Tech decision-makers 'need to take risks'

Each week we ask high-profile technology decision-makers three questions.

Rado Kotorov Rado Kotorov says chief information officers (CIOs) have been too risk-averse following the recession

This week it is Rado Kotorov, chief technology officer (CTO) of Information Builders.

Information Builders sells business intelligence and analytics software.

The company has a worldwide presence, with 47 sales offices and 26 national distributors and agents.

They have more than 1,400 employees worldwide and their revenue in 2007 was more than $315m, with double-digit growth in software licence revenue.

What's your biggest technology problem right now?

I think we have two big technology problems. They are not specifically technical problems, they are organisational and management problems.

The first one is that many CIOs (chief information officers) have become risk-averse to new technologies, thanks to the economic crisis, and the adoption rate - at least in my opinion - has slowed down.

Part of it is because CIOs have assumed a more political role in organisations, and they look at things much more from a financial perspective, so they adopt a risk-averse approach.

It's a deeply human factor. We are much more prone to try to avoid losses than to take risks on a potential benefit in the future.

From that perspective a lot of them are looking at the 'me too' solutions - is someone else successful with the technology? Has anyone made a big financial impact on the business and profit with this technology?

We think this mentality will change as the economy picks up.

We're seeing more and more companies competing on analytics. What we see happening is almost the winner takes it all. If you execute a successful analytics problem it gives you a lead in shipping [your product] to the market place, with better insights.

The 'me too' strategy comes a little bit too late.

What we're seeing, even with technology developments like the iPad and the iPhone, is how new and disruptive technologies can take over established fields.

We believe that this is a structural problem where market forces will push CIOs [to change behaviour] - especially now CFOs (chief financial officers) are looking to them and asking why technology appears to be just a cost factor, rather than a revenue and profit generator.

These are the factors that will push CIOs to a more risk-taking position.

The second factor is end-user adoption.

I would say technology is advancing at a faster rate than the abilities of people in organisations to learn about it and adopt it.

The solution comes from an investment in education and risk-taking. It's a structural problem rather than a systematic problem.

Also, the technologies here become a little more complicated, and they require interdisciplinary skills, whereas people usually specialise in a particular area.

If you are in business intelligence, a successful leader in such a management position needs to understand the business side, the analytical side, the technology side and nowadays the user-experience side; how you design an interactive analytic dashboard, visualisations, and that's a very broad skill set.

So we see a need to find talent that can create the vision, create the execution plan, and sell internally the technology, the business intelligence and the benefits of it to board-level executives.

These are the two big problems and challenges we're facing.

Technology of Business

What's the next big tech thing in your industry?

I think that there are two technologies that are growing very fast. I would equate their impact with the invention of the telegraph, the steam engine and the automobile at the beginning of the last century.

Number one is mobile technologies - like the telegraph that revolutionised communications. They are changing fundamentally how we work, they are having a very dramatic impact.

If we look at the steam engine, it allowed us to move massive amounts of goods. We're now looking at predictive analytics as a new technology that allows us to process an unparalleled amount of data and find insights, that before would have taken us years to analyse and sift through.

The third one is social networking which, like the automobile, has changed how society is organised.

In a very similar way social networks are allowing us to work together, co-ordinate ideas, and are changing our workflows, habits, how we innovate and how we do things.

All three of these technologies are at the evolutionary stage so we don't know how long the neck of the giraffe will be. We're learning as we go along.

But we're seeing a profound impact, and the impact is an impact of scale.

That's when you start seeing the economic benefits, when these technologies gain massive amounts of users. And now practically everyone has a phone, everyone has a tablet, or at least the majority of business people do.

We're talking about the ability to access information in a completely different way to how it's been accessed up till now.

What's the biggest technology mistake you've ever made - either at work or in your own life?

A couple of years ago, prior to joining Information Builders, I was managing a very large loyalty programme and loyalty aggregator.

We recognised that most consumers carry multiple cards to use at different locations. We thought if we could consolidate all those cards into a single card that would be great.

All you had to do was do a second swipe with your loyalty card. We thought that this was a small effort for people in exchange for a big payoff. We created the cards, we wired all the point-of-sales systems with it, we gave it to 5m consumers. And they rejected it.

[Consumers] said it was too cumbersome to carry a second card and swipe it when they paid. After a year and a half, we had to discontinue the programme and we had to write off the entire investment. We exited the space of secondary loyalty cards.

About two years later everyone was carrying multiple cards that they swipe.

What I learnt from that was two things.

Number one was if we enter a market too early, we have to understand that the benefits and expected behaviour may not materialise right away.

The second mistake, which makes it worse, is to exit too early and write off your investment.

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