E-guide

CIO Trends #7
IT leadership best practices for CIOs, CTOs and CDOs
 CIO Trends #7

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
In this e-guide:
Read some of our most popular articles on issues faced by IT
decision makers, such as how to get the most out of the
internet of things, and how to tailor your IT operating model to
fit in the digital age.
We explore how Canada’s tech sector is targeting Europe and
what CIOs can expect from the country’s industry. We also
speak to Wagamama CIO about adopting “pay by walking out”
technology so that customers don’t have to wait for their bill
before leaving a restaurant.
Lis Evenstad, management editor

CIO interview: Richard

Tallboy, CIO, Wagamama

Page 1 of 41

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 2 of 41
CIO Trends #7
Canada’s tech sector is targeting Europe –
does it have what it takes to compete?
Bryan Glick, editor-in-chief
Despite strong historic and cultural links to the UK and France, Canada is only
the 16th largest exporter of technology-related products to the European Union,
with a market share of just 0.5% of EU tech imports.
That is a situation the country hopes to improve as new economic and
geopolitical opportunities open up, encouraging the Canadian government to
target IT buyers in the EU to promote and grow its IT sector.
Ask a European CIO to name a Canadian tech company and they may mention
BlackBerry – formerly a flagship, until it became a shipwreck. Similarly, Nortel
was a well-known telecoms supplier in Europe until 2009, when it became
Canada’s largest bankruptcy.
In contrast, Canadian IT service provider CGI was biggest winner of new UK
government IT contracts in 2017, with £844m of deals, largely a legacy of its
2012 acquisition of Logica for £1.7bn.
And if you have a requirement for content management systems, you’re likely to
be familiar with OpenText, Canada’s largest software company.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 3 of 41
CIO Trends #7
Frankly, that’s probably the extent of most European IT leaders’ knowledge of
the country’s tech sector. However, the elimination of tariffs on Canadian IT
products under the CETA free-trade deal agreed between Canada and the EU
in 2017 – and the current political instability of its nearest neighbour – could
mean that is about to change.
Declining industries
Canada’s historic industrial strengths in oil and gas, commodities mining and
agriculture are slowly declining and the government is looking to invest in new
growth sectors, particularly technology and life sciences.
With a young, liberal, media-friendly prime minister in Justin Trudeau
contrasting with the belligerence and nationalism of US president Donald
Trump, Canada hopes to take advantage.
“Trudeau is our best salesman – Trump is our second-best salesman,” said one
Canadian economic development executive, during a visit by Computer Weekly
to Montreal to meet some of the tech sector’s emerging leaders. Several people
echoed the “Trump effect” as a timely driver for Canada’s plans.
For example, Vancouver, on Canada’s Pacific coast, is less than two-and-a-half
hours’ drive from Seattle, home to Microsoft and Amazon. Both tech giants are
building sizeable development centres in the city because it is easier to bring in
overseas tech talent thanks to Canada’s visa regime.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 4 of 41
CIO Trends #7
In the US, Trump’s immigration crackdown means some foreign workers aren’t
allowed in, and even for those who are, the number of H-1B visas typically used
for high-level tech jobs has been reduced over time.
By contrast, the Canadian government is operating a two-year pilot programme
to attract global talent, whereby anyone with the requisite tech skills and a job
earning at least C$80,000 can get a work visa in just two weeks.
Also, through a combination of federal and regional tax credits for businesses,
the government will fund up to 50% of salary costs for e-business and research
and development (R&D) activities.
Samsung, Google, Facebook and Apple are among the global tech companies
looking to take advantage by investing in Canadian operations.
Innovation superclusters
In February 2018, the Canadian government announced a C$950m investment
in five “innovation superclusters” – with private sector funding to match – aiming
to create 50,000 jobs and grow the economy by C$50bn over 10 years.
Two of those projects cover IT. The digital technology cluster based in British
Columbia will look at big data, analytics, cloud, augmented reality and machine
learning, while the Scale:AI cluster in Quebec will focus on building intelligent
supply chains using artificial intelligence (AI) and robotics.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 5 of 41
CIO Trends #7
The superclusters bring together companies of all sizes in collaboration with
academia and not-for-profit organisations. In line with Trudeau’s inclusivity
policies, the clusters will also target increased representation for women and
minority groups in the programmes.
Montreal, Canada’s second biggest city, is already seeing progress from the
close links between its universities and investors, with a particular focus on AI
and digital media.
Ubisoft Montreal claims to be the largest computer games development studio
in the world, with 3,000 employees, while visual effects company Rodeo FX
worked on Game of Thrones and 2018 Oscar winner Blade Runner 2049. This
talent base is attracting interest from related sectors such as virtual and
augmented reality (VR/AR).
“There is a real crossover of skills between gaming and VR/AR content,” says
Sebastien Ebacher, a producer at Ubisoft Montreal and founder of Arnoovo,
which produces immersive content for virtual reality providers.
AI expertise
Montreal benefits from the global reputation of Yoshua Bengio, described as the
“Mick Jagger of AI”. Bengio is a pioneer in machine learning and neural
networks, who worked alongside Yann LeCun – now Facebook’s director of AI
research – and Geoffrey Hinton, now one of Google’s top AI researchers.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 6 of 41
CIO Trends #7
Bengio is a professor at Université de Montreal and leads the Montreal Institute
for Learning Algorithms (MILA), which claims to be the world’s biggest academic
research centre specialising in deep learning. Many top international academics
and PhD students in AI come to Montreal because of Bengio, and go on to form
startups to commercialise their university research.
According to Naomi Goldapple, programme director at Montreal AI incubator,
Element AI – which was co-founded by Bengio – there are only about 7,000
deep learning experts in the world, with most hoovered up by the big salaries on
offer at Facebook, Google and other internet firms. As such, any advantage in
the market for top skills is an important consideration.
Soodeh Farokhi, for example, is an Iranian computer scientist who came to
Canada in 2016 to set up C2RO, a cloud-based AI platform that uses software
as a service for real-time control of robots.
C2RO is part of a cohort of researchers-turned-entrepreneurs operating under
the auspices of TandemLaunch, a startup incubator that provides investment,
office space, expertise and contacts to take academic AI research and develop
it into commercial products.
“We search for solutions at universities,” says Omar Zahr, technology
coordinator at TandemLaunch. “Our technology scouts review over 4,000 deep
technologies each month. Academics and technical people are not always so
good at running companies, and we can help them.”

