During my first month as Master, I have attended lunches, dinners and lectures, but what has most impressed me is that I am not alone in considering the impact of new technology on the various professions that are covered by the Financial Services Group of Modern Livery Companies. In one way or another all of the professions are having to consider (with their own particular focus) the issues that I want to examine for marketing through my theme of the 2020 CMO. I therefore intend to capture as much information as possible from our exploration of my theme and share it with you in this and subsequent blogs throughout the year.
In the first business lecture of the year, which took place on 15th February 2018, (The Possibilities are Infinite – or are they?) Marc Silvester, set the scene with a survey of what we can expect from the new developments in Information and Communications Technology (ICT). Marc is uniquely qualified to look ahead and predict developing trends in ICT. In his career of more than thirty years in the IT sector, he has created new technology, developed new products and built new markets.
Marc explained that throughout the 80’s, 90’s and early 2000’s technology change was very much on a serial path. The CTO would look at what technology had done over recent history, attempt to predict what new developments would become available in the near future, and then decide what to adopt to beat the competition and secure new markets. Thus large ICT systems evolved gradually over time as changes were required to keep them current.
Over the last eight years, this way of working has changed completely. The large legacy ICT systems still underpin key processes. However, they are too expensive to replace, and it is not possible to update them quickly enough to keep pace with the increasingly rapid developments in ICT that are now taking place.
As a result, the CTO must look for cost-effective, small-scale interim solutions that serve specific needs and work together with the existing legacy systems. Such solutions can not only be deployed easily but also quickly updated or replaced to take advantage of new developments in technology or to satisfy changing market requirements. As a result, while the end of life for legacy systems used to be several years, the end of life for these new solutions is closer to eighteen months.
This new approach requires the CTO to assess currently available ICT applications to find building blocks, each of which can add value when combined to create the system delivering the required solution. For instance, Uber combines its key driver management and scheduling system with a GPS application to track its vehicles and a payment application to collect revenues, but Uber can easily replace either application if a better one emerges.
Although the systems used to deliver the new solutions can be made up of applications that are already available and coming into the organisation in 2018/19, they are often not fully understood by the leadership team. Nevertheless, they are still deployed as part of these systems and relied on as a key business driver, even if there is risk in doing so. This is because risk mitigation is relatively easy – the system can be reworked by replacing the defective application with a better one, and the cost of doing so is not prohibitive.
To sum up:
- We have all the technology we need available today
- We need to have the imagination to put it to good use
- We need to be open to taking risks and surviving failure
However as the roles of CTO and CMO start to converge, Marc challenged the audience to consider:
“Have you adapted yet and are you ready to see what today’s technology is ready to deliver?”
Marc had 19 interlinked themes and trends which together form a connected story that the 2020 CMO must be able to understand and navigate to stay relevant:
- Digitisation – the creation and collection of information. The world’s stored data is doubling every two years. How will the technology develop to help us make sense of it?
- Internet of Things (IoT) – devices of all shapes and sizes (many household appliances) always connected to the internet, that continually collect and share data. With an estimated 75 billion devices in circulation by 2020 this is expected to flood the planet with information.
- Cloud computing – All this accumulated data needs secure storage and vastly increased processing power to make sense of it. Cloud computing (cheap and maintenance free, relying on huge third party data centres) is the answer.
- Willingness to share through technology – creating new solutions by using existing organisations that already do it best. E.g. using LinkedIn rather than creating a new directory, or PayPal rather creating a bespoke payment system.
- Artificial intelligence (AI) – using the power of Cloud computing to learn from, analyse, interpret and process the mountains of data now available. This generates new insights leading to accelerated decision making and event response, often initiated by computers without the need for human intervention.
- Machine learning (ML) – AI (think of it as the brain) needs ML (think of this as the eyes and ears through which the brain obtains information) to help it learn to analyse data and take decisions on the results of the analysis. AI learns by example. ML feeds an AI system very large amounts of data samples so that it can evolve the logic, algorithms, connections and patterns that AI needs to function. For instance for a system to recognise a simple object requires feeding the system around one and a half million images. Without the data storage and processing power provided by Cloud computing, it would not be possible to implement ML to enable the effective use of AI.
- Automation/Bots – One of the best uses of an AI system (once trained by ML) is to remove human repetition by automating simple repetitive tasks. AI (often working through small pieces of software known as bots) provides us with a hidden free workforce which is growing very rapidly. This will in time eliminate many routine business processes now carried out by humans. Bots are already making inroads in the professions – law, finance, accountancy and medicine in particular.
- Robotics – Hardware to replace repetition of routine physical processes, just as Bots will replace routine business processes. The new technology enables us to make lighter, smaller, more intelligent robots, relying on AI and the computing power of the Cloud for their operation. Robotics has become a reality.
- 3D printing – the ability to print objects provides instant low entry-cost manufacturing at the point of use, creating a major disruption in manufacturing, and logistics. The process requires access to large amounts of data (for product templates) and is only made possible by the use of AI and ML.
