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GRIN initiatives will reshape how we deliver healthcare p.8
March/april 2013 VOLUME 4 NUMBER 2 www.itincanada.ca
CANADA’S TECHNOLOGY RESEARCH AUTHORITY
INDUSTRY INNOVATION: UNLEASHING THE POWER OF IT
Publication Mail Registration Number: 41382532
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Contents
www.itincanada.ca
March/April 2013
27 Manufacturing Features 4 Editor’s Note Vertical view advantage 29 New in Social 30 Book Review From China blues to tech red
Departments 6 Technospective on Healthcare Patient-centric healthcare 9 Technospective on Education Portrait of a 21st century classroom 13 Technospective on Finance Financial innovation
20 Technospective on Retail Canadian retail technology at the bleeding edge 24 Technospective on Manufacturing Build-to-order or order and build?
16 Technospective on Government Cloud, consolidation and communications: a government view
Online Extras: www.itincanada.ca Missed an issue? Misplaced an article? Visit www.itincanada.ca for a full archive of past It in Canada issues, as well as online extras from our many contributors. 10 Education March/April 2013 ITinCanada.ca / 3
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ediTOrial
CANADA’S TECHNOLOGY RESEARCH AUTHORITY
EDITORIAL CHIEF CONTENT OFFICER: MICHAEL O’NEIL
michael.oneil@itincanada.ca
EDITOR: MARY ALLEN
mary.allen@itincanada.ca CONTRIBUTORS: RACHEL LEVY SARFIN, KEVIN PRIDDLE
SALES NATIONAL ACCOUNT MANAGER: PATRICIA BUSH
905-727-4091 x336 trisha.bush@itincanada.ca EVENTS
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ART & PRODUCTION ART DIRECTOR: ELENA PANKOVA
elena.pankova@itincanada.ca GRAPHIC DESIGNER
DAVID POTOCKI
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verTical view advaNTaGe
i
n music, ‘call and response’ is a succession of two distinct phrases, where the second adds commentary on the first. In many traditional African cultures, it is a form of democratic participation used in public forums where ‘response’ expresses the voice of the community. At IT in Canada, we have adopted our own version of call and response in this year’s print magazines – turning our first Forecast issue on its head with a bottom up view of the top down technology predictions offered by leading Canadian IT executives this past January. What is the goal of this approach? As it is to music and to African democracy, call and response here represents an effort to introduce balance that will help us inch closer to consensus on the reality of Canadian IT adoption in 2013. In this issue, readers will find the end user perspective – highlighting existing technology usage and emerging trends in six key vertical sectors, chosen not only for their importance to the Canadian economy but also in recognition of the critical role that IT plays within these industries. According to IT Market Dynamics, the vertical markets under investigation in our current issue represented a significant share of IT spend in 2012 – in fact, government, financial, manufacturing, wholesale/retail, healthcare and education accounted for two thirds of business demand for IT products and services last year.
Vertical market IT spending in Canada
publisher@itincanada.ca
Share of total Canadian IT spending, 2012
RESEARCH MANAGEMENT: MICHAEL O’NEIL
michael.oneil@itincanada.ca www.itincanada.ca
Government 16% Other sectors 33%
Wholesale/retail 8%
PUBLISHER’S MAIL AGREEMENT: 42169527
IT in Canada magazine is published six times per year by Brighton Communications Inc., in partnership with IT Market Dynamics Inc. (ITMD) All opinions expressed herein are those of the contributors and do not necessarily reflect the views of the publisher or any person or organization associated with the magazine. Letters, submissions, comments and suggested topics are welcome, and should be sent to michael.oneil@itincanada.ca. IT in Canada is Canada’s only integrated social media news network. Appealing to IT professionals and executives in industries that rely on technology to support their business operations, IT in Canada brings together the essential information assets of the 21st century – news articles sourced from established, reputable publications, video and other broadcast content types, interactive forums that categorize social media as well as data from our related research company, IT Market Dynamics – to add depth to our coverage and analysis. The resulting network provides a perspective that takes full advantage of the “new media” opportunities provided by the Internet, offering a rich destination that benefits readers and advertisers alike. www.itincanada.ca REPRINT INFORMATION
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Manufacturing 15%
Heathcare 7% Financial services 16%
Educa=on 5%
Source: IT Market Dynamics
So what did we learn from our vertical view? Certainly that mobile is on the move, that Big Data is big, that management systems act as a foundational technology and that networks and communication are increasingly critical. Hardly rocket science. More importantly, we have discovered and shared in our Technospective features how these technologies are being implemented and to what (business) end, insight that will be helpful to both technology suppliers and users alike. Consider the advantage to be gained by the provider of clinical healthcare systems who understands the context around the concepts of “patient centric health,” or the benefit to providers of recognizing how technology is changing the way banks work. Imagine the school board hoping to empower students with the latest technology that can look to forward-thinking institutions like the UOIT, the retail company that can tap into a range of solutions to increase efficiency in both consumer and logistical spheres, or the federal government which can draw on best practices in tech renovation at the provincial level in the development of IT strategy. And finally, consider the profit to buyers and sellers of technology in recognizing the potential of IT to revolutionize how we conceive, create and deliver goods. IT’s all here - happy reading!
Mary Allen Editor, IT in Canada 4 / IT in Canada.ca March/April 2013
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Technsopective
ON Healthcare
By Michael O’Neil
Patient-centric healthcare
IT is enabling entirely new options in an industry that is reaching the 'critical' stage.
O
f all the industry sectors in Canada, healthcare is likely the one in which productivity improvement is most needed, and would be most beneficial to the country. Generally thought to consume approximately 12% of Canada’s GDP, healthcare expenditures are growing much faster than the economy as a whole. Additionally, an aging population is placing further strain on our system: while the proportion of the population that is in the workforce (available to work in healthcare or pay taxes to fund the system) is decreasing, the number of elderly patients – who tend to be heavy consumers of healthcare – is on the rise. The outlook in Canada is not as dire as in the U.S., where healthcare accounts for roughly 18% of GDP, but finding ways to improve our ability to increase care delivery capacity faster than we increase the financial or human resources allocated to the system is a critical priority for Canada and Canadians. And though the Canadian government has invested in technology-based solutions to improve healthcare productivity, its flagship program, Canada Health Infoway, has failed to effect meaningful change through its strategy of increasing healthcare automation and efficiency through nationwide deployment of electronic medical records (EMRs). Clearly, something needs to change, but what is the best way forward for Canadian healthcare? Opinions from across the landscape – from a physician now working with Intel, a telemedicine expert, and an IT industry veteran who is active on the board of an innovative healthcare clinic – agree: Canada needs to realign healthcare delivery 6 / IT in Canada.ca March/April 2013
in a patient-centric model. They also agree that technology will play a vital role in enabling patient-centric care to be both more efficient and more effective than current healthcare delivery approaches.
The physician Dr. Mark Blatt’s perspective on technologyenabled patient-centric healthcare began to take shape in the mid-1990s, during a holiday weekend of call support for a dozen primary care doctors. “I got several hundred phone calls,” he said, and “found myself… asking a bunch of very quick questions, and triaging, and deciding “can I treat you or not? I found that after 5-7 hours of literally being stuck on the phone, I probably took care of more people than I could take care of in a week…The majority of people, I was able to do something useful for on the phone.” Then, as now, payment policies were unable to deal with remote care delivery – Dr. Blatt notes ironically that “the price point” for treatment was “approximately free” – but the leverage that communications technology provided inspired Blatt to think about the best ways to organize and deliver care. “I started to think about it. All the calls [to the office] get intercepted by the secretaries; they become billable events; [the patient] takes a half a day off work; you pay me $300-$400, and you get (in many cases) almost the same outcome.” Blatt decided to “join a company, and see how we can reduce the cost of healthcare – literally, by an order of magnitude – and increase the quality of the interaction” by making it immediate. This approach is not appropriate for every ailment, Blatt admitted:
“if you’re having chest pains, I’m not going to ask a lot of questions, I’m dialing 911. But if you call and say, ‘Doc, I’m mowing the lawn, and I’ve got a red itchy rash on my lower legs, and last year we had a lot of Dr. Mark Blatt, director for healthcare industry solutions, Intel poison ivy back there…I can treat you, sight unseen, with steroids.” Since Blatt's initial insight, advances in technology have only increased remote diagnostics capability. Thinking back on his holiday weekend, Blatt added that “If I had the ability to do a video conference – if I could have seen you…you can start to figure out logically how you can make a diagnosis. [We use the phone] because it is convenient…but we have all sorts of devices that can share video – a camera in the pocket is common. So I started to think about how I could improve collaboration… “The biggest issue is the handoff. A large percentage of the time [a healthcare provider] can work alone.” But, Blatt explained, “we need to go to the next step, and say to physicians and other caregivers [treating an illness] is only part of your job. It’s also your job to shepherd the person through the healthcare system, to hand them off to the next person, to ensure smooth transfer of care…so that patients don’t fall through the cracks.”
