Some call it a passing fad. Others deem it critical to their organisation’s evolution. The role of the chief digital officer (CDO) is a major topic of discussion about leadership at organisations around the world and across industries, and people tend to fall into two general camps. One expects the role to proliferate and rise in prominence. Gartner, for example, predicts that 90% of large companies will have a CDO by 2019. The other side, conveyed in Information Age, anticipates the role will be short-lived as digital simply becomes everyone’s job and marketing leaders take greater ownership of the overall customer experience.
At the core, the CDO is a change agent — a C-level executive charged with helping the organisation transform in order to not merely keep pace but to maximise the digital opportunity. [We talked to some award-winning CDOs on this very topic.]
But what happens when that change is complete?...
For anyone interested in supply chain finance and trade finance, a growing amount of number of articles tackle the issue of blockchain. For those who are not yet familiar with this term: it is the underlying technology behind the digital currency Bitcoin.
The starting point for this technology was to allow two parties to transfer a token of value (Bitcoin) from one to another, in a cheap, reliable and fast way. Three main criteria for it are: the two parties can be anywhere in the world, there should not be a central authority processing a transaction, and the same token (Bitcoin) cannot be spent more than once.
To meet all these criteria, the solution proved to be a distributed ledger containing all transactions and visible for all participants in the network. A transaction is approved by consensus, which is reached by cryptographic encryption. This technology is called blockchain. Many articles about blockchain focus on the way it works – hence they are very technical – but due to the complex terminology being used the result can be more confusion rather than clarity. Perhaps the authors of these articles have been inspired by former US president Harry S. Truman, who said: ‘If you can’t convince them, confuse them’.
Rather than focus on the technology, it is far more interesting to understand what it can do for businesses. The technology itself is very powerful and has the potential to radically transform how businesses work and how payments are transacted. If a Bitcoin can be transferred in such a cheap, fast and reliable manner, why not also a euro or a dollar?
European financial regulators are worried that big data techniques might result in restrictions on consumer access to products and services in future, and are considering whether new rules might be needed to tackle the risk of more granular algorithmic analysis leading to discrimination.
While companies processing European Union consumers’ data have to comply with existing EU and national regulations, such as data protection law, consumer protection and competition rules, there are no regulations specific to the financial services sector.
The regulators have put their thoughts into a public discussion paper which considers both potential pros and cons of big data being increasingly applied to shape and personalize financial products and services.
On the plus side, they write that the use of big data is likely to result in consumer benefits on account of products and services that are better tailored to needs, of a higher quality or more cost-effective; while financial institutions are set to benefit from more efficient processes and decision-making or better management of risks or fraud situations.
However they are concerned about the risk of the same big data processing techniques impacting consumers’ access to products/services — and being used by financial institutions to, for example, inform pricing practices that could exploit detailed knowledge of a customer’s likely willingness to pay more or inertia to switch products.
Other possible risks they envisage are limitations or errors in the data and analytic tools, and security and privacy/ethical concerns, which they say could eventually lead to “legal and reputational risks for financial institutions”.
“Potential entry barriers in accessing Big Data technologies could also have negative implications on innovation and competition in the financial markets at the detriment of consumers’ welfare,” they add.
One possible negative scenario they flag up is the risk of consumers that are seeking household insurance for properties located in areas exposed to high risks such as floods, earthquakes or crime having to pay very high premiums or not being offered any insurance cover at all as a result of the fuller picture afforded by so much data being able to be analyzed.
Latest KDnuggets Poll asked readers to select
Industries / Fields where you applied Analytics, Data Mining, Data Science in 2016?
The most popular areas were
In 2016, 552 people voted, compared to 350 in 2015, and 221 in 2014.
Comparing to Where did you apply Analytics/Data Mining in 2015? poll, we note that the biggest increases, computed as (pct2016 - pct2015) / pct2015, were for...
A new report released by The Economist finds that companies are actively monetizing their data. 60% are already generating revenue from their data. 83% say data is used to make existing products and services more profitable.
Do you have applications, connected devices, and other systems that create a constant stream of data? Have you thought about monetizing these data byproducts?
Customer data is now no longer just relevant only to an organization’s internal departments. Turn your data exhaust into revenue.
WHEN communism crumbled in the Soviet Union, 25 years ago this week, the Chinese Communist Party seemed to many to be heading irreversibly downwards. Yes, the tanks had left Tiananmen Square after crushing a revolt in 1989, but the war appeared lost. Even China’s breakneck growth, which took off a year after the Soviet collapse, looked likely only to tear the party further from its ideological bedrock. In 1998 President Bill Clinton intimated that he foresaw an inevitable democratic trajectory. He told his Chinese counterpart, Jiang Zemin, that China was “on the wrong side of history”.
Yet, while the West has suffered from the financial crisis and the fallout after a failed attempt to implant democracy in the Middle East, China’s Communist Party has clung on to its monopoly of power. Its leaders behave as if China will never have to undergo the democratic transformation that every rich country has passed through on the way to prosperity. Instead they seem to believe that the party can keep control—and some officials are betting that the way to do so lies in a new form of digital dictatorship.
The volume and diversity of data have grown exponentially over the last few years. Computational power and storage have increased. Algorithms have become more sophisticated. But here’s the paradox: most companies that have placed big bets on data and analytics are struggling to realize the gains they expected, says a McKinsey study published today.
“In many areas, a few leading companies are racing ahead. But many organizations haven’t yet been able to scale up small-scale experiments to meaningfully improve the performance of the entire enterprise,” says Michael Chui, a McKinsey Global Institute partner.
Five years ago, McKinsey had taken stock of the big data revolution in five areas: location-based services, retail, manufacturing, healthcare, and the public sector. Revisiting these sectors, McKinsey finds the fastest adoption in location-based services and retail. Manufacturing, healthcare, and the public sector, however, have captured less than a third of the potential value from big data, finds the study.
What’s more, the gap between the leaders and laggards is growing wider as new opportunities emerge....
As the tide of disruption and digitization sweeps into every sector, the flow of digital know-how into Executive Management Teams - CDOs, CIOs and CTOs - has stepped up. This report maps the digital competencies of the Boards of the 110 largest stock-listed companies in 11 countries in Europe and the US, and the backgrounds of 1280 Non-Executive Directors.
Digitization on Boards is Still in its Infancy.
Few managers look forward to negotiating contracts. In large companies, there are many stakeholders to consult and it’s easy to make a misstep. And then there’s the expense involved in working with lawyers.
Smart contract technology promises to simplify the contract process and provide greater transparency.
What are smart contracts?
Early approaches to smart contracts included some that were merely “augmented by technology,” says Houman B. Shadab, professor of law at New York Law School. “In a sense, you could view contract signing and management services like DocuSign as an example of [smart contracts].” Other approaches automated the production of traditional contracts using templates.
The latest generation of smart contract technology, by contrast, is based on blockchain and often performs activities such as payment processing. “Smart contracts can be used to automatically send a payment when a shipment is scanned and received at a customer location,” says Shadab.
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