Back in December, CIO Magazine published an article listing the Top 5 strategic priorities for CIOs in 2020. Now that 2020 has started, we should examine how these priorities might impact the stock performance of related software stack companies. Focus on improvements in analytics, customer support and workforce automation are highlighted. Investment into these areas by enterprise IT organizations should drive demand for product offerings from several of our favorite software stack companies.
Analytics
CIOs see continued investment in data science and analytics as necessary to drive their digital strategies. As enterprises generate more and more data from various customer touchpoints, actionable insights can be mined that reveal missed opportunities or drive improved business outcomes. These may range from pricing optimization to better inventory distribution. Data insights might also result in new customer incentives or prompt the timing of a coupon offer. Regardless of the use case, enterprises are investing more money in the tools and people to harvest volumes of business data to generate useful insights.
McKesson is ramping up its use of data beyond business intelligence to predictive and prescriptive analytics, which will improve the way the company ships pharmaceuticals and medical supplies, says Brian Dummann, the company’s chief data and analytics officer.
CIO MAGAZINE, TOP 5 STRATEGIC PRIORITIES FOR CIO’S IN 2020
Enabling this kind of advanced analytics involves improving data processing flows and centralization of disparate enterprise data sources into single, data stores, like a data warehouse or data lake. Important capabilities to support these efforts include connectors to various enterprise software systems, flexible and UI-driven processing flows and aggregated data stores with easy and powerful querying capabilities.
CIOs also highlighted the need for more staff with advanced data analytics skills. These individuals need dual skills of understanding the business context of data and the analytical prowess to filter, sort and merge it.
Industry domain experts who can break down data sets, understand how data flows and extract value from data are in hot demand, says Franzuha Byrd, CIO of consultancy MorganFranklin.
CIO MAGAZINE, TOP 5 STRATEGIC PRIORITIES FOR CIO’S IN 2020
Software stack companies that might benefit from these trends in analytics represent those that facilitate data processing and large scale storage. Alteryx (AYX) provides a set of tools to aggregate, cleanse and prepare data sets as an input into creating and sharing machine learning models. Additionally, Alteryx tools are visual and code light, enabling “citizen data scientists” to handle the majority of data prep tasks, allowing the more specialized data scientists to focus on high value modeling work.
Similarly, MongoDB (MDB) is expanding its use cases into more traditional data warehousing tasks. They recently added support to easily query data on a data lake in any format, including JSON, BSON, CSV, TSV, Parquet and Avro, using the MongoDB Query Language (MQL). This allows enterprises with transactional MongoDB databases to extend their reach into unstructured data sources to generate broader insights. As MongoDB clusters expand and query capabilities extend, the line between transactional database and data warehouse will blur.
Customer Support
Another area that received attention is the application of AI and ML to customer service tasks. Specifically, CIOs want to extend customer support to online intelligent agents (bots), that might be able to answer customer inquiries without requiring speaking to a human. This has two benefits – allowing for more efficient support by moving it into the customer’s preferred channel and cutting down on the number of human operators needed to respond to call center inquiries.
Two different IT leaders, one from the City of New York and another from Alorica, intend to employ virtual assistants to respond to customer inquiries via text or voice. These capabilities will be incorporated into call centers and other communications channels, providing an “omnichannel” response, allowing customers to engage in whatever medium suits them.
2020 will be the year of the omnichannel “superagent,” an assistant that caters to people for whom “instant gratification has become a reality,” says Alorica Chief Transformation Officer Bhaskar Menon.
CIO MAGAZINE, TOP 5 STRATEGIC PRIORITIES FOR CIO’S IN 2020
Intelligent voice and text activated bot solutions are offered by Twilio (TWLO). Twilio Autopilot supports the ability to assemble AI powered bots that work across multiple communication channels – chat apps, SMS, voice and WhatsApp. Autopilot’s speech recognition and natural language processing engine interprets customer inquiries and then determines what task to accomplish based on their intent. Specific tasks for Autopilot to perform can be delivered through configuration of pre-built actions or custom code.
After being assembled, bot apps can be trained using past customer service call transcripts or chat logs. After they go live, bots can continue to improve by processing new conversational data combined with operator feedback. The Autopilot scripting language understands many common data types like dates, names, objects, etc. Users can also create custom data types based on their business context.
Like all Twilio products, customers are billed incrementally based on usage. As you can imagine, automation of these customer support use cases could grow rapidly.
Low Code and RPA
A third theme highlighted by CIOs was workforce automation through low code solutions and robotic process automation (RPA).
Low-code programming is a strategic priority for Nutanix, as the technology company will train storage engineers, network engineers and other infrastructure experts to script and automate code as citizen developers, says CIO Wendy Pfeiffer, adding that low-code tools will help people reclaim their expertise as Nutanix moves further into the public cloud.
CIO Magazine, TOP 5 strategic Priorities for CIO’s in 2020
The idea here is that while developer resources are usually scarce in organizations, technically-minded domain experts are plentiful. These individuals understand the business workflows that they want to automate by creating simple software applications, yet lack the coding skills to do so. Enter low code tools, which allow for the assembly of software applications by connecting data sources with UI templates and basic logic operators using drag-and-drop visual interfaces.
Examples of low code application use cases highlighted included common internal business functions, like on-boarding and off-boarding employees. Beyond serving internal employee functions, low code applications could be exposed to outside customers as well, like enabling signing up for events.
Workforce automation through low code solutions are provided by Smarsheet (SMAR), and advanced through their Accelerators. In fact, these tools have become powerful enough that they have created a new category of employee, the “citizen developer”. These represent knowledge workers who have strong business context and some technical proficiency, but lack advanced coding skills.
The Smartsheet Platform provides all the building blocks needed to assemble a basic application that mirrors many common business workflows. In my experience, probably 80% of business applications involve three things – entry and manipulation of various data types, basic logic or sequence operators and display on forms, record detail pages and summary reports. If these can be assembled using pre-built software components, then internal developer resources can be focused on the custom software applications that deliver unique value for customers.
As an example, you can see from a snapshot of Smartsheet’s Accelerators, that common business functions like managing M&A activities and marketing events can be enabled without creating custom software. As more enterprises turn to low code solutions, Smartsheet can expand their Accelerator offerings and benefit from increased usage.
Going Forward
The priorities for CIOs in 2020 align nicely with capabilities offered by some of our favorite software stack companies. As digital transformation investments continue, software stack products should experience increased usage, driving incremental revenue.
