a bachelor’s degree, companies shut out the 62% of Americans who don’t have that credential.

“You’re really limiting the opportunities for a large pool of people,” she adds.

Skills matter more than academics

Mike Calvo, CTO of Shipt, which operates an app-based shopping and delivery service, also brings that philosophy to hiring; he says the company has focused on hiring for skills since it was founded in 2014.

He says Shipt asks for either a four-year degree or relevant experience for most technology team roles. To ensure they get the right talent, Calvo says hiring managers “get pretty specific with skills, years of experience, technical capabilities, and experiences working in an environment similar to ours.”

Calvo, who oversees internal IT operations, says they’re looking for people who like to solve problems and are curious.

“That’s all way more important to us than where you got a degree, or if you have a degree, and we’ve hired a good number of people who have qualified from a knowledge perspective,” he says. “[College] has become so unimportant a factor in someone’s performance that people don’t talk about it; they don’t look at it. I can’t tell you the last time I looked at a candidate and said, ‘Oh, they have a degree.’”

The Birmingham, Ala.-based company partners with training programs to recruit professionals with the specific tech skills Shipt needs. For example, in 2021 it hired 25 graduates of a Pivot Technology School bootcamp and is onboarding another 17 from the school’s training program.

Real world versus theory

Others similarly stress that hands-on skills matter more than academics for many, if not most, technical positions.

Anant Adya, an executive vice president of cloud services company Infosys Cobalt, says he looks at attitude, testing candidates’ ability and willingness to learn when making hires. Adya’s company often recruits from community colleges and certification programs that focus on giving participants hands-on training in skills that align to existing market needs.

That’s not always the case with graduates from four-year academic programs, Adya says, adding that “we have found there was a gap between what’s required in the real world and what’s taught in [four-year] college programs.”

Tailoring talent to your needs

Proponents of skills-based hiring say the approach works best when it’s part of a comprehensive talent strategy — one that has a heavy emphasis on ongoing training and upskilling.

That’s what plays out at Thoughtworks.

Thoughtworks North America CEO Chris Murphy says the company has a long history of “hiring non-traditional talent for tech roles” including coding bootcamp graduates as well as people who have learned coding on the job or in their own time.

The company in 2005 started its Thoughtworks University program (TWU) to provide a one-year training program to ensure such hires can succeed at the company.

The case for degrees

Not all are convinced that dropping degree requirements is the way to go, however.

Jane Zhu, CIO and senior vice president at Veritas Technologies, says she sees value in degrees, value that isn’t always replicated through other channels.

“Though we don’t necessarily require degrees for all IT roles here at Veritas, I believe that they do help candidates demonstrate a level of formal education and commitment to the field and provide a foundation in fundamental concepts and theories of IT-related fields that may not be easily gained through self-study or on-the-job training,” she says. “Through college education, candidates have usually acquired basic technical knowledge, problem-solving skills, the ability to collaborate with others, and ownership and accountability. They also often gain an understanding of the business and social impacts of their actions.”

Intangibles matter

Zhu, who has a bachelor’s and master’s in computer science and a doctorate in operations research, says her own academic achievements “have played a huge role in my success.”

She adds: “The knowledge I acquired from my degrees equips me with strong technical and problem-solving skills; enables me to easily internalize business strategies, initiatives and challenges; have productive architecture-level discussions with IT staff; and allows me to make sound business decisions faster.”

Vision and commitment

Josh Lazar, who recently served for three years as CIO for Florida’s 18th Judicial Circuit, has a similar take.

“A four-year degree shows that a candidate can make a commitment to a long-term goal and achieve it. Further, the training you get within that setting can be more demanding and a person can gain expertise in a particular area,” says Lazar, who left his CIO role in February and is now CEO of TechThinkTank.

Leadership and learning skills

Others share that perspective, saying a bachelor’s degree demonstrates that candidates can think critically, handle complex problems, and persuasively communicate ideas; that they have studied a range of topics that help them manage and lead; and that they’ve fine-tuned their learning skills so they can more easily develop and upskill throughout their careers.

Of course, not all those with a baccalaureate possess such qualities — something proponents of requiring or preferencing degrees acknowledge.

However, they say someone with at least a bachelor’s is likely to have some or all of them — and that is reassuring.

“The CIO is placing a bet with everyone they hire, and they want a sure bet. And there’s still a sense of comfort when you have someone with a degree from a top-notch school or with an MBA,” says Mark Taylor, CEO of the Society for Information Management (SIM).

Not either/or but both

Dutile, from UST, says his company employs almost 30,000 engineers, most of whom work on software with some 60% deployed to work in the IT departments of the company’s Global 1000 clients. Dutile says nearly all of those clients want those workers to have a bachelor’s degree.

However, two of the companies do not have that requirement. “And their experience has been great,” he says.

That fits with evolving marketplace trends, where there’s more openness to skills-based hiring for many technical roles but a desire for a bachelor’s degree for certain positions, including leadership.

In fact, research shows that nearly all CIOs have college degrees. Online job site Zippia analyzed multiple sources and concluded that in the US 67% of CIOs have a bachelor’s, 20% have a master’s, and 2% have a doctorate. Only 8% have an associate’s degree, and 3% have what Zippia identified as “other degrees.”