Technospective
ON Healthcare
Blatt pointed out that this kind of transfer happens within hospitals, but at discharge, patients are released with instructions (for example, to make follow-on appointments with family physicians, rehab facilities or specialists) and not actively managed through these next steps. Blatt envisions a future where collaborative technology can connect caregivers at the hospital with the specialists who provide follow-on care – through use of tablets or similar devices that send a patient’s EMR, DICOM (digital medical images) and telemetry (remote diagnostics captured via SMS or similar technologies) to the nurse in the specialist’s office – and potentially bring the patient and/ or other members of the patient’s family into the conversation. With real-time collaborative workflows, Dr. Blatt argued, processes can be centred around the patient, fundamentally changing the nature of the current system, in which “the most common activity any citizen does is wait.” With real-time collaboration, we could reduce discharge from hours to minutes; we could move towards reduced cycle time for consults with specialists; and we could deliver initial care to patients at their homes (or wherever they are stricken), rather than move them to hospitals, thereby reducing anxiety and physical stress.
measurements important to treating patients with chronic diseases. The presence of at-home units with the intelligence needed to power monitoring devices isn’t a recent development, of course; we have had home PCs for many years. But Ransom believes that the time is ripe for connecting medical and personal IT devices: with costs dropping and smartphones now always connected and always in the pockets of users, it’s possible to build systems that automatically send monitor results “to the right spot in the right place, and it’s all managed for them – so [patients] really, literally just have to plug [the EKG, etc.] in and go.” In Ransom’s view, convenience and simplicity have become the drivers of a new wave of IT-enabled healthcare – a trend that will move so quickly that traditional
IT functions within healthcare will struggle to keep pace: “innovation is going so fast that IT is paralyzed right now” by the constant changes in user t e c h n o l o g y. H o w e v e r, Bob Ransom, president, Ransom sees TelemedicineIM standards initiatives like the Continua Alliance and the Zigbee Alliance addressing some of these issues, leading to a scenario where we will see “the forces of standards, convenience, mobility, all converging over the next 18 months to do a lot of good” in enabling
The telemedicine expert Bob Ransom is president of TelemedicineIM and founder of Outcubed, a consultancy which explores ways of applying social media to healthcare. A veteran of both leading ICT vendors and the Ontario Telemedicine Network, Ransom is active in helping Canadian healthcare stakeholders find common ground in technology networks. When IT in Canada asked where he expects to see innovation in healthcare, Ransom immediately volunteered “patientcentred care and patient empowerment,” adding that “medical devices are quickly becoming part of a person’s phone, which will create an enormous paradigm shift in the healthcare community.” As examples, Ransom pointed to an $80 device that attaches to an iPhone to create a personal EKG (heart monitor), and other devices that enable patients to track blood pressure, blood sugar and other March/April 2013 ITinCanada.ca / 7
Technsopective
ON Healthcare
patient-centred healthcare practices. Unfortunately, running an app and a device by the U.S. and Canadian governments is “a big deal – you’re probably going to spend $50,000 in the U.S. and $10,000 in Canada” to gain approval for “things that you will sell for $30 or $40.” Privacy is another barrier to the use of distributed technology in healthcare applications. Ransom noted that “it’s going to be a huge issue because the patient is going to be the source of the data…The provider will take absolutely no responsibility for the data that resides on the patient’s phone.” In his view, the obligation to safeguard medical data will shift from the medical institution to the patient, with the physician retaining responsibility for data only after it is received, and for opinions based on that data. Whether this approach will pass muster with privacy regulators is currently unclear, but Ransom believes that “doctors don’t want any of the responsibility” associated with patientmanaged data collection and protection. Ransom is “betting his business” that patient-centred healthcare will change the skills needed in the caregiver community. He believes that as mobile healthcare becomes more prevalent, physicians will move “from delivery mode to coach mode – to counselling mode.” He envisions social structures woven around a continuum that connects patients, doctors, device manufacturers and monitoring services, enabling doctors to move beyond activity siloes to achieve greater efficiencies in care delivery – and in the cost of care delivery.
The industry visionary Ron Kaczorowski is one of Canada’s foremost experts on the application of technology to healthcare. After a long career with leading IT and medical device manufacturers, he has served as a member of the board of directors for Kensington Health Centre, as a development advisor for the International Centre for Health Innovation at the Richard Ivey School of Business and as founder and managing director of consulting firm Mareka Alliances. Kaczorowski believes that understanding and capitalizing on synergies between
8 / IT in Canada.ca March/April 2013
healthcare providers, payers and patients is the key to unlocking the potential cost and quality benefits of patient-centred healthcare. Near term initiatives, he noted, will likely focus on addressing “value for money requirements – striking the best balance between economy, efficiency and effectiveness.” Over time, he added, these initiatives will capitalize on ‘GRIN’ – Genomics, Robotics, Informatics and Nanotechnology – to reshape the ways we provide healthcare. Kaczorowski’s IT background gives him a unique perspective on how IT can be used to affect healthcare processes. Healthcare, he said, “is a data-rich environment that requires the acquisition, integration, analysis (retrospective and predictive) and interpretation of both clinical and financial workflow and outcomes. Acquiring and transforming data into timely information that enhances collaborative knowledge, regardless of where the providers, payers or patients are located, are areas where ICT can enable innovation.” This holistic view is central to Kaczorowski’s insight into the opportunity for IT-enabled healthcare innovation. “Viewing the requirements from a systemic viewpoint, which brings in the end-toend clinical, administrative and financial workflows of the entire process and that includes the provider, payer and patient perspective, usually offers the greatest opportunity for both short and long-term success,” he explained. Acknowledging that more narrowlydefined single-stakeholder initiatives can achieve short-term success, Kaczorowski added that these generally lead to siloed approaches that are poorly aligned to the patient’s overall needs. Ultimately, he argued, “The power to compute, analyze and communicate will open many new doors to the growth of innovative, disruptive technologies that are not even imagined today.” An ICT-enabled “plug and play” foundation will pave the way for “highly technical, low cost applications to become the norm,” creating an “unwelcome challenge” for current healthcare suppliers whose more expensive technologies may be
replaced by new applications running on smartphones and tablets. “Wireless sensor technologies,” Kaczorowski concluded, “attached to a patient/ consumer, IT/healthcare expert s e n d i n g Ron Kaczorowski physiological data that can be viewed on a tablet or smartphone will allow physicians to monitor, diagnose and treat their patients virtually.”
The bottom line Viewed in a global context, Canada is in a privileged position: we have a healthcare system that extends high-quality care to all citizens. However, financial and demographic trends are putting pressure on this position such that we need to take advantage of service delivery innovation that promises both improved quality and reduced cost. We should expect that new options will come under scrutiny from several sources. Dr. Blatt’s embrace of technology is likely to prove more the exception than the rule; many caregivers will reject the changes to their roles Ransom envisions through telemedicine; payers will struggle to align expenditures with emerging value models; and IT organizations will labour to keep pace with innovation. Additionally, there are risks – ranging from data leaking from a phone to network outage during remote surgery – that do not exist in our current system. Though these risks could entail unfortunate, or in some cases, tragic consequences, on balance they should not divert us from embracing ICT-based innovation which has tremendous potential to update both healthcare delivery and healthcare economics. If we do not take advantage of the options that we have before us like GRIN, we may find that our current path results in a state that is less ideal than either our current reality or the achievable future.
Technospective
on Education
By Kevin Priddle
Portrait of a 21st century classroom From kindergarten to university, technology is transforming the technology landscape.
T
he 21st century classroom is an everevolving landscape. Technology is ubiquitous in the personal lives of most students today and it is becoming no less prevalent in their educational experience. “Over the last 10 or 15 years there has so much research done on teaching and learning and we know more now about how humans learn than we’ve ever known in the history of mankind,” said Chris Hinton, director of learning technologies at Durham College’s Centre for Academic and Faculty Enrichment. “Technology opens up many options for more progressive types of teaching and learning and I think we will see tremendous shifts in how we approach education.” These shifts are already underway and many Canadian universities, colleges, high schools and even elementary schools are beginning to deploy and use technology in ways that closely parallel usage in some of the country’s largest corporations. A growing number of institutions are embracing IT trends such as cloud computing, virtualization, collaboration and BYOD. But along with the benefits these technologies provide also come a host of new challenges, including the need for steep learning curves.
