Omnichannel Urgency: Retail at the Customer Experience Tipping Point

By Bob Elliott, managing director, SAP Canada

This is today’s retail reality:Bob Elliott

  • 79% of consumers spend at least 50% of total shopping time researching products online
  • 82% of consumers will substitute and switch brands due to an out-of-stock product
  • 59% of consumers are willing to try a new brand to get better customer service

A vast majority of all purchases begin online. The expectations have never been higher for retailers to deliver shopping experiences through their website, a mobile app or their social networks.  Although the brick-and-mortar store still accounts for most purchases, the beginning of the transaction starts elsewhere.

Innovative retailers are dramatically changing their business model to stay ahead by shifting their storefronts to the digital world. They’re building apps, integrating social media and ensuring a complete omni-channel experience for the customer at every touch point.

Being visible and available to your customer through every channel is highly important for competitive retailers, but how do you retain your customer? What can you do to stop them using another brand or service that’s equally available? The most competitive brands are turning to loyalty management strategies to create a consistent customer experience that provides incentives, and rewards customers for their loyalty.

The beauty of a rewards program is that they entice consumers to repeat their shopping experience. The benefit to retailers is that these programs are often more effective in increasing revenue over the long run than one-time price promotions and can help move stock that might otherwise sit on the shelves.

A smart loyalty program, backed up with high end software, allows you to gather all the information you need from your customer to provide them with personalized, tailored offers to keep them loyal to your brand. Combine real-time personalized promotions with the weight of your shoppers’ point-of-sale transaction history, and we’re talking about a serious market advantage. Your shoppers’ transaction history (easily recorded and assigned to a loyalty account) contains every scrap of detail you can imagine, including:

  • The time, date, location, and frequency of store visit
  • The size and value of each visit
  • The value and frequency of coupon usage
  • The individual items purchased (brand name versus store brand)

With the power of technology like SAP HANA, this data could be loaded and accessed today, in real-time, to trigger personalized promotions through smart phones. Imagine walking into a grocery store to stock up on your weekly staples. As soon as you pick up a carton of eggs, your smartphone chimes as you pass a digital marketing sensor. You check your phone and find out that your favorite brand of breakfast sausages are 50 cents off for the next hour – what luck! Of course, there’s no luck involved whatsoever.

The in-memory analytics engine studied your transaction history, identified a product related to eggs for which you have an existing affinity, and priced it just right to entice you to purchase a high-markup item you didn’t plan on buying. This all happened without human intervention in a fraction of a second. Scale this model to several interaction points throughout your stores, and you begin to see the impact precision retailing can have on your top line.

Juniper Research forecasts retail payment values on NFC-capable smartphones upwards of $180 billion globally by 2017. Mobile spending in general will reach $1.3 trillion globally and account for 35 percent of the technology economy by 2016, according to Forrester Research. Retailers of all shapes, sizes, and markets will be investing in ways to own a piece of this pie. It’s not a question of if but when.

BYOC – Identity Policy Architecture for the Digital Economy

securekey3Earlier today I was fortunate to be given the opportunity to chair this webinar from SecureKey, on ‘BYOC’ – Bring Your Own Credentials.

With inputs from PwC and the Government of Canada, SecureKey explained how their Identity platform is enabling citizens to log on to Government e-services, via their online banking username and password.

Identity as a foundation for Digital Government – Globally

My introduction was to highlight that this is a global trend, based on open standards such as SAML and OAuth, where the USA and the UK among others are also pioneering the same principles as Canada.

Salim Hasham from PwC provides an excellent context of the surrounding Digital Government imperative, including a history of e-government to date and where online citizen services are headed.

Rita Whittle who leads the Identity program for the Government of Canada then steps through their program to date and where they envisage it headed. Rita makes the critical point that this infrastructure is central to Canada’s ambitions to become a Digital Economy leader, describing their policy governance and other key design factors that shape these online services.

Andre Boysen of SecureKey concludes with, and this leads into the key topics of our Q&A at the end, on implementation aspects. In particular the audience were keen to explore how other agencies (Provincial, Municipal) might share in this architecture approach, given other pioneers like British Columbia.