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 7 of 41
CIO Trends #7
Tech startups
Other startups in the TandemLaunch portfolio include Soundskrit, which is
developing smart microphones to improve audio and speech recognition for
devices such as smartphones and home assistants, using technology inspired
by the audio characteristics of insects.
Another firm is SpillAd, an advertising technology firm that uses sensors in
smartphones to deliver “context-aware” targeted ads and track behaviour. For
example, the product can tell whether a user is looking at an on-screen advert,
rather than simply having an advert visible but not taking any notice.
Deeplite is another example, developing ways to optimise deep-learning
algorithms so that neural networks can run on smaller, more energy-efficient
devices, rather than relying on large-scale, cloud or datacentre-hosted servers.
Outside of the TandemLaunch portfolio, Nexalogy is another Montreal startup
that provides deep analysis of social media data – to the extent that it has
developed its own bespoke parallel processing server technology to handle
such huge amounts of data.
Founder Claude Theoret – a former astrophysicist who researched black holes
– claims Nexalogy’s technology was the first to predict a Trump victory in the
US presidential race. He says the firm also worked on Justin Trudeau’s

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 8 of 41
CIO Trends #7
leadership campaign, helping to understand how the future prime minister was
perceived by voters and how he needed to change his image.
Regional expertise
But Montreal is not the only city or region investing in its technology ecosystem.
Every Canadian province has a story to tell, and local specialisations on which
to draw (see below). The country’s geography helps too, with cheap
hydroelectric power available to build low-cost datacentres, and cold winters
helping to reduce cooling needs.
In other emerging technologies, such as autonomous vehicles, photonics,
fintech, quantum computing and 5G, Canada is developing regional expertise
and research capabilities it hopes will attract talent and help to export its
products and services.
The country also pushes its relatively low cost of living and high quality of life as
a further attraction for top tech talent to relocate. Ottawa likes to mention that
citizens can sometimes ice-skate to work.
Competitive market
Canada certainly has a lot going for it, but it is starting from a lower base than
the EU rivals it hopes to compete with, and against European governments that
are also looking to boost their digital economies.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 9 of 41
CIO Trends #7
“The Canadian tech sector has some significant strengths, with a highly
educated workforce and good digital infrastructure,” says Thomas Goldsmith,
policy manager for Brexit and trade at UK IT trade body TechUK. “It has a
growing AI sector and could be well placed to benefit as these technologies,
and the market for them, develops more widely.
“But its biggest challenge is that it is entering a highly competitive market. Take
Google’s DeepMind – it might have opened its first overseas centre in Canada,
but the HQ is in the UK, with most of its research activity here. Likewise, many
other companies have significant R&D activities in the UK and Europe, and the
British and French governments are also actively investing significant sums to
promote their domestic AI industries.”
For the first time, Canada is sending a delegation to London Tech Week this
year, to promote its IT sector and to raise awareness of what it can do for
European tech and digital leaders. There is a lot of work to be done, but Canada
has a clear opportunity to develop a greater presence in European technology
markets.
Canada’s regional tech strengths
Ottawa
The Canadian capital, Ottawa, is “capitalising on a lot of disruptive technology
trends”, according to Adam Dewar, business development project manager at

