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But a new study from Redwood Software and the Centre for Economic and Business Research (CEBR) offers a bit of an antidote.
The report looked at trends in robotics automation in 23 countries over the past 20 years to quantify their impact on GDP per capita and labor productivity. The analysis revealed that robotics now adds more value to the economy than traditionally lucrative industries like financial services and transportation. However, that compared to job growth indicates that we actually aren’t losing workers to automation.
“There is clear evidence that points toward robotic automation in many cases being a complement for human labor, rather than a direct substitute,” said David Whitaker, managing economist at CEBR, in a statement. He asserted that mundane tasks are the ones being automated. As such, Whitaker said, “Human effort becomes more valuable as it is focused on higher-level tasks, creativity, know-how, and thinking.”
Investment in robotics has a greater positive impact on the economy than more established sectors such as information technology, construction, and real estate, according to the report. A 1% increase in robotics investment, the report says, correlates with an increase in GDP per capita of 0.03%.
The report revealed that the U.S. is leading the charge to invest in automation technologies with an estimated robotics stock of $732 billion.
As for the jobs themselves, Neil Kinson, chief of staff at Redwood Software, believes that robotics automation is actually increasing the total number of jobs available. Indeed, the U.S. economy added over 2 million jobs for 75 months since 2009. Like Whitaker, Kinson maintains that work will ultimately change. “The increased level of automation investment highlights the need to rethink how we approach the skill sets needed in the workplace, and the importance of working with automation,” he said, “and not against it.”
Earlier this month I attended the Gartner Symposium in Barcelona. It is billed as the most important gathering of IT leaders and provides insight, strategic views and trends that will affect businesses over the next 12 months. This was my first time attending the event and I must say I was blown away by the sheer size, quality and quantity of the various sessions. The big focus and underlying message was Digital Disruption and how the opportunities it provides can transform businesses. Pause here for a second, the biggest gathering of IT leaders and the focus was on how digital disruption can transform businesses. IT Leaders need to be business leaders.
So, what is Digital Disruption – I was interested to hear the response from family members and colleagues. They focused on the word disruption and assumed the phrase Digital Disruption to be a bad one, perhaps an attack on the business as an example. This couldn’t be further from the truth, in fact the only negative side of this phrase is those who choose not to embrace it.
Digital Disruption is much more than improving efficiency within a business, it is essentially a transformation aided by emerging technologies, processes and business models to positively impact the value of an existing service or product. By connecting all the different parts of the business, greater working relationships can be formed with partners, customers, suppliers and even organisations typically seen as competitors.
The word disruption is used due to the disruptions this business transformation has on the current marketplace.
I have some good examples which demonstrate Digital Disruption far better than I can explain.
Think of Netflix, they disrupted the movie rental market. Blockbuster was the go to place if you wanted to rent a movie, it is safe to say they dominated the market in the UK but they failed to innovate and failed to leverage the emerging technology available to them. Netflix saw an opportunity, they started with a delivery service and then moved into providing movies digitally. Blockbuster didn’t see it coming and furthermore weren’t agile enough to adjust to the demand of the market.
A somewhat controversial disruptor, they came into a market that had been stable for around 4 centuries and completely tore up the rule book. They saw an opportunity to digitalise the way we consume our travel and align it with the on demand needs of the market.
This example is slightly different as it is an insight into the future. Lego, who have a fair proportion of the market they operate in see future disruption coming from horizontal markets. The CEO explained how he anticipates the likes of Facebook and Google being the biggest rivals over the next five years and that Lego must innovate and change their own business model to compete. He sees the rise in virtual reality being the big trend and expects the physical and virtual worlds to collide. He understands the importance of adapting in a market disrupted by technology companies.
How to begin thinking about Digital Disruption
Before businesses can disrupt, they need to analyse the various markets to uncover the opportunities. The Lego example perfectly demonstrates the need to think outside of your market vertical. So where to start? I’ll try and help.
Stage one; Detect and analyse the market demand. What could you change about your own business to improve the experience or value for the customer. Is there anyone that already does this and how do they do it? What are the trends or culture shifts signalling to your business?
Stage two; How quickly can you change or adapt? What, if anything would prevent such change? What is the impact of not adapting? How can Technology support this?
Stage three; Could your products or services be used to solve the customer needs in other markets? Do you have visibility of other markets? What will you do with your existing offerings? How quickly can you shift resources and capability?
Gartner described this as the Three Elements of Digital Business Transformation.
This is where some of the more established organisations struggle, as implementing Digital requires changes to the business strategy and a focus on digital outcomes. In some cases, a digital strategy can replace the business strategy.
