HOW TO PICK THE RIGHT IOT PARTNERS – BY MAGNUS JERN OF DMI

 
Emma Lovett
11 April 2017
 

“If you disassemble a modern drone, VR headset, or IoT device, you’ll find mostly smartphone components.”

-Chris Dixon of a16z

Every business and organization, large and small, will be touched by IoT over the coming years whether it’s smart buildings, transportation, logistics, healthcare, retail, manufacturing, finance, energy utilization or something else. Some will be able to make it a major competitive advantage and others will just do what their competitors are doing.

Typically, the need for one or multiple IoT specialized partners comes from one of these three needs:

  • The organization has a problem that could possibly be solved using IoT technology
  • The organization has a bunch of connected devices stemming out of different initiatives that need to be managed and/or data output that is not yet structured
  • The organization is working on an IoT approach/strategy

But with 300+ vendors claiming to have the right “IoT Platform” for your business, where do you begin? How do you pick the right IoT partners?

Here’s a 3-step guide based on our experience:

1. Define the Problem

Too many IoT projects start with a technology or solution being tested and implemented. Just like with any other IT projects, the greatest ROI comes from identifying and solving business problems.

So, start by identifying problems that the business, customers or employees are experiencing and look at how these could be solved with technology. Use tools such as DMI Active (DMI’s methodology based on Design Thinking, Lean UX and Human-Centric Design) if you don’t already have a long list.

Once you’ve identified problems, explore them to really make sure that you understand them before jumping to solution solving. Prioritise the solutions based on factors such as business impact, complexity and cost.

Example:
A pharma company that provides hardware to hospitals for patient treatment wants to better understand how the product is being used (utilization, location, results, etc.). This could give insights to product improvements, maintenance schedules, selling more equipment, training needs and more.

A beverage company finds out through data that they are missing out on 10% of revenue from existing customers due to inventory running out before the weekly delivery. The delivery team says they need to increase the amount of trucks and drivers to solve the problem, which will increase cost substantially. Would it be possible to solve this problem with better utilization of existing trucks and drivers with the help of vehicle tracking and predictive analytics?

2. Test Concepts and Solutions

With a clear problem definition, it’s time to start looking for solutions.

Integrating IoT in a new product will take time. Typically, the roadmap for any hardware combining connectivity is at least 12-18 months and it’s difficult to do anything about this. The challenge is simply the combination of hardware design, software development, building and testing a prototype, and taking the product to mass market production takes time. And at the end of this cycle there’s another 6-12 months’ lead time to make major changes to the product.

We believe that organizations should always attempt to test the concept/solution before embarking on big implementation and integration programs. And if it’s still necessary due to time pressure, then run the proof of concept in parallel as input to the core implementation program.

Some of the 300 IoT platform providers, or one of the additional thousands of sensor and connected device suppliers, will be able to provide you with solutions that can easily be prototyped. Select one or a couple of them to evaluate. Run a proof of concept rather than pilot if possible. The pilot can be integrated into the implementation.

As per previous articles on prototyping, make sure that end-user feedback is integrated every step of the way.

Also, clearly define the success criteria for the proof of concept and final implementation with KPIs that can be used to track progress towards the core objectives every step along the way.

Example:
Let’s go back to the pharma company above. To connect the device itself and integrate sensors will take at least 2 years including development, certification, security auditing and more. The company wants to test if tracking the device usage will really be worth the effort. To start with, they identify 3 different solutions with sensors using sound, motion and electric circuit measurements and does a proof of concept with all 3 in parallel. The proof of concept is implemented and evaluated in less than 2 months and achieves the desired results.

3. Choose the Best Solution Fit for You

Now the problem has been identified and a solution has been prototyped and proven to work.

Now it’s time to answer the question in the title of this article. How to choose a partner that can help implement the solution.

Pick a partner with relevant industry experience for the problem/solution (assuming there is one) to manage risk and minimize time to market. With hundreds of IoT companies in the market, most are specialized in specific verticals or use cases. Put together a list of the top 5-10 companies and select the ones to invite for a RFI or briefing. Make sure to keep the first implementation limited to the top 3-5 use cases really required and no more.

For companies that lack in-house competencies in IoT UX design, integration, development, connected analytics and security, it might be a good idea to pick a partner to help with the end-to-end implementation. This will vastly increase the chance of achieving objectives within the desired timeline.

Finally, launching the solution is only the start of the journey. Once implemented, use the data output, customer feedback and other results to optimize and improve.

Example:
A furniture manufacturer has identified an opportunity to improve time to market by end-to-end tracking of its products from manufacturing to stores. The concept has been proven with an early proof of concept. Now it’s time to choose a scalable solution. A list of the top 5 suppliers of IoT for logistics and supply chain applications is put together including Alien Technology, Cargo Sense, Xerafy, Arviem and maybe DHL as one of the top IoT-powered logistics companies. Cargo Sense is selected based on fit, cost and time to market.

In Conclusion

Always start with the problem, then test the possible solutions and finally work with best of breed partners to implement, evaluate and continue to optimize and improve.

Magnus Jern, Chief Innovation Officer, www.dminc.com

 

