How to Win with Automation (Hint: It’s Not Chasing Efficiency)

In 1900, 30 million people in the United States were farmers. By 1990 that number had fallen to under 3 million even as the population more than tripled. So, in a matter of speaking, 90% of American agriculture workers lost their jobs, mostly due to automation. Yet somehow, the 20th century was still seen as an era of unprecedented prosperity.

In the decades to come, we are likely to see similar shifts. Today, just like then, many people’s jobs will be taken over by machines and many of the jobs of the future haven’t been invented yet. That inspires fear in some, excitement in others, but everybody will need to plan for a future that we can barely comprehend today.

This creates a dilemma for leaders. Clearly, any enterprise that doesn’t embrace automation won’t be able to survive any better than a farmer with a horse-drawn plow. At the same time, managers need to continue to motivate employees who fear their jobs being replaced by robots. In this new era of automation, leaders will need to identify new sources of value creation.

Identify Value At A Higher Level

It’s fun to make lists of things we thought machines could never do. It was said that that only humans could recognize faces, play chess, drive a car, and do many other things that are automated today. Yet while machines have taken over tasks, they haven’t actually replaced humans. Although the workforce has doubled since 1970, unemployment remains fairly low, especially among those that have more than a high school level of education. In fact, overall labor force participation for working age adults has risen from around 70% in 1970 to over 80% today.

Once a task becomes automated, it also becomes largely commoditized. Value is then created on a higher level than when people were busy doing more basic things. The value of bank branches, for example, is no longer to manually process deposits, but to solve more complex customer problems like providing mortgages. In much the same way, nobody calls a travel agency to book a simple flight anymore. They expect something more, like designing a dream vacation. Administrative assistants aren’t valuable because they take dictation and type it up on a typewriter, but because they serve as gatekeepers who prioritize tasks in an era of information overload.

So the first challenge for business leaders facing a new age of automation is not try to simply to cut costs, but to identify the next big area of value creation. How can we use technology to extend the skills of humans in ways that aren’t immediately clear, but will seem obvious a decade from now? Whoever identifies those areas of value first will have a leg up on the competition.

Innovate Business Models

Amazon may be the most successfully automated company in the world. Everything from its supply chain to its customer relationship management are optimized through its use of big data and artificial intelligence. Its dominance online has become so complete that during the most recent Christmas season it achieved a whopping 36.9% market share in online sales.

So a lot of people were surprised when it launched a brick and mortar book store, but as Apple has shown with its highly successful retail operation, there’s a big advantage to having stores staffed with well trained people. They can answer questions, give advice, and interact with customers in ways that a machine never could.

Notice as well that the Apple and Amazon stores are not your typical mom-and-pop shops, but are largely automated themselves, with industrial age conventions like cash registers and shopping aisles disappearing altogether. That allows the sales associates to focus on serving customers rather than wasting time and energy managing transactions.

Redesign Jobs

When Xerox executives first got a glimpse of the Alto, the early personal computer that inspired Steve Jobs to create the Macintosh, they weren’t impressed. To them, it looked more like a machine that automated secretarial work than something that would be valuable to executives. Today, of course, few professionals could function without word processing or spreadsheets.

We’re already seeing a similar process of redesign with artificially intelligent technologies. Scott Eckert, CEO of Rethink Robotics, which makes the popular Baxter and Sawyer robots told me, “We have seen in many cases that not only does throughput improve significantly, but jobs are redesigned in a way that makes them more interesting and rewarding for the employee.” Factory jobs are shifting from manual tasks to designing the work of robots.

Lynda Chin, who co-developed the Oncology Expert Advisor at MD Andersonpowered by IBM’s Watson, believes that automating cognitive tasks in medicine can help physicians focus more on patients. “Instead of spending 12 minutes searching for information and three with the patient, imagine the doctor getting prepared in three minutes and spending 12 with the patient,” she says.

“This will change how doctors will interact with patients.” she continues. “When doctors have the world’s medical knowledge at their fingertips, they can devote more of their mental energy to understanding the patient as a person, not just a medical diagnosis. This will help them take lifestyle, family situation and other factors into account when prescribing care.”

Humanity Is Becoming The Scarce Resource

Before the industrial revolution, most people earned their living through physical labor. Much like today, many tradesman saw mechanization as a threat — and indeed it was. There’s not much work for blacksmiths or loom weavers these days. What wasn’t clear at the time was that industrialization would create a knowledge economy and demand for higher paid cognitive work.

Today we’re seeing a similar shift from cognitive skills to social skills. When we all carry supercomputers in our pocket that can access the collective knowledge of the world in an instant, skills like being able to retain information or manipulate numbers are in less demand, while the ability to collaborate, with humans and machines, are rising to the fore.

There are, quite clearly, some things machines will never do. They will never strike out in Little League, get their heart broken, or worry about how their kids are doing in school. These limitations mean that they will never be able to share human experiences or show genuine empathy. We will always need humans to collaborate with other humans.

As the futurist Dr. James Canton put it to me, “It is largely a matter of coevolution. With automation driving down value in some activities and increasing the value of others, we redesign our work processes so that people are focused on the areas where they can deliver the most value by partnering with machines to become more productive.”

So the key to winning in the era of automation, where robots do jobs formerly performed by humans, is not simply more efficiency, but to explore and identify how greater efficiency creates demand for new jobs to be done.

 

Source: Harvard Business Review -How to Win with Automation (Hint: It’s Not Chasing Efficiency)

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An introduction to Digital Disruption

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.

Netflix

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.

Uber

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.

Lego

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.

Implement

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.

Common Mistakes

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.

Takeaways

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.