The basic principles should include;
- Agile change management processes
- Getting products or services to market quickly
- Engaging and welcoming feedback with the customer base
- Limiting the time & investment
- Adopting a culture which accepts and learns from trial and error
Some organisational processes may not lend themselves to this new model or will take time to implement such change. This opens opportunities for creating a start-up incubators or partnering with a similar organisation. These should be void of such processes and lend themselves to an agile approach. As these initiatives grow and begin to take products to market funds can be reinvested in talent or speeding up the organisational change. This entrepreneurial model should help attract and retain staff with digital skills.
The business must take the journey to digital whilst supporting and maintaining the existing processes, applications and infrastructure. The IT team can help this by operating in two modes…
Digital Disruption Needs Bimodel IT
I’ll be writing a more in-depth piece on what Bimodel IT is but for the purpose of this article let’s summarise. Bimodel IT is two working speeds of the IT department. The first, referred to as Mode 1 is the traditional IT speed, focusing on governance, safety, return on investments and doing things in the right way. The second speed, Mode 2, is a new way of working for the IT department. Doing things fast, being agile, driving innovation, driving delivery and adding value to the business.
It is easy to see it is this type of model that is required to help drive Digital Disruption. Mode 2 is essential as a digital business contains much uncertainty and the need for agility and flexibility depending on what the market is demanding. The digital world is also one which requires collaboration so the need to provide innovative, flexible working practises is also essential.
There are some common mistakes when it comes to Digital Disruption, the first of which is that Digital Disruption is the responsibility solely of IT. It should sit with the business and in many cases the CEO. Where IT come into it is that most business trends have a meaningful IT component to them and thus IT needs to be woven into the planning process of the organisation. IT leaders can help drive this through Digital Disruption.
Secondly, as discussed you need to understand the market and the demand. Don’t start by launching new digital products and services without analysing the market and engaging with your customer base.
Many businesses see the likes of Netflix and Uber being successful at Digital Disruption and try to imitate start up organisations. The problems arise where traditional businesses do not have the business model and processes in place to adopt the agile, adaptive approach of a start up.
Digital Disruption is not just cloud. I’ve seen and heard lots of people trying to sell or buy Cloud based products because they wish to drive the necessary transformation. Digital Disruption is made up of multiple components such as Cloud, Social, Mobile, Virtual, Analytics, process redevelopment, IoT, business remodelling and importantly, people.
Finally, the business strategy must reflect the areas in which Digital Disruption can exploit, it takes time but enabling disruption must become business as usual. A realistic timescale depends on the business but for the analysis of the market data to be relevant I would suggest a timescale of 12 months to execute on the transformation. This will enable you to create a platform from which you can drive Digital Disruption.
Digital Disruption is changing industries all over the world, altering the way we as individuals and our businesses operate. It brings a whole host of opportunities across industries we may not have had access to previously.
Digital Disruption is more than providing the platforms, it should be business focused, identifying opportunities through customer engagement and collaboration, implementing solutions to improve business processes, services or products and providing agile ways of working to an ever-changing workforce.
Digital should become the DNA of any organisation, woven into the business strategy and the day to day operation of an organisation. This is not something IT can do alone and nor should it be – but don’t wait for the business, get started.
The automation of work has already begun, but according to a new whitepaper, not all employees have to be worried about losing their jobs to machines.
While the Internet has allowed for the rise of employees collaborating remotely; developments in artificial intelligence have also prompted more automation at the workplace.
How will these trends shake up the workplace in 2017? Here are four key factors to look out for, as based on a new whitepaper by Compass Offices.
Automation will take over, but employees might keep their jobs
According to employment portal Glassdoor, the ongoing fear that automation will render many people jobless appears to be unlikely.
It found that the roles most likely to be affected by automation will be routine jobs that do not require much creative judgement or flexibility.
For example, these would be jobs that involve answering generic emails or scheduling meetings. To counter this, workers need to develop skills that are complementary to technological advances, instead of working on the same tasks that machines will one day be able to automate.
This is currently happening in Singapore where Robotic Process Automation (RPA) – the practice of using software to automate structured workflow – is being implemented at the enterprise level. While humans will still be needed, the incoming trend is that business tasks will become increasingly codified.
HR will transform with the help of big data
While this point has been widely discussed, it still bears repeating.
HR will transform into “people science,” due to the rise of big data. Thanks to all the data gleaned from staff and customer base, businesses will be able to make better decisions, have faster turnaround times on projects and cater better to customers.