Antonio Taylor’s own experience mirrors the ongoing discussion about whether and when a degree is needed in IT.

He believes certifications, bootcamps, and other such programs as well as work experience can give IT professionals the skills they need to succeed and advance in technical positions. But he also says, “Degrees do matter when looking for certain leadership roles in IT.”

Taylor returned to college, earning a bachelor’s degree in IT administration and management in 2017 and an MBA in 2018.He has held several management roles since earning his degrees and earned his latest promotion on March 1, moving from a director position to vice president of infrastructure, security, and services at Transnetyx

Careers, Hiring

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As enterprises increasingly look to artificial intelligence (AI) to support, speed up, or even supplant human decision-making, calls have rung out for AI’s use and development to be subject to a higher power: our collective sense of right and wrong.

One such entity weighing in on the need for AI ethics is the Vatican, which exactly three years ago, on Feb. 28, 2020, brought together representatives from Microsoft and IBM to first sign the Rome Call for AI Ethics, a commitment to develop AI that serves humanity as a whole.

This ethical commitment, which brings together high-tech and religious leadership, as well as universities and government entities, was renewed in January 2023, with representatives of the Muslim and Jewish faiths joining alongside the Vatican.

In many ways, the Rome Call is symbolic, enforcing principles that many IT vendors and enterprises are already undertaking around AI’s use and development. But it also raises the profile of an emerging issue that has real impact on people around the globe — something CIOs must consider in their approaches to AI.

Laying the groundwork

IBM and others in the IT industry had been thinking about the ethics of AI since long before signing the Rome Call, says Christina Montgomery, the company’s chief privacy officer and chair of its AI ethics board.

“It’s essentially a reiteration of principles that we had adopted internally, that Microsoft had adopted internally, and that a number of companies were adopting or thinking about at the time,” she says.

It’s natural for IBM, a company that traces its origins back over a century, to take a more holisitic view of its technology, she says. “We’re very different culturally from a lot of new technology companies and we think deeply about the technology that we’re putting into the world.”

Deep thought about the ethics of AI is something IBM is encouraging in other ways, supporting the development of a network of universities that will incorporate the principles of the Rome Call for AI Ethics in their curriculums, something that will eventually lead to a new generation of graduates better equipped to consider such questions.

The six principles

The Rome Call itself consists of a preamble and six succinct principles that supporters commit to. In their entirety, they are:

Transparency: AI systems must be understandable to all.Inclusion: These systems must not discriminate against anyone because every human being has equal dignity.Responsibility: There must always be someone who takes responsibility for what a machine does.Impartiality: AI systems must not follow or create biases.Reliability: AI must be reliable.Security and privacy: These systems must be secure and respect the privacy of users.

While software vendors Microsoft and IBM were the first two enterprises to support the Rome Call, its ethos is aimed more broadly at any organization using the technology, in enterprises, governments, and civil society.

It will be easier for enterprises to comply with some of these principles than with others. Reliability and security can be taken into account at every level, but CIOs may need to bake inclusion and impartiality into project requirements at an early stage.

The principle of responsibility will require broader buy-in, as it requires a cultural shift to avoid blaming unwelcome decisions on an algorithm, whether AI-based or not.

Transparency, though, is a whole other matter.

Hurdles to answering the call

Shlomit Yanisky-Ravid, a visiting professor at Fordham University’s School of Law, says that unless we understand what an AI is really doing, we won’t be able to think about the ethical issues around it. “That’s where I see a lot of gaps and conflicts between the industry and the ethical and legal demands,” she says.

The EU’s General Data Protection Regulation (GDPR) already includes provisions that some academics construe as a right to explainability of software in general. Articles 13-15 give those who are subject to the effects of automated decisions a right to “meaningful information about the logic involved.”

For IBM’s Montgomery, it’s clear: “Using AI models in your operations that aren’t explainable, that aren’t transparent, could have unintended consequences.”

But there’s a problem, says Yanisky-Ravid: “We can speak about transparency, we can speak about explainability, but we cannot really make it happen — at least for now.”

Her speciality is intellectual property law, where the opacity of AI systems is making for interesting cases involving the moral right of AIs to be recognized as inventors or creators.

Some of those cases involve Stephen Thaler, creator of an AI tool called Dabus that he used to design a novel food container. His initial attempts to credit Dabus as co-inventor in patent filings around the world were rejected, with patent authorities insisting only a human could be responsible for the process of invention. However, Thaler later won one case on appeal: IP Australia, the government agency, has recognized Dabus as an inventor. Other appeals are ongoing.

Some may be put off by the fact the first signatories of the call included a representative of the Pontifical Academy of Life, an ethics think tank run by the Catholic Church, but IBM’s Montgomery says it was never intended to be just a religious call. “The goal is to extend it as much as possible.”

Whatever their beliefs, CIOs should be engaging with the ethical questions around AI right now, she says. “If you wait, it’s too late,” she says.