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As per previous articles on prototyping, make sure that end-user feedback is integrated every step of the way. Also, clearly define the success criteria for the proof of concept and final implementation with KPIs that can be used to track progress towards the core objectives every step along the way. Example: Let’s go back to the pharma company above. To connect the device itself and integrate sensors will take at least 2 years including development, certification, security auditing and more. The company wants to test if tracking the device usage will really be worth the effort. To start with, they identify 3 different solutions with sensors using sound, motion and electric circuit measurements and does a proof of concept with all 3 in parallel. The proof of concept is implemented and evaluated in less than 2 months and achieves the desired results. 3. Choose the Best Solution Fit for You Now the problem has been identified and a solution has been prototyped and proven to work. Now it’s time to answer the question in the title of this article. How to choose a partner that can help implement the solution. Pick a partner with relevant industry experience for the problem/solution (assuming there is one) to manage risk and minimize time to market. With hundreds of IoT companies in the market, most are specialized in specific verticals or use cases. Put together a list of the top 5-10 companies and select the ones to invite for a RFI or briefing. Make sure to keep the first implementation limited to the top 3-5 use cases really required and no more. For companies that lack in-house competencies in IoT UX design, integration, development, connected analytics and security, it might be a good idea to pick a partner to help with the end-to-end implementation. This will vastly increase the chance of achieving objectives within the desired timeline. Finally, launching the solution is only the start of the journey. Once implemented, use the data output, customer feedback and other results to optimize and improve. Example: A furniture manufacturer has identified an opportunity to improve time to market by end-to-end tracking of its products from manufacturing to stores. The concept has been proven with an early proof of concept. Now it’s time to choose a scalable solution. A list of the top 5 suppliers of IoT for logistics and supply chain applications is put together including Alien Technology, Cargo Sense, Xerafy, Arviem and maybe DHL as one of the top IoT-powered logistics companies. Cargo Sense is selected based on fit, cost and time to market. In Conclusion Always start with the problem, then test the possible solutions and finally work with best of breed partners to implement, evaluate and continue to optimize and improve. Magnus Jern, Chief Innovation Officer, www.dminc.com

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Next, the million-dollar question; what are the triggers? In a nutshell, feeling consistently stressed rather than stretched by our work. To be stretched, we need to feel secure and in control, forge open and trusting relationships and experience a sense of achievement. This is a tall order though, when you consider that we’re wired for threat. Our biological survival mechanism (the brain’s ‘security guard’) evolved to help our ancestors to get the hell out of dodge when they faced being eaten alive. The system (which operates in a threat or reward-style binary code) worked a treat with dangerous predators and of course still does. Corporate life presents few mortal threats, but unfortunately, this ancient ‘fight or flight’ mechanism can easily trigger off a disproportionate stress response in relation to things like change initiatives, job insecurity and difficult relationships. And when worrying about a potential risk turns into endless rumination, relatively minor hassles can morph into imaginary predators. Our brain doesn’t distinguish between a real or perceived threat. To quote Shakespeare’s Hamlet; “there is nothing either good or bad, but thinking makes it so”. An imagined fear can feel as real and frightening as a sabre-toothed tiger. And when our emotions are running high, our IQ literally drops. This explains why the ‘symptoms’ of being in ‘survival’ mode include feeling unable to focus and think clearly and why stressed executives are often seen to be ‘acting out’ in inflexible, defensive or aggressive ways. Stress levels are further exacerbated by the fact that many company systems, processes and practices in a post-digital world don’t align well with human being design. In particular, digitally-enhanced performance or talent management systems and rankings which require people to ‘evidence competencies’ in line with unwieldy frameworks are fundamentally anti-social. Focusing on self-protective evidence-gathering requires negative introspection – a perfect ingredient for stress! No wonder Dr. David Rock of the Neuroleadership Institute likens the anticipation of a performance review to “the feeling you get down a dark alley when you hear footsteps behind you”. An additional by-product of the vast amount of unsolicited information that lands daily in our inboxes, is that we’re letting our fingers do too much of the talking. I regularly see minor issues (which could’ve been nipped in the bud early, in conversation) escalating through unproductive email exchanges where people resort to second-guessing others’ motives and intentions, lose empathy and end up lashing out. The self-protective habit of email ‘blind copying’ further ups the ante by compromising privacy and making us feel unsafe. And when we’re lured into the trap of too many ‘all staff’ emails there’s a temptation for senior managers to get buried in detail and then end up micromanaging and overcontrolling. Inevitably, this has a knock-on effect on employee engagement - we’re problem-solving creatures, and we don’t think creatively in a mental straightjacket! Most importantly though, we’re not designed to multi-task. There’s now a raft of evidence to suggest that in a world of information overload, unmanageable executive workloads are a prime stress trigger. Edward Hallowell, a US psychiatrist has coined the term ADT – or Attention Deficit Trait to describe the toll that information overload is taking on our mental health. The ultimate price of executive ‘overdrive’ and poor self-regulation can be seen in an increase in binge working, instant gratification, addiction, anxiety and depression at work. The HR profession has a critical role to play in redesigning organisational practices and encouraging habits which create a hospitable climate in which employees can thrive.  And that’s a hot topic. But for now, here are a few simple brain-savvy stress-busters to start practising: Learn to recognize your personal stress triggers and develop strategies to manage these. When you start to feel wound-up, take a break and concentrate on breathing deeply to calm down. Focus on making the outbreath longer than the inbreath, to stimulate relaxation. Build in downtime. We work best in 90 minute bursts with 10 minute breaks. Our energy dips for a purpose – to allow us to process learning, rest, and recharge. If we push through these dips using energy boosts from caffeine and sugar, we elevate stress hormones and reduce our brain power. Less is more. Switch off your phone and devices to allow you to focus on the important stuff. Don’t drain your ‘mental battery’ surfing your inbox. Practise the habit of tuning into information from your gut. When you notice anxious feelings and thoughts, reality-check your fears with a trusted colleague to gain a fresh perspective and support. Finally, diet, sleep and exercise are the best medicine for stress. Regular exercise, like introducing a short walk into your working day, releases ‘feel good’ endorphins. Cathy Harris, Director Keychange Coaching, keychangecoaching.com  E: cathy.harris@keychangecoaching.com T: 07964 099 959

08 March 2017

Why Work in Recruitment?