Andre explained the identity broker model their platform enables, so that apps don’t need to wire a connection for each and every identity provider,and Rita explained the beginnings of a pan-Canadian Identity credentials council for sharing best practices and credential access methods across government.

Access the webinar replay here

Can banks step up to the digital challenge?

bob-elliott1By Bob Elliott, managing director, SAP Canada

The digital journey we’re on today means that even traditional institutions need to become “full service” to connect with customers through every channel.  But for many banks, how feasible is this?  Can a traditional bricks and mortar bank compete with PayPal, Facebook or Amazon?  This is the new reality for banks today. Just last week Facebook announced that the company received Irish regulatory approval to become a “payment and remittance processor,” i.e., a bank, and PayPal is already a bank in many jurisdictions.

When some of the most famous and frequently used brands in the world start competing for your business, what can you do to win? Is it too little too late? Banks are trying hard to go digital –  they’re hiring smart people and they’re making big investments – but can you think of one “physical” business that has successfully evolved into a digital leader?  Companies like Amazon or Facebook are purely digital. They were invented for the internet. They have been using customer and behavior data for years to create a relevant and meaningful digital experience.  And they are engaged with your customers today.

Very few brick and mortar retail businesses have evolved into an internet age powerhouse.  Bookstores, record shops, photography stores, video rental firms, etc. have been decimated by new digital competitors.  Banks have offered online services for several years but are just getting started in the mobile/multi-channel space, and most are struggling to make their cross-channel experience meaningful and seamless for their customers.  When you think about the internal structures of a large bank versus a start up like Facebook, you can begin to understand why banks cannot behave like a start-up.  The challenges include: brick and mortar investments and mentality; complex,  inflexible and aged legacy IT systems; and leadership by the same executives that built up the legacy business.

However, can a digital upstart seriously take on the banking industry and win? For me, the answer is no.  This has been demonstrated by startup banks such as Simple, Moven, Fidor and more. They are fledglings, and what happens to fledglings is they fall out of the nest, can’t fly or get eaten by a predator. We saw this when US based Simple was acquired by multinational Spanish banking group BBVA.  BBVA hopes to use Simple as a stand-alone entity to help them become a  next generation bank.  Many banks are adopting this strategy – acquire a fledgling and hope it can help them transform.

This may be a good plan but it’s traditional thinking.   Let’s flip this thinking upside-down and consider an even bigger risk for banks:  what would happen if an online player like Google were to acquire Citibank in a hostile takeover tomorrow?  What would you do if you were acquired? How would you react? This is the scenario that banks should be considering in their digital strategy.  Of course, there could be regulatory barriers but these are also changing rapidly.    As is often the case, the best defense is a strong offense, and investing in a modern, open and flexible IT platform that is designed to work in a multi-channel / omni-channel world is key to survival, growth and profitability.  This is not optional, it’s required, and we’re seeing examples around the world – Commonwealth Bank of Australia, Standard Bank of South Africa and Deutschebank are great examples.

Canadian bank ATB, the largest Alberta-based financial institution, has leapfrogged the traditional competition by completely transforming the platform on which it runs its business. The transformation meant ATB could bring mobile banking to its customers for the first time, and they rolled this out in months, not years, giving their customers more options for interacting with the bank. Now running their business on an SAP cloud network, ATB is a more nimble organization. They have the flexibility to introduce new offerings to the market quicker than the competition, while improving customer service, productivity and profitability. A perfect example of what other Canadian banks need to do to compete with oncoming trends.

 

Canadian Government Failing Online Citizens, Failing Digital Economy #GC2020

** Update – There have been other media articles on this same story: IT World Canada, and Michael Geist.

The Canadian Government is promoting a future planning exercise called ‘Blueprint 2020‘, to envisage the modernization of the public sector, which is great, and they are also helping co-ordinate collective inputs through a Twitter hashtag: #GC2020

This is also great, an example of how to use social media to engage with citizens.

However what is not so great is just how far behind the rest of the government organization is. A few Twitter posts does not an e-government strategy make.

Canada’s Digital Economy – Stuck in the Netscape Era

Earlier this week the Auditor General released their latest report, and one section focused on the online service delivery of government departments.