Artificial Intelligence

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Climate change is the pre-eminent issue of our present and our future. And figures suggest that our attempts at staving it off so far are falling well short. If we are to achieve a cleaner, greener future, one of the most significant overhauls will be a shift to electric vehicles (EVs). Unsurprisingly, lining our roads with gas-guzzling, fossil-fuel-burning vehicles for the past century has had a less than ideal environmental impact.

In point of fact, transportation accounts for 20-25% of greenhouse gas (GHG) emissions worldwide, with road transport accounting for three-quarters of that total. Clearly, EVs need to move from being the exception to the norm – and soon.

EVs and the automotive industry

Fortunately for the possibility of a liveable human future, the automotive sector has begun taking steps to counter and ultimately eliminate its contributions to GHG emissions. Tesla sales have gone a long way to normalising electric vehicle ownership, despite the high price tag. Maybe you don’t own a Tesla, but you probably know someone who does. Tesla has granted EVs a certain degree of cultural currency, thanks in no small part to the company’s controversial CEO, Elon Musk, and the cult of personality that has developed around him. A broad segment of the public has accepted that EVs are the future.

Other automobile manufacturers have, too. Most leading automotive companies have set dates for when they will transition entirely to “electrified” cars (batteries and hybrids) and/or pure EVs. The list includes Bentley by 2030 and Ford, BMW, Honda, Toyota, Volkswagen, and others by 2050.

Some legislatures are also fuelling the transition. Starting in 2035, the EU is banning the sale of petrol- and diesel-fuelled cars in order to meet its promise of carbon neutrality by 2050. In the US, California is following suit. 

If everyone agrees, what’s the holdup?

The automotive industry is only moving in one direction, but from afar it can seem as if it’s doing so at an unhurried pace.

The primary issue, as ever, is cost. Electric vehicles cost more to make and so cost more to buy. Currently that pricing makes EVs prohibitively expensive for most of the car-buying public. That will change with time, as EV technology develops, demand spikes, and production scales.

Then there are politics and preferences. Some people simply don’t like driving electric cars. Others don’t want to be told that they have todrive one. Mandates will help fix this, but it won’t be pretty so long as people insist on fiddling with the radio while the planet burns.

Another issue is charging stations, or the lack thereof. If the US is to properly match its forecasted sales demand, the number of EV chargers will need to quadruple between 2022 and 2025, and grow by more than eight-fold by 2030. The UK’s Climate Change Committee posits that every 100 kilometres of road will need up to 1,170 charging stations by 2030. At the current growth rate, only a quarter of that number will be in place by 2032.

All of this seems to indicate that the EV revolution’s reach threatens to exceed its grasp. Except there already exists a quick, convenient, durable, and cost-effective solution that promises to help the “auto EVolution” achieve its short-term aims.

Enter connected lighting

Connected public lighting can help bring about the EV overhaul the planet badly needs. Better still, it can do so in a sustainable, speedy, and efficient way, with minimal disruption to public spaces. The solution exists and is available for implementation today, but so far it has been underutilised.

There are two key areas in which connected lighting can prove pivotal. First, by freeing up capacity in the electrical grid to meet the growing need for EV charging. Second, by offering the opportunity to deploy charging points in existing street lighting architecture. Smart poles in a city or municipality lighting network serve as public digital assets, adding to basic illumination a broad range of potentialities, including environmental sensing, public broadband access, and — vitally — EV charging.

Freeing up the grid

When connected and properly managed, monitored, and controlled, LED lighting systems can produce energy savings of as much as 80% over conventional alternatives. Given that two-thirds of professional light points around the world are still non-LED and non-connected, the potential savings of transitioning to a connected lighting system are enormous.

In the EU’s residential sector alone, upgrading the 1.7 billion conventional light points to ultra-efficient LEDs could effectively generate electricity savings of 34.1 TWh annually—enough to charge a whopping 10 million EVs. Consider those numbers on a global scale and connected lighting’s potential to make a positive impact on EV implementation becomes obvious.

Using the existing infrastructure

As noted, one of the EV industry’s worst pain points is how to deploy the necessary number of charging points, both in terms of choosing where to place them and how to do so in a way that doesn’t drastically disrupt public life — which constructing the required numbers of new charging points from scratch almost certainly would.

Connected LED lighting addresses each of these problems. First, and most obviously, there’s no need to run additional underground wiring as light points are already electrified. There’s also no need to construct additional fixtures, as streetlights are already widely distributed across urban areas. This lets cities avoid the cost and inconvenience of greenlighting a slate of new citywide construction projects. It’s also aesthetically beneficial, avoiding additional street furniture in already cluttered areas.

In these ways, connected LED street lighting can help solve the EV infrastructure problem—while at the same making the energy available to power millions of EVs without overwhelming the power grid.

No time to waste

While solutions to the climate emergency are caught up in seemingly intractable policy discussions, its effects are already being felt worldwide, and will only worsen. The number of floods worldwide has increased by a factor of fifteen since 1950, and the number of wildfires by a factor of eight. This is not a problem reserved for future generations: it is here now. All of us, and especially those with the power to enact change, must face this reality head on.

