Showing posts with label Thomson Reuters. Show all posts
Showing posts with label Thomson Reuters. Show all posts

Wednesday, July 29, 2020

How an SAP Ecosystem Partnership Reduces Risk and Increases Cost-Efficiency Around Tax Management

Transcript of a discussion on how end-to-end visibility of business tax, compliance, and audit functions allows for automated adherence to rapidly changing requirements.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP Ariba.

Dana Gardner: Hi, this is Dana Gardner, Principal Analyst at Interarbor Solutions, and you’re listening to BriefingsDirect. Our next data-driven tax optimization discussion focuses on reducing risk and increasing cost efficiency as businesses grapple with complex and often global spend management challenges.

We’ll now explore how end-to-end visibility of almost any business tax, compliance, and audit functions allows for rapid adherence to changing requirements -- thanks to powerful new tools. And we’ll learn directly from businesses how they are pursuing and benefiting from advances in intelligent spend and procurement management.

To uncover how such solutions work, please join me now in welcoming our guests, Sean Thompson, Executive Vice-President of Network and Ecosystem at SAP Procurement Solutions. Welcome back, Sean.

Sean Thompson: Hi, Dana.

Gardner: We are also here with Chris Carlstead, Head of Strategic Accounts and Partnerships and Alliances at Thomson Reuters. Welcome, Chris.

Chris Carlstead: Thank you, Dana.

Gardner: We’re also here with Poornima Sadanandan, P2P IT Business Systems Lead at Stanley Black and Decker. Welcome, Poornima.

Poornima Sadanandan: Thank you.

Gardner: Sean, what’s driving the need for end-to-end visibility when it comes to the nitty-gritty details around managing taxes? How can businesses reduce risk and increase cost efficiency -- particularly in difficult, unprecedented times like these -- when it comes to taxation?

Taxes in the time of COVID-19

Thompson: It’s a near-and-dear topic for me because I started off my career in the early ‘90s as a tax auditor, so I was doing tax accounting before I went into installing SAP ERP systems. And now here I am at SAP at the confluence of accounting systems and tax.
We used to talk about managing risk as making sure you’re compliant with the various different regulatory agencies in terms of tax. But now in the age of COVID-19 compliance is also about helping governments. Governments more than ever need companies to be compliant. They need solutions that drive compliancy because taxes these days are not only needed to fund governments in the future, but also to support the dynamic changes now in reacting to COVID-19 and encouraging economic incentives.

There’s also a dynamic nature to changes in tax laws. The cost-efficiency now being driven by data-driven systems helps ensure compliancy across accounting systems to all of the tax authorities. It’s a fascinating time because digitization brings together business processes thanks to the systems and data that feeds the continuing efficiency.

It’s a great time to be talking about tax, not only from a compliance perspective but also from a cost perspective. Now that we are in the cloud era -- driving data and business process efficiency through software and cloud solutions -- we’re able to drive efficiencies unlike ever before because of artificial intelligence (AI) and the advancements we’ve made in open systems and the cloud.

Gardner: Chris, tax requirements have always been with us, but what’s added stress to the equation nowadays?

Carlstead: Sean hit on a really important note with respect to balance. Oftentimes people think of taxation as a burden. It’s often overlooked that the other side of that is governments use that money to fund programs, conduct social welfare, and help economies run. You need both sides to operate effectively. In moments like COVID-19 -- and Dana used the word “unprecedented,” I might say that’s an understatement.

I don’t know in the history of our time if we have ever had an event that affected the world so quickly, so instantly, and uniformly like we have had in the past few months. When you have impacts like that, they generally drive government reaction, whether it was 9/11, the dot-com bubble, or the 2008 financial crisis. And, of course, there are also other instances all over the globe when governments need to react.

But, again, this latest crisis is unprecedented because almost every government in the world is acting at the same time and has moved to change the way we interact in our economies to help support the economy itself. And so while pace of change has been increasing, we have never seen such a moment like we have in the last few months.

Think of all the folks working at home, and the empathy we have for them dealing with this crisis. And while the cause was uniform, the impact from country to country -- or region to region -- is not equal. To that end, anything we can do to help make things easier in the transition, we’re looking to do.

While taxes may not be the most important thing in people’s lives, it’s one last thing they have to worry about when they are able to take advantage of a system such as SAP Ariba and Thomson Reuters have to help them deal with that part of their businesses.

Gardner: Poornima, what was driving the need for Stanley Black and Decker to gain better visibility into their tax issues even before the pandemic?

