Increasing value while driving down costs can be an elusive objective for many IT executives, but not for Andy Nallappan. As VP & CIO of Broadcom, he’s delivered disruptive innovation to his company’s 18,000 employees at over 80 locations worldwide, and he’s done it with an IT spend that’s just 1% of revenue, while his industry’s standard is as high as 3.5%.
Utilizing automation, AI, & other technologies, Andy has focused relentlessly on a delivery model of faster, cheaper, better. In the process, he’s “liberated” his 800 IT employees from doing mundane tasks so they could contribute to Broadcom at a higher level. On this episode of Intelligent Automation Radio, Andy shares with us the challenges of IT keeping the lights on while integrating newly acquired companies, the most important skills needed to effectively automate IT operations, and why automation needs to be treated like a journey rather than a one-time thing.
Guy Nadivi: Welcome everyone. My name is Guy Nadivi and I’m the host of Intelligent Automation Radio. Our guest on today’s episode is Andy Nallappan, Vice President and CIO of the Global Information Services Division at Broadcom. And for those of you not familiar with Broadcom, they’re primarily known as a chip maker with about $21 billion in annual revenue. Broadcom is one of those companies whose products you almost certainly use, even if you don’t know about them personally. For instance, they are Apple’s sole provider of chips for wireless charging, Wi-Fi, Bluetooth, and GPS capabilities. And they have been in all new iPhones sold since 2018. One analyst estimated that for every iPhone Apple sells, Broadcom earns $10.
But of course Broadcom sells its products to a lot more companies than Apple, and they use automation extensively to achieve some extraordinary efficiencies in their internal operations. And that intrigued us. So we invited Andy to come on our show and talk with us and share his insights. Andy, welcome to Intelligent Automation Radio.
Andy Nallappan: Thank you, thank you, Guy. Glad to be here with you.
stating that the next generation of IT will be, “More nimble, flexible, mobility-based, and consumer oriented.” What did you mean by that, particularly the consumer oriented part?
Andy Nallappan: Sure, sure. You know, Guy, we live in a time where the consumers are dictating the technology trend. Which is way different than what it used to be when enterprises drove that technology trend. The major traits of that consumerization is, is simple, scale, and secure. With a faster, better, and cheaper delivery model. So my point is, it’s time for enterprises to embrace those traits and delivery model of the consumerization in enterprises. With the simple, scale, and secure, with faster and better and cheaper delivery model to make ideas more nimble and flexible and mobility-based. That is what I mean by consumer oriented.
Guy Nadivi: I read in that same Wharton Business School article, that the average IT spend in the hi-tech electronic components industry is 2.5% to 3.5% of revenues, but you’ve kept Broadcom’s costs close to 1%, and you’ve just hit a target of less than 1% in two years. What are some of the ways automation in technologies like AI and machine learning enabled you to do that?
Andy Nallappan: Yeah, that’s a good point, Guy. I take a lot pride in driving down the IT cost while delivering more. While there are so many strategies and culture and initiatives with the, drive the cost down. And there is automation and technologies like AI and machine learning, also one of the critical component of that. This automation technology, it helps to deliver and manage the repeatable tasks. Whether it is a help desk support call, IT service or infrastructure monitoring, completing a service request, like provisioning or de-provisioning, and the business process tasks at the lowest possible costs with the highest quality, and also it scales quickly and seamlessly there. These things, it helps to control our IT operational cost in two ways, I would say. One is eliminating the task itself. We call this a work avoidance or a reduction of the work. The second one is the cost of delivery. Because of this consistency in high quality and in automation, the cost of delivery is lower than even you were outsourcing and offshoring them.
The automation really adds value when you have the scale and those standard offerings, and it has provided great synergies in economy of scale when we started acquiring companies and integrating them into our main enterprise over there. So M&A synergy was much higher due to these technologies.
Guy Nadivi: You’ve been outspoken in liberating your 800 IT employees from performing mundane tasks like monitoring. Can you please tell us about some of the things your employees used to do, versus the ways they’re contributing at a higher level to Broadcom now, thanks to automation?
Andy Nallappan: Sure. This is one of my very favorite taglines, I always say, “Liberate IT from their day-to-day mundane tasks and firefighting, so that they can focus on more value-add stuff for the corporations.” In IT, right, it’s a thankless job. Every day you get so many alerts, and so many P1 tickets, and you’re fighting day in, day out to keep the lights on all the time.
If an organization wants to be an innovative organization, then there needs to be focus. You can’t have it constantly not innovate while doing M&A integrations year after year, and fighting fire all the time to keep the lights on and bright. Unless otherwise you find ways to liberate them there. So what we did is we found ways to liberate my team from those stuff of monitoring, P1 tickets, escalations, and all the stuff, so that they can focus on the critical and more meaningful and business-impacting initiatives.
There’s a few of them. One is the… Like you said earlier, how to keep the IT spend lower than the 1%, while providing more capabilities, enhancing employee experience, empowering employees by exploring the new technologies and solutions available in the market, and being frontier in adapting those technologies and solutions there.
The second one is also, spend more time with the partners in the functions and divisions to understand their pain points, and focus on simply find their processes and also find cost-effective solutions for them.