Source: An introduction to Digital Disruption

Digital technology to unlock revenue for insurance companies

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

Source: actuarialpost.co.uk-Digital technology to unlock revenue for insurance companies

To Lead a Digital Transformation, CEOs Must Prioritize

Given the pace at which digital innovation is disrupting industries globally, it’s not surprising that most CEOs feel pressure to find and deploy the right technology as fast as their budgets will allow. Many are discovering, however, that becoming a digital leader isn’t simply a matter of technological savvy. It’s about creating an agile organization that can detect what type of change is essential and respond quickly with the most competitive solution.

In our experience, most companies are already steeped in technology and learning fast about how it can transform their businesses. Typically, teams in the field are well aware of the digital threats and opportunities within their area of the organization – usually more so than the corporate center. They have launched their own apps, deployed robotics, established partnerships with digital players, or are using data to analyze their business and make better decisions.

The problem is that that these efforts tend to be ad-hoc and uncoordinated. Without the proper framing and orchestration at the overall company level, the best initiatives will fail to get the attention and investment they need. While it is important to encourage local ownership of ideas and projects, turning them into game-changers requires clear, sometimes ruthless direction from the center around which projects to scale and in what order. Only the CEO has the power to provide this kind of direction across the entire enterprise.

To do that effectively, CEOs need a holistic view of the digital threats and opportunities facing key parts of the business, and a way to link them to an overall vision for how digital is reshaping the competitive landscape. This brings order to the chaos of initiatives and provides a clearer basis for narrowing down priorities and managing the cross-functional interdependencies that the best digital solutions often present. Three ways to manage the digital transition are:

Define where change is needed most: Digital technology affects every company differently, but it tends to create or destroy value in four critical areas of the organization: customer engagement, digital products and services, operational performance, and preparing for disruptive new business models. Developing a clear point of view on the opportunities or threats in each area will suggest which capabilities need the most attention and where to concentrate investment.

Consider how General Electric arrived at the decision to develop and launch its Predix cloud-based industrial operation system. The initiative began when GE’s CEO encouraged his organization to explore how the accelerating trend toward value-added services in the industrial sector might eventually affect the company’s growth. In essence, he challenged his team to act as a change leader – to disrupt before being disrupted — by interpreting the weak signals coming from the market. He asked them to pay special attention to how digital native companies were creating shifts in customer behaviors and to diagnose digital solutions for business challenges that had not yet taken a toll on the company’s profit and loss statement.

Launched in August 2015, Predix helps companies see how their machines and infrastructure are performing so that they can improve them constantly. GE has treated the platform as open source, reasoning that it will power the growth of the industrial Internet, which will in turn accrue major benefits to GE. Its early success also highlights the CEO’s critical role in challenging the organization to assess its digital competence and to determine how urgently it needs to respond to threats and opportunities.

Choreograph the change: Even the clearest digital strategy will fail if your people are unprepared to embrace it. As critical as defining where you need change is setting up the capabilities and processes that will enable it. IT, for instance, is very often the tightest digital choke point because it is mired in old processes and needs significant reshaping to link it more closely to strategy, while creating a more agile approach to development. It is also essential to develop key capabilities in data analytics to make better decisions using the flood of new information flowing through the organization.

Ensuring that change sticks involves the hard work of defining new roles, adding new skills and adopting new ways of working. And it is important to carefully choreograph the change, defining who will lead the effort and how it will be sequenced.

Mobilizing for this kind of change inevitably means shaking up the status quo and leaders themselves need to be prepared to manage the company differently. Consider the challenge companies face in the rapidly changing market for power train compressors. Increasingly, competing in this market means equipping compressors with hundreds of sensors that send information back to the manufacturer about power consumption, vibration, wear and output. Manufacturers then analyze the data remotely to predict problems their customers might face and offer solutions proactively. Blending the hardware with digitally enabled services creates measurable customer value. But taking full advantage of it requires significant cultural changes. Product development teams have to work with field maintenance and commercial teams. Data management teams have to develop the predictive algorithms to improve the customer experience in coordination with the customer-facing teams. Marketing, commercial and finance have to work together to develop new pricing models. All of this has to happen fluidly and rapidly. The old system of passing possible solutions across silos, wading through validation loops and meeting threshold tests simply isn’t fast enough.

Empower people: One clear implication of this approach is the central importance of an orchestration model for digital —prototyping, risk-taking, and mobilizing the frontline to push concrete initiatives. Many of the leading digital models to date have been distributed globally throughout an organization via “digital relays” or champions within each geography and business unit. They are centrally orchestrated at a cadence that improves uptake and so the design remains consistent where appropriate.

This “project team”-based approach relies on empowering people at every level of the organization to work together to devise and implement solutions. Again, that requires some critical organizational and cultural changes. Everybody, for instance, needs access to customer data and the analytics and visualization tools used to interpret it – information that is typically hoarded in a particular part of the organization. This “democracy of data” frequently puts pressure on the middle managers in charge of it and passes decision rights to many others.

Only the CEO can manage this process by breaking down the appropriate boundaries, giving teams permission to set new rules, and providing the strategic framework to buttress the new order. It often makes sense for the CEO to delegate to an “orchestrator,” in the form of a Chief Digital Officer. But that person needs to be fully empowered to compel change across the organization in the name of the CEO. There isn’t time for anything else.

Source: Harvard Business Review  – To Lead a Digital Transformation, CEOs Must Prioritize

 

Top 5 benefits for enterprises embracing digital transformation

If you look back at just the past five years, chances are high that new digital technologies have changed the way you live, work and play. New innovations have changed the way you bank, communicate via our devices, and even how much time you might be spending in physical stores. The fact that the digital transformation is gaining ground is no surprise with the most disrupted industries today being media, telecom, consumer financial services, retail and technology.