The report wasn’t just bad, it’s terrible. The Toronto Metro newspaper yesterday ran a headline describing it as “Feds stuck in Netscape era”, highlighting how they are still trapped in the era of floppy discs, there has been no major initiative in this area since 2005 (!), there is no government-wide strategy for doing anything about it. While they have a new plan in the pipe, it’s at least 16 months away…

Wow. Good to know the taxpayers dollars are hard at work, eh!

This might seem like it:’s only a function of convenience, that while it is handy to do stuff online, it’s no big deal to go down and sort it out face to face if needs be – We all spend too much time on Facebook anyway, right..

However consider four very big impacts for all Canadians:

  • The financial cost – The Auditor General highlights how the average cost of a digital transaction for government departments was almost 20 times lower than the cost of a telephone transaction, about 30 times lower than the cost of a mail transaction, and about 50 times lower than an in-person transaction. It’s costing taxpayers 50x more than it should to run the government.
  • More financial cost – The IT departments for the Canadian Government consumes over $4 billion a year, SSC alone almost $2 billion. Given this poor scorecard for IT-based services, what are they spending it on???
  • The downtime risk – This is not the first time the Auditor General has put this spotlight on IT. In their 2010 report they highlighted how all these old systems are on the edge of collapse. Imagine if a major function like Welfare claims went entirely offline! (Read more in our white paper on how to address the issue: Always On Digital Government).
  • The opportunity cost – It’s not surprising therefore that Canada has also not produced a Digital Economy report. This is the document that would direct Canada’s investment into these kinds of areas, for purposes of growing a world-class tech sector.

In short it can be seen that the Canadian Government is spending a fortune to keep in place dated systems which are far more expensive and far less capable of online systems than new Cloud services, and today this is already costing $billions more than it should. This is part of a larger apathy towards technology innovation in general, that will cost Canadians far more on a huge scale in terms of long-term prosperity.

If you want to know why there is this lack of focus on the tech sector, simply read this article and check out this chart. This is a reflection of where priorities and focus lies…. Technology, along with everything else, would be in the red line plunging downwards.

Yes the Feds are reporting a budget surplus, but at what price? Selling off the future of Canada tomorrow to make a buck today?

Openstack in Action conference – Montreal, 8th October

openstackIt’s very exciting news that an ‘Openstack in Action’ conference is opening up a Canadian chapter of activities.

The first conference is scheduled for next week, 8th October, register here.

I am presenting an overview of the Cloud industry in Canada, and also on ‘Openstack for the Enterprise’, a Cloud Best Practices white paper that we are currently working on.

Is Your IDaaS Vendor Really Securing Your Identity?

One major problem with Identity as a Service

With no huge capital investment, and almost equal operational expenditure, organizations all across the globe are rapidly moving to a cloud based infrastructure.

The benefits of moving to cloud may be plenty, but where sensitive corporate data is involved, adopting cloud leaves the enterprise in a fix. Reason being, that almost all the cloud based applications are in a public domain, and the maximum level of security offered by all of the cloud application providers is a secure channel of communication between the SAAS vendor and the consumer.

In older days, enterprises used to manage security by putting big bad firewalls to keep the data within the premises. If the data was to move outside the firewall, there were VPNs. With cloud, all the data residing with the vendor is in clear text and god forbid if the notorious hacker is to get hold of it.

This inherent problem with cloud SAAS has followed organizations in the identity domain as well. But identity is a different beast altogether and the security aspect must not be overlooked when adopting IAAS (identity as a service).

SAML, the protocol to establish trust between two different identity systems, will be the answer provided by many cloud identity providers, but is SAML really the answer? Not so much! SAML just take cares of the establishing a secure channel for transporting identity, but the actual data residing with identity providers may not be secure. This is the question that really needs be to be answered before adopting a cloud based identity provider. Why? Well digital persona theft exposes the organization to plenty of hazards both monetary and reputation wise.

In older days, the organizations used to get rid of the incompetency in the data breach by making a change in the organizational structure of the team responsible for managing security. With cloud, in case of security risk, moving to a different cloud IAAS vendor is harder to do because the digital personas reside with the provider, and replicating those records along with roles and policies would be a nightmare, both in terms of time and cost.

So what to look for in a cloud IAAS vendor if not SAML? Yes, you got it right! The answer is: what is the IAAS vendor doing to protect sensitive data?

