- Five Ways Technology, Media & Telecommunications Companies Are Using RPA and AI to Save Money and Improve the Customer Experience
- Innovation with a Capital “C” – Culture Concerns Climb for Technology, Media & Telecommunications Companies in 2018
- Digital to the Core: Companies Must Have the Right People and Mindset to Succeed at Digital Transformation
Five Ways Technology, Media & Telecommunications Companies Are Using RPA and AI to Save Money and Improve the Customer Experience
Just as mechanical robots revolutionized assembly lines in the 1960s, robotic process automation (RPA) is revolutionizing office work. Any rules-based repetitive task can be handled faster, cheaper and more accurately by a software robot, and advances in artificial intelligence (AI) promise to increase this robotic productivity exponentially in the future.
RPA is a tool that allows employees to deploy virtual “robots” on their workstation to replicate manual repetitive tasks, interacting with multiple applications and keying in responses as if it were a human operator. Unlike enterprise applications, which are expensive, rigid and require long implementation cycles, RPA assistants can be easily deployed on a single workstation and scaled upward or downward as needed. Fast, accurate and indefatigable, software robots are technology agnostic and can work across legacy systems with no changes to the underlying technology infrastructure.
Companies in many sectors have already deployed RPA, notably to transform customer service and improve financial performance and compliance. These applications alone are expected to offer companies a huge reduction in labor costs. For instance, some recent case studies found that the return on investment in the first year varied between 30 and as much as 200 percent. Those savings will only grow as new RPA applications are discovered and RPA is combined with AI to broaden the scope of work beyond the manipulation of structured data to include more sophisticated predictive and unstructured use cases.
Here are five of the more interesting emerging applications we are watching within the technology, media & telecommunications (TMT) industry group:
- Device activation – David Moss, co-founder and chief technology officer at RPA software provider Blue Prism, recently described in a TED Talk how a European telecom company used robots to meet a growing customer demand for faster mobile device activation. Software robots, working across multiple systems, were deployed alongside human coworkers to reduce activation times from a day or more to just over an hour.
- Content creation – Major news organizations have automated structured news content ranging from sports scores to promotions and corporate earnings reports and have begun to experiment with using artificial intelligence to create less-structured news. Media giant Tronc, for example, which owns the Los Angeles Times and several other newspapers and news websites, uses artificial intelligence to monitor trending stories online and automatically create topical multimedia posts without human intervention.
- Customer service – Chatbot technology similar to that used by Siri, Cortana and Alexa, is being deployed by technology providers to resolve first-line customer service challenges without long phone waits, escalating the calls as needed.
- Human resources – Not only can RPA free up human workers to focus on more satisfying and strategic work, but it can also be used to help manage the paperwork associated with hiring, paying and terminating employees.
- DevOps – Software developers are finding RPA to be an effective tool for software testing and other repetitive, structured continuous improvement processes.
A 2017 survey by the Institute of Robotic Process Automation and Artificial Intelligence found that over 70 percent of respondents said they were currently utilizing RPA, and 66 percent said they were either expanding their current implementation or thinking about it. Nearly 70 percent also said their RPA spending would increase in the next 12 months. This is a remarkable rate of adoption. We are following these developments closely. For more on this topic, see our discussion, The March of Artificial Intelligence, in the January edition of PreView, our emerging risks publication.
Innovation with a Capital “C” – Culture Concerns Climb for Technology, Media & Telecommunications Companies in 2018
Amid growing pressure to meet or surpass the speed of disruptive innovation, executives and directors of technology, media & telecommunications (TMT) companies worry that their organizations’ desire to innovate may outrun their ability to properly manage risks.
This culture concern and a deepening fear of obsolescence were key takeaways for the TMT industry group responses in a recent survey, Executive Perspectives on Top Risks for 2018, from Protiviti and North Carolina State University’s ERM Initiative. The top concern within the group, for the fourth consecutive year, was the risk that the rapid speed of disruptive innovations and/or new technologies would outpace an organization’s ability to compete and/or manage risk appropriately without making significant changes to the business model. Economic conditions and data security/privacy round out the top five risks.
Over the course of the past year, we’ve talked about some of these exact issues, both privately with our clients and on this blog. I discussed some of the ways TMT companies can make sure they don’t become overwhelmed by a resistant culture in this post from last year. The real story, for 2018, is how well companies are evolving internally to strategically transform business processes, technology infrastructure, workforce culture and more to compete effectively in an increasingly digital age.
This is reflected in the concern survey respondents showed for both risk culture and operational performance. These two risks showed the largest year-over-year increase among the top five risks – and rightly so. Innovation and digital thinking need to run deep. Over the next few years, many organizations will need to reinvent themselves internally – with a new digital strategy, digital skills, and perhaps more importantly, a digitally-comfortable workforce – as well as externally (with new digital products and services) to remain competitive.
Change on these two fronts must be managed in tandem, and at an appropriate pace. Often, businesses will try to accomplish this too quickly, too ambitiously or even superficially, with disappointing results. One successful approach is to use technology to improve operations, from simplifying and automating repetitive business processes to implementing new tools to enhance workforce communication and collaboration. Such internal improvements can be translated externally into the ability to innovate quickly, deliver better service to customers and meet stakeholder expectations.