Technology in primary and secondary education The use of technology in the classroom can be compared to a “broken front,” according to Todd Wright, curriculum administrator with the York Region District School Board
Chris Hinton, director of learning technologies, Centre for Academic and Faculty Enrichment, Durham College
(YRDSB) – the third largest school board in Ontario with about 200 schools, 10,000 staff and over 120,000 students. The YRDSB has established digital learning as a priority, based on standards set by the International Society for Technology and Education (ISTE), but the level of technological engagement at schools is still
very much tied to what individual teachers decide to incorporate into their classrooms. “Not everybody is at the same level,” Wright noted. “We have some extremely advanced work going on in some of our classes, right down to instructors who are just beginning to explore the possibilities of digital tools with their students.” Computers remain the core technological tool in primary and secondary schools. While traditional computer labs still exist, Wright said that over the last decade there has been movement away from labs that are separate from the classroom, towards a philosophy which recommends that learning technology be integrated into all environments in the school. A new hybrid education model has promoted the placement of more computers in classrooms, more mobile labs (sets of laptops that can move between different classrooms), and the incorporation of other devices like smartphones, tablets, SMART boards, and LCD projectors. In some cases, technology is used with students who are at a very young age. For example, Wright pointed to a YRDSB kindergarten teacher who uses iPads and Skype to enable her students to regularly
March/April 2013 IT in Canada.ca / 9
Technospective
on Education
Todd Wright, curriculum administrator, information and communication technology, Learning Resource Services and Innovation Commons, York Region District School Board (YRDSB)
interact and connect with different people and speakers from around the world. Her pupils have connected with students in other countries, authors who have read excerpts from their latest picture books, and even one student’s father who was overseas in Afghanistan. One of the most important components to powering the use of technology “within all environments of a school” was the installation two years ago of universal WiFi across all buildings and schools in the YRDSB. “We have ubiquitous wireless in our system now, so anywhere in any school students have access to the wireless network for the purposes of learning,” Wright explained. “As soon as we did that, it just changed everything in terms of the opportunity to do BYOD in a constructive way.” During a recent audit of the board’s wireless network, Wright found that there were about 144,000 different connected devices. He said school policy still generally restricts the use of smartphones and other devices in class to avoid distraction, but that in every school there are more classes beginning to allow students to bring in their own devices for educational and curriculum-relevant uses.
Technology in higher education As in primary and secondary education,
the deployment of technology at the postsecondary level is by no means homogenous. There is, however, a definitive upward trend in terms of the adoption of technology and the greater availability of IT resources. Learning management systems (LMS) like Blackboard, Desire2Learn, and the open-source Moodle are one of the core technologies being deployed in education. These software applications provide a central, web-accessible hub that handles all aspects of the learning process. LMSs are used to host course-specific content (assignments, readings, videos and other materials), but can also be leveraged for more advanced purposes like course registration and administration, forum discussions, training, online tests and assessments, as well as to support multi-user and group collaboration. Beyond its status as one of Canada’s newest universities (founded in 2002), the University of Ontario Institute of Technology (UOIT) in Oshawa, Ontario is also a leader in promoting the use of technology in education. The school uses the Blackboard platform and according to Dr. Bill Muirhead, a founding academic member of the UOIT and current associate provost of academic and information technology, the university is among the first in Ontario to move its LMS into the cloud. “We believe that learning in the 21st century is enabled by technology,” Muirhead said. “We’re really a place where technology is ubiquitous and this has been one of the central differentiators for the university. Within the last ten years, we have had the most rapid growth of any university within the history of the country.” Other higher ed institutions deploying LMSs include: Thompson Rivers University (TRU) in Kamloops, B.C. which uses Blackboard and Moodle to deliver online and distance education courses to more than 11,000 students enrolled through its Open Learning division; and Durham College in Oshawa, Ontario, which has deployed the Desire2Learn platform to enhance the learning of its students. Laptops, tablets and other mobile devices are another prominent component
of technology being deployed at postsecondary institutions across Canada. UOIT is also a leader in this space and has a unique program that requires every student to lease a laptop from the school to enable a technology-enriched learning environment across campus. Each year UOIT purchases and distributes more than 9,500 Lenovo laptops and licenses more than 250 software products to students on campus. Any software needed or used in courses is installed and managed by the university. UOIT manages the entire process from acquisition, purchase and distribution to quality control, imaging and network access enablement. Students receive a new laptop every two years and leave the university with a two-year old laptop upon graduation. This is not only a unique value-proposition for students; it also creates a more level and equitable learning environment. “Every student has identical access to the learning tools of the 21st century and every student on campus has access to powerful software tools that enable learning,”
Dr. Bill Muirhead, associate provost, academic and information technology, University of Ontario Institute of Technology (UOIT)
Muirhead explained. “We embed the use of technology in all courses at UOIT and by providing this kind of access to hardware, we enable students to learn anywhere, anytime.” This ability to learn “anywhere, anytime” is supported by other emerging technologies as well. E-textbooks and digitized libraries, which offer greater access Continued on page 12
10 / IT in Canada.ca March/April 2013
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Technospective
on Education
Continued from page 10
to unique resources and multi-media, are becoming more common. Google apps and communications platforms like Skype enable students to collaborate on projects over the Internet. And the use of media solutions such as Mediasite and Camtasia are helping educators capture lectures and presentations on video to make them available for viewing on the web. Durham College's Chris Hinton noted that the benefits of video capture go beyond simply enabling students to catch up on lectures and material if they miss a class. He explained that lecture videos are valuable tools that help ESL students review class material they might not have understood the first time around, or they can be captioned to improve access to information for hearingimpaired students. Video capture can also enable remote or distance learning so that all class members don’t have to be in the same location at the same time – a teacher could provide instruction from a central location to a group of students dispersed across the globe. Simulations – online or in-class – are another technological resource that more educators are leveraging to deliver enriched learning environments to students. For example, over the past two years, Thompson Rivers University has been developing a virtual 3D replica of the Kamloops water treatment facility to share with students in its skilled trades water treatment program. While students have some access to the water treatment facility in Kamloops, it’s not 24/7, and there are times when students have no access the facility at all, said Bob Byrne, curriculum media developer with TRU who has worked on the water treatment facility simulation to address this challenge. The simulated environment uses a series of photographs stitched together into a virtual environment to provide a 360-degree virtual panorama of the facility, which is comparable to the virtual environment found in Google Street View. The project is still under construction, but when completed, Byrne believes it will effectively emulate the Kamloops water treatment plant, providing
12 / IT in Canada.ca March/April 2013
students with an interactive medium to learn about the water treatment process and how the equipment in each different section of the facility works. Other examples of simulation technology being used in higher education today include the programmable robotic dummies used in a lab in the nursing program at Durham College to replicate real-life patient
Bob Byrne, curriculum media developer, Thompson Rivers University
situations, as well a house that has been converted into a simulated crime scene by students in the forensic science program at UOIT. The latter simulates the real-life working conditions of a forensic investigator, and students use tablet computers to collect pictures and data from the crime scene environment and then transmit them to peers in a remote lab for processing. In addition to the learning opportunities these simulations and ones like them at other post-secondary institutions offer, these tools are gaining popularity because of the skills and familiarity with industry-standard technology they provide to help students prepare for success in the workforce.
IT challenges in education Just like any organization, educational institutions face a variety of obstacles in the deployment of information technology. For instance, it’s an ongoing struggle to balance budget and IT staff resources constraints against the need to keep thousands of student laptops (and the
software on them) up to date and relevant at an institution like UOIT. “Technology changes and it changes very rapidly,” Muirhead said. “One of the biggest challenges is the cost pressure of rapid obsolescence and increased capacities of technologies and other developments within the larger technology world.” Security issues and the growing demand on network infrastructure are other sources of pressure that accompany IT growth. “As things like wireless access and BYOD increase, bandwidth demands escalate and that’s not free,” Wright noted. The result, he said, is that more money is being shifted away from end user hardware such as laptops and computers and into physical infrastructure such as fibre optic pipes to keep pace with connectivity demands. At that the same time, more budget is moving away from curriculumspecific software into infrastructure-support software such as database management and security tools. In the end, however, most commentators agree that the advantage of the incorporating technology into learning and education outweigh issues around ballooning infrastructure costs, growing security requirements, and the rapid obsolescence of hardware and software. “It’s a constant challenge,” claimed Hinton. “But as we see more [technology] coming, it just means we need to stay one step ahead.”
For access to the water treatment replication, follow this link.
Technospective
on Finance
By Michael O’Neil
Financial innovation Canada’s FIs are building better business outcomes through mobility, Big Data and the cloud.
I
T Market Dynamics statistics show that the financial services sector is one of the largest source of IT spending in Canada, and citizens here recognize that the industry is largely shaped by five major financial institutions (FIs) – so it is natural that we look to these organizations for guidance when considering how IT is likely to evolve. At the same time, though, Canada’s major FIs look to IT itself to guide their path into the future. The major banks may look like monoliths to consumers passing skyscrapers that dominate the streetscape in major Canadian cities – but inside those buildings, sophisticated IT teams dedicate billions of dollars to finding better ways to build out core transactional systems, to improving the power and efficiency of systems supporting key business areas such as stock trading, and to enabling hundreds of thousands of staff members to be more efficient, more effective and more connected. Not all of the initiatives underway at Canada’s FIs can be shared publicly, as IT is a major source of both innovation and competitive advantage for the banks. However, IT in Canada was privileged to receive input from three highly-placed professionals – Dave Codack, head of employee technology and network services for TD Canada Trust, a senior IT professional working in the risk/trading division at another major Canadian bank, and Dan Emery, owner and principal consultant with services firm ESI, who works as a senior
technical consultant with a third bank – who discussed the ways in which IT delivers productivity to Canada’s most important buy-side industry sector. The three executives provided different perspectives on how IT contributes to the evolution of financial services, illustrating the pervasive impact that effective IT management has on growth and competitiveness within the industry.
