How Digital Transformation Navigates Disruption to Chart a Better Course to the New Normal

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect Voice of Innovation podcast series.

Gardner

I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this timely discussion on architecting businesses for managing ongoing disruption.

As enterprises move past crisis mode in response to the COVID-19 pandemic, they require a systemic capability to better manage shifting market trends.

Stay with us now as we examine how Hewlett Packard Enterprise (HPE) Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities.

Here to share the Pointnext view on transforming businesses to effectively innovate in the new era of pervasive digital business, is Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead, at HPE Pointnext Services. Welcome back, Craig.

Craig Partridge: Hey, Dana. Good to speak with you again.

Gardner: Craig, how has the response to the pandemic accelerated the need for comprehensive digital transformation?

Disruption demands digital solutions 

Partridge: We speak to a lot of customers around the world. And the one thing that we are picking up very commonly is a little bit counter-intuitive.

At the beginning of the pandemic -- in fact, at the beginning of any major disruption -- there is a sense that companies will put the brakes on and slow everything down. And that happened as we went through this initial period. Preserving cash and liquidity kicked in and a minimum viable operating model emerged. People were reluctant to invest.

Partridge

But as they now begin to see the shifting landscape in industries, we are beginning to see a recognition that those pivoting out of these disruptive moments the quickest -- with sustained, long-term viability built behind how they accelerate -- those organizations are the ones driving new experiences and new insights. They are pushing hard on the digital agenda. In other words, digitally active companies seem to be the ones pivoting quicker out of these disruptions -- and coming out stronger as well.

So although there was an initial pause as people pivoted to the new normal, we are seeing now acceleration of initiatives or projects, underpinned by technology, that are fundamentally about reshaping the customer experience. If you can do that through digital engagement models, you can continue to drive revenue and customer loyalty because you are executing those valued transactions through digital platforms.

Gardner: Has the pandemic and response made digital transformation more attractive? If you have to do more business digitally, if your consumers and your supply chain have become more digital, is this a larger opportunity?

Partridge: Yes, it’s not only more attractive – it’s more essential. That’s what we are learning.

A good example here in the UK, where I am based, is that big retailers have traditionally been deeply into the brick world experience of walking into a retail store or supermarket, those kinds of big, physical spaces. They figured out during this period of disruption that the only way to continue to drive revenue and take orders was on digital platforms. Well, guess what? Those digital platforms were only scaled and sized for a certain kind of demand, and that demand was based on a pre-pandemic normal.

This transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That's what they have to focus on -- not just to survive but for beyond that.

Now, they have to double or treble the capacity of their transactions across those digital platforms. They are having to increase massively their capability to not only buy online, but to get deliveries out to those customers as well.

So this transformation is not just an attractive thing to do. For many organizations pivoting hard to digital engagement and digital revenue streams is their new normal. That’s what they have to focus on -- and not just to survive but for beyond that. It’s the direction to their new normal as well.

Gardner: It certainly seems that the behavior patterns of consumers, as well as employees, have changed for the longer term when it comes to things like working at home, using virtual collaboration, bypassing movie theaters for online releases, virtual museums, and so forth.

For those organizations that now have to cater to those online issues and factor in the support of their employees online, it seems to me that this shift in user behavior has accelerated what was already under way. Do companies therefore need to pick up the pace of what they are doing for their own internal digital transformation, recognizing that the behaviors in the market have shifted so dramatically?

Safety first 

Partridge: Yes, in the past digital transformation focused on the customer experience, the digital engagement channel, and building out that experience. You can relate that in large parts to the shift toward e-commerce. But increasingly people are aware of the need to integrate information about the physical space as well. And if this pandemic taught us anything, it’s that they need to not only create great experiences – they must create safe, great experiences.

What does that mean? I need to understand about my physical space so I can augment my service offerings in a way that’s safe. We are looking at scenarios where using video recognition and artificial intelligence (AI) will begin to work out whether that space being used safely. Are there measurements we can put in place to protect people better? Are people keeping certain social distancing rules?

All of that is triggering the next wave of customer experience, which isn’t just the online digital platform and digital interactions, but -- as we get back out into the world and as we start to occupy those spaces again -- how do I use the insight about the physical space to augment that experience and make sure that we can emerge safer, better, and enjoy those digital experiences in a way that’s also physically safe.

Beyond just the digital transactions side, now it’s much more about starting to address the movement that was already long on the way -- the digitization of the physical world and how that plays into making these experiences more beneficial.

Gardner: So if the move to digitally transform your organization is an imperative, if those who did it earlier have an advantage, if those who haven’t done it want to do it more rapidly -- what holds organizations back? What is it about legacy IT architectures that are perhaps a handicap?

Pivoting from the cloud 

Partridge: It’s a great question because when I talk to customers about moving into the digital era, that triggers the question, “Well, what was there before this digital era?” And we might argue it was the cloud era that preceded it.

Now, don’t get me wrong. These aren’t sequential. I’m not saying that the cloud era is over and the digital era has replaced it. As you know, these are waves. And they rise on top of each other. But organizations that are able to go fast and accelerate on the digital agenda are often the same organizations.

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they start to pivot toward digital channels to engage their customers? Does a recalibration of the supply chain mean applications and data are placed in the right part of on- or off-premises cloud architecture supply chains?

The biggest constraint we see as organizations try to stress-test their digital age adoption is to see if they actually have agility in the back end. Are the systems set up to be able to scale on-demand as they pivot to digital channels to engage with their customers?

If you haven’t gone through a modernization agenda, if you haven’t tackled that core innovation issue, if you haven’t embraced cloud architectures, cloud-scale, and software-defined – and, increasingly, by the way, the shift to things like containerization, microservices, and decomposing big monolithic applications into manageable chunks that are application programming interface

(API)-connected -- if you haven’t gone through that cloud-enabled exploration prior to the digital era, well, it looks like you still have some work to do before you can get the gains that some of those other modern organizations are now able to express.

