>> From the cube studios in Palo Alto and Boston, connecting with thought leaders all around the world. This is a cube conversation. >> Hello everyone, welcome back to the cubes. Special presentation on the future of cloud. Three years ago, Alan Nance said to me that in order to really take advantage of cloud and drive billions of dollars of value, you have to change the operating model. I've never forgotten that statement and have explored it from many angles over the last three years. In fact it was one of the motivations for me actually running this program for our audience. Of course with me is Alan Nance. He is a change agent. He's led transformations at large organizations, including ING bank, Royal Phillips, Barclay's bank, and many others. He's also a co-founder of CitrusCollab. Alan, great to see you. Thanks for coming on the program. >> Thanks for having me again, Dave. >> All right, so when we were preparing for this interview, you shared with me the following, you said enterprise IT, often hasn't really tapped the true powers that are available to them to make real connections, to take advantage of that opportunity, connections to the business that is. What do you mean by that? >> Well I think we we've been saying for quite a long time that enterprise IT is certainly a big part of our past in technology. But just how much is it going to be in the future? And enterprise IT has had a difficult time under the cost pressures of being a centralized organization with large, expensive, large topics. While at the same time we see obviously the digital operations for growing oftentimes in separate reporting structures and closest to the business. And what I'm thinking right now is enterprise IT, if it has made this transition to a cloud operating models, whether they are proprietary or whether they are public cloud, there's a huge opportunity for enterprise IT to connect the dots in a way that no other part of the organization can do that. And when they connect those dots, working closely with the business, they unleash a huge amount of value that is beyond things like efficiency or things like just providing cloud computing to be flexible. It has to be much more about value generation. And I think that a lot of leaders of enterprise IT have not really grasped that. And I think that's the opportunity sitting right in front of them right now. >> You know what I've seen lately? I wonder if you could comment, is obviously we always talk about the stove pipes, but you've seen the CIO, the chief data officer that you just mentioned, the chief digital officer, the chief information security officer, they've largely been in their own silos of definitely seeing a move to bring those together. I'm seeing a lot of CDOs and CIO roles come together. And even the chief information or the head of security reporting up into that, where there seems to be as you're sort of suggesting just a lot more visibility across the entire organization. Is it an organizational issue? Is it a mindset? Go on if you could comment. >> Well I would say it's two or three different things. Certainly it's an organizational issue, but I think it starts off with a cultural issue. And I think what you're seeing, and if you look at the more progressive companies that you see, I think you are also seeing a new emergence of the enlightened technology leader. So with all respect to me and my generation our tenure as the owners of the large enterprise IT is coming to an end. And we grew up trying to master the complexity of the silos as you so deftly pointed out. Out we were battling this soaring technology, trying to get it under control, trying to get the costs down, trying to reduce CapEx. And a lot of that was focused on the partnerships that we had with technology suppliers. And so that mindset of being engineers struggling for control, having your most important part of being a technology company itself, I've got now, I think is giving way, giving way to a new generation of technology leaders who haven't grown up with that culture. And oftentimes what I see is that the new enlightened CIOs are female and they are coming into the role outside of the regular promotion chain, so they're coming to these roles through finance, HR, marketing, and they're bringing a different focus. And the focus is much more about how do we work together to create an amazing experience for our employees and for our customers and an experience that drives value. So I think there's a reset in the culture. And clearly when you start talking about creating a value chain to improve experience, you're also talking about bringing people together from different multidisciplinary backgrounds to make that happen. >> Well that's kind of, it makes me think about Amazon's mantra of working backwards, start with the experience. And then a lot of CIOs that I know would love to be more involved in the business, but they're just so busy trying to keep the lights on. Like you said, trying to manage vendors and in the like. I've had a discussion the other day with an individual, we were talking about how, you got to shift from a product mindset to a platform mindset, but you've said that the platform thinking you're always ahead of the game. Platform thinking it needs to make way for ecosystem thinking. Unless you're into that, it'd be giant scale business like Amazon or Spotify you said, you're going to be in a niche market if you really don't tap that ecosystem again . If you could explain what you mean by that? >> Well I think right now, if this movement to experience is fundamental. Right? So Joe Pine and Jim Gilmore wrote about the experience economy as far back in 1990, but the things that they predicted then are here now. And so what we're now seeing is that consumers have choice. Employees have choice. I think the pandemic has accelerated that. And so what happens when you put an enterprise under that type of external pressure, is that it fragments. And if it can fragment in two ways. It can fragment dysfunctionally so that every silo tries to go into a defensive mode, protective mode. That's obviously the wrong way to go. But the fragmentation that's exciting is when it fragments into ecosystems that are actually working together to solve and experience problem. And those are not platforms they're too big. When I was at Phillips, I was very enthusiastic about working on this connected healthcare platform. But I think what I started to realize was it takes too much time. It