Forrester Predictions 2019 – Amicus ITS Digests: Session#4 AI and Automation

(L-R) Forrester CMO Victor Milligan with Principal Analysts Michele Goetz and
JP Gownder

In the fourth of our sequence of digests on Forrester’s 2019 findings and forecasts looking ahead in 2019, Principal Analysts Michele Goetz and JP Gownder were in the hot seat for the AI and automation session with #Forrester CMO Chair, Victor Milligan.

Asked about the current status of AI and Automation, Michele Goetz observed that AI was becoming more interesting to companies.  Activity remains principally on pilots and Proof of Concepts, with the main focus on what analytics can offer.   But it was the automation aspects that were identified as having the most traction because of the opportunity for business benefit outcomes.

JP Gownder added that business values were starting to be seen in ‘Robotic Process Automation’ (RPA), whereby repetitive tasks get automated, freeing up people to spend time on more strategic tasks.  Through automation he said, businesses can identify the seeds of opportunity in AI with connections starting to be made and APIs connected and the starting steps of value to the change in process.

Victor Milligan asked how businesses were addressing the issue of (high) risk and (high) reward with AI (where machines replace people) but what were the ‘consequences’.

To evaluate this, Michele Goetz recommended that if an organisation broke down its ‘business processes’ and ‘automated processes’, you could get a ‘horizon view’ of business activities, business behaviours and customer behaviours.   Then, through Machine Learning providing pattern analysis, organisations would be able to spot the ‘digital twin’ in order to make simulations that could support strategic decisions about a company’s AI road map.  This would enable organisations to:

• Determine where they wanted to go
• Redesign their processes
• Create new products as required
• Create new experiences and engagement with customers

By committing to AI, organisations would be positioned to change the way they operate, to better manage the day-to-day and oversee outputs.  Then if things went awry, managers could act quickly and de-risk any aspects, whilst still looking ahead at new opportunities by virtue of having deep operational knowledge and how customers engage, plus a holistic view of the business.

Victor Milligan wanted to know what AI could improve in business today, against what it will create for a business net new?  Michelle Goetz felt there was great opportunity for the new opportunities arising from AI.  However, most organisations are still getting to grips with the basics.  To get to this next stage, organisations would need to review some key aspects and remove old and inefficient processes. This approach includes:

• How we look at data
• Changes in how we approach and utilise analytics and algorithms
• How we see and understand our businesses

In looking at the changes on how employees work (or not) JP Gownder advised that with RPA, for legacy systems that are disconnected – automation can be a game changer. In retail shops (eg. Wallmart), robotic scanners were now deployed to look for product/shelving or price errors, so clear example in retail where robotics were driving value and adding efficiencies. Elsewhere physical robots are starting to be seen in factories working alongside humans.

Victor Milligan questioned what pragmatic aspects people should think about doing or avoiding.  Goetz reflected that people should think big and re-imagine their approach to business, production and what the experience looks like through a customer’s eyes – and stop testing algorithms.

JP Gownder believed that there were opportunities at both ends of the business spectrum, not just driving costs down.  He advocated that part of the solution lies in cleaning up shared IT operations to use automation – and secondly to make new money solving customer problems.

The traditional role of operations and the new role of digital were not consistently hand-in-hand today, but Gownder said would need to blend together to create commercial success.  Using automation technology could bring about greater clarity through rationalisation, but also be a means to drive profit ultimately for businesses.

Amicus ITS Sales Director, Les Keen

Amicus ITS Sales Director Les Keen commented:  “The evolution of cloud technology with AI and automation is putting B2B and B2C organisations at a crossroads, both developmentally in tech terms as well as the commercial opportunities on the horizon in the longer term”.

“Whatever the industry, the key to realising the benefits of AI and automation will be for organisations to review their business processes against existing infrastructure to understand their direct needs and priorities. Modernisation is key throughout, however looking at the processes that should be targeted to create the greatest improvements and efficiencies is a starting point”.  

“I would agree with Michele Goetz that introduction of AI has to start with a clear business plan to direct the vision, strategy and drivers required (technical or human resource).   Re-imagining an organisation would be a highly invigorating exercise for all companies as it would free you up from thinking about how you have done things before.   AI and automation are still largely in their infancy, but will mark a leap in the way a lot of organisations can and will operate and interact with people in the future”.

“Having a sensitivity and regard for humans in the workplace must be a focus to ensure the humans do the intelligent and creative work to distinguish from the repetitive and mundane. Mapping this journey successfully is also greatly about the messaging within an organisation to ensure everyone understands what the advantages will bring for them, as much as any business benefit”.

