Unless you have been living on a remote tropical island, you’re aware of the effects that technologies such as robotic vacuum cleaners, fitness trackers, healthcare diagnostics, and personal assistants like Siri are having on people’s lives. While we welcome the convenience and the benefits provided by these tools, many of us aren’t prepared for the revolutionary changes brewing. The drivers of technology’s new age, the fourth industrial revolution, involve artificial intelligence (AI), or machines that learn and continue to improve based on past experience. Malcolm Frank, Paul Roehrig, and Ben Pring, executives at Cognizant, a global technology consultancy firm, examine the implications of AI and how to prepare yourself and your organization for these changes in their thought-provoking book What to Do When Machines Do Everything.
THE FULL AI IMPACT
The dramatic changes predicted by the authors won’t be painless. The authors reference the often-cited Luddites, a group of 19th Century English textile workers who destroyed weaving machines to protest unemployment and low wages and have since become synonymous, however inaccurately, with those fearful of technology. More than 200 years later, resistance to change thrives because of a growing concern that AI, machines, and automation threaten people’s livelihoods. As AI takes over, many workers will likely be displaced. The authors point to the vulnerability in the management, business, and financial sectors, with 92% of jobs either replaced or affected by automation and machines by 2022. But it isn’t all bad news—automation and AI will liberate the accounting profession from mundane clerical work and elevate job functions to a higher analytical level. The challenge is to figure out how to do that.
FANG IS AHEAD OF THE CURVE
According to the authors, the FANG vendors (Facebook, Amazon, Netflix, and Google) demonstrate how to effectively leverage digital technology because they embraced AI, algorithms, and Big Data in their business models. To call them leading edge is an understatement. Automation and AI are at the core of their work. For example, Amazon Go plans to introduce a cashierless checkout process that automatically tallies customer tabs based on AI, sensors, and cameras. Netflix buried the brick-and-mortar Blockbuster model, replacing it with an intelligent system to seamlessly deliver its products through your portal du jour—smartphone, tablet, or laptop, to name a few. FANG organizations are disrupting their industries and other industries. Who would have predicted that Amazon would be in the grocery business before it acquired Whole Foods? And it’s reframing the grocery business using the digital and AI lens. Let’s look at the tools that organizations can use to adapt to the AI age: materials, machines, and models.
THE NEW THREE M'S: MATERIALS, MACHINES, AND MODELS
While the FANG companies are leading the charge and appear to have an advantage, traditional companies have rich legacies and assets to transition to a digital model. According to the authors, their edge is established from their products, data history, and market share. They can jump on the digital company bandwagon and reinvent themselves using the building blocks of the three M’s: raw materials, machines, and business models. Raw materials represent the data collected from the company’s products, people, activities, and devices; machines are the hardware, intelligence systems, and people that process the data; and business models harness and make sense of the intelligence systems generated by the machines to guide the company toward its mission and objectives.
Despite its recent market woes, GE is a 126-year-old traditional company that understands the necessity of a digital transition and is moving toward becoming a digital industrial company. Its leadership recognized the future digital landscape and incorporated into its products sensors capable of collecting data to manage and glean intelligence from those products. Former CEO Jeff Immelt says “If you look out 10 to 15 years, there’s going to be trillions of dollars of wealth created in the Industrial Internet, and we’re just in the first inning.”
TRANSFORM YOUR COMPANY
No tidy checklist exists for preparing your company for the AI age. The authors warn that you can’t just copy the FANG companies and call it a day, but you can adopt their best practices such as providing customers with an exceptional experience, leveraging and pushing data to the limit, and creating a digital corporate culture in your organization. Amazon saves you time and money by recommending Aunt Molly’s birthday present, so follow suit and find ways to anticipate your customers’ needs. Netflix stores your viewing history and selects your next movie. Become an organization with the mantra “In Data We Trust” that relies on data, evidence, and analysis to drive company strategy and decision making. Toss the attitudes that base decisions on how it was done in the past or rubber-stamp the company oracle’s intuition. Adopt a digital tone at the top that pervades all corners of your operation. Live and breathe excellence in the customer experience.
Agile companies can transform the power of AI without hiring an army of data scientists. Apps and tools are being developed that you can integrate into your business processes to digitize and leverage AI. Check out AWS (Amazon Web Services) for examples of these tools.
FASTEN YOUR SEATBELTS
AI is here to stay. There’s no turning back the time machine. The AI world of the future will render obsolete the quote “The more things change, the more they stay the same.” Instead, “The more things change, the more things change” is the new normal. You must adapt, and, as the authors say, “Let’s get on with it.”