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.
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).
My 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.
I’ve been producing the Digital Business newsletter for almost six months now. I’m up to about 73 subscribers — some journalist/cronies, some CIO-types, some competitors. Recent lead stories have included:
Each issue also includes brief summaries of digital initiatives; and a list of job openings and career moves of digital executives. One conclusion from my newsletter research is that more and more digital executives (e.g., CIOs) are being appointed to the board of directors at other (non-tech) companies, thus adding much-needed digital expertise at the board level.
My goals in 2019 are to produce more-but-shorter editions, at a steadier pace — and then figure out when to start charging a subscription price (though some editions will remain free, as a showcase of the valuable content).