What used to be viewed as a less than desirable career option is increasingly becoming the profession of choice, made attractive by its image as a fast-paced people business.  In this blog we take a look at why choosing a career in recruitment has become so appealing. Competitive Salary and Great Perks One of the main draws to the industry is that if you succeed in recruitment then your earning potential is vast.  With often uncapped commission schemes and impressive incentives such as all expenses paid holidays abroad, it is easy to see why more people are seeking out a career in recruitment.  One of our Consultants earned over £200k last year and you could do the same! Fast Progression The opportunity for promotion in this industry is second to none.  Performance is easily measurable - produce good results and you can expect to be climbing the career ladder well before you would in another role. Rewarding Recruitment changes lives.  Literally.  What could be more rewarding than that? Social Environment Recruiting is all about engaging with your candidates and clients, so if you enjoy speaking to people both over the telephone and face-to-face then recruitment is a good career choice for you.  It involves building lasting relationships with your contacts, understanding their needs and using your knowledge to help them. Competitive and Varied As a recruiter, filling each role is like entering into a competition with your competitors.  When you successfully fill these roles it is energising, exhilarating and exciting!  You’ll face a variety of assignments and challenges with every new position you work on, keeping the job interesting and continually challenging. Do you think you’ve got what it takes?  The JM Group are actively looking to recruit: Associate Recruitment Consultants – if you are a recent graduate who is driven, enjoys a challenge and would like to join one of the most established and well respected recruitment companies in the UK then we want to hear from you. Experience Consultants with a proven track record of developing business and delivering a range of quality recruitment solutions. Email your CV to us today careers@thejmgroup.com or call us 020 7251 7300.

22 February 2017

Blockchain in Financial Markets, Part 2 – By Alex Powell

Last week we published part 1 of Alex Powell’s blog which looked at the application of blockchain technology within financial markets.  Alex is a senior financial services professional working in capital markets, exchanges, asset management and asset servicing sectors.  He has served as a Partner at Accenture and EY (Ernst & Young) and has line management experience as a former COO for HSBC Securities Services.  He is currently advising on an early stage FinTech start-up.  Part 2 of Alex’s insightful blog continues this week. In my other article on Blockchain in Financial Markets, I set out what I have been seeing and working on in the application of blockchain, or distributed ledger technology (DLT) to payments and post-trade processing. Every firm in each industry sector is reviewing what changes blockchain might drive and how they can take advantage of the new technology.  Here is the rest of my synopsis of what is going on but importantly what I am actually seeing and hearing about.  Here I shall cover know your customer, reference data, asset management, custody, trade finance and insurance. Know your customer (KYC) KYC is a pretty obvious area where blockchain technology could be used to share customer information on a selective basis.  After payments and settlement (post-trade), KYC is probably the most directly obvious financial application. Since the credit crisis began, KYC has come to the fore to better tackle money laundering and fraud.  A number of financial services ‘utilities’ formed to process KYC information for the benefit of members of the utility.  The largest are Thomson Reuters, Depository Trust & Clearing Corp Clarient Global, Kyc.com a joint venture between Markit and Genpact, and SWIFT KYC Registry.  So far they appear to be using traditional technologies. There are a few players attempting to apply blockchain to KYC, mostly in the retail space.  Kyc-chain (a Hong Kong company), Innopay and PwC is assessing how a blockchain could be used for “know your customer” procedures.  The consulting firm Z/Yen is active here and also in DLT for insurance. Reference data The benefit of putting reference data such as market and client/counterparty data on a blockchain is that it eases the need to reconcile and disseminate the data. Credits Blockchain has been working on a proof of concept for a major stock exchange group and several banks and information providers are considering how data could be more easily shared and distributed. Asset management Blockchain could be totally transformative for the funds industry, both in how it operates and in reducing costs. Operational efficiency could be improved and incumbents and new entrants could make use of the technology to offer new services.  The big use cases for the asset management industry are probably in Transfer Agency, (which handles the subscription and redemption of funds), funds distribution and fund accounting which could offer shared ledgers of fund valuations. A group of fund managers including some of the largest; Schroders Aberdeen Asset Management, Columbia Threadneedle Investments, Aviva Investors, Henderson Global Investors have come together to explore areas where blockchain could be deployed. My sense is that asset managers are quite a way behind the sell side on the blockchain adoption curve. Custody I suspect that all large custodians are exploring blockchain in some capacity.  The Bank of New York Mellon, for example, is active with Settlement Coin and has made prominent hires to look at blockchain technologies. Arguably custodian banks have the most to lose if (or when) securities settlement moves on to blockchain solutions.  This is because information on settlement can be transferred to all participants seamlessly and so could flatten the custodian to sub-custodian to CSD structure which exists today, robbing them of current business or further eroding their margins. Trade Finance For the past two years, trade finance has been touted as an area up for disruption by blockchain, combined with the internet of things (by attaching radio frequency identification devices to physical assets). Barclays and start-up company Wave claim to have become the first organisations to execute a global trade transaction using blockchain technology. A letter of credit transaction between Ornua (formerly the Irish Dairy Board) and Seychelles Trading Company is the first to have trade documentation handled on the new Wave platform, with funds sent via Swift. Bank of America Merrill Lynch, HSBC and the Infocomm Development Authority of Singapore (IDA) are using a blockchain prototype to streamline the paper-heavy world of global trade. The consortium used the Linux Foundation open source Hyperledger Project blockchain fabric, supported by IBM Research and IBM Global Business Services. Blockchain will certainly drive changes to trade finance operation and enhance traceability and transparency. Insurance The insurance industry is going through digital transformation in terms of processing and claims management. Take telematics installed in cars which enable insurers to better forecast the likelihood of car crashes and accident claims and reduce the cost of insurance for safer drivers. Blockchain is being considered for claims management as a means of storing customer contract information and sharing it amongst insurers, then using smart-contracts to manage the claims processing.  But for this to happen it requires wide scale industry adoption using a common claims processing platform.  There could be similar benefits for the automatic underwriting of policies too.   To wrap up….. In my view, the most valuable benefit of blockchain based solutions is the ability to easily share data amongst participants and eliminate the need for multiple reconciliations.  For any use-case, this requires participants to sign up to and use the solution.  Adoption is the real challenge just like setting up any multi-participant solution. The winners in years to come will be the ones who succeed in generating the ‘network effect’ for their solution and overcome regulatory and legal obstacles.   Alex can be contacted at alex.powell@btinternet.com or https://uk.linkedin.com/in/alexapowell  