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 10 of 41
CIO Trends #7
Invest Ottawa. The city is a centre for research into autonomous vehicles. Ford
has committed C$338m to a connected vehicle development centre, and
BlackBerry has a centre for its QNX automotive operating system software.
Dewar says Ottawa is “Canada’s most tech-intensive city”, and last year
conducted Canada’s first demonstration of an autonomous vehicle on a public
road communicating in real time with city infrastructure such as traffic lights.
Ottawa employs about 77,000 people in IT-related jobs.
Edmonton
The capital of Alberta province, Edmonton is Canada’s most northerly city, with
over one million inhabitants. It is also one of the largest producers of medical
marijuana – Canada legalised the drug this year. Edmonton has among the
lowest taxes, lowest average age and highest birth rate in the country – the
latter unconnected to the long winter nights and local marijuana expertise, of
course. But it is also a hub for AI and open data – the first North American city
to adopt the International Open Data Charter and with the highest score in
Canada’s Open Cities Index 2017. Google’s London-headquartered DeepMind
machine learning business opened its first lab outside the UK in Edmonton,
attracted by the academic talent at the University of Alberta, ranked second in
the world for AI and machine learning research. The city employs 19,000 people
in 1,300 tech companies.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 11 of 41
CIO Trends #7
Calgary
Best known as an oil and gas town – Canada’s equivalent of Aberdeen –
Calgary has suffered from the drop in global oil prices. As a result, it is turning to
the tech sector and claims the highest concentration of entrepreneurs and
startups per capita in the country. Calgary developed local skills through the
data-heavy energy industry, with expertise in 3D visualisation and geospatial
technology for mining and exploration. This, combined with its position as
Alberta’s banking and finance hub, has brought a focus on blockchain
development. “Blockchain is going to be very big for us,” says Terry Rock, CEO
of startup accelerator Calgary Technologies. The local government is investing
C$100m in new and existing tech businesses. The city is also the centre of the
Alberta SuperNet, a high-speed broadband network connecting 429
communities across the region, enabling high-speed internet access to 80% of
Alberta residents. GE and IBM have innovation centres in Calgary focused on
AI and IoT research for the oil and gas industries. The city employs 22,000
people in IT.
Quebec City
The capital of the French-speaking province of Quebec, the city has a unique
appeal for French tech companies, with Thales and datacentre firm OVH
housing development centres there, along with Swiss-Swedish engineering
group ABB, and Japanese firms Fujitsu and Olympus. Quebec City has a
particular focus on optics and photonics, as well as autonomous vehicles, IoT

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 12 of 41
CIO Trends #7
and smart cities, and animation/gaming. The city is home to 9,000 researchers
across 600 labs, with 19,500 workers in IT.
Winnipeg
The capital of Canada’s Manitoba province, Winnipeg benefits from its central
location. It is home to Sightline Innovation, one of Canada’s biggest machine
learning companies, and houses Canadian Tire’s main cloud computing facility.
In 2017, local visual effects technology firm Thinkbox Software was acquired by
Amazon Web Services, and in 2016 Winnipeg-based online food delivery firm
SkipTheDishes was bought by the UK’s Just Eat for C$200m in one of
Canada’s largest tech startup acquisitions. The city has more than 20,000 IT
employees working for over 1,300 companies, more than 160 computer science
academics and exported C$183m of technology last year.
Vancouver
Canada’s third-largest city benefits from being part of the British Columbia
digital technology supercluster, from its proximity to Seattle, and by being in the
same time zone as Silicon Valley. Microsoft is building a new city centre
campus with the University of British Columbia, and Amazon is opening a
3,000-employee R&D centre. It is also home to games maker EA’s largest
development studio. The city hosts some of Canada’s biggest tech events, such
as the BCtech Summit, Siggraph 2018 and TED. Some 75,000 people work in
IT, generating C$23bn in sector revenue.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 13 of 41
CIO Trends #7
Saskatoon
The capital of Saskatchewan is in the heart of Canada’s farming, foresting,
mining and commodities industries. Saskatoon is one of the smaller regional
cities, but houses the province’s first tech incubator, Co.Labs, which uses city
funding to attract innovators and entrepreneurs. About 8,000 IT employees work
at 80 companies in the city.
Toronto
Canada’s biggest city also boasts its largest tech hub, with 400,000 IT workers
in 14,000 companies – largely as a result of being the country’s financial
services capital. Google, Cisco, IBM and Microsoft all have their Canadian
headquarters in Toronto, with IBM conducting blockchain research. Fintech is
seen as a local strength. The city claims to have one of the largest clusters of
mobile app companies in North America, and the world’s highest concentration
of AI startups.
Next Article

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 14 of 41
CIO Trends #7
CW500: Getting the most out of the
internet of things
Lis Evenstad, management editor
The internet of things (IoT) is becoming mainstream, and connected devices are
everywhere – in our homes, on our streets, and in our lives.
Gartner predicts that by 2020, there will be more than 20 billion connected
devices in the world, presenting the IoT market with one of the biggest
opportunities today.
But how far have we actually come in reaping the benefits of IoT? And how do
you ensure IoT adoption is successful, and where do the best opportunities lie?
At the latest CW500 club, experts shared their tips, advice and real-life
experience on how to do just that.
It’s not just technology companies or new and modern businesses that can
benefit from IoT. In fact, the UK’s national mapping agency, Ordnance Survey,
is carving out its own place in the world of connected devices.
Ordnance Survey was founded in 1791, but that hasn’t stopped the agency from
embracing the digital world. Ordnance Survey’s director of innovation, Miranda
Sharp, told the audience at the CW500 club that a lot of work is being done to