According to CA Technologies’ new survey – Keeping Score: Why Digital Transformation Matters which details the significant impact digital transformation is having on enterprises in Asia Pacific & Japan (APJ), there is a strong connection between business performance and the technologies and practices that underpin digital transformation.

Across the Asia Pacific & Japan (APJ) region, the telecom and public sectors in the region are thriving the most in terms of digital transformation.

The survey introduced the Digital Transformation Business Impact Scorecard (BIS), which assessed the success of enterprises’ digital transformation initiatives. As per the study, overall, impact driven from digital initiatives from the APJ region was higher than the global BIS average of 53, with a score of 56. What this reflects is the enterprises’ high confidence in their ability to transform digitally.

Here are the top five key areas in which digital transformation is paying off:

1. Attaining Better Customer Focus

An omni-channel user experience is a must whether it is in-person at a bank branch or retail outlet, over the phone to a call center, or via a mobile app being consumed on the go. If this is handled well, customers will directly and indirectly share huge insights into their preferences and purchasing habits. If this is miscalculated, rate of the customer attrition can be rapid, with little chance to win that disaffected audience back.

As per the survey findings, 73 percent respondents from APJ, reported improvement in customer experience after undergoing digital transformation. There was also 40 percent improvement in customer satisfaction.

2. Improving Business Agility

With mounting pressures to respond to competitive, global market pressures, enterprises that can pivot through technology disruption will remain standing. Digital transformation has improved business agility on a global scale. Organizations in the region are surely seeing marked improvements with 32 percent increase in time-to-decision and 25 percent increase in speed-to-market.

3. Achieving Business Growth

Leveraging modern technology and communications to transform one or more key aspects of the business to achieve a state of digital readiness has now become a mainstream activity to drive ROI. Digital disrupters in APJ are twice more profitable than mainstream organizations. India and China rank highest globally for digital effectiveness, where organizations have seen the most benefit and impact from digital initiatives.

As per the latest findings of the study, respondents in APJ noted 38 percent growth in new business revenue. In fact, the deepening adoption of practices such as agile management, DevOps, API management and identity-centric security has boosted business impact by up to 54 percent in APJ.

4. Gaining a Competitive Advantage

In the application economy, both speed and quality are critical. Quickly delivering customer-winning applications to market can translate to a real competitive advantage. DevOps (the development and operations teams) best practices, such as Continuous Delivery and Agile Operations, can be used to capitalize on opportunities and create competitive differentiation in the application economy.

Having engaged digital transformation, 76 percent reported improvement in digital reach thus gaining a competitive edge.

5. Accomplishing Operational Efficiency

By digitally transforming, enterprises can improve their operational efficiencies through technologies such as automation that helps them keep pace with their dynamic cloud and virtualization environments that are the backbone of the application economy. Other benefits include reduction in IT-related costs, employee productivity as well as mitigating risks.

Besides these five, some of the other benefits include time-to-act on new opportunities, digital reach, customer retention, employee recruitment and retention, quality of development processes/apps and leveraging of third-party developer innovation.

With mobile application becoming preferred interface to the business, CIOs and CTOs need to transform their businesses into thriving, proactive ‘software factories’. Software factories that thrive on an agile and efficient software development process that is constantly translating customer need into delivered experience.

Today, to meet the ever-growing demands of the digital era, it is pertinent for enterprises

to incorporate technology – specifically software, into their operations and embrace digital transformation. It is key for businesses to develop ideas with customers iteratively in order to deliver a rich customer experience throughout the digital journey.

Source: networksasia.net-Top 5 benefits for enterprises embracing digital transformation

2016 State of Digital Transformation

In the age of the customer, the next generation customer experience will be powered by artificial intelligence. When everyone and everything is connected to the Internet, companies must leverage information and digital technologies including cloud computing, mobile, social, Internet of Things (IoT) and AI to transform how they connect with customers in a whole new way. Per Gartner, 89% of marketers expect to compete primarily on the basis of customer experience. Customer experience is a top priority and managed as a team sport. Digital business transformation will require an experimental and technology-led mindset that must be inclusive of the entire business – marketing, sales, services, IT, R&D and customer and partner communities. How can companies today leveraging technology to drive digital business transformation? To better understand the state of digital transformation, I spoke with Brian Solis, a world renowned digital business expert regarding his most recent research.
Brian Solis (@briansolis) is a digital analyst, anthropologist, and also a futurist at Altimeter, a Prophet company. Solis studies the effects of disruptive technology on business and society. He is an award-winning author and avid keynote speaker who is globally recognized as one of the most prominent thought leaders in digital transformation and innovation. Brian has authored several best-selling books, including What’s the Future of Business (WTF), The End of Business as Usual, and Engage!. His latest book, X, explores the intersection of where business meets design to create engaging and meaningful experiences.
The latest focus by Solis is ‘The 2016 State of Digital Transformation’ research, designed to learn about how companies are changing and the challenges and opportunities they face while doing so, per Solis. The research is based on input from 500 digital transformation strategists and executives who are digital transformation change agents.
Let us begin by first defining digital transformation. According to Solis, digital business transformation is defined by:


The realignment of or investment in new technology, business models, and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy.

Research overview:

  • Digital transformation is one of hottest trends in business today but the term itself means different things to different people.
  • Many organizations continue to wrestle with balance of technology and organizational priorities to define a collaborative productive path toward change.
  • IT remains influential in driving digital transformation.
  • In 2016, companies are making progress, but customer-centricity still appears to be more about words than actions.
  • Customer experience remains top driver of digital transformation, but only half of the companies have mapped or are mapping the customer journey.
  • Digital transformation is pushing businesses, across departments and functions, to collaborate, innovate, and design new business models and processes.
  • Innovation has become a key priority in digital transformation efforts.