These could include being able to track an employee’s progression stages throughout a company, from onboarding to annual review. Being able to gather real-time feedback from staff is also another way to foster and retain happy workers.
Employee well-being will become a priority
Improving the well-being of employees has been increasing in importance over the past few years.
Studies show that cultivating good company culture, developing an attractive work environment and investing in the professional future of your employees leads to more productivity, engagement and retention.
The Compass Index, an annual survey of 1,200 workers across Asia Pacific, showed that 65.3% of workers in China consider “career development” their key motivator. This indicates that upward mobility is one of their top priorities.
In Hong Kong, where a mix of C-suites and managers were surveyed, “work environment” was considered by 29% the most important element at work, while “career development” came in at 26%.
Workers will look beyond compensation for satisfaction
Despite compensation being important to surveyed workers, high pay doesn’t move the meter much in terms of employee satisfaction. In its employer review survey, Glassdoor notes that “culture and values” was the number one important factor for respondents.
Today’s workers are looking for more than just a good paycheck; they want a place of work that resonates with their values.
But compensation still carries weight, as it is an indicator of opportunity for upward mobility at a company.
In fact, the Compass Index reveals that workers are optimistic about getting a pay raise this year. Respondents in the Philippines (65.6%), Hong Kong (43%), Singapore (38.8%) and Australia (34.4%) all replied hopefully when prompted for their thoughts on increased compensation this year.
What do Americans fear more than flying, germs, or animals? Computers replacing people in the workforce. The 2016 Chapman University Survey on American Fears found 16 percent of respondents were afraid or very afraid of losing jobs to technology. And the generation that’s grown up attached to a smartphone is even more concerned. An international 2016 Infosys survey of 16-to 25-year-olds found that 40 percent thought their current jobs could be replaced by some form of automation within a decade.
So just how worried should we be about being replaced by a robot?
Not very, according to Martin Fiore, Americas Tax Talent Leader for EY, the global professional services firm. Fiore believes we should look forward to working alongside robots, particularly young people starting their careers. EY is the number two hiring firm for U.S. college graduates.
“Robots can free workers from mundane tasks, allowing them to provide purpose and value at a higher level,” says Fiore. EY uses Robotic Process Automation (RPA) in its tax practice, which consists of bots, or software applications that handle repetitive, high-volume automated tasks.
“Our people used to have to spend hours cutting and pasting, pulling together disparate pieces of information, “ says Fiore. “Now they can start with that information and ask ‘What does it mean for our client?’ It’s a huge change.”
Using this type of automation allows EY workers to focus on interpreting data as they work alongside a bot, according to Fiore. He says the bots haven’t cost any jobs at EY.
“We’ve taken the robot out of the human, “ says Fiore, by eliminating mundane and repetitive tasks. He says this is especially important for millennials, who want to make a difference early in their careers and apply what they’ve learned in college more quickly.
This sounds great for an information worker who no longer has to slog through data, but what about other industries? Momentum Machines has developed a robot that creates 400 made-to-order hamburgers in an hour without any help from humans. A 2015 Ball State University report found that almost 88 percent of job losses in manufacturing in recent years could be attributed to enhanced productivity because of automation. Can we expect more jobs to disappear as robots become cheaper and smarter?
It depends on who you ask. A 2016 Oxford University report found that 47 percent of U.S. jobs are at risk of being lost to automation over the next two decades.
But a 2016 McKinsey Global Institute report concluded that fewer than five percent of careers can be completely automated using existing technology. However, the report found about half of work activities could potentially be done by a machine. Data collection and processing and predictable physical work are the activities most likely to be automated.
Perhaps the most likely scenario is that many of us will end up working alongside robotic technology, like EY’s tax practitioners, rather than being kicked to the curb by them. For example, Fiore says a robot could lay bricks while a human being directs its work.
Nearly two-thirds of Americans are already using a digital assistant or some form of robotic technology, according to Loop Intelligence. A Roomba cleaning the kitchen floor has become routine for many of us, frightening only the cat.
But even as we become more reliant on Siri and Alexa in our personal lives, accepting more automation at work won’t be easy. Companies that invest in robotic technology will have to work hard to manage the people side of change. Workers worried about losing their jobs may have to learn new skills. For example, Momentum Machines, the maker of the burger bot, posted a job ad for a “restaurant generalist” who can troubleshoot software—quite a different skill from what’s normally expected of fast food workers.
“If you look at what’s ahead, you’re either going to be disrupted, or get in front of the disruption,” says Fiore. He says the best way to prepare workers for robotic technology is to help them understand how it will benefit them—improving the quality of their work, reducing mundane tasks, and giving them the time to provide purpose and value at a higher level.