“For the public sector in the UK, despite a Cloud First Government directive, budgets are increasingly under pressure to maintain legacy IT estates, so ‘re-imagining’ could remain just a dream for many. However, in the short term it may well be that the greatest initial changes we see are in the clinical environment, rather than with core business IT”.

What are your thoughts on AI in the workplace? Do you consider it a threat or an advance that’s overdue? Leave your comment here

 

 

Forrester Predictions 2019 – Amicus ITS Digests: Session#3 – Digital Transformation

In the third of our sequence of digests on Forrester’s findings and forecasts for 2019, we look at digital transformation and how it will be different this year to last for many companies with Allen Bonde, VP Research Director at  #Forrester.

Allan Bonde’s first observation was that 2018 had shown that many firms’ experience of attempting large scale ‘big bang’ transformation had been problematic with a number failing in their endeavours.

This, Bonde felt, was frequently because people’s focus needed to shift from transformation efforts to innovation efforts to improve everyday processes. He illustrated this quoting the anecdote of a Chief Digital Officer who’d hidden his digital road map away and instead was looking to go out into the field to talk to others business leaders and gather grass route support for change strategy, taking small incremental steps towards improvement to make his transformation achievable.

Allen Bonde felt that in 2019 transformation focus would be on pragmatic efforts, creating efficiencies and taking big transformation and making it small.   Operational improvements would become higher priorities as companies ‘tuned up their digital experience stock’.

To execute this, Bonde said we needed to build up our cultural reinforcements as we accepted constant change. This meant re-evaluating strategy to put the right people in the right roles.   This would mean shifting customers to:

• Lower cost digital channels
• Launching digital products
• Turning data assets into new products
• Driving automation in everyday tasks faced employees and customers

Allen Bonde acknowledged this would be uncomfortable for a lot of people, currently modelling their business case on a B2C basis.  Instead though, Bonde felt that the B2B route would be the main profit driver, as digital leaders should look at the macro economic picture and decide upon their investments based on which tools would result in ‘payback’.

Forrester anticipate 25% of organisations will decelerate their digital spend either through an assumption they had done enough, or that they were worried about the economy – and will end up losing market share.

The winners would be the 15% of top companies who are customer-obsessed, who will look to invest more, build the right processes and modern architecture to be ‘fit’ and back this up with the right product managers and digital leaders to roll out the next phase of ‘pragmatic transformation’ using the right processes to achieve this.

Ben Davis, Snr Account Manager

Senior Account Manager for Amicus ITS, Ben Davis added:  “These observations by #Forrester echo with Amicus ITS’ thinking.  In the last two and half years we have been supporting our customer base in their journeys to digital transformation.  Our Consultancy efforts primarily focus on understanding our customers, their business outcomes, priorities, IT environment, challenges and budgetary constraints.  For the public sector, our customers are also challenged by other wider mandates including UK Gov’s Cloud First strategy.   For the health sector, the desire to achieve the digital transformation, create improvements and efficiencies is there in full.   However, there are so many legacy applications and keeping the lights on is as great a struggle as any desire to fulfil ‘transformation’”. 

“In the NHS, they are operating in a highly politically charged environment where targets and patient service must come first.  For instance, we see a resistance in Office 365 adoption because of the high ongoing revenue costs.  What this sometimes fails to take into account, is that in subsequent years, NHS organisations would stand to make significant productivity gains and efficiencies, making the operating costs far lower.  Those productivity gains and efficiencies are sometimes intangible.  For instance, a business may struggle to pin a value on the implementation of Microsoft Teams for collaboration, or say, Microsoft Forms (a powerful and easy tool for customer service questionnaires and surveys)”.

“Healthcare organisations are simultaneously looking to implement clinical advances which utilise the best of modern technology, but unless they are freed to be able to take the steps towards digital transformation, they will ultimately always face an uphill struggle.  Minister of Health, Rt Hon Matt Hancock MP said in September 2018 that he wanted to accelerate a vision of a greater technology-driven NHS.   This necessarily has to be more than a five year political plan which ensures it is not just full integration of technology across primary and secondary healthcare, but the binding in of health and social care with wider agencies to provide a full patient-centric service and efficient NHS”. 

“The road to digital transformation is not a rapid journey for any organisation.  The business change has to be carefully thought through and engaged with by all stakeholders to have a chance of success”.

