Below is the content of a blog series published on the CIOCAN website. The first entry is the original announcement of the DX Agents undertaking. The next pieces, written by Dawood Kahn, use examples like Tesla, Blockchain, and Netflix to illustrate the digital transformation journey. Read this document, and you will begin to appreciate the importance of this alliance to CIOs, and recognize why CIOCAN is one of the founding partners of this alliance.
Announcing DX Agents – Published Feb 23/17
New consortium including SAP, AWS, and Deloitte targets digital transformation acceleration in Canada
Alliance of 11 organizations kicks off DXagents program; aims to help Canadian businesses become more globally competitive by embracing digital technology
TORONTO, 23 February, 2017 Today marks the launch of DXagents, a first-of-its-kind national digital transformation accelerator comprised of business leaders and technologists from leading private, public and not-for-profit organizations in Canada.
The year-long partnership between Deloitte, SAP, Amazon Web Services, Intel, SUSE, CIO Association of Canada (CIOCAN), Financial Executives International Canada (FEI Canada), TDWI, ITAC, and B2B News Network, aims to help Canadian businesses better understand and get on the path to realizing their digital transformation opportunities.
Digital transformation, also known as DX in the IT community, refers to the adoption of digital technologies such as cloud, big data, mobile and social media. With recent IDC research finding that 63% of Canadian companies are ‘digital laggards’ leaving themselves vulnerable to competition from less risk-averse global peers, DXagents was created as a community for Canada-based CIOs, CFOs and other decision makers to more easily and effectively share and discuss experiences related to digital innovation.
Humza Teherany, President of the CIO Association of Canada and CEO of CompassDigitalLabs, said: “The majority of Canadian enterprises are putting themselves in danger of being outpaced by global competitors who see gaps forming in our markets because of the widespread resistance to digital innovation.
“Joining forces with the organizations that make up DXagents is a big step towards us pooling our collective resources and talent to help more Canadian businesses accelerate their transformation. We believe we can give them the best chance of fighting off the competition eyeing up their essentially unguarded market share.”
Michael Conway, President and CEO of FEI Canada, Canada’s leading association for CFOs and other senior financial executives, said: “It seems some inertia has set in at many Canadian organizations, and it’s preventing them from adopting new digital technologies. I’m hoping this consortium can be a launch pad for changing attitudes across Canadian business.”
Conway added that FEI Canada encourages senior financial executives to learn more about the potential benefits of investment in technologies such as ERP systems, cloud computing, big data and data analytics, mobile business applications, digital payments and other innovations.
John Graham, President and CEO of SAP Canada, said: “I’ve seen firsthand what it takes to turn a big ship and transform in response to market conditions. It was invariably purposeful partnerships, shared successes and distributed knowledge that led to the most effective change, which is why I believe this consortium is such a powerful opportunity for Canada.”
The DXagents.com digital hub will provide the content backbone of the accelerator. Each month the site will focus on a stage in the transformation process, including digital readiness guides, starter kits, needs assessments and other regularly updated resources for CIOs and CFOs. The site will also feature interviews with Canada-based and global CIOs, webinars and invitations to Deloitte-led roundtables and workshops with C-level executives from across the country.
As part of DXagents’ accelerator, roundtable and workshop events will be held on April 11 in Montreal, April 12-13 in Ottawa and April 18 in Toronto. The group is also holding a competition to find Canada’s most interesting, effective and inspiring digital transformation stories. To take part and see a public sector example, please visit DXagents.com/Watchlist.
To find out more about DXagents and become involved in the community or request an event invitation, visit DXagents.com.
For more information, contact:
DX: How will it Impact your Organization? Published Feb 28/17
Tesla – Driving Digital Transformation & Disrupting the Ecosystem
As organizations explore digital transformation (DX) and determine business value considering the buzz around Internet of Things (IoT) and Big Data, it is essential to remember that DX is more than just a technology overhaul, DX is a journey that can transform business models, processes, and customer engagement, and can even impact unrelated industry verticals. The recent launch of the Tesla #Model3 illustrates this perfectly.
DX can have implications on different levels, from company-level impact, to impacting the sector, and even an entire ecosystem. Take Tesla as an example. Everyone knows that it revolutionized the way we look at electric cars, but until the recent launch of the Tesla Model 3, few could have imagined the frenzy of consumer buying. People lined up to buy the vehicle like they would buy a hot new consumer electronics product. Within 48 hours of its launch, the car had 276,000 pre-orders totaling $10B in potential sales, and $276M in deposits. Tesla has in fact revolutionized the business model in its sector. It has crowd-funded the partial cost of manufacturing the Model 3. While the actual process to reserve a Tesla Model 3 took all of 2 minutes on average, consumers who signed up are willing to wait a year and a half or more to receive their vehicles.
