Archive | September 13, 2015

Big Data and Mobile Data Security: Two bagels and a Cup of tea

Every day you wake up with that same daily ritual: alarm goes off, you get ready, you leave the house. Given your high environmental consciousness (or the lack of a driver’s license), you take as part of your morning ritual to set off on a train to get to your destination. To help you kill time and make your ride more enjoyable you take your mobile phone out of your pocket, connect to the train’s Wi-Fi and complete your journey as most of the people in the train.

What seemed to be a normal day may come with an unpleasant surprise. We often make use of public hotspots to save a few of those megabytes that consume our bill at month end. However, what is often neglected is the security of these connections.

Hannes Muhleisen is just an Amsterdam citizen who happens to live in a boat. In one regular afternoon he was setting up his internet connection when his laptop recognizes the Wi-Fi network very familiar to many of us, the “Wifi in de trein”, as a train passed by. Curious, Muhleisen decided to experiment by setting up equipment to ‘listen in’ into the devices of the train’s travelers (Maurits, M 2015). Would NS provide such an unsecure connection to its customers? With two antennas and some open software, Hannes was set to test. Thus, you are probably wondering: what kind of information was he able to pickup?

  • 114,558 different MAC-addresses over 5 months
  • Unique numbers of devices, time and data
  • Device history of web-browsing and app usage
  • Types of devices the travelers were using (e.g. Apple, Samsung, etc.)

For the additional fun, Muhleisen even created a model evaluating Wi-Fi usage based on the weather.

Weather

Muhleisen’s example is just one in many of the big data security and privacy concerns. However, these extend further than simply individuals’ data security, it also affects society and organizations. Among the top 10 big data privacy risks are (Herold, R 2015):

  1. Targeted marketing leading private information to become public.
  2. The need to have one piece of data linked to another to make sense would make your data impossible to be anonymous.
  3. Based on the previous point, data masking could easily be overrun and reveal personal information.
  4. Big data can be used to influence business decisions without taking into account the human lives involved.
  5. Big data does not contain rigorous validation of the user data, which could lead to inaccurate analytics.
  6. Big data could lead to discrimination of job candidates, employee promotion and more because it is an ‘automated’ discrimination.
  7. There are only few legal protections to involved individuals.
  8. Big data is growing indefinitely and infinitely making it easier to learn more about individuals.
  9. Big data analytics allows organizations to narrow documents relevant to litigation, but raises accusations of not including all necessary documents.
  10. Due to the size of big data it makes difficult to make sure patents and copyrights are indeed unique.

SensitiveDataTheft

All these implications lead to major concerns towards IT security investments, paranoia and conspiracy theories. How to tackle all the ethical implications that come with big data? If one man with two cheap antennas can collect enough data to learn what you ate for breakfast, what can corporations do to trigger behaviors using first-of-line equipment? Whether you are an iOS or Android user, the big brother is watching.

Lilian Shann, 342890ls

Sources:

Marits, M (2015). De wifi in de trein is volstrekt onveilig (en de NS doet er niets ann), [Online], Available at: https://decorrespondent.nl/3166/De-wifi-in-de-trein-is-volstrekt-onveilig-en-de-NS-doet-er-niets-aan-/97373496-af07ccc1  [Accessed: 13 September 2015].

Herold, R (2015). 10 Big Data Analytics Privacy Problems, [Online], Available at: https://www.secureworldexpo.com/10-big-data-analytics-privacy-problems [Accessed: 13 September 2015].

Damato, T (2015). Infographic: What’s threatening your mobile apps?, [Online], Available at: http://blog.vasco.com/application-security/infographic-whats-threatening-mobile-apps/ [Accessed: 13 September 2015].

