17The National Business Review / February 24, 2017

Chris Keall

Why bother with outsid-ers?

Data analytics has become such a hot area that many large organi-sations now have teams dedicated to its pursuit. The name of the game is to pull bits of data from all around the com-pany, analyse it for telling trends, then present that analysis in easily digest-ible form so people will actually do something with the information.

But in corporate New Zealand, it has also become common to con-tract a specialised data analytics crew.

Two players in this area are Data Insight (DI) and Enterprise IT (e-IT).

DI founder and man-aging director Carmen Vicelich says sometimes there are ordinary reasons for bringing in a company like hers.

An IT department can be swamped, lack special-ised data analysis skills, or not be particularly adept at the cross-department co-ordination a good data analysis project requires.

Sometimes it’s just good to get a fresh, out-side perspective on a technical problem.

And sometimes it’s good to have a team come in not influenced by company politics or various in-house agen-das, she says.

Overcoming large organisations’ inertiaEnterprise IT direc-

tor Devin Deen takes a similar tack, telling The National Business Review, “We know how to overcome the usual iner-tia associated with large organisations and econo-mise the use of members of our team and our clients’ team to gain trac-tion in our projects.”

“As well as maintain-ing e-IT’s currency of technical knowledge and expertise in enterprise data hub software and platforms, e-IT takes care to understand trends in licencing models for all the necessary software, infrastructure, appliance, and cloud vendors.

“We guide our cli-ents toward designing a configuration that will provide the best possible return on investment from a total cost of oper-ations perspective and negotiate the best pos-sible prices on procuring these items – sometimes even at sharper prices than what the customer

can obtain going directly to the provider.”

Some of New Zea-land’s biggest companies are buying this logic.

e-IT names Sky TV and Air New Zealand among its hero local customers.

DI’s corporate roster includes Spark, ASB, BMW, BNZ, SkyCity, Gen-

esis, MediaWorks and Z Energy

But what about the cheap seats?What are the reasons for an SME to call in a data analytics crew?

“Data benefits busi-nesses of all sizes as it strategically identifies who their customers are, what their profile is, and how they can find more customers. Analysis can also extend to a range of other business deci-sions including where to put new branches, brand decisions, growth and acquisition as well as just targeted relevant communications,” Ms

Vicelich says.Mr Deen offers, “We

are experts in many of the evolving open source, supported open source, or proprietary products and tools in the big data and analyt-ics space and help our smaller customers lever-age these communities and vendors to make their dollar stretch.

Not just millennialsAnalytics has changed the relationship between businesses and their customers, Ms Vicelich says.

“Put simply, data ana-lytics enables companies to better understand their customers. Con-sumer expectations have changed and now eve-ryone, not just millen-nials, expect a relevant and seamless experience with every company they interact with.

Depending on a cus-tomer’s needs, life stage and situation, data can help a company bet-ter understand how to deliver this experience,” she says.

“There are many great examples such as Ama-zon, Spotify and Netflix who use analytics and models to suggest items a customer may also like to deliver a better experience.”

Data analytics means a closer customer rela-tionship and the intro-duction of social media and digital means this can now also be a two-way conversation, she

says.“However, with the

huge amount of data now being generated, also comes a greater responsibility for com-panies to be authentic and transparent in their use of customer data. It’s vital they have a best practice framework to protect that fragile rela-tionship and vast private information and DI helps customers achieve this.”

Government tooMr Deen says big data technologies and easier-to-use analytic tools have enabled companies to better understand their customers and how they can better provide goods and services to them.

He adds, “This is also done in the government

area where government organisations with a digital and data-driven culture are engaging with their constituents in more effective ways to improve their service outcomes while lowering cost to provide that out-come.”

Ms Vicelich says com-panies can gain much insight about their cus-tomers through their behavioural, transaction-al and social data. “I have been working in this industry for more than 15 years and it’s great to finally see companies connecting the dots and understanding what’s actually possible with the plethora of data they hold. It’s a very exciting time to work in data ana-lytics.”

ckeall@nbr.co.nz

Data analytics: the human factor

THE OUTSIDERS: Enterprise IT director Devin Deen and Data Insights founder and MD Carmen Vicelitch

More than 90% of all data in the history of humanity was generated in the last three years. Yet this flood of data and easy communications has customers demanding more transparency. Many companies are still coming to grips with utilising all this information. But even the basic step of looking at the generated data is already separating those who want to stay in the game and those who won’t be around much longer

Special Report

IT/ICT Information of Everything

www.OneNet.co.nz

0800 OneNet (66 36 38)

Talk to us when you need a New Zealand cloud computing partner you can trust.