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 15 of 41
CIO Trends #7
ensure the agency’s content is machine readable and ready for the big data
world.
Partnering with Space Syntax, a company originally spun out of University
College London, Ordnance Survey is analysing the data to help with several
areas, including city planning and connectivity on roads. An example Sharp
gave was using statistics on changes in land use to evaluate how much
greenfield land is being turned to brown, which areas of land are being built on,
and so on.
“We’re no longer just about rucksacks and damp people on hillsides,” Sharp
said, adding that the Ordnance Survey is the holder of “the biggest geospatial
data set in the world”, which is “frankly nuts” considering the size of the UK,
which only accounts for 0.2% of the world’s landmass.
So why is that relevant to IoT? When the Ordnance Survey was first born at the
end of the 18th century, “we were to map things we could hide behind and
shoot” at a time when we were worried about the French and the Scottish and
the likelihood of invasion, Sharp said.
Now, people need increasing detail, and that detail has to be mapped. In an
area of Manchester, south of Oxford Road, the Ordnance Survey mapped
everything at street level, such as bollards, cycling lanes, 40,000 assets of
yellow lines, cycling lanes, CCTV cameras and lamp posts to support IoT use
cases.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 16 of 41
CIO Trends #7
“Some of the use cases that emerged out of that were things like this, so this
enabled people with visual impairments to navigate safely around the urban
environment, because we’re able to tell them where everything is and we can
get them from their homes to their bus stops safely,” said Sharp.
In another area of Manchester, Ordnance Survey mapped changes in house
prices, following the extension of the Metro line to Didsbury.
Huge IoT potential
There are huge successes with IoT, but so far, Sharp said, the use cases we
are seeing are single use cases.
“Air quality monitors are just being used for measuring air quality, which is what
they were designed for. We’re seeing phones being used to track people. All
those sensors are producing enormous amounts of data that can be used in
many different ways. It’s the exploitation of the data that provides the biggest
opportunity in IoT,” she said.
“What we have yet to really uncover is the multiple use case benefit. How do we
get all the sensor data together to building a complete picture so we’re not
running individually optimised networks, but we’re running a system of systems
that can engage people and measure different outputs?”

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 17 of 41
CIO Trends #7
She pointed to the example of a connected, talking bus stop. Through your
mobile phone, or another sensor, the bus stop will know you’ve arrived and that
you get on the appropriate bus.
In the event of an emergency, the authorities will have an appropriate view of
the street-side population, the city will be able to plan the bus route better as it
will have rich data sources enabling it to send the right bus down the street at
the right time. It could also predict if it’s going to rain, or know that there will be
an increase in people taking the bus on market day, Sharp said.
“Public health can also get involved through nudging people, saying if there’s no
bus for 20 minutes, but you walk for 10 minutes and invest in your health, we
can reduce your bus fare,” she added.
The problem is, Sharp said, that the level of collaboration required to “make this
thing actually fly is almost impossible”.
At the moment, the technology is way ahead of the business model when it
comes to IoT.
Andrew Chapman, strategy and product development lead at Digital Catapult,
agreed that we’re still at the very beginning of realising the potential of IoT.
What’s forgotten, he said, is the ecosystem, which is “often underrated as an
element for success”.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 18 of 41
CIO Trends #7
According to Chapman, “you can have the physical infrastructure and have the
real-life business challenges, but if you don’t have that innovation support” then
it can be a struggle.
Digital Catapult, which works to accelerate the adoption of advanced digital
technologies, such as IoT, across the UK, is trying to solve that through its
Things Connected programme.
Digital Catapult identified a key problem, said Chapman, as low-power wireless
networks can deliver “real significant benefits in the IoT space across industrial
through to consumer, but there is a lack of investment in national networks and
coverage for low power wireless”. To combat the issue, Digital Catapult
launched a network across London, which has now been rolled out across other
regions as well.
“This is effectively a means to encourage innovation, by large players coming
together with smaller innovators to test the technology and the business model
in the network we provided for them to do that,” said Chapman. “They can test
new sensors along with a new platform and try to work out how some of those
new business models might work in the future.”
As networks start to become available in a way they haven’t been before, the
use of IoT will grow, he added.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 19 of 41
CIO Trends #7
Cultural challenges
However, there are also cultural challenges, and trying to break through those in
a large organisation isn’t always easy.
Chapman’s advice on this matter is to “come up with a strategy and just get
started – sometimes, you can have paralysis through analysis”.
Digital Catapult’s aim is to support innovation, getting people to come together
to try to solve challenges. This includes an innovation lab where technologies
and business models can be tested, new devices can be produced and
companies can learn about what different types of platforms may do for them.
Cultural issues are also something Chad Naeger, customer success officer at
GE Digital, is concerned with. GE is a 125-year-old industrial company, and like
most companies, culture is often engrained in the business. Despite this, GE
has been successful in rolling out industrial IoT on a huge scale.
Naeger said that early on, they didn’t recognise the opportunity IoT could bring
– it was simply focused on mitigating risk in some of its services and business.
GE found that when selling its jet engines and wind turbines along with service
contracts, software companies were trying to leverage their technology to sell
performance improvements on GE’s assets. “So our foray into digital was
basically because we didn’t want to become uberised,” Naeger said.

