Ep. 6: Digital Transformation is More Than NPS – Chris McGugan

The leading edge of customer experience is where enterprises need to be – knowing Net Promoter Score is no longer enough. Join VANTIQ CMO, Blaine Mathieu, and Chris McGugan, SVP Solutions and Technology at Avaya, as they discuss real-time digital transformation and the future of customer experience.

Transcript

Blaine: Joining me today is Chris McGugan, SVP solutions and Technology at Avaya. In addition to his current role at Avaya, Chris holds numerous board and board advisorship seats at tech startups and previously had senior product and marketing roles at companies including Cisco, Motorola, and Belkin. Thanks for your time, Chris. We’re going have some fun this morning.

Chris: Thanks for having me, Blaine.

Blaine: You bet. Well Chris, that’s quite a resume I blasted through there. Please tell us a bit more about yourself, Avaya, and your role at Avaya.

Chris: Sure.

My role at Avaya, I lead the overall organization responsible for solutions and technology which encompasses all the products that we bring to market today. I rejoined Avaya just recently in April of this year after a four-year break in time here at Avaya. I’d spent six years here previously and it ended in 2014. I took some time off in the middle there spending time in the IoT space and private equity. It was nice to come back into a telecommunications company that was in the middle of transformation. It’s definitely an exciting time to be here.

Blaine: Interesting. For those that haven’t heard of Avaya, tell us a little bit more about what its solutions are.

Chris: Avaya has a long, long history stemming back from Bell Labs. If you go back in time, AT&T divestiture went on and Avaya was a spin out of AT&T specifically focused on voice over IP in the contact center space. We are one of the world’s largest manufacturers of enterprise and SMB telephony platforms. We service premise customers, we service cloud customers, and we build the largest contact centers in the world. So pretty much of the Fortune 100, we would call, many of them are our customers today.

Blaine: Interesting. Obviously, you’re seeing a lot of what’s going on at the intersection of business and technology these days. What excites you? What excites you a lot about what’s going on or excites you most?

Chris: I tell you, it’s a really interesting time if you think back. I think what, in many cases, it made the cell phone possible and then the cell phone made voiceover IP possible. Number one, it was changing the expectations of the users and how they interacted with their telecommunications infrastructure.

But, I think we’re at another junction point today where the majority of our users who are interacting with an enterprise or with a contact center are using mobility or their mobile phone. That affords us a very different means of interacting with those users. We can auto identify users. We have the ability to know location specifics, capabilities of their device. We can have a very rich communication session, if you will, between the enterprise, the contact center, and/or that user.

I think that probably is one of the biggest, interesting parts for me because that’s driving quite a bit of how operators and CIOs are thinking about the customer journey or the experience that they’re offering up for how they interact. That rich technology basis of it allows us to transform the way that we interact with each other.

Blaine: And sounds like it’s a very transformative moment in the enterprise communications/telecommunications area. So, it’s a good segue into the general topic of digital transformation.

You recently published a really interesting blog post about the importance of culture and digital transformation and the relationship to the role of dev ops. I’d love to hear more about the thesis of your blog post and obviously it will encourage people at the end to read it in full. But, tell us more about your thesis.

Chris: Yeah! I appreciate that.

One of the things that I think, enterprise software companies are also on their own internal side having to handle transformation today. It is in and around the notion of moving to a dev ops community. Where in the past, we’ve often built software and we delivered it every six months or an update or upgrade or a major release. When we think about how consumers have been “consuming technology”, it’s not been based on that annual release cycle. As soon as it’s ready, with whatever feature or features, are coming out.

I think we’re going to see that transformation happen in enterprises. Some of our largest customers today are trying to determine how best to leverage the dev ops style mentality for their own delivery of enterprise applications. I think we have to do the same thing as a manufacturer in moving in that particular direction.

The blog post this morning talked a bit about culture. I think that’s also a big part of this. Many of my compatriots around the world who build software have moved to an agile develop methodology. Meaning, we can very rapidly bring features into a particular product.

But, it talks a bit about culture. And culture, in an agile methodology from a software developer perspective, really gets into team trust and how well you are ensuring the code complete and the code quality as you develop. When you think about that from a dev ops perspective, now it has to go all the way through the chain into the delivery of that software into the public domain, whether it be in the enterprise or in the big bad internet. That post this morning was talking about the transformations that are required to drive a dev ops style culture in an R&D organization.