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The players in mobile payment

In the USA it is already possible to pay with your mobile phone since in 2011, when the Google wallet was released, making use of the Near-Field Communication (NFC) chip in your mobile phone. Thereafter came Apple pay in 2014 and a few days ago, Android pay has been launched as the new and improved version from Google. Google wallet will now only handle peer-to-peer transactions and Android pay will work at the payment terminal. It is expected that the final grand player, Samsung, will come with their mobile payment system at the end of September for US users. Combining Google wallet and Andriod pay would’ve given google a unique differentiating position as Apple and Samsung pay will only facilitate payment terminal transactions. Why they didn’t opt for this integrated app remains unclear to me.
Nowadays, the Netherlands stand at the start of a mass-introduction of mobile payment. Even though all major providers in the US have the intention to provide their payment-apps in Europe, none of them wants to give information on when this will be. It is therefore expected that the largest banks in the Netherlands will take the lead in the Dutch market. Rabobank is currently operating on a small scale and ING is providing a trial version for a selected group and is expected to have an app up for business at the end of this year. ABN AMBRO will follow in 2016.
There are three reasons why Apple is not active in the Dutch market. The first has a practical nature, as Apple pay in the US functions with Mastercard, Visa, etc.. but is incompatible with Maestro which is the system from Mastercard whereupon European cards function. Secondly, Apple does not allow banks to install their payment applications on their specially developed chips. Lastly, it is the earnings model from Apple (and all other providers) which is unfavorable for European banks. It is a necessity for Apple to be a player on the mobile pay market in Europe to keep the sales of their products up.
.apple pay
The European banks have a difficult decision to make. They do not want to have their clients snatched off, but their mobile payment constructions can only be viable if they are based on a profitable business model. Suggestions that have been proposed to counter this ‘problem’ include; a monthly fee for the use of mobile payment, transaction costs for each mobile payment or an overall increase in the tariff of the underlying bank account. Honestly I don’t think (Dutch) customers are willing to pay for this innovation, at least at this point in time.
Recent surveys show that the interest in paying with your smartphone is already fairly disappointing. Apple pay is ruling as the market leader, but only 13% of iPhone compatible users have tried Apple pay at least once. The survey shows that some of the main reasons to not use this method of payment are unfamiliarity and security concerns. A global prognoses shows that at the end of 2015, 5% of the total of 600-650 million smartphones worldwide will be geared up with the required NFC chip and will be used at least one a month. I’m not overwhemeld by these numbers,
It is in the Netherlands still relatively new to pay contactless, let alone use mobile pay. The words of opposition that I hear are mostly safety related. Just leaving the costs and safety discussion in the middle, the adoption of mobile payment comes with an additional hurdle, that is privacy. In technology development privacy is always at discussion and I could see why people are apprehensive to give out all their consumer information. Will we trust Apple when they say they will not store the details of our transactions? If there is a way for both providers and retailers to give their customers some mental security, I believe that one day even the skeptical Dutchies will leave their wallets at home.

Sources:
http://fd.nl/ondernemen/1118400/uw-portemonnee-zit-dadelijk-in-uw-telefoon

http://www.nrcq.nl/advertorial/wat-een-zegen-de-telefoon-bedreigt-de-portemonnee

http://www.pymnts.com/apple-pay-adoption/#.VfXHlZfakiI

http://www.automatiseringgids.nl/nieuws/2015/37/google-probeert-het-nog-eens-android-pay

http://www.apple.com/apple-pay/

Author: R.L. de Vries
Student ID: 361372

Technology of the Week – Spotify and Coursera

The Internet strongly disrupted both the music and education industries, giving rise to new companies with innovative business models, and forcing old companies to rethink their own in order to survive their new competitive landscape. In this article we discuss and compare the business models of Spotify and Coursera with the goal of showing the effects of IT in shaping global business.

Spotify’s Business Model

spotify

In 2006, the music-streaming platform Spotify was launched in response to the changing landscape produced by information technologies. Today Spotify is one of the leading music streaming platforms and counts with over 75 million active users1.

Spotify serves two different customer segments; on one-hand music fans, and on the other advertisers2. Spotify’s value proposition to music fans is “get all the music you want, whenever you want it”2. To fulfill its promise, Spotify requires massive Data Centers and Cloud Services3. Data is another key resource for Spotify, since it uses all data collected on user listening habits to develop “taste profiles” to deliver the “right music listening experience”4.

Spotify builds relationships with key partners in order to provide its services. First, with music labels, which allow access to their catalogues; royalty payments to these partners are one of Spotify’s main cost drivers. Second, with brands such as Facebook, which serve as channels to reach their customers 2.