Snapshots: technology and business innovation Each of the experts contacted by IT in Canada is active in enabling technologyfueled innovation within their respective organizations. Here are brief descriptions of their current areas of focus: Dave Codack is working on a dizzying array of initiatives – his 950 staff members are active in 178 different projects. Asked to define a key area, though, Codack focused on mobility – which, within TD, references several different deployment models. One specific initiative that Codack is working on is the deployment of mobile technology within the branch network. At first blush, this seems counterintuitive, but Codack urged us to “look at what Apple’s done in their stores.” Employees using iPads “in essence are mobile, even though they’re resident. They have an app [that they show customers, saying] ‘I can look at inventory, I can do order management, I can do authentication – there are so
Dave Codack, VP and head of employee technology, network and contact centre services for TD Bank Group
many things I can do with mobility,’ and the customer’s involved in that experience. And that is the goal that we’re trying to get to.” Codack noted that while at one point the brick-and-mortar branch location was thought dead, “they’re declining, but they’re not declining at the level you would have thought.” He sees opportunities for inbranch mobility to improve relationships with both Gen Y customers (who expect these services) and seniors who are in need of help. Separately, Codack is also in the process of rolling out a BYOD initiative serving three categories of employees – those who are looking for occasional access to bank systems through remote devices, those (like the IT staff) for whom mobile devices are an extension of the work infrastructure, and those (such as investment advisors and
March/April 2013 ITinCanada.ca / 13
Technospective
on Finance
mortgage specialists) for whom mobile/ remote devices are the primary work infrastructure. In both in-branch technology and BYOD initiatives, there is potential for enterprise-wide progress leveraging core corporate standards: however, as Codack explained, the size and complexity of the organization acts as a drag to rapid implementation of these kinds of standards and to delivery of new capabilities. Our second executive (who has asked to remain anonymous) is focused on trading systems and other risk-related technologies for a major Canadian FI. He sees the most significant new activity being centred on data aggregation and reporting on the “Big Data” derived from transactions. In his opinion, this is “almost by definition, a technologyenabled area.” He cited I/O speed, physical data segregation and indexing as technologies that are essential to delivering business benefit, noting that “advances in storage, data structures and compression technologies are enabling responsiveness for large structured data queries that have previously been supportable only in costly proprietary or vendor applications based on in-memory, multi-dimensional data structures.” In this expert’s opinion, systems of this type drive demand for Big Data engineers (infrastructure and development) and business analysts; the key challenge to deployment, in his opinion, is “stubbornness and protectionism by technologists” that “can result in prolonged lifecycles for legacy patterns and systems” – an issue that might apply to any new IT/business system. Dan Emery works with a global FI on a recruitment/talent acquisition system. The system is in “high demand” within the bank and makes a meaningful contribution to the bank’s success, but is challenging to maintain and enhance. On the IT side, this type of system requires a broad base of skills spanning both traditional and new technologies: Emery noted that “cloud computing is rapidly gaining ground” as a platform for recruitment systems, and that cloud “combined with web technologies plus standard network and database technologies, requires constant skills upgrades.” There are
challenges to providing system support and enhancement beyond the core technologies as well – for example, the system needs to accommodate the many languages used in the countries where the bank operates, which impacts the time required to update or introduce new features.
New system directions One question that applies regardless of the nature or intended outcome of an IT/ business project is “where did the impetus for new system originate – from IT, or from business management?” Codack believes
an understanding of the business objectives and will, if appropriately positioned, put forward ideas and innovations that directly address business issues. Obviously, the sweet spot is where the business understands the technology constraints and opportunities, and technology has a clear view of business objectives.” In Emery’s experience, there is a pattern of business leading and IT providing complementary perspectives; he finds that in his practice “about 80% [of new system initiatives] come from business management and 20% from IT.” Emery, like our other experts, sees merit in connecting IT and business perspectives: “The main advantage is the combination of skill sets that come up with ideas, plans, and processes.”
Technology and trust
Dan Emery, owner and principal consultant, ESI
that if line of business management works with IT to drive delivery of a new product, “then that gets done…but generally, it’s usually either [IT leading new system initiatives] or a decision made in concert, where [discussion] goes back and forth” between IT and business leaders. He added, “the business is not very [educated] when it comes to anything beyond a consumer devices, so they don’t really know what’s the art of the possible – so I think there’s a big advantage in technology being a consultant rather than just responding…that’s a model for all technology groups to be better at.” Our second large-FI expert agreed, stating that “in general, the business identifies the ‘macro’ opportunity – line of business, sales initiative, etc., as an endeavour worthy of investment in a technology platform. However, in established enterprises with healthy businesses, technologists acquire
Trust is crucial in financial institutions – and in an increasingly-electronic world, trust is built by and/or threatened by the use of technology in commercial interactions. IT in Canada asked our experts about the link between IT and trust: what customers and colleagues expect, and the key issues involved in establishing this link. Unsurprisingly, much of this discussion revolved around security. ESI’s Emery said, “the key issue is security. Sensitive data is collected on-line during [transactions] and it’s not only expected, but demanded and legislated that it be kept secure.” Our unnamed expert expanded on this theme, highlighting three issues: staffing and segregation of duties within the IT department (“there are few robust defenses against a rogue system administrator”), mobility (“both policies and technical barriers are required”) and identity (“clients expect full and open access to their data, as well as robust safeguards against inappropriate access”). In a related context, TD’s Codack highlighted what he described as “the underlying current that’s flowing from the regulatory environment and our risk policies.” He noted that a sound approach to security and risk management provides both protection and cost-savings, but added that this comes at the expense of rapid deployment of new business systems, and Continued on page 28
14 / IT in Canada.ca March/April 2013
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Technospective
On Government
By Mary Allen
Cloud, consolidation and communications: a government view Canadian governments at every level are weighing the benefits of advanced technology adoption, but putting the house in order first through consolidation, standardization and governance.
I
n Canadian ICT markets, the government sector commands pride of place. It is the largest buyer of IT products and services – IT Market Dynamics’s forecast model has estimated $6.845 billion in product acquisition for 2012 and an additional $8.630 billion for operations – and has traditionally been a leader in the adoption of advanced technologies. In a statement on Canada’s digital economy strategy, the Government of Canada website notes: “Governments can promote private sector innovation by being a smart and demanding purchaser and a model user of advanced technologies and services.... By being an early adopter of emerging and next generation technologies (e.g., Green IT and cloud computing models), governments can help drive ICT uptake in the private sector.” So where are Canadian governments looking to innovate? In a word – or rather a few – it’s consolidation to improve efficiency in service operation and delivery. The most striking example of this approach comes from the federal government, which in August 2011 introduced Shared Services
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Canada (SSC), a new entity made up of 1,300 employees from Public Works and Government Services Canada and 5,000 IT services specialists from 42 other government departments whose mandate is to plan, build, operate and manage IT infrastructure for all federal bodies. On launch of SSC, Minister of Public Works and Government Services Rona Ambrose noted: “every federal government department and agency set up and ran its own IT infrastructure. This produced cumbersome and expensive infrastructure: 100 e-mail systems, 300 data centres, and over 3,000 networks across government. Simply put, our IT systems overlap, they are outdated, and they are inefficient.” The federal government’s new approach is not without provincial precedent. In Ontario, for example, an integrated “Information and Information Technology” (I&IT) strategy was introduced as early as 1998, involving creation of a new organization and governance structure for all IT resources to eliminate duplication of effort in various ministries, invest in
a common infrastructure and introduce common policies and standards. Based on this foundation, the province is now working on an enterprise architecture to coordinate IT implementation across the government. So far, a conceptual architecture has been completed, and the logical/physical architecture, which is still a work in progress, has helped the provincial government define and deliver on e-government service initiatives in education, healthcare, elections and policing. But beyond fulfilling e-government mandates, consolidation of provincial IT infrastructure has produced considerable savings. Commenting on provincial examples, Shared Services Canada COO Grant Westcott noted, “the Government of British Columbia began its consolidation in 2002 and by 2011 had reduced its number of data centres from over a hundred to two. As a result, its of data centre energy costs alone are expected to be 50% lower. As well, the Government of Ontario has reported that at maturity, its IT consolidation is saving $100 million annually, representing 10%
GOverNMeNT
of total IT spending, and between 20% and 25% of IT infrastructure spending.” Introduced eighteen months ago, Shared Services Canada is near completion of its high level architectural strategy (based on a ‘Plan-Build-Operate’ model), and has defined three specific IT objectives: creation of a new email system for all federal employees, data centre consolidation and telecom transformation. The goal in these projects is to reduce cost while improving system efficiencies, security and reliability. With one email system, for example, the government may shrink resources now devoted to managing various systems and practices, negotiating licenses and delivering training and technical support. So far, SSC has qualified four vendors to review and refine the business and technical requirements for this email project, and by the spring of this year, expects to award a contract to one successful bidder in the RFP process. Transition to a new email service will proceed over the next two years with full implementation targeted for the spring of 2015. Through this process, the government has worked with various stakeholders to promote effective change management. As Westcott explained, “This is not simply about IT – it is about leveraging the Government’s IT infrastructure to better serve Canadians through a more secure and modern platform. The contributions of SSC partner organizations and stakeholders have been key to the initiative, and will continue to be essential to the successful implementation of a consolidated, cost effective and modern email solution.” On this email initiative, for example, SSC has worked closely with the TBS [Treasury Board Secretariat] Chief Information Officer Branch and Communications Security Establishment Canada to develop appreciation for the complexity of email systems and security levels across the government. SSC c u r ren tl y ma n age s th e IT infrastructure that supports 43 partner organizations and offers services to 120 departments. In streamlining resources, it intends to maximize use of existing IT infrastructure through improvements to data storage and implemention of standardized