J000807-30

“ The enterprise is moving inexorably towards the cloud.”CIO

NEWS 19The National Business Review / February 24, 2017

Nathan Smith

The bad news is choosing not to gather data isn’t real-ly an option anymore. The good news is, how data is used is far more important than quantity.

But it has to be good-quality data. As the old say-ing goes, garbage questions lead to garbage answers, and there’s nothing more frustrating for SMEs than realising they spent what little funds they had on pointless data. Recent Gartner research suggests poor-quality data costs large organisations an average of $US9.7 million each year in bad marketing and wasted human hours.

That particular problem is likely to worsen for SMEs too as the information becomes more complex. As a result, those with mul-tiple business units and

operations in several geo-graphic regions with many customers, employees, suppliers and products will face more severe data qual-ity issues.

Jade Software chief innovation officer John Ascroft says although busi-ness has always been about understanding the cus-tomer, the world is becom-ing more competitive on a global scale. Although it gives customers more choice, it is a new concern for small companies.

“Companies in New Zealand are almost de facto competing globally now. So being close to customers, understanding their needs and meeting those needs is more important now than ever. It also means person-alised offerings are critical,” he says.

However, gathering piles of data just because

it exists, then analysing it to discover what custom-ers want is approaching the problem backward. Mr Ascroft says the correct action is first asking what needs to be done to under-stand the customers to

drive what data needs to be accumulated.

Should you do it too?Perhaps perfectly placed to explain how a company can best spend its limited resources is international dating site EliteSingles. Its

chief executive Jeronimo Folgueira suggests head-ing straight to those who actually build the product or service, and then asking the marketing team.

“The need for data should come from the

operations of the business to help them make better decisions. Let’s say I know I’m looking for a customer with certain characteristics because they generally convert to a sale. Any gath-ered data should be used to target those customers

to improve the return on investment. That’s a good strategy for marketing.”

But it depends on the business, Mr Folgueira says. Data is valuable and necessary and, if used correctly, it can increase

productivity. On the other hand, sometimes it can be overrated and unnecessary. Companies shouldn’t have data scientists just for the sake of it.

“There has to be a rea-son to make it a true com-petitive advantage. The

more you know about cus-tomer behaviour and what makes people convert, the better you can focus prod-uct development in those areas and build features people are willing to pay for.

“A good algorithm must look for particular patterns for that personalised user. This is going in the direc-tion of machine learning. It’s an exciting area, which will add a lot of value to customers in general. But this is a relatively new field and quite expensive, so really only large technology companies can afford to invest,” he says.

No matter the size of the company, however, privacy laws are tightening. And even if they weren’t it would still be ethical not to mislead customers when gathering data. Mr Ascroft outlines how, even while

To gather or not to gather, that is(n’t) the question

Campbell Gibson

Sydney-based tech start-up Thinxtra launched a capital rais-ing earlier this week, seeking $A20 million, a sign that the Internet of Things (IoT) industry in Australasia is heating up.

IoT means machine-to-machine communication can occur. Ithas been around for dec-ades but is now gaining momen-tum thanks to placing sensors and wireless networking capabilities in otherwise ordinary objects. From health sensors and connected cars to home appliance monitors and livestock trackers, the potential for connected devices is endless.

This also means the stakes are higher in the event of a security

breach, especially if cyber crimi-nals sabotage medical devices such as pacemakers.

Thinxtra has the contract to roll out French company Sigfox’s low-powered wide area network (LPWAN) technology throughout Australia, New Zealand and Hong Kong.

Although an Australian com-pany, Thinxtra’s largest shareholder before the series B round is NZX-listed Rakon, which at the end of last year held at least a 47% stake.

Rakon managing director Brent Robinson tells NBR the company is not taking part in the capital rais-ing but it is happy with Thinxtra’s performance.

Another Kiwi company work-ing with Thinxtra (but not directly

investing in it) is private invest-ment firm Millennium Corpo-ration, which invests in tech companies.

