Category Archives: Digital Transformation

Microsoft and Kroger are taking on Amazon with a futuristic grocery store pilot

Microsoft CEO Satya Nadella smiles during the question and answer portion of the Microsoft Annual Shareholders Meeting in Bellevue, Wash., on Nov. 28, 2018.
Stephen Brashear | Getty Images

Published Mon, Jan 7 2019 • 11:04 AM EST
By Sara Salinas
@sarasalinas

Key Points
  • The two outfitted Kroger locations, in Monroe, Ohio and Redmond, Wash., will feature digital shelving displays with real-time price updates and product information.
  • The displays will also feature digital advertisements personalized to the individual shopper.
  • The pilot is reminiscent of Amazon’s new age shopping software.

Microsoft and Kroger are taking on Amazon’s cashierless stores with their own futuristic grocery store pilot.

The move deepens the partnership between the two companies, which is partly a response to Amazon’s move into grocery stories with its 2017 acquisition of Whole Foods. As Amazon’s retail business pushes into more industries, Amazon Web Services is starting to experience a backlash. Kroger is joining the likes of Wal-Mart and Target in finding other vendors to handle their massive workloads for their digital and e-commerce offerings.

The two outfitted Kroger locations, in Monroe, Ohio and Redmond, Wash., will feature digital shelving displays with real-time price updates and product information, as well as digital advertisements personalized to each shopper.

Video analytics systems will alert store associates to low inventories. Location-specific data will be stored and processed on Microsoft’s Azure cloud infrastructure.

Microsoft and Kroger will jointly market the technology to other retailers, the companies said.

“Our partnership brings together Kroger’s world-class expertise in the grocery industry with the power of Azure and Azure AI,” Microsoft CEO Satya Nadella said in a statement. “Together, we will redefine the shopping experience for millions of customers at both Kroger and other retailers around the world, setting a new standard for innovation in the industry.”

The pilot is reminiscent of Amazon’s new age Amazon Go pilot, which detects the items a shopper has picked up and scans them automatically as the shopper leaves, eliminating the need for traditional cashiers. Amazon is reportedly planning a broad expansion of Go, including in Whole Foods stores, putting pressure on traditional grocers to offer similarly innovative shopping experiences.

WATCH: Amazon’s cashier-free store opens to the public

AI and the Future of Work

Getty Images

Partner Content – WIRED Insider
By WIRED Brand Lab for Accenture

 

While no one knows what artificial intelligence’s effect on work will be, we can all agree on one thing: it’s disruptive. So far, many have cast that disruption in a negative light and projected a future in which robots take jobs from human workers.

That’s one way to look at it. Another is that automation may create more jobs than it displaces. By offering new tools for entrepreneurs, it may also create new lines of business that we can’t imagine now.

A recent study from Redwood Software and Sapio Research underscores this view. Participants in the 2017 study said they believe that 60 percent of businesses can be automated in the next five years.

On the other hand, Gartner predicts that by 2020 AI will produce more jobs than it displaces. Dennis Mortensen, CEO and founder of x.ai, maker of AI-based virtual assistant Amy, agreed. “I look at our firm and two-thirds of the jobs here didn’t exist a few years ago,” said Mortensen.

In addition to creating new jobs, AI will also help people do their jobs better — a lot better. At the World Economic Forum in Davos, Paul Daugherty, Accenture’s Chief Technology and Innovation Officer summed this idea up as, “Human plus machine equals superpowers.”

For many reasons, the optimistic view is likely the more realistic one. But AI’s ability to transform work is far from preordained. In 2018, workers are not being adequately prepared for their futures. The algorithms and data that underlie AI are also flawed and don’t reflect the diverse society it’s meant to serve.

How AI Could Grow Jobs: Inventing New Ones, Empowering Existing Ones

While AI will certainly displace some jobs, such displacement has occurred long before AI was on the scene. In the past century, we’ve seen the demise or diminishment of titles like travel agent, switchboard operator, milkman, elevator operator and bowling alley pinsetter. Meanwhile, new titles like app developer, social media director, and data scientist have emerged.

Daugherty and Jim Wilson, managing director of Information Technology and Business Research at Accenture Research have co-authored a book titled Human+Machine: Reimagining Work in the Age of AI. In their view, future (and current) jobs include trainers and explainers. Trainers will teach AI systems how to perform and mimic human behaviors. Explainers will liaise between machines and human supervisors.

Trainers

Chatbots have recently emerged as a new communications conduit for brands and consumers. It’s no secret though that they have often been stiff and offered inappropriate responses. For instance, we might say “It’s raining again. Great,” and humans would recognize the sarcasm. A machine wouldn’t.

