AEG CIO David Jones interview – Digital innovation and live disruption

Anschutz Entertainment Group’s Vice President of IT in Europe, David Jones, is focused on helping formulate growth at the sporting and music entertainment organisation, while dealing with the opportunities and threats of digital disruption.

AEG is perhaps best known in the UK as the organisation which redeveloped the Millennium Dome into the docklands entertainment hub it now operates known as The O2. Indeed, the telco and mobile network provider has naming rights until 2027 for the facility which Jones described as “the most popular music and entertainment venue in the world”.

The company’s UK portfolio includes the SSE Arena, Wembley, and the MBNA Thames Clippers service, a defensive acquisition over concerns about the resilience of transport links to its flagship East London venue which were almost solely dependent on the Jubilee underground line. In the CIO’s European remit, the company owns and operates businesses in Paris, Berlin, Hamburg and Stockholm – from arenas and stadia to the Eisbaren ice hockey team in the German capital.

“The big strategic challenge for our business is being aware of opportunities like The O2 elsewhere in the world; getting that level of growth is quite tricky if you are going to continue the model elsewhere,” Jones said.

“One of the challenges our owner sets for the business is where we could go next.”

Live entertainment disruption

Jones noted that digital disruption was both an opportunity and a threat for AEG, with the CIO and organisation trying to identify exactly where disruption will come from in the burgeoning live entertainment industry.

“There is an element of understanding how digital will change what we do and how it can make what we do more profitable or make a better experience for our customers – or ideally both,” Jones said. “And that challenge applies both in what my day job is, but also it’s a challenge for the organisation.

“Actually what are the disruptors to our business? It’s not immediately obvious, because live entertainment is growing all the time and people still actually really want a live experience and young people even more so are really keen.”

Jones joined AEG in January 2008 as Director of IT in the UK, and took on the broader role as EMEA Vice President of IT in 2011.

Senior management influence

Jones sits on the company’s European management team and is privy to the commercial and financial imperatives of the business, which he says provides the technology leader with an important oversight beneficial to his CIO role.

“Often, particularly in smaller companies when you start out in this sort of role, IT directors are reporting to the CFO,” Jones said. “They are usually a level down the organisation.

“They often don’t get a seat on the senior management team. And then you’re in isolation, you don’t really understand necessarily what the commercial realities are of your business and where the focus should be.

“The fact that I get to see the management accounts for the month means I understand which businesses make a load of money and which don’t make so much money, and then can kind of direct my team accordingly so we don’t end up spending way too much time on a bit of the business that’s not actually very profitable.”

Sitting on the organisation’s senior leadership team is also a boost to the technology leader’s executive colleagues, with Jones adding CIOs on executive committees are in a privileged position to espouse the opportunities provided by the digital world to their peers.

Scale and revenue streams

Jones noted that the scale and variety of revenue streams from AEG’s different businesses was a huge benefit to the organisation, offering the ability to pilot projects before much broader implementations, while diverse income streams help negate some of the risks of disruption.

“A lot of businesses in our space don’t have the range of venues and range of previous experience, and they don’t have the depth of knowledge to tap into,” Jones said. “We get the benefit of scale.

“We can pioneer something at The O2 and have the opportunity to take that and try it out in other venues, and hopefully it works really well there as well.”

“Our business has quite a lot of revenue streams; all our income doesn’t come from one place. And it’s more than venues, they have revenues associated with sponsorship, ticket sales, food and beverage, car parking, merchandise. Here at The O2 also the bars and restaurants and other businesses around the arena.”

Another business brand in the portfolio is AEG Presents, previously AEG Live, the live events promoters behind festivals like British Summer Time in Hyde Park and promoters of shows by some of the world’s biggest artists including Leonard Cohen, Carole King, The Rolling Stones, Stevie Wonder, The Who, Taylor Swift and Rod Stewart.

AEG Presents of course provides a very different set of challenges to running a commuter boat service along the River Thames, which Jones describes as “a really interesting, exciting business” with its own operational hurdles. The Thames Clippers service is receiving “a lot of digital innovation and investment” Jones explained, and that a focus on digital streams were a constant across AEG’s portfolio.