The 2016 State of Digital Transformation Key Findings:

1. Customer Experience (CX) remains the top driver of digital transformation. But IT and marketing still influence technology investments (even without fully understanding customer behaviors and expectations)

53% of companies cite “growth opportunities in new markets” as a driver to not only reach existing customers in better ways, but also expand markets.

2. 55% of those responsible for digital transformation cite “evolving customer behaviors and preferences” as the primary catalyst for change.Yet, the number one challenge facing executives (71%) is understanding behavior or impact of the new customer. In my opinion, companies must lean into their CRM platform to accelerate transformation and grow market share. This will require investments in smart applications powered by artificial intelligence (machine learning, deep learning, analytics – proactive and prescriptive analytics) and marketing automation technologies that are integrated with services and sales lines-of-business.

3. Leaders struggle to understand new connected customer behaviors.
“Companies that don’t grasp or internalize the customer journey are obstructed from seeing its potential for optimization and innovation,” said Solis.

4. The #1 challenge facing executives (71%) is understanding behavior or impact of the new customer. Yet, only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity.

“Another top challenge facing digital transformation is the very thing that governs the course of business: a culture that is pervasively risk-averse (63%). Boards, shareholders, and stakeholders want to make improvements and increase profitability but are often unwilling to examine and change the governance in place today,” said Solis.

5. Only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity.

6. The top three digital transformation initiatives at organizations today are:

  • Accelerating innovation (81%);
  • Modernized IT infrastructure with increased agility, flexibility, management, and security (80%);
  • Improving operational agility to more rapidly adapt to change (79%).

The CMO and CEO continue to lead digital transformation.

7. According to the survey, digital transformation is largely led by the CMO (34%). Not far behind, though, is a digitally savvy generation of CEOs who, at 27%, recognize that it’s time to lead their companies into the 21st century, according to Solis.

Which departments are digital transformation change agents?

8. Digital departments are now very common, with 81% of companies citing their existence. Yet, only 40% have a formalized cross-functional workgroup. These digitally focused groups tend to employ four to five full-time employees.

9. Innovation tops digital transformation initiatives at companies today. 81% said it was at the top of their agenda, 46% stated their company has launched a formal “innovation center.” Right behind innovation was modernizing IT infrastructure (80%) and improving operational agility (79%).

10. Disrupt or die? Despite all the lip service it gets, only 19% cited “fear of disruption” as a major reason for digital transformation efforts.

11. Mobile is still not getting enough respect. A mere 20% of leaders surveyed are studying the mobile customer journey/behavior.

“Mobile is just the beginning of disruption in the customer journey. With the runway for disruptive technologies still ahead (e.g., wearables, Internet of Things (IoT), artificial intelligence, virtual and augmented reality), companies will need a resilient infrastructure that adapts to not only mobile’s “micro-moments,” but also the impact of all these trends and new devices over time,” said Solis.

A good reference for to better understand the six stages of digital transformationand how mature companies implement emerging technologies.

12. More data, less understanding. 71% of leaders said understanding behavior of connected customers is a top challenge they face. Despite more data being available, this number has increased from 2014, when only 53% cited familiarity with this challenge.

13. There is ROI in digital transformation.
41% of leaders surveyed said they’ve witnessed an increase in market share due to digital transformation efforts, and 37% cite a positive impact on employee morale (37%).

“Digital strategists must still rethink metrics to chart future development in new channels, experiences, content, and devices,” said Solis. In the early stages of digital transformation maturity, survey respondents revealed the six most important metrics that organizations can actually measure around digital transformation right now are:

“Existing KPIs help validate early work in digital transformation. But often, measurement efforts are focused on measuring isolated efforts within each department/function. For example, only 22% of those surveyed cited having a content strategy in place that addresses customer needs at all journey stages, but content analytics are in the top five most important metrics measured. There is disconnect between strategy and measurement in digital transformation efforts,” said Solis.

14. Digital transformation appears to be driven by short-term plans: Just 29% of companies have a multi-year roadmap to guide to digital transformation evolution.

What are the top benefits of digital transformation?

“Digital Darwinism favors those companies that invest in change,” said Solis.

“Digital transformation isn’t easy though. Its true evolution takes time and resources, with benefits delivered in the longterm. This, to some, can represent deliberate moves away from delivering against quarterly returns. That’s the paradox of investing in digital transformation; it gives returns to those who treat it as a long-term investment versus those who expect immediate impact,” said Solis.

15. Companies are realizing types of ROI any C-suite and board can appreciate:

  • increased market share (41%) and increased customer revenue (30%).
  • Additionally, the ROI of digital transformation is reflected in employee morale. In that regard, 37% of respondents stated that second to increased market share, employee engagement was the next big return.

16. Digital transformation required multi-disciplinary involvement – To accelerate innovation, 46% of those surveyed stated that their company has launched a formal “innovation center” to understand and test new technologies and develop new solutions/services.

17. More advanced companies combat disruption and expand innovation by partnering with startups, investors, entrepreneurs, and universities to accelerate use and adoption of emerging technologies.

18. 51% of businesses partner with the startup ecosystem, 28% focus on product innovation and or concept development and 13% hope to enhance CX as a result of their innovation center.

“Digital transformation is as much a technology story as it is one about how people lead change inside and outside the company. The human factor is pervasive in each of our reports on the subject. It’s really the driving force behind evolution and revolution in business,” said Solis.