02 February 2017

Why Would You Be Led By Trump? – An analysis of Trump and Clinton’s leadership personas by Viren Lall of ChangeSchool.org

A number of short articles have appeared on this subject and quite a few from the London Business School, some even predicting that Trump’s leadership style will get him into trouble in the future. We already know that there is only so much power vested in the President, as Obama discovered, and there are counterbalancing forces that will stand in his way[1]. Trump has been a great proponent of Robert Moses[2], the public figure who transformed the landscape of New York’s public spaces by building parks and buildings, held power for nearly 44 years and was known as the master power broker in New York. Robert Moses said ‘you can’t make an omelette without breaking a few eggs’, and Trump has said ‘you can’t build skyscrapers without breaking a few heads’! Trump has quite a job to do in building his power base and coalitions if he is going to deliver on his rhetoric of “draining the swamp” as he describes Washington. As someone said the role of a social psychologist is to be descriptive of what has happened and not prescriptive about perceived difficulties of a leadership style. We are not saying that Trump is or will be a good leader or that we like him; this piece focuses solely on how Trump and Hillary came across as leaders to their electorates and the impact it may have had. A perspective on Leading Harvard University’s Howard Gardner[3], one of America’s most interesting psychologists, who applied a cognitive lens to leadership famously, said “Effective leaders create new stories that successfully wrestle with stories that already populated the minds of their followers”.[4] In this piece we look at three specific characteristics of the leadership personas of the two candidates, how they came across to their electorates, and how it may have influenced people on their choices. 1. Communicating change and buy-in: Three weeks before the election campaign we ran a course on the psychology of change for 25 CEOs. We started this session with a slide and footage of Hillary and Trumps focusing on how they came across on change. It was clear that Trump appealed to the emotional side of his audience and Hillary for the longest time in her campaign was happy to rattle off statistics. Her arguments were rational. They probably appealed to the intellectual elite. When we want to drive change, the rational argument is a necessary but not a sufficient condition. According to Chip and Dan Heath (popularised in their book Switch[5]), to make change easy for people to adopt, you have to get them in touch with your feelings and Trump was a master of creating that kind of impact. A bigger enemy, visualization of a wall… he got his audience in touch with his feelings. 2. Authenticity We interviewed a number of people, including some senior professors from UCL on their perceptions of the two candidates and how they came across. Trump, though despicable came across as authentic. He shared his flaws. He said he had beaten the system. People didn’t mind. People even admired that, wishing they could be as successful as him. When tapes revealed his locker room talk, a personality flaw, Trump did not spend much time and effort on correcting it or trying to tow a politically correct line. Truly inspirational leaders selectively reveal weaknesses and dare to be different. In their work on “Why should anyone be lead by you?” Rob Goffee and Gareth Jones[6] argue that leaders don't become great by aspiring to a list of universal character traits, and Trump trumped this one. Hillary neither revealed weaknesses - in-fact she spent enormous energy covering them up - nor did she dare to be different. People did not trust Hillary, she was too opaque. When accused of buying cheap steel from China, and bankrupting organisations to his own benefit, Trump was quick to admit he had done so because the system allowed it. The system was broken and because of how he had gotten around all the loopholes, he and not the establishment was best placed to fix it. It added to his credibility. People believed him. 3. Influencing through pre-suasion and not just persuasion Not only were Trump’s messages consistent, they were pre-suasive. In the latest work by Robert Cialdini[7] a solid influencer persuades by pre-suasion. At a talk given by Robert Cialdini earlier this month at @RSAevents, he summarised his new work by suggesting that people who can get their audience to focus on the precise of goal of their message and before delivering that message, create a mindset (through words, images, situations) that is consistent of that goal, significantly improve their power to persuade. A classic technique use by people strong at influencing is that through movements before their message they create a mindset of receptiveness for those they seek to influence. Clinton and Trump were equally good at using levers of influencing like social proof, and individual stories of personal condition. Where Trump triumphed was his emphasis on losses and putting people in a frame of mind that gave him a privileged reception of his message. People were losing their jobs to China, Mexico and others. By putting people in this frame of losses, a psychological chute of thinking, people only considered losses, losses that had occurred due to labour arbitrage or efficiency innovations that had taken away jobs through mechanisations. This positive test strategy failed to ask the reverse questions: people did not consider the opposite –had there been new opportunities? With a big common enemy (China, Mexico), stagnation of job creation, a man who had successfully beaten the system vowed to fix it and made it a compelling case of persuasion. According to Prospect Theory[8], the work that got Daniel Kahneman his Nobel prize, people in a loss frame of mind are likely to take riskier (all or nothing) decisions and that was one reason why the electorate was ready to take a gamble. Howard Gardner, mentioned earlier, did not distinguish between good and bad leaders from the perspective of social outcomes, he focussed on their effectiveness of their influencing. It just so happened that Trump was more effective as a leader - that he was able to create new stories that successfully wrestled and won over the existing ideas that populated the minds of his (new) followers”. Bottom line, he did a better job of getting his stories across. Not all victories are idiosyncratic Nationalism is up in India, in the UK, and now in countries like France, Holland and Austria. It's a trend Trump had picked up a long time ago. He shared these views early on in 2000[9], when he considered standing for president with the liberal reform party. Trump had been in touch with his electoral base for a while. People believed his Jacksonian politics - that the US should not take the lead in esoteric global problems just because US always has. And if you think that this is a bolt out of the blue, here is a man who has been consistent with his message on what he would do as a president from the 1980’s. Have a look at this video to see the consistency of Trump’s message: The long road to the white house from 1980 to 2015. https://www.youtube.com/watch?v=OCabT_O0YSM He just managed to increase that significantly to include what is called the “Springsteen” democratic base that effectively elected him. In the end his leadership persona as a change inspiring, authentic, and persuasive leader trumped that of Hillary’s. Viren Lall, FRSA, Managing Director, ChangeSchool www.changeschool.org  ChangeSchool expertise and latest published work [1] Is President Trump a sign of our times, Randall Peterson https://www.london.edu/faculty-and-research/lbsr/is-president-trump-a-sign-of-the-times#.WDNEoGSLQ6U [2] The Power Broker: Robert Moses and the Fall of New York; Robert Caro, Published by Bodley Head, 2015 [3] Professor of Education at Harvard Graduate School, Adjunct professor of Neurology of at the Boston University School of Medicine. Author of fourteen books on leadership [4] From his seminal work Leading Minds[1]: An Anatomy of Leadership written in 1995 [5] Switch: How to change things when change is hard, Chip and Dan Heath, 2011, Published by Random House Business Books [6] Why Should Anyone Be Led by You? What It Takes To Be An Authentic Leader by Rob Goffee (Author), Gareth Jones (Author) [7] Robert Cialdini was most famous for his previous work [8]  (Kahneman and Tversky 1979). [9] And contrary to popular belief, Trump did not decide to stand for President, post the humiliation he received from President Obama at the 2011 correspondents dinner