“Digital is quite a key part of what we’re doing, bringing in revenue and so on, across the variety of revenue streams,” he said.

Information security

A member of the 2017 CIO 100, cyber security has risen on the agenda for AEG and Jones, who had recently appointed a new security director when we met at the start of the summer. Jones noted that while physical and operational security had always been incredibly important for the organisation, as AEG increased its scale it had perhaps been slower to keep up with some elements of cyber security best practice.

“From an information security point of view, I think partly because we’re a private company and partly because we’ve grown rapidly, we probably didn’t have some of the more enterprise things that a business of our size should have had in place,” Jones said.

“We had a new CIO join the global organisation a year ago and he identified quite quickly that there was a gap in our operation that we didn’t have any real resource in information security. Also at the same time we were identifying this as a potential challenge as well.

“We’re quite a lean business, so to have invested in information security is a clear sign that everyone really takes it seriously.”

Jones said that the new information security director and team were providing a health check to make sure the correct technological practices were happening, while helping with more high-level policies, procedures and strategic business security elements.

GDPR

With the enforcement of EU General Data Protection Regulations approaching in May 2018, Jones said that regulatory compliance would also be an important focus over the next year.

Getting ready for GDPR is a hot topic among Jones and his CIO peers. His biggest concerns relate to the clarity of guidelines and interpretation of the regulators, although with a significant business in Germany where privacy regulations are significantly more strict Jones is confident AEG will not fall foul.

“The reality is probably that many organisations aren’t anywhere near where they should be,” he said. “I think one of the big challenges with GDPR is there’s probably quite a big lack of clarity about actually what the regulations will really mean in day-to-day life.

“We’ve got complexity, we’ve got businesses in three European countries. And of course the benefit of GDPR is that all those businesses will then be conforming to one common set of standards. The reality of course is it won’t be like that because each regulator will interpret things slightly differently.

“To a certain extent we’re already dealing with some of the GDPR themes in Germany, because Germany’s just been ahead of the game on this one, particularly with things like marketing consent.

“There’s quite a lot of due diligence to be done in most businesses. So it’s definitely a focus for us, and there’s a little joint working group between the information security director, myself and a couple of key people from our legal team in Europe as well.”

Earlier this year Yodel CIO Adam Gerrard quipped that he absolutely did not want to be CIO of the first big organisation the Information Commissioner’s Office went after, sentiments echoed by Jones.

“I think it’s going to be an interesting couple of years for us all, and a bit of a roller coaster at times,” Jones said. “People will have understood something one way, and actually it will turn out the regulator’s interpreting it another way, and we’ll be rushing around to catch up with that.

“I think we’re all hoping the ICO will go after the likes of Google and Facebook first rather than smaller organisations, and that will help set some sort of case law.”

Digital innovation

With his broader European remit, Jones hopes to “cross-fertilise” pockets of expertise across AEG and notes that digital innovation is “not something one bit of the business does on their own”.

Jones said that AEG’s mobile app was a good example of a customer-centric digital project, built on a common platform which can be tailored to the needs of the company’s different venues.

As such Jones said that his time was divided up in an equal split between digital projects and security projects, with operational IT bumped down the list for the time being.

“I always say you have to earn the ability to talk about digital projects as an IT leader,” he said. “If your core operational technology is not working reliably, then it’s hard to start preaching about digital to your business.”

This is typical of the CIO role, however, and Jones praises his team of direct reports which enables the CIO to concentrate on the bigger picture and strategic issues. That is not to say though that the role is all big thinking, Jones acknowledges.

“CIOs don’t really talk about it when they are on stage at a conference but I know all of them are dealing with it – is that one minute they’re looking at something incredibly important and strategic, and the next they are dealing with something that couldn’t be any less strategic or important,” he said.