Not only is Tesla disrupting the auto sector, it either has already or will soon impact a range of other sectors. As a connected car – updates are done via software upgrades, “over the air”, using wireless carrier networks or WiFi, thereby creating revenue streams for an ecosystem of carriers, electronic SIM manufacturers, etc. And generally, the expected entry of self-driving vehicles will certainly impact how smart cities plan transportation systems, roads, traffic flow, etc. The insurance industry is already looking to assess the impact of such vehicles on policies, and one can imagine that changes to driving regulations are in order.
So, digital transformation is about more than harnessing a new technology to improve, revamp, and overhaul processes and operations; it is about identifying and creating new value propositions. And as we have seen with the likes of Tesla, Uber, and other disruptors, entire industry sectors and business models have been disrupted, in some cases, traditional ways of doing business have been rendered obsolete.
While most organization realize that it is imperative for them to assess and respond to changes that digital technologies bring in order to remain viable, the challenge many organizations face, however, is that with the rapid changes in technologies and the plethora of vendor solutions for the “Internet of Things” and “Big Data Analytics” – figuring out where to start the DX journey and navigate the landmines along the way is a challenge in and of itself. Starting and planning the DX journey the right way are essential to success.
Dawood Khan, CMC, P.Eng.
Partner, RedMobile Consulting
DX: Where do you start? Published March 7/17
Getting Lost is Easy!
Digital Transformation – Mobile, Cloud, them Things, and that really Big Data
We’ve all heard that the Internet of Things (IoT) and data analytics are essential to future success of organizations. Almost every day, like me, I am sure you’re bombarded with a new event on the topic. Having spent a long time in the emerging technology and innovation area, I thought I’d attend one of the more established IoT conferences and see what all the fuss is about. I inherently dislike paying good money and spending valuable time at an event to hear nicely concealed sales pitches. But at this IoT event, to add insult to injury, I actually found myself lost half-way through the event. I thought I was alone in this, so I casually broached the topic at lunch with several other people. It turned out that they were in the same boat. The conversations over breaks, evening networking sessions, and hallway chats only reaffirmed the general sense of bewilderment. And this audience was mainly people in the tech-innovation space.
After hearing from 250+ different IoT platform vendors, half a dozen different interoperability/ standardization bodies, and many dozens of vendors who made sensor chipsets, “things”, radio networks, gateways, and analytics engines – one realizes the problem. It’s a classic tale of technology hype and lofty promises of what “can be” on one side and the reality (some may call these shackles) of legacy business. Between the two sides, you’ll find confused decision makers.
Where do you start? A rooftop patio is a great place
Over dinner on a rooftop patio on one of our warm winter evenings, I had an eye opening moment with a client who manages a large number of complex and diverse infrastructure assets. We were discussing the value of data analytics and the role IoT could play. His view was that before his organization could think of big data, they had to get credible, reliable and usable data first. They had no shortage of data – it’s just that the data they had was inconsistent, in different formats, and resided in disparate systems. Hence the level of confidence they had in its efficacy for decision making was questionable, especially in a highly regulated industry. I asked him why? He explained that they couldn’t even consistently identify an asset because they used stick-on bar codes that would peel off, wash off, or just get scratched. So, in such cases, the maintenance staff would write the information on a paper and enter it into their system at a later time. Most of the time they could identify the assets correctly, but a large number of times they couldn’t. As a result, their degree of confidence in the large amount of data they had was limited.
Digital Transformation – Failure isn’t an option, it’s a requirement!
To me, the fore-mentioned discussion, illustrates a classic challenge organizations face. Their line of business operations folks have business problems, but don’t necessarily understand where to start their Digital Transformation (DX) journey or how to go about IoT and analytics. This is because, these things seem too far a stretch from the reality of where they are today.
The examples illustrate major barriers to adoption of IoT and analytics, and corporate-wide success of Digital Transformation. In addition, the absence of a return on investment (RoI), justifying implementation costs, and an inability to visualize tangible results, have also been cited as main challenges for adoption.