Visibility improves taxation compliance

Sadanandan: At Stanley Black and Decker, SAP Ariba procurement applications are primarily used for all indirect purchases. The user base spans across buyers who do procurement activities based on organizational requirements and on up to the C-level executives who look into the applications to validate and approve transactions based on specific thresholds.

So providing them with accurate data is of utmost importance for us. We were already facing a lot of challenges concerning our legacy applications due to numerous challenges like purchasing categories, federated process-controlled versions of the application integrated with multiple SAP instances, and a combination of solutions including tax rate files, invoice parking, and manual processing of invoices.

There were a lot of points where manual touch was necessary before an invoice could even get posted to the backend ERP application due to these situations, including all the payback on return, tax penalties, and supplier frustrations, and so on.

So we needed to have end-to-end visibility with accuracy and precision to the granular accounting and tax details for these indirect procurement transactions without causing any delay due to the manual involvement in this whole procurement transaction process.

Gardner: Poornima, when you do this right, when you get that visibility and you can be detail-oriented, what does that get for you? How does that improve your situation?

Sadanandan: There are many benefits out of these automated transactions and due to the visibility of data, but I’d like to highlight a few.

Basically, it helps us ensure we can validate the suppliers’ charge tax, that suppliers are adhering to their local tax jurisdiction rules, and that any tax exemptions are, in fact, applicable for tax policies at Stanley Black and Decker.

Secondly, there comes a lot of reduction of manual processes. That happened because of automation, the web services, and as part of the integration framework we adopted. So tax calculation and determination became automated, and the backend ERP application, which is SAP at our company, receives accurate posting information. That then helps the accounting team to capture accounting details in real-time. They gain good visibility on financial reconciliations as well.
Tax calculations became automated, and the backend ERP, which is SAP, receives accurate posting information. That helps the accounting team capture details in real-time. They gain good visibility on financial reconciliations as well.

We also achieved better exception handling. Basically any exceptions that happen due to tax mismatches are now handled promptly based on thresholds set up in the system. Exception reports are also available to provide better visibility, not just to the end users but even to the technical team who are validating any issues that helps them in the whole analysis process.

Finally, the tax calls happen twice in the application, whereas earlier in our legacy application that only happened at the invoicing stage. Now this happens during the requisition phase in the whole procurement transaction process so it provides more visibility to the requisitioners. They don’t have to wait until the invoice phase to gain visibility on what’s being passed from the source system. Essentially, requesters as well as the accounts payable team are getting good visibility into the accuracy and precision of the data.

Gardner: Sean, as Poornima pointed out, there are many visibility benefits to using the latest tools. But around the world, are there other incentives or benefits?!overview

Thompson: One of the things the pandemic has shown is that whether you are a small, medium-size, or large company, your supply chains are global. That’s the way we went into the pandemic, with the complexity of having to manage all of that compliance and drive efficiency so you can make accounting easy and remain compliant.

The regional nature of it is both a cost statement and a statement regarding regional incentives.  Being able to manage that complexity is what software and data make possible.

Gardner: And does managing that complexity scale down as well up based on the size of the companies?

Thompson: Absolutely. Small- to medium-sized businesses (SMBs) need to save money. And oftentimes SMBs don’t have dedicated departments that can handle all the complexity.

And so from a people perspective, where there’s less people you have to think about the end-to-end nature of compliance, accounting, and efficiency. When you think about SMBs, if you make it easy there, you can make it easy all the way up to the largest enterprises. So the benefits are really size-agnostic, if you will.

Gardner: Chris, as we unpack the tax visibility solution, what are the global challenges for tax calculation and compliance? What biggest pain points are people grappling with?

Challenges span globe, businesses

Carlstead: If I may just take a second and compliment Poornima. I always love it when I hear customers speak about our applications better than we can speak about them ourselves; so, Poornima, thank you for that.

And to your question, because the impact is the same for SMBs and large companies, the pain centers around the volume of change and the pace of that change. This affects domestic companies, large and small, as well as multinationals. And so I thought I’d share a couple of data points we pulled together at Thomson Reuters.

There are more than 15,000 jurisdictions that impact just this area of tax alone. Within those 15,000 jurisdictions, in 2019 we had more than 50,000 changes to the tax rules needed to comply within those jurisdictions. Now extrapolate that internationally to about 190 countries. Within the 190 countries that we cover, we had more than two million changes to tax laws and regulations.