requires too much investment and you are bringing people who tune you based on your capability, whereas what the market needs is much more agile than that. So if we look in healthcare, for instance and you want to connect patients at home, with patients, with the doctors in the hospital. In the old model when you said, I'm going to build a platform for this, I'm going to have doctors with a certain competence, so they're going to be connecting into this. And so are the patients in some way. And so are the insurers. I think what you're going to see now is different. We're going to say let's get together a small team that understands its competence. So for instance, let's get an insurance provider, let's get a healthcare operator, let's get a healthcare tech company and let's pull their data in a way that helps us to create solutions now that can roll out in 30, 60 or 90 days. And the thing that makes that possible is the move to the public cloud. Because now there are so many specialized suppliers, specialized skillsets available that you can connect to through Amazon, through Google, through Azure, that these things that we used to think were very, very difficult, are now much easier. I don't want to minimize the effort, but these things are on the table right now to read value. >> So you're also technologist. And I want to ask you and everybody always says, technology is easy part of the people and the process. We can all agree on that. However sometimes technology can be a blocker. And the example that you just mentioned, I have a couple of takeaways from that. First of all the platform thinking is somewhat, sounds like it's more command and control and you're advocating for let's get the ecosystem who are closest to the problem to solve those problems. However they decide and they'll leverage the cloud. So my question is from a technology standpoint. Does that ecosystem have to be in the same cloud, with the state of today's technology? can it be across clouds? Can be there pieces on prem? What's your thinking on that? >> I think exactly the opposite. It cannot be monolithic and centralized. It's just not practical because that would cause you too much time on interoperability. And who owns what. You see the power behind experience is data. And so the most important technical part of this is dealing with data liquidity. So the data that, for instance somebody like Kaiser has or the Harvard Mental Healthcare have or the Phillips have, that's not going to be put into a central place for the ecosystem mobilization. There will be subsets of that data flowing between those parties. So the technical, the hardware. Is how do we manage data liquidity? How do we manage the security around data liquidity? And how do we also understand that what we're building is going to be ever changing and maybe temporary, because an idea may not work. And so you've got this idea that the timeliness is very very important. The duration is very uncertain. The mojo energy for this is data liquidity, data transfer, data sharing. But the vehicle is the combination of public cloud, in my mind. >> Somebody said to me, hey that data's like water. It'll go where it wants to go, where it needs to go and you can't try to control it. It's let it go. Now of course many organizations, particularly large incumbent organizations they have many many data pipelines. They have many processes, many roles, and they're struggling to actually kind of inject automation into those pipelines. Maybe that's machine intelligence really do more data sharing across that pipeline and ultimately compress the end and cycle time to go from raw data to insights that are actionable. What are you seeing there? And what's your advice? >> Well I think you make some really good points, but what I hear also a little bit in your observation is you're still observing enterprises. And the focus of the enterprise has been on optimizing the processes within the boundaries of its own system. That's why we have SAP and this why we have Salesforce. And to some degree even service now. It's all been about optimizing how we move data, how we create production services. And that's not the game now. That's not an important game. The important game right now is how do I connect to my employees? How do I connect to my customers in a way that provides them a memorable experience? And the realization is, I'm assuming it's already manufacturing for some years. I can't be all things to all people. So I have to understand this is where the first part of data comes in. I have to understand. Who this person is that I am trying to target? Who is the person that needs this memorable experience? And what is that memorable experience going to look like? And I'm going to need my data, but I'm also going to need the data of other actors in that ecosystem. And then I'm going to have to build that ecosystem really quickly to take advantage of the system. So this throws a monkey rage in traditional ideas of standardization. It throws a monkey rage in the idea that enterprise IT is about efficiency. If I may, I just want to come back to the AI because I think we're looking in the wrong places. Things like AI. And let me give you an example today, there are 2.2 million people working in call centers around the world. If we imagine that they work in three shifts, that means that anyone time there are 700,000 people on the phone to a customer, and that customer is calling that company because they're vested, they're calling them with advice. They're calling them with a question they're calling them with a complaint. It is the most important source of valuable data that any company has. And yet, what have we done with that? What we've done with that is we've attacked it with efficiency. So instead of saying, these are the most valuable sources of information, let's use AI to tag the sentiment in the recordings that we make with our most valuable stakeholders. And let's analyze them for trends, ideas things that needs to change. We don't do that. What we do is we're going to give every cool agent two minutes to get them off the phone. For God's sake, don't answer many important, difficult questions. Don't spend money talking to the customer, try to make them happy. So they get a score and say, they hire you at the end of the call, and then you're done. So where the AI automation needs to come in is not in improving your efficiency, but in mining value. And the real opportunity with AI is that Joe Pine says