hfs webinar slides: the great roboboss debate
TRANSCRIPT
The Services Research Company
The Great Robo-Boss Debate!
An HfS Research Webcast,
November 10th 2016
Host: Phil FershtChief Analyst and CEO, HfS [email protected]@pfersht
©2016HfSResearch
Overview:• 20 years’ business experience in the global IT and business process
outsourcing and shared services industry • Coined the “As-a-Service Economy” in 2014• Industry analyst, author, speaker, strategist and blogger• Advised and cogitated on 100’s of global IT services, BPO and
shared services engagements• Meddles with the largest global network of enterprise services and
operations professionals
Career Experience:• Practice Lead, IT Services & BPO Research, Gartner, Inc• Global BPO Marketplace Leader, Deloitte Consulting • Consulting Practice Lead, IDC Asia/Pacific• IT Markets Practice Lead, IDC Europe
Education:• BS with Honors in European Business & Technology, Coventry
University, United Kingdom • Diplôme Universitaire de Technologie in Business & Technology from
the University of Grenoble, France
Phil Fersht, CEO and Chief Analyst, HfS Research
©2016HfSResearch
Automation Fantasy…
• McKinseybelieves asmuchas45%ofcurrentjobs couldbereplacedusingtechnologythatalreadyexists;
• Forresterclaims1millionUSB2Bsalesjobs willgoawayby2020;
• Gartnerpredictsoneinthreejobswillbeconvertedtosoftware,robotsandsmartmachinesby2025– andBy2018,morethanthreemillionworkersgloballywillbesupervisedby"robo-bosses”by2018
• AccordingtoanOxfordUniversityStudy,about47 percentoftotalUSemployment isatrisk;
• StephenHawkingwarnsusthat AIwouldbethebiggest– andpossiblythelast– eventinhumanhistory;
• TheGuardian(blessthem)evenhighlightsScientistMosheVardi’sviewthattheoldestprofessionintheworldisunderthreatofbeingrobotized;
Cognitive Automation Reality…
• RoteB2Bsalesandcustomerservicejobshavealreadygoneaway
• Manufacturingjobshavealreadybeenautomatedout
• Transactionalback-officeandITworkhasalreadybeenmovedoffshore
• Automationinthebackofficeisaboutproductivityimprovements,notdirectheadcountreduction
• Thereisonlyoneveryshakyexampleof"robo advisors"intheindustry(RBS)
• Westillhaven'thadarealdebateontheethicsofautomationandcognitivecomputingintheB2Benvironment
• Thespeedofinternalorganizationalchangeispainfullyslow
• Cognitivetoolswithrealbusinessapplicationsareonlyjustemerging…
©2016HfSResearch
Automation Impact Scenarios on Services Professionals by 2021
Scenario1ModerateLowskilledjobsfallingby22%
Mediumskilledjobsincreasingby13%
Highskilledjobsincreasingby57%
Totaljobsfallingby2%
Scenario2Likely
Lowskilledjobsfallingby30%
Mediumskilledjobsincreasingby8%
Highskilledjobsincreasingby56%
Totaljobsfallingby9%
Scenario3Aggressive
Lowskilledjobsfallingby36%
Mediumskilledjobsincreasingby1%
Highskilledjobsincreasingby55%
Totaljobsfallingby14%
~300,000jobsatrisk ~1,400,000jobsatrisk ~2,200,000jobsatrisk
©2016HfSResearch
Total Impact of Automation on IT/BPO Services Workers by Major Country (all skill-levels across all workers)
1.00
1.54
3.38
4.90
4.43
1.08
1.47
2.90
4.30 4.18
-20%
-15%
-10%
-5%
0%
5%
10%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Philippines UK India US Other
%Cha
ngeinW
orkforce
ServicesW
orkers(M
illions)
2015 2021 %Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM, US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment
©2016HfSResearch
Total Impact of Automation on IT/BPO Services Workers by Major Country (likely scenario, low-skilled workers)
0.73 0.74
2.28 2.34
0.670.54
1.641.57
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0% 0.0
0.5
1.0
1.5
2.0
2.5
Philippines UK India US
%DecreaseinW
orkforce
ServicesW
orkers(M
illions)
2015 2021 %Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM, US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment
©2016HfSResearch
Total Impact of Automation on IT/BPO Services Workers by Major Country (likely scenario, mid-high skilled workers)
0.28
0.80
1.11
2.56
0.41
0.94
1.27
2.73
0%
10%
20%
30%
40%
50%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Philippines UK India US
%In
creaseinW
orkforce
ServicesW
orkers(M
illions)
2015 2021 %Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM, US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment
©2016HfSResearch
Reality… Meet the new Robo-boss!
©2016HfSResearch©2016HfSResearch Proprietary│Page11
©2016HfSResearch
Define Robo-Boss… what should it be?