30 January 2017

Forex Trends

Foreign Exchange in London is an essential element of international business.  Currency transactions have grown explosively over recent years.  London accounts for more than three times the daily volume of any other city in the world. Twenty popular bilateral currencies are traded daily, the US $ being top at 87% with the South African Rand bottom at 1%.  There are more 'exotic' contracts for the more adventurous dealers looking for greater reward, or loss! Hedge Funds have taken their share of criticism for driving speculation at the cost of frail economic values.  Some economists say that Hedge Funds are the only professional traders and that individual traders have more of a destabilizing role than the more informed players. Forex dealers now have access to "Autotrading" once only available to the whole-sale market.  Autotrading is now OTC (over the counter) to those who pay for it.  This has stimulated "retail investors" that now form an important segment of market turnover.  This type of trading has increased from 2% in 2003 to almost 65% of the market today. Speculation is the market, providing vast liquidity that no other market sector in the world can come near to, and it cannot be controlled.  As long as there is human input the markets will be volatile. The markets over the last 10 years have been in crisis across the world.  In 2007 we all rushed headlong into "safer" investments in order to escape falling values - Gold hit an all-time high, someone paid $176 million* for a "poor" Picasso, $5 million* has been paid for a chair and $35 million* for a red car.  "Insane splurge" according or some, or is it? Artificial intelligence is, we are told a few years away and then we can expect the markets to be calmer - no "human input", really?  Until robots can think and can program another robot, traders will have a future.  Artificial Intelligence could be a very short time away, after all cars drive themselves, don't they? Markets are super sensitive to all forms of news and comment from around the world, evidenced by UK Prime Minster Theresa May speaking about a "hard Brexit" whereby the UK could lose access to the EU?  Sterling roiled by this remark falling to its lowest point for more than 15 years.  The Prime Minister will, of course, negotiate the best trade deal we can get whilst remaining out of the regional bloc. Our position in the UK during these quintessential negotiations guarantees volatility in the markets for years to come, that means "opportunity" in a market where Trillions are traded every day.  It remains to be seen if we can become "super-stars" or just left out! Adversity is no stranger to London so, look forward to a super bright future. Ad Astra! *Source KFWR (Knight Frank Wealth Report 2016) Article written by Barry Mason, CEO of Invest F1 s.a. (barry@investf1.com)  