There’s another constraint, which is really key. For most of the customers we speak to, it tends to be in and around the operating model. In a lot of conversations that I have with customers, they over-invested in technology. They are on every cloud platform available. They are using every kind of digital technology to gain a level of competitive advantage.

Yet, at the heart of any organization are the people. It’s the culture of the people and the innovation of your people that really makes the difference. So, not least of all, the supply chain agility, right in the heart of this conversation. It is the fundamental operating model -- not just of IT, but the operating model of the entire organization.

So have they unticked their value chain? Have they looked at the key activities? Have they thought when they implement new technology, and how that might replace or augment activities? And what does that mean to the staff? Can you bring them with you, and have you empowered them? Have you re-skilled them along the way? Have you driven those cultural change programs to force that digital-first mindset, which is really the key to success in all of this?

Gardner: So many interdependencies, so much complexity, frankly, when we’re thinking about transacting across the external edge to cloud, to consumer, and to data center. And we’re talking about business processes that need to extend into new supply chains or new markets.

Given that complexity, tell us how to progress beyond understanding how difficult this all can be and to adopt proven ways that actually work.

Universal model has the edge 

Partridge: For everything that we’ve talked about, we have figured out that there is a universal model that organizations can use to methodologically go off into this space.

We found out that organizations are very quickly pivoting to exploring their digital edge. I think the digital agenda is an edge-in conversation. Again, I think that marks it out from the preceding cloud era, which was much more about core-out. That was get scale, efficiency, and cost optimization out of service delivery models in-place. But that was a very core-out conversation. When you think digital, you have to begin to think about the use case of where value is created or exchanged. And, that’s an edge-in conversation.

And we managed to find that there are two journeys behind that discussion. The first one is about deciding to whom you are looking to deliver that digital experience. So when you think about digital engagement, really caring passionately about who the beneficiary persona is behind that experience. You need to describe that person in terms of what’s their day-in-the-life. What pains do they face today? What gains could you develop that could deliver better outcomes for them? How can you walk in their shoes, and how do you describe that?

We found that is a key journey, typically led by kind of chief digital officer-type character who is responsible for driving new digital engagement with customers. If the persona is external to the customer, if it’s a revenue-generating persona, we might think of revenue as the essential key performance indicator (KPI). But you can apply similar techniques to drive internal personas’ productivity. So productivity becomes the KPI.

That journey is inspired by initiatives that are trying to use digital to connect to people in new, innovative, and differentiated ways. And you’ll find different stakeholders behind that journey.

And we found another journey, which is reshaping the edge. And that’s much more about using technology to digitize the physical world. So let’s hear about the experience, about business efficiency and effectiveness at the edge -- and using the insights of instrumenting and digitizing the physical world to give you a sense of how that space is being used. How is my manufacturing floor performing? The KPI is overall equipment effectiveness (OEE) in the manufacturing space and it becomes key. Behind this journey you’ll see big Industry 4.0-type and Internet of Things (IoT)-type of initiatives under way.

If organizations are able to stitch these two journeys together -- rather than treat them as siloed sandpits for innovation – and if they can connect them together, they tend to get compound benefits.

You asked about where the constraint comes in. As we said, it is about getting agility into the supply chain. And again, we’ve actually found that there are two connected journeys, but with very different stakeholders behind them, which drive that agenda.

We have a journey, too, that describes a core renovation agenda that will occupy 70 to 80 percent of every IT budget every year. It’s the constant need to challenge the price performance of legacy environments and constantly optimize and move the workloads and data into the right part of the supply chain for strategic advantage.

That is coupled with yet another journey, that of the cloud-enabled constraint and that’s very much developer-led more than it is led by IT. IT is typically holding the legacy footprint, the technical debt footprint, but the developer is out there looking to exploit cloud-native architectures to write the next wave of applications and experiences. And they are just as impactful when it comes to equipping the organization with the cloud scale that’s necessary to mine those opportunities on the edge.

So, there is a balance in this equation, to your point. There is innovation at the edge, very much line of business-driven, very much about business efficiency and effectiveness, or revenue and productivity, the real tangible dollar value outcomes. And on the other side, it’s more about agility and the supply chain. It’s getting that balance right so that I have my agility and that allows me to go and explore the world digitally at the edge.

So they sort of overlap. And the implication there is that there are three core enablers and they are true no matter which of the big four agenda items customers are trying to drive through their initiative programs.

In digital, data is everything 

Two of those enablers very much relate to data. Again, Dana, I know in the digital era data is everything. It is the glue that holds this new digital engagement model together. In there we found two key enablers that constantly come up, no matter which agenda you are driving.

The first one is surely you need intelligence from that data; data for its own sake is of no use, it’s about getting intelligence from that dataset. And that’s not just to make better decisions, but actually to innovate, to create differentiated value propositions in your market. That’s really the key agenda behind that intelligence enabler.

And the second thing, because we are dealing with data, is a huge impact and emphasis on being trusted with that data. And that doesn’t just mean being compliant to regulatory standards or having the right kind of resiliency and cybersecurity approach, it means going beyond that.

You need to gain intelligence from the data; data for its own sake is of no use, it's about getting intelligence for the datasets. And that's not just to make better decisions, it's to innovate and create differentiated value propositions in your market.

In this digitally enabled world, we want to trust brands with our data because often that data is now extremely personal. So beyond just General Data Protection Regulation

(GDPR) compliance, trust here means, “Am I being ethical? Am I being transparent about how I use that data?” We all saw the Cambridge Analytica-type of impact and what happens when you are not transparent and you are not ethical about how you use data.

Now, one thing we haven’t touched on and I will just throw it up as a bit of context, Dana. There is a consideration, a kind of global consideration behind all of this agenda and that’s the shift toward everything-as-a-service (EaaS).

A couple of key attributes of that consideration includes the most obvious one; it’s the financial flexibility one. For sure, as you reassemble your supply chain -- as you continue to press on that cloud-enabled side of the map -- what you are paying, what you consume, and doing that in a strategic way helps get the right mix in that supply chain, and paying only for that as you consume, is kind of obvious.