While the majority of large enterprises claim to be in the midst of Digital Transformation, the fact is that many of the same organizations, when asked to define Digital Transformation, couldn’t do so.
As an example, we can see the fore-mentioned dynamics at play in the banking sector. Financial institutions (FI) are generally encumbered with bureaucracy, legacy systems, and regulatory burdens. At the same time, they are faced with the onslaught of web and mobile-based offerings from a growing pool of financial technology (FinTech) startups. These over-the-top players are disrupting the traditional business of FIs.
As the business of FI’s is disrupted, much like Uber disrupted the taxi industry, the overarching question for the banks is whether or not there are compelling drivers to embrace DX. Justifying implementation costs and quantifying return-on-investment (RoI) may provide insight for decision making. However, becoming sidelined in your own industry, or being rendered obsolete, are business outcomes that can never be undone.
So, the risks are high – but where does one start? How does one really plan a viable DX journey? And how does one’s mindset and approach have to evolve to be successful?
“You may never have all the answers, so start, start small, be open to failing, learn quickly, refine your approach, and iterate! That’s the “fail fast” approach in a nutshell, you go from concept to proof-of-concept in several rapid iterations”
What people may not tell you is that, this requires a certain degree of discipline, and an appreciation for the art and science of “Design Thinking.” While organizations are starting to rapidly prototype and willing to fail fast – it’s no fun if you fail fast, fail everywhere, and just keep on failing.
A disciplined approach using “Design Thinking” that accords the latitude to experiment, learn, refine, and improve through discrete iterations is an art and a science.
Dawood Khan, CMC, P.Eng.
Partner, RedMobile Consulting
How Can Incumbents Respond to Disruption? Published March 14/17
Part 1: Start by Accepting that Disruption will Happen!
It is well-known that incumbents in any industry seldom feel the impact of an early-stage disruption on their core business for many years or even decades. This is even truer for those industries that are heavily regulated, as regulation creates a barrier to new entrants. Hence, in such situations, incumbents are typically highly profitable and may not feel threatened. They may prefer to remain on the sidelines for an extended period of time, often somewhat skeptical of the degree to which the disruption may impact their business. In this period, they may experiment with new technologies and business models, or hedge via a investments in emerging start-ups. In some cases, they may take a wait-and-see approach. The question is at what cost?
As an example, one could say that FinTech is another oft-hyped, early-stage technology. But a look at alliances, investments, FinTech-focused technology accelerators, and the growing number of Fintech Unicorns suggest otherwise. Exponential growth in global FinTech investments attests to the industry’s path toward acceptance. Over a span of five years (2010-2015), global investment in FinTech reached $49.7 billion. In the U.S alone FinTech investment doubled from $4.05 billion in 2013 to nearly $10 billion in 2014 and by June 2015 it skyrocketed to $31.6 billion.
Today a new breed of FinTechs is focusing on crypto-currency, which are powered by blockchain technology. Crypto-currency is a blockchain technology that involves financial transactions based on encryption technology. Blockchain is on its way to disrupt a wide range of transactions in the financial industry such as stocks, bonds, loans, and payments with a subsequent transformative impact on the banking ecosystem.
From a financial perspective, blockchain technology keeps all transaction records permanently on thousands of computers from various networks distributed around the world. Each of these computers attests to the authenticity of transactions with no single entity controlling them as they all run on open-source collaboration. Hence the arrival of frictionless transactions and possible disappearance of intermediaries. Blockchains can be used to record transactions of asset exchanges (or “value”) among owners. Transfer of assets, buying and selling of stocks and properties, private banking, and lending will all be disrupted. These are what blockchain FinTechs are focusing on. 2015 U.S investments in blockchain-focused FinTechs stood at $400 million and over $150 million in Q1 2016.
The global FinTech Unicorns (20 and rising) are bound to make their impact felt at the corporate boardrooms of incumbent banks. However, it may appear that there is a lack of urgency among incumbents, this is because their market share has not, and may not be impacted for some time to come.
By now, you may have already asked the proverbial $64,000 question: How will the incumbents react?
Part 2 of this piece looks at this question and provides an approach to addressing on-going disruption.
Dawood Khan, CMC, P.Eng.
