CIO Leadership Live at the CIO100 with Max Chan, SVP & CIO, Avnet

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Welcome to CIO Leadership Live.
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I’m Lee Renick, executive
director of CIO communities for CIO,
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and I’m thrilled to be here today
at the CIO 100 and Symposium and Awards
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with Max Chan, SVP, CIO of Avnet.
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Max, thanks so much for joining me
on the show today.
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I really appreciate it.
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and congratulations to your award
winning CIO 100 award of your project.
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So could we kick off first by
maybe you could introduce yourself,
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tell us a little bit about your role
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and then maybe tell us a bit
about the project.
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Absolutely.
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First of all,
thank you. Thanks for having me.
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I’m really, really proud of the team.
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Right.
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This is I think this is the fourth award
that we have won in the last five years.
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So congratulations.
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Very happy with the many projects
that the team are doing.
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And obviously they’re delivering business
value and a lot of innovation with it.
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as CIO, at Avnet, and maybe
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let’s talk a little bit about Avnet
because it’s not exactly a household name.
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Okay.
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We are one of the largest,
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technology distributor and, supply
chain solution provider.
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we sit in the middle of a technology
value chain.
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And the interesting thing,
that what we do is that we offer,
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designed supply chain and logistic
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capabilities, expertise to, our customers
to help them with the entire technology
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lifecycle from concept to design,
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new product introduction to go to market
all the way to repatriation.
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Right. The management.
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So we always try to also talking
about how we can actually,
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bring a customer in
and maybe talk about customer.
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Interesting thing about us.
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as distributor. Right.
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We have both the upstream
supplier partners,
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that we serve as well as the downstream
customers.
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Right. Actually gets the product ready.
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Yeah. Right.
so we always pride ourselves.
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So being able
to bring in any of our customer
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into any part of the lifecycle
and then scale from there. Wow.
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So very exciting.
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and, obviously as a CIO,
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I’m responsible for not only the, it’s
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spark, for, for the organizations
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I also run the digital transformation,
the digital strategy.
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and I also, manage,
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a shared company, within our portfolio.
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that deliver solutions to our customers.
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Oh, well,
within the space that we, we deal with.
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Right.
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So you’re really then
acting in both areas, really connecting up
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that technology base for for the company
right across the board.
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That’s right.
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Congratulations on the award.
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And, we were just chatting
before we started recording about
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the importance of data
and you’re asking me, what do you hear?
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And I said, well,
what I’m hearing is that a lot of,
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the CIOs I’ve spoken to during Covid
put a lot of their data into the cloud.
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You know, that was a solution
for that time. That made sense.
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But then now they’re really evaluating it,
and they’re looking at those costs
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around cloud where they need
their most important data on the edge.
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And a lot of saying
now they’re looking at repatriation
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or bringing bringing their cloud back on
or their data, excuse me, back on prem.
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So we’d love to hear your thoughts
about that.
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You know,
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lucky thing,
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is that we’re not 100% in the cloud,
right?
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and we, we are facing the same
challenges that everyone is in cloud.
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If you don’t manage it
well, it’s going to be very expensive.
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we we learned that, early
on when we started our journey,
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our transformation, to the cloud and,
and and without putting in,
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the proper FinOps, capabilities
and overall governance, etcetera.
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what we found is that, oh, my God, the,
the, the,
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the costs really skyrocketed.
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and later we,
we actually put that discipline
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around it, implement this kind of looking
at how we can optimize.
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Now we are getting it to the right level.
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But like I say
earlier, we’re not 100% in the cloud.
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We are focusing on use cases that
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truly elaborate cloud
enabled capabilities.
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Right.
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And we bring we prioritize those workload
and bring that to the cloud.
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Right.
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the rest of it is really a matter
of what it makes sense.
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Right? some of it
we still keep, internal.
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In fact,
as we are talking about generative
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AI and large language model, right
when we started,
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just like everyone else, we leverage what,
providers, offering in the cloud.
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But we all knew from the very beginning
with the cloud experience and also what,
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the, the, the providers are doing,
it’s very expensive propositions.