In this e-guide
Canada’s tech sector is
targeting Europe – does it
have what it takes to
compete?
CW500: Getting the most out
of the internet of things
An IT operating model for the
internet of things
Manufacturers, technology
and the fourth industrial
revolution
CIO interview: Richard
Tallboy, CIO, Wagamama
Page 20 of 41
CIO Trends #7
“We then began to look for a platform and software capabilities that we could
leverage to disrupt ourselves. Looking throughout the industry, what we
discovered was that, from an industrial IoT perspective, there was no platform
or software technology that we could really leverage,” he added.
Building for success
Instead, GE decided to build its own industrial purpose-built platform called
Predix, which it now also offers to customers with great success. In 2017, GE
realised more than £1bn in productivity gains in 2017, through its use of tech.
It’s not always been easy, and according to Naeger, the company is still going
through a journey of cultural transformation.
“The technology component of the transformation is relatively easy compared to
the change management that needs to occur. So we really focus on the
leadership, the talent in the organisation and the cultural transformation
necessary,” Naeger said.
“What we did in the early days was we took someone from the business and we
would put them in a leadership position to execute this digital transformation. In
hindsight, it was probably fairly obvious that was not going to be the most
successful approach, because in many cases they resisted the change, they did
not necessarily have the right skill sets or background to believe in this type of
transformation.”
 CIO Trends #7

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(OT) together. Taking someone coming in with an IT perspective as a digital
disruptor, and partnering them with someone from OT, giving them a joint set of
outcomes, worked much better. In fact, it worked so well that this was replicated
across the different business units.
Getting digital into the “DNA of the entire organisation” and getting people from
different parts of the business to work together is a long journey, Naeger said.
“But when you can overcome your hurdle and get them together with shared
outcomes and shared context so they work together to deliver, you can really
accelerate the journey,” he added.

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CIO Trends #7
An IT operating model for the digital age
Tim Sheedy, guest contributor
Speed and innovation are at the core of any successful business today. With
power put increasingly into the hands of digital-savvy, fickle customers, the
pressure to continuously improve products and services has never been
greater. If they are not delighted by each and every interaction with a brand,
today’s customers simply move on at the click of a button or swipe of a screen.
For digital-native businesses – such as Spotify or Amazon Web Services – this
competitive, customer-focused spirit is in their lifeblood. But otherwise, most
traditional businesses today are not set up to deliver a great customer
experience. Bogged down by traditional organisational models, they are
structured more around cost efficiencies than innovation.
Consider a typical IT team – generally, all tech staff will sit in their own division,
removed from the rest of the business because it is easier to track, manage and
budget their work. What happens, then, if the head of customer experience has
a request?
It is unlikely that customer experience teams, which have different key
performance indicators (KPIs), will have much interaction with IT. The result is

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CIO Trends #7
two frustrated parties lacking a common language and unable to deliver
innovation at the pace required by customers and the wider business.
The challenge is to reorganise team structures in a way that allows innovation to
flourish. In the era of digital transformation 1.0, that meant a bolt-on or “bi-
modal” approach to digital, essentially giving a dedicated team the resources
and licence to operate at pace, while the rest of the business continued
plodding along in a traditional environment.
It is not a bad place to start to get digital initiatives prioritised, but the reality is
that “digital” now impacts every transaction and every touchpoint.
For example, even if customers go into a bricks-and-mortar store, they are likely
to have researched products and compared prices beforehand. Meanwhile, on
the business side, sales and marketing teams are now using aggregated data
insights to inform their campaigns in the hope of shortening sales cycles.
Or how about airline passengers – how many people now go into a travel
agency to book a flight? These days, we can book our flight, seat, meals and
luggage online, as well as check in before we even get to the airport.
Work together for a united goal
This means that a one-dimensional team is not enough to change or affect
customer experiences. Instead, businesses need to gather people from across
their organisation – product, customer experience, distribution and, of course, IT

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CIO Trends #7
– who have different metrics, budgets, priorities and timelines, and give them
the mandate to work together towards one united goal.
In an airline, that might mean moving from a structure where logistics, ticketing,
loyalty, IT, project management, customer lounges, check-in and baggage are
all dealt with by a single team called “pre-flight experience”. Every time a
change needs to be made to the customer experience before the flight, all the
roles that can affect that change can come together easily, knowing that they
share the same goals and are driving towards the same outcome.
It is a divide-and-conquer approach – instead of putting all your IT eggs in one
basket, you send them into the product and experience teams to develop and
improve digital services on the ground. The new structure of IT teams would
have:
 Product and project managers working side-by-side, complementing
each other’s skillsets while overseeing the process of developing and
improving products, services and experiences.
 Developers embedded in the teams, sitting alongside quality assurance
to ensure the development of digital services is not slowed down
unnecessarily.
 DevOps providing the cloud infrastructure and platform services as
required.
 Customer/user experience teams, working closely with tech to ensure
final products and services are easy and intuitive to use, and delight the
customer.