But I think the more important thing to understand is that our customers are being equally innovative at the edge. So they are using that everything-as-a-service momentum to change their industry, their market, and the relationship they have with their customers. It helps especially as they pivot into a digital customer experience. Can that experience be constructed around a different business model?

We found that that’s a really useful way of deconstructing and simplifying what is actually quite a complex landscape. And if you can abstract -- if you can use a model to abstract away the chaos and create some simplicity -- that’s a really powerful thing. We all know that good models that abstract away complexity and create simplicity are hugely valuable in helping organizations reconstruct themselves.

Gardner: Clearly, before the pandemic, some organizations dragged their feet on digital transformation as you’ve described it. They had a bit of inertia. But the pandemic has spurred a lot of organizations, both public and private, on.

Hopefully, in a matter of some months or even a few years, the pandemic will be in the rearview mirror. But we will be left with the legacy of it, which is an emerging business paradigm of being flexible, agile, and more productive.

Are we going to get a new mode of business agility where the payoff is it commensurate with all the work?

Agility augurs well post-pandemic 

Partridge: That’s the $6 million question, Dana. I would love to crystal ball gaze with you on that one because agility is key to any organization. We all know that there are constraints in traditional customer experiences -- making widgets, selling products, transactional relationships, relationships that don’t lend themselves to having digital value added to them. I wonder how long that model goes on for as we are experiencing this shift toward digital value. And that means not just selling the widget or the product, but augmenting that with digital capabilities, with digital insights, and with new ways of adding value to the customer’s experience beyond just the capital asset.

I think that was being fast-tracked before this global pandemic. And it’s the organizations now that are in the midst of doubling down on that -- getting that digital experience right, ahead of product and prices – that’s the key differentiator when you go to market.

And, for me, that customer experience increasingly now is the digital customer experience. I think that move was well under way before we hit this big crisis. And I can see customers now doubling down, so that if they didn’t get it right pre-pandemic, they are getting it right as they accelerate out of the pandemic. They recognize that that platform is the only way forward.

You will hear a lot of commentators talk about the digital agenda as being driven by what they call the platform-driven economy. Can you create a platform in which your customers are willing to participate, maybe even your ecosystem of partners who are willing to participate and create that kind of shared experience and shared value? Again, that’s something that HPE is very much invested in. As we pivot our business model, to EaaS outcomes, we are having to double down on our customer experience and increasingly that means digitizing that experience through that digital platform agenda.

Gardner: I would like to explore some examples of how this is manifesting itself. How are organizations adjusting to the new normal and leveraging that to a higher level of business capability?

Also, why is a third-party organization like HPE Pointnext Services working within an ecosystem model with many years of experience behind it? How are you specifically gearing up to help organizations manage the process we have been describing?

HPE digital partnerships 

Partridge: This whole revolution requires different engagement models. The relationship HPE shares with its customers is becoming a technologically enabled partnership. Whenever you partner with a customer to help advance their business outcomes, you need a different way to engage with them.

We can continue to have our product-led engagement with customers, because many of them enjoy that relationship. But as we continue to move up the value stack we are going to need to swing to more of an advisory-led engagement model, Dana, where we are as co-invested in the customers’ outcomes as they are.

We understand what they are trying to drive from a business perspective. We understand how technology is opening up and enabling those kinds of outcomes to be materialized, for the value to be realized.

A year ago, we set out to reshape the way we engage with customers around this conversation. To drive that kind of digital partnership, that means sitting down with a customer and to co-innovate, going through workshops of how we as technologists can bring our expertise to the customer as the expert in their industry. Those two minds can meld to create more than one plus one equals two. By using design thinking techniques and co-design techniques, we can analyze the customers’ business problem and shape solutions that manufacture really, really big outcomes for our customers.

For 15 years I have been a consultant inside of HP and HPE and we have always had that strong consulting engine. But now with HPE Pointnext Services we are gearing it around making sure that we are able to address the customers’ business outcomes, enabled through technology.

Never has there been a time when technology has been so welded into a customer's underlying value proposition. ... There has never been a more open-door policy from our partners and customers.

And the timing is right-on. Never has there been a time when technology has been so welded into a customer’s underlying value proposition. I have been 25 years in IT. In the past, we could have gotten away with being a good partner to IT inside of our customer accounts. We could have gotten away with constantly challenging that price and performance ratio and renovating that agenda so that it delivers better productivity to the organization.

But as technology makes its way into the underlying business model -- as it becomes the differentiating business model -- it’s no longer just a productivity question. Now it’s about how partners work to unlock new digital revenue streams. Well, that needs a new engagement model.

And so that’s the work that we have been doing in my team, the Digital Advisory and Transformation Practice, to engage customers in that value-based discussion. Technology has made its way into that value proposition. There has never been a more open-door policy from our partners and customers who want to engage in that dialogue. They genuinely want to get the benefit of a large tech company applying itself to the customers’ underlying business challenges. That’s the partnership that they want, and there is no excuse for us not to walk through that door very confidently.

Gardner: Craig, specifically at HPE Pointnext Services, what’s the secret sauce that allows you to take on this large undertaking of digital transformation?

Mapping businesses’ DX ambition

Partridge: The development of this model has led to a series of unique pieces of intellectual property (IP) we use to help advance the customer ambition. I don’t think there has ever been a moment in time quite like this with the digital conversation.

Customers recognize that technology is the fundamental weapon to transform and differentiate themselves in the market. They are reaching out to technology partners to say, “Come and participate with me using technology to fundamentally change my value proposition.” So we are being invited in now as a tech company to help organizations move that value proposition forward in a way that we never were before.

In the past, HPE’s pedigree has been constantly challenging the optimization of assets and the price-performance, making sure that platform services are delivered in a very efficient and effective way. But now customers are looking to HPE to uniquely go underneath the covers of their business model -- not just their operating model, but their business model.