1. Are they putting firewalls?

2. Are they getting security audits done for their infrastructure?

3. Or are they doing real-time encryption?

1 & 2 are the norm and comes by default with IAAS vendors. However, encryption is the trickiest part, because simple encryption is nothing without carefully crafted key management system. IAAS providers for a non-collaborative way of providing SSO, the key management is usually poor. Either the keys reside with data that it is being stored with, or the keys generated are through an algorithm, making the encrypted data exposed to rainbow tables.

The Smart-Key Algorithm developed by SmartSignin and its inferred system architecture make possible a new class of security and trust for cloud based identity and access management. One can think of this as perfect trust because it is based on the principle of mutual distrust of all elements in the system.

By using key splitting, mutual authentication of client and server, and ensuring that an actual encryption key used for entity/password protection is never stored or used on a server (encrypted or otherwise), it gives absolute assurance that even if an attacker was to penetrate that said server they would never have enough information (even if actively stealing data out of memory) to ever reconstitute a key or steal an online identity. By ensuring decryption and use of credentials exclusively on the client it renders cloud servers (which are the single point of security failure and highest risk element in any system) immune to any attacks associated with account compromise.

In summary beyond the Smart-Key Algorithm offering a high level of security with the right implementation, it also offers cloud based security and identity management a significant forward evolution that is very compelling and worthy of broad use and deeper integration (i.e. direct use of the algorithm rather than just encryption of regular passwords) into various web services.

SmartSignin takes security very seriously. With its patent pending Smart-key algorithm & carefully crafted key generation and management architecture, it leads the way and stands apart from all the players in the cloud.

Implementing a Canadian G-Cloud on OpenStack

openstackOur headline theme of ‘Building the Canadian Cloud‘ is intended to help grow the Canadian Cloud supplier industry, by linking product development to major market opportunities, like repeating implementation of the UK’s G-Cloud model for Government.

Shared Services Canada have recently released an updated roadmap plan (46-page PDF) for their implementation of Cloud Computing, which describes:

  • An overall model based on the NIST definitions
  • Overall business drivers include data centre consolidation to as few as possible
  • An architecture of secure zones and VPCs (Virtual Private Clouds)
  • Workload mobility

What is especially noteworthy is how big a foundational role ICAM (Identity and Credential Access Management) will play in this architecture, and a critical point about ‘Certified and Accredited infrastructure’.

Programs like the G-Cloud are basically marketplace systems based on certification of suppliers. What’s especially important about this approach is how it levels the playing field, small suppliers can join as easily as large ones. The traditional RFP process typically excludes them.

Building an Open Cloud Operating System

What really leaps out is the goal and desire for an “Open Cloud Operating System”, and how this would further accelerate this effect.

From slide 32 they describe a detailed vision of how using a platform like OpenStack would help them avoid lock-in to one particular vendor and improve workload mobility, and then poses a number of questions about the practical implementation of wholly standardizing on OpenStack.

These topics will be the agenda for our next Building the Canadian Cloud meet up.

Cloud Service Brokerage – The Missing Link for Government Cloud Adoption

By Ilyas Iyoob, PhD, Gravitant

Dr. Iyoob is presenting at our upcoming workshop: Building the Canadian G-Cloud.

This week’s top story in FEDConnects says that “General Dynamics Information Technology (GDIT) and NJVC are leading the way when it comes to helping agencies meet the Cloud First mandates” in the US.  Wait a minute…  didn’t the CATAAlliance just launch the G-Cloud First for Canada campaign a few days ago as well?

What if we leverage the success of GDIT and NJVC for successful G-Cloud First adoption in Canada?

Why Cloud Services Brokerage?

CalloutGDIT and NJVC are large Service Integrators for the US government.  Their experience with IT for the military as well as the intelligence community led them to believe that the agencies would have a tough time with Cloud First…  unless…  there’s a way for them to quickly and securely test cloud solutions in a controlled environment.

