Automation at Goldman, The Computer takes out four people

Today, nearly 45 percent of trading is done electronically, according to Coalition, a U.K. firm that tracks the industry.

Pay:

Average compensation for staff in sales, trading, and research at the 12 largest global investment banks, of which Goldman is one, is $500,000 in salary and bonus, according to Coalition. Seventy-five percent of Wall Street compensation goes to these highly paid “front end” employees, says Amrit Shahani, head of research at Coalition… Investment bankers working on corporate mergers and acquisitions at large banks like Goldman make on average $700,000 a year, according to Coalition, and in a good year they can earn far more.

Automating those $700,000+ meat-sacks:

Goldman Sachs has already begun to automate currency trading, and has found consistently that four traders can be replaced by one computer engineer, Chavez said at the Harvard conference. Some 9,000 people, about one-third of Goldman’s staff, are computer engineers.

Finding the things to automate:

Though those “rainmakers” won’t be replaced entirely, Goldman has already mapped 146 distinct steps taken in any initial public offering of stock, and many are “begging to be automated,” he said.

To be all double-turns-out about the grim automation stuff, in theory, this could mean hiring more programmers and people who support those robots, bringing down those big chunks of cash from “rainmakers” and spreading it down to “lower” grade staff. Of, you know, the bank can just keep that money and trickle it up to execs and share-holders.

Source: As Goldman Embraces Automation, Even the Masters of the Universe Are Threatened

WTF is “digital transformation”? Beyond AI and VR for practical, software-driven innovation – My January Register Column

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At the top of the year, companies are setting their IT agendas. Most high level executives seem to be lusting for “digital transformation,” but that phrase is super-squishy. In my Register column this month, I offered my advice on what it should be: simply “digitizing” existing, manual work-flows by perfecting how you do software.

This, of course, is the core of what I work on at Pivotal; see my wunderkammer of knowledge, the soon to be PDF’ed “Crafting your cloud native strategy,” for example.

What do these opportunities look like in businesses? Here’s a chunk that cut out of the piece that provides some examples:

A project to “digitize” the green card replacement program in the US provides a good example of the simple, pragmatic work IT departments should be curating for 2017. Before injecting software into process it’d “cost about $400 per application, it took end user fees, it took about six months, and by the end, your paper application had traveled the globe no less than six times. Literally traveled the globe as we mailed the physical papers from processing center to processing center.”

After discovering agile and cleaning up the absurd government contracting scoping (a seven year project costing $1.2bn, before accounting for the inevitable schedule and budget overruns), a team of five people successfully tackled this paper-driven, human process. It’s easy to poke fun at government institutions, but if you’ve applied for a mortgage, life insurance, or even tried to order take out food from the corner burger-hut, you’ll have encountered plenty of human-driven processes that could easily be automated with software.

After talking with numerous large organizations about their IT challenges, to me, this kind of example is what “digital transformation” should mostly about, not introducing brain-exploding, Minority Report style innovation. And why not? McKinsey recently estimated that, at best, only 29% of a worker’s day-to-day requires creativity. Much of that remaining 71% is likely just paid-for monotony that could be automated with some good software slotted into place.

That last figure is handy for thinking about the opportunity. You can call it “automation” and freak out about job stealing, but it looks like a huge percentage of work can be “digitized.”

Check out the full piece.

The internet of food nutrition labels

“So anyone who is producing food that ends up in our grocery stores, we’re working with them to get the data from their labels and the packaging information to come right into the database for us,” Pamela Stark Reed, deputy administrator for Nutrition, Food Safety and Quality, said on Information Management month.

The database has actually existed for over a century, Reed said. But before starting the initiative, it only had about 8,000 entries. Since opening it up to manufacturer submission, ARS has received 80,000 new items, a 1000 percent increase.
And on future plans:

The goal for the database is to eventually expand to 1,000,000 items. Reed said ARS anticipates getting store brand and international food items into the database soon. Some items from chain restaurants may follow.

Because of this, the agency is looking into cloud services to increase its storage capacity.

Just imagine, globally, how many data sets like that there are. Throw in the workflow to injest and cleanup the data, and change it, plus APIs to access it, and you have an almost endless amount of projects for software eating.

http://federalnewsradio.com/information-management-month/2016/11/usda-turns-nutritional-data-open-data/

AirBnB lowers hotel prices 8-10%, effects low end hotel more


There’s all sorts of fun findings and theories in this study of AirBnB’s effect in the hotel market in Austin and Dallas. The easiest one is that it lowers pricing by 8-10% for the non-business traveler segment:

As Airbnb has its roots in casual stays, including those involving shared accommodations, we expect it to be a more attractive option for travelers on a budget. Conversely, business travelers and vacationers who frequent high-end hotels are two examples of consumers we argue are less likely to substitute a hotel stay with an Airbnb stay.

There’s also some interesting commentary on the very fixed assets of traditional hotel companies verses the agility of AirBnB:
– It’s impossible to rapidly increase the supply of hotel rooms to meet demand: it takes an average of 4 years to build new hotels, so you can’t really meet rising demand even on an annual basis.
– In contrast, the AirBnB supply can expand and contract on a daily basis as people decided to list and delist their rooms and houses.
– Of course, AirBnB demand is cap’ed to the number of fixed houses and apartments in an areas…but companies to hotel rooms, that supply seems infinite. (There’s an interesting analogy to public cloud here.)