Now, we are not writing the board-level strategy for digital ambition because there is a great sweet spot for us, rather it’s where customers have a digital North Star, some digital ambition, but are struggling to realize it. They are struggling to land those initiatives that are, by definition, technology-enabled. That’s where tech companies like HPE are at the forefront of driving digital ambition.

So we have this unique IP, this model we developed inside of HPE Pointnext Services, and the methodology of how to apply it. We can use it as a visualization tool, as a storytelling tool to be able to better communicate, and onward to further communicate your businesses’ digital ambitions.

We can use it to map out the initiatives and look at where those overlap and duplications occur inside organizations. We are truly looking at this from edge to cloud and as-a-service -- that holistic side of the map helps us unpick the risks, dependencies, and prerequisites. We can use the map to inspire new ideas and advance a customer’s new thinking about how technology might be enabled.

We can also deploy the map with our building blocks behind each of the journeys, knowing what digital capabilities need to be brought on-stream and in what sequence. Then we can de-risk a customer’s path to value. That’s a great moment in time for us and it’s uniquely ours. Certainly, the model is uniquely ours and the way we apply it is uniquely ours.

But it’s also a timing thing, Dana. There has never been a better time in the industry where customers are seeking advice from a technology giant like HPE. So it’s a mixture of having the right IP, having the right opportunity, and the right moment as well.

Gardner: So how should such organizations approach this? We talked about the methodology but initiating something like this map and digital ambition narrative can be daunting. How do we start the process?

How to pose the right questions 

Partridge: It begins by understanding a description of this complex landscape, as we have explored in this discussion. Begin to visualize your own digital ambition. See if you can take two or three top initiatives that you are driving and explore them across the map. So what’s the overriding KPI? Where does it start?

Then ask yourself the questions in the middle of the map. What are the key enablers? Am I addressing a shared intelligence backbone? How am I handling trust, security, and resiliency? What am I doing to look at the operating model and the people? How is the culture central to all of this? How am I going to provide it as-a-service? Am I going to consume component parts of the service? How to stress over into the supply chain? How is it addressing the experience?

HPE Pointnext Services’ map is a beautiful tool to help any customer today start to plot their own initiatives and say, “Well, am I thinking of this initiative in a fully 360° way.”

If you are stuck, come and ask HPE. A lot of my advisors around the world map their customers initiatives over to this framework. And we start to ask questions. We start to unveil some of the risks and dependencies and prerequisites. As you put in more and more initiatives and programs, you can begin to see duplication in the middle of the model play out. That enables customers to de-risk and be quicker to path of value because they can deduplicate what they can now see as a common shared digital backbone. Often customers are running those in isolation but seeing it through this lens helps them deduplicate that effort. That’s a quicker path to value.

We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box type thinking and putting in enough of a value proposition behind the idea to excite people.

We do a lot around ideation and design thinking. If customers have yet to figure out a digital initiative, what’s their North Star, where should they start? We engage customers around one- to two-day ideation workshops. Those are very structured ways of having creative, outside-of-the-box-type thinking and putting in enough of a value proposition behind the idea to excite people.

We had a customer in Italy come to us and say, “Well, we think we need to do something with AI, but we are not quite sure where the value is.”

Then we have a way of engaging to help you accelerate, and that’s really about identifying what the critical digital capabilities are. Think of it at the functional level first. What digital functions do I need to be able to achieve some level of outcome? And then get that into some kind of backlog so you know how to sequence it. And again, we work with customers to help do that as well.

There are lots of ways to slice this, but, ultimately, dive in, get an initiative on the map, and begin to look at the risks and dependencies as you map it through the framework. Are you asking the right questions? Is there a connection to another part of the map that you haven’t examined yet that you should be examining? Is there a part of the initiative that you have missed? That is the immediate get-go start point.

Gardner: I’m afraid we will have to leave it there. We have been examining how to better architect businesses for not only managing ongoing disruption, but to get to a new and better way of doing business.

And we have learned how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging market opportunities.

So please join me in thanking our guest, Craig Partridge, Senior Director Worldwide, Digital Advisory and Transformation Practice Lead at HPE Pointnext Services. Thank you so much, Craig.

Partridge: Thanks, Dana. It was great fun speaking to you again.

Gardner: And thanks as well to our audience for joining this sponsored BriefingsDirect Voice of Innovation Discussion. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of HPE-supported discussions.

Thanks again for listening. Please pass this along to your IT community and do come back next time.

Listen to the podcast. Find it on iTunes. Download the transcript. See the video. Sponsor: Hewlett Packard Enterprise.

A discussion on how HPE Pointnext Services advises organizations on using digital transformation to take advantage of new and emerging opportunities. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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How Sustainability and Diversity Prove Foundational to the Evolving Modern Data Center

A discussion on how data center challenges and advancements will hinge around the next generation of diverse talent supporting data centers and how sustainability will advance as a top design requirement.

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

Dana Gardner: Hello, and welcome to the next edition of the BriefingsDirect podcast series. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host and moderator for this ongoing discussion on the latest insights into data center strategies.

Gardner

International Data Center Day, this spring in 2020, provides an opportunity to both look at where things have been in the evolution of the modern data center -- and more importantly -- where they are going.

And those trends involve a lot more than just technology. Data center challenges, and advancements alike, will hinge around the next generation of talent supporting those data centers and how diversity and equal opportunity best support that.

We also forecast that sustainability improvements -- rather than just optimizing the speeds and feeds -- will help determine the true long-term efficiency of IT facilities and systems.

Stay with us now as we observe International Data Center Day with a look at how to make the data centers of the future the best operated and the greenest ever. To learn how, please join me now in welcoming our panel.

We are here with Jaime Leverton, Senior Vice President and Chief Commercial Officer at eStruxture Data Centers in Montreal. Welcome, Jaime.

Jaime Leverton: Thank you so much for having me. It's great to be here.

Gardner: We are also here with Angie McMillin, Vice President and General Manager of IT Systems at Vertiv^TM. Welcome, Angie.