government-wide processes to optimize asset use, and develop initial plans for the consolidation of data centres and networks in a “whole-of-government approach.” In its data centre initiative, SSC plans to introduce centralized IT management to make better use of shared capacity, and to reduce the number of data centres to less
Grant Westcott, COO Shared Services Canada
than twenty (and potentially fewer than ten) modern, efficient facilities. The government looks forward to consolidation through the standardization of services, but also to achieving new levels of efficiency in existing capacity (modernizing data centre heating and cooling, for example), and will not “rule out any options, including the concept of cloud solutions,” Westcott added. While acknowledging that cloud has the potential to deliver a number of exciting benefits, Westcott also pointed to potential issues around data sovereignty, security and privacy: “these challenges need to be addressed in a way that provides assurances that Government of Canada and Canadians’ data is secure and protected within a Canadian cloud before any decisions could be made on enterprise cloud computing.” SSC has stated it will consider all public providers, including global companies, but has outlined specific requirements for the use of hosted data centre services, including: location of data centres, servers and storage devices within Canada; ownership and control of access to data to remain with the government regardless of how IT infrastructure is managed; control of network access so that no data in transit will be saved, copied or stored between the
TechNOspecTive
starting and end points; and demonstration by vendors who require access to data that their services are consistent with Canadian legislation, including the Privacy Act, and protected from the reach of foreign governments. Shared Services plans are ambitious indeed, especially when the magnitude of transformation is taken into account. According to Herman Yeh, president of the Canadian IT Provider Association and founder/president of Ottawa-based, Northern Micro, a long term solution provider to the federal government, migration at this scale poses special challenges - not the least of which is maintaining government service levels while introducing new technology solutions. “Revenue Canada cannot stop collecting taxes,” he explained, but has to continue operation “so the real challenge is where to find new money for new equipment for a new data centre.” Yeh also pointed to some technical hurdles: implementing a unified email system for 500,000 government employees, for example, will be complicated as content can be classified at many security levels, and decisions will have to be made around what can be hosted and what needs to stay on-premise. With cloud-based services, he added, there is little control over data location, and as a result “government may not be able to take full advantage of public cloud.” Yeh has interpreted some changes in government acquisition patterns, particularly in networking, storage and servers over the last couple of years, as part of a shift towards the development of hybrid cloud, though he believes ultimately the most likely scenario is that SSC will act as IaaS provider to other departments. Local governments face many of the challenges that beset their federal and provincial cousins. According to Gilles Dupuis, Guelph’s GM for information technology, while Canadian municipalities were all given some funding for acquisition of ERP systems to address Y2K, these were acquired in best-of-breed fashion. When additional systems were acquired over time (GIS, business licensing programs in Guelph), the result was implementation of several vendors’ technology – and March/April 2013 ITinCanada.ca / 17
Technospective
Government
Gilles Dupuis, Guelph GM for information technology
siloed systems and data. To address the inefficiencies this creates, Guelph has developed a Corporate Technology Strategic Plan outlining a governance structure that will leverage existing systems, applying what Dupuis called “whole-systems thinking to their ownership and use” to ensure optimal use of IT. Interestingly, governance in the Guelph case entails the involvement of business users of technology in decisions around configuration and investment in systems – they actively participate in subcommittees that manage this process and report to an executive steering committee which has responsibility for oversight and setting priorities. Beyond this more decentralized approach, Dupuis described another thrust in Guelph’s IT strategy as “re-implementation of major systems to leverage all this technology.” As example, he outlined Guelph’s master data management goal, where data which currently resides in separate systems (property data in tax, GIS and business licensing/permits, for example) would be treated and stored one time as “the single source of truth on property data,” obviating the need for multiple databases. While this exercise may not necessarily entail investment in new systems, Guelph’s strategy document does consider the additional capabilities that data warehousing and business analytics could deliver in future. Guelph has also begun to make use of cloud to drive efficiencies: of the 150 servers at the main data centre located at city hall, approximately 40% are virtualized, and IT
has adopted cloud solutions where it makes sense. Ambulance services, for example, which Guelph also coordinates on behalf of Wellington County, are delivered through an Electronic Patient Care Reporting system hosted by iMEDIC EMS that supports remote access for geographically distributed emergency response administrators. Cloud has also been used for a Cultural Mapping project, a Local Immigration Partnership project and for web interfaces that were put in place for city services that are supported on Guelph’s municipal network, such as the pressurized water SCADA system. A final technology area that Guelph is addressing is communications – and mobility in particular through a 4.9 gigahertz licensed radio frequency pilot in 2014/15 that will provide connectivity on street level and link to the city’s fibre network. In addition to mobile access for city workers and first responders, the system will also support management of city infrastructure such as traffic lights. In Stratford, the strategic importance of communications in rebuilding community, establishing economic sustainability and delivering city services has been proven out. The city’s acquisition in the early 1990s of a local utility (Festival Hydro) brought with it 40 km of fibre optic cabling (now 60 km) and 802.11n wireless technology for a smart meter system, which now serve as the foundation for a wireless mesh – a fibre/WiFi system capable of delivering high speed bandwidth across the city at highly competitive rates. This communications system has attracted several new businesses from new industries to the region (a major RBC data centre in 2010, for example), while supporting electronic service delivery initiatives, such as an online high school and online conduct of the 2010 municipal election. In Mayor Dan Mathieson’s vision, the technology now exists to create a continuum of services, which might begin with a smartphone report on a pothole that is integrated into the city’s works/ management system, pushed out to staff who tackle the project and then complete the loop by notifying the initial reporter of
the repair, while gathering statistics on the process. According to Mathieson, this type of system would provide both new levels of efficiency in the delivery of city services and the transparency that the public now demands. The city already has many of the required components – a web interface for the public, data capture capabilities in its work management software, and mobile hardware devices that employees can use in the field – and Mathieson expects to see a system in place in the next three to five years. Another example of service integration is Stratford’s Mutual Link, which provides interoperability between emergency responder systems to improve response time, but which adds a software communications link to engage additional
Dan Mathieson, Mayor of Stratford
agencies, i.e. hospitals, and a social media component that Mathieson believes could provide the timely alerts needed to save people’s lives. Digital push notification of service information to replace cumbersome mail systems is another means to engage citizens that will be built on Stratford’s communications platform. As IT at the federal and provincial levels groans towards more centralized service delivery to various departmental operations, at the municipal level, there appears to be greater focus on the adoption of new technologies to support the delivery of citizen services, an observation that matches urbanist Richard Florida’s characterization of municipalities at this year’s FCM conference as “the real source of pragmatic innovation.”
18 / IT in Canada.ca March/April 2013
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Technospective
on Retail
By Rachel Levy Sarfin
Canadian retail technology at the bleeding edge Canadian retailers are implementing the newest hardware and software to stay one step ahead of the competition.
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anada’s retail industry accounts for a significant portion of the country’s economy – approximately 5.4 percent of GDP. Between 2002 and 2011, the last year for which data was available, Industry Canada reported that retail sector earnings increased from $58.5 billion to $76.8 billion. What accounts for this growth? While consumer spending and greater competition play a role, technology innovation also makes an important contribution to the Canadian retail industry’s success. Canadian retailers have implemented a number of technologies inside the store and beyond to maintain competitiveness. Geoff Le Quelenc, director of information technology, Retail Council of Canada, believes that technology has had an enormous impact on Canada’s retail industry. He divides retail technology into two types: the first category is consumerfacing technologies that enable personal interaction with shoppers, and the second
20 / IT in Canada.ca March/April 2013
category is technology that has been implemented in the supply chain.
Consumers: driving innovation In Le Quelenc’s view, the consumerfacing technologies that Canadian retailers are implementing have been driven by the nation’s shoppers. “It’s a reaction to consumer technology and what they’re doing,” he explained. Some of the contemporary technologies that shoppers are engaged with include mobile devices and social media. However, shoppers also continue to engage in what could be considered traditional buyer behaviours, such as searching for the best deal and demanding high levels of customer service. To respond to these twin expectations of modern consumers, retailers have implemented tools that aid engagement, automate marketing and keep consumers safe.
Michael Eubanks, SVP, technology, One, Inc.
E-tailer engagement How do stores with an online presence only attract and retain customers? Much like their bricks-and-mortar counterparts, web shops must deliver an outstanding
Retail
experience. In a virtual shopping session, that becomes difficult because the shopper is not dealing face-to-face with any store employees. One way to keep shoppers coming back to an online store is to make it easier for them to buy the items they want on their preferred devices. As smartphones and tablets grow ever more popular, Le Quelenc noted that Canadian e-tailers have made efforts to optimize their websites to fit mobile device screens. Michael Eubanks, SVP, technology at the Toronto-based loyalty program improvement solution provider, One, Inc., agreed that creating mobile applications can be a good way to retain customers. If consumers can place their orders through a smartphone or tablet app, this “makes things efficient,” he said. Eubanks pointed out that building a strong online community can also play an important role in an e-tailer’s success. An online community gives consumers an opportunity to ask questions, share their (hopefully) positive experiences and feel a sense of camaraderie with other members. C a n a d i a n w e b s i t e S h o p . ca, which launched last spring, rewards shoppers with points when they share information about products with other individuals in their social networks. These points can be used during the checkout process to reduce the bill.