If you are interested in discussing your digital transformation plans or any challenges you are facing in confidence, please contact our Sales team on +44 2380 429429.

Warning to UK Public Sector about leaky Amazon Web Services

Amazon Web Services (AWS) are currently in the news for all the wrong reasons.  Their Simple Storage Servers (S3) – known as ‘buckets’ – have been successfully targeted by hackers.  The AWS servers have been found to be alarmingly leaky, enabling the new Buckhacker search engine tool to readily access unsecured sensitive data.

AWS, as one of the UK Government’s chosen cloud service providers (GOV.UK PaaS) runs from AWS in Ireland (a UK-based hosting centre is planned for 2018) and is accredited for handling personal and confidential information classified at ‘Official’ level.

Users are able to search either by ‘bucket’ name, which may typically include the name of the company or organisation using the server, or by filename. The service collects bucket names, grabs the bucket’s index page, analyses the results and stores it in a database for others to search.  There are other tools like AWSBucketDump and according to the hackers exposed buckets can also be trawled for rich pickings with a specific Google Search.

Created by anonymous hackers, a Buckhacker developer commented:  “The purpose of the project is to increase the awareness on bucket security, too many companies were [sic] hit for having wrong permissions on buckets in the last years”.

Clearly, it is in the public sector’s interests not to risk exposure of any sensitive data (theirs or the public’s) and thus a prime consideration for any public sector organisation is to scrutinise the credentials, security performance and sovereignty badge protections of their chosen cloud provider.  Public sector organisations struggle to find funding in already tight IT budgets to defend against cyber attack, but with so many different lines of attack facing them, IT managers are having to take a risk-based approach to identify where to allocate their limited funds.

Amicus ITS Director of Technology, Security & Governance JP Norman commented:   It is worth remembering that the security of the data, no matter where it resides is the responsibility of the Data Controller in each organisation. There are ways to provide security assurance in the cloud layer that conform to the basics of Cyber Essentials. Furthermore, the right partner organisation, such as Amicus ITS, can act as a cloud broker providing proven security assurance recommendations and actions to mitigate such risks.

At Amicus ITS, we are happy to challenge the status quo as we brand ourselves are the safe pair of hands for our customers.  So with any digital transformation journey we will ensure intelligent, joined up thinking to ensure our Security and Governance views chime with those of our technical architects and sales professionals.

HMRC mark U-turn on VAT for IT Managed Services

HMRC appears to have done something positive for a change in a way that will be welcome news for IT Managed Service Providers.

Last year, HMRC advised that only large system IT integrators would get a VAT refund for aggregated purchases. Public sector organisations were thus being penalised for buying standardised ‘off the shelf’ Cloud services and having to pay the full amount of VAT on purchases.  An unjust penalty where transparency and best price are being argued for by the regulators.

However, following representations to HMRC from public sector bodies which spend several billion pounds per year, happily HMRC have done a pleasing U-turn on VAT refunds. The new document published this week, ‘Contracting Out Services’ guidance, shows that cloud services are now eligible for the VAT reclaim. Hardware can be considered but only if part of a managed service bundle. The new rules also support a “disaggregated” managed IT service, where the various areas of IT such as hosting and networks are broken up into multiple suppliers.

The rules specifically state that the following services should be included in the VAT refund:

• Hosting Computing Services
• Archiving Communication Services
• Data Communications Services
• Desktop Communications Services, for example Picture Archiving Services (PACS)
• Ethernet cable/Data lines and Cloud computing

With the new G-Cloud 7 Digital Marketplace providers to be announced in November to compliment the public sector tendering frameworks, the Government’s linking of a transparent approved supplier system and joined up thinking on tax for public sector buyers will make a positive change for SMEs and their clients on tightened budgets, especially in the downtrodden NHS marketplace.  The latest sales reported for G-Cloud are £753million, with 51% in value and 60% in volume going to SMEs (defined as sub 250 employees with annual turnover not exceeding Euro 50 millions).  77% of total sales by value were through Central Government, with 23% through the Wider Public Sector.

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The Week’s Technology News – 19th December 2014

IT security needs embracing in the boardroom
Talking from GCHQ headquarters this week, Minister for the Cabinet Office, Francis Maude has urged businesses to make IT security a boardroom issue.  Amicus ITS has recommended this point repeatedly in blogs this year.  Government is now urging businesses to review IT security as an integral part of strategic thinking for the Board, to ensure secure data management remains at the heart of the agenda.

