Marshall Van Alstyne Explains Platform Strategies

At the recent Platform Strategy Summit, Van Alstyne talked about 'extraordinary changes' taking place.


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      Digital Business Transformation

      How would you describe the current pace and accomplishments of digital technologies at your business or enterprise?

      Paula KleinCreated by Paula Klein on Sep 21, 2015 in Public Site: MIT IDE

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      It’s difficult enough to connect thousands of office workers, even with leading-edge technologies; it’s quite another challenge, however, when workers may be on a construction site or at a utility plant on different continents. Dispersed, non-office work environments are typical for CDM Smith’s 5,200 engineering and construction employees and their partners. And it’s CIO David Neitz’ job to make sure digital technologies support these clients and create business value wherever they may be located.

       

      In the past two years Neitz has introduced enhanced technologies and processes that distribute digital assets more efficiently to improve client interactions. New visualization and collaboration design capabilities, for instance, have resulted in time-savings for clients. And using cloud partnerships, CDM Smith sped up the modeling process twenty-fold, cutting modeling time from days to minutes while adding new intelligent-design capabilities for the business. The team then extended the modeling capability to include CDM Smith-proprietary analytics such as ground-water diffusion. Now, designers can now work alongside clients to consider different scenarios, rather than having each design cycle take days.

       

      http://cdmsmith.com/en-US/Insights/-/media/Images/Insights/Business-and-Industry/171x181/Dave-Neitz_171x181.ashx

      Neitz’s efforts earned him the MIT Sloan CIO Leadership Award at the annual CIO Symposium on May 18, recognizing the firm’s successful Business Technology practice, including a transformative Digital Capital strategy that focuses on innovation.

       

      Adding Tools, Building Trust

      Neitz said that the support of CDM Smith’s executives and their passion for technology have allowed him to use social media platforms like Yammer and to fast-track virtual design technologies for designers, construction professionals and field employees. “We had to create the physical environment for internal collaboration as well as tools that helped the value chain, from modeling to the construction process,” he said. “And we had to build trust with internal and external stakeholders.”

       

      Moreover, in an industry running on thin margins, no new budget was allocated. Neitz had to find ways to turn the Digital Capital group into a strategic corporate asset while eliminating outdated projects or data centers that were not showing significant ROI. For instance, he moved applications to the cloud to deliver better customer solutions. He also relied heavily on his team-- engaging Amy Corriveau, an associate and business architect, Doug Cushing, a VP of Digital Capital, Mike Woods, an associate in foundational technologies and Scott Aldridge, a manager of disruptive technologies within CDM Smith’s Business Technology group-- to build client trust, and Maria Brown, a principal and sourcing specialist, to interface with strategic partners.

       

      "It's easy to think this was just a cloud effort, but it was much more,” said MIT CIO awards Co-Chair, George Westerman. “Speeding up the process greatly transformed the company's customer experience. Now designers and clients can work together in real time to make important modeling decisions.”

       

      “Large design/construction projects, with their complex tradeoffs and coordination challenges, are a rich environment for digital transformation,” Westerman said. “Dave and his team have done fascinating things with cloud, virtual reality, and analytic modeling to radically enhance the process. And they've set the stage for much more to come.”

       

      One area Neitz wants to explore further is how to tap into CDM Smith’s smart cities projects --where municipalities develop more effective processes with limited resources—for community benefits. He also wants to more widely develop some of CDM Smith’s innovations, such as sensors, for clients.

       

      Mixed-reality Modeling

      Neitz describes the mixed-reality modeling that CDM Smith is using as an environment that combines real and digital world visualization to help designers. Based on Microsoft’s HoloLens, the technology improves infrastructure design, construction and operation “with enhanced precision, greater efficiency and improved collaboration.” It lets remote team members “experience the project immediately, without travel... improving decision-making and resolving questions faster by enabling everyone to experience “what-if” scenarios in the context of a physical environment,” according to CDM Smith.http://digitalconstructionnews.com/wp-content/uploads/2016/04/Hololens.jpg

       

      During a panel discussion at the MIT CIO Symposium, Neitz said he’s fortunate on several fronts:  “My executive team gets the importance of IT, and the business is on board.” At the same time, “disruption is a different mindset; engineers have to understand that it’s safe to experiment and to fail in the virtual world. You have to engage stakeholders and encourage ideas to percolate on social media...even crazy ideas,” he said. Most of all, Neitz is learning to build trust and protect the professional reputation of his internal and external clients. That’s a huge challenge, and a huge win, for any CIO.

