News Barclays banks on agile and DevOps to tackle competitive threats in fintech Cloud disruption set to shift the balance of IT budgets and increase rate of adoption Bar Council CIO creates flexibility to attract talent from far and wide Editor’s comment Buyer’s guide to expense management For IBM, the answer is Watson. But what is the question? Deprogramme your legacy mindset to unlock the fourth generation of flash Downtime computerweekly.com Watson gets to work IBM’s cognitive computing system powers applications in healthcare, education, business and law – but it doesn’t come cheap Home 12-18 JULY 2016 IMAGES: JON SIMON/FEATURE PHOTO SERVICE/IBM
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computerweekly.com 12-18 July 2016 1
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Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
computerweekly.com
Watson gets to workIBM’s cognitive computing system powers applications in
healthcare, education, business and law – but it doesn’t come cheap
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Public sector data sharing to transform service deliveryThe government is aiming to transform service delivery across the public sector by bringing in new legislation to allow for data sharing as part of the Digital Economy Bill Besides provisions for broadband access rights and new protections for consumers online, the bill – which was put before parliament on 5 July – contained clauses aimed at changing how the public sector goes about storing, managing and using data.
A second US man pleads guilty to hacking celebrity accountsA second US man has pleaded guilty to gaining authorised access to celebrity iCloud and Gmail accounts and stealing nude images that were leaked online in 2014.Edward Majerczyk (28) of Chicago, Ilinois, used methods similar to those of Ryan Collins (36) of Lancaster, Pennsylvania, but US authorities have not made any connections between the two men.
IDC predicts slowdown in public cloud spend will be short-livedThe downturn in global demand for IT infrastructure from the public cloud provider community during the first quarter of 2016 is likely to be relatively short-lived, according to IDC. The market watcher’s latest Worldwide Quarterly Cloud IT Infrastructure Tracker revealed a softening in demand for servers, storage and Ethernet switches for use in public cloud environments during the period.
NHS England chooses to scrap controversial Care.data projectNHS England has pulled the plug on the controversial Care.data project, after the national data guardian for health and care Fiona Caldicott asked the government to consider the future of the programme.Health and life sciences minister George Freeman said in light of Caldicott’s review: “NHS England has taken the decision to close the Care.data programme.”
Euro Championship network traffic spike highlights OTT boomThe BBC and EE each reported huge spikes in network traffic during last month’s England versus Wales clash at Euro 2016, highlighting the growth of over-the-top (OTT) entertainment services and their impact on network quality.
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Wimbledon deploys smartphone app to engage fansThe Wimbledon tennis championships previously used digital tech to engage fans unable to attend matches, but has switched focus to fans in the grounds.
NEWS IN BRIEF
Scottish police and Accenture terminate IT systems contractThe Scottish Police Authority (SPA), Accenture and Police Scotland have agreed to end the troubled i6 project, which had aimed to replace a series of legacy IT systems. Accenture won the £40m contract in 2013 to join up more than 100 legacy systems and deliver a new operational policing system as part of SPA’s wider IT strategy.
Digital Economy Bill enshrines right to broadband into UK lawThe right to access broadband services of 10Mbps under a universal service obligation could become UK law by next spring, after the government presented the Digital Economy Bill to parliament.
Facilities firm ISS picks IBM Watson to manage client sitesDanish facilities firm ISS is to embark on a major transformation project across its global customer base by implementing IBM Watson.
Openreach starts duct and pole sharing trials for broadbandOpenreach has commenced trials of a simplified duct and pole sharing process with a number of communications service providers to encourage investment in broadband in parts of the UK that aren’t served by fibre networks. If the trials are successful, a number of fibre broadband networks could be built across the country.
HummingBad Android malware highlights concerning trendSecurity researchers have traced the HummingBad Android malware to a seemingly legitimate advertising analytics firm in China, highlighting a worrying trend in cyber criminal operations.
The Services Family bank outsources IT to Sopra SteriaThe Services Family, a challenger bank that targets the military community, has outsourced its digital activities to Sopra Steria. n
❯ Business has critical role in fighting cyber crime.
❯ Iceland tops list of low-risk datacentre locations.
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Barclays banks on agile and DevOps to tackle competitive threats in fintechThe drive to survive in financial services is fuelling Barclays’ use of the methodologies, says Caroline Donnelly
Banking giant Barclays has opened up about the challenges and successes it’s experienced in its 18-month push to adopt agile working practices in its business. Speaking at
the Enterprise DevOps Summit in London, Jonathan Smart, head of development services at Barclays, said it is incorporating agile processes and thinking in all areas of business – not just IT.
“We are not doing agile for agile’s sake. We are pursuing a strat-egy for the whole business to exhibit agility. When I say the whole business, I mean HR, auditing, security, compliance, the invest-ment bank, the retail bank – everything,” he said.
During the first 16 months of the initiative, the amount of “stra-tegic spend” going into agile practices and processes rose by 46%, he said, and the organisation now has over 800 teams involved in the programme.
“That’s more than 10,000 people. We have more than 30,000 training attendances, and – far as we know – it’s the world’s larg-est and fastest agile adoption,” said Smart.
The financial services sector is under immense competitive pressure from varied entrants to the market, including mobile-only
banks and the likes of Apple and Google entering the mobile pay-ments market, he said.
“The investment in fintech [financial technology] startups is £10bn per annum, and records are being broken every single quarter for the amount of venture capital going into fintech start-ups,” he added.
For this reason, incumbent firms such as Barclays need to ramp up their ability to innovate at scale and pace for their long-term survival, Smart said – which is where agile comes in.
ANALYSIS
“There is a huge amounT of disrupTion, and companies ThaT
do noT change will noT survive”Jonathan Smart, BarclayS
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
“There is a huge amount of disruption and innovation going on at the moment, and companies that do not change will not sur-vive,” said Smart. “It’s survival of the most adaptable.”