Another brick in the (Facebook) wall Market research firm Ipsos Global recently released a surprising statistic: 55% of survey respondents said that they use social media to keep themselves informed about brands and products. PwC’s MultiChannel Retail Survey, published around the same time as Ipsos Global’s findings, arrived at similar conclusions. Forty four percent of those surveyed use social media to follow their favourite brands. How can e-tailers take advantage of these insights to reach out to customers in an effective way? Social media marketing tools allow retailers to send targeted, timely messages to their customer base in an efficient and cost-effective manner. A number of
providers in this space allow marketers to log into a single platform to compose advertising materials and schedule their delivery to different channels and customer segments. These marketing tools enable users to post to more than one social network at a time and to create blog or wiki entries to push more detailed advertising opportunities. The analytical capabilities of these
Mark Kovarski, business technology analyst and ITMD peer lead
marketing platforms provide insight into how consumers respond to advertising messages. Analytics show demographic and geographic data in addition to what customers are saying about the product, the brand and the campaign itself. Some social media marketing software gives users the option of developing customized analytics reports that focus on specific information relevant to the retailer.
Efficiency: another technological driver While some consumer-facing retail innovation has been driven by shopper expectations, some new technologies have emerged from the need to improve efficiency and to save money. One example may be readily visible to consumers the next time they walk into a store. They might notice that the shop has
Technospective
gotten rid of its bulky, noisy cash registers and replaced them with computers, tablets or even smartphones. New, leaner pointof-sale systems and cloud–based solutions let retailers access customer data from anywhere, as long as they have an Internet connection. They also link to inventory systems to update them. The solutions will also “talk” to POS hardware such as printers and cash drawers so that these can play their roles in a seamless transaction. Cloud-based POS systems attract retailers because they cost far less than their legacy counterparts. They are also not just for bricks-and-mortar stores. E-tailers can take advantage of cloud-based POS applications designed to carry out online transactions and accurately report on inventory levels. Customers will see another example of efficiency-generating technology at the cash register. Near field communications (NFC) technology makes use of electromagnetic radio fields to exchange data between devices in close proximity to one another. With NFC, shoppers no longer need to insert their credit cards into a reader. If their cards have a chip, they can simply tap it against a transponder and the card transmits payment data. Soon, consumers might not even need to bring their wallets with them to the store. Smartphone manufacturers are working on creating devices with built-in mobile payment chips that will securely send payment information. Visa recently approved the integration of its credit card systems with new BlackBerry phones.
Shopping Securely While technology might innovate the way consumers pay for their purchases, how can Canadian retailers keep those payments secure? Mark Kovarski, Torontobased business technology analyst and ITMD peer lead, believes that new security standards recently released by the Payment Card Industry Standards Council will be more important than any hardware or software coming to market. These standards dictate how application developers should write the code that transmits mobile
March/April 2013 ITinCanada.ca / 21
Technospective
Retail
payments, and outline what vendors need to do to mitigate risk to themselves and to consumers. Mobile payment technology is still in its infancy in Canada, but Kovarski added that when its speed, convenience and security fully align, vendors and shoppers will readily adopt it. Payments are not the only thing retailers need to secure; preventing merchandise theft remains a concern. Many Canadian stores use radio frequency identification (RFID) tags to keep their items from leaving the stores before customers pay for them. Three components make up RFID anti-theft systems: a tag with a radio transmitter, a reader that communicates with the tag and a database that analyzes the tag’s information. RFID technology has been a part of the Canadian retail scene since the middle of the last decade. However, manufacturers continue to improve their products to make RFID anti-theft systems more effective at preventing shrinkage. They are making more powerful antennae, less conspicuous readers and faster tag encoding software. Security cameras have also received a technological makeover. Many cameras now run on an IP network, meaning that they transmit their footage wirelessly and in high definition. They also have a better zoom function than legacy surveillance recorders. In addition to improved images, IP cameras can also be linked to other security system components such as motion sensors. For example, if someone walks past a camera, it can trigger lights to turn on or off.
The supply chain gets smart While customers may be driving a good deal of innovation in Canada’s retail sector, Canadian retailers have also invested significantly to improve efficiency in the supply chain – in technology to make warehousing smarter. For example, when a warehouse receives a shipment, employees may enter data on the items into an RFID system that uses various tags and receivers to track the contents of the shipment from
22 / IT in Canada.ca March/April 2013
the warehouse shelf to time of purchase. Warehouse management software can also help things run smoothly. On delivery of goods, this type of software can assign the items to a location in the warehouse, as well as designate an employee that is responsible for their receipt. Warehouse management software can also integrate mobile technology; a worker can accept the consignment on a mobile device, and the software will send instructions for the most direct route from the loading dock to the shelf via a smartphone or tablet. When
Paul Reid, VP, retail store operations, Sport Chek
an order comes into the warehouse, the software assigns an employee to retrieve the goods and the worker uses a mobile device with a scanning application to scan the lot number and quantity. Once the product gets onto the truck, plane or boat, the software generates an automated notice to inform the customer the package is on its way. Warehouse management software does not only track shipments. Supervisors can also use it to determine optimal staffing levels based on the amount of deliveries the warehouse expects to receive.
Canadian Case Study: Sport Chek Lab One Canadian retailer has implemented a
number of these technologies in its newest store. Sport Chek created a “retail lab” in downtown Toronto to test out how well consumers will respond to these cutting edge tools. Paul Reid, VP, retail store operations, Sport Chek, explained that the company installed 140 digital screens in the new store that shoppers can touch to interact with customized content. Reid added that the screens also possess NFC capabilities. In this case, NFC technology will not be used for payments; customers will be able to transmit and receive content from the screens by touching or holding their mobile devices near them. Reid called NFC “a key way to communicate in the future,” which is why Sport Chek chose screens with that capability even though the technology is still in its early days. Sport Chek’s retail lab also features a digital community bulletin board. The board broadcasts local activities, such as pick up hockey games and announcements for exercise classes. Reid explained that the board will also display customersubmitted information. For instance, if a shopper completes his first marathon and wants to share the accomplishment, he can send the news to the store’s community board manager, who will then upload it to the board’s content management system. The goal is to create community while demonstrating an exciting use case for store products. At Sport Chek’s lab, employees use tablets on the sales floor to help shoppers. They can show images such as the crosssection of a sneaker. Employees can also look up information for customers, such as registration dates for junior hockey leagues. Reid has received highly positive feedback from shoppers and other vendors, who have commented on the store’s “dynamic energy.” Sport Chek is currently weighing which of these technologies it will deploy in its other locations. Shoppers in the rest of the country might be seeing tablets, touch screens or community boards at a store near them soon.
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Technospective
Manufacturing
By Mary Allen
Build-to-order or order and build? ITC drives efforts towards greater efficiency in lean manufacturing, but may also support more distributed models going forward.
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T powers virtually all activities in the manufacturing business. While design software and collaborative systems fuel product development, ERP manages resources – both physical and human – providing a financial account that is critical to ongoing success. Increasingly, analytics solutions, in forms ranging from Excel to sophisticated business intelligence (BI) systems, are applied to markets, materials compliance, and business process monitoring, while sales/marketing and post sales support benefit from CRM, social media and call centre solutions. The list goes on – and this before standard productivity and backend equipment is taken into account: personal devices, data centre systems, data repositories and communications. But impressive as this list is, the same could apply to companies in many other verticals. So what IT is unique to the manufacturing world and what technologies will companies look to as a means of building advantage in an increasingly competitive global marketscape characterized by shorter
24 / IT in Canada.ca March/April 2013
product cycles, slimmer profit margins and tighter regulation? First and foremost are Manufacturing Execution Systems, or MES control systems that manage and monitor work flow processes on the factory floor, and which typically integrate with MRP II (Manufacturing Resource Planning) or ERP systems. Designed to enable a transactionoriented business systems approach in realtime production operations, MES collect, analyze and report production data on a very short time frame – often seconds – to optimize the manufacturing process. By linking business systems to plant-floor control equipment, MES information systems support a number of integrated capabilities, including detailed planning and control, material management, operating resources management, personnel management, data acquisition and processing, interface management, performance analysis, quality management and information management. In years past, the combination of multiple, standalone software systems for discrete
processes on the shop floor (which often grew in number through acquisition), combined with unique manufacturing environments, demanded a custom approach to systems deployment. This in turn led to the development of dedicated industry solutions by highly specialized vendors. Since the introduction of MES in the 1990s, however, a trend towards process standardization has enabled the introduction of systems – offered by more familiar names such as SAP, Siemens, Schneider, Honeywell, GE and Oracle – that support common IT platforms and databases, and which aim at process automation to create the ‘virtual factory’ that can respond in a more dynamic way to changing market requirements. Though many of these solutions still exhibit a vertical orientation, they enable monitoring and management across logically and geographically distributed systems.