Understanding language is one component of perfecting chatbots. Another is empathy. A new wave of startups is injecting the emotional intelligence into chatbot-based communication.

Eugenia Kuyda, cofounder of Replika, said empathetic chatbots like hers rely on human trainers. “In the future I think one of the most interesting areas of knowledge will be knowing human behavior and psychology,” she said. “You have to build chatbots in a way that makes people happy and want to achieve their goals. Without a certain amount of empathy, it’s not going to happen.”

In addition, companies like Facebook and Google use humans to moderate content. Facebook currently employs around 7,500 people for this purpose. Google parent company Alphabet also recently said it planned to have 10,000 people moderating YouTube content.

Explainers

Trainers bring a human element to AI systems, but “explainers” will bridge the gap between the new systems and their human managers.

C-suite executives, for instance, will be uneasy about basing decisions on “black box” algorithms. They will need explanations in plain English — delivered by a human — to ease their concerns.

Legislation is another impetus. The European Union’s General Data Protection Regulation, which goes into effect this year, includes the “right to explanation.” That means consumers can question and fight any decision made on an algorithmic base that affects them.

Such explainers will perform “autopsies” when the machines make mistakes. They will also diagnose the error and help to take steps to avoid similar mistakes in the future.

Empowering Workers, Businesses and Industries

Rather than replacing workers, AI can be a tool to help employees work better. A call center employee, for instance, can get instant intelligence about what the caller needs and do their work faster and better. That goes for businesses and industry too. In another example, in life sciences, Accenture is using deep learning and neural networks to help companies to bring treatments to market faster.

In addition to helping existing businesses, AI can create new ones. Such new business include digital-based elder care, AI-based agriculture and AI-based monitoring of sales calls.

Finally, automation can be used to fill currently unfilled jobs. As Daugherty noted recently, there is a shortage of 150,000 truck drivers in the U.S. right now. “We need automation to improve the productivity of the drivers, the lifestyle of the drivers to attract more people to the industry,” he said.

Changes We Need To Make Today

It will likely take a decade or so until some AI technologies become the norm. While that provides plenty of lead time for the transition, few companies are taking action now to train their workers. Another little-noticed problem is that the AI systems themselves are being created with data and algorithms that don’t reflect the diverse American society.

Regarding the former, Accenture research shows business leaders don’t think that their workers are ready for AI. But only 3% of those leaders were reinvesting in training. At a Davos meeting held by Accenture, Fei-Fei Li, an associate professor at Stanford University and director of the school’s AI lab, suggested using AI to retrain workers. “I think there’s a really exciting possibility that machine learning itself would help us to learn in more effective ways and to re-skill workers in more effective ways,” she said. “And I personally would like to see more investment and thought going into that aspect.”

Another issue to address in 2018 is the lack of diversity among the companies creating AI. As Li noted, this lack of diversity “is a bias itself.” Recent research from MIT has underscored this point. MIT Media Lab researcher Joy Buolamwini said she found evidence that facial recognition systems recognizing white faces better than black faces. In particular, the study found that if the photo was of a white man, the systems guessed correctly more than 99 percent of the time. But for black women, the percentage as between 20 percent and 34 percent. Such biases have implications for the use of facial recognition for law enforcement, advertising and hiring.

As such research illustrates, AI may present itself as an alien force of disruption, but it’s actually a human invention that reflects its creator’s flaws and humanity. “The effect of AI on jobs is totally, absolutely within our control,” Cathy Bessant, chief operations and chief technology officer, Bank of America, said in her Davos chat. “This isn’t what we let AI do to the workforce, it’s how we control its use to the good of the workforce.”

This story was produced by the WIRED Brand Lab for Accenture.

Behold the IoT Invasion: Eight Reasons to Plug In (Slideshow)


John McDonald, CEO, ClearObject | Mar 12, 2019 for IndustryWeek

An IoT integrator shares what big trends to capitalize on in the next few years

 

By 2021 consumer spending on digital products and services is predicted to double, and the Internet of Things (IoT) space grew just as fast in 2018. Every industry is looking for new, advanced ways to meet production and consumer demands in a world of instant gratification. These trends are some of the things we see as an IoT systems integrator that will continue in the forefront of 2019 and beyond.

IoT and data are critical for today’s operations in any industry. It’s no longer feasible to ignore the benefits for efficiency, productivity and customer satisfaction that are results of using advancements in IoT and data. Each and every industry must adopt new and inventive methods like IoT and machine learning to analyze transactions and data in any form whether it’s a car that can detect driver fatigue, preventive maintenance sensors, or nanotechnology to monitor food sources.

