Loyalty Management Innovator AIMIA's Transformation
Journey to Modernized and Standardized Apps, Data
Centers, and IT Assets
Transcript of a discussion on how improving end-user experiences and using big data analytics
helps head off digital disruption and improve core operations.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Dana Gardner: Hello, and welcome to the next edition to the Hewlett Packard Enterprise
(HPE) Voice of the Customer podcast series. I’m Dana Gardner, Principal Analyst at Interarbor
Solutions, your host and moderator for this ongoing discussion on IT
Innovation -- and how it's making an impact on people's lives.
Our next digital business transformation case study examines how loyalty
management innovator Aimia is modernizing, consolidating, and standardizing
its global IT infrastructure. As a result of rapid growth and myriad acquisitions,
Montreal-based Aimia is in a leapfrog mode -- modernizing applications,
consolidating data centers, and adopting industry standard platforms.
We'll now learn how improving end-user experiences and leveraging big data analytics helps IT
organizations head off digital disruption and improve core operations and processes.
To describe how Aimia is entering a new era of strategic IT innovation, we're joined by André
Hébert, Senior Vice President of Technology at Aimia in Montreal. Welcome, André.
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André Hébert: Thank you.
Gardner: What are some of the major drivers that have made you seek a common IT strategy?
And tell us about your organization and why having a common approach is now so important.
Hébert: If you go back in time, Aimia grew through a bunch of acquisitions. We started as
Aeroplan, Air Canada's frequent flyer program and decided to go in the loyalty space. That was
the corporate strategy all along. We acquired two major companies, one in the UK and one that
was US-based, which gave us a global footprint. As a result of these acquisitions, we ended up
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Gardner

with quite a large IT footprint worldwide and wanted to look at ways of globalizing and also
consolidating our IT footprint.
Gardner: For many people, when they think of a loyalty program, it's frequent flyer miles,
perhaps points at a specific retail outlet, but this varies quite a bit market to market around the
globe. How do you take something that's rather fractured as a business and make it a global
enterprise?
Hébert: We've split the business into two different business units. The first one is around
coalition loyalty. This is where Aimia actually runs the program. Good examples are Aeroplan in
Canada or Nectar in the UK, where we own the currency, we operate the
program, and basically manage all of the coalition partners. That's one side.
The other side is what we call our global loyalty solutions. This is where we run
loyalty programs for other companies. Through our standard technology, we set
up a technology footprint within the customer site or preferably in one of our
data centers and we run the technology, but the program is often white-labeled,
so Aimia's name doesn't appear anywhere. We run it for banks, retailers and many industry
verticals.
Almost like money
Gardner: You mentioned the word currency, and as I think about it, loyalty points are almost
like money -- it is currency, it can be traded, and it can be put into other programs. Tell us about
this idea. Are you operating almost like a bank or a virtual currency trader of some sort?
Hébert: You could say that the currency is like money. It is accumulated. If you look at our
systems, they're very similar to bank-account systems. So, our systems are like banks. If you
look at debit and credit transactions, they mimic the accumulation and redemption
transactions that our members do.
Gardner: That's pretty important when it comes to transactions,
making sure integration works among systems. Let's look at this from
the perspective of your challenge. As you say, you came together through a lot
of acquisitions. What's been your challenge from an IT perspective to allow your company to
thrive in this digital economy, given that there is a transactional integrity issue, but also a lot of
disparity in terms of the types of systems and heterogeneity in systems?
Hébert: Our biggest challenge was how large the technology footprint was. We still operate
many dozens of data centers across the globe. The project with HPE is to consolidate all of our
technology footprint into four Tier 3 data centers that are scattered across the globe to better
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Hébert:

serve our customers. Those will benefit from the best security standards and extremely robust
data-center infrastructure.
On the infrastructure side, it's all about simplifying, consolidating, virtualizing, using the cloud,
leveraging the cloud, but in a virtual private way, so that we also keep our data very secured.