EVs are the obvious next step when it comes to transport, with clear and significant benefits. By freeing up electricity through energy savings and making use of existing city infrastructure, connected lighting can help knock down some of the obstacles slowing adoption and speed up the movement toward the sustainable state the planet so badly needs to attain.

To find out how to start taking action now click here.

Car Tech, Cars, Electric Cars, Technology Industry

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By Bryan Kirschner, Vice President, Strategy at DataStax

One of the most painful – and pained – statements I’ve heard in the last two years was from an IT leader who said, “my team is struggling to find ways that our company’s data could be valuable to the business.”

Contrast this with what a financial services CIO told me: “Our CEO told every line of business general manager you now have a second job: you’re the general manager of the data produced in your line of business.”

The latter case is as it should be. In a pre-digital world, there would be no doubt that the people running a business function – sales, service, support, or production – should be using all the information available to them to drive better results.

But many organizations took a detour, misled by a fundamentally flawed assumption that because some data is digital in nature and technical skills are necessary to ensure it is properly stored, secured, and made available, those same technologists should be on the hook for finding new ways for business managers to leverage the data.

Wanted: Real-time data skills

Leading organizations have proven there’s a better way forward – but success can’t be taken for granted. Among all respondents surveyed for the latest State of the Data Race report, complexity, cost, and accessibility are cited as the top three challenges they face in leveraging real-time data. In contrast,  the number one challenge among those most accomplished at driving value with real time data today is the availability of the necessary skills in their business units to leverage it.

It’s likely a hangover from the old way of doing things. The good news is that there’s a cure — in the form of a clear playbook for making progress toward equipping business managers

Your technology teams should indeed be accountable for understanding the capabilities of best of breed tools – and making them available widely in your organization.

But everyone — not just technologists, but also business leaders — must have both accountability and skills for using real-time data to drive the business and grow revenue.

Consider pharma giant Novartis (as detailed in this Harvard Business Review article). Over the past decade, the company invested heavily in data platforms and data integration. But it found that these investments only resulted in spotty success. Data scientists had little visibility into the business units, and, conversely, leaders from  sales, supply chain, HR, finance, and marketing weren’t embracing the available data. Once data scientists were paired with business employees with insight into where efficiency and performance improvements were needed, and once frontline organization employees were trained to use data for innovation, the intensity and impact of transformation accelerated.

New ways of working

A clearer sense of a shared mission, along with a stronger common understanding of capabilities of modern technology and greater shared intimacy with business processes and customer experiences further pays off by opening the door to new ways of working.

Take banking, one industry where developers are critical to success in delivering new services for customers, and where incumbents must contend with a growing fintech ecosystem of aspiring disruptors. Goldman Sachs is embedding software developers deeper into the business where–in the words of the CIO– “we want them to answer the ‘why’ questions that get to the business purpose behind their work.”

In the State of the Data Race report, 91%  of respondents from organizations with a strategic focus deploying apps that use data in real-time said that developers, business owners, and data scientists are working in cross-functional teams. Compare that to organizations who are still early on in their real-time data journey: only 67% of them claim to have this cross-functional coordination.

The other side of the coin is AI and ML, which are integrally related to activating data in real time. Some 93% of those with AI and ML in wide production are organized into cross functional teams versus 63% among those in the early days of AI/ML deployment.

Leveraging real-time data used to be a technology problem. Complex, legacy data architectures can still cause challenges, but the data technology landscape — assisted significantly by advances in the open source community — has advanced more than far enough to make real-time capabilities available to organizations of all sizes. The primary challenge real-time data leaders face is a clear indicator of this. Now, companies like Goldman Sachs and Novartis are working to ensure that the real-time data they’ve made readily available turns into real-time results. 

Learn more about DataStax here.

About Bryan Kirschner:

Bryan is Vice President, Strategy at DataStax. For more than 20 years he has helped large organizations build and execute strategy when they are seeking new ways forward and a future materially different from their past. He specializes in removing fear, uncertainty, and doubt from strategic decision-making through empirical data and market sensing.

Data Management, IT Leadership

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For veteran CIO Amir Arooni, the aha moment came during a master’s dissertation deep dive into why there were so many IT project failures. Digging through research examining the impact of standard conventions like siloed teams and staged gate processes, Arooni began percolating ideas for how to shift IT organizations away from the traditional project-oriented culture to something more agile, with greater business accountability and more responsiveness to changing customer needs.

“We came to the conclusion that the way we do things in IT is outdated,” says Arooni, now executive vice president and CIO at Discover Financial Services. “If you want to increase the success of IT projects, you need to create a team that is responsible for what they make and takes ownership over what they do.”

Since that 2011 revelation, Arooni has been doing just that: redefining IT organizations and service delivery models to embrace agile ways of working, including creating product-centric structures with persistent teams responsible for the entire lifecycle of a product.

Amir Arooni, executive vice president and CIO, Discover Financial Services

Discover Financial Services

Arooni is joined by scores of industry leaders across segments such as retail, financial services, healthcare, even government entities moving in this direction. Forrester estimates about a third of organizations have either made or are in the process of orchestrating the shift to product-centric structures with more to follow as cloud migration gives IT a platform to retool for greater business agility, according to Charles Betz, vice president and research director for enterprise architecture at Forrester.