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 Data management shared across teams to ensure insights are not siloed,
but rather treated as a product and integrated throughout the business.
 Architecture as a guiding function, constantly evolving and improving
capability that makes the business better, more efficient and faster.
 Security, often shared across teams, and given the ultimate power to say
“no” if a product could compromise customers, employees or the
business itself.
But where should businesses start? Ultimately, the power to drive change lies in
the hands of the CIO, but will require collaboration across the c-suite as
business leaders adapt their relationship with IT and determine team KPIs. It is
also important to provide training to help employees prepare for the new
structure.
Once in place, this model could well change the face of IT teams as we know
them. For technology leaders, the role of CIOs will inevitably evolve – whether
they become a technical leader, run innovation and invention functions, or take
responsibility for delivering revenue and/or customer outcomes.
CIOs who are ahead of this change will be able to shape their role going
forward based on their profile – but it is worth noting that those who have
change forced upon them will rarely be in a position to be masters of their own
destiny.
On the flipside, for technology suppliers, this model is likely to bring challenges.
Bringing business and technology buyers together into one team should shorten
the sales process – but it will also make it harder to find the right buyer in the
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first place.
To complicate matters further, with a focus on delivering continuous customer
value, buyers are likely to require specialised solutions tailored to their unique
needs and goals. Suppliers will therefore have their work cut out to better
understand their customers and the outcomes they are trying to drive, in order
to make the sales process smoother.

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This new model of delivering continuous customer value is not perfect – it has
inefficiencies, and moves away from focusing on big-ticket inventions towards
smaller, everyday innovations. But it is only by becoming a fast and evolving
business that companies will maximise their IT and digital capacities.

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CIO Trends #7
Manufacturers, technology and the fourth
industrial revolution
Ben Sillitoe, guest contributor
Worldwide spending on the technology and services enabling business and
product digital transformation is forecast to surpass $1.1tn in 2018, with discrete
manufacturing and process manufacturing expected to account for $333bn.
The data comes from global tech analyst group IDC’s latest Worldwide semi-
annual digital transformation spending guide, which says these areas of the
manufacturing world will spend the most on digital transformation and set the
agenda for many priorities, programmes and use cases across industries.
From a technology perspective, IDC predicts that the largest categories of
spending will be applications, connectivity services and IT services as
manufacturers develop their platforms to compete in the digital economy. The
main objective and top-spending digital transformation priority for those
industries, according to the analyst, is smart manufacturing, such as material
optimisation, smart asset management and autonomic operations.
Such investment priorities are being labelled by commentators as composites of
the fourth industrial revolution (4IR), driven by use of technologies such as

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machine learning, artificial intelligence (AI), robotics, sensors and big data. A
report from Barclays Corporate Banking at the end of 2017, for example,
surveyed 500 UK manufacturing decision-makers and found there is already a
high rate of adoption when it comes to automation, such as robotics, but still
limited investment in wider AI.
IDC expects discrete and process manufacturing to invest more than $115bn in
smart manufacturing initiatives this year, in addition to $33bn in innovation
acceleration and $28bn in digital supply chain optimisation.
This is part of a wider trend in a business world being disrupted by technological
advancements, with IDC also identifying retail and construction as sectors set to
spend “aggressively” to meet their own digital transformation objectives.
Robotics, automation, mixed reality and 3D printing
There are multiple examples of manufacturers investing in new systems to drive
efficiencies and improvements in their operations.
Earlier this year, chocolate maker Mars unveiled new automated handling and
robotics systems at its site in Boigny-sur-Bionne, France. The newly revamped
facility, which is run by XPO Logistics, has given the company capacity to
accommodate up to 10 million packages a year, with preparation and
distribution quicker than before.

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Supply chain company XPO worked alongside automated handling systems
provider Alstef to introduce the technology for Mars, which also holds its pet
care and food lines at the site.
Features at Boigny include a robot that can prepare 50,000 to 60,000 packages
a day, and an automated storage and retrieval system which places the pallets
in racks at high speed. One of the key features, according to Mars and XPO, is
the robot’s articulated arm which, they say, can pick up five stacks of packages
at once, enabling it to assemble pallets with multiple product codes.
One industry to be significantly disrupted by digital transformation in recent
years is the mattress sector, exemplified by online-first companies such as
Casper and Eve Sleep starting to take more market share from long-term
incumbents. Emma Mattress is another new business in this space, and the
company’s founder, Max Laarmann, says technological expertise in production
and customer service are aiding its growth.
“We see that in our production, we can automate much more in terms of the
cutting, gluing and the tacking process,” he says. “A lot of this has already
happened and this will continue.”
Emma Mattress does not operate its own manufacturing facilities; instead, it
relies on local partners in the UK and Switzerland, and one in Germany that
serves the rest of continental Europe. Senior staff at Emma work closely with
these partners for quality assurance and to continually check if there are

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opportunities for better API (application programming interface) connections or
improved data flow in the product development process, says Laarmann.
“The fact that we are able to cut mattress production and delivery from five or
six weeks plus to a few days without losing quality and saving a lot of money
shows that new and innovative business models and lean systems can change
an industry quite a bit,” he adds.
From chocolate and mattresses to automotive, manufacturers of all types are
looking at ways to use technology to improve their product and general
operations.
Car makers such as Volvo and Ford are working with Microsoft, using the tech
company’s Hololens mixed reality technology, which is embedded into eyewear,
to aid either the design process or the customer experience when making or
buying a new vehicle. In Ford’s case, it is used during the design and
manufacturing stage.
With Microsoft’s mixed reality capability, Ford can take a physical product and
overlay new virtual concepts onto it during design, which the tech company says
augments – rather than replaces – existing processes in Ford’s create and build
stage. The idea is to speed up the step between design and manufacture, and
the technology also offers a system on which to collaborate as Ford looks to
bring new vehicles to market.