At that scale, it’s just impossible to maintain manual processes and many companies look to do that either decentralized or otherwise -- and it’s just impossible to keep pace with that.
With the COVID-19 pandemic impact, we expect that supply chains are going to be reevaluated. You're changing processes, moving to new jurisdictions, and into new supply routes. And that has huge tax implications.

And now you introduce the COVID-19 pandemic, for which we haven’t yet seen the full impact. But the impact, along the lines where Sean was heading, is that we also expect that supply chains are going to get reevaluated. And when you start to reevaluate your supply chains you don’t need government regulation to change, you are changing. You’re moving into new jurisdictions. You are moving into new supply routes. And that has huge tax implications.

And not just in the area of indirect tax, which is what we’re talking about here today on the purchase and sale of goods. But when you start moving those goods across borders in a different route than you have historically done, you bring in global trade, imports, duties, and tariffs. The problem just magnifies and extrapolates around the globe.

Gardner: How does the Thomson Reuters and SAP Ariba relationship come together to help people tackle this?

Thompson: Well, it’s been a team sport all along. One of the things we believe in is the power of the ecosystem and the power of partnerships. When it comes down to it, we at SAP are not tax data-centric in the way we operate. We need that data to power our software. We’re about procurement, and in those procurement, procure-to-pay, and sales processes we need tax data to help our customers manage the complexity. It’s like Chris said, an amazing 50,000 changes in that dynamic within just one country.
And so, at SAP Ariba, we have the largest business network of suppliers driving about $3 trillion of commerce on a global basis, and that is a statement regarding just the complexity that you can imagine in terms of a global company operating on a global basis in that trade footprint.

Now, when the power of the ecosystem and Thomson Reuters come together we can become the tax-centric authorities. We do tax solutions and help companies manage their tax data complexity. When you can combine that with our software, that’s a beautiful interaction because it’s the best of both worlds.

It’s a win, win, win. It’s not only a win for our two companies, Thomson Reuters and SAP, but also for the end customer because they get the power of the ecosystem. We like to think you choose SAP Ariba for its ecosystem, and Thomson Reuters is one of our -- if not the most -- successful extensions that we have.

Gardner: Chris, if we have two plus two equaling five, tell us about your two. What does Thomson Reuters bring in terms of open APIs, for example? Why is this tag team so powerful?

Partner to prioritize the customer

Carlstead: A partnership doesn’t always work. It requires two different parties that complement each other. It only works when they have similar goals, such as the way they look at the world, and the way they look at their customers. I can, without a doubt, say that when Thomson Reuters and SAP Ariba came together, the first and most important focus was the customer. That relentless focus on the customer really helped keep things focused and drive forward to where we are today.
When you bring two large organizations together to help solve a large problem it's a complex relationship and takes a lot of hard work. I'm really proud of the work we have done.

And that doesn’t mean that we are perfect by any means. I’m sure we have made mistakes along the way, but it’s that focus that allowed us to keep the patience and drive to ultimately bring forth a solution that helps solve a customer’s challenges. That seems simple in its concept, but when you bring two large organizations together to help try to solve a large organization’s problems, it’s a very complex relationship and takes a lot of hard work.

And I’m really proud of the work that the two organizations have done. SAP Ariba has been amazing along the way to help us solve problems for customers like Stanley Black and Decker.

Gardner: Poornima, you are the beneficiary here, the client. What’s been powerful and effective for you in this combination of elements that both SAP Ariba and Thomson Reuters bring to the table?

Sadanandan: With our history of around 175 years, Stanley Black and Decker has always been moving along with pioneering projects, with a strong vision of adopting the intelligent solutions for society. As part of this, adopting advanced technologies that help us fulfill all of the company’s objectives has always been in the forefront.
As part of that tradition, we have been leveraging the integration framework consisting of the SAP Ariba tax API communicating with the Thomson Reuters ONESOURCE tax solution in real-time using web services. The SAP Ariba tax API is designed to make a web service call to the external tax service provider for tax calculations, and in turn it receives a response to update the transactional documents.

During the procurement transactions, the API makes an external tax calculation. Once the tax gets determined, the response is converted back per the SAP Ariba message format and XML format and it gets passed on by the ONESOURCE integration and sends that over to the SAP application.

The SAP Ariba tax API receives the response and updates the transactional documents in real time and that provides a seamless integration between the SAP Ariba procurement solution and the global tax. That’s exactly what helps us in automating our procurement transactions.