Barclays processes payments equating to 30% of the UK’s gross domestic product every single day, and using DevOps develop-ment methods ensures its systems remain upright and opera-tional: “It’s a better way of working. We don’t need any survival anxiety to show it is a better way of working. We know it reduces delivery risk – and we know it increases quality,” he said.
If there is an outage at Netflix, Smart said: “It’s a case of sorry you can’t binge-watch Orange is the New Black.” But in banking, an IT failure can have serious repercussion, he said.
One of the big challenges the company faces is trying to balance the need for agility with the fact the financial services industry is one of the most highly regulated sectors in the world, he said.
“If you want to deploy a one-line piece of code, you will have to fill in 28 artefacts. The average elapsed time to go through the process is 56 days, and we have a large number of project man-agers spending 20 days filling in forms for a single piece of code,” Smart said.
Despite this, Barclays is now pushing out updates to around 56% of its core applications every “nought to four weeks”, and has seen a marked decline in its lead times, while the complexity of the code its developers create has also fallen.
ANALYSIS
Adopting a DevOps approach improves code quality and cuts downtime and costs
Improved business agility is often cited as a major reason why enterprises are rushing to adopt a DevOps approach to software development, but there are other benefits.
The 2016 State of DevOps report from automation supplier Puppet said creating cross-functional teams to create small, iterative software updates, multiple times a day, leads to higher quality code.
Organisations that integrate security checks into each stage of the software delivery and development cycle also end up spending less money on rectifying mistakes in the long-run.
This is because the amount of costly, unplanned work and downtime those organisations experience – as the result of security breaches or site crashes, for example – turns out to be markedly lower.
“DevOps is no mere fad or buzzword, but an understood set of practices and cultural patterns,” the report said.
“People turn to DevOps not just to improve daily work-ing life and get time back for family, friends and beer, but to improve their organisation’s performance, revenues, profit-ability and measurable outcomes.”
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Smart said the senior management team has supported Barclays’ agile efforts from the start. He says this has been critical to its success: “I speak to many people at firms in other indus-tries and in financial services that are trying to move the needle on agile and DevOps, and they’re not succeeding because they don’t have the buy-in from the top.”
Another was important to get support for the huge organisa-tional change from the bottom up, said Smart, which Barclays achieved through creating “communities of practice”.
“We have 35 communities of practice with 10,000 members of staff, who are voluntary. We also have 2,500 people in the agile community of practice. So we have that groundswell of passion-ate practitioners to help us on that journey,” he said.
Next on the agenda is engaging its middle management teams: “Leadership training is something we’re not doing enough of – we need to do more of it. The same with any culture change – it’s the pressurised middle. Senior management get it, the troops get it, but it’s the people in the middle who have to deliver – come hell or high water – that we need to get on board,” he said. n
“leadership Training is someThing we’re noT doing
enough of – we need To do more”Jonathan Smart, BarclayS
ANALYSIS
❯The financial services IT community faces a period of uncertainty following Brexit
BARC
LAY
S
With the spike in competition and disruption
in the financial services sector, organisations must
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Why cloud disruption will shift the balance of IT budgets and increase rate of adoptionCloud computing is set to become one of the most disruptive forces of IT spending since the dawn of the digital age, so IT leaders will no longer be able to avoid it as more systems become cloud-based. Cliff Saran reports
From 2016 through to 2020, more than $1tn in IT spending will be directly or indirectly affected by a shift in spend-ing to cloud-based services, according to analyst Gartner.
Ignoring the cloud or not having a cloud strategy will not be an option for CIOs.
According to Gartner, more than 30% of the 100 largest sup-pliers’ software investments will have shifted from cloud-first to cloud-only by 2019. Gartner believes cloud-first in software design and planning is gradually being augmented or replaced by cloud-only. This also applies to private and hybrid cloud scenarios.
“More leading-edge IT capabilities will be available only in the cloud, forcing reluctant organisations closer to cloud adoption,” said Gartner vice-president and research fellow Yefim Natis.
“While some applications and data will remain locked in older technologies, more systems will be cloud-based, further increas-ing demand for integration infrastructure.
“Rigid organisations cannot produce agile IT systems. As deliv-ery shifts more to the cloud, most IT organisations will have to
reorganise to reflect the business realities of cloud computing, such as continuous innovation and change, pervasive integration, competing with cloud providers for some initiatives and crucial prevalence of influence over control in IT’s relationship with lines of business.
“While historically the greatest competitor to external ser-vice providers has been internal IT – with spend shifts, struc-tural reorganisation and the business realities mentioned above – cloud providers will be in the position to gain the upper hand,” he said.
Organisations that have used cloud for a number of years have seen the benefits of moving more IT to the public cloud.
When Computer Weekly spoke to News Corp’s global CIO Domini Shire in May 2016, he said cloud services would play a major role in the future of IT at News Corp.
“It seems likely that our next generation of network will not be an MPLS wide area network. It is going to be a beefed-up inter-net approach to connectivity across the organisation,” he said.
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
According to Gartner’s Market Insight: Cloud Shift report, by 2020, the biggest growth market for cloud will be in cloud-based business processes, where $42bn will be spent in cloud services, representing 43% of the $113bn market.
In the $144bn application software market, software as a ser-vice (SaaS) is expected to grow 37% to $38bn by 2020, accord-ing to Gartner. When combined, these two market sectors repre-sent $80bn of cloud-based spending.
Jeffrey Mann, research vice-president at Gartner, said: “Cloud will increasingly be the default option for software deployment. The same is true for custom software, which is increasingly designed for some variation of public or private cloud.”