Blaine: Very, very interesting and well written.

Actually, since many of our listeners come from the business or operations side, not necessarily from the IT side, step back a little bit and tell us what you mean by dev ops or what that term even means. I’m not sure many might be familiar with it.

Dev ops is unusual in tech. We like to try to merge things together and make things into an acronym if we can. It’s this shortening of development and operations and it really brings together the tail end, if you will, of the development cycle and the delivery and deployment cycle that normally had been two separate entities.

Often in an enterprise, you would have a procured software package that would come into the enterprise that would be validated. There would be user acceptance testing. There would be all this system verification and things that went into play whereas you were looking at an 18 to 24 month window for delivering new software. All of us carry around these little things in our pocket, we never really know, unless you pay close attention, that a new release of your favorite app got pushed to you last night or during the day today because you just expect it.

I think we’re going to see that type of expectation happen in the enterprise as well where we’re not looking for these massive, monolithic upgrades. We’re looking for incremental features segment and growth as we go ahead.

It happens today in any of our cloud-based SAS offers that we have, whether you’re using Salesforce, NetSuite, Oracle, or any of those types of packages are continuously adding functionality into those types of applications without us having to go back and monolithically validate every step along the way.

Blaine: Very interesting. I think this probably touches on to a topic I like to discuss frequently which is – Who should fundamentally own digital transformation in the organization? Is it the IT side or is it more the business or operations side?I think this dev ops concept is related to the answer to that question, actually, so I’d love to hear more of your thoughts on that.

Chris: That’s a great question and I think there’s a lot of blurry lines on the answer to it because, depending upon the type of organization you are, it may be the business driving that, it may be the IT driving it.

But what I would say is that it has to be a very tight partnership between the two because so much of it involves the information technology executives and/or staff who helped deliver that application, if you will, to market. It also has to be a transformation in the business from what they expect, how they expect it, and how they consume it. It really is a partnership between the two of them.

Some companies, especially in a cloud-based company if you think of it as a sales force, or again as any other cloud delivery vehicle, that dev ops organization lives within the product house, if you will; the team who actually develops the product. They deliver it all the way to market. Whereas in those particular entities, the IT organization is providing a platform and keeping the lights on, if you will, and making sure the data center runs. But the application is actually delivered by the core development organization all the way into production.

Blaine: Interesting. It’s interesting how, as businesses keep evolving to be more digital in nature, the notion of IT versus operations blurs.

I was reading a stat just the other day that a quarter of all Goldman Sachs employees are now software developers. So, obviously figuring out how to continue their digital transformation into the future of finance and financial services will be very much driven by the intersection of technology, people, and dev ops, just what we’re talking about now.

Chris: I think you’re right. The fintech space is most definitely highly concentrated today with technology with all the digital trading that you have going on. The decisioning trees that go on behind that from the AI perspective is pretty important.

But I do think the other question that we should always consider too in looking at this is it if we have 100 software developers, how many dev ops engineers do I need to deliver that particular service to market? I’ve seen all types of ratios from 3 to 1, 4 to 1, 2 to 1 in some cases, depending upon the type of service you’re talking about. So, I’d be curious to see how Goldman’s lines up their dev ops to dev ratios.

Blaine: Very interesting. Back on the general topic of digital transformation, since you’ve been Avaya a few times now, have you had any experience in terms of how the company has been able to digitally transform itself in the last few years and what it’s doing? Obviously, without giving any confidential information, but what’s going on in the digital transformation of your company?

Chris: When you think about digital transformation, I think you really have to think about running a real-time business. Leveraging technology to bring it to the front and center in the core of what it is that you do, the digital transformation has many different faces to a company. It can be anything from driving customer experience and journey in how you interact to how you run back office.

And it’s interesting. When I started back at Avaya, one of the core goals I set forth for engineering was moving towards agile and getting that as a core methodology. One of the first queries that came to me was from my HR organization to say, “When you’re finished building that transformation office for R&D, when can we start to look at back office processes here in the company and transform those to an agile process methodology as well?”.