Spotify uses a freemium revenue model1. Users that opt for the free version are financed by brands, which in exchange are allowed to advertise to users using several ad-formats. Premium users pay 9.99 euros for unlimited music streaming.

Coursera’s Business Model

coursera

Coursera also serves two customer segments; first students and second employers and universities5. It provides value to students by providing access to top-quality education from prestigious universities, and to companies and universities by sharing the data and insights it collects from students. It builds strong customer relationships with students by providing personalized services like course recommendations, and promoting interaction within its online communities.

A key success factor for Coursera is developing relationships with key partners such as Universities, which deliver the content that attracts users to the platform. Similarly to Spotify, fees to universities and are a large cost driver for Coursera. Coursera primarily communication channel is its own platform.

Similarly to Spotify Coursera uses a freemium revenue model. Users can attend to courses for free, but if they wish to get a verified certificate they need to pay. Coursera also makes revenue by selling companies and universities the data it collects.

Comparison between both business models

The following table provides a comparison between the strengths and weaknesses of the business model of each platform.

Spotify vs Coursera

Both platforms have several similarities when it comes to strengths; differences lay mainly in their weaknesses. Both companies are extremely good at providing valuable content for free, using data to engage users, and they have both build strong partnerships with well-established brands.

Authors (BIM2015 – Team 6): 

  • Stéphanie Visser – 407153
  • Job Deibel – 407756
  • Dirk Breeuwer – 329445
  • Colin van Lieshout – 414788
  • Jord Sips – 421144

Sources:

  1. Spotify, (2013). Spotify Explained. [online] Available at: http://www.Spotifyartists.com/Spotify-explained/ [Accessed 12 Sep. 2015].
  2. Chaffey, D. (2015). How Spotify built a $5 billion business with more than 50 million subscribers. [online] smartinsights.com. Available at: http://www.smartinsights.com/digital-marketing-strategy/online- business-revenue-models/Spotify-case-study/ [Accessed 12 Sep. 2015].
  3. Garcia, D. (2013). Spotify: Data center & Backend buildout. [online] Slideshare.net. Available at: http:// http://www.slideshare.net/davidpoblador/Spotify-bcn2013slideshare [Accessed 12 Sep. 2015].
  4. Heath, A. (2015). Spotify is getting unbelievably good at picking music — hereâ€TMs an inside look at how. [online] techinsider.com. Available at: http://www.techinsider.io/inside-Spotify-and-the-future-of-music- streaming [Accessed 12 Sep. 2015].
  5. TED, (2012). What we’re learning from online education.

    Available at: http://www.ted.com/talks/ daphne_koller_what_we_re_learning_from_online_education [Accessed 12 Sep. 2015].

Online reviews: Content vs. Reviewer

Word-of-mouth has always been very important. With the rise of the Internet online word-of-mouth is increasingly important nowadays. Everyone wants to know the opinion of their peer consumers and based on this information they will feel more secure to make the final decision in purchasing a product or a service. But how big is the effect of online reviews? Why is one review more reliable to a certain potential customer than another one? Do we rely on what people say or maybe more on who says what?

Forman, Ghose and Wiesenfeld (2008) have done some research about the role of the reviewer identity disclosure in online reviews. This research shows that consumers in general rate a review as more helpful if the review contains identity-descriptive information, which means more information about the reviewer such as their real name, hobbies, profile picture and where they come from. These reviews will even have the power to influence and increase online sales as well.
A notable fact here is that Forman et al. (2008) show that source information (identity-descriptive information) often appears to be more important than the actual content itself. If the source information matches a certain profile and the consumers can identify themselves with this (matching community norms), this review is more likely to be rated as an interesting and helpful review. Social identification makes people more secure about the review and it reduces uncertainty. Especially when there is an overload of information in reviews, source information appears to be a good way to process all the information and customers will use source characteristics as a heuristic device on which they base their final product decision. Common geography for example will also increase the feeling of similarity with other people and this will increase the positive relationship between disclosure of personal information of the reviewer and the sales of a product (Forman et al., 2008).

The results of this research surprise me in a way that in my opinion the Internet is full of fake accounts, unreliable information about people and imaginary identities (DailyInfographic, 2015). So why would we trust this personal information and base our decision on that? Why would we for example trust a review written by a person who comes from the same city more? Isn’t it really easy to just lie about the fact that you are from Rotterdam?