Gardner: Sean, this is such a great use case of what you can do when you have cloud services and the right data available through open APIs to do real-time calculations. It takes such a burden off of the end user and the consumer. How is technology a fundamental underpinning of what ONESOURCE is capable of?

Cloud power boosts business outcomes

Thompson: It's wonderful to hear Poornima as a customer. It’s music to my ears to hear the real-life use case of what we have been able to do in the cloud. And when you look at the architecture and how we are able to drive, not only a software solution in the cloud, but power that with real-time data to drive efficiencies, it’s what we used to dream of back in the days of on-premises systems and even, God bless us, paper reconciliations and calculations.

It’s an amazing time to be alive because of where we are and the efficiencies that we can drive on a global basis, to handle the kind of complexity that a global company like Stanley Black and Decker has to deal with. It’s an amazing time.

And it’s still the early days of what we will doing in the future around predictive analytics, of helping companies understand where there is more risk or where there are compliance issues ahead.

That’s what’s really cool. We are going into an era now of data-driven intelligence, machine learning (ML), applying those to business processes that combine data and software in the cloud and automate the things that we used to have to do manually in the past.

And so it’s a really amazing time for us.

Gardner: Chris, anything more to offer on the making invisible the technology but giving advanced business outcomes a boost?

Carlstead: What’s amazing about where we are right now is a term I often use, I certainly don’t believe I coined it, but best-of-breed suite. In the past, you used to have to choose. You had to go best-of-breed or you could go with the suite, and there were pros and cons to both approaches.

Now, with the proliferation of APIs, cloud, and the adoption of API technology across software vendors, there’s more free flow of information between systems, applications, and platforms. You have the ability as a customer to be greedy -- and I think that’s a great thing.
Stanley Black and Decker can go with the number-one spend management system in the world and they can go with the number -one tax content player in the world. And they can expect these two applications to work seamlessly together.

As a consumer, you are used to downloading an app and it just works. And we are a little bit behind on the business side of the house, but we are moving there very quickly so that now customers like Stanley Black and Decker can go with the number-one spend management system in the world. And they can also go with the number-one tax content player in the world. And they can have the expectation that those two applications will work seamlessly together without spending a lot of time and effort on their end to force those companies together, which is what we would have done in an on-premise environment over the last several decades.

From an outcome standpoint, and as I think about customers like Stanley Black and Decker, getting tax right, in and of itself is not a value-add. But getting it wrong can be very material to the bottom line of your business. So for us and with the partnership with SAP Ariba, our goal is to make sure that customers like Stanley Black and Decker get it right the first time so that they can focus on what they do best.

Gardner: Poornima, back to you for the proof. Do you have any anecdotes, qualitative or quantitative measurements, of how you have achieved more of what you have wanted to do around tax processing, accounts payable, and procurement?

Accuracy spells no delayed payments

Sadanandan: Yes, all the challenges we had with our earlier processes with respect to our legacy applications got diminished with respect to incorrect VAT returns, wrong payments, and delayed payments. It also strengthened the relationship between our business and our suppliers. Above all, troubleshooting any issues became so much easier for us because of the profound transparency of what’s being passed from the source system.

And, as I mentioned, this improves the supplier relationship in that payments are not getting delayed and there is improvement in the tax calculation. If there are any mismatches, we are able to understand easily how that happened, as the integration layer provides us with the logs for accurate analysis. And the businesses themselves can answer supplier queries on a timely manner as they have profound visibility to the data as well.

From a project perspective, we believe that the objective is fulfilled. Since we started and completed the initial project in 2018, Stanley Black and Decker has been moving ahead with transforming the source-to-pay process by establishing a core model, leveraging the leading practices in the new SAP Ariba realm, and integrated to the central finance core model utilizing SAP S/4HANA.

So the source-to-pay core model includes leading practices of the tax solution by leveraging ONESOURCE Determination by integrating to the SAP Ariba source-to-pay cloud application. So with a completion of the project, we were able to achieve that core model and now the future roadmaps are also getting laid out to have this model adopted for the rest of our Stanley Black and Decker entities.

Gardner: Poornima, has the capability to do integrated tax functionality had a higher-level benefit? Have you been able to see automation in your business processes or more strategic flexibility and agility?

Sadanandan: It has particularly helped us in these uncertain times. Just having an automated tax solution was the primary objective with the project, but in these uncertain times this automated solution is also helping us ensure business continuity.
Having real-time calls that facilitate the tax calculation with accuracy and precision without manual intervention helped the year-end accounts payable transactions to occur without any interruptions.