Millennium chief executive Jus-tin Lobb says the company is try-ing to understand the capability of Thinxtra’s IoT network and one of its subsidiaries, Digital Mobile, sells IoT products through Vodafone.

The two networks will have dif-ferent uses and can complement each other because Thinxtra’s will have a lower bit rate and cost, Mr Lobb says.

He uses the example of a securi-ty activation in an avocado orchard (there was a crime wave during the shortage last year). Thinxtra’s

18 SPECIAL REPORT / The National Business ReviewFebruary 24, 2017

millcorp.co.nz

MC

17001/

NBR-IO

T-20

x3

Switched onThe Millennium Corp Groupis bringing the Internet of Thingsto New Zealand and the Pacific.

Distributed and executed by:

SUPPLIED CONTENT

Blockchain is a tantalising technology that is exciting a lot of people. Tens of billions of dollars worldwide is being poured into developing technology that uses it. (If you haven’t heard about the blockchain, just search for “blockchain” and “business”.)

A blockchain is essentially a digital ledger that cannot be changed. It means that parties on a network do not need to keep their own ledgers of transactions, nor are central authorities required to keep, maintain and verify transactions.

There are hundreds of blockchains. Some are public (decentralized) such as Bitcoin; others are private (permissioned), such as many being developed for Fintech where only certain parties have access to that blockchain.

Smart contracts use blockchain technology. Despite the name, “smart” contracts are not smart; they are simply self-executing computer programmes. Nor are smart contracts limited to contracts between parties; they can potentially be used in many ways. Health and safety is one.

Currently most workplaces require human intervention to ensure that machines operate correctly. There are numerous examples where systems fail, sometimes with fatal consequences (last year we had 23 workplace deaths involving a vehicle or other machinery). You may recognize these common scenarios:n A piece of machinery requires servicing after a certain number of

uses, but does not receive it.n A protocol prohibiting two or more machines operating at the

same time in close proximity, such as a forklift and a truck, is ignored.

n Skilled operators only are permitted to use a certain machine, but if an authorised person is not there, the temptation is to allow others to use that machine.

Smart contracts could be used to stop a machine from working once the maximum number of uses has occurred, prevent two machines operating at the same time, and prevent unauthorized people using machinery.

Some people will question the need for smart contracts. Isn’t the technology to achieve such health and safety goals already available, particularly through the internet of things (IoT)?

The IoT means machines that require servicing can be externally monitored so that servicing is booked when usage nears the limit. If servicing does not occur the machines are disabled when the limit is reached. Sensors can be placed on machines so that if they come within a set distance one or more are disabled. Biometrics locks – unlocked for example by fingerprints - limit the use of machines to certain operators.

But, all these technological locks are the digital equivalent of a guard on a machine, and operators commonly remove guards as they get in the way. Similarly, someone with good programming skills could hack the machines and bypass the annoying limitations.

It is here where smart contracts come in. Because the employee could not change the code the digital locks would remain in place.

Also, once a set limit is reached the smart contract could automatically request the relevant party to service the machine and payment would be made automatically.

There are as yet no cases of smart contracts being used for health and safety in New Zealand, but it is just a matter of time. The costs will fall rapidly and should be in the low thousands of dollars.

The question for employers under the Health and Safety at Work Act will be: if the technology exists to make workplaces safer, would an employer’s failure to use such technology mean the employer has breached the Act by failing to take reasonably practicable steps?

How smart contracts could radically transform

health and safety

Associate Professor Alexandra SimsHead of DepartmentCommercial Law

www.auckland.ac.nz

Hiring Challenges Persist

1 2 3

55%MoreThan

Skills and cerificationsin demand

1 in 5organisations get

FEWER THAN 5 APPLICANTS for an open cyber security position. 37%

SAY FEWER THAN 1 IN 4 Candidates are qualified

55%SAY PRACTICAL HANDS

ON EXPERIENCEthe most important qualifications for a

cyber security candidate

Close To 70%

of hiring enterprises require a SECURITY

CERIFICATION for open cyber security positions.

13%

14%59%

OF ENTERPRISESreport that the time to fill cyber security and information security positions is SIX MONTHS OR MORE.

32%

GET 20 OR MORE APPLICANTS.