And what about the reviewers’ privacy? If you see the results of the research, it seems like a profitable business for online companies to ask more and more personal information from the reviewers. But how should the reviewer and consumer feel about that? A lot of different resources will warn you these days to just write everything down on the Internet. According to Forbes (2012) personal lives, businesses and careers can be affected in more ways than you think if you share too much information online. The intention can be innocent but the results can be worse than expected. Even some minor personal details, such as where you were born, can be enough for some people to manipulate you (ITProPortal, 2015).

Finally we can state that Forman et al. (2008) did some interesting research about online reviews and the role of a reviewer. Important to know for all kinds of businesses is that bad publicity is not always as devastating as we think. The opinion of a public community might be even more powerful than that.

References:
– Daily Infographic. 2015. ‘How Many Of The Internet’s Users Are Fake’ http://www.dailyinfographic.com/how-many-of-the-internets-users-are-fake, last visited 13 September 2015.
– Forbes. 2012. ‘Sharing Too Much? It’ll Cost You’ http://www.forbes.com/sites/cherylsnappconner/2012/10/19/sharing-too-much-itll-cost-you/, last visited: 10 September 2015.
– Forman, C., A. Ghose, B. Wiesenfeld. 2008. ‘Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets’, Information Systems Research, 19(3), 291-313.
– ItProPortal. 2015. ‘The surprising danger posting personal information online’ http://www.itproportal.com/2015/03/13/surprising-danger-posting-personal-information-online/, last visited 13 September 2015.

Author: Lizan Bakker

Food delivered by phone, app, website or go to the store?

Truthfully spoken, I started this post because I was hungry and thinking about what to eat. As a student who sometimes forget to do grocerie shopping, the app “Thuisbezorgd” is my savior. For my fellow (future) hungry readers: Thuisbezorgd is an universal app that has an assortment of delivery restaurant. You can order sushi or pizza. Internationally the company is also known as “Takeaway”.

The company has an average of 20 euro spent per meal and every customer orders on average 4 times a year in the Netherlands alone. The FSIN estimates that the revenue of all variants of food order is easily above 1 miljard euro. They also noted that in 2013 640 mln euros was generated on online food orders, 2014 it was 665 and in 2015 it is expected to be 680 in the Netherlands( Smit 2015). There is real shift in the way consumer order food, and online is taking over.

Even though Thuisbezorgd is market leader in The Netherlands and Belgium and generates millions in revenue, the company still makes a few million euro loss. The founder, Jitse Groen, explained that this is a deliberate choice of the company. In the fifteen years  of operating, the company could have make profit, but because of the fierce competition they decided to invest in grow. In three years he expects to make profit. The reason to still heavily invest in grow is that the customers are apparently loyal to the first online food order service they use.

An interesting note is the reaction of the offline competitors. Supermarkets like Albert Heijn and Jumbo already started online groceries shopping and delivery services. Even though it is a starting service and the profit margin is low, these household names are convinced that they need to experiment with online orders and take the marketshare. A few web supermarkets, like MaxFoodMarket, BoodschappenXL, have appeared, but couldn’t keep their operations going

What do you guys think. Will traditional supermarkets be able to dominate the websupermaket era to come. Or will it be an dedicated online supermarket that will transform the landscape? Can you imagine doing your groceries online?

Author: I.R. Anijs
SDID 347015

Sources

Keuning, W., Smit, R. (2015) “Picnic kijkt kunst af van platsoendienst en postbode”, Het Financieel Dagblad, 20 augustus 2015

Smit, R. (2015) “Bestelsites voor eten verkiezen snelle groei boven winst”, Het Financieel Dagblad, 27 augustus 2015

Zuiderveld, U. (2015) http://fsin.nl/blog/wil-de-echte-fooduber-nu-opstaan

Does IT matter? Temporarily? Multiple perspectives

When Nicholas Carr (2003) stated that IT did not create a competitive advantage, he created uproar amongst many. Carr argued that IT became a general, standardized and affordable commodity that can be shared by all competitors. In his opinion, IT investments can be reduced and do not need special attention from higher management (Brown 2004).