The third one is, since we’ve been doing a lot of M&A integrations year after year, find ways to speed up that integration to deliver it faster and faster.
And also, we are venturing into a software business now, which is a different business than the hardware chip design business. So we enable our business to embrace that software business by adding more capabilities over there.
So these are the things, my team is able to focus, by liberating them from their mundane tasks of monitoring and firefighting escalations on those things, moving to either automations or offshoring and outsourcing it so that I can have this… My team cannot day in, day out, focus on these stuff there.
Guy Nadivi: From a psychological and cultural perspective, how difficult was it to persuade resistant staff to let go of the old way of doing things, so automation could take on a bigger role, and so could they?
Andy Nallappan: It all depends, right? It’s mostly, it’s a mindset and culture there, you know. First of all, the organization and the leadership should believe in that before we get into the individuals. And also we would educate the individuals the need and the benefits of automation, not only for the corporation, but also for the individuals.
Automation is not new to the human being. Automation keeps evolving and extends itself into the areas as the need arises over the years there. In my perspective, we can’t avoid automation, as it does eventually help the human race to move up in their life and in the quality of life too. Human race has dealt with many automations for decades and decades and decades, like in farming, transportations, constructions, manufacturings. It’s not new. And just it has come to the technology now, in IT and other business classes.
So what we have done the right way is, we go and educate and convince the resisting individuals, and we use all this to influence them. And since everyone is talking about these automations and we are a high-tech company, and we have a lot of presence in Silicon Valley and big cities there. You know, people are really aware of these automations, and AI and ML and chatbots, you know. So it’s much easier to go and convince now than a few years back. So, we try to educate them and enable them, and make them understand the need. And this is something you can’t avoid. You can’t run away there, you need to embrace it there.
And so, once they start doing it… And we also help them, to retrain them, and their skill levels, their value-add goes up, so they become much more happier there. So it’s just that you have to break that ice initially there, by doing all this, showing how important to the corporation and how it can help them to maintain things up. And focus on it.
Guy Nadivi: Chatbots, or virtual support agents are playing an increasingly important role in the automation of IT operations by enabling end-user self-service. What do you envision will be the role of virtual support agents in IT operations by, let’s say, the end of 2020?
Andy Nallappan: You see, my vision is that every corporate employee will have their own, personal IT assistant. Of course, it should be virtual, you know. You can name it any way what you want to name it. But the important thing is, it will know more about the employee than the employee, himself or herself, knows about now. The IT assistant will become very smarter and smarter, and will start resolving issues before even the employee notices it. The thing is, employees won’t even have to read the tons and tons of emails that comes up about ITs, about outages, or downtimes or trainings, et cetera there. It will provide, the assistant, you know, the informations when the employee need it. And it will train you when the employee needs it there.
It also… It will give you the right help, directing to the right resources, whether it is a human being or other resources, without having to wait, or to call, or go through the menus after menus and selecting or filling out forms there. It will not only improve their productivity, but also will help to secure the enterprise better and also it will make the work more enjoyable. They will also be more collaborative also. It will improve the productivity at the same time too.
I call these the smart assistants in the future. Will be really at your fingertip all the time, whenever or wherever you are, and whenever you need it. And it will be very proactive as well as predictive.
Guy Nadivi: Andy, what skills have you found are most needed to effectively automate IT operations?
Andy Nallappan: In my perspective, the most important skill to effectively automate IT operation is process knowledge. It is whether it is business or IT there. I would say that techno-functional is the best skills to have. Apart from that, the ability to identify the use case and simplify that, and use that right technology to automate that particular use case over there.
Also, the ability to drive the automation towards the desired business outcome, which is very important. The desired business as well as the end-user outcome there. It is my opinion the skills are not the typical or traditional IT skills. It’s more of a process… Business process skills, end user-specific skills there, and also more focused on the outcome-driven skills.
Guy Nadivi: You’ve had a lot of success with automation at Broadcom and that leaves me curious. What kind of organizational changes are needed in order for automation and AI to succeed in the enterprise?
Andy Nallappan: There are many ways we can… Many skills we needed there. So, obviously, it’s all based on the business outcome, on the process there. You need to identify… Have the right leaders to really drive this. And, like I said earlier, automation is not just technology, it is a culture change too. So, we need to decide what’s the right staff setup. Now, one of the things you need to make a decision is to have either, there is a horizontal function, or a group of people which drive this whole automation, or you have embed it into each functional divisions, whether they are IT organizations or not. Or you have the horizontal team work with each one and then work will now gain that process knowledge and automate it. So, based on the size and culture of your company there.
And also, the automation requires lots of marketing and training. Adoption is very critical. If there’s no adoption, there will be big failure there. So, it’s good to have those kind of skills to market this and train and improve that adoption is there.
And automation is not a one-time thing. It’s incremental and it’s a journey. So, it’s important to have that strength and agile methodology so that the benefits come in incrementals. And so to have the skills to follow that strength and agile processes and methodology there. And also to have the skills to… Familiar with the data, and the knowledge of the data or the patterns. And the ability to think outside of this IT technology framework, which all this is critical skills.