Angie McMillin: Thank you. Hi, Dana, glad to be here.

Gardner: And we are also joined by Erin Dowd, Vice President of Global Human Resources at Vertiv. Welcome, Erin.

Erin Dowd: Thank you, very much. I am very proud to be a part of it.

Gardner: Erin, why -- based on where we have come from -- is there now a need to think differently about the next generation of data center talent?

Dowd

Dowd: What's important to us is that we have a diverse population of employees. We think about diversity from the perspective traditionally around ethnicity and gender. But when we consider diversity, we think about diversity of thought, diversity of behavior, and diverse backgrounds.

That all makes us a much stronger company; a much stronger industry. It's representative of our customer base, frankly, and it's representative of the globe. We are ensuring that we have people working within our company from around the world and contributing all of those diverse thoughts and perspectives that make us a much stronger company and much stronger industry.

Gardner: We have often seen that creative and innovative thought comes when you have a group of individuals that come from a variety of backgrounds, and so it's often a big benefit. Why has it been slow-going? What's been holding back the diversity of the support talent for data centers?

Diversity for future data centers 

Dowd: It's a competitive environment, so it's a struggle to find diverse candidates. It goes beyond our tech type of roles and into sales and marketing. We look at our talent early in their careers, and we are working on growing talent, in terms of nurturing them, helping them to develop, and helping them to grow into leadership roles. It takes a proactive approach, and it’s more than just letting the talent pool evolve naturally. It is about taking proactive and definitive actions around attracting people and growing people.

Gardner: I don’t think I am going out on a limb by observing that over the past 30 years, it's been a fairly male-dominated category of worker. Tell us why women in science, technology, engineering, and math, or the so-called STEM occupations, are going to be a big part of making that diversity a strength.

Dowd: That is a huge pipeline for us as we benefit from all the initiatives to increase STEM education for women and men. The results help expand the pool, frankly, and it allows candidates across the board, that are interested at an early age, to best prepare for this type of industry. We know historically that girls have been less likely to pursue STEM types of interest at early ages.

So ensuring that we have people across the continuum, that we have women in these roles, to model and mentor -- that's really important in expanding the pool. There are a lot of things that we can be doing around STEM, and we are looking at all those opportunities.

Gardner: Statistically there are more women in universities than men, so that should translate into a larger share in the IT business. We will be talking about that more.

But we would also like to focus on International Data Center Day issues around sustainability. Jaime, why is sustainability the gift that keeps giving when it comes to improving our modern data centers?

Leverton

Leverton: International Data Center Day is about the next generation of data center professionals. And we know that for the next generation, they are committed to preserving the environment, which is good news for all of us as citizens. And as one of the world's biggest consumers of energy, I believe the data center industry has a fundamental duty to elevate its environmental stewardship with energy efficient infrastructure and renewable power resources. I think the conversation really does go well together with diversity.

Gardner: Alright, let's dive in a little bit more to the issues around talent and finding the best future pool. First, Erin please tell us about your role at Vertiv.

Dowd: I am the Global Business HR Partner at Vertiv. So my focus is to help us design, build, and deliver the right people strategy for our teams that have a global presence. We focus on having super-engaged and productive people in the right places with the right skills, and in developing career opportunities across the continuum -- from early level to senior level of contributors.

Gardner: We have heard a lot about the skills shortage in IT in general terms, but in your experience at Vertiv, what are your observations about the skills shortage? What challenges do you face?

Dowd: We have challenges in terms of a shortage of diverse candidates across the board. This is present in all positions. Increasing the diversity of candidates that we can attract and grow will help us address the shortage first-hand.

Gardner: And in addition to doing this on a purely pragmatic basis, there are other larger benefits. Tell us why diversity is so important to Vertiv over the long term?

We have challenges in terms of a shortage of diverse candidates across the board. This is present in all positions. The diversity of candidates that we can attract will help us.

Dowd: Diversity is the right thing to do. Just hands down, it has business benefits, and it has cultural benefits. As I mentioned earlier, it reflects not only on our global presence but also on our customer base. And research shows that companies that have more diverse workforces outperform and out-innovate those that don’t.

For example, companies in the top quartile of the workforce on diversity are 33 percent more likely to financially outperform their less diverse counterparts, according to a 2018 study from McKinsey. We have been embracing diversity, which aligns with our core values. It’s the right competitive strategy. It's going to allow us to compete in the marketplace and relate to our customers best.

Gardner: Is Vertiv an outlier in this? Or is this the way the whole industry is going?

Dive into competitive talent pool 

Dowd: This is the way whole industry is going. I come from a line of IT companies prior to my tenure with Vertiv. Even the biggest, the most established companies are still wrestling with the competitiveness affiliated with the tracking of candidates that have diversity of thought, diverse backgrounds, diverse behaviors, and diversity on ethnicity and gender as well.

The trend is toward engineering and services, and everywhere we are experiencing turnover because it's so competitive. It’s a very competitive environment. We are competing with brother and sister companies for the same types of talent.

As I mentioned previously, if we attract people who are diverse in terms of thought, ethnicity, and gender we can expand our candidate pool and enhance our competitiveness. When our talent acquisition team looks at talent, they are expanding and enhancing diversity in our university relations and in our recruiting efforts. They are targeting diverse candidates as we hire interns and then folks that are later in their careers as well.

Gardner: We have been looking at this through the demand side, but on the supply-side, what are the incentives? Why should people from a variety of backgrounds consider and pursue these IT careers? What are the benefits to them?

Dowd: The career opportunities are amazing. This is a field that’s growing and that is not going to go away. We depend on IT infrastructure and data centers across our world, and we're doing that more and more over time. There's opportunity in the workplace and there are a lot of things that we are specifically doing at Vertiv to keep people engaged and excited. We think a lot about attracting talent.

But there is another piece, which is about retaining talent. Some of the things we are doing at Vertiv are specifically launching programs aligned with diversity.