That's on the infra side.
On the application side, we probably have more applications than we have customers. One of the
big drivers there is that we have a global product strategy. Several loyalty products have now
been developed. We're slowly migrating all of our customers over to our new loyalty systems
that we've created to simplify our application portfolios. We have a large number of applications
today, and the plan is to try to consolidate all these applications into key products that we've been
developing over the last few years.
Gardner: That’s quite a challenge. You're modernizing and consolidating applications. At the
same time, you're consolidating and modernizing your infrastructure. It reminds me of what HPE
did just a few years ago when it decided to split and to
consolidate many data centers. Was that something that attracted
you to HPE, that they have themselves gone through a similar
activity?
Hébert: Yes, that is one of the reasons. We've shopped around
for a partner that can help us in that space and we thought that
HPE had the best credentials, the best offer for us to go
forward.
Virtual Private Cloud (VPC), a solution that they have offered, is
both innovative, yet it is virtual and private. So, we feel that our customer’s data will be
significantly more secure than just going to any public cloud.
Gardner: Other key issues for you are data privacy and security. Again, if this is like currency, if
transactions are involved and you're also dealing with multiple markets, different regulatory
agencies, and different regulatory environments, that's another complication. How is
consolidating applications and modernizing infrastructure at the same time helping you to
manage these compliance and data-protection issues?
Raising the bar
Hébert: The modernization and infrastructure consolidation is, in fact, helping greatly in
continuing to secure data and meet ever more difficult security standards, such as PCI and DSS
3.0. Through this process, we're going to raise the bar significantly over data privacy.
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We've shopped around
for a partner that can
help us in that space and
we thought that HPE had
the best credentials, the
best offer for us to go
forward

Gardner: André, a lot of organizations don't necessarily know how to start. There's so much to
do when it comes to apps, data, infrastructure modernization and, in your case, moving to VPC.
Do you have any thoughts about how to chunk that out, how to prioritize, or are you making this
sort of a big bang approach, where you are going to do it all at once and try to do it as rapidly as
possible? Do you have a philosophy about how to go about something so complex?
Hébert: We've actually scheduled the whole project. It’s a three-year journey into the new HPE
world. We decided to attack it by region, starting with Canada and US, North America. Then, we
moved on to zooming into Asia-Pacific, and the last phase of the project is to do Europe. We
decided to go geographically.
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The program is run centrally from Canada, but we have boots on the ground in all of those
regions. HPE has taken the lead into the actual technical work. Aimia does the support work,
providing documentation, helping with all of the intricacies of our systems and the infrastructure,
but it's a co-led project, with HPE doing the heavy lifting.
Gardner: Something about costs comes to mind when you go standard. Sometimes, there are
some upfront cost, you have to leapfrog that hurdle, but your long-term operating costs can be
significantly lower. What is it about the cost structure? Is it the standardized infrastructure
platforms, are you using cheaper hardware, is it open source software, all the above? How do
you factor this as a return on investment (ROI) type of an equation?
Hébert: It’s all of the above. Because we're right in the middle of this project, it will allow us to
standardize, to evergreen, a lot of our technology that was getting older. A lot of our servers were
getting old. So, we're giving the infrastructure a shot in the arm as far as modernization.
From a VPC point of view, we're going to leverage this internal cloud much more significantly.
From a CPU point of view, and from an infrastructure point of view, we're going to have
significantly fewer physical servers than what we have today. It's all operated and run by HPE.
So, all of the management, all of the ITO work is done by HPE, which means that we can focus
on apps, because our secret sauce is in apps, not in infrastructure. Infrastructure is a necessary
evil.
Gardner: That brings up another topic, DevOps. When you're developing, modernizing, or
having a continuous-development process for your applications, if you have that cloud and
infrastructure in place and it’s modern, that can allow you to do more with the development
phase. Is that something you've been able to measure at all in terms of the ability to generate or
update apps more rapidly?