Dell order design Dell manufacturing offers a fascinating view of this transformation. Back in
Manufacturing the 90s, Dell rocked the PC world with introduction of the ‘build-to-order’ model to computer manufacturing. Based on the principle that goods are produced to suit individual requirements, build-to-order created enormous competitive advantage for the company. In contrast to competitors who targeted production at a best assessment of future markets, Dell charged upfront for orders, fixing and building against known demand and cost. But the systems to support that approach were not without challenge. As Matt Griffiths, executive director, Dell manufacturing systems, explained, “The
Matt Griffiths, executive director, Dell manufacturing systems
majority of our IT systems, up until about four years ago were very much developed inhouse. They leveraged Oracle technology for databases and Microsoft operating systems, but for the most part they were custom developed. They were very expensive to maintain and support.” Commoditization in PC markets, however, inspired in Dell a rethinking of production and supporting IT systems. Driven by a growing “commonality of demand” and a reduction of the product mix for both consumer and enterprise PCs (which the company is now beginning to see repeated in the server market with increasing demand for appliances and replaceable blades), Dell initiated its shift towards ‘lean manufacturing’ about five years ago. As Griffiths described it, “both Dell’s manufacturing facility and supply chain and the IT systems that supported that were completely geared to the concept that every order is unique. When you are trying to build a hundred thousand
PCs a day, and treating every one as unique, you need a pretty complex set of systems. But as that demand signal changed, we realized we had a Ferrari when we needed a Volkswagen from an IT perspective.” On the production front, Dell began to move from ‘sell-build’ where every unit is unique to a model which allowed the organization to build in a more traditional, progressive manufacturing fashion – “taking batch orders or orders with similar configuration and building ten thousand of those, changing things up and then building ten thousand of another order,” Griffiths added. At the same time, Dell began to remove some of the more specialized, customized IT systems pieces, preparing the way for the adoption of more off-theshelf technology packages that were geared towards lean manufacturing, and more capable of delivering new efficiencies at the IT system level. Specifically, the company has implemented Microsoft’s Dynamics AX across its global factories – the largest implementation of Microsoft's ERP solution in the world to date – uses JDA software for material planning, and is in the midst of rolling out Oracle’s transportation module for outbound logistics and supply chain. In cases “where we do have disparate systems,” Griffiths explained, “we do have B2B or EDI systems that sit between them” to manage integration. Dell’s BOOMI, for example, provides connection between systems and the company also uses messaging technologies, such as MQSeries middleware and open protocols based on HTTP. Most integration activity is aimed at connecting front office order management systems, which tend to be Oracle, and back end systems for supply chain provided by Microsoft and JDA. While some of this is custom developed, much is enabled through use of off-the-shelf configurated products such as BOOMI or the GSX middleware gateway. Dell’s shift towards greater standardization has produced considerable savings: Griffiths estimates that moving to the Dynamics AX platform has reduced IT costs for manufacturing by over 60%, reduced the application footprint by 75%, and enabled the removal of close to 4,000 physical servers out of the environment.
Technospective
Over half of Dell’s manufacturing IT now runs on virtual machines. Commenting on future IT provisioning, Griffiths noted that “IT costs are typically fixed – and easier to justify against high margin, configured business than against simple, low margin business,” a consideration that is driving Dell’s ongoing search for greater rationalization of IT systems. Cloud, he explained, could be a major component of manufacturing growth on two counts: it would offer more efficient storage for the 50 petabytes of images that Dell stores on behalf of customers; and through IT resource sharing, the company could establish additional physical plant without adding additional fixed IT infrastructure cost. Currently Dell maintains manufacturing facilities in the U.S., Brazil, Mexico, Poland, India, Malaysia and China, having moved a lot of laptop production closer to the Asian supply of many components. In this distributed environment, Griffiths sees networking infrastructure as a critical component as “we still want to be able to offer the configured-to-order product, and we want to get it to the customer in the shortest time frame possible, while taking advantage of our geographically dispersed network.” To coordinate materials supply and component assembly (PC units are manufactured in APJ, while monitors, printers, accessories are fulfilled from different in-region locations) business process systems powered by ICT networks are key. To handle the several million messages that flow through supply chain on a daily basis, high resolution image
Ian Farthing, CFO, Juvenile Segment, Dorel Industries Inc.
March/April 20132 ITinCanada.ca / 25
Technospective
Manufacturing
ordering (some are 80-90 gigabytes), or to move demand from factory to factory should this become necessary, Dell relies (increasingly) on Force10 networking gear, dedicated 80-150 megabytes MPLS links at each manufacturing location (as well as redundant links and DR capability) and a communications backbone provided by third party telecom providers, including BT and Verizon.
Dorel VPN This focus on developing links between distributed operations has been a recent preoccupation of another manufacturer with headquarters closer to home. Montrealbased Dorel Industries Inc., a manufacturer of bicycles, juvenile products and furniture, has just implemented an MPLS-enabled Virtual Private Network (VPN) from AT&T that will serve as a rallying point for connection between 40 offices worldwide. Dorel’s new VPN service provides the foundation for a number of collaboration activities. Beyond supporting a couple of divisions that rely on the MPLS connection for access to a centralized, shared email platform and providing for the continuous replication of Montreal corporate email at another site for DR, the network provides a secure link for the sharing of data generated by discrete ERP systems across North American, European and Asian sites. Having grown through acquisition, Dorel currently runs 15 ERP systems, including SAP, JD Edwards, Movex M3 and Infor XA, using an EDI interface, IBM Controller (for financial
Phil Petrella, network administrator, Dorel Industries Inc.
26 / IT in Canada.ca March/April2013
consolidation) and Cognos (for operational data) tools as reporting mechanisms for the management of company data. According to Ian Farthing, CFO, Juvenile Segment, Dorel Industries Inc., “Every day we collect data on daily sales from every group around the world, and we populate a centralized repository in Michigan. That’s a lot of data flow that is facilitated by the MPLS.” And because the data is in one location, accessed via VPN, Dorel network administrator Phil Petrella added, “it is more secure than if people were emailing an Excel sheet to forty different people,” or if they were using mobile devices to share the information over the Internet. Intended as a solution to connect internal staff, the VPN is currently closed to thirdparties; however, within the Dorel context, it also supports supply chain decisioning and operation. As Farthing explained, “we source a lot of our product in Asia, mainly China, and we have a large group of 200 employees there. Communication with that group is critical, and they are a big part of our supply chain success. They’re the ones who do quality control with our suppliers; they oversee logistics and make sure we get our products on time. With VPN, our communication with China is greatly enhanced.” Another potential use case for Dorel’s VPN is centralized VoIP and messaging, which the company’s Recreation and Leisure division is now rolling out (on an Avaya system) for additional savings on long distance and other services – a good example of a local IT
initiative that may serve as best practice for the whole company going forward.
3D distribution If coordinating and consolidating manufacturing processes for greater efficiency savings is the goal of MES and various communications solutions, an emerging technology is poised to stand this model on its head, making distribution of manufacturing itself the end game where extreme customization meets logistical virtuosity. 3D printing, which found its way onto the Gartner hype cycle for 2012, is an ‘additive’ manufacturing process that uses data ‘slices’, or digital cross sections from virtual blueprints produced by CAD or animation modeling software to guide the successive layering of materials to build solid three dimensional objects. As introduced in the mid 1980’s, 3D printing was an expensive process that was typically used for rapid prototyping of components in the manufacturing tool room. Design, architecture and engineering businesses were also able to make good use of 3D’s unique capabilities. As Nick Aroutzidis, principal at Stratford-based NA Engineering Associates Inc. and an early adopter of 3D, explained, the technology’s ability to rapidly construct objects that help clients visualize space has been invaluable in presentation work. For clients in government, mechanical/ electrical and nuclear generation industries, NA Engineering uses 3D to build physical replicas of parts and buildings, and highly
NA Engineering 3D building model
Manufacturing accurate scale designs that show how various components might fit in a specific space. “Sometimes we are dealing with mechanical rooms, and if the owner wants to introduce new equipment, we can model the space to verify that everything they want will work,” he added. Another use case is to print renderings of a streetscape to show how a new building might fit into the environment. In this process, NA Engineering begins with 3D models drawn in AutoCAD 3D or Revit, saving the data in .sdl format that is exported for processing by Catalyst software and then printed using a Dimension 1200 printer. According to Aroutzidis, before introduction of 3D printing, model building was very time consuming and “the people we use in our industry are highly paid.” Now, printing objects from software renderings is a transaction that may take 15 minutes to an hour, and the 3D models are highly accurate – within a thousandth of a millimeter. 3D precision allows for new levels of rapid customization that are ideal for a number of industries. Geomagic Inc., (a 3D software provider that is the subject of our book review in this issue), found its first customers in the denture and prosthetics fields. Currently, experimentation is going on in the use of 3D to build transplant organs, and just this month, surgeons in the U.S. replaced 75 percent of a man’s skull with a custom-designed polymer cranium constructed from CT scans with a 3D printer from Connecticut-based Oxford Performance Materials – ‘build-to-order’ on a scale not seen before. But it is in delivery that the most revolutionary aspects of 3D can be found. Digital abstraction of an object and the transport of the data – rather than the physical good – removes much of logistics from the equation, and enables the local, distributed manufacture of made-to-order items that is the antithesis of centralized, assembly line production. And with drastic price reductions and the advent of desktop 3D printers in the last couple of years, this technology is now in the hands of consumers, as the growing popularity of The Maker Movement suggests. Are we back to craft manufacture or forward to the Star Trek replicator – and does it matter which?