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Yeah.
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And, now that we have gotten
a few use cases in production,
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we have been able to, starting to evaluate
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maybe some domain specific model.
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Yeah. Doesn’t have to sit in the cloud.
Right.
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That’s
where we are starting to dabble into,
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in-house hosted,
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manage, small language
model or domain specific language models.
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and this really is in line
with many of the research
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that I think IDC has published as well,
thinking about, hey, with the compute,
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with the power over the cooling
and also the sustainability agenda, right?
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Yeah.
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The cloud proposition with AI is going
to be very expensive for every one of us.
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Yeah.
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And and trying to rationalize
that is really very important.
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Yeah.
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And I think, you know, I was just
thinking about this as you were speaking
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because you’re working on prem
and you’re still you.
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I’m, I’m assuming you have teams
to support that you can still evolve
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your on prem cloud storage
or your on prem storage
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so that you’re retraining your staff
or upgrading your staff,
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you know, and training them
and making sure you have
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the proper skills to manage it there.
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So I think that’s probably
it feels very agile to me, in a sense.
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Right.
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From a business perspective, you know, is
is both agile and it’s also a necessity.
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Yeah. Yeah.
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Because as far as a distributor is
concerned, we are a low margin business.
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Right? Right.
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And if you are thinking
about it, it’s actually
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is as
much as 25% of your operating income.
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Yeah. percent.
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That’s a lot.
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Yeah, yeah, yeah.
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So, so we have to look at how we do it.
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in the agile manner,
we are able to react to the, the,
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the business need and and also,
be proactive.
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Yeah. You know, providing
what the businesses.
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Yeah.
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Is requiring and there’s no other way,
than to really embrace it ourselves.
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Train trained internal team.
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Sounds.
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Really
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sounds like you’re doing you have all
the right approaches in place.
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Congratulations on that.
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We’ve been talking a lot today,
and I think you may have heard me mention
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this, that we released a state of the CIO
report.
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79% of the CIO surveyed
said they have an educational partnership
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with their CEO and their board
of directors and business leaders.
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So what are your thoughts on that?
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How has your role evolved?
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You know,
I think, I’ve been with the company for,
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close to 12 years
and I’ve been CIO half that time.
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Right. for being the company.
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So I have had a great relationship
working with the
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the currency of,
since I joined the company.
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b before I became the CIO.
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Right. and
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a few years
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ago, when
cybersecurity is such a hot topic,
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we started that motion
of educating the board,
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educating the executive team,
the importance of cybersecurity
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that has taken on further, to focusing
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on digital transformation, etc..
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So, yeah, I mean, that is critical.
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and I think for many of,
my CIO appears out there,
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I think you probably have seen that
if you do this.
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Well, just like, what you see, your board
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members will probably,
invite you to, to to be,
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you know, in education,
the agenda, your reports as well.
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And I have that privilege.
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I feel able to go to other boards
and talking to them about, our AI journey
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back to the point about agility
and being practical about approach.
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Right.
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Because out of necessity.
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Yeah. people loved our story.
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Talk to me about how we started with AIS
about seven years ago
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and how we accelerate with generative
AI in the last year or so.
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and they find that a lot more practical,
a lot more approachable is not the
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consultant speech that they get
or the people who have gone so far ahead.
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Right.
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They struggle with to see how they,
you know, how they bridge
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that gap from here
to, to to to light years away.
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Yeah.
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So yes, that is definitely, a trend.
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And I think it’s really up to it,
to the CIO like ourselves.
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Right.
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To be able to position ourself
that way, to be proactive.
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Yeah. Becoming that, education partner.
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Yeah.
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Especially with the democratization
of generative AI.
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Everyone knows about it. Right?
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So it’s like, kind of in the cell phone,
you know, came out all of a sudden.
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It was a democratization.
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That’s really interesting.
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Well,
we are, as you mentioned, learning a lot
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about how IT leaders
are working with generative AI.
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What I’m hearing
is more internal productivity first.
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And then if they do have like a customer
base, service industry kind of thing,
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they might be doing the chat bot stuff or,
you know, that kind of thing.