With recent breaches affecting major household names both in the UK and the US, Maude warns against complacency:  “All companies, large or small, face threats from vulnerabilities on a daily basis”.

The Government’s launch of Cert UK earlier this year, created a cyber security information sharing partnership, now enabling 750 organisations to exchange information in real time on threats and vulnerabilities occurring.   Maude pointed to GCHQ data which showed that 80% of attacks were preventable, if best practice was followed.

As organisations are reflecting on 2014 with their staff at Christmas parties up and down the land, a cautionary ice cube should be travelling down the spine of any Board members whose businesses have not thought to place IT security at the forefront of their business continuity plans.  For them, January will be the time to really start pulling this into focus on the 2015 Agendas to review, consult, embrace and invest as required, to ensure the bottom line of their business is not threatened – either profitability or reputation.

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Nats on the rack for IT system failures
Thousands of travellers in UK airports were delayed last weekend due to a software problem from a faulty line of coding at the London Air Traffic Control Centre at Swanwick in Hampshire. National Air Traffic Services (Nats), which controls 200,000 m2 of airspace, reportedly had a power system failure on an internal telephone switch controlling nighttime ‘standby’ to daytime ‘live’ operation.

The partially privatised company (owned 49% by the UK Government, 41.9% by The Airline Group, 4% by Heathrow (formerly BAA)) and 5% by Nats’ employees), has been running air traffic control for commercial UK flights since 2002.

The company handled over 2.1million flights last year, carrying 220 million passengers in the UK.  Nats had problems with its IT in 2008. Additionally, the CAA criticised Nats in a report about a telephone failure which grounded 300 flights in 2013 – and flights in Southern England were delayed earlier in 2014 due to “technical problems”.

The problem software came from a package originally being developed by the US air traffic control network. When this project collapsed, it was left to Nats to work through the outstanding development to make it serviceable and raised the price of Swanwick’s delivery by £150m from an original £475m budget.  Some of the blame is said to lie with an aged IT infrastructure.  Nats CEO explains, “There are 50 different systems at Swanwick and around four million lines of code”.  Nats’  decision last year to make a significant number of its most experienced, older IT engineers redundant when these were the specialists most used to working with the older technology, will not have helped. Especially worrying with this failure is that the fault had not been seen before.  The latest incident follows accusations about a corporate failure to invest in new technology and opens Nats to an increased risk of repeated outtages in future – this despite CEO Richard Deakin’s promise that £575m was being invested over the next five years.

A CAA inquiry will now be launched to assess whether Nats has learned from its previous failures, with the risk of its licence being reviewed. It will be a bumpy ride for the UK’s Transport Secretary, Patrick McLoughlin who will be providing a full account to Parliament about what went wrong.   Clearly any organisation, whatever type, lumbered with legacy infrastructure whether hardware, software or both will see operational effectiveness and bottom line profitability suffer if the Board does not grip the bull by the horns and review and assess the best way to upgrade and secure their IT systems.

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Microsoft and Skype attempt to eliminate the language barrier 
Back in May, during the Code Conference event, Microsoft demoed a breakthrough, upcoming feature for Skype which would let people who speak different languages talk to each other without a human translator. Users can either voice or video call each other with translations appearing in near real-time with options for spoken and sub-title like written translations.

This week Skype has opened up a preview of this new feature to Skype users who would like to give the in-development service a spin. Interested parties can go to the Skype website and register their interest. Currently the preview is limited to just English and Spanish languages with more promised coming soon. Initial reactions report – although not perfect yet – the service does exactly as you would expect, allowing two people who can’t speak the same language hold a conversation.

The business applications for an accurate auto-translator that can handle both voice and video calls are enormous. For example a single-language Service Desk could be enabled to communicate with customers worldwide without the traditional language barrier or costly multilingual employees. Skype Translator if successful will shake up the translating business even more, with the need for a dedicated human translator being brought up into question and the knowledge of knowing additional languages not being as valued as is currently.

As the technology develops and matures it is also likely we will see Skype Translator being incorporated into Microsoft’s enterprise communication tool Lync, which was recently announced to be later rebrand Skype for business, and if so, adds further reasoning for the name change decision.

The future for Skype is looking very promising and this announcement more than any so far, including the cross-compatibility of Lync and Skype makes Microsoft’s Skype acquisition in 2011 more justified than any announcement the two companies have made since. With Skype being pre-installed into Windows and tight integration with its own Microsoft account system Skype now more than ever fits very nicely into the Microsoft ecosystem.