this. "If you are able to understand the customer, rather than interpret them, that is so valuable to the customer, that they will pay money for that". And I think that's where the whole focus needs to be in this new team in enterprise IT, and they're still in the business. >> That's a great observation. I think we can all relate to that in your call center example, or you've been a restaurant, and you're trying to turn the tables fast and get out of there. And it's the last time you ever go to that restaurant. And you're taking that notion of systems thinking and broadening it to ecosystems thinking. And you've said, ecosystems have a better chance of success when they're used to stage and experience for whether it's the employee for the brand. And of course the customer and the partners. >> That's it that's exactly it. So every technology leader should be asking themselves what contribution can I and my organization make to this movement, because the business understands the problem. They don't understand how to solve it, and we've chosen a different dialogue. So we've been talking a lot about what cloud can do and the functionality that cloud has and the potential that cloud has. And those are all good things, but it really comes together. Now when we work together and we as the technology group brings in the know how we know how to connect quickly through the public cloud, we know how to do that in a secure way. We know how to manage data liquidity at scale, and we can stand these things up through our new learning of agile and DevOps. We can stand these ecosystems up fairly quickly. Now there's still a whole bunch of culture between different businesses that have to work together. The idea that I have to protect my data rather than serve the customer. But once you get past that, there's a whole new conversation enterprise IT can have, that I think gives them a new lease of life, new value. And I just think it's a really really exciting time. >> (inaudible) The intersection of a lot of different things. You talk about cloud as an enabler for sure. And that's great. We can talk about that, but you've got this. What you were referring to before is maybe you're in a niche market, but you have your marketplace. And like you're saying, you can actually use that through an ecosystem to really leave a much, much broader available market. And then vector that into the experience economy. We talk about subscriptions, the API economy, that really is new thinking. >> It is and I think what you're seeing here it's not radical in as much as all of these ideas have been around. Some of them have been around since the nineties, but what's radical is the way in which we can now mix and match these technologies to make this happen. That's growing so quickly. And I would argue to you and I've argued this before. Scale, scale as a concept within an organization is dead. It doesn't give you enough value. It gives you enough efficiency and it gives you a cloud. And it doesn't give you the opportunity to target the niche experiences that you need to do. So if we start to think of an organization as a combination of known and unknown potential ecosystems, you start to build a different operating model, a different architectural idea. You start to look outside more than you start to look inside. Which is why the cultural change that we were talking about just now goes hand in hand with this because people have to be comfortable thinking in ecosystems that may not yet exist and partnering with people where they bring to the table. There 20, 30 years of experience in a new and different way. >> So let me make sure I understand that. So you basically, if I understand it, you're saying that if your sort of end goal is scale and efficiency at scale you're going to have a vanilla solution for your customers in your ecosystem. Whereas if you will allow this outside in thinking to come in, you're going to be able to actually customize those experience, experiences and get the value of scale and efficiency. >> Right, so I mean Rory Sutherland, who is a big thinker in the marketing world has always said, "ultimately scale standardization and best practice lead to mediocrity". Because you are not focused on the most important thing for your employee or your brand. You're focused on the efficiency factors and they create very little value. In fact we know that they subvert value. So yes we need to have a very big mindset change. >> Yeah you're a top line thinker Alan and always at the forefront. I really appreciate you coming on to the cube and participate in this program. Give us a last word. So if you're a change agent, I'm an organization and I want to inject this type of change. Where do I start? >> Well I think it starts by identifying. Are we going to work on the employee experience? Do we feel that we have a model where the employees that are on stage with customers are so important that the focus has to be employees. We go down that route and then we look at what's happened to the pandemic. What type of experiences are we going to bring to those employees around their ability to have flow in their work, to get return on energy, to excite the customers? Let's do that. Let's figure out what experience are we driving now? And what does that experience need to be? If we're the customer side. As I said let's look at all the sources of information that we already have. I know companies that spend hundreds of millions a year trying to figure out what consumers want. And yet if we look in their call sentences, you will call up and they will say to you, your call may be recorded for quality purposes and training. And it's not true, less than 10% of those calls are ever listened to. And if they listened to, it's compliance, that's driving that, not the burning desire to better understand the consumer. So if we change that, then we shall get to. What can we change? What is the experience we are now able to stage with all we know and with all we can do. And let's start there, let's start with, what is the experience you want to stage? What's the experience landscape look like now? And who do we bring together to make that happen? >> Alan fantastic. Having you back in the cube, it's always a pleasure and thanks so much for participating. >> Thank you, Dave. It's always a pleasure to speak with you. >> And thank you everybody. This is Dave Vellante the cube on cloud. We'll be right back right after this short break, stay with us. (soft music)