So recently, and Angie has been involved in this, we have a women at Vertiv resource group called Women at Vertiv Excel (WAVE). And that group is nurturing women, encouraging more women to pursue leadership positions within Vertiv. Really it looks at diversity in leadership positions, but it also provides important training that women can apply in their current positions.

Together we are building one Vertiv culture, which is a really important framework for our company. We are creating solutions and resources that make us more competitive and reflect the global market. We find that diversity breeds new and different ideas, more innovation, and a deeper understanding of our customers, partners, employees, and our stakeholders all around the globe. We are a global company, so this is very important to us. It's going to make us more successful as we grow into the future.

Another thing that we are doing is creating end-to-end management of Vertiv programs. This is new. We continue to improve this. It integrates behavioral skills and training designed to look at the work that we do through the eyes of others. We utilize experiences and talent effectively to grow stronger and stronger teams. Part of this is about recruiting and hiring. It has an emphasis on finding potential employees who possess a diverse experience of thought and perspectives. And diversity of thought comes from field experiences, from different backgrounds, and all of this contributes to our values as an employee in our organization.

Together we are building one Vertiv culture, which is a really important framework for our company. We are creating solutions and resources that make us more competitive and reflect the global market. We find that diversity breeds new and different ideas, more innovation, and a deeper understanding of our customers, partners, and employees.

We also are launching the Vertiv Operating System. Now this is being created, launched, and built with an emphasis on better understanding of our differences, in bridging gaps where there are differences, and in ways that bring out the best in everybody. It's designed to encourage thought leadership, and to help all of us work through change management together.

Finally, another program that we've been implementing across the globe is called Intrinsic. And Intrinsic supplies a foundational assessment designed to improve our understanding of ourselves and also of our colleagues. It's a formal experiential program that's going to help us all learn more about ourselves, what makes our individual values and styles unique, but then also it allows us to think about the people that we are working with. We can learn more about our colleagues, potentially our customers, and it allows us to grow in terms of our team dynamics and the techniques that we are using to manage conflict, stress, and change.

Collectively, as we look at the full continuum of how we behave at Vertiv in the future we are building for ourselves, all of these efforts work together toward changing the way we think as individuals, how we behave in groups, and ultimately evolving our organizational culture to be more diverse, more inclusive, and more innovative.

Gardner: Jaime at eStruxture, when we look at sustainability, it aligns quite well with these issues around talent and diversity because all the polling shows that the younger generation is much more focused on energy efficiency and consciousness around their impact on the natural world -- so sustainability. Tell us why the need for sustainability is key and aligns so well with talent and retaining the best people to work for your organization.

Sustainability inspires next generation 

Leverton: What we know to be true about the next generation is when they look to choose a career path, or take on an assignment, they want to make sure that it aligns with their values. They want to do work that they believe in. So, our industry offers them that opportunity to be value-aligned and to make an impact where it counts.

As you can see all around us, people are working and learning remotely now more than ever, and data centers are what make all of that possible. They are crucial to our society and to our everyday lives. The data center industry is only going to continue to grow, and with our dependence on energy we have to have a focus on sustainability.

It represents a substantial opportunity to make a difference. It's a fast-paced environment where we truly believe there is a career path for the next generation that will matter to them.

Gardner: Jaime, tell us about eStruxture Data Centers and your role there.

Leverton: eStruxture is relatively new data center company. It was established just over three years ago and we have grown rapidly from our original acquisition of our first data center in Montreal. We now have three data centers in Montreal, two in Vancouver, and one in Calgary. We are a Canadian pure-play -- Canadian-owned, -operated, and -financed. We really believe in the Canadian landscape, the Canadian story, and we are going to continue to focus on growth in this nation.

Gardner: When it comes to efficiency and sustainability, we often look at power usage effectiveness (PUE). Where are we in terms of getting to complete sustainability? Is it that so farfetched?

Leverton: I don’t think it is. Huge strides have been made in reducing PUE, especially by us in our most recent construction, which has a PUE load of sub 1.2. Organizations in our industry continue to innovate every day, trying to get as close to that 1.0 as humanly possible.

We are very lucky that we partner with Vertiv. Vertiv solutions are key in driving our efficiency in our data centers, and we know that progress can be made continually by addressing the IP load deficiency and that is a savings that is incremental to PUE as well. PUE is specifically about the ratio of IP power usage and the power usage of the equipment that supports it. But we look at our data center and our business holistically to drive sustainability even outside of what the PUE covers.

Gardner: It sounds like sustainability is essentially your middle name. Tell me more about that. How did you focus the construction and placement of your data centers to be focused so much on sustainability?

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Leverton: All of our facilities have been designed with a focus on sustainability. When we have purchased facilities, we have immediately gone to upgrade them and make them more efficient. We take advantage of free cooling wherever possible. As I mentioned, three of our data centers are in Montreal, so we get to take advantage of about eight months of the year of free cooling where the majority of our data centers are using 99.5 percent hydro-power energy, which is the cleanest possible energy that we can use.

We virtualize our environments as much as possible. We carefully select eco-responsible technologies and suppliers, and we are committed to continuing to increase our power usage effectiveness without ever sacrificing the performance, scalability, or uptime of our data centers, of course.

Gardner: And more specifically, when you look at that holistic approach to sustainability, how does working with a supplier like Vertiv augment and support that? How does that become a tag-team when it comes to the power source and the underlying infrastructure?

Leverton: Vertiv has just been such a great partner. They were there with us from the very beginning. We work together as a team, trying to make sure that we're designing the best possible environment for our customers and for our community. One of our favorite solutions from Vertiv is around their thermal management, which is a water-free solution.

Our commitment is to operate as sustainably as possible. Being able to partner with Vertiv and build their solutions into our design right from the beginning has had a huge impact. 

That is absolutely ideal in keeping with our commitment to operate as sustainably as possible. In addition to being water-free, it's 75 percent more efficient because it has advanced controls and economization. Being able to partner with Vertiv and build their solutions into our design right from the beginning has made a huge, huge impact.