Source: Huffington Post – 2016 State of Digital Transformation

2016 State of Digital Transformation

“Efforts in customer experience often serve as the heart and soul of digital transformation.” – Brian Solis

In the age of the customer, the next generation customer experience will bepowered by artificial intelligence. When everyone and everything is connected to the Internet, companies must leverage information and digital technologies including cloud computing, mobile, social, Internet of Things (IoT) and AI to transform how they connect with customers in a whole new way. Per Gartner, 89% of marketers expect to compete primarily on the basis of customer experience. Customer experience is a top priority and managed as a team sport. Digital business transformation will require an experimental and technology-led mindset that must be inclusive of the entire business – marketing, sales, services, IT, R&D and customer and partner communities. How can companies today leveraging technology to drive digital business transformation? To better understand the state of digital transformation, I spoke with Brian Solis, a world renowned digital business expert regarding his most recent research.

Brian Solis (@briansolis) is a digital analyst, anthropologist, and also a futurist atAltimeter, a Prophet company. Solis studies the effects of disruptive technology on business and society. He is an award-winning author and avid keynote speaker who is globally recognized as one of the most prominent thought leaders in digital transformation and innovation. Brian has authored several best-selling books, including What’s the Future of Business (WTF), The End of Business as Usual, and Engage!. His latest book, X, explores the intersection of where business meets design to create engaging and meaningful experiences.

The latest focus by Solis is ‘The 2016 State of Digital Transformation‘ research, designed to learn about how companies are changing and the challenges and opportunities they face while doing so, per Solis. The research is based on input from 500 digital transformation strategists and executives who are digital transformation change agents.

Let us begin by first defining digital transformation. According to Solis, digital business transformation is defined by:


The realignment of or investment in new technology, business models, and processes to drive value for customers and employees and more effectively compete in an ever-changing digital economy.

Research overview:

  • Digital transformation is one of hottest trends in business today but the term itself means different things to different people.
  • Many organizations continue to wrestle with balance of technology and organizational priorities to define a collaborative productive path toward change.
  • IT remains influential in driving digital transformation.
  • In 2016, companies are making progress, but customer-centricity still appears to be more about words than actions.
  • Customer experience remains top driver of digital transformation, but only half of the companies have mapped or are mapping the customer journey.
  • Digital transformation is pushing businesses, across departments and functions, to collaborate, innovate, and design new business models and processes.
  • Innovation has become a key priority in digital transformation efforts.

The 2016 State of Digital Transformation Key Findings:

1. Customer Experience (CX) remains the top driver of digital transformation. But IT and marketing still influence technology investments (even without fully understanding customer behaviors and expectations)

53% of companies cite “growth opportunities in new markets” as a driver to not only reach existing customers in better ways, but also expand markets.

2. 55% of those responsible for digital transformation cite “evolving customer behaviors and preferences” as the primary catalyst for change.Yet, the number one challenge facing executives (71%) is understanding behavior or impact of the new customer. In my opinion, companies must lean into their CRM platform to accelerate transformation and grow market share. This will require investments in smart applications powered by artificial intelligence (machine learning, deep learning, analytics – proactive and prescriptive analytics) and marketing automation technologies that are integrated with services and sales lines-of-business.

3. Leaders struggle to understand new connected customer behaviors.
“Companies that don’t grasp or internalize the customer journey are obstructed from seeing its potential for optimization and innovation,” said Solis.

4. The #1 challenge facing executives (71%) is understanding behavior or impact of the new customer. Yet, only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity.

“Another top challenge facing digital transformation is the very thing that governs the course of business: a culture that is pervasively risk-averse (63%). Boards, shareholders, and stakeholders want to make improvements and increase profitability but are often unwilling to examine and change the governance in place today,” said Solis.

5. Only half (54%) of survey respondents have completely mapped out the customer journey. This means that many companies are changing without true customer-centricity.

6. The top three digital transformation initiatives at organizations today are:

  • Accelerating innovation (81%);
  • Modernized IT infrastructure with increased agility, flexibility, management, and security (80%);
  • Improving operational agility to more rapidly adapt to change (79%).

The CMO and CEO continue to lead digital transformation.

7. According to the survey, digital transformation is largely led by the CMO (34%). Not far behind, though, is a digitally savvy generation of CEOs who, at 27%, recognize that it’s time to lead their companies into the 21st century, according to Solis.

Which departments are digital transformation change agents?

8. Digital departments are now very common, with 81% of companies citing their existence. Yet, only 40% have a formalized cross-functional workgroup. These digitally focused groups tend to employ four to five full-time employees.

9. Innovation tops digital transformation initiatives at companies today. 81% said it was at the top of their agenda, 46% stated their company has launched a formal “innovation center.” Right behind innovation was modernizing IT infrastructure (80%) and improving operational agility (79%).

10. Disrupt or die? Despite all the lip service it gets, only 19% cited “fear of disruption” as a major reason for digital transformation efforts.

11. Mobile is still not getting enough respect. A mere 20% of leaders surveyed are studying the mobile customer journey/behavior.

“Mobile is just the beginning of disruption in the customer journey. With the runway for disruptive technologies still ahead (e.g., wearables, Internet of Things (IoT), artificial intelligence, virtual and augmented reality), companies will need a resilient infrastructure that adapts to not only mobile’s “micro-moments,” but also the impact of all these trends and new devices over time,” said Solis.

A good reference for to better understand the six stages of digital transformationand how mature companies implement emerging technologies.

12. More data, less understanding. 71% of leaders said understanding behavior of connected customers is a top challenge they face. Despite more data being available, this number has increased from 2014, when only 53% cited familiarity with this challenge.