17 January 2017

Blockchain Technology – By Alex Powell

Alex Powell is a senior financial services professional working in capital markets, exchanges, asset management and asset servicing sectors.  He has served as a Partner at Accenture and EY (Ernst & Young) and has line management experience as a former COO for HSBC Securities Services. He is currently advising on an early stage FinTech start-up.  Alex has written a guest blog on behalf of the JM Group which looks at the application of blockchain technology in financial markets.  Part 1 focuses on payments and post-trading processing. Blockchain in Financial Markets Over the past couple of years there has been considerable activity in financial services examining and applying blockchain technology, or sometimes described as Distributed Ledger Technology (DLT).  This activity does not yet live up to the media hype but nonetheless the industry has gone from thinking that blockchain is the same as Bitcoin to a general acceptance and understanding that this new technology will form an important part in the technology arms cabinet.  Furthermore, there is considerable investment in blockchain for real world applications in regulated markets. I am interested in the real world applications in financial services for blockchain and have been working with one of the more established blockchain technology companies for some time, deploying and considering use-cases in financial services. What is blockchain technology? But first to get everyone on the same page if you are not so familiar with what blockchain actually is.  Blockchain is a chain of transactions which is agreed by a wide group of participants and which is recorded in a replicated and distributed manner.  A blockchain’s integrity hinges on strong cryptography that validates and chains together blocks of transactions, making it unfeasibly difficult to tamper with any individual transaction record without being detected. Source: Financial Times Each firm in each industry sector is reviewing what could happen and here is my synopsis of what they are saying but importantly what I am actually seeing and hearing about.  Here I shall cover payments and post-trade processing, the first areas which have sparked interest and where huge cost savings will lie from deploying blockchain technologies. So where are the applications in financial services? Payments Many banks have looked at the wholesale payments space.  Some (e.g. Unicredit) are working with Ripple Labs who use a DLT at the core of their international payments offering. BNY Mellon, Deutsche Bank, Santander and UBS – the latter of which first disclosed its work on a so-called "settlement coin" last year – are hoping to launch a commercial-grade blockchain system by 2018, with blockchain start-up Clearmatics.  The settlement coin will be used as the cash payment leg of a securities settlement transaction. Santander introduced a pilot payment system amongst staff in July 2016. Central banks are also looking at using blockchain for central bank money. The Bank of England has openly discussed and explored issuing a digital currency using blockchain, while the People's Bank of China is reportedly investigating the idea and the Swedish central bank, the Riksbank, may also look at this. And let’s not forget the crypto-currencies.  Bitcoin is widely used as a means for payment, though I am not aware that it is used in the wholesale markets.  Bitcoin is so established that exchanges are compiling indices and listing futures contracts on Bitcoins e.g. CME CF Bitcoin Real Time Index (BRTI). Post-trade processing Securities settlement A blockchain provides a shared ledger which is well suited to the transfer of title of assets.  A good application of blockchain technology is to the settlement (exchange of ownership) of securities and derivatives following trading. There is a lot going on in the securities settlement space, most notably many proofs of concepts by banks, Central Securities Depositories and exchanges; a launch by the Nasdaq stock exchange (Nasdaq Private Market); an initiative with good funding SETL and Digital Asset Holdings who are working with the Australian Securities Exchange . The benefits of changing the existing securities settlement systems provided by the Central Securities Depository (CSD) and Target 2 Securities to a blockchain based environment would be enormous.  Benefits include near instantaneous settlement rather than T+2/3, the removal of the need for clearing and reduction in reconciliation costs.  However, the barriers to adoption are very high and it is not something a single institution can do on their own.  Therefore banks are looking at other smaller areas that can be produce a result internally or with a limited number of participants or clients. Derivatives processing This year, the Depository Trust & Clearing Corporation (DTCC) announced that it has selected IBM, Axoni and R3 to create a blockchain framework to improve the derivatives post-trade lifecycle.  It looks like it may eventually replace the DTCC’s current Trade Information Warehouse (TIW).  It is developed with input from Barclays, Citi, Credit Suisse, Deutsche Bank, J.P. Morgan, UBS, Wells Fargo, IHS Markit and Intercontinental Exchange. It will build on Axoni’s AxCore distributed ledger protocol which will be submitted to the Hyperledger consortium when the solution goes live, anticipated in early 2018. Clearmatics and OpenGamma demonstrated a proof-of-concept showing how two counterparts can collectively value in real-time a portfolio of FX swaps using blockchain technology adapted from the Ethereum codebase. Asset servicing Banks are looking for smaller areas where they could deploy blockchain technology on post-trade areas in support of settlement which is a much larger topic.  I have come across use cases such as proxy voting (which would have to bring together different market participants: custodians, issuing agents) and syndicated loans administration. Collateral management Current collateral models will be severely impacted by blockchain settlement – existing cash and collateral management models will no longer be required because trade and settlement could be practically instantaneous. The need for collateral could almost be eliminated.  But this is a huge step which requires real time gross settlement across all securities which would be a fundamental shift away from current operations. Securities issuance Depositories and transfer agents are looking into how issuance could be made directly onto a blockchain.  Stock transfer and Registrar Company Computershare and British start-up firm SETL have teamed up on a project to create an immutable record of securities ownership using blockchain technology in Australia. Corporate actions could be integrated into a securities ledger on a blockchain and then execution of the action could happen via a smartcontract which updates everyone's shareholding.  And as everyone is using the same shared ledger, custodians, investors and the company registrar do not have to update their own system. Part 2 of Alex’s blog continues next week. Alex can be contacted at alex.powell@btinternet.com or https://uk.linkedin.com/in/alexapowell References: DTCC Embracing Disruption (post-trade focused) http://www.dtcc.com/news/2016/january/25/blockchain-white-paper Euroclear and Oliver Wyman – Blockchain in Capital Markets (excellent input from Euroclear experts) https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=4&cad=rja&uact=8&ved=0ahUKEwjTmraC663RAhXMExoKHaMyCwwQFgguMAM&url=http%3A%2F%2Fwww.oliverwyman.com%2Fcontent%2Fdam%2Foliver-wyman%2Fglobal%2Fen%2F2016%2Ffeb%2FBlockChain-In-Capital-Markets.pdf&usg=AFQjCNECjxE2iaAlqj20WhbOyyOvcxZgzA Santander Innoventures – Fintech 2.0 https://www.google.co.uk/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&cad=rja&uact=8&ved=0ahUKEwi7n7ar7K3RAhXKmBoKHRcfBV4QFgggMAE&url=http%3A%2F%2Fsantanderinnoventures.com%2Ffintech2%2F&usg=AFQjCNEHKQm-EsDY-nL2juhLWWLaxdmEoA ESMA Discussion Paper: The Distributed Ledger Technology Applied to Securities Markets https://www.esma.europa.eu/sites/default/files/library/2016-773_dp_dlt.pdf

17 January 2017

The Internet of Things – Forget the hype this is the reality

The JM Group were invited to exhibit at the IP EXPO, Europe's leading IT event covering Cloud, Cyber Security, Networks and Infrastructure, Data Analytics, DevOps and Open Source. The event showcased senior level insights from across the industry discussing the latest technologies and techniques.  One of the speakers providing such insights was Jean Turgeon, VP and Chief Technologist of Avaya, who presented a keynote speech about the security concerns raised by the Internet of Things.  His insightful presentation is summarised below. Adding millions of new devices, hardware endpoints, and billions of lines of code, along with more infrastructure to cope with this load is, unsurprisingly, creating a vast set of security challenges across all areas of the IoT—a set of challenges the scale of which we haven’t seen before. Fortunately, the technology industry is working hard to address these issues, and from the network side there are many lessons we can apply from the Internet and BYOD-ready networks. Let’s face it: the days of a fixed network edge, defined by office and a few home workers using corporate laptops is long gone. And we’ve been living the last several years with the borderless network—or as I like to call it, the Everywhere Perimeter.  At Avaya, we’ve built on our fabric networking technology to create a solution that addresses this challenge, providing a layer that seamlessly manages segmentation, stealth and elasticity across the organization.  This approach makes securing the everywhere perimeter much more practical. If all this sounds like gobbledygook, I can assure you it isn’t. Here’s an example of how it works: if an IP phone is plugged in, the voice network is automatically and securely extended. If a video surveillance camera is plugged in, the surveillance network is extended. When devices and objects are unplugged, the network retracts, eliminating potential back door entry points to the network. What this means is that organisations can hide much of their networks while protecting those elements that remain visible. The end result: you can’t hack what you can’t see, so businesses can avoid many of the conventional hooks and tools that hackers seek to exploit, while at the same time engaging with their customers and employees in an agile and timely manner via the IoT. Jean Turgeon, Avaya                                                                                        www.avaya.com If you would like to discuss opportunities within the cyber security space please call 0207 251 7300 or email contactus@thejmgroup.com