DON’T KNOW

CAN FILL OPENINGS

27%US 30%

EUROPE

22%ASIA

HIRING STATUS

Many are UNABLE TO FILL open cyber security positions in their enterprises:

IN THE US:

indicate that open positions take

at least THREE MONTHS TO FILL.

Source: ISACA

State of cyber security 2017

Data must be gathered in a context in which someone would reasonably expect it to be used

– EliteSingles’ Jeronimo Folgueira

storage is cheap, capturing data must be consistent with privacy.

Privacy and strategy“Data must be gathered in a context in which some-one would reasonably expect it to be used. So a company might capture credit card details at the point of sale. But if they’re going to use it for data analytics and marketing, then the company really needs to tell the customer that’s going to happen.”

That’s why loyalty programmes are a good option, says Mr Folgueira. They allow customers to sell their information in return for a discount. Another process, adds Mr Ascroft, is subtly gather-ing information by using a company Facebook page to build a more complete picture of customers as people.

Yet, even when a strate-gy has been organised, it’s important not to get car-ried away and overwhelm

a customer with queries. In the case of EliteSingles, it needs to know every-thing about users; oth-erwise it wouldn’t have a dating business. But for other companies, pages upon pages of forms risks losing customers before they get in the door.

“The more information asked, the harder it is for customers to go through the funnel. So only ask the questions for the data you truly need, and no more. People feel uncomfortable

giving too much personal information because they don’t know if it will be shared,” Mr Folgueira says.

Then again, says Jade’s Mr Ascroft, a company may not actually know what it needs until it begins the analytics. He says even with all the advice in the world, just how much data a compa-ny requires and how often it should be collected hap-pens to be a bit of conun-drum after all.

nsmith@nbr.co.nz

Ever-increasing investment in the Internet of Things

Continued on P23

Nathan Smith

Everyone is talking about it but no one seems to have any answers. Perhaps there won’t ever be a resolution, as some predict, and businesses fight it until the earth is swallowed by a giant dying star.

The problem? Cyber-security (or the lack of security) has rocketed to the top discussion point for boards across the country. Last year a “botnet” – some-times hundreds of thousands of infected computers – for the first time attacked the “Internet of Things” (IoT) in a major way, which led many manufacturers and customers to question the wisdom of putting computers in everything.

The so-called ‘Mirai’ malware accessed devices ranging from comput-er-enabled Barbie dolls to toasters using default password and usernames. The malware then turned the devices into a botnet to run a distributed denial of ser-vice (DDoS) attack, which flooded one of the largest website hosting companies in the world, bringing a slew of major, well-known websites and services to a screeching halt for hours.

Cyber-security company Norton recently discovered the virus respon-sible for the attack has now jumped to Windows operating systems. Originally, this malware only infected Linux-based systems. But with this new jump, the malware has a broader infection and dis-tribution rate. There are approximately one billion Windows PCs running all ver-sions of Windows today, Norton says.

Barbie dolls and toasters are the least concern, says Vodafone’s head of security Colin James – what if your fridge is held hostage? No more ice-cream for you.

“The rise of ransomware means hackers are looking at all your connected devices, such as targeting a smart TV or fridge and demanding money to unlock it. Due to the growing sophistication of cyber-security threats, this year

it will be more important than ever for regulators to keep up with cyber-criminals,” Mr James says.

“Cyber-security will also hot up in 2017 due to the growth of IoT, especially among Kiwi businesses, which is where connected technologies have had the most impact to date. It’s likely this will be amplified as more consumer-orientated IoT offerings reach the market.”

Skills lackingJust as concerning, the non-profit consultancy ISACA also

released a report early this year high-lighting the worrying dearth of cyber-security professionals in the workforce. The report says a majority of surveyed business heads fear they are ill-equipped to address the threats head-on.

“Though the field of cyber-security is still young, demand continues to rise and will only grow in coming years. When positions go unfilled, organisa-tions have a higher exposure to poten-tial cyber-attack. It’s a race against the clock,” ISACA group director informa-tion security Christos Dimitriadis says.

More than one in four companies report the time to fill priority cyber secu-rity and information security positions can be six months or longer. Addition-ally, 55% of respondents want practical, hands-on experience as the most impor-tant cyber security qualification but 25% say candidates don’t have the necessary technical skills. The skills gap is getting worse.