Leadership and Culture
There has been a tendency among some TMT organizations to equate technology-enabled change with technology projects, and not with a business strategy shaped and driven by senior management and the board, with enterprisewide buy-in and participation. Conversely, many emerging companies, though “born digital” and indisputably tech-savvy, lack the seasoned business leadership required to evolve and maintain competitive advantage over the long term.
Transformation is, at its core, about people and culture. Corporate executives and directors of TMT companies are more awake to this than ever before, as evidenced by the sharp rise in concern regarding organizational culture over the last year.
Boards understand that that if a company’s brand or reputation is harmed due to a toxic culture, the impact will be swift and possibly irreversible. Conversely, a value-based corporate culture is a tremendous asset to the organization in terms of recruiting and retaining top talent, as well as to the company’s reputation and brand image.
As the pace of change accelerates, a healthy culture will only become more important. Oversight of culture, including the culture of innovation, must be a key board responsibility, inextricably linked with strategy, CEO selection, and risk oversight.
Digital to the Core: Companies Must Have the Right People and Mindset to Succeed at Digital Transformation
A common mistake that companies make when pursuing digital transformation is viewing the process as a collection of technology projects, and not a business strategy that is shaped and driven by senior management and the board. They become so focused on the technological aspects of this massive change effort that they overlook the “people factor,” which is critical to their success in becoming a true digital enterprise.
Leaders of digital enterprises must be both technologically competent and business-savvy, and able to assemble and guide teams with strong digital expertise. Leading tech firms have a good handle on these things. But many emerging companies — the “born digital” businesses — are not always as strong across these competencies as they may believe. They have highly skilled tech talent focused on disruption and innovation but may lack the seasoned business leadership needed to evolve and grow the business over the long term and help it maintain its competitive advantage. In short, being born digital doesn’t instantly make you a sustainable digital enterprise.
Meanwhile, well-established, legacy businesses often find themselves somewhere in-between. They may have a good mix of business and technology talent in place at the senior leadership level, yet they do not understand what it means to act digital at their core. They don’t have the right type of “digital team” needed to force meaningful change throughout the organization. Building that team is about more than just aligning resources with the right skills — it’s about mindset. The entire workforce, from the top down, must think like a digital enterprise to become a digital enterprise.
Digital Thinking Needs to Run Deep
Without the right leadership and mindset, companies risk becoming digital only on the surface. They make changes, such as embracing a new business model or technology, that help them do business more effectively with customers in an increasingly digital world. But at their core, they are still analog in how they think and operate.
As discussed in an earlier post, TMT companies, including those born digital, must evolve both externally and internally — as well as continuously — to become successful digital enterprises. External evolution relates to how the business is positioning itself in and contributing to the expanding digital economy. Internal evolution is about the organization strategically transforming its business processes, technology infrastructure, workforce culture and more to compete effectively as a digital business.
Our recent white paper, Catching the Digital Wave of Change, talks about the fact that, over the next few years, many organizations will need to undergo radical change programs. In some cases, they may need to completely reinvent themselves to remain relevant and competitive. For many of these businesses, that change process will require building a culture of innovation and embracing a world of experimentation and failure that is alien to them. And that is why the right leadership — with a clear vision and the ability to make bold and sometimes very uncomfortable decisions for the business — is necessary for digital success. Digital leaders don’t just have ideas; they can execute on those ideas.
Before any business, traditional or born digital, embarks on a digital transformation journey, its leadership must ensure that the organization has:
- A sound digital strategy and a governance structure that are well-understood by everyone in the organization.
- A strong digital team ready to execute the digital strategy. That includes identifying senior leaders who will manage the effort on a day-to-day basis, promote strong collaboration and communication throughout the organization, and are experts at driving change.
- A workforce that feels safe and empowered to think creatively and innovate, and take appropriate risks, to help the business achieve its digital vision.
Keeping an Eye Toward the Future
For some firms, preparing for digital transformation could mean significant reorganization and even streamlining of their current workforce. As organizations embrace new business models and ways of working, like cloud computing and analytics, they will need employees who can work with new technologies and function effectively as part of a multidisciplinary team. And as they automate repetitive or labor-intensive business processes, and become more agile operations, some organizations may find they need fewer workers.
As for companies that are born digital, implementing a solid corporate governance structure as part of their digital transformation journey will be especially important, as it will help to position them for future growth. Without the right foundation, these businesses risk failure in the long term — no matter how disruptive and innovative they are today.
All businesses pursuing digital transformation also must be supported by a workforce that is excited about the opportunities that digital disruption presents, and inspired by the vision that has been defined by the leadership team. In fact, we have found that this excitement is a hallmark of a company that is, or is poised to become, a digital leader.
Another characteristic of a digital leader is an executive team that is invigorated by change, is curious and engaged, and is excited — and not frightened — about the opportunities that digital transformation presents to the business. Many traditional leaders do not fit that mold. However, if they believe in legacy and longevity for their business, they have no choice but to embrace disruptive change. If they are unable or unwilling to do that, then they must at least invest in talented people who can guide the organization through digital transformation today, and become the leaders of tomorrow’s digital enterprise.