Experts, such as HBS professors F. Warren McFarlan and Richard L. Nolan (2003), responded to Carr by saying that IT needs consideration from multiple different perspectives:

  1. Efficiencies and cost savings
  2. Incremental improvement of products, services and organizational structure
  3. Creating competitive advantages

They argue that competitive advantages can be created through IT and although likely to be temporarily, it can be extended through nurturing and evolving. The first two perspectives would relate to Porter’s concepts of operational effectiveness and the third to strategic positioning (Porter 2001).

I was impressed by business models such as FreshDirect. The company used IT as an important component of its entire unique online groceries business model. Their business model avoids paying high rent in large metropolitan cities, and their warehouses serve groceries directly to customers through their purchases on apps instead. Their large success and strong differentiation attracted giants like Amazon, which could confirm Carr’s point (Bruno 2010).

Ten years after writing his article, Carr commented that he got some parts right and some parts wrong (Bednarz 2013).

My view

I related all the different opinions to Geoffrey Moore’s business process lifecycle. It provides an overview of how a process evolves from a differentiator to a commodity (see illustration below).

Featured image

I agree with Carr on one point: a highly profitable IT differentiator will soon be imitated by competitors and become a commodity. In my opinion, this is a property of economics in general, and not a part of IT. A fundamental economic principle is that arbitrage opportunities can only be exploited temporarily, before the rest of the market discovers them. Although these differentiators will disappear, that does not mean we should not chase them. That is the whole essence of what traders are doing for example.

In general, IT can be used as a differentiator when used in combination with other assets for strategic positioning. IT should enable your company to exploit its other strengths, but it should never be solely relied upon. It is an economic principle that arbitrage opportunities come and go.

Dilara Okci

S.I.D: 366348ao

Information technologies and the refugee crisis

syrian-refugee-teen-takes-selfie

The pictures of refugees arriving on European sole and using their selfie-sticks to capture this memorable moment have been a point of criticism and confusion amongst Europeans. The last comparable refugee crisis was in 1945, right after the Second World War. Though the context is similar, the technologies could not be more different. Therefore, reactions to the refugee crisis need to be adapted to the information age, which requires new experts, new strategies, and a new mindset: Instead of criticizing, we should rather look at how these technological changes within our societies can help us solve the crisis.

Like in 1945, the refugees are travelling from one city or country to the next, hoping to find a home and waiting for the ideal circumstances to settle down and start their new life. Though this has not changed, their methods have: WhatsApp, Viber and Skype are used to keep in touch with their families abroad. Google Maps allows them to find a route, which does not require people-traffickers. Foreign-currency-conversion calculators help them to avoid being ripped off by local services. These applications have become essential surviving tools for refugees. Moreover, social media are used by traffickers to advertise their services like any other legal travel agency and Facebook groups like ‘How to emigrate to Europe’ with 39,304 members play significant roles in the refugee crisis. The ease and autonomy these applications provide for refugees and traffickers illustrate a totally new and revolutionary aspect to the smuggling business. Because, that is what you can call it… A business.

Digging into this point of view and attempting to analyze the current situation with existing knowledge and theories in the travel industry, one could argue that the refugees are the demand-side while human traffickers and aid organizations are the supply-side. Consequently, the refugees are the consumers of services provided by either traffickers, governments or aid workers. The competition between illegal traffickers, who are focused on financial profits, and aid organizations, which are focused on the well being of the refugees, makes it an interesting battle. As for all industries, the winner is determined by its competitive advantage and the ability to match supply to demand. So, how can this be applied to the refugee crisis?

Figure 1:

enhanced-9477-1428511576-7-2
In Belgrade, aid workers have already developed an application called “Miksaliste”, which provides refugees with accurate information about services and their costs. Other applications such as “Gherbetna” (Figure 1), which assists the refugees in filling out government forms or “Duburah”, which helps them to find jobs, facilitates the integration of refugees into European countries and consequently simplifies the governments’ tasks concerning the provision of information, procedures and rules and eliminates the need for traffickers.