With Microsoft’s current Mobile first, Cloud First mantra we will likely see Skype translator eventually being integrated into the Skype app for smart phones and tablets and with near real-time translations built into your phone, Microsoft may be the first to successfully smash the language barrier for all.

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Financial services benefiting from outside help
The financial sector has seen major changes since the start of the credit crunch in 2008.  Changes have occurred in working practice, organisational restructures, cost cutting exercises with branch closures in banking and jobs cuts with people replaced by technology as part of a digital strategy, which has seen sector employment decline by 16% since 2009.  Lloyds bank is cutting 9,000 staff as part of its digital strategy and Dutch bank ING has a similar project that will result in 1,700 staff losing their jobs.

Financial services organisations have increasingly turned towards using more third-party IT products, services and talent, as well as outsourcing their IT, which has boosted the number of workers in the IT sector.  According to an analysis by accountancy practice experts Nixon Williams, in 2009 there were 403,000 jobs in the IT sector compared to 459,000 in 2014 (12% up). In comparison, financial services jobs have fallen from 1.18m in 2009 to 986,000 today (16% down).

With the sector witnessing a major increase in automation software replacing manual roles and the rise in public expectation for truly 24×365 customer services, this places enormous pressure on financial institutions to manage such huge data volumes in highly regulated, highly secure environments and needing to resist any downtime or DDos.

Whilst traditionally the banking sector will have had huge in-house IT teams, the costs, regulations and pace of technology evolution has whetted the industry’s appetite for using third parties with expert knowledge and robust solutions.  This lies alongside the disconcerting reality of often uncomfortably large legacy IT systems that continue to create vulnerabilities whilst they remain unchanged and instead rely on being patched up, versus long term strategy and commitment to invest in new IT infrastructures with more flexible integrated systems.

Some of the larger banks are starting to think laterally by turning to third parties for IT innovation to develop and implement non-core systems and apps, involving joint ventures with other institutions or even working with start up firms.  These include Sumeet Chabria, CIO of HSBC Global Banking and Markets and Deutsche Bank who have recently set up a JV innovation project with IBM, Microsoft and Indian IT services firm HCL Technologies to improve its digital credentials.

The motivation to sharpen the pencil, starts to look clearer when recent studies such as those   from specialist retailer Bizrate Insight reveal that 72% of the public still trust banks with their details, over that of retailers.   However there is no room for complacency over ‘trust’.  Potential competition for marketshare should they move into banking could be on the horizon from established transactors Paypal and Amazon who jockey for position on the trust rankings at 48.9% and 45.4% respectively.   Tech giants Apple and Google lag further behind at 21.4% and 12.9% respectively.  Nonetheless all of these, as well as Facebook, all have systems that contain details about people and businesses and handle monetary transactions.   So the circling pirranhas angling for additional income streams and greater global dominance may include some new names in the future.

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Public Sector changing outsourcing habits in 2014
Market watcher ISG’s north Europe President, John Keppel, reports that the UK has seen a major boost in outsourcing from the public sector in 2014. This has included small and large contracts remaining in this country, versus being awarded offshore with spending levels nearly doubling in comparison to the UK’s private sector.

This has involved some big-ticket outsourcing deals but also a lot of mid-market government business.  Annual Contract Values (ACVs) from IT outsourcing in 2014 has risen 16% across EMEA, with France’s ACV increasing by 250%, whilst the UK with its more mature outsourcing market has seen a steady increase in line with cautious post recessionary optimism.  This is seen as largely due to the complexity of services required in the UK public sector, as well as a lack of appetite just to exploit cheaper resources from offshore suppliers.  The old adage buy cheap, pay twice perhaps resonating more closely with those responsible for procurement. “The challenge for buyers will be to understand how they can get the most value from their outsourcing efforts, and to understand the real business impact,” concludes Keppel.

Director of Sales at Amicus ITS, Les Keen comments:  “With the increase in Cloud services, this presents ever greater opportunities in 2015 for IT MSPs.  Those who can demonstrate the breadth of their experience, deliver the highest levels of data security, be a true 24×365 IT provider AND respect their customer as a business partner not a number – should see the benefit of working in this sector in 2015”.

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End of 2014
This is our last review of IT for the year and the blog staffers at Amicus ITS would like to take this opportunity to wish all our customers and everyone reading these posts, a very Happy Christmas and a peaceful New Year.   We will be back looking at the latest technology developments and worldwide IT business news once again in January.  See you in 2015.