At the beginning of March, I started to work with Citigroup as strategic advisor for innovation and technology. This is a part-time position, which I will take on while continuing my current activities with IBM, MIT and Imperial College.
When I retired from my full time position at IBM last May, my intent was to continue working pretty much full time, but instead of doing so at one company - as I had done for 37 years - I wanted to now do so by working closely with a few different institutions. In particular, I wanted to split my formerly one-company job roughly three ways: one third with IBM; one third with MIT and other universities; and one third doing something entirely different. In addition, I wanted to continue my participation in various boards and committees.
The first two thirds of this equation has worked out very nicely since I started my post-retirement life in June, perhaps because they were essentially a continuation of activities I was already involved in. The final piece of the puzzle took more time, but I believe it is now in place with my new relationship with Citigroup.
There are multiple reasons why working with Citigroup is appealing. At the top is innovation, and in particular, how technologies are transforming whole businesses and industries. This was, after all, the subject of my recent graduate seminar at MIT, which I will be offering again this coming Fall.
It is one thing to talk about how disruptive technologies are transforming an industry - it is another to be part of that industry, see it happen from the inside, and get personally involved in helping to formulate the proper strategies to take advantage of the disruptive transformations taking place all around us. So, when the recently appointed CEO Vikram Pandit offered me the opportunity to come work at Citigroup - it did not take me long to accept.
My own professional career at IBM has been primarily marked by helping to bring disruptive innovations to market - like parallel supercomputing, the Internet, Linux, Grid Computing, and more recently, Services Sciences, Virtual Worlds and Cloud Computing. The IT industry is what I know, and where I have worked for the last almost forty years.
In that time, I worked closely with a number of clients in various industries to help them take advantage of new technologies for their own transformations. But now, I have an opportunity to do so from the inside in financial services - perhaps one of the fastest changing industries in the planet.
The world's attention has been focused on the carnage - if I may call it that - that the Internet and digital technologies continue to bring to the media and content, telecommunications, and consumer electronics industries. Their fundamental technologies have gone from analog and physical, to digital and virtual in the last decade, causing everything to change, particularly their business models.
But, there is another very important technology that has been transforming from analog and physical to digital and virtual - money. This is of course not new. Credit cards and ATMs have been around for decades, both enabled by the rise of information technologies. The Internet revolution of the last fifteen years has brought us online banking and online trading. Just about every survey of IT usage by industry ranks financial services way up there among the leaders. You would think that the financial services industry is through with its IT-based transformations - but in fact, this transformation is about to go into warp drive over the next few years. The reason is the explosive growth of digital mobile devices.
We are surrounded with digital paying devices of all kinds: EZ-pass and other road and congestion payment schemes in our cars; Oyster cards in London, EZ-link in Singapore and many other similar smart payment cards around the world; and of course, a multitude of credit cards, which we increasingly use instead of physical money everywhere.
The rise of mobile devices - cell phones, Blackberrys, iPhones and the like, could in principle converge all these various payment devices. After all, as the music industry has been painfully learning, once your product is digital, software and the Internet will unleash a plethora of innovative ways of dealing with your previously analog product.
The digital payment battles are on. Every vendor in every affected industry will be tempted to try to impose their own proprietary approach to mobile payments. But, as history has shown with information technologies and other successful technologies that became ubiquitous in society over the years, such an approach does not work - at least for long.
You have to start looking at the problem and opportunity from the users point of view. And most of us would prefer not to have to own and carry 57 different devices to deal with the various electronic payments in our lives. It may not be just one - but the number of different payment devices we all would prefer to deal with is likely to be counted in single digits.
I can imagine three, for example: my payments-enabled mobile phone; a credit-card size smart card; and perhaps something in my car with a built in transponder, although the mobile phone can probably do that as well. I may have forgotten a few additional ones here and there, but say - a half dozen such devices is not a bad number to aim for. Needless to say, these devices have to be global in nature, and work everywhere.
Do we know how to do this? Well yes - the Internet, industry standards, and open source technologies have shown the way. There is no technical reason why we cannot come up with a set of standards and open source implementations of those standards that would work around the world and could be embedded in mobile phones, smart cards and everything else involved in payments.
As we well know, the fierce battles will not be centered around technology, but around business models. In particular, people often forget that disruptive innovations are truly disruptive. Whole industries will be radically transformed. Many companies will fight the changes instead of trying to figure out how to embrace the inevitable innovations, and build their new business models around them.
One of the appeals of working with Citigroup is that it is a very global company, doing business in over 100 countries around the world. For example, just in my first week on the job, Citi and Korea’s SK Telecom announced the launch of Mobile Money Ventures, to jointly develop a comprehensive mobile phone platform that will enable the development of financial service and technologies to consumers around the world.
The US and US-based companies are not the leaders in mobile technologies and applications. Those are happening elsewhere around the world, so it is nice to be involved with such a global company in addressing the technology and innovation opportunities.
This is all a big challenge and will require that I quickly learn lots of new things I don't know much about. Luckily, I am surrounded by smart people already working on these problems who are teaching me the ropes. This is truly a very exciting opportunity that I am looking forward to.