Cloud Platform Adoption: Lessons Learned — Philip Glebow, Gap

Gap’s Philip Glebow goes over their use of Pivotal Cloud Foundry, including things that worked well and need improvement. His list of the supporting tools they use – like APM and data virtualization – is handy as well.

Some items:

  • (~2:30) Fast deploys: “We can deploy changes faster than people can really consume them.”
  • (~18:00) Developer morale: “We could really push something in five minutes… and developers love it, you click the commit button and there you go.”
  • (~19:40) [Poor transcription by me] On the danger of changing too fast: …generally we want to have a little bit of control into what goes into that production environment… but we don’t want to change so rapidly so that users are confused… There’s also a little bit of cultural change that we need to go through… ((too rapid of change is jarring)) …and as we bring that capability forward, we want to be sensitive to those concerns.
  • (~23:58) Overview of their pipeline and testing.
    (~26:29) [Poor transcription by me]  Typically we’ve organized out teams around sort of domain concepts – so we have a pricing team – then there’s several squads, then that squad is responsible for optimization – price, packing the stuff, etc. That’s how we’ve organized the teams, two pizza teams, we’ve tried to that. Also, distributed teams… sometimes that’s a little bit complicated.

Allianz now deploying to production in minutes

By changing its development practices and investing in a private cloud platform as a service, there have been clear benefits to the business. “Historically it would take two or three days for a deployment to go to production, with lots of manual production. Now with the apps in the garages we can do it on the basis of Cloud Foundry within minutes.”

Source: Allianz app deployment goes from ‘days to minutes’ with PaaS and agile practices

The Apple Watch in Restaurant Dining Rooms

Using Apple Watches to assist waitstaff is interesting, but sort of over kill.

I’d assume they’d still need to take orders which probably works best with paper (or just memorizing), or at best a tablet or phablet. The watch is not very good for reading and gathering information: it’s better at taking quick actions, just getting quick info like the time or current temperature, and small notifications.

Still, any new use case people come up with is interesting:

Second, the use of the Apple Watch adds an interesting layer to day-to-day hospitality practices. Guest notes within reservations are nothing new, but employing a dynamic, real-time system to make sure that the people who need to read the notes actually do read the notes is a major step. The Apple Watch, for its… shortcomings, is arguably less intrusive than a mobile phone or larger screen, and can be checked far more discreetly. I can’t speak for restaurant floor managers, but from this side of the keyboard, this seems like an efficient technological upgrade.

Another interesting tidbit buried in the Eater piece: soon, ResyOS will support the ability to add other diners to a reservation so the restaurant has a clearer picture of everyone at the table — great news for couples who keep track of which reservation profiles have all of the “good notes.” (We all do that, right?)

Source:  The Apple Watch in Restaurant Dining Rooms 

IT-driven innovation in cameras

It’s easy to take all the recent advances in photography for granted. They all just sort of work. This overview from Sinofsky on the bokeh effect in the new iPhones explains what’s going on, and also highlights a mainstream – consumer! – case of how software, IoT, and hardware (mobile phones) are innovating what was a moribund field:

If you extrapolate from today you can start to see how mobile photography that incorporates multiple sensors, machine learning, and real-time compute will continue to create new types of images.

It’s a good example of what we mean by “digital transformation.” It means using IT to the maximum and, I think, is best understood by contemplating what exactly the opposite is: “analog.” There are so many things in our daily lives (both business and personal) that are not being augmented by software, let along “sensors” and “machine learning.” There’s almost an endless TAM out there to gobble up; rather, an infinite future of opportunity to create fun, new experiences and productivity.

Source: Photos: How Tools Start a Revolution

Adding more individual controls to debit cards

Some interesting ideas to improve debit (and credit, one’d presume) with software-driven features:

CardGuard provides additional protection against fraud, since customers are able turn their debit card “on” or “off.” When the card is “off,” no withdrawals or purchases will be approved, with the exception of previously authorized or recurring transactions. Additionally, transaction controls can be set according to location, meaning transactions attempted outside of the geographic parameters set by the customer will be declined.

Also:

With CardGuard, customers are able to better manage their spending by establishing limits for debit card purchases based on the amount of the transaction. Additional controls can be set to manage spending in different categories by enabling or disabling transactions for certain merchant groups, such as gas, grocery or retail stores.

Source: First National Bank app comes with debit card controls

Go to where the customers are. True story.

By making it easy for people to buy movie tickets online or through a smartphone app, Fandango has experienced breakneck growth over the last two years. A couple of taps and presto! The seats are yours.

And on the “omni-channel,” even cyberspace has lots of omni:

“Consumers, particularly young ones, find it inconvenient to hop into different silos to get something done,” she said. “They want it all in one place. That sounds obnoxious, I know — the definition of a ‘first-world problem’ — but it’s true, and Fandango is solving it for them.”

Source:
Buy Movie Tickets on Facebook? Fandango Makes It Possible