13. There is ROI in digital transformation.
41% of leaders surveyed said they’ve witnessed an increase in market share due to digital transformation efforts, and 37% cite a positive impact on employee morale (37%).

“Digital strategists must still rethink metrics to chart future development in new channels, experiences, content, and devices,” said Solis. In the early stages of digital transformation maturity, survey respondents revealed the six most important metrics that organizations can actually measure around digital transformation right now are:

“Existing KPIs help validate early work in digital transformation. But often, measurement efforts are focused on measuring isolated efforts within each department/function. For example, only 22% of those surveyed cited having a content strategy in place that addresses customer needs at all journey stages, but content analytics are in the top five most important metrics measured. There is disconnect between strategy and measurement in digital transformation efforts,” said Solis.

14. Digital transformation appears to be driven by short-term plans: Just 29% of companies have a multi-year roadmap to guide to digital transformation evolution.

What are the top benefits of digital transformation?

“Digital Darwinism favors those companies that invest in change,” said Solis.

“Digital transformation isn’t easy though. Its true evolution takes time and resources, with benefits delivered in the longterm. This, to some, can represent deliberate moves away from delivering against quarterly returns. That’s the paradox of investing in digital transformation; it gives returns to those who treat it as a long-term investment versus those who expect immediate impact,” said Solis.

15. Companies are realizing types of ROI any C-suite and board can appreciate:

  • increased market share (41%) and increased customer revenue (30%).
  • Additionally, the ROI of digital transformation is reflected in employee morale. In that regard, 37% of respondents stated that second to increased market share, employee engagement was the next big return.

16. Digital transformation required multi-disciplinary involvement – To accelerate innovation, 46% of those surveyed stated that their company has launched a formal “innovation center” to understand and test new technologies and develop new solutions/services.

17. More advanced companies combat disruption and expand innovation by partnering with startups, investors, entrepreneurs, and universities to accelerate use and adoption of emerging technologies.

18. 51% of businesses partner with the startup ecosystem, 28% focus on product innovation and or concept development and 13% hope to enhance CX as a result of their innovation center.

“Digital transformation is as much a technology story as it is one about how people lead change inside and outside the company. The human factor is pervasive in each of our reports on the subject. It’s really the driving force behind evolution and revolution in business,” said Solis.

I subscribe to a simple definition of digital per Accenture: Digital is the application of information and technology to bolster human performance. How is your company using information and technology to bolster the performance of your stakeholders – employees, partners, customers and the communities that you serve?

 

Source: Huffington Post-2016 State of Digital Transformation

A two-speed IT strategy for the digital era

As the business world gets rapidly digitized, the practice of “bimodal IT” is gaining popularity. For CIOs who want to keep up with the latest trends in technology, it is important to understand what the term, coined by Gartner, actually means. Bimodal IT is the practice of maintaining two distinct modes — Mode 1 and Mode 2 — of IT delivery. Mode 1 is more traditional, with a focus on stability, while Mode 2 is more exploratory, with a focus on agility.

In this webcast presentation, Kurt Marko, analyst at MarkoInsights, discusses how the era of digitization is driving the idea of two-speed IT. Read on to find out about the important differences between the two modes, the role of cloud services in a bimodal IT strategy, and why IT shops need to be able to develop digital IT products in an uncertain environment.

Editor’s note: The following is a transcript of the first of four excerpts of Marko’s webcast presentation on two-speed IT. It has been edited for clarity and length.

The term “bimodal IT” was coined by Gartner in 2014. And like many of the buzzwords that Gartner coins, it quickly became a very commonly used phrase, and, of course, they were instrumental in promoting that through their venues or their conferences and white papers.

Unfortunately, I think a lot of people ended up hearing the term “bimodal” — and it does seem sort of stark when you hear it — and it sounds like a psychological disorder. But it’s not any of that, and it’s not nearly as threatening as some people seem to make it out to be. But hopefully after the next 20 or 30 minutes, you’ll understand why.

It really defines two modes of IT where, as I say, they are creatively named Mode 1 and Mode 2. But they’re basically categories to describe different characteristics for IT systems and applications, the operating characteristics, the business requirements, the business environment even.

What is the first mode of two-speed IT?

And the notion is Mode 1 would be what most people would consider traditional IT: your big business systems, your ERP, your finance, your HR, those mission-critical systems that really have defined IT for decades. And IT as a discipline grew up around these systems. In fact, actually the way I got into IT out ofproduct development and engineering was as IT was becoming formalized as a discipline, and it looked like it was an attractive opportunity for me both professionally and just intellectually.

But … many, many businesses have become IT-centric, where IT, instead of being just an operator of critical infrastructure, is now an instrumental part of the business itself.

Kurt Markoanalyst, MarkoInsights

And IT became synonymous with conservative, keep it running, but let’s not take too many risks because the business could be at stake if we mess up. And that worked fine for many, many years. Unfortunately, as the business environments have changed dramatically, through the internet, there have been many catalysts, internet, mobility, consumerization of technology. But … many, many businesses have become IT-centric, where IT, instead of being just an operator of critical infrastructure, is now an instrumental part of the business itself.

What is the second mode of bimodal IT?

And this is where Mode 2 comes in, and it’s a concept Gartner calls the digitization of business. We’ll look at that in a bit. But this type of environment is characterized by digital applications that really take their cue almost from the mobile and the internet world, where things have to be fast, agile, fail-fast, continuous delivery, you have new ideas that need to be tested and implemented at at least a very initial stage rapidly. And it focuses on cloud services and design as vehicles for the deployment. Often, it includes mobile as the target application platform.