Summary: Global executives that understand the full value of advanced analytics are making it a core element in their business strategies and using it as a competitive differentiator. That’s why they’re embedding analytics into all parts of their enterprises, beyond traditional pockets like marketing and sales departments. Senior leaders are opening their minds—and their checkbooks—to capitalize on opportunities created by the explosion of data and sophisticated analytics. But a new survey by EY and Forbes Insights shows that this is one area where simply boosting investments doesn’t necessarily lead to better outcomes. In fact, many large enterprises throughout the world still struggle to achieve the promise of today’s analytics capabilities.
This report is based on a survey of 1,518 executives across a range of industries conducted by Forbes Insights, in collaboration with EY, in August and September of 2016. Thirty-four percent of the executives are based in the Asia-Pacific Rim region, 34% in the Americas, and 32% in EMEA. Respondents are C-level executives, of whom 25% are chief executives or presidents of their organizations. Executives’ companies had at least $500 million in annual revenues, and 21% had revenues of more than $50 billion.
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At seven-year-old startup WorkFusion, employees are working at the helm of what they call ‘intelligent automation.’
The New York company is in the business of Robotic Process Automation, with the lofty goal of building the future of work. Their software can sift through massive volumes of content and make intelligent decisions — automating menial, low-impact tasks that take up 40 percent of workers’ days, and up to 90 percent of a person’s manual work.
WorkFusion was founded by Max Yankelevich and Andrew Volkov out of the MIT Computer Science and Artificial Intelligence Lab in 2011. Now, backed by over $71 million in venture capital, the company digitizes business tasks and operations, including processes like accounts payable, customer onboarding and chatbots that increase service capabilities.
We caught up with Adam Devine, WorkFusion’s Head of Marketing, to discuss what the company is up to now, and how that will play into its long-term vision of using software to reduce the “carbon footprint” of companies’ business operations by driving rapid productivity by way of artificial intelligence.
In laymen’s terms, what is Robotic Process Automation?
Robotic Process Automation (RPA) is a technology that uses software bots to perform repetitive tasks on legacy systems. RPA tools operate the user interfaces of enterprise applications such as Citrix, Oracle and SAP to automate routine actions such as data entry, insurance claims payouts, information verification and send responses by following programmed rules. RPA reduces human resources required for high-volume business processes. It can greatly improve the quality and speed of processing for shared services organizations – especially within data-intensive industries such as banking, financial services, insurance and healthcare.
In what ways will RPA change the future of work in the short-term?
There have been many recent headlines on robotics eliminating jobs. RPA doesn’t fully replace jobs; it redistributes menial tasks from a workers’ day and frees up time for them to focus on more complex tasks. Software bots complete these tasks faster, and with fewer errors, and people are elevated to work that requires their intelligence and critical thinking. Those who incorporate RPA into their processes and workflows will see big efficiency gains.
In the long term?
RPA is the first step to digitization. Once adopted, many businesses see its impact and want to expand their automation efforts. RPA is often a stepping stone to intelligent automation, which uses machine learning to automate business processes with more variability and judgment work. It applies natural language processing, optical character recognition (OCR), image recognition and more to gain context and make judgments, and it can learn over time. By pairing RPA with these cognitive technologies, enterprises minimize operational bottlenecks and support high-level jobs and workers through automation. This combination can have a far-reaching impact, improving everything from productivity to lowering the bottom line to customer relationships to employee engagement by freeing workers of boring, mundane work.
In what ways does WorkFusion digitize business?
The expectations for real-time output has increased and businesses are struggling to meet this demand. WorkFusion’s automation tools are being applied to a number of horizontal and industry-specific processes. Horizontally, our RPA tool automates and eliminates the ‘swivel chair’ work of entering credentials, navigating application user interfaces and performing core systems functions.
Vertically, there are many industries benefiting from our solutions. In the insurance industry, for example, WorkFusion’s AI capabilities are being used to take over the first step in the claims process to match customer information in databases. It’s also being used for regulatory compliance, handling tasks such as LEI mapping and verifying customers, as well as fact checking and reconciling life insurance claims to detect fraud. In banking, our AI-powered chatbots are trained on historical conversations so they can perform the same tasks as a human agent, such as answering customer questions or even fixing an invoice without burdening people. These are just some examples of how we’re digitizing operations.
How is it possible that WorkFusion eliminates 90 percent of manual work?