Having real-time calls that facilitate the tax calculation with accuracy and precision without manual intervention helped the year-end accounts payable transactions to occur without any interruptions.

And above all, as I was mentioning, even in this pandemic time, we are able to go ahead with any future projects already in the roadmap because they are not on a standstill, we are able to leverage the standard functionalities provided by ONESOURCE and that’s easier to adopt in our environment.

Gardner: Chris, when you hear how Stanley Black and Decker has been able to get these higher-order risk-reduction benefits, do you see that more generally? What are some of the higher-order business benefits you see across your clientele?

Risk-reduction for both humans and IT

Carlstead: There are two broad categories. I will touch on the one that Poornima just referenced, which is more the human capital, and then also the IT side of the house.

The experience that Stanley Black and Decker is having is fairly uniform across our customer base. We are in a situation where in almost every single tax department, procurement department, and all the associated departments, nobody has extra capacity walking around. We are all constrained. So, when you can bring in applications that work together like SAP Ariba and Thomson Reuters, it helps to free up capacities. You can then shift those resources into higher-value-add activities such as the ones Poornima referenced. We see it across the board.

We also see that we are able to help consolidate resourcing from a hardware and a technology standpoint, so that’s a benefit.

And the third benefit on the resource side is that as you are better able to track your taxation, not only do you get it right the first time, when it comes to areas of taxation like VAT recovery, you have to show very stringent documentation in order to receive your money back from governments, so there is a cash benefit as well.

And then on the other side, more on the business side of the relationship, there is a benefit we have just started to better understand in the last couple of years. Historically folks either chose not to move forward with an application like because they felt they could handle it manually, or even worse, they would say, “We will just have it audited, and we will pay the fine because the cost to fix the problem is greater than the penalties or fines I might pay.”

But they didn’t take into consideration the impact on the business relationship that you have with your vendors and your suppliers. If you think about every time you have had a tax issue between them, and then in the case in many European countries and around the world, where VAT recovery would not allow that supplier to recover their taxation because of a challenge they might have had with their buyer, that hurts your relationship. That ultimately hurts your ability to do commerce with that partner and in general with any partner around the world.

So, the top-line impact is something we have really started to focus on as a value and it’s something that really drives business for companies.

Gardner: Poornima, what would you like to see next? Is there a level of more intelligence, more automation?

Post-pandemic possibilities and progress

Sadanandan: Stanley Black and Decker is a global company spanning across more than 60 countries. We have a wide range of products, including tools, hardware, security, and so on. Irrespective of these challenging times, all our priorities regard the safety of the employees and the families and keeping the momentum of business continuity responding to the needs of the community … these all remain as the top consideration.

We feel that we are already equipped technology-wise to keep the business up and running. What we are looking forward to is, as the world tries to come back to the earlier normal life, continuing to provide pioneering products with intelligent solutions.

Gardner: Chris, where do you see technology and the use of data going next in helping people reach a new normal or create entirely new markets?

Carlstead: From a Thomson Reuters standpoint, we largely focus on helping businesses work with governments at the intersection of regulation and commerce. As a result, we have, for decades, amassed an extensive amount of content in categories around risk, legal, tax, and several other functional areas as well. We are relentlessly focused on how to best open up that content and free it, if you will, from even our own applications.
When we can leverage ecosystems such as SAP Ariba, we can leverage APIs and provide a more free-flowing path for our content to reach our customers. The number of use cases and possibilities is infinite.

What we are finding is that when we can leverage ecosystems such as SAP Ariba, we can leverage APIs and provide a more free-flowing path for our content to reach our customers; and when they are able to use it in the way they would like, the number of use cases and possibilities is infinite.

We see now all the time our content being used in ways we would have never imagined. Our customers are benefiting from that, and that’s a direct result of the corporations coming together and suppliers and software companies freeing up their platforms and making things more open. The customer is benefiting, and I think it’s great.

Gardner: Sean, when you hear your partner and your customer describing what they want to come next, how can we project a new vision of differentiation when you combine network and ecosystem and data?

Thompson: Well, let me pick up where Chris said, “free and open.” Now that we are in the cloud and able to digitize on a global basis, the power for us is that we know that we can’t do it all ourselves.
We also know that we have an amazing opportunity because we have grown our network across the globe, to 192 countries and four million registered buyers or suppliers, all conducting a tremendous amount of commerce and data flow. Being able to open up and be an ecosystem, a platform way of thinking, that is the power.