“There’s been a fundamental hunger for the responsive creation of new digital capabilities through the dawn of computing and now there’s actually an ability to deliver systems at the speed of business,” Betz says. Cloud delivery is part of the solution, but product-centric teams help build trust and continuity of expertise. “Organizations don’t want fractional allocation — people rolling on to a project and rolling off,” he explains. “They want to bring work to a team … and make a team more responsible for outcomes as opposed to deliverable activities.”

Arooni, along with his CIO counterparts, have made a variety of structural changes and initiated a range of best practices to ensure a successful transition away from legacy-style project management to an IT operating model architected around product centricity. Following are their most significant shared strategies for making the shift successful.

Establish product ownership

Traditional IT project teams are no match when the goal is all about building solutions quickly and being hyper responsive to customer needs. At JP Morgan Chase, the approximately 12,000-person IT organization is being completely revamped to build solutions quickly with teams encompassing product owners along with technology, data, and design leaders.

Gill Haus, CIO for Consumer & Community Banking, JP Morgan Chase

JP Morgan Chase

Consider this product structure in the context of the account opening process. Instead of each business line, such as checking accounts or mortgage applications, employing a different team to design different account opening flows, account opening becomes the product backed by its own multifunctional Chase team. That team manages the account opening function throughout its lifecycle, from architecting the experience to managing backlogs and making tweaks to reduce friction for customers. The end result is that the account opening process remains consistent across channels. It can be reused by any other lines of business or Chase groups, streamlining software delivery while also ensuring a seamless customer experience across the Chase portfolio.

“The teams are responsible for the product and have the autonomy and wherewithal to make changes,” says Gill Haus, CIO for Consumer & Community Banking (CCB) at JP Morgan Chase. “No matter how agile you are, you are solving different problems for customers in different ways unless you are organized by product and are customer backed.”

TruStone Financial is also knee deep in transforming its IT organization and operating model, transitioning away from a program management office (PMO) to a product-centered organization. Leadership worked to identify process owners within the business to become product owners within product families that are essentially owned by IT, according to Gary Jeter, TruStone’s executive vice president and chief technology officer. 

“This helps us respond quicker and identify the right project to execute, delivering business value quicker,” Jeter says. Establishing technology and business owners also drives collaboration. “It gets people closest to the work helping to prioritize and drive deliverables,” he explains.

While it can be a challenge to identify the right product owners within the business, the changes, which have been implemented in phases since last September, are already increasing TruStone’s business agility, Jeter says.

Gary Jeter, EVP & CTO, TruStone Financial

TruStone Financial

Last December, the firm was presented with an opportunity to expand its portfolio by a fintech specializing in automotive refinancing — a set of services that weren’t part of its offerings or IT stack. Because of the IT organization transformation, TruStone was able to integrate the new auto refinancing capabilities into its digital banking platform in just shy of two months.

“This was not in the budget for the year nor was it on our roadmap, yet we were able to initiate cost-benefit analysis, do demos, and get it deployed as a two-month project,” he says. “In the old PMO model, it would have been added to the project backlog, taken a month to get in front of EVPs, then approved and probably double that time to get it across the finish line.”

Embrace agile practices

Few associate a government agency with a fast-track to business value, but Jamie Holcombe Jr., CIO at the United States Patent and Trademark Office (USPTO), would beg to differ thanks to the agency’s wholesale transformation to a product-oriented IT organization and agile culture. Along with replacing project teams with product teams and reimagining its PMO to be more of a coaching resource, USPTO adopted agile practices in earnest, including daily scrums, working in sprints as opposed to project plans, and embracing DevSecOps processes, Holcombe says.

Jamie Holcombe Jr., CIO, USPTO

USPTO

Changes were implemented on a small scale, among two or three teams at first, then scaled up.  Ongoing communications emphasized that the new patterns of working and team structure were being made for the long haul, not just a passing fad. Soon, Holcombe says, people began to see results and wanted to be part of the transformation. “We were delivering all this stuff we never delivered before, and everyone wanted to be part of it,” he explains.

As part of its journey Align Technology, which manufacturers the Invisalign orthodontic devices, also reorganized its teams around products, processes, and experiences, not systems. Instead of a backend ERP team and front-end UI/UX team, the company now has a single “payments team” that melds people with expertise from the relevant ERP platform and UX designers, in addition to product owners, all driving towards the same goal: delivering a seamless payments expertise for customers, according to Ema Patki, vice president of software engineering at Align.

“The pivot from systems to processes and products has changed the focus of the discussion, from which applications we need to integrate to what is the process and experience we want to deliver and what capabilities do we need to build to realize those experiences,” Patki says. “These capabilities are then delivered using Scrum/agile methodologies in frequent, low-risk deployments to production, eventually leading to the launch of an end-to-end product.”

Establish metrics to incentivize teams

One of Align’s critical success factors was finding ways to incentivize teams to define their operating and governance models.