Technospective
NA Engineering 3D nuclear reactor model
NA Engineering Revit rendering of a nuclear reactor
March/April 2013 ITinCanada.ca / 27
Technospective
on Finance
Continued from page 14
creates a perception that IT itself is to blame: “for those with great ideas, [a process built around risk and security management] really slows them down dramatically – they will look at IT within TD as an impediment.”
The future – innovative technologies on the horizon Each of our expert interviews ended with a question about the “big picture” technologies that will impact financial services in 2013 and beyond – and they, like professionals in other sectors, see the need to stay abreast of the technologies that dominate trade press headlines. A common belief in mobility as a transformative technology emerged from these discussions: ESI’s Emery cited cloud computing and mobile/handheld technologies as having the greatest near-term impact; TD’s Codack highlighted mobility (“the big one”) and HTML5, as well as the advantages of integrating edge networking systems with active directories into a sort of neural network; our third expert pointed to Big Data and mobility as the technologies that will have the most impact on his risk/ trading functions within the bank.
The bottom line As noted above, Canada’s IT industry looks to major banks for leadership. These organizations have the scope and budget needed to take advantage of most IT-enabled solutions, and an urgency derived from operating in highly-competitive domestic and global markets. In this context, the results of IT in Canada’s exploration of the industry are reassuring with respect to the overall trends in the Canadian IT industry. Companies of all sizes, and across all sectors, are investing in solutions like cloud, mobility and Big Data to drive increased productivity, efficiency and competitiveness; and the snapshots that we’ve taken from inside Canada’s FIs demonstrate that leading Canadian IT experts are betting their own resources on the benefits that can be gained in each of these areas.
28 / IT in Canada.ca March/April 2013
Perspective and invective
New in Social
from the IT in Canada Forum The IT in Canada IT Forum is Canada’s most active source of IT-focused social content. Here’s a sampling of what’s new/active, as of Mar. 26, 1:04 p.m. Innovation Needed Posted: one week ago...Started by: cherylg… Forum: IT-Nomics...Views: 3,560 A couple of weeks ago, my good friend Michael O’Neil, Chief Content Officer here at IT in Canada, posted information about Innovation York’s industry liaison program, wherein Canadian companies can collaborate with York University researchers to solve business problems, create new IP, develop new products and services, and improve processes. There is government support for these collaborations, essentially giving companies access to leading edge researchers and labs for significantly reduced costs. Canada needs innovation. We all know that. It drives growth in both revenue and jobs. It improves our standard of living. And we are slipping on the innovation scale globally. So here is a challenge to Canadian businesses – reach out and contact me. cgiblon@yorku.ca. Tell me about your challenges and wildest dreams for business success. Let me find you a researcher to help you solve your business issues, grow your revenue, reduce costs, design new products. The time to act is NOW. Cheryl
Why everyone should learn to code... Posted: three weeks, five days ago...Started by: Kevin Priddle… Forum: Skills & Delivery...Views: 665... Replies: 2 A really inspiring video from Code.org, which is a non-profit who’s goal is to expose all students to computer programming. Some big names like Bill Gates, Mark Zuckerberg and Twitter’s Jack Dorsey talk about why they think every student in every school should have the opportunity to learn to code. http://www.youtube.com/watch?v=nKIu9yen5nc After watching, I feel like I should take some computer science classes and join the world of coders... how about you?
Replies: • No argument from me. I can code. Been coding since I was 9 years old. Made a lot of money as a coder back in the day. Now I dream in code. Does the Matrix have you? • A recent post from Dell’s Tech Page One (http://www.techpageone.com/technology/three-reasons-programming-will-become-a-commodity/#.UVHbgDfNiXp) gets into the reasons why learning to code will be important, but they say there are three emerging trends that will make programming a commodity - “making programmers interchangeable and driving down wages.” “Developers will still be a necessary and valuable member of any organization, but their role will be more akin to other white-collar positions such as civil engineers and accountants,” the post says. Penetration of technology and the Internet into the mainstream everyday life of businesses and the average end user has reduced the “mystical awe” surrounding programming wizards (although I think there’s still plenty to be in awe about). The Tech Page One folks say ensuring growth, stability, and security is more valuable today than producing the most avant-garde technology. They say “Frameworks and Open Source” have also contributed to the commoditization of programming. Lastly the maturity of overseas development work will offer reliable, yet cheaper, sources for programming. In closing, the author says “there will always be opportunities for exceptional developers to find high-paying jobs building the next generation of applications and tools,” but that “the easy availability of existing solutions and the rapidly growing population of programmers will continue to put downward pressure on wages.” Just some more food for thought.
If you want to check out the IT Forum yourself, you can find it at www.itforumexchange.com (or simply by clicking on the Forums link at the top any page on IT in Canada, www.itincanada.ca). While you’re there, why don’t you register (it’s free) and join the debate? March/April 2013 ITinCanada.ca / 29
Book Review
From China blues to tech red
By Mary Allen
“Bamboo is flexible, bending with the wind but never breaking, capable of adapting to any circumstance. It suggests resilience, meaning that we have the ability to bounce back even from the most difficult times. . .” Ping Fu
B
end, Not Break is a compelling account of one woman’s struggle to negotiate two totally disparate worlds – China during the Cultural Revolution and the American tech startup landscape. What unites these two are common challenges that the author of this two-part memoir encounters in both environments. Loss, betrayal, physical and mental deprivation and the ongoing need for darned hard work confront Ping Fu, the child growing up in Mao’s anti-capitalist China, and Ping Fu, founder and CEO of Geomagic Inc. Ultimately, Fu triumphs in her second home in the U.S. – is named Inc. Magazine’s Entrepreneur of the Year in 2006 – through sheer perseverance, a healthy dose of optimism and life lessons learned from family, national culture and her early experience. But in many ways, the book is a coming of age account that is remarkable more for the contrast between Ping Fu’s lack of advantage and achievement than for her success alone – and for the raw candour she uses in telling her tale. In person, Ping Fu appears an unlikely heroine. Petite, stylish and sporting custom sneakers manufactured with the help of Geomagic 3D digital reality software, she presented at a recent event as an inspirational speaker and supporter of women’s entrepreneurship (she is member of President Obama’s National Council on Innovation and Entrepreneurship). But Fu’s early history belies this polish. At the age of eight, she was forcibly removed from her adoptive parent’s home by the Red Guard and moved to a government-run dormitory in Nanjing with a younger sister in tow. Branded an enemy of the people 30 / IT in Canada.ca March/April2013
because of her family background, Fu was subjected during her ten year stay there to starvation, ‘cultural education’, a violent gang rape (before she knew what sex was) and factory labour. Lacking any formal schooling, she somehow managed exams for entry to Suzhou University, but was later imprisoned as a result of her involvement with a school journal and hackles raised over her senior year research project – a study of female infanticide in China. While no formal charges were laid, Fu was asked by police to leave the country, a menacing offer that she could not refuse. Life in the U.S. was initially no better. Fu arrived at age 25 with three English phrases – “thank you,” “hello” and “help” – and $80 in travellers’ cheques (bus fare to the University of Albuquerque in New Mexico where she was enrolled to study English cost $85!). Drawing on a talent for survival developed in China, she endured a kidnapping, gruelling language catchup, loneliness, poverty and double duty as a student and waitress, eventually completing a MS in computer science at the University of Illinois. On graduation, Fu found employment with a tech startup, with AT&T Bell Labs and next with the National Center for Supercomputing Applications, where she worked on early cloud computing models, computer animation and 3D printing technology. At NCSA, she managed a team that included Marc Andreessen and created Mosaic software, the user-friendly web browser that later became Netscape. In addition to Mosaic, Andreessen was involved in the development of 3D printing capabilities, work that ultimately inspired Fu to create Geomagic.
Bend, Not Break: A Life in Two Worlds, Ping Fu, Penguin, 276 pages, $29.50
As CEO of the North Carolina-based provider of 3D scanning and design software solutions, Fu faced a number of hurdles that she was able to surmount through reliance on skills forged in her China years. Pitching to investors, for example, proved less daunting than public confession forced by the Red Guard in her youth. Similarly, when betrayed by a CEO she had hired to drive the company to commercial stability (he drained the company of funding to the point of bankruptcy), she was able to apply the strong work ethic drilled into her in the China factory to reassert control and raise new funds. And when confronted by flagging sales suggesting that the company’s new approach to manufacturing might be on the bleeding as opposed to leading edge, Fu was able to “bend not break” – and hold out for a better time. This moment appears to have finally arrived: this February, 3D Systems announced completion of its acquisition of Geomagic Inc. for $55 million in cash. Nice change for a lady who began her career in the U.S. five dollars short.
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