Click on Start Slideshow for eight areas that should see serious growth in the next few years:

Start Slideshow

John McDonald is the CEO of Fishers-based ClearObject and chair of the Indiana Technology and Innovation Policy Committee.

When Digital Transformation Does Not Happen: Big Box Retailers That Closed Their Doors In 2018


DANIEL LEAL-OLIVAS/AFP/Getty Images Getty

Jan 22, 2019  02:42pm

By Blake Morgan, Contributor – CMO Network (Forbes), Customer Experience Futurist, Author, Keynote Speaker

 

When it comes to retail, the only constant is change. Today news broke that Starbucks will be trying delivery to customers, as the in-store experience has lost some traffic. As you will find out below, not everything that Starbucks touches turns to gold, such as Teavana. Those who compete on customer experience today are doing so by competing on logistics. A digital transformation that includes logistics and supply chain prove to be the power of companies that remain relevant to customers. Target is an example of a company that struggled to get a hold on the digital aspect of its business, and outsourced its digital side and website to Amazon from 2003 – 2011. They saw digital as ancillary but eventually woke up. They focused on supply chain combining digital and in-store inventories enabling them to get customer’s their orders faster. Target became a company that used technology to improve its supply chain and offer curbside pick-up for customers. Not to mention the success of its many Target-only brands. Target has triumphed seeing a twenty nine percent growth in online sales in 2018 and a growth in retail sales as well (almost six percent). But for those who refuse to go through a digital transformation fast enough, the risk is real.

In 2018 when some iconic retailers shuttered their doors by either completely going out of business or closing a portion of their stores. Retail is incredibly competitive, and specialty stores or brands that can’t innovate and compete often fall by the wayside. Thanks to Amazon and an explosion of direct to consumer companies like Casper, Dollar Shave Club and Away, more big box retailers are closing their doors.

Here are the top 9 biggest retail closures of 2018:

1. Toys R Us

Iconic toy store Toys R Us closed the doors of all of its 735 stores in June after months of liquidation sales. It marked the end of an era for brick-and-mortar shopping in standalone toy stores. Even with a loyal customer base and strong rewards program, Toys R Us had problems keeping up with online toy retailers and big box stores.

2. Sears Holdings

Sears has been battling to survive since it filed for bankruptcy in October. As a result, the company is restructuring and focusing on a smaller core of profitable stores. Sears Holdings announced in late 2018 that it will close more than 140 Sears and Kmart stores. Sears used to be a prominent retail store, but both Sears and Kmart have faced difficulties in recent years with increased competition and the growth of e-commerce. When given the choice to shop more modern brands online or go to an older Kmart store, customers are choosing the former.

3. Lowe’s

Home improvement store Lowe’s closed 51 stores across the U.S. and Canada. Nearly half of the under-performing stores are within 10 miles of another Lowe’s store, which has allowed employees to transfer to new locations. Closing less profitable stores will allow the company to focus on stores with big earnings.

4. Mattress Firm

Also on the list of retailers that filed for Chapter 11 bankruptcy is Mattress Firm. As a result, the company closed 700 of its more than 3,300 stores. Stores closed quickly after the announcement, some within a few days and others within a few weeks. Most of the stores that closed were in markets that already had numerous other Mattress Firm locations. In recent years, many customers have moved to ordering mattresses online.

5. Brookstone

Mall and airport staple Brookstone filed for bankruptcy in August after a long period of slumping sales. Brookstone closed or is in the process of closing all 102 of its mall stores. However, it is adding 35 new stores in airports to help meet revenue goals. Airport stores tend to be smaller but gain lots of traffic from tired travelers wanting to test the famous massage chairs. Brookstone’s mall locations simply couldn’t compete with online retailers, and most consumers found it easier and more enjoyable to find their quirky gadgets online.

6. GNC

Vitamin store GNC closed 200 stores across the U.S. and Canada after slumping sales. The company said it was trying to renegotiate leases to lower the number of stores it closed, but that didn’t turn out. There are still more than 9,000 GNC stores around the world, but more locations could close if the company can’t turn things around. With its specialty products, GNC is in competition with other vitamin retailers and online stores.

7. Foot Locker

A fixture of many malls, Foot Locker closed 110 stores in 2018, mostly in malls that the company said were “starting to deteriorate.” As it closed underperforming stores, Foot Locker starting putting a bigger emphasis online. However, brick and mortar isn’t completely dead for Foot Locker: it also opened 40 new stores in 2018, including a Champs Sports flagship store in Times Square.

8. Teavana

Starbucks shut the door on its retail tea chain, Teavana. Most of the stores hadn’t been performing well, and Starbucks wanted to move the company in a different direction. In recent years Starbucks tried to spice things up with improved store designs and creative packaging, but it wasn’t enough. All 379 Teavana stores closed in 2018.