10 January 2017

Tech Trends 2017

From augmented reality to 3D printing, we highlight some of the key tech trends that we think will make a lasting impression in 2017. Blockchain - currently popular within the financial services industry, this technology is rapidly expanding to other areas to verify the integrity of critical information. As the technology grows, more businesses will begin to create services that support it.  Blockchain may not hit the mainstream in 2017 but it will certainly start to create a stir as investors become more comfortable with the idea of this emerging technology. Augmented Reality will see a greater shift to the mainstream, further blurring the lines between the physical and digital worlds. 2017 will be the year these technologies arrive in the workplace, enabling employees, improving collaboration and better engaging with customers and clients. Autonomous Vehicles will evolve and become far more mainstream next year, shifting from stand-alone models to collaborative, whereby intelligent ‘things’ communicate with one another. In the same way a pilot spends just 14 minutes, on average, flying a plane (the rest of the time is on auto pilot), the driver of an automated vehicle can expect the same when they get behind the wheel. 3D Printing although it has been available since the 80s, the technology has not been cost-effective or capable enough for most commercial manufacturing, however this is about to change. Lower priced printers are emerging, speeds are increasing and major patents are about to expire, meaning the 3D printer market will transform rapidly in 2017. IoT - the explosion of IoT will continue throughout 2017. This year will be when businesses really start to become hyper-connected as they begin to embed IoT technologies into the everyday running of their businesses.  Consequently, the role of an IoT architect will become the most valuable role for HR departments. Security issues will continue to grow due to increased IoT and AI adoption. Cyber Attacks will become major board-level concerns due to reputational damage impacting heavily on revenues.  Companies will realise that failing to protect customer information will be their biggest source of regulatory non-compliance and reputational risk.  There will be increased investment around cyber security with a particular focus on correcting technology weaknesses, careless cultures and poor procedures. The demand for Cloud Computing will increase significantly with 80% of all businesses expected to migrate to the cloud by 2020. Without a cloud strategy, organisations will not be able to compete in the marketplace.  The huge adoption of cloud will force providers to provide an easier, safer and cheaper option as the competition increases.

03 January 2017

Mobility Trends 2017

What will the big mobility trends be for 2017? How will they impact businesses and consumers? The latest report from DMI provides insights, research and recommendations on the trends that will make the most impact and drive differentiation. "Follow our recommendations and you will have a greater chance of success..."                                                                                 Magnus Jern, Creative & Innovation Officer, DMI  

19 December 2016

How to Make Better Decisions by Viren Lall of ChangeSchool.org

The JM Group is working in close partnership with Viren Lall, MD of ChangeSchool.org to produce a series of articles focusing on change and transformation.  Viren’s first insight looks at the decision making process of managers in change leadership programmes and how it is that you can make better decisions for yourself. "A while ago, we published a post on the different ways managers made decisions, and the decision making processes that worked better than others. It said that a change that is “pushed” downstream and driven in a climate that supports bias for action doesn’t last as long, get implemented as well, or produce as good outcomes as other more facilitative techniques. I have personally seen plenty of examples.  In one very large telecom company I saw a change programme go horribly wrong when cuts in the name of efficiency went so deep that the business unit ended up dropping almost all KPIs related to customer satisfaction. They lost contracts, revenue and future orders, and to get out of the death spiral they had to hire just as fast as they cut. The urgency to drive change overlooked validating the edict, evaluating options, and what could go wrong. Was the solution biased by the leaders’ own personal preferences? Yes. Were any techniques used to validate prescription? No. What I want to do over a series of articles is go a step deeper into decision making.  I want to take you into the heads of managers and executives.  I want to help you understand what it is they are basing their decisions on.  Why is it that some decisions go awry?  And how it is that you can make better decisions yourself. Thinking wider than process A decision initiates change.  One reason we are fascinated by decision-making is it is the most overlooked part of change leadership.  In the same way that you start a sales conversation before anyone knows there is a problem to solve, so you start a change programme before there is a change to programme. As Louise Lavelle, associate editor and book reviewer for BusinessWeek famously (and ironically) wrote, there is no management conundrum so big that it can’t be solved by a deft application of a 5 (or a 6 or an 8 step model). People resist change, not any change but definitely change that is ill thought through.  Leading strategic change is more than following an 8 step process. It’s a right combination of leadership goodwill, decision making skills that overcome common biases that lead to poor outcomes, change that makes sense overall, and change savvyness (the change process and mobilisation). In this blog, we focus on a couple of biases on that first step, the making of the decision, that are promoted by action orientedness, and the decision making skills to overcome them. Common Biases promoted by action orientedness What is well known in management literature is there are 2 main causes of poor decision-making: lack of motivation and cognitive biases. If a company has a bias for action, it is not lacking in motivation.  To take the telecoms example again, the problem here is not lack of “communication” or “sense of urgency” that are typical of a change process.  It is a poor decision that will lead to disastrous results no matter how well executed. It will be the cognitive biases that produces problems.  I am going to talk here about two – confirming evidence and excessive optimism. The confirming evidence trap is where you have a set idea in mind, so all you can find or want to find is evidence that you are right.  This is often at the cost of evaluating alternatives. The space shuttle challenger accident tragedy was a vivid case of this systematic error in NASA’s decision-making process. Despite evidence that suggested that O reigns would fail, NASA and its engineering teams only focussed on confirm evidence that everything would be OK. Not too dissimilar to choosing statistics that suit your hypothesis. The US congress is in a political decision making trap right now.  Mass shootings are seen as evidence of the need for more guns, not gun control (I wonder if the NRA will pick this blog up and weigh in?  That would be fun J ). The other common error is optimism and overconfidence in estimation, aiming for one possible future of the best possible outcome. “Lets put some ambition into this programme”  “Why can’t we have that new SAP system up and working by December?”  (real quote, uttered in the October, when target date until then had been the next August).  We know why it happens.  Business transformation programmes are littered with cases where estimates had to be revised downwards, usually several times, after the commitment was made. All leading to value destruction when costs and benefits are finally compared. Tackling these biases There are ways of not doing this.  Getting into good habits and processes on decision making that force you to check your own thinking can overcome these.  For example, you can consider multiple possible futures with 3 point estimates, conduct pre-mortems to derive them and for each future have more than one option. Another is the vanishing options test, which is a big shift in thinking.  It asks what if the prescribed solution suddenly was not an option, what would the alternatives be? So how do we overcome these biases systematically? Well first is education and realisation that these biases are more pervasive and predictable than we think. Secondly leadership, change and transformation teams can adopt practices and habits that help de-bias prescriptive answers to create more realistically achievable outcomes that good leadership and change savvy teams can follow through on for a better chance of success. There are many techniques to avoid traps that lead to poor decisions and, ultimately, poor implementation solutions that result in disastrous outcome. If you can make that habit, not only will you be rewarded for errors of commission (I am a glad we worked on more realistic estimate) but also not fired for errors of omission (sorry, looking back I did not consider this obvious option at all). Benefit of hindsight is cruel thing. Some of the leading thinkers and researchers, in the area of behavioral insights and decision-making biases, are John Beshears, Francesca Gino, Richard Thaler, Cass Sunstein, Chip Heath, Dan Heath, John Hammond, Ralph L. Keeney, Howard Raiffa, Emre Soyer, Robin M. Hogarth, Jack B. Soll, Katherine L. Milkman, John W. Payne and of course Daniel Kahneman who kick started this field. At ChangeSchool, our better decisions for better outcomes programme, helps organisations avoid the traps and change failures that result from poor decisions. Make one habit and it sets the scene for more realistic and robustly evaluated change targets. Targets that make sense. Targets, teams buy into. Targets you are more likely to achieve." Related article: Bias for Action – a delusional business style that could hurt your company Viren Lall, FRSA is the MD of ChangeSchool and has taught executive education at London Business School and is a visiting faculty on MBA programmes. ChangeSchool is a London based executive education and advisory company that delivers custom programmes in digital and business strategy execution, innovation and change. It has offices in the UK, GCC and India. If you want to talk more about leadership and change, we’re at www.changeschool.org or just send me a message through LinkedIn.