Like Chris said, it’s amazing the number of things that you never realized were possible. But once you open up and once you unleash a great developer experience, to be able to extend our solutions, to provide more data -- the use cases are immense. It’s an incredible thing to see.

That’s what it’s really about -- unleashing the power of the ecosystem, not only to help drive innovation but ultimately to help drive growth, and for the end customer a better end-to-end process and end-to-end solution. So, it’s an amazing time.

Gardner: I’m afraid we will have to leave it there. You have been listening to a sponsored BriefingsDirect discussion on reducing risk and increasing cost efficiency as businesses grapple with complex and often global taxation management challenges. And we have learned how the payoff to gaining such a full and data-rich view of compliance spend patterns reduces errors, enables new business efficiencies, and leads to better strategic spend management.

So a big thank you to our guests, Sean Thompson, Executive Vice President of Network and Ecosystem, SAP Procurement Solutions. Thank you so much, Sean.

Thompson: Thank you, Dana.

Gardner: We have also been with Chris Carlstead, Head of Strategic Accounts and Partnerships and Alliances at Thomson Reuters. Thank you so much, Chris.

Carlstead: Dana, thank you. I have really enjoyed the time with you.

Gardner: And lastly we have been with Poornima Sadanandan, P2P IT Business Systems Lead at Stanley Black and Decker. Thank you so much, Poornima.

Sadanandan: Thank you, Dana. I enjoyed the conversation.

Gardner: And a big thank you to our audience as well for joining this BriefingsDirect modern digital business innovation discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host throughout this series of SAP-sponsored BriefingsDirect discussions.

Thanks again for listening. Please do come back next time, and feel free to share this information across your IT and business communities.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: SAP Ariba.

Transcript of a discussion on how end-to-end visibility of business tax, compliance, and audit functions allows for automated adherence to rapidly changing requirements. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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Thursday, March 12, 2015

How a Hackathon Approach Juices Innovation on Big Data Applications for Thomson Reuters

Transcript of a BriefingsDirect discussion on how information giant Thomson Reuters leveraged a hackathon to spur new ideas among its big data-focused developers.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Dana Gardner: Hello, and welcome to the next edition of the HP Discover Podcast Series. I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on technology innovation and how it's making an impact on people’s lives.

Once again, we're focusing on a major trend, how big data changes everything, and how companies are adapting to the new style of IT to gain new insights, deliver better user experiences, and better overall business results.

Our next innovation interview explores the use of a hackathon approach to unlock creativity in the search for better use of big data for analytics. We will hear how Thomson Reuters in London sought to foster innovation and derive more value from its vast trove of business and market information.

The result: A worldwide virtual hackathon that brought together developers and data scientists to uncover new applications, visualizations, and services to make all data actionable and impactful.
Bringing human understanding to the cloud
Helping developers build a new class of apps
To learn more about getting developers on board the big-data analysis train, please join me in welcoming our guest, Chris Blatchford, Director of Platform Technology in the IT organization at Thomson Reuters in London. Welcome, Chris.

Chris Blatchford: Hi. Good to be here.

Gardner: Tell us about Thomson Reuters, the organization, for those who don't know.

Blatchford: Thomson Reuters is the world's leading source of intelligent information. We provide data across the finance, legal, news, IP, and science, tax, and accounting industries through product and service offerings, combining industry expertise with innovative technology.

Gardner: It’s hard to think of an organization where data and analysis is more important. It’s so core to your very mission.

Blatchford: Absolutely. We take data from a variety of sources. We have our own original data, third-party sources, open-data sources, and augmented information, as well as all of the original content we generate on a daily basis. For example, our journalists in the field provide original news content to us directly from all over the globe. We also have third-party licensed data that we further enrich and distribute to our clients through a variety of tools and services

Gardner: And therein lies the next trick, what to do with the data once you have it. About this hackathon, how did you come up upon that as an idea to foster innovation?

Big, Open, Linked Data

Blatchford: One of our big projects or programs of work currently is, as everyone else is doing, big data. We have an initiative called BOLD, which is Big, Open, Linked Data, headed up by Dan Bennett. The idea behind the project is to take all of the data that we ingest and host within Thomson Reuters, all of those various sources that I just explained, stream all of that into a central repository, cleanse the data, centralize it, extract meaningful information, and subsequently expose it to the rest of the businesses for use in their specific industry applications.

As well as creating a central data lake of content, we also needed to provide the tools and services that allow businesses to access the content; here we have both developed our own software and licensed existing tools.