Managing Partner, RedMobile Consulting
 The State of Fintech Industry as We Know It Infographic:
 Quartz, “Money keeps pouring into blockchain startups”, April 19, 2016
How Can Incumbents Respond to Disruption? Published March 21/17
Part 2: Embrace an Innovation-focused Culture
When it comes to disruption and the introduction of disruptive practices in a particular market, we should keep in mind what renowned Canadian communication and media theorist Marshal McLuhan said in 1964 about the heavy reliance of newspapers on classified ads and stock-market quotes. McLuhan said that “should an alternative source of easy access to such diverse daily information be found, the press will fold.” But as we all know, the demise of classifieds in print media did not happen until just a few years ago. And even more than a decade after the advent of the internet, many print publications did not care to invest in digital technology and transition to online publications. As a result, many of them suffered royally at the hands of startups and a few incumbents that had the foresight to make the transition and disrupt themselves.
Netflix’s transition in 2011 from DVDs to streaming is well documented. The company suffered 80% drop in its stock price as it transitioned to online streaming, but it eventually paid off as evidenced by a 134% spike in its stock price over the last 12 months, causing the cable industry to lose more than 6.7 million subscribers over the last five years, and driving Blockbuster, its arch-rival at the time, out of business. Another testament to Netflix’s success: the number of hours many of us spend on weekends, binge-watching our favorite shows.
The challenge for incumbents is the task of preparing for the day when their cost structure won’t be aligned with alternatives in the market. The preparation can entail taking measures against some of their current operations with subsequent hits to their profitability. But those measures may eventually pay off handsomely. The challenge is that it’s difficult to predict accurately what may and may not work.
The questions then are:
- What is an incumbent to do as it prepares for emerging disruption – Is there a way to know what will work and what may not?
- When should it act – while timing is important, is it possible to get the timing mostly right with a high degree of certainty? and
- How it should bring its new approach to the market?
As no one really knows what approach would work best, or how to predict market reaction, prudent organizations are tackling disruption as a transformative journey rather than a discrete action at a point in time or the proverbial “destination.”
A Digital transformation journey means that these organizations are continuously experimenting with new business models, emerging technologies and ways in which to engage and interact with their customers.
As part of this journey, organizations are increasingly looking at determining how an approach may be desirable (do people want it?), viable (is there a business case/model that will work?), and feasible (is there a technical solution?). These three elements form the foundation of design thinking. Which, when used as part of an organization’s digital transformation journey, allows an organization to rapidly identify opportunities, test them through quick and iterative proof-of-concepts, refine the approach or move forward.
For anyone, and especially incumbents, it is important to accept market realities. Disruption is inevitable. In order to survive, organizations have to be prepared, and the way to do this is via a journey towards transformation. While many call this “digital transformation,” people (customers and organizational culture) form the core of any successful transformation. An innovation-focused culture that is open to employing a human-centric approach to solutions, rapid prototyping, and experiencing failure, is the corner-stone of success in addressing the ongoing disruption in the market.
Dawood Khan, CMC, P.Eng.
Partner, RedMobile Consulting
 “Can Netflix Survive in the New World It Created?”, New York Times, June 15, 2016
DX: Disruptive Change – Caught with your Pants Down Again? Published March 28/17
Let’s be honest, we’ve all been caught off-guard in our lives when disruptive change happens. Each time, like many of us, after the fact you likely kick yourself for not being better prepared – “I should have done this or that to avoid the negative impact or benefit from the reward.” I’ve been there myself and I know I am in good company.
However, when it comes to business or public trust, we cannot take disruption lightly. We cannot afford to not be ready. In today’s shared economy with rapidly changing technologies and disruptive business models, our business can be disintermediated and made redundant; our customers can leave us; and our ability to recover from the fallout can be seriously diminished.
We cannot take disruption lightly. We cannot afford to not be ready. In today’s shared economy with rapidly changing technologies and disruptive business models, our business can be disintermediated and made redundant; our customers can leave us; and our ability to recover from the fallout can be seriously diminished.
So, what is the next big disruptor?
While there may be many we don’t even know exist, over the last little while the one area that has been gaining incredible momentum and has the ability to seriously disrupt the status quo within the wider framework of digital transformation, is blockchain.
The financial sector isn’t the only area blockchain will impact. Retail, insurance, telecom, government, healthcare, transportation, education, energy, utilities – you name it – everything is game!
How can you be prepared for this disruption?
The best approach is to prepare by evolving your organization to an innovation-focused culture. How do you do this in light of unpredictable changes in technologies, business models and customer expectations? You do this by embarking on a business and digital transformation journey – yes, transformation is a journey, not a destination!
Dawood Khan, CMC, P.Eng.
Partner, RedMobile Consulting