Gardner: And, like I mentioned, sustainability is the gift that keeps giving. This is not just a nice to have. This is a bottom-line benefit. Tell us about the costs and how that reinforces sustainability initiatives.

Leverton: Yes, while there is an occasional higher cost in the short term, we firmly believe that the long-term total cost of ownership is lower -- and the benefits far outweigh any initial incremental costs.

Obviously, it's about our values. It's critical that we do the right thing for the environment, for the community, for our staff, and for our customers. But, as I say, over the long-term, we believe the total cost is less. So far and above, sustainability is the right thing to do.

Gardner: Jaime, when it comes to that sustainability formula, what really works? It's not just benefiting the organization that's supplying, it’s also benefiting the consumer. Tell us how sustainability is also a big plus when it comes to those people receiving the fruits of what the data centers produce.

Leverton: Sustainability is huge for our customers, and it’s increasingly a key component of their decision-making criteria. In fact, many hyperscale cloud providers and corporations -- large corporate enterprises -- have declared very ambitious environmental responsibility objectives and are shifting to green energy.

Microsoft, as an example, is targeting over 70 percent renewable energy for its data centers by 2023. Amazon reached a 50 percent renewable energy target in 2018 and is now aiming for 100 percent.

Women and STEM step IT up 

Gardner: Let's look at the sustainability issue again through the lens of talent and the people who are going to be supporting these great initiatives. Angie, when it comes to bringing more women into the STEM professions, how does the IT industry present itself as an attractive career path, say for someone just graduating from high school?

McMillin

McMillin: When I look at children today, they're growing up with IT as part of their lives. That's a huge advantage for them. They see firsthand the value and impact it has on everything they do. I look at my nieces and nephews, and even grandkids, and they can flip through phones, tablets, they are using XBoxes, you name it, all faster than adults.

They're the next generation of IT. And now, with the COVID-19 situation, children are learning how to do schooling collaboratively -- but also remotely. I believe we can engage children early with the devices they already know and use. And with the tools that they're now learning for schoolwork, those are a bridge to learning about what makes that work. It’s the data center industry. All of our data centers can be a part of that as they complete their schooling and go into higher education. They will remember this experience that we're all living through right now forever -- and so why not build upon that?

Gardner: Jaime, does that align with your personal experience in terms of technology being part of the very fabric of life?

Leverton: Oh, absolutely. I'm really proud of what I've seen happening in Canada. I have two young daughters and they have been able to take part in STEM camps, coding clubs, and technology is part of their regular curriculum in elementary school. The best thing we can do for our children is to teach them about technology, teach them how to be responsible with tech, and to keep them engaged with it so that over time they can be comfortable looking toward STEM careers later on.

Gardner: Angie, to get people focused on being part of the next generation of data centers, are there certain degrees, paths, or educational strategies that they should be pursuing?

Education paths lead to STEM careers 

McMillin: Yes. It's a really interesting time in education. There are countless degrees specifically geared toward the IT industry. So those are good bets, but specifically in networking and computers, there's coding, there is cyber security, which is becoming even more important, and the list goes on.

We currently see a very large skill set gap specifically around the science and technology functions. So these offer huge opportunities for a young person’s future. But I also want to highlight that the industry still needs the skill sets, the traditional engineering skills, such as power management, thermal management, services and equally important are the trade skills in this industry. There's a current gap in the workforce and the training for that may be different, but it still has a really vital role to play.

And then finally, we'd be remiss if we didn't recognize the fact that there are support functions, finance, HR, and marketing. People often think that you must only be in the science or engineering part of the business to work in a particular given market, and that really isn't true. We need skill sets across a broad range to really help make us successful.

Leverton: I am an IT leader and have been in this business for 20 years, and my undergraduate degrees are in political science and psychology. So I really think that it's all about how you think, and the other skills that you can bring to bear. More and more, we see emotional intelligence (EQ) and communication skills as the difference-maker to somebody's career success or career trajectory. We just need to make sure that people aren't afraid of coming out of more generalized degrees.

Gardner: We have heard a lot about the T structure, where we need to have the vertical technology background but also we want those with cultural leadership, liberal arts, and collaboration skills.

Angie, you are involved with mentoring young women specifically. What's your take on the potential? What do you see now as the diversity is welling up and the available pool of talent is shifting?

McMillin: I am, and I absolutely love it. One of the things I do is support a women's engineering summer camp probably much like Jaime's daughters attend, and other events around my alma mater, with the University of Dayton. I support mentoring interns and other early career individuals, be they male or female. There is just so much potential in young people. They are absolutely eager to learn and play their part. They want to have relevance in the growing data center market, and the IT and sustainability that we talked about earlier. It's really fun and enjoyable to help them along that journey.

There are two key themes I repeat. One is that success doesn't happen overnight. So enjoy those small steps on the journey, learn as much as you can, and don't give up. The second is keep an open mind about your career, try new things, and doors you never imagined will open up.

I get asked for advice, and there are two key themes that I repeat. One is that success doesn’t happen overnight. So enjoy those small steps on the journey that we take to much greater things, and the important part of that, is really just keep taking the steps, learn as much as you can, and don’t give up. The second thing is to keep an open mind in your career, being willing to try new things and opportunities and sometimes doors are going to open that you didn’t even imagine, which is absolutely okay.

As a prime example, I started my education in the aerospace industry. When that industry was hurting, I switched to mechanical. There is a broader range of that field of study, and I spent a large part of my career in automotive. I then moved to consumer and now I am in data center and IT. I am essentially a space geek and car junkie engineer with experience in engineering, strategy, sales, portfolio transformation, and operations. And now I am a general manager for an IT management portfolio.

If I hadn't been open to new opportunities and doors along my career path, I wouldn’t be here today. So it's an example for the younger generation. There are broad possibilities. You don’t have to have it all figured out now, but keep taking those steps and keep trying and keep learning -- and the world awaits you, essentially.