9. Claire’s

Home to tween girl accessories, Claire’s filed for Chapter 11 bankruptcy in March 2018 and announced it was closing more than 90 stores. It’s the perfect storm for Claire’s: aging customers, dying malls with slowing foot traffic and a move to online shopping. The store has also faced more competition from big box chains like Target and Walmart.

Nothing in retail is ever certain, especially as e-commerce continues to boom. Stores need to find ways to adapt or they might follow in the doomed footsteps of these retail stores.

Blake Morgan is a keynote speaker, futurist and author of “More Is More.” Sign up for her weekly customer experience newsletter here

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Note: The following link is not part of this article from Blake Morgan, but provides further details on additional bankruptcies experienced from 2015 through early 2019. It is quite extensive, but a very good review (Infographic with commentary) of the “Retail Apocalypse” and the impact of big-box retailers falling behind the technology curve and not shifting to e-commerce and establishing an online presence early enough:  Here’s A List Of 68 Bankruptcies In The Retail Apocalypse And Why They Failed from CBInsights (March 12, 2019).

The World Wide Web Turns 30. Where Does It Go From Here?

Sir Tim Berners-Lee invented the World Wide Web in 1989.- Tristan Gregory/Redux

By Tim Berners-Lee, Inventor of the World Wide Web – Opinion – 03.11.19  05:00 PM for Wired

 

Today, 30 years on from my original proposal for an information management system, half the world is online. It’s a moment to celebrate how far we’ve come, but also an opportunity to reflect on how far we have yet to go.

The web has become a public square, a library, a doctor’s office, a shop, a school, a design studio, an office, a cinema, a bank, and so much more. Of course with every new feature, every new website, the divide between those who are online and those who are not increases, making it all the more imperative to make the web available for everyone.

And while the web has created opportunity, given marginalized groups a voice, and made our daily lives easier, it has also created opportunity for scammers, given a voice to those who spread hatred, and made all kinds of crime easier to commit.

Against the backdrop of news stories about how the web is misused, it’s understandable that many people feel afraid and unsure if the web is really a force for good. But given how much the web has changed in the past 30 years, it would be defeatist and unimaginative to assume that the web as we know it can’t be changed for the better in the next 30. If we give up on building a better web now, then the web will not have failed us. We will have failed the web.

To tackle any problem, we must clearly outline and understand it. I broadly see three sources of dysfunction affecting today’s web:

  • Deliberate, malicious intent, such as state-sponsored hacking and attacks, criminal behavior, and online harassment.
  • System design that creates perverse incentives where user value is sacrificed, such as ad-based revenue models that commercially reward clickbait and the viral spread of misinformation.
  • Unintended negative consequences of benevolent design, such as the outraged and polarized tone and quality of online discourse.

While the first category is impossible to eradicate completely, we can create both laws and code to minimize this behavior, just as we have always done offline. The second category requires us to redesign systems in a way that changes incentives. And the final category calls for research to understand existing systems and model possible new ones or tweak those we already have.

You can’t just blame one government, one social network, or the human spirit. Simplistic narratives risk exhausting our energy as we chase the symptoms of these problems instead of focusing on their root causes. To get this right, we will need to come together as a global web community.

At pivotal moments, generations before us have stepped up to work together for a better future. With the Universal Declaration of Human Rights, diverse groups of people have been able to agree on essential principles. With the Law of Sea and the Outer Space Treaty, we have preserved new frontiers for the common good. Now too, as the web reshapes our world, we have a responsibility to make sure it is recognized as a human right and built for the public good. This is why the Web Foundation is working with governments, companies, and citizens to build a new Contract for the Web.

This contract was launched in Lisbon at Web Summit, bringing together a group of people who agree we need to establish clear norms, laws, and standards that underpin the web. Those who support it endorse its starting principles and together are working out the specific commitments in each area. No one group should do this alone, and all input will be appreciated. Governments, companies, and citizens are all contributing, and we aim to have a result later this year.

Governments must translate laws and regulations for the digital age. They must ensure markets remain competitive, innovative, and open. And they have a responsibility to protect people’s rights and freedoms online. We need open web champions within government—civil servants and elected officials who will take action when private sector interests threaten the public good and who will stand up to protect the open web.

Companies must do more to ensure that their pursuit of short-term profit is not at the expense of human rights, democracy, scientific fact, or public safety. Platforms and products must be designed with privacy, diversity, and security in mind. This year, we’ve seen a number of tech employees stand up and demand better business practices. We need to encourage that spirit.