Ema Patki, vice president of software engineering, Align

Align

For example, the platform teams — which manage an overall platform like ERP or CRM and are responsible for best practices, uptime, and system hygiene — give engineers performance feedback specific as to how well product teams met the platform teams’ specific goals. At the same time, the product teams — which manage customer experience across multiple platforms — evaluate their counterparts on the platform side, providing input on the timeliness of code releases or assessing whether there were appropriate levels of coordination.

“This gives everyone a sense of ownership and allows people to hold each other accountable to collective goals,” Patki says.

Talent and culture are essential

Arooni came to Discover in March 2020, during the height of pandemic shutdowns with a primary mission to transform the technology organization, improve alignment between IT and business, and steer the organization to deliver better and faster results.

On Arooni’s watch, Discover launched Runway, a three-pronged program to transform IT by shifting to a product-centric way of working, automating as much as possible, and upleveling its talent bench, both by hiring more seasoned experts and by nurturing internal team members.

Central to the upskilling strategy is the Discover Technology Academy, a hub for training led by internal experts, along with learning journeys that provide clear guidance and pathways for advancement. There is also a slate of internally run hackathons and bootcamps.

“In the past, people came to the technology function as novices and built up expertise within Discovery,” Arooni says. “We needed to have better talent so we created a way to educate our own people as well as hire from the outside at a higher level of proficiency. Someone wants to know what an excellent API looks like — now they go to Discover Tech Academy because the standards and education are there.”

Listening to employees and understanding what’s working and what’s not is central to the change management exercise, and to winning collective hearts and minds. Employee feedback surveys, one-on-one sit downs, all-hands meetings — anything that helps the organization understand why you are doing what you are doing, including the pain points the change will resolve, is a worthwhile approach, Arooni says.

So too is sharing success stories and showing team members what success looks like. Doing so will motivate people and engender broad organizational support.

“You need to show leadership believes in the new direction and that you’re able to scale the changes,” Arooni says. “Tech people need to learn how to be thought leaders instead of order takers, and their business colleagues need to learn to deal with technology. You need to educate everyone about what you are doing.”

Even though agile is at the heart of this transformation, reorienting an IT culture to be product-oriented, not project-focused is a marathon, not a sprint.

“There isn’t a done,” says Chase’s Haus. “You will continue to be doing this going forward. Being an agile organization means being agile forever, learning and adapting as you go to provide better experiences for customers.”

IT Leadership, IT Strategy

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Data intelligence helps organizations create new customer experiences, accelerate operations and capitalize on new market opportunities. It also gives them the agility to pivot when the unexpected strikes. 

While becoming data-driven makes great sense, some organizations struggle to put it into practice. Adopting a company-wide data culture can be particularly challenging, requiring companies to overhaul how they operate from the board room to the shop floor. On the technical side, IT teams must liberate and unify data long segregated in departmental silos so IT can provide broad accessibility and comprehensive analytics. 

Some businesses have stumbled in their data transformation initiatives, causing them to question whether the effort is worth it. Recent research would suggest that it is worth it: IDC estimates that organizations that excel at leveraging data in decision-making enjoy more than three times greater revenue and nearly two-and-a-half-times greater profit than those who don’t.

Success Factors

Generally, organizations that succeed with data-driven initiatives have built and executed a cohesive data strategy. That strategy is reflected in how the business operates, which requires buy-in at executive levels and buy-in across departments and business units. The goal now is to have more data to base decisions on for greater accuracy, rather than relying solely on collective experience.

Executing the strategy necessitates aggregating data and expanding access company-wide for analytics to expose bigger-picture insights and trends. The combined data serves as a single source of truth for creating corporate value that runs the gamut from gauging customer sentiment to troubleshooting IT snafus to averting supply-chain delays. 

The Role of the Data Lakehouse

A data lakehouse is one solution that organizations can use to help break down data silos and use as a foundation for an intelligent data ecosystem. It combines a data lake’s ability to store data in any format—structured, semi-structured, and unstructured—with the performance, security, and governance strengths of a traditional data warehouse. 

The lakehouse provides central access to data as-is, independent of format. Organizations can run a variety of analytics on it to improve decision-making, from dashboards and visualizations, real-time analytics and machine learning. Open interfaces enable data scientists, business analysts and others to use their favorite analytics tools to access and analyze lakehouse data.

Building a Modern Data Ecosystem

While becoming more data-driven is a formidable undertaking, it’s becoming a competitive requirement in the digital economy. The same IDC report found that more than 84% of teams who excel at using data in decision-making get answers in minutes or hours compared to only 3% companies who don’t. 

Culturally, companies need to commit to using data to drive decisions. At the IT level, they require unified data infrastructures, built around a data lakehouse, with the following characteristics:

Affordable, scalable, and reliable storageSecurity and governance A holistic, integrated view of company-wide dataBroad analytics capabilities, including the ability to process streaming data in real-time and machine learningAutomation, including continuous learning and adaptabilityAn online data catalog

With the Dell Validated Design for Analytics – Data Lakehouse, organizations can stop chasing data and start using it to create value for the organization instead. 

Want to learn more about data lakehouses and how to succeed with your data-driven initiative? Read the Dell Validated Design for Analytics – Data Lakehouse Solution Brief. 