However, the agencies face a number of issues.  Here’s a short list of them:

  • There are so many certified providers out there.  How do we know which of them will truly satisfy our IT needs?
  • There is no standardization of terminology.  How do we know what to order from the provider?
  • Each provider has a different pricing model.  How do we compare offerings and providers side-by-side?
  • Each provider has a different process for provisioning.  How do we quickly provision resources?
  • The on-demand pricing model is very unpredictable.  How do we know what the actual bill would be?
  • There are many people in the organization with access the resources.  How do we control this access?

As a result, Gartner identified this as the critical piece in making the cloud consumable and coined the term Cloud Service Brokerage (CSB).  It is the job of the CSB to answer these questions, and well established CSBs even have self service portals for their customers.

How will it work?

Consumers access the CSB portal and begin designing their architecture using virtual resources on a canvas.  Then, they compare the cost of this architecture across providers and select one or more providers.  A sample bill of materials is shown to the consumer, and once the consumer approves it, a push of a button is all it takes to automatically provision all the virtual resources across all the providers simultaneously.

Once the resources are provisioned, consumers have the ability to customize access to each resource.  Based on monitored utilization data, consumers are also given recommendations to reduce cost and continually operate in an optimal manner.

Has it been done before?

Gravitant’s CloudMatrix technology currently powers the Texas Cloud Services Portal for the Texas government.  Seeing this success, NJVC established a branded cloud portal using CloudMatrix as the underlying technology and GDIT followed soon after.  And within a year, both NJVC and GDIT have been branded as leaders in helping agencies meet the Cloud First mandate.

How does this apply to Canada?

Seeing as Canada is in the initial stages of G-Cloud First, it only makes sense to adopt cloud brokerage from the very beginning and propel Canada into the forefront of cloud adoption.

Let us assume that we have the following constraints;

  • all data and infrastructure should be housed within Canadian borders,
  • only Canadian cloud providers should be available to consumers, and
  • access to the brokerage portal should be controlled.

CSB technology such as CloudMatrix should integrate with Canadian cloud providers, aggregate managed services from 3rd party Canadian providers, and customize to Canadian cloud requirements.

In other words, Cloud Services Brokerage is the key to operationalizing G-Cloud First in Canada.

Here’s an example of a CSB portal for the government of Ontario.

GCModel

For a more concrete discussion on CSB for Canada with lessons learned from the state of Texas, please join us on June 20th at the Toronto Business Development Center.  Register here

How Ottawa Can Get Its Head in the Clouds

ottawa-planes3Shane Schick posted this great article the other day on Yahoo Finance, describing the exciting potential the UK government Cloud computing program ‘G-Cloud’ might be applied here in Canada to great effect.

Defining the best practices that helps organizations understand and plan their migration to the Cloud is the fundamental purpose of our work here at the CCN.

As the Canadian chapter of the Cloud Best Practices Network, the CCN is responsible for producing the Canada Cloud Roadmap, the official Cloud migration roadmap for Cloud Best Practices globally.

This will be updated on an ongoing basis, with the latest release adding in a number of powerful Canadian Government case studies and reference models. These best practices provide a repeatable framework for other agencies to migrate successfully to Cloud providers.

Download here: CanadaCloud.net/Roadmap

Ping: Building the Canadian Cloud Identity Ecosystem

Recently Ping Identity have been providing a huge helping hand to our CCN industry initiative  to make Canada a world leader in the field of Cloud computing.

Most notably John Fontana conducted and wrote up this excellent interview, and also Ping kindly hosted me at their Cloud Identity Summit in Toronto.

Here are my PPT slides: The presentation was the same theme as the ZDNet article – Building the Canadian Cloud Identity Ecosystem.

Zero Sign-on from Mobile Cloud Identity

This was a content rich afternoon session that covered all the essential mechanics of Cloud Identity, including showcasing the innovative work being pioneered by the mobile web services guys at Telus.

This includes Mobile Cloud Identity tools that enable app developers to create “Zero Sign-on” apps, presented by Andrew Johnstone of Telus.

In my presentation I then outlined the regulatory framework that Canada could deploy so these powerful features could be utilized for e.g. Government-secured applications.

A very interesting point Andrew made was how new “Cloud developers” aren’t as friendly to the relevant standards like SAML, preferring quicker off the shelf methods.

However I think ultimately they will find it was the smart thing to do as this standards support becomes the keystone foundation that enables expansion of tailored apps stores like for the public sector.