And this is partly where some of the confusion about bimodal IT has come in because cloud services are really instrumental in these Mode 2 applications, because they allow developers and businesses to both create rapidly and deploy at any scale desired. And so many people consider Mode 2 synonymous with cloud, Mode 1 synonymous with on premises. That’s not the case, and we’ll get into some of the subtleties of why in a bit.

See other excerpts from this webcast presentation on the two-speed IT delivery model.

Part 2: Mode 1 vs. Mode 2.

Part 3: Myths vs. facts.

Part 4: Bimodal IT takeaways.

Two-speed IT delivery model driven by digital economy

As I mentioned, digital business is driving this notion of two-speed IT. And that’s really what this whole Mode 2-Mode 1 dichotomy is about. It’s about having a set of applications that are run conservatively, but it’s important to understand they’re not on life support. And [then there is] another set of applications which need to be developed, deployed very rapidly but where failure is an option and getting it right the first time or getting it perfect isn’t an absolute requirement.

Explaining this rationale for bimodal IT, Gartner talks about this notion of different eras of IT. And the Mode 1 is characterized by this industrial manufacturing line, kind of the Henry Ford era of IT, where it’s about minimizing risk, planning, being predictable, doing it right, maintaining control, reliability, stability.

However, in this era, this digital business era, which they call a third era, there are very different business drivers and that prompts different behaviors. And they characterize the challenges and the activities that IT and businesses need to be capable of the following five [things]:

  • Absorbing new business models rapidly. Being able to adapt to a changing digital environment.
  • Being able to scale up and down rapidly again, and this gets to some of thecloud discussion, but the notion that a successful product may grow demand, like a hockey stick, or it may have very seasonal demands.
  • You have to be able to react both over time and to events as they call them, “business moments,” whether you have a promotional campaign that’s going to coincide with the Super Bowl or the Oscars or some big event that you’re focusing on, or you have a product that gets mentioned on Oprah Winfrey and suddenly demand has shot through the roof.
  • You also have to be able to support different business models. And as we know, the internet and the digital business era we’re in now, whether it’s sharing services like Uber, and Airbnb, or different distribution channels for media like Spotify or digital content books, you have to be able to support different ways of monetizing your digital assets.
  • And you have to be able do this in an environment where you don’t necessarily understand ahead of time what’s going to work and what’s not. And so you have to be comfortable in developing digital IT products in this environment of uncertainty.

Gartner’s contends, and I actually agree with it, these are two very distinct sets of requirements, and that doing it within one business structure of IT is impossible; hence, this idea that you have two modes of your IT organization.

 

Source: searchcio.techtarget.com-A two-speed IT strategy for the digital era

ITSM: The ‘what’ and ‘how’ of digital transformation

When it comes to digital transformation, the question is not just whether organisations are ready for it but how they will carry it out.

Digital transformation is defined as the changes associated with the application of digital technology in all aspects of society – from government to mass communications and from art to medicine and science.

Two steps to digital transformation

In business there are two steps to every digital transformation plan: the ‘what’ and the ‘how’. The ‘what’ are the digital initiatives needed to achieve transformational change and the ‘how’ is ensuring this transformational change delivers business results.

We recently conducted a survey at the SITS 2016 conference in London, which showed that mobility and IT service management (ITSM) is key to executing digital transformation strategies. Over half the SITS survey respondents, who were mostly CIOs and business decision makers, said they are ‘nearly ready’, followed by 19 per cent who said they are ‘neither ready or not’. In contrast, only 16 per cent said they were ‘completely ready’.

When it comes to digital transformation, mobility is key. While most organisations have implemented an enterprise mobility strategy, risk, and security concerns are still preventing organisations from realising value from it. Having the right tools to manage risk and ensure security has never been more important.

Over half of respondents said mobile ITSM is somewhat important to their digital transformation plans while just over a quarter said it’s ‘highly important’. In the middle, just 12 percent said mobile ITSM was ‘neither important or not important’ while the naysayers who said it was ‘not very important’ or ‘not relevant’ were 7 per cent and 3 per cent respectively.

Some of the key reasons why ITSM is changing the workplace of the future include the fact that service quality and customer satisfaction have become the biggest technology priorities for organisations. ITSM is moving away from ‘budget driven’ IT legacy whilst transforming IT into service brokers.

Despite the recognition of the importance of mobile ITSM by the majority of respondents, 34 per cent said they don’t have the right mobility and ITSM tools to operate in a digital world. Though the majority (48 per cent) said they have the right tools with only 19 per cent saying they weren’t sure.

In addition to the tools, organisations also need to ensure that they recruit the right people skilled in mobile app provision, mobile app development and management and mobile content management in order to accelerate their mobile strategies.

Given organisations are faced with new challenges introduced by mobility such as mobile device management (MDM) and enterprise mobility management (EMM), they need the right tools.

Device and application management solutions can benefit businesses in numerous ways, including enabling them to automate business process flows and approvals that are mobile first in approach, ensure licence compliance across multiple operating systems platforms and make real time cost allocations of apps and services.

ITSM: A key investment

ITSM is also one of the key spending areas, the survey found. The majority of respondents said budgets are likely to increase over the next 12 months for security, followed by ITSM, compliance, mobility, hardware, OS upgrades and ID and access management. However, in all of those categories, some respondents said spending is likely to stay the same. Participants said the biggest decrease in spending will be in hardware and OS upgrades.

The majority of respondents said they will be working on ITSM projects over the next 12 months, followed by security and mobile workforce management.