And most important of all, citizens must hold companies and governments accountable for the commitments they make, and demand that both respect the web as a global community with citizens at its heart. If we don’t elect politicians who defend a free and open web, if we don’t do our part to foster constructive, healthy conversations online, if we continue to click consent without demanding our data rights be respected, we walk away from our responsibility to put these issues on the priority agenda of our governments.

The fight for the web is one of the most important causes of our time. Today, half of the world is online. It is more urgent than ever to ensure that the other half is not left behind offline, and that everyone contributes to a web that drives equality, opportunity, and creativity.

The Contract for the Web must be not a list of quick fixes but a process that signals a shift in how we understand our relationship with our online community. It must be clear enough to act as a guiding star for the way forward but flexible enough to adapt to the rapid pace of change in technology. It’s our journey from digital adolescence to a more mature, responsible, and inclusive future.

The web is for everyone, and collectively we hold the power to change it. It won’t be easy. But if we dream a little and work a lot, we can get the web we want.

This story was co-published with the World Wide Web Foundation.

Digital Transformation, Dynamic Threats and Growing Accountability

March 1, 2019

By Mark Sangster, Chief Security Strategist at eSentire, Inc., contributor to SecurityMagazine.com

 

Businesses today accept the presence of cyber risks. In fact, 70 percent assume a business-altering event will occur in the next few years (FutureWatch Report), but often have a more difficult time identifying specific risks, key factors and mitigation strategies. Worse, the board or senior leadership often makes assumptions about the safety of the firms that is overly optimistic when compared to confidence ratings of security practitioners.

The difference between awareness and understanding is driven by the communication gap between the board and executives steering the business, and the security experts close to the problem. Both parties struggle to comprehend the other’s needs and responsibilities.

A firm’s risks stem from a handful of business aspects, including the firm’s participation in high-risk industries, its appetite for emerging technologies, and willingness to properly invest in targeted security practices. While this sounds obvious at first, it’s lost when the line of sight from the security practitioners to the board is over the horizon.

This article will explore board-level concerns, key drivers to invest in security, and how emerging technologies outpace the evolution of security technologies and services. The data presented in this article was collected in late 2018, through third-party research that surveyed 1,250 security executives, managers and practitioners. Data was collected from the United States, Canada and the United Kingdom. Participants were equally represented across various industries and company sizes, ranging from less than 100 employees to 5,000 employee or more. Read the full FutureWatch Report.

Major Attacks Are an Assumption

Unanimously, business leaders such as the CEO, board members and technical executives (CIO) alike predict a major cyber-attack in the next two to five years. Over 60 percent of respondents assume a major event will occur. Interestingly, 77 percent of CEO and board respondents consider their organization prepared for such an event. As expected, technical leaders are approximately 20 percent more likely to predict an attack and are 10 percent less optimistic than their business peers in their organization’s preparedness.

Senior leadership fears operational disruption, reputational damage and significant financial losses over regulatory penalties as top consequences of a major security event.

While business leaders show a confidence in their firm’s ability to manage a security breach, the devil is in the details. Only 29 percent of respondents indicated that their high-value or high-profile information is not adequately protected. And two-thirds of respondents are not confident that their cybersecurity programs match their peers, nor that their programs are appropriately resourced.

The Cybersecurity Rosetta Stone

Boards and security practitioners still struggle to translate their concerns and objectives. Only one-third of business leaders are confident in their security executive’s ability to monitor and report on cybersecurity programs and 66 percent worry that these programs are not aligned to business objectives.

IT and security leadership sentiments echo this concern. Most organizations struggle to show the value of IT security spend to senior management, including status reporting difficulties. Aligning to enterprise risk management confounds over half of businesses, along with the ability to managed external risks with third-party vendors and the growing complexity of regulatory compliance.

On the positive side, progress has been made over the last few years. The CISO is no longer the least interesting person to the board, until they are the most important person.  Over half of respondents indicate their board is very familiar with the security budget (51 percent), overall strategy (57 percent), policies (58 percent), technologies (53 percent), and currently review current security and privacy risks (51 percent).  Moreover, line of sight from the CISO to the board is more direct. Forty-five percent of security officers report to the board or CEO, 33 percent continue to report to the CIO and a small handful (10 percent) report to a privacy or data officer.

Moreover, nearly two-thirds of security budgets are set to rise in 2019. Spend on the security side is still reactionary. While regulatory requirements is in the basement of the board’s concerns, it tops the list for security practitioners. A security teams spend is generally reactive to client demands, major technology purchases, a major security event or near miss, and the adoption of emerging technology.