Our software bots and cognitive technologies are used for work that requires little to no human intervention to incredibly high-volume back- and front-office tasks. Our AI capabilities learn highly manual tasks in any industry with the need for data scientists – and get smarter over time.
What’s in the pipeline for WorkFusion this year?
In the coming weeks, WorkFusion will be releasing RPA Express, a free tool, to the general public. The beta, released in December, sparked great interest in the product, with hundreds of companies signing up. This tool is a great way for companies to get started or accelerate their digitization efforts and get quick wins and efficiency-gains with no cost or risk. Another project we’re excited about is the launch of our public education portal ‘Automation University’ this summer to help operations and IT teams learn more about RPA. The free materials, classes and exams offered will help organizations grow the maturity of their skill base.
If WorkFusion hits the market right, then what?
We were founded in and have been building our solutions since 2011. We often joke that we were four years too early for the market. The demand for and adoption of Process Automation tools is just becoming more widespread, but we’re ready to capitalize on it. We’ve got a strong customer base already seeing results and believe our RPA Express solution – the world’s first free RPA product – will attract many more that want to begin or accelerate their digitization efforts and will eventually grow into the full breadth of intelligent automation capabilities that WorkFusion provides.
The global RPA market alone is expected to reach $8.75 billion by 2024. And that’s just RPA. When looking at robotics and related services more broadly, this number is expected to reach $135 billion globally by 2019. We also see a big opportunity to take some of the nearly $63.5 billion global business process outsourcing market – our automation technology is already taking over many tasks traditionally outsourced to companies overseas.
Insurance companies are facing unprecedented challenges and opportunities where digital is no longer just a new way to package and sell traditional concepts, but something that will redefine the industry at its core.The massive value of today’s $5 trillion global insurance market is impossible to ignore. Add to that over $1.63 trillion worth of new value to be unlocked if the industry is digitised by 2018 – and the industry becomes even more exciting.
This is demonstrated in Cognizant’s recent report on the future of work in insurance, The Work Ahead – Seven Key Trends Shaping the Future of Work in the Insurance Industry. The report is part of a larger study for which Cognizant’s Center for the Future of Work interviewed 168 insurance company executives worldwide on their digital and technological priorities, how they view the opportunities presented by digital transformation and its impact on future developments in their business.
Insurance providers, traditionally focused mainly on their core business, should rethink what they do, and how they do it, in the face of change driven by data, automation and artificial intelligence (AI).
Digital is key
According to the research, approximately two-thirds of insurers (61%) believe that digitally-driven transformation is the key to their organisation’s commercial future. The data-driven insurance industry has much to gain from working with automation and machine learning that enhances the ability to analyse and create value through data.
For a corporation, being more strategic and specialised may mean targeting a micro-vertical niche, for example, bio-chemical research intellectual property protection, rather than continuing to pursue large, undifferentiated marketplaces. Furthermore, being more automated and technical may mean reducing costs in back-office business processes through the deployment of robotic process automation (RPA). Almost all respondents agreed with the statement that “the required skills to succeed in my industry are going to change significantly in the next three years”.
As such, by 2018, there will be five major business dynamics that will materially impact the future of work in insurance:
• Work will become more strategic than ever
• Work will become more specialised
• Work will become more automated
• We will work more with machines that enhance what humans already do
• Work will become more technical
In order to keep up with the competition, insurance companies should adapt to these dynamics and equip their employees with the relevant skills.
Data-based insights lay the ground for analytical skills
A significant number (68%) of insurance executives said that, in 2016, analytical skills were the most important. By 2020, this figure rises to 88%. Analytical skills will only grow in importance as businesses increasingly understand the power of data and data-based insights.
In contrast, 57% said “selling” was the second most important skill in 2016. By 2020, this figure will have remained relatively consistent and will only have grown to 61%. Respondents perceive selling remains very essential but that its importance will not grow substantially over the next few years. The ability to sell products and services will always remain relevant; however, other skills previously given less recognition, such as data analytics, are a key requirement for insurance companies, in a world increasingly driven by software.
Michael Clifton, Senior Vice President, global insurance strategy and ventures, Cognizant, comments: “It is clear there is an industry consensus on the central role of data and analytics – both now and in the future – in shaping business models and commercial opportunities. In many ways, this is not a surprise, but the research confirms something profound: without a data-centric approach at the core of what an insurance company does and how it does it, some may struggle to maintain their current spot in a competitive industry – and unlock the trillions worth of new value in it.
To download the study please click on the title The Work Ahead – Seven Key Trends Shaping the Future of Work in the Insurance Industry