***

Intel® Technologies Move Analytics Forward

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Modern data analytics spans a range of technologies, from dedicated analytics platforms and databases to deep learning and artificial intelligence (AI). Just starting out with analytics? Ready to evolve your analytics strategy or improve your data quality? There’s always room to grow, and Intel is ready to help. With a deep ecosystem of analytics technologies and partners, Intel accelerates the efforts of data scientists, analysts, and developers in every industry. Find out more about Intel advanced analytics.

Data Management

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Sometimes one size does fit all.

That’s true in the case of audio specialist Sonos, which developed a universal IT stack that could be used by its 1,200 employees, manufacturing partners, and engineers scattered in 15 locations across the globe.

The innovation, dubbed “IT in a Box,” was developed in October 2020, just as CIO Ruth Sleeter took the helm, and though it was designed for more general use it was a panacea for the Sonos IT’s pandemic response. 

Also known informally as “Sonos Homes,” the solution enabled a scalable and expedient way to build a Sonos office environment in areas where no office exists. The project has earned Sonos a CIO 100 Award for IT leadership and innovation.

Sleeter credits the company’s “very virtual” and employee-centric corporate culture with the project’s inception at a time when COVID-19 was forcing employees out of physical offices worldwide.

“We believed in a very flexible, diversified workforce and were employee-centric well before the pandemic hit in order to get the right talent in the right places,” says Sleeter, noting that employers often forget, for example, that recent college graduates often share an apartment with several others and needed a solution that would work in tight areas as well as big manufacturing plants. “Even pre-pandemic, we were at the forefront of this work experience and used video and Zoom and Teams.”

Plans for IT in a Box began in mid-2020 when it became clear Sonos engineers needed a more dependable work environment to collaborate with external design and manufacturing partners — not relying on partners’ infrastructure, such as “guest wifi,” which sometimes proved unreliable and a security risk, according to the company.

The project got a big push with Sleeter’s arrival.

“One of the biggest impacts that I can have as a CIO is to drive culture through technology that leads to great innovation,” she says.

“We continue to raise our pace and our innovation around collaboration. We realized that there is a huge need to think globally about that and not to get super mired in our own experiences through the pandemic,” Sleeter adds. “We really look to try to solve this problem across our entire technology stack and one of the things that we ended up with was with this very portable infrastructure.”

A network-centric solution

Sonos’ IT in a Box consists of three components: a secured network, robust collaboration tools, and compute power for engineers designing the company’s high-end audio and entertainment gear.

Wide availability of components, particularly in an era of supply-chain fiascos, was a key design element for a solution that would be used not only by employees but also by third-party partners at large independent manufacturing sites globally, Sleeter says.

The network layer is the most unique aspect of the solution, according to Sonos, and was designed to ensure that any employee and partner from any location globally could confidently access the corporate platform.

The network, for example, is comprised of low-cost Meraki routers and access points that enable Sonos IT to manage and configure the installation from anywhere in the world using the Cisco Meraki management portal. This equipment is readily available from local vendors to allow for fast implementation, according to the company.

“We looked at the technology stack from a network perspective first, one that we can replicate and expand whether employees are working in a small location or a big office,” Sleeter says. “It’s perfectly adaptable. It can work for two people in a room, a mobile solution that people carry with them, or a full installation in a very big room with 10 seats and a big table. We made it very elastic and very scalable.”

Jim Hauser, senior director of cloud infrastructure and operations at Sonos, says the magic of the solution is in its simplicity. Prepackaging a company-specific IT stack with components that are widely available ensures that Sonos IT eliminates common communication snags that occur between employees and partner engineers at different locations globally.

It also guarantees access to its components for engineers or designers who may be in very remote locations with limited access to technology.

“In North America, we have a little bit of a blessing that in many cases, we have big spaces to work if we’re not in an office. But when you go outside of this very small region, in the rest of the world, it’s not always the case,” Hauser says. “A lot of our employees really value the fact that everybody has the exact same experiences if they’re walking into someone’s office here in Seattle or anywhere else in the world.”

The corporation, which competes with Bose and Bang & Olufsen, is headquartered in Santa Barbara, Calif., and has many offices in the US and Europe. But most of its employees, designers, and engineers are scattered across the globe and require great flexibility and dependability in order to work as a team.

“We could be working with any type of partner [such as] an installation partner, an LSP, a contract manufacturer, a [retail] store even, and any location that pops up in which we need to put an engineer in,” Sleeter says. “We deploy this, and again that can be anywhere in the globe at any point, and they’re automatically connected into our Sonos network.”

Ging Yong Tan, senior business development manager at Pentech, an IT partner that supports Sonos’ manufacturing facilities in Malaysia, sees the solution as unique in the industry.

“The new IT infrastructure from Sonos has given the company’s manufacturing partners a convenient way to collaborate with Sonos employees around the world. I don’t see many companies set up their own collaboration infrastructure in a manufacturing facility. This solution offers time savings and productivity improvements for both the manufacturing team and my IT team which supports them,” he says.

The future of work, indeed.