Peterborough City Council, for instance, is looking at how to use Salesforce.com to hold master records, which would enable it to avoid the major expense of integrating legacy systems.
Datacentre spending is likely to be split between on-premise, hybrid and pure cloud-based IT. By 2020, Gartner estimates infra-structure-as-a-service (IaaS) and platform-as-a-service (PaaS) spending is set to grow to $33bn, which will represent 27% of overall IT infrastructure and platform spending.
Thomas Bittman, vice-president and distinguished analyst at Gartner, said: “Unless very small, most businesses will continue to have an on-premises – or hosted – datacentre capability.”
“But with most compute power moving to IaaS providers, organisations and suppliers need to focus on managing and leveraging the hybrid combination of on-premise, off-premise, cloud and non-cloud architectures, with a focus on managing cloud-delivered capacity efficiently and effectively,” he said. n
ANALYSIS
Peterborough City Council: Running on Salesforce.com Software as a service (SaaS) looks like a logical choice for many organisations migrating away from legacy systems. One example is Peterborough City Council, which is hoping to expand its use of Salesforce.com, as more SaaS applica-tions become available on the Force.com platform.
In an interview with Computer Weekly, the council’s head of IT, Richard Godfrey, explained how Force.com SaaS applications would enable Peterborough to pool data, with Salesforce.com customer relationship management (CRM) holding the master data.
Creating a master record that all applications can refer-ence is a big challenge for IT departments. The majority of enterprise systems have their own databases, which can lead to data inconsistencies.
As a consequence, organisations are unable to make the best use of common information across systems, such as sharing customer records between CRM, order processing and help desk.
Peterborough City Council plans to improve its cloud delivery to enable cost savings and to improve how it con-nects with citizens. However, Godfrey said the council does not want to become digital by default for fear of isolating non-digital-savvy citizens, such as the elderly.
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Bar Council CIO creates the flexibility to attract talent from around the worldPoli Avramidis tells Mark Samuels how he is transforming the organisation’s IT estate to reflect its cultural shift
INTERVIEW
Poli Avramidis: “Once the board buys into your vision, the rest of the C-suite starts to see that technology can provide dramatic improvements”
Transforming a traditional organisation into a modern, digi-tal business is a significant test. With support from his executive colleagues, Poli Avramidis is meeting that chal-
lenge head-on and providing the General Council of the Bar with a platform for lasting change.
Avramidis has led technology for the organisation for just over 18 months. Operating from close to London’s legal heartland in Chancery Lane, the Bar Council is the professional association for barristers in England and Wales.
The organisation was formed in 1894. Avramidis has gone to great lengths to protect that long and distinguished history, while finding a way to update the Bar Council’s legacy IT. He talks about professional and personal challenges in a coffee shop just a short stroll from his office.
“It’s a terrific place to work,” he says. “The chief executive and director general are great to engage with. They quickly under-stood what I was trying to achieve. That sort of support from the top makes a huge difference when you’re a CIO who is trying to push business transformation through IT.”
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Taking the lead on transformationAvramidis’ interest in IT emerged as he completed his maths degree in Greece. After graduating, he worked in a range of technology areas for Greek firms, including development work on applications. He moved to the UK in 1988 to complete a Masters degree in IT and moved around different computing specialisms, including network and project management.
His first CIO role came at Gwent Police in 1997. In June 2001, Avramidis took up the mantle at the British Medical Association (BMA) for more than decade. He says strategic difference came from his focus on the information part of IT.
Avramidis left the BMA in mid-2014 and began working for the Bar Council in September. He initially joined the organisation as interim CIO and helped the organisation create its IT strategy. Avramidis found the organisation was struggling with a mismatch between IT capability and business objectives.
“They had big issues to resolve in terms of information qual-ity and technology systems,” he says. “IT and business were not correctly aligned. There were a number of disparate systems and there was a lack of integration. As a result, it was difficult for the executives to draw out useful management information.”
These concerns with the existing IT setup were allied to a broader requirement to push business transformation. It became clear to board members at the Bar Council that they needed an experienced pair of hands. Avramidis provided the perfect fit – and he was offered the permanent CIO role after two months.
“I guess it’s a story that’s familiar to a lot of organisations,” he says, referring to the situation he found at the Bar Council.
“Systems deteriorate over time and the people at the sharp end of the business don’t see the challenges until it’s too late. Recovering quickly can be difficult, so you need someone who can come in and take instant remedial action, provide sensible solu-tions and create a long-term vision.”
Creating a shift in culture Avramidis created his IT strategy during his first month in the job. It might have been difficult to sell his plan for transforma-tion to a board that had seen technology fail to deliver on its promises in the past, but Avramidis worked hard to surmount any scepticism.
“I had to present the information carefully to gain board mem-bers’ trust,” he says. “As a new CIO, you have to overcome hurdles and instil confidence. Once the board buys into your vision, the rest of the C-suite starts to see that technology – when imple-mented correctly – can provide dramatic improvements to the rest of the business.”
The organisation both represents and regulates the legal pro-fession. These two strands encompass different dynamics and requirements; the first is goal-driven while the second involves transparency. Avramidis reckons his challenge is to provide tech-nology that works across these two key areas.
“Technology, in many ways, is the easy part,” he says. “There are lots of experts who will tell you how a specific system provides a solution to a business challenge. But the money you spend will be wasted, and the challenge will remain unsolved, if the business doesn’t use the technology you implement.”
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
Agility creates constant improvements Avramidis says quick wins helped demonstrate the power of change. He refers to the introduction of a database system that helped internal staff administer regulations. The technology was implemented in less than three months and was delivered well below budget.
Another quick win came via improve-ments to the organisation’s informa-tion architecture. Avramidis says the enhancements helped highlight the importance of systems integration. Data was described in detail, and the processes associated to infor-mation collection were refined and automated. The analysis allowed Avramidis and his team to elimi-nate unused systems.