But it’s not all gloomy in the world of digital. New forms of facilitating commerce seem to emerge every few months, from mobile wallets, virtual fit-ting rooms, personalised and geo-target-ed online shopping offers to enhanced connectivity through near field commu-nications (NFC) and Bluetooth.

“I think we’ll see more demand from consumers for businesses to make shopping from mobile readily available. Mobile is becoming the new standard for consumers to make purchases, and the convenience factor means we should expect significant demand com-ing from consumers who agree that cash

isn’t going to be relied on into the future,” Vodafone head of commercial Angus Wilson says.

The DX economy arrivesIDC New Zealand agrees, adding that digital transforma-tion will “attain macroeconomic scale over the next three to four years, changing the way enterprises operate and reshaping the global economy.” It calls this the dawn of the DX economy.

“By 2020 a digital transformation (DX) economy will emerge and it will become the core of what industries focus on. It is no longer enough to make piecemeal investments in DX. To succeed, every enterprise that wants to grow must become a ‘digital native.’ From the board level through to the C-suite, organisations must be prepared to think and act digital when the DX economy emerges in 2017,” IDC senior research manager Louise Francis says.

It also predicts by year-end 2018, more than half of New Zealand organisations will have dedicated digital transformation/innovation teams and by 2020, half will see the majority of their business depend on creating digi-tally enhanced products, services, and experiences.

“The key to DX is customer-centricity and, while the technology aspect is important, it will be the prioritisa-tion of customers that creates a meaningful difference to future businesses’ ability to thrive in the DX econo-my,” senior telecom analyst Shane Minogue says.

nsmith@nbr.co.nz

SPECIAL REPORT 21The National Business Review / February 24, 201720 SPECIAL REPORT / The National Business ReviewFebruary 24, 2017

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SUPPLIED CONTENT

Affording the features of new security technologies

Ross Johnson Director

As with all industries, new technologies in security have made major advancements and in addition to increased core functionality – remote viewing/interrogation, smartphone/bluetooth access cards, integrated people counting and remote alarm verification; they now offer solutions to important business issues – visitor/contractor management, lone worker welfare, OSH certification management and reducing expensive man power based security budgets etc.

Although many of these technologies will add real benefit and possibly exceed their costs in operational savings, there is often the barrier of the initial investment.

The leasing of such systems – either completely new platforms or upgrading core components of existing systems, has become very popular – the main reasons being:

• Avoiding delays associated with budgeting/approval processes for large capital outlays;

• Costs are in line with revenues, or operational cost savings;

• Bundling with comprehensive maintenance plans and other security services (mobile patrol, alarm response services) can allow a fixed cost, comprehensive security budget;

• High flexibility – including the ability to upgrade to emerging technologies mid-term;

• Landlords can provide more features to tenants within operating budgets;

• Building tenants can match their property related investments with their lease terms.

We have provided leasing solutions to clients valued from $5,000 (typical minimum value) to $500,000 – there is no real limit.

The standard fee for a $100,000 system on a sixty month operating lease is under $2,000 plus GST per month – we find that sixty months is in line with the technology life of many solutions.

Lease to own is also available – which has a benefit where the product has an extended usable life.

There are also new developments in leasing solutions, where businesses can sell their existing infrastructure and lease it back as part of a comprehensive upgrade – with an initial period pre-paid.

We strongly recommend a leasing partner that has an affinity with such technology based investments.

We are very happy to provide additional information and costing scenarios.

Phone 0800 247400Email sales@globalsecurity.co.nz

Web globalsecurity.co.nz

2017 trends: cyber-security, commerce and DX, oh my!

When positions go unfilled, organisations have a

higher exposure to potential cyber-attack. It’s a race against the clock

– SACA group director of information security Christos Dimitriadis

LOUISE FRANCIS: It is no longer enough to make piecemeal investments in digital transformation (DX)

SHANE MINOGUE: The key to DX is customer-centricity

COLIN JAMES: The rise of ransomware means hackers are looking at all your connected devices

Chris Keall

Artificial intelligence (AI) and machine learning are two of the strongest memes in the technology right now – both in terms of speeding the development of smarter software, and helping to create technology that can replace more and more sophisticated jobs traditionally done a person.

Where will it all end?I put that question to Derek Austin, Dragon business manager, Asia Pacific for speech recognition company Nuance Communications.

Will we get to the point where humans can be replaced entirely?