Gardner: Angie what sort of challenges have you faced over the years in your career? And how is that changing?

Women rise, challenges continue 

McMillin: It’s a great question. My experience at Vertiv has been wonderful with a support structure of diversity for women and leadership. We talked about the new WAVE program that Erin mentioned earlier. You can feel that across your organization. It starts at the top. I also had the benefit, as many of us I think had on this podcast, of having good sponsors along the way in our career journeys to help us get to where we are.

But that doesn’t mean we haven’t faced challenges throughout our careers. And there are challenges that still arise for many in the industry. In all the industries I have worked, which have all been male-dominated industries, there is this necessity to have to prove yourself as a woman -- like 10 times over -- for your right to be at the table with a voice regardless of the credentials you have coming in. It gets exhausting, and it's not consistent with male counterparts. It’s a “show me first” and then “I might believe,” it's also BS. That’s something that a lot of women in this industry, as well as in other industries, continue to have to surpass.

The other common challenge is that you need to over-prove yourself, so that people know that the position was earned. I always want people to know I got my position because I earned it, and I have something to offer not because of a diversity quota. And that’s a lot better today than it's been in years passed. But I can tell you, I can still hear those words, of accusations made of female colleagues that I knew throughout my career. When one female gets elevated in a position and fails, it makes it a lot harder for other females to get the chance of an opportunity or promotion.

Now, again, it's getting better. But to give you a real-world example, if you think about the number of industries where there are women CEOs. If they don't succeed, boards get very nervous about putting another woman in a CEO position. If a male CEO doesn't succeed, he is often just not the right fit. So we still have a long way to go.

Gardner: Jaime at eStruxture, what's been your experience as a woman in the technology field?

Leverton: Well, eStruxture has been an incredible experience for me. We have diversity throughout the organization. Actually we are almost at 50 percent of our population identifying as non-white heterosexual male, which is quite different from what I've experienced over the rest of my career in technology. From a female perspective, our senior leadership team is 35 percent women; our director population is almost 50 percent women.

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So it's been a real breath of fresh air for me. In fact, I would say it really speaks to the values of our founder when he started this company three years ago and did it with the intention of having a diverse organization. Not only does it better mirror our customers but it absolutely reflects the values of our organization, the culture we wanted to create, and ultimately to drive better returns.

Gardner: Angie, why is the data center industry a particularly attractive career choice right now? What will the future look like in say five years? Why should people be thinking about this as a no-brainer when it comes to their futures?

Wanted: Skilled data center pros 

McMillin: We are in a fascinating time for data center trends. The future is very, very strong. We know now -- and the kids of today certainly know -- that data isn't going away. It's part of our everyday lives and it's only going to expand -- it's going to get faster with more compute power and capability. Let’s face it, nobody has patience for slow anymore. There are trends in artificial intelligence (AI), 5G, and others that haven't even been thought of yet that are going to offer enormous potential for careers for those looking to get into the IT space.

We are in a fascinating time for data center trends. The future is very strong. Data isn't going away. And nobody has patience for slow anymore. There are trends in AI, 5G, and others that haven't even been thought of yet.

And when we think about that new trend -- with the increase of working or schooling remotely as many of us are doing currently -- that may permanently alter how people work and learn going forward. There will be a need for different tools, capabilities, and data management. And how this all remains secure and efficient is also very important.

Likewise, more data centers will need to operate independently and be managed remotely. They will need to be more efficient. Sustainability is going to remain very prevalent, especially edge-of-the-network data centers and enabling the connectivity and productivity wherever they are.

Gardner: Now that we are observing International Data Center Day 2020, where do you see this state of the data center in just the next few years? Angie, what's going to be changing that makes this even more important to almost every aspect of our lives and businesses?

McMillin: We know now the data center as an ecosystem that is changing dramatically. The hybrid model is a product that's enabling a diversification of data workloads where customers get the best of all options available: cloud, data center, and edge, as our regional global survey of data center professionals are experiencing phenomenal growth. And we also see a lot more remote management to operate and maintain these disparate locations securely.

We need more people with all the skill sets capable of supporting these advancements on the horizon like 5G, the industrial internet of things (IIoT), and AI.

Gardner: Erin, where do you see the trends of technology and human resources going that will together shape the future of the data center?

Dowd: I will piggyback on the technology trends that Angie just referenced and say the future requires more skilled professionals. It will be more competitive in the industry to hire those professionals, and so it's really a great situation for candidates.

It makes it important for companies like Vertiv to continue creating environments that favor diversity. Diversity should manifest in many different ways and in an environment where we welcome and nurture a broad variety of people. That's the direction of the future, and, naturally, the secret for success.

Gardner: I’m afraid we’ll have to leave it there. We have been exploring how future data center advancements will hinge around the next generation of talent and sustainability. And we have observed at International Data Center Day 2020 that we are seeing new ways to make the data center of the future the best operated and the greenest ever.

So please join me in thanking our guests, Jaime Leverton, Senior Vice President and Chief Commercial Officer at eStruxture Data Centers. Thank you so much, Jaime.

Leverton: Thank you again for having me. It was a lot of fun.

Gardner: And also thank you to Angie McMillin, Vice President and General Manager of IT Systems at Vertiv. Thank you, Angie.

McMillin: Thank you. I enjoyed this today.

Gardner: And lastly, thank you to Erin Dowd, Vice President of Global Human Resources at Vertiv. Thank you so much.

Dowd: Thank you. This is a very important topic to all of us.

Gardner: And a big thank you to our audience as well for joining this sponsored BriefingsDirect data center strategies panel. I’m Dana Gardner, Principal Analyst at Interarbor Solutions, your host for this ongoing series of Vertiv-sponsored discussions.

Thanks again for listening. Please pass this along to your community, and do come back next time.

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

A discussion on how data center challenges and advancements alike will hinge around the next generation of diverse talent supporting data centers and how sustainability will advance as a top design requirement. Copyright Interarbor Solutions, LLC, 2005-2020. All rights reserved.

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