When I think about that whole notion of digital transformation, I think it really starts to play on every part of the business in different ways and at different times.

Blaine: Yeah absolutely. I fundamentally agree. You brought up a topic which is near and dear to my heart: the notion of turning your business into a real-time business.

When I talk to companies about their digital transformation, whether or not they use the words real time, I think that’s often core to moving out of an old model, old processor, or an old application which was more in batch mentality, the way technologists think about things, toward things happening in real time: inputs coming in, actions being taken as they flow in and around the business.

Do you agree? Is that a concept you are touching on?

Chris: Absolutely. When you look at all that’s going on today, this soup between artificial intelligence, IoT, the notion of big data, and analytics to go with all of these pieces, all of that is driving at that decisioning at a much faster pace. So, it is about getting closer to real time. Here we are at quarter end this weekend and I’m thinking to myself, “What’s the quarter close process going to take? How long will it take? Is it instantaneous? Is it going to be a week? Is it going to be a day? What does it look like?”.

I think that, as we’re looking at transforming all of our businesses and continuing to be competitive in the market space, it is driving towards that notion of real time or pseudo real time, maybe. But, it is definitely a core part of all that I think many of our executive teams are thinking through.

Blaine: Absolutely. Another term you brought up a few times now is agility and I think you’re using it mostly in the technology parlance of running an agile development process. But, for overall corporate agility, as I’m sure an element of most digital transformation initiatives again, is there a way for companies to increase their agility overall? What can they do to become more agile not just in their development process?

Chris: That’s a good question. Business processes are one of those things that when you’re setting up a company or you’re looking at how you’re going to run it or you’re building your ERP system, you find ways to automate, if you will, certain business processes. Many of the times, they’re created, they’re built into a tool, and then they’re set in stone.

I would encourage our listeners and my compatriots in the market space to think flexibly about that. So often, we get caught into, “That’s how we’ve always done it. How could you possibly change?”.

The world is rapidly evolving around us and if we aren’t capable of transformation, we will get stuck.I think that there’s not a binary answer to it other than I think we have to always challenge if that’s the right business rule for today.

Blaine: Yeah I think that’s right. And if it’s not the right business rule, then you need to be able to react and change it now, not go through a two year long process. You need to be agile and be able to make the adjustment because the world is moving too fast.

That’s why most disruptive startups and other companies are beating the incumbents, in many cases, because they are able to move fast, able to respond if not in the moment, then in very short order to the market as it’s dynamically changing. The larger legacy enterprises haven’t been able to do that in the past. Although, they’re waking up to that very quickly now.

Chris: I think you’re right but that actually gets back to some of the, while I don’t mean to keep harping on agile, but it gets back to that small team mentality. Go back 10 years ago, it was not abnormal to walk into a conference room with 35 people and you’d spend two hours and you ask yourself, ‘what did I accomplish at the end of that meeting?’.

Now, we’re seeing much smaller teams acting and driving on a particular decision or a topic. I think that focus is something that is really important when we think about businesses in the form of transformation.

Blaine: Absolutely. You brought up a couple of newish technology trends that have been very hot for a while. Let’s dive into those in a little more detail. You brought up A.I. (artificial intelligence), machine learning. What do you think will be the impact of AI and machine learning on digital transformation in general? What’s your general working theory these days on the impact of AI?

Chris: I’ll give a very Avaya-centric view of it because it’s a space that is important to me. I mentioned that we built some of the world’s largest contact centers. When you think about, traditionally, what a contact center has done when a call comes in, it was, ‘I need to know what they want, who can best help them, and I’ll que that call into a particular que, if you will. Generally, it will be language-based and skill-based, not a lot of parameters are going into that decisioning tree.

But, when you think about the amount of data that’s available today for coming up with information about why that person’s calling, what they might be trying to accomplish, and then how I can better handle that particular interaction, now I start to want to bring data sources in from my CRM system. Maybe I want to look at the phone number they’re calling from if I already know it. Have they called before? Are they call a mobile phone? Where the on my web last week?

So, putting together all of those various data points about a particular interaction and trying to drive to the most rapid and positive experience for that consumer is really important.