“I guess I’d say that we’re building artificially intelligent systems, not artifi-cial humans,” he replies.

“I don’t see any reason in principle why humans can’t eventually build sys-tems with human characteristics like self-awareness. But, while we have close to enough computing power to build something with the performance of a human brain, we lack the understanding

to build a sentient being.“We don’t know how to do it and it’s a

problem that no amount of big data will solve. A solution is a long way away.”

After easing NBR’s Terminator fears, he takes things in a more constructive direction.

“AI systems are built to solve particu-larly human problems. While AI might be able to solve problems faster and bet-ter than a human can, they are designed to meet human goals,” he says.

“It’s interesting that once software can solve a problem, the solution is no longer regarded as intelligent in the sense it was before. It’s like the reverse of Arthur C Clarke’s third law: Any suffi-ciently advanced technology is indistin-guishable from magic. Once advanced technology is deployed, people think it’s mundane.”

Once you have an app on your phone that can recognise your daughter’s face, you don’t think it’s all that clever, he says, by way of example.

He adds, “Scheduling truck deliver-ies or airline schedules are notoriously difficult problems for humans and com-

puters to do. But now that software can create schedules faster and better than humans can do it, we don’t think the software that does it is particularly extraordinary.”

These AI systems can bring problems of their own: trading stocks too quickly for effective control of a stock exchange system, or incorrectly targeting civilians in a drone strike, he cautions.

Thus, “When we build complex systems including those with AI com-ponents, they need to be designed with human oversight in mind. It’s a require-ment.”

While its speech recognition technol-ogy is not being used to control drones (at least as far as NBR is aware), Nuance

Humans: who needs them?

Continued on P23

I don’t see any reason in principle why humans can’t eventually build systems with human characteristics like self-awareness

– Derek Austin

SPECIAL REPORT 23The National Business Review / February 24, 2017

Garry Green

Technology is changing the way businesses operate at an increasingly disruptive rate, and those who aren’t agile enough to adapt will quickly lose competitive advantages.

Add to the list robotic process automation (RPA). In 2017, this phrase will increasingly be heard around New Zealand boardroom tables, in chief executive offices and at corporate IT planning ses-sions.

New Zealand businesses lag many organisations in Europe and the US when it comes to embedding RPA into their back office and support areas but the advantages are increasingly

impossible to ignore.Massive change is com-

ing and almost every sector – from financial institu-tions to health, to logistics, to telcos, to utilities – will be affected. Bottom-line profitability, the ability to rapidly adapt, improved customer satisfaction and a 24/7 virtual workforce are among the many advan-tages RPA delivers.

So, what exactly is meant by RPA? It depends on the sector, of course, but rather than be a new back-end IT solution, RPA can best be described as a vir-tual workforce, logging into existing IT systems and performing monotonous and repetitive tasks now done by humans.

And this doesn’t neces-

sarily equate to widespread job losses. In the UK, The Co-operative Bank’s pri-mary impetus for introduc-ing RPA was to improve customer service levels.

The bank found that, by reducing the levels of manual administration in its business, it could move these staff away from time-consuming activities and into customer-facing roles.

The bank became more efficient and customer sat-isfaction improved.

Prime candidatesIn the financial sector, the kinds of tasks which can be digitally automated include the processing of direct debit cancella-tions, account closures, payments, audit reports,

internet applications and others – all tasks that for most banks or insurance companies involve a high level of manual interven-tion and a high number of people managing the process.

District health boards (DHBs) are also prime candidates to benefit. Our DHBs receive patient and other information from multiple sources, neces-sitating a high level of human intervention to bring all the relevant infor-mation together.

By automating these high-volume and repeti-tive tasks, DHBs can free up skilled support staff to focus on more valuable patient-focused activity, and at the same time increase accuracy and reduce error rates. Demands on DHBs are growing as populations increase but are con-strained by budgets and resources. Somehow, they must become more pro-ductive and efficient if they are to continue delivering the same or better services.

Hutt Valley DHB has implemented an RPA pilot to integrate electronic patient referrals from GPs. One of the attractions for the DHBs was the tangible benefits they saw had been achieved internationally within the health sector by adopting RPA solutions.

Shayne Hunter, chief information officer for Capital Coast, Hutt Valley and Wairarapa DHBs, says the pilot has shown RPA “can free up our skilled support staff to focus on more valuable patient-

focused activity, at the same time increasing accu-racy and reducing error rates.”