Emerging Technology: A Double-edged Sword

IT and security teams find themselves in a difficult position between meeting the demands of the business to adopt emerging technologies that offer competitive advantage, while also carrying the burden of mitigating the risks that come along with new deployments.

Nearly three-quarters of respondents are currently using cloud services or plan to deploy cloud services in the next six months, with financial services, manufacturing and healthcare leading the adoption rate. Only law firms lag in their cloud adoption. Artificial Intelligence (AI), Internet-of-Things (IoT) and Industrial IoT (IIoT) top the list behind cloud.

Cloud security adoption is the priority, followed closely by identity and access management, threat detection and response, and endpoint detection and response. Security Information and Event Management (SIEM) moves beyond a compliance tool and now plays a role in the greater detection and response portfolio.

More than half of telecom, information technology, financial services and manufacturers invested in securing their cloud services. Similarly, financial services, healthcare and manufacturing also emphasize threat detection and response investments. These industries are equally investing in identity and access management as a response to a more distributed workplace. Again, law firms are significantly less likely to adopt these technologies.

Digital transformation is here to stay and brings with it a drive to always evolve and constantly change. Economics demand that vendors constantly improve and offer new features and technologies which outpaces our understanding of the associated risks. We focus on the benefits while assuming vendors have resolved the security issues. For example, cloud technology tops the list of security priorities today, but AI and IoT/IIoT are on track to surpass cloud as the primary risk concern in less than two years.

This challenge will only increase over the coming years as 5G facilitates a ubiquitous mosaic of always connected devices. Risk associated with emerging technologies becomes more concerning as adoption rates accelerate, compressing the time in which organizations and vendors can adapt and develop appropriate security controls and deploy protective solutions.

Most Susceptible to Risk: Law Firms, Transportation and IT

Law firms lead when it comes to risks associated with external actors and attacks and their ability to report status, show value and meet internal risk standards and regulatory requirements. Transportation and IT firms report higher than average levels of risk. Financial services tend to run just below industry averages across external attacks and internal or industry requirements.

Digital Transformation Outpaces Current Security Approaches

Digital transformation touches every facet of business operation and redefines how businesses engage with their customers. The emerging technologies underpinning this tectonic shift must constantly expand capabilities and adapt to survive in a competitive environment. Current security approaches are not fluid enough to keep pace with adoption of emerging technology and platforms.

Today, most firms identify their primary security posture as leveraging prevention technologies and device management. Firms that leverage a predictive security model such as threat hunting, machine learning, and device analytics reduce their risk by thirty percent. Less than one-fifth of firms identify as predictive. The trend is consistent across all industry segments with financial and healthcare services leading the charge and law firms lagging.

Firms adopting predictive security models are better able to identify never-before-seen threats and have engaged rapid response capabilities to reduce the risk of a business-altering event. Over the next two years, older preventative models drop to less than one-third, while predictive threat hunting will more than double to 40 percent. This trend correlates with the shift in business drivers away from regulatory dominance toward business-centric considerations such as operational disruption, reputational damage, and, of course, financial losses.

Interestingly, advanced firms are more apt to adopt emerging security technologies such as endpoint, threat detection and response, identity access management, and cloud security. Moreover, mature firms aggressively leverage SaaS and are more likely to adopt 100 percent cloud-based security services than firms using a device-management model. Outsourcing is a palatable alternative to recruiting and retaining threat hunting talent from a pool that cannot support the growing demand.

Digital Transformation, Dynamic Threats and Growing Accountability

Digital transformation continues to expand a larger and more fluid attack surface from the advanced methodologies used by well-resourced adversaries like organized criminals and nation-state actors. Regardless of industry, businesses operate in a world with ever-increasing accountability to protect their clients’ confidential information, adhere to state legislation, comply with privacy laws and meet the growing complexity of overlapping regulatory obligations.

This triad of risk demands that IT, security practitioners, and leaders align with business governance objectives, while senior leadership acknowledge their role in establishing expectations and providing resources to adequately protect the business, its investors, employees and customers.

We’ve left the world of prescriptive regulations as a measure of security end state. Many organizations recognize that the financial loss associated with operational disruption and reputational damage outweigh the penalties set out by regulators. In the future, organizations will likely move to a perspective driven by their clients. In this state, brand and reputation will form the barometer by which a company’s security performance is ultimately measured. Protecting the client will mean by extension, protecting their data and services, avoiding operational disruption and resulting financial losses.


Author: Mark Sangster, Chief Security Strategist at eSentire

Mark Sangster is an industry security strategist and cybersecurity evangelist who researches, speaks and writes about cybersecurity as it relates to regulations, ethical obligations, data breach incident response and cyber risk management.