We recently announced a strategic partnership with a company called Affinityand Affinity allows us to bring a pretty incredible, contextual AI engine on top of the contact center. What I mean by contextual is it really is about how to solve a particular customer’s problem in the most meaningful and expedient manner if you’re trying to muster speed or maybe you’re trying to optimize for upswell, if you’re an insurance company, for example.

The affinity AI engine gives the customer the ability to get very specific on what they’re trying to optimize for. It allows them to tune that AI engine to really drive significant success in their particular environment.

I think AI is going to be a key driver in context of transformation going forward. That’s a big piece of investment for us as we look at 2018, 2020, and beyond.

Blaine: Very interesting. We talk a lot on this series about human-machine collaboration, about these increasingly intelligent systems like you were just talking about being able to enable more effective human workers and actually vice versa: being able to literally collaborate together.

Do you see that as being an important outcome of where you’re going, where Avaya is going towards with the use of AI, or are we fundamentally talking about replacing people and taking them out of call centers altogether?

Chris: I don’t think we’re going to replace people in call centers altogether. There are still things that need a human touch or need an individual to interface with. But, I do think there’s ways we can make those interactions much more meaningful much quicker, pick whatever metric you’re after.

But imagine if you’re doing pseudo real-time transcription services on a particular call. Behind the scenes of an agent in consumer experience, what if my AI engine is building a word cloud of all that’s been said during that conversation and is starting to rank those words?

Now, I can do sentiment analysis. I can determine is Blaine starting to get angry because of this conversation? Do I need to offer to bring a supervisor into the mixture or do I need to say, “Hey, I know you’re having a rough time with this. Maybe I defer a payment for a month or something.” So there’s things we can do in real time to make the experience much better.

I do think that there’s a human element and human benefit to some of these technologies that we can leverage in different ways than we have in the past. Maybe it’s not just about finding the right agents. Maybe it’s about providing an active coaching methodology for that particular agent because if you can marry up that word cloud along with a backend knowledge base, now maybe I’m bringing articles to that agent that they might see on their screen to make your experience better, to solve your problems faster.

Blaine: Right on. That absolutely is the future of the customer experience in call centers. I think ‘enabled by AI’ that makes perfect sense. It’s really great to hear you guys are working on that because the next time I call a major service provider, I want them to be able to give me the optimal experience. I know they’ve got to do a lot of work on that.

Chris: Think about last week when the fiber outage that hit on Friday that affected Verizon. If you’re a call center agent at Verizon and all you know is, “I can’t give you your X1 service right now because it’s down.” But if all of a sudden, on your screen while you’re talking, if the person is explaining that I happened to be in in Atlanta, all of a sudden, what popped up on your screen was the fact there’s a fiber cut between Charleston, South Carolina and Atlanta, you can simply say, “Hey, we’re working on it, but there’s a fiber outage.

That type of a real time data becomes very meaningful.

Blaine: Absolutely. Because the worst experience for a customer calling in is to get no information; to not know what’s going on. When you know the person on the other end of the line also doesn’t know what’s going on, then you get frustrated very fast.

That’s right. That makes perfect sense. Earlier on, you also brought up IoT and you have experience in the IoT space. Maybe not necessarily so much with Avaya, maybe so, but also earlier in your in your career, since you know a lot about IoT, what’s your thought on where we are with IoT and the market today?

Chris: It’s an exciting space. Being a technologist, I love it. It makes my wife crazy that we automate too much around our house, but that’s just me.

That said, I think that connected devices will continue to pervade our lives in a lot of different ways. There’s definite benefits in some aspects to the consumer. There’s most definitely benefits to the manufacturer. And often, depending upon what we’re talking about, the benefit for the manufacturer might be greater.

So that becomes an interesting challenge for us as device makers to it find a natural balance between driving value that the consumer will receive from something new in the market, but also making it so it doesn’t trip up the creepy factor (which sometimes I see devices can) while still providing a unique value for that user to watch or play something else that’s a rip and replace kind of model. That’s one piece of it.

The other piece that I think is important to think about in IoT is that we’ve kind of had some starts and stops already with IoT. I say that in many companies have made an approach or a start at enabling devices in the market. Sometimes they may have picked a particular platform vendor they wanted to work with and they built on IoT Version 1.0.