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Craig Wetzel, design technical operations manager at Ford, says: “The Hololens
helps me see 3D designs full-scale on top of production vehicles. We are
developing apps for Hololens to be used within our production environment for
designing cars in the near future.”
Meanwhile, in the sports car sector, 3D Systems revealed in June that Sauber
Motorsport, the company that operates the Alfa Romeo Sauber Formula One
team, is using its additive manufacturing technology as part of a strategy to
drive innovation in its vehicles.
This is an extension of a partnership that began 10 years ago, when Sauber
Motorsport first launched an additive manufacturing department at its base in
Switzerland. At times, Sauber has used the 3D Systems technology to create
200-300 plastic parts in a day.
“When we decided to upgrade our stereolithography (SLA) production
capability, we felt it was time to take our cooperation with 3D Systems to a
deeper level,” says Christoph Hansen, head of additive manufacturing at
Sauber.
“We are using 3D Systems’ SLA solutions predominantly and extensively for
wind tunnel testing, but also for tooling for carbon laminating, as well as vacuum
casting for silicon parts.”

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Digital transformation and manufacturing CIOs
The shift in focus within manufacturing, which is expected to see an increase in
innovation and technological investment on the factory floor, will inevitably open
up new responsibilities for CIOs in the sector.
Rob Pritchard, former CIO at global drinks company Britvic, whose brands
include Robinsons, Fruit Shoot, Tango and Teisseire, says the switch of focus is
already happening in the FMCG (fast-moving consumer goods) sector.
“For a CIO of a consumer goods company, until four or five years ago, whatever
went on down on the factory floor wasn’t a major concern,” he says.
“Microsecond stoppages on production lines and understanding what causes
them, and all the data to see what’s really going on, can help drive micro gains
and percentage improvements. This is all within the CIO’s remit now, as it
provides a chance to lower the cost of manufacturing and build more margin
into products.”
Pritchard says digital technology on the factory floor is hugely important for this
sector and, unlike in previous generations, the scope of central IT is beginning
to come from within the actual manufacturing process lines.
A recent report by Searchlight Consulting, which specialises in helping
businesses – notably in retail and manufacturing – undergo IT-enabled change,

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drew attention to the key areas CIOs must consider as they ride the 4IR and
digital transformation wave washing over manufacturing.
The Searchlight study – The new era: making the most of technology – calls on
manufacturing businesses to identify technology that can support their core
functions but ensure that part of their organisation is dedicated to
experimentation and trialling new systems that might provide a competitive
edge.
From the interviews with senior manufacturing leaders, the report concludes
that leadership teams must create a compelling vision for the wider organisation
and bring the workforce along on the ride. Companies must make business-led
technology investment decisions, it says, while data analysis is set to be
increasingly important.
Bryan Oak, director of Searchlight, says: “Operational efficiency comes from
making sure the back office, manufacturing and supply chain systems are
suitable, alongside accessing more information from the factory floor in order to
make the right decisions and use this data to improve the way they deliver their
business.
“Beyond the factory floor, the innovation dimension either comes from the way
they embed technology in their products, or the way they use technology to
enhance the customer service and the customer experience in both their selling
and support of products after sales.”

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Start of a journey
Although the phrase “fourth industrial revolution” conjures up vivid images of a
dramatic change in landscape for global manufacturing, the truth is perhaps
more nuanced.
IDC’s Worldwide semi-annual digital transformation spending guide indicates
that, although there are some leaders in each sector, many organisations,
including those in the manufacturing industries, are just beginning an era of
digitisation. This is based on the report’s findings that some of the strategic
priority areas with lower levels of spending this year include building cognitive
capabilities and data-driven services.
Craig Simpson, research manager at IDC’s customer insights and analysis
group, says: “This suggests that many organisations are still in the early stages
of their digital transformation journey, internally focused on improving existing
processes and efficiency.
“As they move into the later stages of development, we expect to see these
priorities, and spending, shift toward the use of digital information to further
improve operations and to create new products and services.”
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CIO Trends #7
CIO interview: Richard Tallboy, CIO,
Wagamama
Clare McDonald, business editor
As consumers become increasingly fickle, retailers are doing everything they
can to make the customer experience as seamless as possible.
For Wagamama, the most recent step to offer a better customer experience was
adopting “pay by walking out” technology so that customers don’t have to wait
for their bill before leaving a restaurant.
Richard Tallboy, CIO of the chain, says the industry average time between
customers deciding they want to leave and being able to pay and go is 12
minutes, which sounds like a short time but can make a huge difference to the
customer experience.
“The best thing to do for a truly painless experience is the ‘Uber experience’ –
so how do we replicate that in the restaurant environment?” he says. “That’s
where the idea came from.”
The 12 minutes between finishing a meal and being able to pay and leave can
be the “most annoying part of eating out”, says Tallboy.