So why does ITSM rank so highly with respondents in terms of spending? They outlined the key benefits of ITSM as:

  • Improvement of service
  • Reduction of costs
  • Improvement self-service
  • Automation

By helping businesses improve their processes, ITSM meets some of the main objectives of digital transformation, which include driving employee productivity and improving innovation. In the 21st Century, it’s all about collaboration, which is why a human-centric approach to digital transformation is vital. This goes beyond automation replacing manual tasks to equipping employees with the right information at the right time and on the right platform whether that’s their laptop, tablet or mobile phone.

So it’s not just merely a question of whether businesses are ready for digital transformation but how they’re going to execute it.

Source: ITproportal-ITSM: The ‘what’ and ‘how’ of digital transformation

Despite progress, the future of AI will require human assistance

Part one of this story on the future of AI explained how technology developments have led to a resurgence in a field that has progressed in fits and starts since the 1950s. Today’s cheap storage and amped-up and inexpensive compute power, combined with an explosion in data, have revived an interest in deep learning and “neural nets,” which use multiple layers of data processing that proponents sometimes liken to how the brain takes in information.

The field is red hot today, with Google, Facebook and other technology giants racing to apply the technology to consumer products. In the second part of this story, SearchCIO senior news writer Nicole Laskowski reports on where two AI luminaries — Facebook’s Yann LeCun and Microsoft’s Eric Horvitz — see the trend going.

Like Microsoft, IBM and Google, Facebook Inc. is placing serious bets on deep learning, neural networks and natural language processing. The social media maven recently signaled its commitment to advancing these types of machine learning by hiring Yann LeCun, a well-regarded authority on deep learning and neural nets, to head up its new artificial intelligence (AI) lab. A tangible byproduct of this renewed focus on neural nets is Facebook’s digital personal assistant, M, which rolled out to select users a few months back.

Today, M’s AI technology is backed by human assistants, who oversee how M is responding to queries (such as placing a take-out order or making a reservation) and can step in when needed. According to a Wired article, the AI-plus-human system is helping Facebook build a model: When human assistants intervene to perform a task, their process is recorded, creating valuable data for the AI system.

Once enough of the “right data” is collected, M will be built on neural nets, which is where LeCun’s team comes in. But even as the AI behind M advances to neural nets, humans will need to be in the loop to continue training the technology, according to the article.

Still work to be done

That’s because M, like most contemporary AI systems, is a supervised learning system, which means the system can’t teach itself. Instead, if LeCun wants an algorithm to recognize dogs, he has to feed it examples of what dogs look like — and not just a handful of examples. “You have to do it a million times,” LeCun said at EmTech, an emerging technology conference hosted by the MIT Technology Review. “But, of course, humans don’t learn that way. We learn by observing the world. We figure out that the world is three-dimensional, that objects move independently. … We’d like machines to be able to do this, but we don’t have good techniques for this.”

Yann LeCun

Building machines that have a kind of artificial common sense, according to LeCun, will be the big challenge for the future of AI. “It’s done by solving a problem we don’t really have good solutions for yet, which is unsupervised learning,” he said.

One of the ways Facebook (among others) is trying to insert rudimentary reasoning into AI systems is with vector embedding, where unstructured data is mapped to a sequence of numbers that describe the text or object in detail. LeCun said the process brings together perception, reason, perspective and language capabilities so that if the algorithm encounters an unfamiliar word or image, it can make an educated guess by comparing and contrasting the rich mathematical descriptions of the unknown against the known. One of his clearest explanations about how vector embedding works had to do with language translation: “We can take two pieces of text, one in French and one in English, and figure out if they mean the same thing,” he said.

Facebook is not alone in taking this approach to improving AI. A recent article inExtremeTech described the “thought vector” work Google’s doing as a way of training computers to comprehend language, which they are incapable of doing now.

The future of AI

But language comprehension is a far cry from machines that can perform the same intellectual tasks that humans perform. Developing a common sense program, or “artificial general intelligence,” as it’s called, is still a way’s off, said LeCun, who shared the EmTech stage with Eric Horvitz, director at the Microsoft Research laboratory in Redmond, Wash. “If Eric were to grab his water bottle and walk off stage, you could close your eyes, be told that, and picture all of the actions he’d have to take to do that.” AI machines, on the other hand, can’t.

Sci-fi films such as Her and Ex Machina may give the impression that the future of AI is conscious machines, but LeCun and Horvitz described generalized intelligence as really hard problems to solve. “We’re nowhere near being able to think that through,” Horvitz said. “I do think that with the great work on the long-term road toward intelligence, we’ll have competencies, new kinds of machines, and it may well be that deep competency is perceived as consciousness.”

Eric Horvitz

One of the basic obstacles Horvitz is interested in solving is a classic IT problem: AI technologies were essentially built in silos. For systems to become more powerful, they’ll likely need to be knitted together. “When I say we’re trying to build systems where the whole is greater than the sum of its parts, we sometimes see surprising increases in competency when we combine, for example, language and vision together,” said Horvitz, who recently launched (and, along with his wife, is funding) the One Hundred Year Study on Artificial Intelligence at Stanford University, an interdisciplinary research effort on the effects of AI.

Exactly how AI systems should be integrated together is still up for debate, “but I’m pretty sure that the next big leaps in AI will come from these kinds of integrative solutions,” Horvitz said. Silo busting may not be as sexy as creating conscious machines, but it could lead to what Horvitz called a “symphony of intelligence.”

“With every advance, and particularly with the advances in machine learning and deep learning more recently, we get more tools. And these tools are often really interesting components we can add to older components and see them light up in new ways,” he said.

Source: searchcio.techtarget.com-Despite progress, the future of AI will require human assistance