©2016HfSResearch
How HfS Defines Intelligent AutomationRobotic Process Automation describes a software development toolkit that allows non-engineers quickly to create software robots to automate rules-driven business processes. E.g. digitizing the process of collecting of unpaid invoices, that involves mimicking manual activities in the RPAsoftware, the integration of electronic documents and generation of automated emails to ensure the wholecollections, process is run digitally and can be repeated in a high-throughput, high intensity model.
Cognitive computing is the simulation of human thought processes in an Intelligent Automation process or set of processes. It involves self-learning systems that use data mining, pattern recognition and natural language processing to mimic the way the human brain works, without continuous manual intervention. E.g. an insurance adjudication system that assesses claims, based on scanned documents and available data from similar claims and evaluates payment awards.
Autonomics is referring to self-learning and self-remediating engines, where the system makes autonomousdecisions, using high-level policies, constantly monitoring and optimizing its performance and automaticallyadapting itself to changing conditions and evolving business rules and dynamics. Increasingly minimal humanintervention. E.g. a virtual support agent continuously learning to handle queries and creating new rules/exceptions as products evolves and queries change.
Artificial Intelligence is where intelligent automation systems go beyond routine business and IT process activity to make decisions and orchestrate processes. E.g. an AI system managing a fleet of self-driving cars or drones to deliver goods to clients, manage aftermarket warranties and continuously improve the supply chain.
©2016HfSResearch
How far from reality are today's viewpoints from other "experts" - what's real and what's fantasy?
©2016HfSResearch
Do we need a Code of Ethics for Intelligent
Automation and Cognitive?
©2016HfSResearch
Where are we going to see “real Cognitive
applications” in the short-medium term?
©2016HfSResearch
The “Intelligent OneOffice” will emerge from Digital + Automation
The Digitally-Driven Front
OfficeMobile,
Social/Interactive, Real-time actionable data,
Design Thinking
Digital UnderbellyIntelligent Automation of manual processesDigitization of documentsIoT
Intelligent Digital Support FunctionFront office-aligned IT, Finance, HR, Procurement, Supply Chain
Intelligent Digital Processes Predictive & Operational Analytics, Cognitive.
TheCustomer-firstDigitalOrganization
TheEnablingIntelligentOneOffice
The Nervous System, incepting & Processing
all Inputs
The Neural System
The Circular System
©2016HfSResearch
Where should we start our Cognitive journey?
©2016HfSResearch
Intelligent Automation is the Place to Start for well over half of Enterprises Whatisthemostimpactfultimingtobegintheseactions?
19%
18%
19%
20%
24%
21%
23%
31%
33%
33%
32%
30%
34%
34%
30%
32%
29%
26%
30%
28%
26%
15%
11%
13%
16%
12%
10%
12%
6%
6%
7%
5%
4%
7%
4%
Accomplishcreativeproblemsolving/"DesignThinking"
Retrainexistinginternaloperationstalenttoredesignprocesses
Investinspecializedchangemanagementsupporttoreorientoperationsstaff
InvestininternalITtalenttohelpusmigrateawayfromlegacysystems
Investineffectiveanalyticstools&skill
Identify/hireatransformationalleader/changeagent
Investinintelligentautomation
Now Withinthenextyear Within3years
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
Are today’s service providers really going to be the enablers of
Cognitive?
©2016HfSResearch
Source: “Making that leap from effective to strategic BPO/BPM" Study, HfS Research 2016Sample: 343 Industry Stakeholders (Enterprise Buyers = 115, Advisors = 55, Service Providers = 173)
Barely half of today’s buyers are looking to their providers for value beyond operational support
25%
27%
28%
71%
86%
95%
89%
91%
89%
10%
30%
31%
71%
83%
90%
72%
90%
83%
14%
16%
17%
34%
39%
43%
44%
47%
48%
Deliverycenterlocations
On-siteaccountmanagers
Sourcing“fresher”talent
Continuousimprovementprograms
Consultingskillsforprocessredesign/reimagining
Datascientistsandanalyticsskills
Cognitivecomputingplatforms
Processautomationtools
Designthinkingcapability(e.g.,methodologies,tools,…
Buyers Advisors ServiceProviders
Whichcapabilityattributesfromserviceproviderswillbetheimportant2018?(moreimportantormuchmoreimportant)
The Service Providers will bifurcate into two groupings
BackOfficeOutsourcersEfficiency,Automation,LaborArbitrageandScalability
OneOfficeEnablersDataOrchestrationandHumanCollaboration
Buyers - if you could start this all over again,
what would you do differently?
How can we develop “Cogno-boss” skills?
Top skills in 2020 shift to critical thinking, creativity and Emotional Intelligence…
Source: Future of Jobs Report, World Economic Forum, 2016
©2016HfSResearch
What is the Real Endgame with Cognitive?
©2016HfSResearch
Endgame: Vertically infused insights and data??!!Insights,Data
VerticalProcesses
Verticallyinfusedinsightsanddata
BPaaS,BPOas-a-stack,Industryplatforms.
Machinelearning,Neuralnetworks,Enterprisesearch,ArtificialintelligenceAnalytics
Automation is in the eye of the beholder