- Voice and gesture activation – will replace the traditional computer interfaces. Once again, this type of interface requires AI and the computing power of the Cloud to operate successfully. Some early applications (such as Amazon Alexa or the Apple Siri) are already in use.
- Platforms – systems such Facebook and LinkedIn provide the platform for data, contacts, commerce and processes to come together. They are not to be mistaken for a full end-to-end application or service, but rather as the building blocks for future services. Examples of such services would be Amazon, Uber or Airbnb.
- Virtual reality – creates a digital world in which humans can participate. This is set to change the film and entertainment industry with dynamic content as well as event driven and reactive environments. Again, this requires advanced AI and massive processing power.
- Augmented reality – Computer generated data which superimposes objects, and on the real world. Some applications include x-ray images of bones overlaid on a patient’s body, information overlaid on a car windscreen, and images generated for the purposes of game-playing.
- Block chain – big IT systems operate a centralised security system under the control of a trusted person protected by firewalls. The system is costly and vulnerable to cyberattacks. Block Chain relies on distributed information security with no central control. Each block in the chain is a self-contained information package (for instance a text message) with its own encryption key based on the key for the previous block, thus creating a link with that block As this process continues the linked blocks build up into a chain, and a route to any particular block can be found via the chain. All blocks are visible to every member of the system, but only someone with the relevant key can access the information in a particular block. People are joining block chains in the millions every day.
- Bitcoin – A distributed banking system, operating securely through Block Chain, without a geo-political centre. It is an alternative cash and current account banking system (though Bitcoins may represent assets other than cash) and currently seen as a threat to the establishment. As it provides a global ledger distributed to all participants it represents a collective agreement that a transaction is real and valued. Bitcoins can be earned through transactions for the supply of goods or services, or purchased for cash. A common way of earning bitcoins is to allow other members of a bitcoin system to access your computing power for processing their own transactions during periods when it would otherwise be idle.
- Event Driven Systems (EDS) - Applications, devices, networks, activities, purchases and changes all create messages or events. IoT, AI, Bots, Block Chain and Cloud computing are brought together into an integrated system to listen for these events, analyse them, and then create new events to action or inform other systems in the chain. EDS reacts to events around it. For example if the system senses power has been lost in one area it switches on an alternative supply. If the stock market crashes in the US it switches investment to Asia. Such systems, smart in their simplicity, automate routine human decision-making.
- Increases in Battery Life –a most important area of advancement and change, driven by car manufacturers and mobile phones. This will lead to the next version of mobility, creating, amongst other things, true mobility for robots.
- Application Programming Interfaces (API) - create a world of connected data and systems (e.g. open banking). There is no more need for large-scale applications, single bespoke solutions and end-to-end developments. In their place we now have modular, self-contained, single focused, specific applets connecting to other systems using API’s and EDS. Growth is generated without having to build massive systems. Hive for example builds a system out of IoT, Microsoft’s Azure Cloud, AI analytics and EDS.
- Data Grids – are an architecture or set of services that gives individuals or groups of users the ability to access, modify and transfer extremely large amounts of geographically distributed data. They bring everything previously discussed together. When you can access a mesh/grid of all of these technologies, participating in a secure and open way, you do not need to be a large corporate to create a whole market. New development are possible without the need to invest in large bespoke systems, generating great opportunities for SMEs.
In conclusion the role of the CIO today should now be to bring together existing capabilities, generating rapid evolution combining and recombining smaller building blocks in new ways.
There were many questions both during and after Marc’s lecture and broadly fell into three main areas:
- understanding the technology
- understanding how the CMO can use it to develop his profession
- ethical and legal issues raised around security, privacy, and the use of ICT for criminal purposes
Marc supplied us answers to the first, but stated that his role as CIO/CTO was to implement new developments in ICT and make them available to all his stakeholders – including the CMO. It was up to the CMO to decide how to use them. We will examine this issue in future lectures in the series.
This led on to the third area; does the technology actually create more threats than opportunities? Have we gone too far? Will the potential abuses of ICT by criminals and terrorists outweigh the benefits it could otherwise bring to society? Will a backlash of regulatory interference by governmental and international authorities create Big Brother in 2084 rather than 1984? There was a lively discussion, but no real conclusion.
In my opinion, one thing is certain; turning back is now not possible.
We have built and are building our global society on ICT, and will continue to do so. There is no doubt the right use of ICT will deliver immeasurable benefits. There is also now doubt that abuse of ICT can cause significant harm. However, we can be sure that someone somewhere will explore all the possible ways in which we can exploit ICT, good and bad, whatever the moral or legal implications of doing so.
Technology delivers us tools, but we have to decide how to use them. In truth, this has always been the issue. When our remote Paleolithic ancestors invented the stone hand axe, did they use it to carve up their dinner or each other? Sadly the answer is probably both. Nothing has really changed. The Manhattan project gave us atomic energy. We chose to build both atomic bombs and atomic power stations. Today, like then, the choice is ours.