“The first 18 months has been all about focusing the minds of key stakeholders on the potential benefits of an investment in IT,” he says. “We want to engage them and show that the right approach to technology is productive and it delivers the results the business demands.”
Such engagement represents a marked shift from the traditional approach to IT implementation. Rather than execu-tives in the Bar Council leaving development to the IT team, line-of-business managers are involved in both the decision-making
and the implementation process. “My contribution comes in the form of shaping this joined-up approach, so that what we create works for the rest of the business,” says Avramidis. Small, con-
stant improvements to existing systems have been allied to the introduction of agile project management. Rather
than lengthy implementations, the IT team focuses on short, iterative cycles.
“It’s been the first time that business people at the Bar Council have been
involved in the design of systems,” says Avramidis. “Internal customers understand what the technology will deliver and how it will improve operations. The end result is that we’ve been able to deliver tech-nology quicker, and of a higher quality, that really meets business
requirements.”
Building new services on solid foundations
Avramidis is pleased with progress. With the platform for change complete, he is
eager to move onto the next stage of IT-led busi-ness transformation. “It’s been a very successful jour-
ney so far,” he says. “We’re a year and a half into my plan and I think we’re in a great position. We’ve proved the strategy and vision is correct and we’ve also delivered a lot of benefits to
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
the business. More importantly, we’ve set the foundations for the next period of change.”
Avramidis has appointed an external technology partner to help with project scoping. He expects to soon have a roadmap for the second stage of transformation across enterprise resource plan-ning (ERP), customer relationship management (CRM) and front-end systems. The organisation is using Microsoft Dynamics as its platform for change.
“We want to create a single source of truth,” says Avramidis. “We also want to develop a single, integrated system for the entire organisation. This movement is taking place through a combina-tion of in-house development and the cloud. Our long-term inten-tion is that anyone in the organisation can access our applications from any location, regardless of device.”
Supporting the move towards flexible working The Bar Council is also developing what it calls a Work Smart strategy, to support individuals in their attempts to work flexibly – either out on the road or working from home.
“The underlying technology must support our move towards flexibility,” says Avramidis.
The Work Smart strategy extends to the C-suite. Avramidis lives in Cardiff and commutes to London midweek. He tries to get as much work completed away from the office as possible, and often spends two or three days a week working flexibly.
“Sometimes you have to change your plans and go to head office. But the flexibility is great – and it works both ways,” he says. “It’s a key initiative for the organisation. We want to help people
work from home. Modern technology allows capable individuals to contribute from any location.
“A flexible working strategy helps your business to attract exper-tise, including talented developers from global locations. As long as the person is working hard, businesses shouldn’t care where the employee is based. Being open to flexible working opens up great possibilities for the individual and the organisation – and the Bar Council is keen to make a difference.”
Looking to the future – phase two and beyondAvramidis looks back at his first 18 months working for the Bar Council and says he continues to enjoy the challenge of using IT to help transform the business. With the foundations for change complete, Avramidis is working hard to ensure technology helps the organisation achieve its aims.
“It’s fantastic that the executives at the organisation have really bought into my vision,” he says. “I work with some terrific people, and I’ve given them some tangible and intangible benefits. We’ve achieved a great deal and it’s an excellent place to work.”
The second stage of the Bar Council’s technology transforma-tion is scheduled for completion by the end of 2017.
Avramidis believes the organisation will benefit from a cut in IT spending and reduced system complexity. He says other benefits will include the creation of trustworthy management information and the ability to generate tailored marketing knowledge.
“If I can achieve those targets, it will be a huge step forwards from where the organisation found itself a couple of years ago,” says Avramidis. n
INTERVIEW
❯The law firm that served Charles Dickens takes a very modern approach to IT
According to Gartner, more than 30% of the 100 largest suppliers’ software investments will have shifted from cloud-first to cloud-only by 2019.
In fact, the analyst firm believes the era of cloud-first is over: Today is the age of cloud-only (see page 7). If user organisations could start their IT from scratch, they would reduce expenditure on in-house IT systems.The cloud is the logical choice for CIOs to reduce the extent of their physical IT assets such as server and storage hardware and
on-premise software.Arguably, cloud swings the supplier relationship pendulum back to the IT buyer.Speaking last week at the AWS Summit in London, Amazon.com CTO Werner Vogels said there is never a contractual obligation to
stay on Amazon Web Services (AWS). “If we don’t offer the best service, you can move away.”In global organisations the cloud changes the economics of not just datacentres, but also networking. For instance, Dominic Shire,
global CIO of News Corp, believes the media group’s next-generation network will not be an MPLS wide area network: “It is going to be a beefed-up internet approach to connectivity across the organisation.”
Then there is the challenge facing established businesses that have built empires over decades – and now face challengers rewriting the rules of their businesses and undermining their unique selling points.
Amazon.com’s Vogels believes that 85% of companies listed on the S&P 500 won’t exist by 2025. The leading companies today will need to revolutionise their businesses and pioneer software and analytics services to compete in the future.
It is highly unlikely that heads of business have the appetite to make large upfront technology investments to power these growth opportunities. The public cloud offers CIOs and IT leaders a low-risk, low-cost method to support such digital business initiatives.
The old ways of running and managing the IT function are being revamped for the 21st century. Cloud is spearheading this revolution. But it works alongside significant changes in working practices. As Jonathan Smart, head of development services at Barclays, says, the bank is using agile and DevOps across the business to ramp up its ability to innovate at scale and pace, in a bid to stave off competition both from established financial services firms and financial technology startups (see page 4). n
Some business executives seem to believe that travel and entertainment (T&E) expense claims are a licence to practise their creative fiction skills. While the grow-ing use of expense management solutions has made
it easier and faster for organisations to automate, monitor and manage T&E claims, it is also helping to reduce available oppor-tunities for would-be fiddlers and fraudsters. But given the grow-ing availability of advanced data analysis tools and algorithms, some believe that expense management solutions must evolve to include ever smarter fraud detection capabilities. Not all sup-pliers in the sector are convinced, however.