       

       

      In IT circles, it’s common to talk about next-generation technologies, business transformation and the rapid pace of change. Usually, those discussions are in the future tense. It’s clear, however, that the next generation is unfolding now — and not just at leading-edge tech firms. Enterprises and organizations of all types and sizes are being swept up in digital-driven transformation. Disruption really is the norm, and new business models are emerging whether planned or not.

      These trends were reinforced at the recent MIT CIO Symposium May 18, where academics and business leaders checked the state of the digital economy and determined that it is roaring ahead.Among the examples: Amazon is a search company as well as a retailer; old-line financial services like Principal Financial Group and BNY Mellon see themselves as data companies, not insurance providers or banks. Rapid, agile experimentation is standard procedure, and open APIs are the rule. CVS Health and JetBlue are customer-focused tech companies that use data and analytics for competitive advantage. At JetBlue, the boundaries between business operations and technology are blurring and job titles may be the next old-school vestige to disappear.

      Tech Soars at JetBlue

      “We’re a customer service company that happens to fly planes,” Marty St. George, JetBlue EVP, said at the CIO Symposium. Partnerships are more important than silos and “we need great digital experiences” in everything we do, he said. In fact, earlier this year JetBlue entered the VC business with an office in the heart of Silicon Valley so that it can “own the products that we develop” and encourage faster innovation of all types including call centers and customer service.


      During a Symposium panel discussion, Gary Scholten, a 30-year veteran of Principal Financial Group, and now VP and CIO, noted that “Banks have to change or risk obsolescence.” Their physical presence is diminishing, while robotic advisers and smartphone transactions are becoming commonplace. Suresh Kumar, BNY Mellon Senior Executive VP and CIO, said that the bank may be more than 200 years old, but it has to “think like a startup and build on our strengths.” Nothing is taken for granted when startup firms like Kabbage — described by its CEO and founder Rob Frohwein, as “a data company” that can approve small business loans in seven minutes — is nipping at your heels. Frohwein shared the stage with Kumar and Scholten at the Symposium.


      On-Demand Upheaval

      And these profound changes don’t even touch on one of the most disruptive upheavals of all: the on-demand economy. Moderating a panel discussion, MIT IDE Director, Erik Brynjolfsson, said that the on-demand economy is growing at 50% annually. Though it still only represents four-tenths of 1% of the overall economy, it’s rapidly accelerating. Uber, for instance, has over 1 million users, and new cities are being added every day.Yet, as proof of the constant change taking place, even while pundits analyze the success of Uber as a digital economy platform, the company is quietly testing out driverless cars, according to General Manager Chris Taylor, so it can stay ahead of the next wave of disruption that’s bound to follow.

       

      IT has certainly caused business disruptions in the past, but it seems that deeper shifts are under way this time. MIT Economics Professor, David Autor, said that “old norms no longer apply. We are a transaction/services economy, but transaction costs are falling and boundaries are widening.” This creates new dynamics between workers and employers where special skills are highly valued, but other workers face risks and insecurities, he said.

       

      Paul Osterman, MIT Professor of Human Resources and Management, also sees a “Fundamental shift in how employers view labor.” Rather than taking care of workers for extended tenures, employers are replacing them with subcontractors at a rising rate. There are benefits from these changes for workers who want flexibility and for employers who can lower their costs, he said, but there’s a dark side, too. Public policy needs to step in and the courts need to enforce laws that will protect workers, Osterman recommends. Otherwise, workers may become the collateral damage of the rapid-fire tech disruption now under way.

       

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