Apart from all of this, what’s an important thing in the organization is to have a trustworthy leadership. And a partnership with your functions and the divisional stakeholders, so that they can go and influence them and they can drive the adoption and make the automation more successful.
Guy Nadivi: So, once automation and AI are implemented in the enterprise for IT, what is the best way to persuade other enterprise leaders to implement it in their domain?
Andy Nallappan: See, once you’re successful, and meaningful automation is delivered, with a clear business outcome, then obviously you have earned the trust to have a discussion with your peers in the organization there. So, that’s the basics. Then you need to approach them with a proposal to solve their business problems. You know, you need to be perceived as a helper first.
Also be respected for the knowledge you have on their problem, and that’s how the automation’s there. So, it is better to develop the relationship with the movers and shakers in that organization. And go with them as a joint proposal to enable them to either improve their SLAs, if there’s a customer-facing organization there, or even internal. And also help them to improve their bottom line or top line or productivity there.
So, it’s basically… You need to go and have a seat with them there and influencing and talking in their language. And giving hope that, “I’m going to impact positively your outcome, your SLAs, your top-line.” And that’s how, you know… That’s the important way to go and extend this automation, expand to the other parts of your organization there.
Guy Nadivi: We’ve discussed how to succeed in the enterprise with automation and AI, but I’m curious, what kinds of setbacks and failures are you likely to experience when implementing automation and AI?
Andy Nallappan: Some of the things are the adoption rate… If it is not done right, the adoption rates and effectiveness could be one of the setbacks. And also, to get the support within and also outside of the organizations there. And also the time it takes to have a meaningful… Very explicit, meaningful ROI of the automations there. And sometimes the complication of the process… Make a wrong choice of the use case, which is not the right candidate or suitable for the automation, ends up in that not delivering the desired outcome. And also, sometimes you have competing initiatives. Either something, the same thing as somebody else is doing, in other organizations, if it’s a big organization there. And that might also be a setback. So, those are a few things there. And also, last but not least, is the wrong choice of tools and technology and the use case.
Guy Nadivi: Speaking of ROI, is there a single metric, other than ROI, that best captures the effectiveness of automating IT operations?
Andy Nallappan: Yes, there is. In my opinion the single metric is the business, or end-user outcome. That is the metric there. But what is that? So, for each use case or process could be different. It could be a service up-time, or it could be a service completion time, or the quality of the tasks, or work reduction, or work avoidance, or cost savings. So, it depends on the business process. But it’s all has to be an end user or a business focused ROI there, not an IT-focused or a technology focused.
And it has to be a hard cost. That is better than, more than the soft cost there. You should be able to quantify it and be able to come up with a convincing hard dollars. And that is possible with automation.
Guy Nadivi: Andy, what should enterprise executives who have never dealt with AI and automation, know before deploying it?
Andy Nallappan: I think, the first thing is define the purpose. “Why should I automate, or should I? And what is in it for the corporation?” That is the very first thing. Next is, go and identify the right use case. You want to start with the right foot. The right process, whether it is business or IT, to automate, so that the outcome is meaningful, easily explainable there, so that it can gain some traction and trust and credibility there.
And third is, to get the sponsorship. The sponsorship and leadership for the automation, which is very critical, so that everybody [inaudible 00:19:31] to you.
And last but not least is… Like we talked about this metric. Having a metric on the outcome and status of the automation there, and measure it continuously there. It’s a journey and it’s not a one-time thing there. Many automations don’t deliver the desired outcome, and not every automation is the right one for every corporation. So, it’s very important to have that metric and continuously monitor and make sure that it is delivering what it’s supposed to.
Guy Nadivi: For the CIOs, CTOs and other IT executives listening in, what is the one, big, must-have piece of advice you would like them to take away from our discussion with regards to implementing automation and AI for IT operations?
Andy Nallappan: Okay, I think what I would say is automation is real and beneficial. Because automation has been there for a long time. A lot of people say it is expensive, it’s costly, it’s not going to be easy to do, no benefits there. We have passed all that. Now, automation is not that cumbersome, it’s not that hard. It is easy. It’s real. It’s beneficial.
And it is not really that capex-intensive, you know. You can do a lot of automations inexpensively. There are many choices too. There’s not one thing, there are a lot of choices and technologies available. But one has to be very careful about what use case you choose to automate, and what technologies and solutions you choose. Everyone nowadays calls everything as AI, ML or data science or automation there. So, be smart and figure out the right automation for your corporation and culture.
Guy Nadivi: Excellent advice. All right. Looks like that’s all the time we have for, on this episode of Intelligent Automation Radio.
Andy, thank you very much for joining us today and providing some fascinating insights about what AI and automation are doing for Broadcom. It’s been a pleasure having you as our guest.
Andy Nallappan: Thank you, it’s been great talking to you. I enjoyed the conversation with you, thank you. I hope it has been useful for everyone who is listening to this conversation.
Guy Nadivi: Andy Nallappan, Vice President and CIO of the global information services division at Broadcom.
Thank you for listening everyone. And remember, don’t hesitate, automate.