Cloud-based booking and travel expense management provider KDS conducted user surveys and found that around 25% of peo-ple admit to embellishing their expenses or bumping up the mile-age on car travel claims. The real figure is probably higher. But vice-president Kate Roe says that while a good expense manage-ment tool can help prevent such abuses, it’s the operational sav-ings that are more significant.
Operational overhead“One of our clients, a large multinational in the telecoms sec-tor, has around 100,000 people regularly submitting expense claims,” she says. “Before the company implemented expense management software, it would take each claimant around an hour to fill in their monthly claim, then another hour or two for the business to process it. That worked out at around 150,000 days the company was spending every year just on processing expense claims.
Could advances in data analytics put paid to expense fraud? Jim Mortleman investigates
Barclays banks on agile and DevOps to tackle competitive threats in fintech
Cloud disruption set to shift the balance of IT budgets and increase rate of adoption
Bar Council CIO creates flexibility to attract talent from far and wide
Editor’s comment
Buyer’s guide to expense management
For IBM, the answer is Watson. But what is the question?
Deprogramme your legacy mindset to unlock the fourth generation of flash
Downtime
“This represents a much bigger cost to busi-ness than expense fraud. I’d question how useful it would be to apply fraud detection analysis when you’re only likely to find a little drop of savings in an ocean of waste.”
As Roe says, expense management tools are already reducing the opportunities for fiddling. They increasingly hook directly into the booking systems of approved accommodation or travel providers, elimi-nating the requirement for paper receipts or manual claims filing. Where paper receipts are the only option, employees can typi-cally just take a photo of them using a smartphone. They will be automatically read by optical character recognition (OCR) soft-ware, along with time and location data, and sent to the system.
Some handwritten or faded thermal receipts may need to be read and approved manually, but today’s OCR technology typi-cally has an accuracy level of around 95%. And if it’s company policy to have to take a photo of receipts as soon as they’re given to you, this eliminates the ‘screwed-up in my pocket for three weeks’ illegibility problem.
Automatic checkingThe tools also allow for the automatic checking of expense claims against corporate policy and compliance rules, with approvals required from managers for any claims outside the rules or permitted spending limits.
Anthony Sherwin, chief client officer at cloud-based expense management provider Software Europe, says: “There are many
ways of reducing the opportunity for fraud by hav-ing a clear expense policy and the correct flags in place. For example, an expense management system would prevent situations like manipulat-ing a restaurant bill to include a large drinks tab in the food section of the bill, or claiming food over a certain cost.
“One of our customers had a couple of employ-ees who were romantically involved and it was discovered that they were both arranging business meetings that required an overnight stay. They would put in separate claims for hotel rooms, when in fact they were sharing a room and pocketing the cost of the unused room.
Milking it“Reports can also flag suspect expense claims like ‘double dip-ping’ – when someone claims for the same item twice – or indi-viduals who are repetitively not submitting receipts with their claims. Other useful reports can be based on particular employ-ees’ expenditure and whether this suitably equates to their posi-tion in the company. These comparison checks and data analy-ses are certainly a very useful tool for our customers in spotting fraudulent patterns.”
Chris Baker, UK head of enterprise at expense management solution provider Concur (now part of SAP), agrees. “Prevention is always better than detection,” he says. “That’s where a lot of our work is focused – developing the ability of the product to pre-vent certain types of fraud.
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“For example, the system will detect ‘buddy meals’ – where two people get a receipt for the same meal and both claim for it on expenses – by looking for the same names on expense reports from different people. Basic, rules-based reporting does catch people out, but you need a good, clear policy and some kind of audit functionality to check claims against the organisa-tion’s policy and flag things up for investigation if they don’t look quite right.”
Baker says more advanced data analytics comes into play when Concur is deciding on what reporting capabilities and rules-based analysis to include in the solu-tion. “We’re processing millions of expense claims per quarter across many customers. That gives us a huge amount of data that we can usefully interrogate, uncover-ing patterns in the aggregated claims which help us continually improve the product. Our analyses uncover a lot of interesting statistics – such as just 5% of employees being responsible for 85% of fraud.”
Embedded analysisNonetheless, Baker also believes more advanced analytic capabilities will increas-ingly be embedded in (or easily connected to) the expense management systems them-selves. Already, for example, third-party expense
analytics apps for Concur, such as Oversight, are beginning to appear, and are likely to become more advanced.
“The future of predictive learning lies in bringing together mul-tiple systems,” says Baker. “In terms of detecting fraud, you need an expense management system that can pull in data from, for example, your CRM [customer relationship management] and accounting systems, correlating data and looking for patterns across all of them. We don’t know how big a problem expense fraud really is, but as paper receipts become a thing of the past,
people will undoubtedly find clever new ways to defraud the system that will require ever more
advanced analytic techniques to detect.”Indeed, some large corporates and finan-cial companies are already using such
techniques. The big strategic consul-tancies and analytics specialists say they are seeing increased demand among blue chip clients to include expense data in broader analyses looking across multiple systems for indications of fraudulent behaviour
and non-compliance. Stephen Shelton, a director in the
forensics team at PwC, says: “Expenses are a big cost bucket. And since analyt-
ics is becoming more accepted as a busi-ness tool, expenses seems an obvious area to
apply it. There are forms of expense fraud that are
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Expense management tools are eliminating the requirement for paper receipts or manual claims filing
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difficult to spot in the rules-based workflow process typically used by expense management tools. Double dipping is one. Persistent claims below certain thresholds is another.
