Office workers positive over AI but bosses must invest in training

07 August 2017 Consultancy.uk

Almost half of office workers in the UK are optimistic about the impact automation technologies will have on the workplace of the future. While 48% of employees were hopeful for a future where new technologies transformed the world of work however, the cost of implementation and lack of infrastructure remain big barriers to the adoption of AI for UK businesses.

Professional services organisation Capgemini has revealed that many UK office workers remain optimistic of future automisation in their fields, despite perceived threats of digital disruption. The consulting firm, which is currently celebrating its 50th year in the business, commissioned independent research company Opinium to survey over 1,000 UK office workers at companies larger than 250 employees to explore their attitudes and expectations of cutting-edge technologies including automation, robotics, and artificial intelligence (AI), including machine learning. The data, gathered between February and March 2017, found that 40% of respondents believed machine learning would likely have a positive impact in the workplace along with 32% expecting the same from robotics. Only 10% of respondents felt automation would have a negative impact.

The research follows a recent projection that at current economic growth rates, AI will only replace 19% of the jobs lost after its implementation. The realignment of labour may not be confined to blue-collar work meanwhile, with AI increasingly being leveraged by consulting firms and companies to find solutions without less need for costly human input, even in administrative office environments. Still, the largest minority of 47% of respondents in Capgemini’s study revealed they have given serious thought to how automation technologies can support their department positively with its day-to-day processes – 85% among office workers responsible for finances – with large numbers already reporting having seen the benefits these could have, including freeing up staff time to do higher value, core business tasks (27%), lowering costs (25%) and improving the accuracy of results (21%).

UK office workers positive over AI but bosses must invest in training

In addition, business owners and directors, who were also part of the research sample, believe that as much as 40% of business tasks in their organisation could be automated in the next three to five years – a rate previous reports from consulting firms McKinsey and PwC have suggested may well be surpassed, projecting as many as 60% of jobs could be automated to some extent by 2055. Tasks such as invoicing (41%), managing expense claims (28%) reporting (28%) and administration tasks (28%) were all highlighted as having the potential for automation in the near future.

Digital and Physical

Although there is much optimism surrounding the benefits of automation technologies, office workers also noted a number of challenges to their organisation’s adoption, with an average of just under a third of respondents saying that implementation costs were the main barrier across all the technologies. Cybersecurity is most commonly seen as an obstacle to taking up AI (17%), with computing systems being viewed as liabilities in the wake of the WannaCry hack which hit the NHS earlier in the year – to the extent the UK is among the most sceptical nations regarding the use of AI in areas such as healthcare, in the world.

Time needed to implement, as well as skills and expertise needed, were also in the top five reasons cited as barriers, something a number of private and public sector employers have remained reluctant to invest in, with the notable example of UK civil service staff taking it upon themselves to upgrade their digital skills set in the absence of action from their management. Furthering this, one of the biggest problems businesses have to overcome is a current lack of adequate infrastructure to accommodate AI and automated technologies. More than seven in 10 office workers were either unsure, or knew their businesses didn’t have the infrastructure in place to adopt AI. Respondents had the most confidence in automation, but 60% still admitted they didn’t or might not have everything in place to adopt the technology, suggesting the knowledge gap also ties into the need for a remodeling of companies physical and digital infrastructures.

Lee Beardmore, Vice President and Chief Technology Officer of Capgemini’s Business Services Unit, remarked that it was encouraging to see the continued optimism for new technologies by UK office workers, regardless of various suggestions of negative impacts it could have, “At present our survey estimates that around 13% of businesses in the UK are benefiting from automation, but there’s still a lot that haven’t seen anything yet. We certainly expect this figure to rise in the near future as more and more businesses realise the transformational power of technologies such as AI, robotics and automation. All of these technologies represent an opportunity for growth for businesses in every industry sector.” 

Antony Walker, deputy CEO of techUK meanwhile said, “This survey is a useful reminder of the positive outcomes we will see from automation. Whilst it is clear that new technologies will have a transformational impact on many jobs, it is by no means inevitable that machines will simply be used to displace humans. Dynamic economies that harness innovation to drive productivity and economic growth remain the best generators of rewarding and meaningful employment. This study suggests that many of today’s workers see real benefits in technological innovation.”

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Four ways digitalisation is transforming car brands and dealers

16 April 2019 Consultancy.uk

From changing expectations from the customer to new stakeholders entering the industry, the digital transformation of global automotive industry means it is facing the wholesale transformation of its business model. In a new white paper, global consulting partnership Cordence Worldwide has highlighted four major digital trends that are transforming the relationships between car brands and dealers with consumers.

With digital transformation drives booming across the industrial spectrum, automotive groups are no different in having commenced large digital transformation programmes to improve productivity, efficiency, and ultimately profitability. Falling sales figures mean the automotive sector is facing an increasingly difficult road ahead, something which means companies in the market are even more hard pressed to find new ways to improve their bottom lines.

While it offers major opportunities, the industry’s move to digitalise is not without complications. It has triggered a series of major internal changes, which have presented automotive entities with the challenge of becoming a “customer-oriented” industry. A new report from Cordence Worldwide – a global management consulting partnership present in more than 20 countries – has explored how automotive companies are navigating the rapidly changing nature of digital business.

New business models

The level of change likely to be wrought on the automotive industry by digitalisation is hard to overstate. Automation could well lead to significant reductions in the number of accidents, higher vehicle utilisation and lower pollution levels, while leading to a $2.1 trillion change in traditional revenues, with up to $4.3 trillion in new revenue openings arising by 2030.