So, we could demonstrate that we could build big-data tools using our internal expertise, and we could demonstrate that we could plug in third-party specific applications that could perform analysis on that data. What we hadn’t proved was that we could plug in third-party technology enterprise platforms in order to leverage our data and to innovate across that data, and that’s where HP came in.

HP was already engaged with us in a number of areas, and I got to speaking with their Big Data Group around their big data solutions. IDOL OnDemand came up. This is now part of the Haven OnDemand platform. We saw some synergies there between what we were doing with the big-data platform and what they could offer us in terms of their IDOL OnDemand API’s. That’s where the good stuff started.

Gardner: Software developers, from the very beginning, have had a challenge of knowing their craft, but not knowing necessarily what their end users want them to do with that craft. So the challenge -- whether it’s in a data environment, a transactional environment or interface, or gaming -- has often been how to get the requirements of what you're up to into the minds of the developers in a way that they can work with. How did the hackathon contribute to solving that?
As well as creating a central data lake of content, we also need to provide the tools and services that allow businesses to access the content.

Blatchford: That’s a really good question. That’s actually one of the biggest challenges big data has in general. We approach big data in one of two ways. You have very specific use cases, for example, consider a lawyer working on a particular case for a client, it would be useful for them to analyze prior cases with similar elements. If they are able to extract entities and relevant attributes, they may be able to understand the case final decision, or perhaps glean information that is relevant to their current case.

Then you have the other approach, which is much more about exploration, discovering new insights, trends, and patterns. That’s similar to the the approach we wanted to take with the hackathon -- provide the data and the tools to our developers for them just to go and play with the data.

We didn’t necessarily want to give them any requirements around specific products or services. It was just, "Look, here is a cool platform with some really cool APIs and some capabilities. Here is some nice juicy data. Tell us what we should be doing? What can we come up with from your perspective on the world?"

A lot of the time, these engineers are overlooked. They're not necessarily the most extroverted of people by the nature of what they do and so they miss chances, they miss opportunities, and that’s something we really wanted to change.

Gardner: It’s fascinating the way to get developers to do what you want them to do is to give them no requirements.

Interesting end products

Blatchford: Indeed. That can result in some interesting end-products. But, by and large, our engineers are more commercially savvy than most, hence we can generally rely on them to produce something that will be compelling to the business. Many of our developers have side projects and personal development projects they work on outside of the realms of their job requirement. We should be encouraging this sort of behavior.

Gardner: So what did you get when you gave them no requirements? What happened?

Blatchford: We had 25 teams that submitted their ideas. We boiled that down to 7 finalists based upon a set of preliminary criteria, and out of those 7, we decided upon our first-, second-, and third-place winners. Those three end results were actually taken, or are currently going through a product review, to potentially be implemented into our product lines.

The overall winner was an innovative UI design for mobile devices, allowing users to better navigate our content on tablets and phones. There was a sentiment analysis tool, that allowed users to paste in news stories or any news content source on the web and extract sentiment from that news story.

And the other was more of an internally focused, administrative exploration tool, that  allowed us to more intuitively navigate our own data, which perhaps doesn’t initially seem as exciting as the other two, but is actually a hugely useful application for us.
Bringing human understanding to the cloud
Helping developers build a new class of apps
Gardner: Now, how does IDOL OnDemand come to play in this? IDOL is the ability to take any kind of information, for the most part, apply a variety of different services to it, and then create analysis as a service. How did that play into the hackathon? How did the developers use that?

Blatchford: Initially the developers looked at the original 50-plus APIs that IDOL OnDemand provides, and you have everything in there from facial recognition, to OCR, to text analytics, to indexing, all sorts of cool stuff. Those, in themselves, provided sufficient capabilities to produce some compelling applications, but our developers also utilized Thomson Reuters API’s and resources to further augment the IDOL platform.

This was very important, as it demonstrated that not only could we plug in an Enterprise analytics tool into our data, but also that it would fit well with our own capabilities.

Gardner: And HP Big Data also had a role in this. How did that provide value?

Five-day effort

Blatchford: The expertise. We should remember we stood this hackathon up from inception to completion in a little over one month, and that’s I think pretty impressive by any measure.

The actual hackathon lasted for five days. We gave the participants a week to get familiar with the APIs, but they really didn’t need that long because the documentation behind the APIs on IDOL OnDemand and the kind of "try it now" functionality it has was amazing. This is what the engineers and the developers were telling me. That’s not my own words.