“Each claim might comply with the rules, but the broader pattern of behaviour could indicate something is amiss. For example, one common approach among our customers is to look at the history of expense claims, both for individuals and departments. Over time, certain people or groups may have a very different claims profile to others. There might be legitimate reasons for that, but it gives you a basis for further investigation.”
Anomaly detectionShelton says PwC uses techniques such as clustering and predictive modelling to detect anomalous patterns in data. It’s often done as a one-off exercise for corpo-rate clients looking to uncover potential anomalies in their expense claims history and other data. Typically, this would cost an organisation in the region of £30,000 to £50,000, he says.
Business intelligence and analytics company SAS is also seeing a rise in demand for more advanced expense analytics. Sundeep Tangur, a business solutions specialist at the company who has worked extensively with blue chip banking and finance companies, says: “A lot of companies are moving towards holistic surveillance.
Since putting in such advanced analytics is a significant invest-ment, it is not yet economical to focus solely on expense fraud. Rather, companies are looking to detect fraud across the board.
“Most of them are currently at the stage of using very simple exploratory tools, looking for anomalies in data they’ve never previously analysed. But the next stage is to apply more intelli-gence to mitigate risk and define a process to tackle anomalies.”
By applying advanced analyt-ics to expense data in combination with CRM and finance system data, Tangur says it’s easier for compa-nies to detect things such as col-lusion among employees, insiders who may be part of an external fraud ring, bribery and corruption, even the illicit funding of terrorism.
That such advanced analytics tools will eventually find their way into (or be able to connect easily to) off-the-shelf expense management
systems seems a growing inevitability as the technology becomes ever more mature.
The challenge in future may well be more cultural than technical – ensuring that employees are reimbursed quickly for any expenses they genuinely incur on behalf of the organisation, without unnec-essary red tape, while also avoiding the danger of making people feel as if they are being spied on or treated with suspicion by a distrustful, penny-pinching employer. n
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“over Time, cerTain people may have a very differenT claims
profile To oThers. There mighT be a legiTimaTe reason, buT iT gives a basis for furTher invesTigaTion”
In 2011, IBM’s Watson computer beat two of the most suc-cessful human contestants on the long-running US game show Jeopardy!, which requires participants to provide a question in response to general knowledge clues. In the event,
Watson marked a breakthrough in artificial intelligence (AI) with its understanding of natural language and ability to make sense of vast amounts of written human knowledge.
Since then, IBM has been preparing Watson for work in busi-ness, research and medicine, aiming to help organisations find answers to the questions they often ask, faster and at lower cost.
Businesses can select from a set of 28 application programming interfaces (APIs), with which they can build Watson applications or integrate Watson’s capabilities in systems they are developing. The APIs can help analyse the tone of text, build a list of con-textually related terms, script conversations and classify natural language, and are all available from IBM’s cloud platform Bluemix.
Application of these technologies is spreading. In May 2016, IBM announced a breakthrough macromolecule that could help prevent deadly virus infections, such as Zika or Ebola, with the aid of Watson technologies. Meanwhile, global law firm Baker & Hostetler has built a “robot lawyer” on Watson.
But businesses cannot simply plug in and go. Any application must first learn the ontology – the language and definitions – particular to a domain in which it operates, a process IBM will help with. From there, developers train Watson in the knowl-edge that makes up a particular domain, with the help of human experts in the field.
For IBM, the answer is Watson. But what is
the question?IBM’s Watson natural language processing analytics technology is a move away from commoditised technologies, but will it fly?
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Once experts are confident in their Watson appli-cation’s ability, they can let users loose to ask it questions in natural language.
Volume, a UK-based marketing, training and technology company, has been using Watson to develop applications to help its clients in tech-nology sales.
“We developed bespoke software applications for enterprise clients,” says Volume CEO Chris Sykes. “The idea is to create ‘cognitive consultants’ who provide accurate answers to questions from the sales teams. They are able to query in natural language in real time, making a salesperson ready from day one.
“During the normal sales process, a salesperson can only go so far before they need to bring in a technical expert. But if that expert is not available, it extends the sales cycle,” adds Sykes.
“With our application, the sales team have the technical knowl-edge they need at their fingertips. They can query the system before a meeting or while they are with the customer. Information comes back to them in natural, accurate language.
“The net benefits are higher revenue per salesperson, a shorter sales cycle and higher conversion rates,” he says.
Vast volumes of materialApplications that help businesses make sense of vast volumes of written material could benefit from using Watson, says Surya Mukherjee, senior analyst with research firm Ovum.
For example, consultancy Deloitte is working with IBM’s Watson team to offer a service that absorbs greater volumes of
legal information than would be humanly possi-ble, helping businesses save on regulatory com-pliance, says Mukherjee.
“Some businesses might have 20,000 pages of regulations to sift through every month to keep on top of compliance,” he says. “To under-stand what is relevant to them, it takes an army of lawyers. The Watson application can parse
the documents and, because it knows what to look for, flag up the relevant parts.”
Crucially, Watson learns from its errors, he adds. “There are false positives and false negatives, but with heuristic algo-rithms and human feedback, the software learns from its mis-takes over time.”
Businesses that invest in these types of application could save time and money on employing experts to analyse large volumes of text or other unstructured data – but Watson does not come cheap, says Mukherjee.
“It is not commodity technology, so it will not be commodity priced,” he says. “There will be cheques to sign.”
While users will be able to select the APIs for their applica-tions from the cloud on a pay-as-you-go basis, they will also need to spend money to ‘train’ Watson in a particular ontol-ogy and employ human expertise to check that the applica-tions’ output makes sense.