“But the more your day-to-day operation is being run well and you’ve got great people around you, that’s the key thing. One of the most important things you can do in an IT leadership role is make sure you’ve hired the right people, that you can trust them, they know what they’re doing, they’re making good decisions, you’re not having to micromanage, and you’re confident if there’s a query that comes in you can hand it over to one of your team straightaway and know they’ll deal with it professionally and give the right answer.

“Then you’ve got time to focus on these bigger strategic issues.”

From IT director to CIO

Jones’ role has changed considerably as he approaches a decade at AEG, explaining that as IT Director in the UK 90% of his focus in 2008 was on The O2 and IT operations, particularly critical infrastructure, networking security and availability, disaster recovery – and going about building a new UK technology team.

In its European business Jones said that AEG took on a more international outlook, with a plan to become less siloed and more internationally coordinated.

Now Jones said that the strategy is to centralise “as much as makes sense to centralise and leave the local IT teams to deal with the stuff that they are best placed to deal with”. With reports including a director of business intelligence and a director of digital which were not roles that existed back in 2011, Jones said that IT was now “the glue in between” the organisation’s different businesses, departments and geographies.

Innovation in a corporate environment

Trying to foster growth and digital innovation in a corporate environment is a challenge, Jones said, and businesses need to a adopt a different approach to tried and tested approval and project management processes to succeed in the new digital business environment.

“I think there’s a risk in big companies, particularly in the digital space, where if you’re not careful you can kind of encumber your ability to innovate just through internal process,” Jones said.

“Because you’ve got too much internal bureaucracy. Those things can, if you’re not careful, make it harder to innovate. It’s something I talk a reasonable amount with my senior colleagues.

Jones said that “those processes are there for a reason” when you are dealing with large real estate projects and require quite serious Capex approval processes, but warned it could hold organisations back.

“If you’re trying to do something quite innovative in the digital space, you don’t want to take two years planning it because by the time you get to do it, it’ll be out of date,” he said.

Balance

The Internet of Things provided a good example of finding the right balance between innovation and security for Jones. Arenas and stadia have been early adopters of deploying sensors and adding more and more to the building network – dubbed IoT in some circles. Combined with emerging artificial intelligence capabilities, Jones sees significant benefits to AEG’s business in the IoT space.

“We’ve got all sorts of sensors in our buildings,” Jones said. “If you look at our new arenas, pretty much everything is on the network. We’re also looking at technologies that let you measure queue length using cameras and artificial intelligence, or let you count people coming through the doors so we can work out how many people are in a particular part of the building.

“One of the biggest challenges from an information security point of view is that we’re always being asked to stick something on the network in the building. It’s that tension between trying to be agile and innovative but also not losing complete sight of process, procedure, documentation and information security.”

WiFi, Brexit and The O2 retail village

The O2, AEG’s flagship UK venue, hosts over 200 events a year – a calendar which is filled without a resident sports team and as a multiple-use venue. Jones said that WiFi had become an important part of the customer experience at The O2, but admitted there was an “element of disruption that none of us really understand” regarding stadium WiFi.

Pandering to the connectivity needs of its audience did not necessarily satisfy the usual business case protocols such an infrastructure project would usually have to go through, but Jones said that fully-connected arenas in the UK would become increasingly common as people become used to having a good experience in other venues.

“No one builds an arena now without WiFi the same way no one builds a new arena without toilets,” he said.

Jones described WiFi use at The O2 as “staggering”, with more than half of people in the arena now logging on to the stadium WiFi, with a reasonable range from those watching Drake or One Direction, and those at a Barry Manilow concert.

Coming up, Jones and his team are working on a new entertainment district in Berlin, taking over the management and operation of the Friends Arena in Stockholm and working on the new designer outlet village at The O2. Working as the European technology leader in a global enterprise, Jones is also keeping a close eye on Brexit negotiations.

He noted that with businesses inside and outside of the European Union the organisation was in a strong position to understand exactly where challenges could occur, with a particular concern about exchange rate impact and the effects of a weak pound with all financial reports presented in US dollars. Jones also said that with 20% of IT staff in the UK being non-British EU nationals, he was watching closely how the government addresses the issues of EU citizens in the UK.