The Big Data Group was able to stand this whole thing up within a month, a huge amount of effort on HP’s side that we never really saw. That ultimately resulted in a hugely successful virtual global hackathon. This wasn’t a physical hackathon. This was a purely virtual hackathon the world over.

Gardner: HP has been very close to developers for many years, with many tools, leading tools in the market for developers. They're familiar with the hackathon approach. It sounds like HP might have a business in hackathons as a service. You're proving the point here.

For the benefit of our listeners, if someone else out there was interested in applying the same approach, a hackathon as a way of creating innovation, of sparking new thoughts, light bulbs going off in people's heads, or bringing together cultures that perhaps hadn't meshed well in the past, what would you advise them?
First and foremost, the reason we were successful is because we had a motivated, willing partner in HP.

Blatchford: That’s a big one. First and foremost, the reason we were successful is because we had a motivated, willing partner in HP. They were able to put the full might of their resources and technology capabilities behind this event, and that along side our own efforts ultimately resulted in the events success.

That aside, you absolutely need to get the buy-in of the senior executives within an organization, get them to invest into the idea of something as open as a hackathon. A lot of hackathons are quite focused on a specific requirement. We took the opposite approach. We said, "Look, developers, engineers, go out there and do whatever you want. Try to be as innovative in your approach as possible."

Typically, that approach is not seen as cost effective, businesses like to have defined use cases, but sometimes that can strangle innovation. Sometimes we need to loosen the reins a little.

There are also a lot of logistical checks that can help. Ensure you have clear criteria around hackathon team size and members, event objectives, rules, time frames and so on. Having these defined up front makes the whole event run much smoother.

We ran the organization of the event a little like an Agile project, with regular stand-ups and check-ins. We also stood up a dedicated internal intranet site with all the information above. Finally, we set-up user accounts on the IDOL platform early on, so the participants could familiarize themselves with the technology.

Winning combination

Gardner: Yeah, it really sounds like a winning combination: the hackathon model, big data as the resource to innovate on, and then IDOL OnDemand with 50 tools to apply to that. It’s a very rich combination.

Blatchford: That’s exactly right. The richness in the data was definitely a big part of this. You don’t need millions of rows of data. We provided 60,000 records of legal documents and we had about the same in patents and news content. You don’t need vast amounts of data, but you need quality data.

Then you also need a quality platform as well. In this case IDOL OnDemand.The third piece is what’s in their heads. That really was the successful formula.
You don’t need vast amounts of data, but you need quality data.

Gardner: I have to ask. Of course, the pride in doing a good job goes a long way, but were there any other incentives; a new car, for example, for the winning hackathon application of the day?

Blatchford: Yeah, we offered a 1960s Mini Cooper to the winners. No, we didn't. We did offer other incentives. There were three main incentives. The first one, and the most important one in my view, and I think in everyone’s view, was exposure to senior executives within the organization. Not just face time, but promotion of the individual within the organization. We wanted this to be about personal growth as much as it was about producing new applications.

Going back to trying to leverage your resources and give them opportunities to shine, that’s really important. That’s one of the things the hackathon really fostered -- exposing our talented engineers and product managers, ensuring they are appreciated for the work they do.

We also provided an Amazon voucher incentive, and HP offered some of their tablets to the winners. So it was quite a strong winning set.

Gardner: Sounds like a very successful endeavor others out there might be interested in emulating, so I am glad we could find out more about it.

I'm afraid we're going to have to leave it there. We've been learning about how Thomson Reuters in London sought to foster innovation and derive more value from its vast trove of business and market data, and how they used a virtual worldwide hackathon approach to bring together developers and data scientists to uncover new applications and services.

So a big thank you to our guest, Chris Blatchford, the Director of Platform Technology in the IT organization at Thomson Reuters in London. Thank you, Chris.

Blatchford: Thanks.
Bringing human understanding to the cloud
Helping developers build a new class of apps
Gardner: And I'd like to thank our audience as well for joining us for this special how Big Data Changes Everything discussion. We've explored solid evidence from early adopters of how Big Data changes everything, and how companies are adapting to the new style of IT to gain new insights, deliver better user experiences, and better overall business results.

I'm Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HP-sponsored discussions. Thanks again for listening, and come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. Sponsor: HP.

Transcript of a BriefingsDirect discussion on how information giant Thomson Reuters leveraged a hackathon to spur new ideas among its big data-focused developers. Copyright Interarbor Solutions, LLC, 2005-2015. All rights reserved.

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