I think we’re kind of at the precipice of IoT 2.2, if you will, where the second generation of platform providers are coming into market and they’ve really started to hone their offer. I’ve seen a lot of movement around securityin the IoT space which is utterly important. And for device makers, the ability to rapidly provision and rapidly deploy is so terribly important.

Here we are in California or on the coasts of the country. I think our user demographic and our patience factor with technology is very different to what we might find in Middle America or in the middle of any large country.

We have to make sure that devices in the IoT space are absolutely simple to deploy if we expect users to have mass adoption. I think we’ve been very fortunate in the notion of Wi-Fi, for example. But many users, they pull it out of the box, they plug it in, as long as the lights all go green, life is good.

If you start thinking about that user and asking them what their web key is, what their SSID is, and all those little things that I would argue, in the Bay Area, we don’t even think about. But, if you ask someone in St. Louis, they might ask a different question back to you. I think that IoT is stumbling on all those things today.

Blaine: Very interesting. I think your version 2.2 answer for IoT is right on the money and very revealing to me. I hadn’t thought about it that way because I’ve been thinking a few years ago, IoT, especially industrial IoT, was clearly in the science experiment phase. Then, it went through a lot of companies doing POCs.

I think you’re right. It’s past 1.0 now for many companies and many use cases were probably just above V2 where it’s really starting to hit the mainstream. It’s becoming easy enough to create full solutions that include IoT that will let you to sense the data coming in from the devices, analyze it in real time, and then take actions, which is, of course, the most important thing.

I think 2.2 is right on the money. That’s a great insight.

Chris: Yeah I think the other piece that has got to go along with that is companies that want to make smart devices often today are heading at it full steam ahead, running at it like they normally would. “I know how to build a product. I’ve got double E’s on staff. I can do this.”.

When you think about all the disciplines involved in connecting something to the Internet, that’s a very different skill set than I think most of us may have in-house. I would encourage companies who are thinking about this to find a development partner that can help offload some of those pieces and parts off of their staff.

If you think about it, you’re talking about network security. You’re talking about perimeter security. You’re talking about communications encryption between devices and the cloud, the cloud and a mobile device.

Sure, you may have mobile app developers on staff and that’s great and maybe you’ve got some cloud guys. But do you have encryption expertise? Do you have radio frequency expertise? What kind of radios are you using? How are you going to get it on their network? I mean, the list goes on.

I would encourage people to think about this from a platform perspective and really do the core and context comparison of whether or not it’s best in-house to go and develop and build these things or if it’s best of partner and go to market with a trusted provider, so I’ll leave it at that.

Blaine: I agree with that. Although, now you’ve talked me down from version 2.2 to maybe 1.8. Maybe we aren’t up to version 2.2 yet, but I agree with everything you just said.

Let’s change gears a little bit here. Are you feeling or are seeing any emerging trends in technology that people aren’t speaking much about yet or enough yet? Or are we already bombarded with so much technology, maybe there’s nothing left? What’s on your radar maybe a little further out? What’s the next level?

Chris: I don’t know. It seems to fly at you so fast these days. I’m not sure if we’re not touching on it some way, shape, or form.

I think mobility is going to be another area we’re going to have another big push. I think that with some of the new cellular technologies that are that are finally making their way out of the market with things like voice over LTE (which was rolled out last year by the large carriers in America), you combine that together with something called RCS or Rich Communications Services, that starts to open the door for some of the things I talked about a moment ago relative to identity, locating, and whatnot that happens with mobile devices.

I think that’s an area we’re going to see a number of advancements over the course of the next year. It’s interesting that it’s taken this long because many of those functionalities and features were demonstrated back at Mobile World Congress back in maybe 2012. But, it’s taken a while for it to finally find its way into the market which I think is just a function of some of the expense and realities of upgrading our mobile infrastructure.

I think as we continue to see the price of mobile data decrease, the price of the chipsets available to us, some of the sub gig functions that are coming out, all of these things have implications for us in communication and devices and the IoT space, quite candidly. Those areas are ones that I’m watching very, very closely.

Blaine: Well you haven’t said the word 5G yet, but I imagine a lot of what you just said is related to the rollout of 5G over the next couple of years.