“You have to ask: do you have the talent to use Watson for your purpose? Those people are expensive, not a commodity,” says Mukherjee.
ARTIFICIAL INTELLIGENCE
❯Computer AI has been the holy grail of application development for nearly 50
years, but not all projects that claim to be AI really are.
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IBM is heavily promoting Watson with the term “cognitive computing”, in an attempt to move its core business beyond the technologies that it pioneered, but which have become commoditised and less profitable.
“Cognitive computing, cloud and big data are the areas where IBM is investing billions, and cognitive might just be the priority,” says Mukherjee. “In technology markets such as databases, analytics and business applications, IBM has lots of competition.
“You could say that what IBM offers, Oracle and SAP also offer. But the last frontier is cognitive, and that is IBM’s story. Tactically, it is betting the farm on Watson.”
IBM has not released pricing for Watson per se, because it will depend on the particular combination of APIs and add-on ser-vices that customers consume. It has also not announced how much it is investing in its Watson venture or discussed the com-puting capacity it has created to support Watson worldwide.
However, it does make strong claims about Watson’s abilities in cognitive computing.
Phil Westcott, European ecosystem leader at IBM Watson Group, says: “Watson is based on systems that learn at scale, reason with purpose and interact with humans naturally. It understands the world in the way that humans do: through senses, learning and experience.”
Elsewhere in IBM’s promotion of Watson, the company claims: “Watson and its cognitive capabilities mirror some of the key cognitive elements of human expertise: systems that reason about problems like a human does.”
Watson lacks common senseBut John Carroll, professor of computational linguistics at the University of Sussex, says despite Watson’s impressive perfor-mance in natural language processing and question answering in Jeopardy! and elsewhere, he is sceptical about the claim that it can reason or understand the world the way humans do.
“It is different and complementary,” he says. “Humans don’t have the ability to read millions of documents an hour, so it goes beyond human ability. But, at the same time, it does not have com-mon sense. It does not have the ability to reason inductively or understand how humans act, move and behave in the real world.
“It can do something that a human can do in same way IBM’s Deep Blue can play chess and Google AlphGo can play Go, but it is still not the answer to replicating human intelligence. It can only do the types of things it was set up to do: to get information from text and from databases and integrate them. It cannot act like a human in the real world and does not have any notion of what the real world is.”
Watson bases its responses on the expert human texts it pro-cesses, but is not able to reason much beyond this evidence, says Carroll.
“Ontologies are inconsistent and incomplete, and once you make two or three inferences, it is quite possible to go badly wrong,” he says. “The computer won’t know what is an inconsist-ency and what an incorrect inference is because it does not have any common sense. It can be led astray very easily. It is safer to work from documents that people have written or individual facts that people have input.”
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Carroll says AI is being applied to a range of business problems (see box below) and some problems may be applicable to more specialist technologies other than Watson.
IBM has impressed businesses, academics and analysts with Watson’s performance in answering natural language questions based on vast amounts text and other unstructured data. Experts agree it has many applications that could benefit businesses and other organisations, but whether its capacity for human-like rea-soning stands up to IBM’s claims remains an open question. n
ARTIFICIAL INTELLIGENCE
Other artificial intelligence systems are also available
Arria extracts information from complex data sources to create output in natural language, typically in the form of a report. It partners with IBM Watson and, until April 2015, counted Shell among its customers.
Brandwatch produces insight into public opinion based on social media and the web. Its customers include Ikea, Marks & Spencer and British Airways.
iLexIR has developed text processing tools in collaboration with the Universities of Cambridge and Sussex and specialises in text analytics, mining, classification and search applications.
DeepMind was founded in the UK in 2010 and was acquired by Google in 2014. Its AlphaGo program beat a human professional Go player for the first time, prompting widespread publicity.
Its Health unit is working with the Royal Free Hospital NHS Foundation Trust to present timely information to help nurses and doctors detect cases of acute kidney injury.
AlchemyAPI analyses text for sentiment, category and key-words, and recognises objects and faces in images. IBM Watson Group acquired the firm in 2015 to complement its ability to draw connections in textual data.
Seldon is an open source and platform-agnostic machine learning system that provides real-time recommendations. It combines behavioural, social, contextual and first- and third-party data to increase the relevance of content and product recommendations. Seldon’s customers include lastminute.com.
“waTson is based on sysTems ThaT learn aT scale, reason
Are you ready for a fourth generation of enterprise flash storage? That is, flash used not just to accelerate IT, but to transform it – and, in the process, to enable whole new ways of building applications and give IT
the agility it needs to keep up with today’s business.On the hardware side, most of what is needed is already here.The first generation of flash was as an adjunct, to accelerate
servers and storage systems, including creating hybrid disk/flash storage arrays. The second comprised relatively simple all-flash arrays as point solutions to accelerate specific applications that were I/O-bound.
The third generation took its place when all-flash arrays began to acquire the sort of management capabilities standard in tradi-tional enterprise storage systems. This was when an organisation could move many, or all, of its applications onto the same shared all-flash array.
This is the key enabler for the fourth generation, which expects storage to be built for general-purpose use, not as a point solu-tion. But the real change does not come from hardware. It comes with the realisation that flash storage systems now allow IT to do things that simply were not possible before.
They are faster, save space in the datacentre, draw less power and require less cooling, and provide far more consistent perfor-mance than mechanical storage.
Deprogramme your legacy mindset to unlock
fourth generation of flashUsing the medium as general-purpose storage will unleash the capabilities of your IT – and your business, writes Bryan Betts
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Running ahead of Moore’s LawUnderlying this is the fact that enterprise flash, with its massive density growth, is running ahead of Moore’s Law – and the corresponding cost reductions have the potential to turn the pro-gramming world on its head.