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“It’s the last thing the guests experience and therefore remember about their
restaurant experience,” he says. “It’s not the biggest issue for us to solve, but
we realise it is a big issue for guests, so we do want to make sure we have an
excellent solution in place for it.”
To address this, Wagamama partnered with Mastercard to develop an
application, Wagamamago, which includes a feature whereby customers can
walk out when they have finished eating and payment is taken from them
automatically.
Once customers have registered for the app and added valid payment details,
they can use it to check in at the restaurant, order what they want, and then pay
through the app, via a team member, or simply by walking out.
The restaurant was already using the Mastercard Qkr platform, which allows
customers to pay at their table using their mobile device. This will still be
available, but the firm has used Qkr APIs (application programming interfaces)
to build the pay-by-leaving capability into its own app and integrate the
Masterpass digital wallet.
Tallboy says the reason for Wagamama using its own app rather than
continuing to offer only Qkr was to make the experience as “frictionless” as
possible.

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The restaurant’s new iOS and Android app gives customers one place where
they can find the nearest restaurant, view the menu, find information about the
menu, order food, split the bill or order a takeaway.
As technology has enabled retailers to offer services to customers via several
channels, including online, offline and on mobile, consumers have come to
expect a seamless experience across all channels.
When customers visit a Wagamama hoping to use the walk out to pay feature,
they can give a four-digit code to a team member which allows the restaurant’s
system to associate the customer’s phone to the table where they are sitting,
then it is up to the customer whether they use the app to order.
Customers can also choose to have a more traditional experience while cutting
out the wait to pay, or some items can be ordered via the mobile app to further
cut the waiting time.
Giving customers this choice makes the experience more seamless, says
Tallboy.
Importance of team members
In some cases, technology has made it easier for customers to avoid interacting
with employees in shops.

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Tallboy says Wagamama has intentionally made sure that its waiting staff are
part of the experience of visiting a restaurant.
“We have deliberately kept in the experience where your first touchpoint will
always be with a team member,” he says. “You cannot start ordering on the app
until the team member has taken the first order from you. We’ve kept that
because we believe the engagement with team members is really important to
the guest experience.”
Instead, the technology is designed to make the experience of both staff and
customers easier.
Tallboy’s team chose not to include main meals on the app so that customers
are encouraged to interact with team members.
The idea is to ensure the right balance between a good consumer experience
and giving consumers a level of control over how their experience goes.
“You get the experience that you want, but we think it’s really important to have
the team members engaged in your experience,” says Tallboy. “So that will
always be part of it, but if you want to order a second drink, that’s up to you
now. You can either do it on the app or you can call over a team member.”
Many have commented on the shift in the retail industry caused by technology –
where once retailers were in control, customers are now able to influence what
retailers do as technology allows them to vote with their feet.

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Tallboy says of the Wagamamago app: “We have tried to give everyone as
much control over their experience as possible.”
Since launching its app, the restaurant has seen a mixture of people who have
downloaded and signed up for the appn before arriving at a restaurant and
those who have seen it advertised upon arrival and want to try it.
Smaller IT teams – less legacy?
Some retailers have been around for a long time, creating huge legacy systems
by bolting new technologies onto their existing custom-built systems.
Tallboy says that because his team is small, the firm relies on partnering with IT
service providers and implementing software as a service (SaaS) to develop its
technology offerings.
“Because the team is so small, it’s all around outsourcing when we can, cloud,
SaaS, and finding experts to run these platforms for us,” he says.
To develop the Wagamamago app, the restaurant worked with software
development and mobile engagement firm Altaine, which built the app and used
Mastercard and Oracle APIs to integrate the Masterpass wallet and the point-of-
sale (PoS) system into the app’s capabilities.
In this way, Wagamama has developed fewer legacy systems than other
companies, says Tallboy.

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He says this helps it to keep pace with technology change as its partners handle
new versions and upgrades, which would not be so easy if all the systems were
bespoke.
“We are keeping things as ‘vanilla’ as we can,” says Tallboy. “What we try to do
is use the tools out of the box and modify them, so we can take a competitive
advantage rather than develop bespoke where we can.”
Developing the Wagamamago app is what Tallboy calls “phase one” in a major
roadmap for the company.
Next, the restaurant is considering adding feedback to the app so that diners
can rate their experience through the app as well as via traditional channels.
Feedback also plays a part in deciding whether or not Wagamama implements
technologies – the restaurant asks customers what they think about potential
ideas.
“We are constantly talking to people and trying to get feedback on what we
should do next,” says Tallboy.
But he emphasises that his team does not develop technology for technology’s
sake, making sure it adds value to both the customer and the staff experiences.
“Some technology would be fun to do from an IT perspective, but unless it’s
what our guests want, then we’re not going to do it,” he says.
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CIO interview: Richard

Tallboy, CIO, Wagamama

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