21 November 2016

The IR35 Headache

Draft legislation will be announced at the end of this month to reform IR35 in the public sector.  Effective from April 2017, the new legislation will mean the responsibility to determine a public sector contractor’s IR35 status will shift from the contractor to the end-client, whether that be a recruiter, client or employment intermediary. Workers loss of liability to determine their own tax status could have a worrying effect on the public sector’s ability to attract highly skilled interim and contractor workers.  In a recent survey of public sector employers nearly half (43%) thought that fewer interim managers and contractors would want to work for them if the government enforces the proposed crackdown.  However HMRC say the change is necessary to counteract the £440 million lost in tax revenue in the last tax year. There is a real possibility that clients or recruiters will apply a risk-adverse approach, meaning they will declare many contractors to be working like employees where previously the very same people were deemed to be outside of IR35.  Remember that IR35 status is not a choice and is determined on the terms of individual contracts.  A thorough review of your contract will give you peace of mind as to your status and whether you are in or out.  It has always been important to determine your own status carefully and collect evidence which is of even more importance now that third parties maybe relying on it. No one looks set to gain if the IR35 proposals go ahead.  Interim and contract workers will, rightly, not want to be taxed as if an employee without receiving employment benefits, meaning public sector jobs will be snubbed. Come April 2017 public sector interim and contract workers will have to decide if working within this sector is right for them or if a switch over to the private sector is more favourable.  However those in the private sector should also pay attention to what is announced as no one is really safe. It seems everyone wants less red tape, more clarity on legislation, and initiatives that will genuinely benefit them.  Let’s see what Hammond has to say on the 23rd.

21 November 2016

Never Accept a Counter Offer!

You have decided to leave your company having accepted a new position elsewhere.   You hand in your notice to your boss who swiftly offers an attractive pay rise.  Do not be flattered into accepting this offer!  Statistics show that the majority of people who accept will leave again within a short space of time, meaning you have to start the whole recruitment process over again. Counteroffers are only made in response to a threat to quit so stick by your reasons for wanting to go, you won’t regret it.  Here’s why: You will most likely leave anyway - 90% of people who accept counteroffers leave or are let go within a year. Your value has gone unrecognised – it is a costly irritation to find your replacement and far easier and cheaper to retain you. Previous issues won’t go away – the reasons you want to leave are still there. Nothing else is likely to change other than your pay. Question whether that will make you happy. Your commitment will be questioned – your lack of loyalty to the company is likely to result in a loss of trust and respect from your manager which could make for an uncomfortable work environment. Job security will diminish – now that you’ve shown your willingness to leave, you will be first on the list when times get tough and cutbacks begin. You have already accepted your new role – you will be acting in an unprofessional manner by breaking your commitment to your prospective employer. It’s a small network out there and you don’t want to burn bridges. So the message is clear - do not accept counter offers.  Accepting the wrong proposal could cost you money and career growth in the long run. If the urge to accept a counteroffer hits you, take charge of the situation and follow these few tips: Politely but firmly decline the offer and state that after careful consideration your resignation still stands. Stress that you have taken time to weigh up your options and have come to your conclusion based on what you feel is best for you and your career path. Make it clear that you are not seeking another counter offer. Thank your employer for giving you the opportunity to work with them. Leave on good terms. It will be observed and noted. To check if your offer is a fair one use the JM Group Salary Guide or speak with a JM Group consultant 020 7251 7300 / email contactus@thejmgroup.com

17 November 2016
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