For decades, programmers have been taught to avoid writing to disk wherever possible – but that is no longer necessary. Tasks in areas such as analytics – which would previously have required too much disk input/output (I/O) or simply taken too long – have now become practical.
“When I looked at the future datacentre, it was clear there was a significant disconnect between the modern business world and IT,” says Dani Golan, CEO of flash storage developer Kaminario.
“Business has changed dramatically over the last 15 years – it’s agile, it scales, it’s fast to change and flexible. IT is the opposite, so every change in IT – whether it’s the cloud, big data or 100% virtualisation – every change is an attempt to close that gap.
“Flash is the biggest revolution in IT today, maybe the biggest since virtualisation. We are not just solving a storage problem, we are rebalancing IT. But there is a whole generation we need to re-educate. If you were taught programming in the past 45 years, you were taught: ‘Don’t go to disk.’ We are turning that on its head – we say: ‘Go to disk as much as you like.’”
Some of the major software developers have already adapted their platforms to take advantage of flash memory’s attributes, and a few companies already deliver flash-specific versions of their software.
However, these are still mostly second- or third-generation implementations, where flash is used to accelerate existing programs or processes. Applications have been rebuilt, for example, to have faster and fewer write cycles, or to remove the intentional I/O delays that were sometimes used in the past to make the processor wait for a hard disk to catch up and deliver data.
It is a hugely disruptive opportunity, says Carlo Wolf, Emea vice-president at all-flash pioneer Violin Memory. “You relieve appli-cation developers of a constraint, now they can develop differ-ently,” he says. “First, you accelerate their work anyway – but then the storage moves closer to the application, so now companies can design their applications differently. The structure of writing applications so far has always been with the expectation of disk on the back end.”
Wolf says that, in one extreme case, during testing with a cus-tomer, Violin encountered an application that would not work with a flash array. “The storage was too fast for the application, which didn’t expect the data to be ready yet,” he says.
Flash-enabling new business processesThe real generational change will come with the next big step of building whole programmes and processes, or reworking exist-ing ones, in ways that were not possible before flash.
Wolf offers the example of a gas distribution firm that changed its logistics, as it could wait until 5.00am to do its routing, when staff loaded the trucks, instead of having to start at 2.00am.
FLASH STORAGE
❯Computer Weekly surveys the startups and specialists in the all-flash array market in which
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Rohit Kshetrapal, CEO of Tegile – which has developed software-defined flash arrays – offers another example closer to home. His arrays can, with their owner’s permission, report usage data back to Tegile. This allows the company to predict when the customer will run out of capacity or cache hits, and offer upgrades or main-tenance – and it only works because of flash. “It’s a huge amount of data, and we couldn’t do it without flash because collecting the data would have slowed the systems down,” he says.
But how far has the wider business moved in this direction?A recent survey, carried out on behalf of Kaminario, suggests
flash adoption is still mostly driven by affordability and the desire for higher performance – which suggests most organisations’ thinking is still at generations two and three. Also, it is imple-mented in less than a third of UK datacentres – and, even when you include the US, very few organisations are 100% flash so far.
Wolf cites other research that suggests perhaps 10% of the global installed base of storage has gone all-flash, for its primary storage at least. That leaves 90% of a $20bn industry still to move, he says.
Implementing the fourth generation of flashA move to the next generation of flash is about teaching devel-opers and systems analysts new ways of thinking, that make use of flash’s unique properties, and using those properties to re-engineer business processes.
It is not about the flash array hardware, but it does place some requirements on the hardware; if the underpinnings are wrong, you will not be able to make everything else work as you want.
General-purpose storage is essential. Because the change is so sweeping, it almost goes without saying that you need an array designed to handle mixed enterprise workloads, not something designed as a point solution. Some current enterprise flash imple-mentations will work well as a foundation for generation four, but others may not.
Scalability is another essential – ideally both scale-up and scale-out. Part of the story of fourth-generation flash is the transition to a solid-state datacentre. There may still be mechanical storage in your backup and archive tiers, but it will be all-silicon on the front line. The last thing you need here is array sprawl, with indepen-dently managed arrays added in discrete siloed chunks to meet growing capacity demands.
Deprogramme your legacy mindsetCost-effectiveness is another objective. There are several ways in which you can build flash arrays – for example, using solid-state drives, specially designed flash cards or a software-defined storage approach to bind together commodity storage units. Be sure to choose one that not only scales well, but does so economically and which can also take advantage of advances in flash density and price performance.
Of course, there are challenges in moving to fourth-generation flash. There is a lot of legacy thinking to unlearn and baggage to abandon, as well as pioneering techniques to take on board and the flash-enabled datacentre infrastructure to plan. But get it right, and flash could be the final piece of the jigsaw that enables IT to reboot the business it serves. n
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GDS finds Millennium Bug down the back of the sofaThe Millennium Bug – which, as long-time readers of Computer Weekly will remember, was going to cause systematic global IT failure at the stroke of midnight on 1 January 2000 (power cuts, planes falling from the sky, nuclear missiles launching them-selves... that sort of thing – is back. Sort of.
That is according to Government Digital Service (GDS) auditor Evans Bissessar, who seems to have found the nefarious beastie cowering down the back of the digital sofa.
It turns out that even though the government’s Action 2000 campaign shut down on 31 March 2000, its website did not.
Actually, the government kept bug2000.gov.uk online for 16 years, during which time it automatically continued to pay its hosting and domain registration fees. Whoops.
Besides the Millennium Bug’s homepage, GDS found a number of other defunct websites during the audit, includ-ing government sites providing information on the digital TV switchover, old campaigns on road safety and alcohol con-sumption, and even the G7 Finance Ministers’ Summit – from February 2005.
The old websites, 947 of them in total, were shut down, but will be preserved for posterity at the government’s web archive. n
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