CIO 100, Collaboration Software, Networking

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2022 could be a turning point for pairing edge computing and 5G in the enterprise. Let’s examine trends to watch.

The distributed, granular nature of edge computing – where an “edge device” could mean anything from an iPhone to a hyper-specialized IoT sensor on an oil rig in the middle of an ocean – is reflected in the variety of its enterprise use cases.

There are some visible common denominators powering edge implementations: Containers and other cloud-native technologies come to mind, as does machine learning. But the specific applications of edge built on top of those foundations quickly diversify.

“Telco applications often have little in common with industrial IoT use cases, which in turn differ from those in the automotive industry,” says Gordon Haff, technology evangelist, Red Hat.

This reflects the diversity of broader edge computing trends he sees expanding in 2022.

When you pair maturing edge technologies and the expansion of 5G networks, the enterprise strategies and goals could become even more specific.

Simply put, “the 5G and edge combination varies by the type of enterprise business,” says Yugal Joshi, partner at Everest Group, where he leads the firm’s digital, cloud, and application services research practices.

Broadly speaking, the 5G-edge tandem is poised to drive the next phases of digital transformations already underway in many companies. As Joshi sees it, there will be a new wave of high-value production assets (including the copious amounts of data that edge devices and applications produce) becoming mainstream pieces of the IT portfolio – and subsequently creating business impact.

“Enterprises combine 5G to edge locations and create a chain of smart devices that can communicate with each other and back-end systems, unlike earlier times where network transformation didn’t touch the last-mile device,” Joshi says.

 

Edge computing’s turning-point year

The 5G-edge pairing is a long-tail event for enterprises. But there are plenty of reasons – including, of course, the expansion of telco-operated 5G networks – to think 2022 will be a turning-point year.

“We’ll see the transition from many smaller, early-stage deployments to wide-scale, global deployments of production 5G networks, following cloud-native design principles,” says Red Hat CTO Chris Wright. “As we provide a cloud-native platform for 5G, we have great visibility into this transition.”

“In 2022, 5G and edge will unify as a common platform to deliver ultra-reliable and low latency applications,” says Shamik Mishra, CTO for connectivity, Capgemini Engineering. A confluence of broader factors is feeding this type of belief including, of course, more widely available 5G networks.

“Edge use cases have a potential to go mainstream in 2022 with the development of edge-to-cloud architecture patterns and the rollout of 5G,” says Saurabh Mishra, senior manager of IoT at SAS.

The “last mile” concept is key. From a consumer standpoint, the only thing most people really care about when it comes to 5G is: “This makes my phone faster.”

The enterprise POV is more complex. At its core, though the 5G-edge relationship also boils down to speed, it’s usually expressed in two related terms more familiar to the world of IT: latency and performance. The relentless pursuit of low latency and high performance is embedded in the DNA of IT leaders and telco operators alike.

New horizons, familiar challenges

Consumer adoption of 5G and edge is enviably straightforward: Do I live in a coverage area, and do I need a new phone?

Obviously, there’s a little more to it from both the operator and broader enterprise perspective. While the potential of 5G-enabled edge architectures and applications is vast – and potentially lucrative – there will be some challenges for IT and business leaders along the way. Many of them may seem familiar.

For one, the 5G-edge combo in an enterprise context invariably means deploying and managing not just IT but OT (operational technology), and lots of it. As with other major initiatives, there will be a lot of moving parts and pieces to manage.

“Governance and scale will continue to be a challenge given the disparate people and systems involved – OT versus IT,” says Mishra from SAS. “Decision-making around what workloads live in the cloud versus the edge and a lack of understanding about the security profile for an edge-focused application will also be a challenge.”

Scale may be the biggest mountain to climb. It will require pinpoint planning, according to Kris Murphy, senior principal software engineer at Red Hat.

“Standardize ruthlessly, minimize operational ‘surface area,’ pull whenever possible over push, and automate the small things,” Murphy says.

5G and edge will also breed another familiar issue for CIOs – the occasional gap between what a vendor or provider says it can do and what it can actually do in your organization. Joshi says this is one important area that enterprise leaders can prepare for now, while the underlying technologies advance and mature.

“What will be more important for enterprise IT is to enhance its business understanding of operational technology, as well as be comfortable working with a variety of network equipment providers, cloud vendors, and IT service providers,” Joshi says.

Lock-in could be another familiar challenge for enterprise IT, Joshi says, underlining the need for rigorous evaluation of potential platforms and providers.

“Open source adoption and openness of the value chain, [including] RAN software, towers, base stations, cloud compute, and storage” will be an important consideration, Joshi says, as well a nose for finding substance amidst hype.

That brings us back to use cases. If you’re unsure about what’s next for 5G and edge in your organization, then start with the potential business applications. That should ultimately guide any further strategic development. Joshi sees growing adoption of remote training using digital twins, remote health consultations, media streaming, and real-time asset monitoring, among other uses.

“Any enabling factors in 5G such as small cells and low latency, strongly align to an edge architecture,” Joshi says. “However, the intention should not be to enable 5G, but to have a suitable business scenario where 5G adoption can enhance impact.”

To learn more, visit Red Hat here.

Edge Computing