Chris: Yeah I think it all reaches back to it. 5G kind of refers more to the radio technology that’s going out there. Much of the core underpinnings of our provider networks are based on this thing that was standardized many, many years ago called IMS.

What’s really cool about that is the way that Avaya builds its enterprise, selecting the infrastructure for its clients, very much follows a very similar model. We’ve kind of taken a very similar approach, if you will, to both session management as well as device provisioning and management in the enterprise in a very similar fashion that you might see running in a AT&T, Vodafone, or Orange, in a cellular case. I think there’s definite similarities in telephony and communications infrastructures that are very unique there.

Blaine: Shifting from what you think the next thing is coming around the corner to almost the opposite question, what is a thing which is overhyped that you’d like to call B.S. on? It can be some aspect of conventional wisdom. It could be tech related or business related, but anything that strikes you as you’ve just got a call B.S. on this?

Chris: I don’t know if I’m going to call B.S. on it completely, but I think the hype around blockchain is an interesting one at the moment.

If I can find the picture, I’ll it to you. You can post it. I was driving along a Lawrence Expressway about a year ago and there was a spray-painted billboard for block chain. I thought it just kind of crystallized where I think the technology was at that point. I think we’re still looking for the problem statement.

It is very intriguing technology. I think it’s very cool. I don’t think we solved what we’re going to do with it at this point. As a technologist, I’m all for finding the practical application of something that we can monetize and do something useful and unique with. All the cryptocurrency stuff that’s going on, I don’t know. Maybe I’m old school, but somehow cold, hard cash works for me. I don’t know what else to say.

Blaine: I’m totally with you. I think, again, just for our business listeners that might not be too up on the terminology, blockchain is a core technology of a distributed database, a ledger so to speak, I think you’re right. There are some interesting use cases starting to evolve and be thought through and are all working at the sort of science experiment, POC stage right now. Bitcoin and the crypto currencies are something totally different. That’s based on the block chain technology.

I was just at a technology conference in London. It had three themes: AI, machine learning, IoT and block chain. The block chain third of the conference was 90 percent crypto currency vendors, not actually technology vendors, in the classic sense. I think blockchain is actually suffering from a bit of hype right now around Bitcoin price run ups and cryptocurrency B.S. But that’s not to say the core technology behind blockchain I think will end up coming up with some interesting use cases in the years ahead.

Chris: Absolutely. I think you hit the nail on the head there that it’s a bit tarnished by the fact that it’s major published use case today is in cryptocurrency. I think you’re spot on. It’s unfortunate that it’s been tarnished or harnessed first by this dubious currency play.

Blaine: There you go. All right enough said about that.

So let’s wrap it up. Given your very vast experience in your current role, any key takeaways or tips for more of the business leader who is trying to figure out how to drive a real-time transformation in her business?

Chris: It’s hard to have a generic tip that goes with that. Interestingly enough, I’ve seen a lot of companies start to really start talking specifically about customer experience.

It’s not a net promoter score problem anymore. It really is about the brand extension and the customer experience. That’s how I would encourage folks to think about it. If I’m honest with myself about how we bring products to market, I first start with user experience. The user experience, or UI, is where every core new development starts and then we bring development into it.

We want to first identify the user experience we’re trying to drive towards, and then wrap a product underneath it. Where in many cases, you became second thought. I think that’s often what’s happened to us in the year’s past with customer experience. We went after the business problem and then went, “Oh. How do we make sure that customer fits in this particular journey?”.

That would be my piece of guidance: really consider the consumer, the customer, whatever you call your purchasing arm or your purchaser, if you will, of your goods services. Really understand the journey that you’re trying to drive for them and what that experience through that journey will be.

Blaine: Yeah right on. I love what you said. NPS is not enough. Net Promoter Score is not enough anymore. Focus on the user experience. Use these enabling technologies to build that amazing user experience in real time, which is of course what customers want. I think that’s great advice.

So that actually wraps it up. Chris, thank you so much for joining us today and for this great conversation.

Chris: Not a problem. I enjoyed it. Thank you.

Blaine:All right. And for those interested in hearing more of Chris’s thoughts, you can follow him on LinkedIn and Twitter @cmcgugan. And you can reach out to me or VANTIQ anytime at real time at VANTIQ.com.

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