As a result of this colossal opportunity, it is easy to see why almost all automotive groups now have digital departments, with generally strong communication within the digital transformation and the customer approach. The changes to society which this may have are potentially distracting automotive firms from the change it is leading to in its own companies though, according to Cordence’s paper.

The automotive market is dead, long live the mobility market

Because of this, the sector’s business model is set to transform over the coming decades. With digitalisation speeding up the appearance of concepts such as car-sharing, a subscription package model will likely become more palatable. At the same time, car and ride-sharing models will cater to the sustainability criteria of millennials, who will rapidly become one of the automotive market’s leading consumer demographics in the coming years.

Antoine Glutron – a Managing Consultant with Cordence member Oresys, and the report’s author – said of the situation, “These ‘old school industries’ are now working on creating new opportunities, but in so-doing are facing challenges and threats: new jobs, new technologies, new ecosystem of partners, necessary reorganisation, different relationship with customers, and even new businesses. The customer approach topic is in fact a real challenge for car companies as it implies changing their business model and adjusting their mind-set to address the customer 4.0: from product-centric to customer-centric, from car manufacturer to service provider.”

Digital customer experience

In the hyper-competitive age of the internet, even top companies face an uphill challenge when it comes to holding onto customers through brand loyalty. Digital disruption has resulted in changes to consumer behaviour, which is forcing a range of marketing strategists to reconsider their old, possibly out-dated strategies. As modern customers wield an increasingly impressive array of digital tools and online databases, they and are now able to quickly and conveniently compare prices, check availability and read product reviews.

The automotive sector is no exception to this trend, according to the study. In order to adapt to the needs of the so-called ‘customer 4.0’, car companies will increasingly need to change their business model and move away from product-centric companies to customer-centric ones, from car manufacturers to service providers.

Glutron explained, “As an automotive company, you can no longer expect customer loyalty simply with good products; you must conquer and re-conquer a customer that “consumes” your service. The offer now has to be global, digital and personalised. Your offer has to be adapted to this customer’s needs at any given moment. A key issue related to data control is to build customer loyalty by creating a customer experience 'tailored' throughout the cycle of use of the 'car product': purchase, driving, maintenance and trade-in of the vehicle.”

One way in which the sector may be able to benefit from this desire for a tailored experience is via connectivity. Consumers are generally positive about new connective features for automobiles, and many are even willing to pay upfront for infotainment, emergency and maintenance services. Chinese consumers, where the connected car market is set to hit $216 billion, are already particularly interested in paying a little more for navigation and diagnostic features in their future new car. This can also enable automotive companies to exploit a rich vein of customer data, enabling them to rapidly tailor their offerings to consumer behaviour.

New automotive segments

Digital transformation has also brought with it the rise of completely new application areas. As mentioned earlier, the most well-known example is the autonomous or self-driving car, where the last steps forward were not taken by major automotive groups but by technology companies such as Tesla. While this may have given such firms the edge in the market briefly, a number of keystone automotive names will soon be set to take the plunge into the market themselves, leveraging their car manufacturing prowess and huge production capacities to their advantage.

Before companies rush to invest in this market, however, it is worth their while to remember that the readiness and uptake for such vehicles differs greatly geographically. For example, following a study published in 2018, 92% of Chinese would be ready to buy an autonomous car, compared with only around 35% of drivers in France, Germany and US. Meanwhile, the infrastructure of different nations will also be significantly less accommodating of the new technology.

Use digital for steering thr activity

Elsewhere, Cordence’s analysis has suggested that hooking the cars of tomorrow into the Internet of Things is also likely to see a rapid change in the business model for car maintenance, providing real-time diagnostics for problems. This presents chances for partnerships to improve the connectivity of cars, especially with tech companies; for example, PSA partnered with IBM for a global agreement on services in their vehicle. Meanwhile, data could also be sold to other parties with an interest in this data, such as the government, which could use it to manage traffic levels, or ensure that only adequately maintained vehicles take to the road.

Glutron added, “With the increase in the amount of client data and connected opportunities, the recommendation is to set up data-centric approaches. The value is now in the customer data. The general prerequisites are to rework the data model and the Enterprise Architecture and generally build up a data lake including data from all sources (internal and external, structured and unstructured).”

From automotive to mobility

Relating further to the idea of connectivity, the report claimed that automotive firms must now adjust their models in line with the provision of end-to-end mobility, rather than treating the sale of a car as an end point in their relationship with the customer. In order to realise this transformation, transformations are likely to become more and more important.

A network of partner companies means automotive firms can provide a global mobility experience. As the vehicle is increasingly connected to its environment, new partners can also be cities, governments, and other service providers within the global mobility services industry in which the car brands want to take part.

According to the study, the target is clear. Companies must look to a holistic transport service, offering to move customers from A to B in a unique and pleasant way – otherwise they might as well take public transport. At the same time, they should extend the services reachable “on-board” (especially the enhancement of the connectivity between the car and smartphones or other connected devices), and reach high standards in terms of user experience (online sales, online payment, customised experience during and after the use of the car).

Concluding the report, Glutron stated, “These mobility market transformations could be considered a threat for the car manufacturers. Quite the opposite: if they take up the challenge and review their business model so that they become the service provider – communicating no longer to a driver but to a ‘mobility customer’ – they can then take advantage of their expertise and their position as a historical player. The most convenient means of transport are cars, and building a car is highly-skilled work.”