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How to get started with AI and automation projects

Artificial intelligence technologies (broadly defined here, including machine learning and intelligent process automation) represent new territory for chief information officers. Traditional IT processes won’t work, and the technology isn’t mature, yet CIOs know they can’t wait on the sidelines while competitors plunge ahead seeking to disrupt their industry.

This IDC PeerScape ($$$$) — “Best Practices for Launching Artificial Intelligence Initiatives” — explores how several early adopters of artificial intelligence (AI) technologies got started on their journeys, in a field full of hype, risk, and (potentially) great business value. These pioneers developed a set of guidelines for how to pick the first applications for AI, how to balance in-house and external resources, and how to make sure they have the right quantity and quality of data to feed AI systems.

For this report, I interviewed Sherif Mityas chief experience officer at TGI Fridays Inc.; Rajeev Ronanki, chief digital officer at health insurer Anthem Inc.; and Tom Sheppard, CIO at Brake Parts Inc.

My conclusion: To launch their first AI projects, CIOs must become educators, evangelists, and coordinators of cross-functional teams.

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How the CIO at CarMax is working on transforming the used-car market

CarMax-Test_Drives_DeliveredSometimes there’s synergy among my journalism ventures, where one activity feeds another. For example, I found out Stitch Fix Inc. was doing interesting things with its style-matching algorithms, wrote it up in my “Digital Business newsletter — and then interviewed their CTO for CIO Dive. Similarly, I covered CarMax Inc. in my newsletter, and then interviewed their CIO for CIO Dive.

It helps when you’re lining up a CIO interview if you already know they’re doing something worth writing about. At CarMax, the nation’s largest retailer of used cars, CIO Shamim Mohammad is helping the company roll out an omnichannel business model in which customers can buy 100% online, or start online and finish at the store, or vice versa. A key development was creating an online portal where customers and CarMax associates can see the current status of the transaction and collaborate to complete it. They’ll even deliver the car to your home or workplace for a test drive (that’s what the photo above shows).

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Old IT procurement practices can’t match the fast pace of the digital economy

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My latest IDC PeerScape report ($$$$) describes how several CIOs are revamping IT procurement and vendor management to get in sync with a fast-paced digital economy. They’re dealing with more vendors (including startups) and more contracts, which are refreshed more often because of the quickening pace of technological change. Readers will notice some clear themes: fewer traditional RFPs, more proof-of-concept tests, and higher CIO expectations from the vendor relationship.

The advice from leading CIOs is this: Streamline the bureaucracy, automate the workflow, learn to deal with innovative startups, and demand more business value from your vendors.

These insights come from interviews with:

  • Greg Tacchetti, chief information & strategy officer at State Auto Insurance
  • Ken Piddington, CIO at SGR Energy Inc.
  • Niel Nickolaisen, CTO at O.C. Tanner
  • Raman Mehta, CIO at Visteon Corp.

Related: CIOs NOT working with startups are falling behind

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The clever way that Stitch Fix gets more data to feed its style-matching algorithm

Screen Shot 2019-03-30 at 5.42.31 PMMy latest article for editorial website CIO Dive profiles Cathy Polinsky, the CTO at Stitch Fix Inc. It’s the fast-growing (and now public) online clothing retailer known for having personal stylists — backed by data & style-matching algorithms — select items customers might love and deliver them in a box.

In about two and a half years, Polinsky has:

  • doubled the size of her team so it could support, rather than constrain, the burgeoning business
  • helped Stitch Fix expand into additional markets: menswear, plus sizes, “extras” (such as socks & underwear), and kids
  • supported international expansion — starting with a launch in the U.K. later this year
  • adapted systems to Europe’s General Data Protection Regulation, the Sarbanes-Oxley Act, and California’s privacy law

My favorite part of the article covers the clever way that this company gets additional data to improve it’s style-matching algorithm.

To gather even more clues about customer likes and dislikes, Stitch Fix developed an application called Style Shuffle. The Tinder-like game shows a series of clothing items and lets clients give each one either a thumbs-up or a thumbs-down — thus providing more data to feed the style-matching algorithm.

“Clients love it. It’s super engaging. It’s fun. We have over a billion ratings now on this platform. Over 75% of our active clients have tried it at least once. Clients who have played with Style Shuffle have better ‘keep rates’ — they’re keeping more items because we’re sending more relevant items and really getting their style,” Polinsky said.

The company must be doing something right: Stitch Fix reported net revenue up 25% from last year in the second quarter of 2019. The number of active clients increased 18% to 3 million — and on average they each spent 6% more than the previous year.

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Reinventing the IT department for the fast-paced digital economy

My latest IDC report ($$$$), “Reinventing the IT Department as a Business Accelerator,” is the result of interviews with five CIOs about they got their IT departments to be more business-focused. The traditional, tech-focused IT department is a bad match for the fast-paced digital economy. But what do you replace it with? There are numerous ways IT departments can become more business-focused, e.g., embedding IT professionals in business units, or creating cross-functional teams. One company even changed the name of its revamped IT department to Digital Services.

I started out thinking this would be a report about IT reorganizations; instead, I found that this is less about changing boxes on the organization chart and more about getting IT professionals working with their business peers to co-invent the future of the business.

I’m grateful to the following CIOs who let me pick their brains for this report, which will be read by other CIOs seeking inspiration.

  • Glenn Schneider at Discovery Financial Services (and a member of the CIO Hall of Fame)
  • Trish Torizzo at Houghton Mifflin Harcourt Co.
  • Bill Martin at AEG Worldwide
  • Raman Mehta at Visteon Corp.
  • Deepa Soni at BMO Financial Group (U.S.)

Related: Dear CIOs: Speed matters