These examples illustrate how new technologies allow aid workers to help refugees. However, this can also be turned around. The Internet and GPS tracking systems on refugees’ smartphones may allow aid workers to predict the location of refugees and thus forecast the peaks and lows at various refugee camps. At the moment, governments struggle to allocate the refugees and experience extreme peaks, making them incapable to supply enough space and food. Based on the theory of adaptive learning based on the article by Li & Kauffman (2012), we learn that the allocated capacity may change over time but based on new information, the aid workers and governments can react appropriately. Moreover, this information can be passed to the refugees through social media, guiding them to safe and available places in refugee camps.

In conclusion, new information technologies and theories can be used to develop a thorough understanding of the refugees, their locations and their routes, leading to a more organized cooperation between governments to spread refugees evenly throughout countries.

Do you have more ideas on how new information technologies can contribute to a solution of the refugee crisis? Have you hear of other technologies that have become popular for refugees to use when arriving in Europe? How do you think governments should use the technologies to come to agreements or prevent illegal immigrants?

rtx1rb6c-2

Sources:

http://uk.businessinsider.com/refugee-crisis-how-syrian-migrants-use-smartphones-avoid-traffickers-2015-9

http://www.nytimes.com/2015/08/26/world/europe/a-21st-century-migrants-checklist-water-shelter-smartphone.html?_r=0

https://www.newscientist.com/article/dn28137-tech-helps-refugees-make-journey-and-survive-when-they-arrive/

Li & Kauffman (2012). Adaptive learning in service operations. Decisions support systems (53), pp. 306-319. doi:10.1016/j.dss.2012.01.011

Author: Florianne Griffioen, 355919fg

Google Grocery Deliveries Race

Google has started a trial of fresh-food deliveries this month in San Francisco called Google Express. This service is still in a testing form, however if it succeeds than it will be big rival for Amazon’s fresh food delivery service in the U.S.

Google is well known for its search engine web page and many people use Google to search for products and then click away from Google to the business offering the product which Google search has generated. With introducing Google Express, they will try to become direct rival of the biggest competitor where people leave to shop – Amazon.

Source: recode.com

                                                                            (Source: recode.com)

Google Express promises same day delivery because the goods are not shipped from warehouses but are shopped directly in local stores and then being delivered to you.

The key reason for Google to start offering this service is to make Google users spend more time on their webpage and increase the traffic on Google, rather then switch to different retailer’s web pages.

Online groceries are a $10.9 billion industry in the U.S., and the market is expected to grow 9.6 percent annually through 2019, according to a December report by IbisWorld. Google wants to have a crack on this big market and of course along with this market comes the other business which is search generated advertisement which big business spend a lot of money on.

The new business sector can bring Google useful information about its users, which can be generated via the search engine of each user. This information can be used to target efficiently the advertisements, which are the main source of Google’s revenue.

According to Forrester Research for RetailMeNot 84% of consumers use smartphones while in a store, so why not directly shop online? Due to digital transformation of shopping, stores can monitor your in store activity and use this information to target your needs and tastes better. Google wants to get access to this also and wants to be able to use the information from e-commerce interaction taking place through their platform to be able to target search advertisement and tailor search engine better for its users.

The advantages of Google introducing online groceries sector are that the online shopping will be faster and easier without any switching cost and Google has already introduced their own Google Wallet payment system. In the future Google Express wants to partner with startup businesses, which are concentrating on delivery, and transportation services so they would be able outsource the delivery costs.

The main question however is whether people using Google as a search engine will be comfortable to give away personal and search information in return to receive better tailored offers and allow Google to use the information for more personalised experience of its users and search ads.

Let me know in the comment if you think Google is making a good step towards customer satisfaction by introducing the Google Express or if it will fire back and users will not be comfortable with it and dislike the personal information being used by Google?

Author: Natalie Jonasova

Resources: 

http://www.bloomberg.com/news/articles/2015-09-08/google-to-start-testing-grocery-deliveries-this-year

http://www.mediapost.com/publications/article/256143/84-of-consumers-use-smartphones-while-in-a-store.html

http://recode.net/2014/07/06/inside-googles-big-plan-to-race-amazon-to-your-door/

Tech success through diversity – the beginning of a long story

Ever since Facebook COO, Sheryl Sandberg published, her book Lean it has always been in the spotlight that tech companies are not as inclusive and diverse when it comes to their employees or leadership body as about their customers. In the last couple of years diversity in tech has gone from “nice to have”, to “need to have”, to “desperately urgently need to have” and many companies (especially the ones in Silicone Valley) are putting huge efforts in growing their “diversity indicators”.