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just wondering, you know, you’ve talked
a little bit how you’re working with that.
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Obviously,
you were working with a lot of LMS
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language models prior to generative AI.
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So you’re in that space.
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really
what you think the tips might be for 2025
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or what trends we might see going into it.
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Any thoughts there?
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No. I think, you know,
just like everyone else, we,
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we we started
with, use cases that we can control.
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Right.
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So, you know, use cases,
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be content generation is or, or sentiment
analysis and stuff like that.
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As we get that under our belt, we feel
more confident and comfortable about that.
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Then we dabble into other areas.
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For example, we have a use case,
which is very exciting.
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about, cleaning up our data.
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Right, right.
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So leveraging generative AI as well as non
generative machine learning.
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Yes. To help us identify,
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description, inaccuracy
or incorrect classifications
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and then identifying it, cleaning it
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up, regenerating those in description.
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While this might be driving
internal productivity because
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think
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of it this way as a, distributor, right?
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We at any one time we deal with
about 16 million hot.
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Right.
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And those keep coming in. Yeah. Yeah,
yeah.
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Upon those keep
selling their price book or spec sheet or.
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Yeah. Yeah.
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Every quarter. Right. Right.
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So having a group of people trying to go
through that, inaccuracy and try to.
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Yeah,
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it’s a daunting
and almost an impossible task.
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And then using that. Right.
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If you are talking about dosing accuracy
amounting to about 15%.
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Right. Generative AI is able to then
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AI and generative AI helping us
clean it in 24 hours.
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That 15% that helps us with
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15% more chances of conversion.
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Yeah. And that becomes an external right.
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Customer experience improvement, etc..
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Right? Right.
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That is just one of the
many example that we have.
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The other one is on our design services.
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What we do is that we have a design hub
that provide customers
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self-service capabilities.
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Right.
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Bot diagram and turning into a spec
sheet and a fabulous etc..
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This was,
a project that we won last year.
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for the Design Hub
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project and now regenerative AI,
allowing the customers to now ask
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questions like, all right, help me reduce
the physical footprint 30%.
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Wow. By the way, I want to, drive my,
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go to market timeline to three months
shorter.
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Going in, getting the right data,
providing,
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allowing them
to get the right pin to pin placement,
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the lead time for the different things.
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All right.
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So again, this help us with external,
services and customer satisfaction.
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But none of this is a is, is is going to
be, easy if you don’t have the right data.
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Yeah.
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We talk about, you know, clean data.
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I mean, that those are so important.
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And we are again, back to, you know,
the cloud conversation, everything.
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We make sure that everything
that we bring to the cloud, we allow
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for downstream consumption
like those, properly transforming things.
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Well that’s fantastic
I appreciate you sharing that.
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So basically your tips are make sure
your data is in the best shape possible.
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Data is number one.
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Yeah. Always be number one. Yeah.
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The number two thing is that stop
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being stuck into a PR feature.
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You have to prioritize.
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Look for one that or 2 or 3 that can scale
and then go scale.
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Got it.
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Because if you don’t scale you’re going
to be working with hundreds and hundreds.
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And I think I saw one of IDC report this.
269
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Well or that that, you know,
everyone may be dealing with like 39 to,
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you’ll see you. Yeah.
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And then only five,
actually goes to production.
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Yeah. Why deal with the 39 is eight.
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Focus on the five. Yeah.
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And then go scale 1 or 2 of them. That’s.
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That is where, you know, where,
where it should be.
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And number three is there are so many
providers, so many, models out there.
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Pick one.
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because, yeah, at the end of the day.
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Right. yeah. One.
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Learn from it.
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Yeah.
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You need more then decide
what to do from there.
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don’t do it. Just try everything.
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Because then it goes back to the number
two bullet
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points is you’re going
to be stuck in there for your CTO.
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That’s fantastic advice.
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00:14:42,064 –> 00:14:43,332
Thank you so much for sharing that.
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I really appreciate it
and I appreciate having you on the show.
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00:14:46,118 –> 00:14:47,486
Max, thanks so much. Thank you.