A report by international consultancy McKinsey & Company found as many as 45% of the activities individuals are paid to perform in the US can be automated by adapting demonstrated technolo-gies.

Automated jobsThe November 2015 report states: “In the US, these activities represent about $US2 trillion in annual wages. Although we often think of automation pri-marily affecting low-skill, low-wage roles, we dis-covered even the highest-paid occupations in the economy, such as financial managers, physicians and senior executives, have a significant amount of activ-ity that can be automated.

“The organisational and leadership implications are enormous… we found benefits (ranging from increased output to higher quality and improved reli-ability, as well as the poten-tial to perform some tasks at superhuman levels) typically are between three and ten times the cost. The magnitude of those benefits suggests the ability to staff, manage, and lead increasingly automated organisations will become an important competitive differentiator,” the report says.

Ask any CEO and most will probably tell you the work they do is person-alised and reflects their skills and experience. But

McKinsey estimates activi-ties consuming “more than 20% of a CEO’s working time can be automated. These include analysing reports and data to inform operational decisions, pre-paring staff assignments, and reviewing status reports.”

Already, in New Zea-land, major financial institutions, health sec-tor organisations, telcos, government agencies and other sectors are adopting or piloting RPA solutions. Corporate and government agencies globally are under increasing pressure to con-tain costs while achieving service excellence, security and compliance improve-ments. RPA delivers both these seemingly at-odds expectations while also offering better speed, relia-bility and error reductions.

International experi-ence shows the degree to which New Zealand executives embrace and understand the econom-ics of automation and the implications for human skill development within their organisations will dic-tate the pace of change.

While New Zealand has fallen behind in global terms, Quanton has found local management displays an “adoption mentality” more prevalent than over-seas. Once the benefits are clear they tend to move quickly to implementation.

And that, ultimately, will dictate whether they sharpen or lose their com-petitive edge.

Garry Green is managing director of Quanton

garry.green@quanton.co.nz

22 SPECIAL REPORT / The National Business ReviewFebruary 24, 2017

Betterunderstandyour customers

Game changing analytics that unlock insights on your most important asset - your customer.

info@datainsight.co.nz

Dr Robot will see you now

By automating these high-volume and

repetitive tasks, district health boards can free up skilled support staff to focus on more valuable patient-focused activity

– Garry Green

has specialised its voice recognition technology with products aimed at the medical, legal and other pro-fessions. And it now also boasts a biometric security product that can be used to identify a person by their unique “voiceprint.”

“Or it can be active, where the caller is asked to recite a passphrase such as ‘my voice is my password’,” he says.

“People find it a natural, effort-less, and much more accurate way to authenticate themselves with a service, vs using a PIN number or password.”

Nuance’s current application includes contact centre caller verifi-cation, self-service interactive voice response systems, mobile app authentication and web transac-tion authentication.

“In Nuance’s traditional Dragon Windows and Mac speech recog-nition products for professional document productivity, the latest version 15 software uses machine learning to improve recognition of syllables and words, and improves performance in noisy environ-ments. Surprisingly perhaps, machine learning uses fewer com-puting resources with the machine learning implementation,” Mr Aus-tin says.

In other areas, AI and machine learning are being applied to the interaction between people and technology.

“Nuance’s Nina is a virtual assis-tant that allows customers to trans-act, navigate, ask questions and get exactly what they need whether they are using a mobile phone, static web pages, or a mobile app,” he says.

And Nina’s sister, “Jetstar Jess” is “Australia’s most popular airline employee.”

NBR is not aware of a popularity chart of budget airline employ-ees but JetStar Australia customer service head Ian Watson vouches for Jess’s chops.

“About a year-and-a-half ago we had real problems where custom-ers could be waiting 45 minutes to an hour to get through to our call centre,” he says.

“Now most of the time we have an average answer time of a couple of minutes.”

ckeall@nbr.co.nz

Auckland Economic Insight and Symposium

From a global perspective, Auckland is well known as both a destination and as a quality of life city. In both these areas Auckland has performed well against competitors. However, when it comes to Auckland’s visibility as a business location, a centre of investment or a magnet for talent, there is still work to be done.

The perception of Auckland is changing and there is growing recognition that Auckland is a ‘new world city’ with an innovation-driven economy.