Gartner Indicates Seven Future CMO Spending Trends in Their Latest Survey

Viraj T

Gartner Surveys 600 Marketing Champions Across the US and the UK to Uncover Industry Trends for Enterprises to Prioritize Their Budgets and Allocate Funding

Innovation emerges as the loudest thought in a CMO’s cognizance! About 16 percent of Chief Marketing Officers have confirmed that they spent the maximum on innovation in 2018 — two-thirds confirmed that spending on innovation will grow next year. The irony here is that marketing leaders admitted they are not very confident about how to innovate or exactly where to spend — although beaming of huge ambition about being innovative.

MarTech Series runs down Gartner’s findings and talks about eight trends for 2019 and beyond where marketing leaders are most likely to spend.

1.    Digital Marketing

The winds of change have begun to flow! Businesses are going digital by the hordes and the pursuit to make businesses successful on digital mediums has now gotten the eyeballs of the entire C-suite. 57 percent of marketing leaders are confirming now that they would be inclined to spend on digital marketing endeavors.

We interacted with Derek Slayton, CMO Terminus, and asked him his views on 2019 CMO spend:

Derek Slayton
Derek Slayton

“I actually think marketers are going to have to spend on technology to help with the first two bullets (better targeting and better measuring progress). Most activity-oriented systems today don’t help with where we point the resources and how we measure success.

As far as my team goes — tech aside from Terminus tech (which we are using for segment identification and measurement) — we are excited about Vidyard because it helps us focus on creating great connections with key accounts and stakeholders.”

However, CMOs need to work in conjunction with CFOs. Convincing financial officers to invest for methodologies not yet in the limelight can be extremely hard for the CMO. More so, even if they agree, the CMO is accountable for ROMI.

Also Read: Gartner Predicts Digital Optimization Will Disrupt CRM Sales Technology

2.    MarTech

Marketing Technology is on the radar of CMOs for investment. MarTech spend has increased when compared to the percentage spend last year (29% in 2018 as against 22% in 2017). Evidently then, MarTech is the crux of CMO spend because it serves as the paramount source of marketing resources and initiatives.

As per Gartner’s survey, CMOs will be spending the most on the below mentioned ‘big three’ technologies:

  1. Email Marketing platforms
  2. Web Content Management
  3. Digital Marketing Analytics platforms

Although, Ewan McIntyre, who is the lead author of the report, asks CMOs to practice caution. MarTech is extremely effective but can be costly. Marketing leaders need to think this through in order to avoid financial disasters.

3.    Advertising

The survey reflects the CMO’s annual spend for 2018 was capped at 21 percent for advertising. This is for both offline and online (digital) models of advertising. However, as per the first trend of this report, CMOs now prefer to spend a lot more (two-thirds out of the 21 percent budget) on digital advertising. Paid advertising on digital channels such as search engines, social mediums, et al. are the focus areas of digital advertisement spending.

Also Read: Can Google’s Flutter Truly Solve the Developer Nightmare of Cross-Platform Application Programming?

We spoke to Jenn Steele, CMO, Madison Logic, to understand if she agrees with the trends:

Jenn Steele
Jenn Steele

“Well, ABM is still super-hot, so I see people continuing to spend on various ABM tactics. At our recent client summit, everyone was buzzing around how to use data in the best ways, so data sources and solutions should be in most marketers’ budgets.

Personally, I’m looking at AI tools such as Drift and Conversica so that I can do more with less (because we all have to do more with less, right?). These tools help us drive contacts to a more “ready” state before we have to get a more expensive human being involved.”

GDPR and the current atmosphere of user privacy and data security is the worst nightmare for owners of digital mediums. Even when red flags are being raised for brands as huge as Facebook, marketing leaders choose to continue ingesting a substantial chunk of dollars for paid advertising. Main reasons? Increasing revenues and proving to stakeholders that marketing is a critical cog to aid the enterprise’s engine to run smoothly. Other reasons are bolstering brand value gaining new business.

4.    Workhorses

Tech watchers are going gaga over emerging technologies such as ABM, AI, ML, Programmatic and Native among many others. Even then, CMOs spend a whopping 25% on workhorse technologies such as email, organic search, paid search, etc. So why do marketing leaders continue to invest in these technologies that belong to a prior phase of MarTech evolution? Here are the reasons:

  • These channels are easy to measure for ROI
  • Easier to groom in-house talent to operate workhorse technologies
  • Easier to prove the effectiveness of these channels to stakeholders compared to newer, impactful but complex technologies

Workhorse technologies still work, and really well!