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Hébert: We're just dipping our toe into advanced DevOps, but definitely there are some benefits
around that. We're currently focused on trying to get more value from that.
Gardner: When you think about ROI, there are, of course, those direct costs on infrastructure,
but there are ancillary benefits in terms of agility, business innovation, and being able to come to
market faster with new products and services. Is that something that is a big motivator for you
and do you have anything to demonstrate yet in terms of how that could factor?
Relationship 2.0
Hébert: We're very much focused right now on what I would say is Relationship 1.0, but
HPE was selected as a partner for their ability to innovate. They also are in a transition phase, as
we all know, so while we're focused on getting the heavy lifting done, we're focusing on
innovation and focusing on new projects with HPE. We actually call that Relationship 2.0.
Gardner: For others who are looking at similar issues -- consolidation, modernization, reducing
costs over time, leveraging cloud models -- any words of advice now that you are into this
journey as to how to best go about it or maybe things to avoid?
Hébert: When we first looked at this, we thought that we could do a lot of that consolidation
work ourselves. Consolidating 42 data centers into 4 is a big job, and where HPE helps in that
regard is that they bring the experience, they bring the teams, and they bring the focus to this.
We probably could have done it ourselves. It probably
would have cost more and it probably would have taken
longer. One of the benefits that I also see is that HPE
manages thousands and thousands of servers. With their
ability to automate all of the server management, they've
taken it to a level. As a small company, we couldn’t afford
to do all of the automation that they can afford doing on
these thousands of servers.
Gardner: Before we close out, André, looking to the future -- two, three, four years out -- when
you've gone through this process, when you've gotten those modern apps and they are running on
virtual private clouds and you can take advantage of cloud models, where do you see this going
next?
Do you have some ideas about mobile applications, about different types of transactional
capabilities, maybe getting more into the retail sector? How does this enable you to have even
greater growth strategically as a company in a few years?
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We probably could have
done it ourselves. It
probably would have cost
more and it probably
would have taken longer.

Hébert: If you start with the cloud, the world is about to see a very different cloud model. If you
fast forward five years, there will be mega clouds, and everybody will be leveraging these
clouds. Companies that actually purchase servers will be a thing of the past.
When it comes to mobile, clearly Aimia’s strategy around mobile is very focused. The world is
going mobile. Most apps will require mobile support. If you look at analytics, we have a whole
other business that focuses on analytics. Clearly, loyalty is all about making all this data make
sense, and there's a ton of data out there. We have got a business unit that specializes in big data,
in advanced analytics, as it pertains to the consumers, and clearly for us it is a very strategic area
that we're investing in significantly.
Gardner: Getting all your i’s dotted and t's crossed in the infrastructure can pay huge dividends
for years to come, especially, as you say, when you can focus more on the analytics, on the
applications, on your business model, and less on server maintenance.
Hébert: That’s correct.
Gardner: I'm afraid we'll have to leave it there. We've been learning how loyalty management
innovator Aimia is modernizing, consolidating, and standardizing its global IT infrastructure.
We've heard how improving end-user experiences and using big data analytics helps head off
digital disruption and improve core operations.
So please join me in thanking our guest, André Hébert, Senior Vice President of Technology at
Aimia in Montreal. Thank you, André.
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Hébert: Thank you very much.
Gardner: And I'd like to thank our audience as well for joining us for this Hewlett Packard
Enterprise Voice of the Customer podcast. I'm Dana Gardner, Principal Analyst at Interarbor
Solutions, your host for this ongoing series of HPE-sponsored discussions. Thanks again for
listening, and do come back next time.
Listen to the podcast. Find it on iTunes. Get the mobile app. Download the
transcript. Sponsor: Hewlett Packard Enterprise.
Transcript of a discussion on how improving end user experiences and using big data analytics
helps head off digital disruption and improve core operations. Copyright Interarbor Solutions,
LLC, 2005-2016. All rights reserved.
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