digital labor disruption

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© 2016 Information Services Group, Inc. All Rights Reserved. Stanton Jones Research Director & Principal Analyst Digital Labor Disruption

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Page 1: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Stanton JonesResearch Director & Principal Analyst

Digital Labor Disruption

Page 2: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

The impact of price performance

Technology price performance is increasing exponentially.

In the manufacturing sector, have seen this effect for some time in the form of industrial robots.

In the services sector, just now starting to see this effect in the form of software that mimics the way a human works and makes decisions.

Price

Performance

Performance

Price

Old Equilibrium

Page 3: Digital Labor Disruption

Digital Labor.

Software that works like a human, or mimics the way humans make decisions, focused on the automation of knowledge work.

Page 4: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

How is this different?

Intelligent Systems

MachineLearningSystems

Expert Systems

WorkflowSystems

Scripts & Runbooks

Programmed. Procedure-based.

Configured. May perform work

as if it were a human.

References knowledgebase & uses inference system.

Experts provide feedback on quality of decisions.

Algorithms are “trained” using data, not experts.

Assesses probability and classifies results.

Enterprises have traditionally focused

hereWhile digital labor will focus here.

Uses biology as foundation to understand patterns, make predictions & develop behaviors.

Page 5: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Digital Labor plans.

Robotics

Robotic Process Automation (RPA)

Machine learning / AI / Cognitive

Voice Recognition / Natural Language Processing

Data Science / Big Data

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

23%

22%

13%

13%

6%

18%

22%

21%

18%

18%

24%

24%

29%

32%

23%

23%

20%

23%

21%

29%

11%

12%

14%

16%

24%

Source: ISG 2016 global IT leader survey; n = 352

Not deployed, no plans to useResearching, no current trialsTesting, no plans to deployTesting, plans to deployIn production

Survey Question: Rank the following emerging technologies on a scale from “Not Deployed” to “In Production” as they are in use today

Page 6: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Enterprises are getting there differently.

Model Benefit DrawbackDo it yourself Retain IP.

Avoid black box syndrome. Employee morale.

Assume risk. Emergent software. Small COE driving big change.

Embed in outsourcing

Transfers risk. Leverage industry processes. Focus on outcomes.

Incentives often not aligned. Software and process are linked. New business model for

providers.

Page 7: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Digital labor in outsourcing is driving significant productivity gains.

VolumetricProductivity Improvement

(%)Number of Applications Managed +30%Number of Virtual Instances Managed

+29%

Storage GBs Managed +34%Number of End Users Supported +20%Number of End User Devices Managed

+85%

Number of Network Devices Managed

+100%Source: ISG Automation Index

Over past 12 months, seeing dramatic improvements being committed to in ITO contracts.

Traditional productivity improvements 3 to 5 percent.

Cost savings for the IT services contracts we assessed ranged from 26 to 66 percent.

50 percent decrease in the number of resources required to support certain IT services.

Page 8: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Do it yourself: Agile automationchampion required.

Nearly all emerging DIY use cases we are researching share three common characteristics: Strong, non-technical automation champion. Using digital labor to increase capacity and

drive consistency / quality. Using Agile approaches.

Agile

Scope

Schedule Budget

Schedule Budget

Scope

Variable

Fixed

Traditional

Page 9: Digital Labor Disruption

© 2016 Information Services Group, Inc. All Rights Reserved.

Guidance

Start now. Exponential increases in price/performance means digital labor will expand faster than expected.

This is an operating model change (people, process, governance) more than a technology change.

DIY buyers: Focus digital labor on scalability and consistency challenges; cost savings is a derivative.

Sourcing buyers: Cost will remain primary focus, however, ensure supplier can deliver on productivity promises.

Create an digital labor COE; use agile approaches.

Page 10: Digital Labor Disruption

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