While recent economic growth has been strong, there is no room for complacency as we will continue to compete everyday with cities across the world for export revenue, talent and investment – and the competition is tough.

If Auckland is to be successful – with the prize being sustained economic growth and prosperity – we must continue to build on our region’s reputation as an emerging global business destination. In addition, there is also a need to understand the future barriers to and enablers of economic growth.

In general terms, the growth of Auckland’s economy will be determined by a wide range of factors, most of which are outside of the direct control of either central or local government. Over the longer term, improving the economic performance of our city and its businesses will depend on improving productivity through a focus on skills, innovation, investment and trade.

In seeking to understand how best to deliver future economic growth for Auckland, Auckland Tourism, Events & Economic Development (ATEED) has partnered with the New Zealand Institute of Economic Research (NZIER) to identify which segments of Auckland’s economy offer the greatest potential.

Based on the findings of this work, ATEED is releasing an ‘Auckland Economic Insights Series’, comprising four reports designed to stimulate wide ranging discussion. The first report, Advanced Industries: Auckland’s Opportunity, will look at Auckland’s advanced industries, a diverse group of industries which play an increasingly important role in Auckland’s economic performance. The report will summarise the role and importance of these industries and detail opportunities for ATEED, our partners and other key stakeholders to support their growth.

Three other publications in this series will seek to explore in more depth various opportunities within the advanced industry segment:

Auckland: An Emerging Knowledge Capital of the Asia Pacific (March 2017)Convergence and Disruption Auckland’s Tech Opportunity (April 2017)Engaging Globally Auckland’s Trading Linkages (May 2017)

These publications provide insights to the role of investment, technology and trade in realising these growth opportunities, leading to a more competitive Auckland economy.

Maximising the strong growth prospects of our advanced industries will be debated at an Auckland Economic Symposium on 28 March.

At this symposium, city, government and industry leaders will meet to debate how Auckland can best capitalise on its ‘new world city’ status, so that we can advance these unique and dynamic sectors of our economy which are such powerful drivers for Auckland’s prosperity.

The first report in ATEED’s Economic Insights Series, ‘Advanced Industries: Auckland’s Opportunity’ can be found on http://www.aucklandnz.com/ateed/economicinsights

Patrick McVeigh, Auckland Tourism, Events and Economic Development (ATEED) general manager business innovation

and skills.

Supplied content

Growing Auckland’s economy –

opportunities and challenges

network could notify a user of an intruder but that will be its limit, while Vodafone’s could have a camera con-nected, Mr Lobb says.

However, the businessman says it’s still too early to identify which IoT networks are going to be available and when.

The market is also heavily fragmented and it’s dif-ficult to see who will come out on top, Mr Lobb says.

“From a customer perspective, you would want all the information stored in one place.”

Security a second priorityResearch company Gartner is forecasting that 8.4

billion connected “things” will be in use at the end of this year, a 31% increase on 2016.

Consumers will be the biggest users of “things,” representing 63%, while busi-nesses will make up the remain-der, Gartner says.

The company says total spend-ing on endpoints and services will reach almost $2 trillion in 2017.

Despite the proliferation and investment in IoT, one expert is concerned about how much security is being implemented.

Auckland University computer science asso-

ciate professor Giovanni Russello says 90% of IoT play-ers are thinking about functionality first and security last.

Prof Russello points to a University of Michigan experiment where researchers were able to breach Samsung’s Smart Home system, including unlocking a door remotely.

This was done through a couple of methods, such as a malicious app that was able to obtain the PIN code to a smart lock, and exploiting vulnerabilities in a third-party app on Samsung’s SmartThings store.

Samsung defended its SmartThings product and said its certification and code review process-es would not allow a malicious app to be pub-lished.

However, Prof Russello says, “It’s not just a piece of software, it’s a physical issue with your security. Privacy is one concern but, if someone can get inside your place easily or do some damage, it’s much worse than hav-

ing your phone hacked.“They think security is just an add-on and

people don’t care. I’m not saying their system isn’t secure but they might not have the right type of security.

“Depending on which sector these sensors will be deployed in, there should be different security requirements,” Prof Russello says.

cgibson@nbr.co.nz

Ever-increasing investment in the Internet of Things

From P19

Humans: who needs them?From P20