But how and why did diversity become so important? McKinsey’s ‘Why diversity matters’ report from January of 2015 shows that gender diverse companies perform 15% better financially, and ethnically diverse companies are 35% more likely to outperform the less diverse ones. Their research found that companies in the top quartile for gender or racial and ethnic diversity are more likely to have financial returns above their national industry medians. Companies in the bottom quartile in these dimensions are statistically less likely to achieve above-average returns. A similar research by Gallup outlines that more gender diverse business units have 14% to 19% higher average comparable revenue than less gender diverse units. And with these figures in mind both gender and ethnical diversity turns from a nice socially responsible goal to a change needed driven by business goals. Especially for companies that depend on innovation and build products for a diverse customer base, diversity should be understood as a business priority that leads to understand the needs of existing and potential customers better and thus perform better.

For most tech companies there is a long way to go until they can put the “diverse” stamp next to their brand’s name. Even just looking at the big players we can see that tech is still white man dominated. At Google, blacks and Hispanics each accounted for just 4 percent of Google’s non-technical workforce last year. In Facebook, blacks made up 3 percent of its non-tech workforce in May, while Hispanics were at 7 percent. Despite some of their effort to promote diversity – Apple’s gender diversity has moved just 1 percent, and the number of non-white employees also only moved 1 percent compared to last year. If we talk about leadership positions the picture is even more “monochrome” so to say.

Diversity in Tech
(source: TechCrunch)

On the positive side though many companies are already taking initiatives to tackle this issue, here mentioned are some of the most common or innovative ones:
  1. Diversity Reports: although tech companies are completely data driven when it comes to their business up until super recently we didn’t even had the data about how diverse (or non-divrese) company workforces are. We all know that you will never achieve what you don’t measure so Tracy Chou, engineer at Pinterest started a movement to collect more data about diversity in a call for tech companies to be more transparent. Growing from this initiative last week Slack became the fourth unicorn publishing it’s diversity report after AirBnB, Pinterest and Dropbox. With these reports potentially published every year in the future we will be able to see how companies progress in this question.
  2. Hiring Heads of Diversity: some companies like Yelp, Facebook, Twitter, Square already have a responsible for diversity within the company, others like Asana, AirBnB, Autodesk and Dropbox are currently looking for one. This shows that transforming a companies workforce, mindset and attitude towards multiculturalism is not a side-job although C-level involvement is also an irreplaceably important factor in achieving success.
  3. Working with companies specialised in diversification like Paradigm or Culture Shift Lab: Pinterest recently announced it’s new initiative Inclusion Lab initiative created in cooperation with Paradigm. This start up helps innovative companies attract, select, develop and retain a more diverse workforce.
  4. Building awareness about unconscious bias in hiring and promoting women and people of colour and explore how could this be decreased
  5. Focusing on retention: “It’s not just about hiring diverse candidates; it’s about keeping them. If companies don’t foster a welcoming environment, diverse candidates will be out the door just as quickly as they walked in”. For example there should be surveys to ask employees things like how long they plan to be at the company, how they perceive diversity and inclusion in the company, and if they are aware of opportunities for advancement
  6. Support initiatives aiming at creating diverse pipeline: Often times companies complain that they would hire people from more diverse background if there would be sufficient “supply”, a solution for this problem could be supporting girls and minorities to learn to code and get more involved with technology. There are already many initiatives of this kind like Black Girls Code, Code2040, Hack the Hood or Skool and many others.
With so many opportunities out there to improve gender and ethnical diversity I hope that the “diversity gap” will become visibly smaller and smaller year by year. And on a personal finish note this hope of mine is not just because all of the potential financial benefits but because I experienced the most creativity, the best output and most success when working with people from 18 different nationalities from all colours and background and I wish everyone can have such an experience.

Author: Gabriella Pimpao

Resources:
Lean in by Sheryl Sandberg