5.    Innovation

Innovation is a major focus area for the CMO. According to 9 percent of the CMOs surveyed, innovation will be vital in enterprise growth over the coming 18 months. And they are right — the business eco-system overall is flux. Disruptions, changing consumer behaviors, M&As, and so many other factors are ensuring that it is difficult for enterprises to run their business. Hence, innovation automatically becomes the fallback element of every enterprise.

Also Read: Interview with Peter Isaacson, CMO, Demandbase

To confirm the growing importance of innovation, now, 63% of CMOs confirm that their spend on innovation will only grow in 2019.

Speaking about innovation, Jeff Nolan, CMO, Kahuna, said,

Jeff Nolan
Jeff Nolan

“Modern marketing is increasingly centered on data science, and if we accept that premise, CMOs will spend big on AI. The underlying neural networks are services now. It is the training model and ability to ingest massive amounts of data, which is generated by your systems but increasingly purchased from other vendors, that is the critical element in these initiatives. I am in a B2B market, so what I’m looking at are technologies that give me deep perspective on funnel and pipeline. I want to be able to look at my demand gen activities holistically but then down to increasing granular cohorts that I can gauge for the probability to close, or not.

This is important for me because this will give me insight into where I should be focused, which then guides strategy and tactics. Where existing analytics solutions come up short is that they start with a premise of “this is good, do more of it,” which leads to unnatural bias that gets increasingly narrow in scope, and then misses the opportunities that emerge that are outside of the static scoring models. Basically, I need a really intelligent system that is capable of generating human insights on data across a portfolio of groupings and metrics.”

Marketers nowadays employ a hybrid marketing strategy for their campaigns. Here the hybrid model will mean sticking to the core marketing tactics and methods while embracing and applying newer technologies. But as discussed before, Chief Marketing Officers’ abilities do not really match up to their ability to innovate. The survey is indicative though marketers want to change and be more matured and absorb innovation.

6.    Customer Experience

The start-up culture is going full throttle. Newer companies that offer innovative, cutting-edge and problem-solving technical capabilities are being founded in multitudes. This has given rise to stringent competition and made it harder for businesses to better serve their existing customers and gain newer ones. From a customer standpoint, their expectation from a brand about how they want to be treated has skyrocketed.

Spending on Customer Experience (CX) has been picking up speed from the past several years. According to the survey concluded, it will see a good amount of CMO spend over the coming one and a half years. CMOs that were a part of the survey have declared that they will be spending 18% of their budget on Customer Experience.

7.    Personalization

Personalization is an extension of existing enterprise efforts towards providing a maximum positive customer experience. CMOs are spending an average of 14.2 % of their budgets on personalization efforts. The interesting element here is that double-digit spends are common across industries. The spending is critically invested in gaining deeper insights into the accumulated customer data.

Richard Black, CMO at Aki Technologies, said,

Richard Black
Richard Black

“I think brand CMOs will continue to increase their spend on the media that actually works. These days, mobile is no longer a place to test; it’s where a brand has to be because consumers have their devices with them all day long. Eyeballs are always on mobile.

So, smart CMOs will look for tech that helps them optimize and maximize the impact of mobile dollars so they reach people when they are most receptive to marketing messages. AI developments will help there. And, of course, video can make mobile creative even more impactful. OTT is another area that I see spend increasing with better and better content coming through and more eyeballs heading that way.”

Considering GDPR, marketers need to be careful about not pushing too much in their efforts to obtain data. This might just completely drive away consumers. Marketers may have dollars and data but there is an atmosphere of uncertainty pertaining, where marketers must tread cautiously. Marketing leaders need to develop fool-proof strategies taking into account the current market and consumer complexities.

Clearly, 2019 seems to be the year for innovation and customer experience with statistics pointing at a maximum spending in these spheres. The survey also speaks of changing patterns of marketers towards their perspective on the whole marketing operations stream. Typically, to gauge marketing performance, businesses have a fixed set of KPIs that are crafted around ROI and customer satisfaction. However, marketers are adamant that they would want to design their campaigning around brand awareness.

Andrea Lechner-Becker
Andrea Lechner-Becker

Here is Andrea Lechner-Becker, CMO, LeadMD, with the parting note:

“I think they’ll spend on technology. But I wish they’d spend on headcount and training. Marketing teams, regardless of size, are missing core and important skill sets. We have not educated marketers well at the collegiate level in a decade. The pace of change in marketing is too fast to go to a conference or webinar here or there and maintain the ability to be “good” at your job.

Technologies I’m looking at… I’m obsessed with B2B data right now, or the lack of great data. I want someone to fix the buyer insights data problem for me.”

Recommended Read: TechBytes with Josh Martin, Sr. Director, Product Marketing, Brightspot CMS

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