Common wisdom has it that changes brought by technology can enable organisational transformation only if aligned with a shift in company culture and how business is conducted. Avsharn Bachoo has had to help lead such a project as CTO of PPS Insurance, implementing a cloud-based IT infrastructure at the 78-year old insurance and financial services firm, which he joined three years ago. The South Africa-based company focuses on graduate professionals, and has a client base of more than 200,000. Bachoo has had a two-decade career in the financial services field, having also worked at First National Bank and Standard Bank Group.
As a technology strategist, what advice would you give CIOs undertaking digital transformation?
CIOs need to convince their organizations that building for ‘digital’ goes beyond simply migrating to the cloud or building a new website. Your architecture has to be designed as an ecosystem of social, mobile, analytics and cloud harmony. To achieve this, the underlying tech infrastructure, processes and internal culture all have to change. Most organizations try and predict the future, and then based on those predictions, build a rigid IT ecosystem. You have to apply conscious design. This means using architecture to drive your digital transformation strategy. You need to have clear current state and target state architectures and use architectural patterns. This architectural approach allows applications to be changed without disrupting other applications. It provides a more evolutionary approach where new applications can be incrementally added and applications can be snapped in and snapped out, switched in and switched out, without disrupting the entire ecosystem. That’s how you start your digital transformation.
As CTO what’s the most significant digital transformation undertaking you’ve been involved with?
PPS’s digital transformation initiative is the most recent and the largest IT-related initiative for which I was responsible. I had to transform a 78-year old insurer from a traditional broker-based business into a digital organisation. Becoming a modern digital organisation meant that I had to firstly define digital, as it’s one of those buzzwords that is deep, broad, complex and diverse — often used differently by different people. I decided to use the SMAC (social, mobile, analytics, cloud) framework, and create an ecosystem of social, mobile, AI and cloud harmony. Attributes of this framework included people, processes, cultural changes.
I started by upgrading the underlying technology by migrating to the cloud. I adopted a hybrid multi-cloud strategy, using a combination of SAAS (the application runs fully in the cloud), PAAS (we control the application only) and IAAS (just a virtual machine). My architectural approach meant we could snap in and out of technologies as newer innovation become available. It also meant we were always ahead of the technology curve, strategically, as well as operationally. For PPS, this meant more system stability, scalability on demand, improved project ROI, and elasticity. These benefits then filtered to our customers in the form of more cost-effective products, faster claims processing and more innovations. PPS was the first financial services company in South Africa fully running in the cloud.
Once the foundation was in place, still using the SMAC framework, I started with the analytics component. I then built a platform for product recommendations. Now, unlike most product recommendation engines, I built this engine on cloud using machine learning tools such as TensorFlow & Keras. This engine plugged into the credit bureau as well. Based on individual behavioural history patterns, the engine recommends personalised products to PPS customers.
Adopting this SMAC approach is a cyclical approach, so initiatives are still in progress. As regards the costs, they were in the region of R50 million (US$3.4 million) which isn’t too bad considering the gravity of the task, which was to digitally transform a 78-year old company. I worked with approximately 80 people on this initiative.
Which functions in your business rely on cloud and how do you go about selecting a cloud provider?
We have a multi-cloud strategy, with different applications sitting with different cloud providers, i.e. Google GCP and Microsoft Azure. We are using a combination of SAAS, PAAS, and IAAS. This gives us stability, scalability on demand, improved project ROI, and elasticity.
In terms of selecting a cloud provider, we ran a POC, whereby certain batch production jobs were firstly run on premises, as well as the aforementioned cloud providers. As part of that POC, we assessed compute (processing power), storage, and databases. Based on the POCs, Google was ahead in terms of speed. Google ran 70% faster than on premises, using fewer cores, and less RAM. Google also supported a multitude of open source applications, which is in-line with our strategy of open source technologies. Microsoft was very close, and is part of our multi-cloud design.
What tangible benefits (both business and IT) do you associate with cloud-based infrastructure?
Cost reduction should not the primary reason to move to the cloud. Cost control should be. In my case, we had several strategic projects that required super computing power, and wanted to avoid the capital expenditures associated with upgrading infrastructure for these projects. I also wanted a predictable, opex-based cost model. One of those strategic projects was our analytics project comprising of the recommendation engine I mentioned earlier. The cloud’s scalability and elastic architecture gave me an ideal platform to build our analytics solution that could be used for cross-sell and up-sell offers, as well as for storing and analysing big data. Importantly, cloud provided several open-source toolsets, and models that could be utilised. With analytics projects comes the obvious requirement for more storage capacity, and cloud give us unlimited storage.
With regards to your hybrid cloud strategy, what are the ramifications from both an infrastructure and developer perspective and what is the new cloud technology stack in your organization?
Firstly, we used architecture to drive the employee transition. We have used target state architecture blueprints with layers to drive the cloud transition, and staff could immediately visualise where the changes where happening. We then performed a thorough ‘as is’ analysis of our current applications, infrastructure, skillsets and budget levels to get a better picture of the capabilities that we needed to execute a successful migration to the cloud.
We could obviously see that the need for IT staff to deploy servers and monitor data centres was reducing. With a combination of workshops and courses and online training, we started to reskill staff with cloud skills such as serveless computing, distributed computing and automation skills, microservice, API skills, AI ML and cloud security skills.