Automation, employees and the bottom line

Originally featured: CIODive
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Though it is often approached with fear, automation doesn’t necessarily mean bad things for employees.

Advancements in technology are not always welcome, particularly to a workforce fearing displacement. This is particularly true with the rise of automation, with the threat that companies could outsource labor to machines. And while experts say artificial intelligence and automation can provide a cheaper and better way to solve problems that previously took up valuable human time and effort, putting numbers to those changes is challenging.

Almost half of knowledge work activity can be automated, according to a recent McKinsey study. Physical tasks "in highly structured and predictable environments, as well as data collection and processing" will be the first to be automated, according to the report. And because those types of jobs make up a little over half of activities in the economy, that equates to almost $2.7 trillion in wages.

McKinsey also acknowledges almost all occupations — blue collar and white collar — have potential for some automation, which could result in a savings of about $16 trillion in wages. Those are big numbers, certainly large enough to garner the attention of businesses looking to trim costs in a competitive environment.

Though it is often approached with fear, automation doesn't necessarily mean bad things for employees. When it comes to replacing workers altogether, McKinsey estimates that could only work in less than 5% of occupations.

Instead, automation is more likely to make employees more productive.

Not all bad news for employees

While some people express concerns about job losses due to automation, others focus on how the gradual displacement in the workforce through automation will aid the economy and drive growth. McKinsey estimates automation could raise productivity growth globally by 0.8% to 1.4% annually.

"Technology such as natural language generation (NLG) — AI technology that can absorb vast quantities of big data and communicate key insights and conclusions into easily digestible reports — will drive our workforce forward by streamlining processes, helping people to do their jobs more efficiently," said Sharon Daniels, CEO of Arria NLG. "The best and brightest will be free to innovate; the engineers to build, the doctors to heal, the scientists to discover."

Only 60% or less of actual work time today is spent productively, according to a report from Atlassian. If employees had access to tools and technology they need to automate their workflow, the amount of time spent on workflow disruptions could be drastically lowered.

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"Successful work will require humans and machines working together to better delight customers, better grow the top line, and better improve the bottom line," said Tiger Tyagarajan, CEO of Genpact.

Workers will not only be happier, many are likely to see a bump in salary as well, Tyagarajan predicts. For example, a recent Deloitte study in the U.K. found that AI technology has replaced 800,000 lower-skilled jobs with 3.5 million new ones, which pay on average £10,000 ($12,500) more than the jobs they replaced. Those jobs include engineers and data analysts, who create the machines and analyze the data collected by the them.

"Essentially, as tasks and jobs become increasingly automated, that automation opens the door for employees to work more efficiently and creatively to solve problems in which human knowledge is intrinsically valuable," said Tyagarajan. "Machines are taking over more and more repetitive, time-consuming tasks, meaning humans will have more time to take on higher-skilled roles."

Daniels agreed. For example, in financial services and healthcare, the vast troves of data collected can change as fast as someone can analyze it.

"AI capabilities and the ability to automate reporting actually takes the time-consuming and repetitive mechanical tasks away from the human, freeing them to investigate new ideas and to create new solutions," said Daniels. "We believe that AI will augment knowledge-workers, who will advance to a whole new level of expertise."
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The tasks that are taken away by AI are often the time-consuming, repetitive, mundane tasks associated with preparing reports.

"The responsibility of actual reporting remains intact but now can be done more efficiently, in real-time and at scale," said Daniels. "This does not remove the job per se; it optimizes the dynamics of the task, allowing knowledge knowledge-workers and analysts to do more and know more, faster."

Who delivers the bad news?

One question that remains unanswered: If automation is to take away jobs, will the CIO be responsible for making that decision?

While it's still unclear, experts say in some cases, it will likely be the CIO, but the chief data officer (CDO) may also play a role.

It will also depend on the area being automated. For example, financial services and healthcare sectors see a strong ROI from using AI technology. "While the CIO has a responsibility for implementation, the benefits are delivered to multiple departments and stakeholders, so decision-making typically becomes a collective exercise of evaluating and redefining information-related roles," Daniels said.

Either way, experts say enterprise IT leaders need to begin preparing their workers to embrace robots as teammates, not adversaries. McKinsey predicts workers will have to adapt for automation and perhaps learn new, more complex skills that they then perform alongside machines. It will therefore be more a matter of better assisting machines rather than being replaced by them.
Sharon Daniels- CIO Dive- 3.png"I would advise CEOs and CIOs to stay focused on creating a company culture that equips employees with the tools to succeed in a workplace cohabited by robots," said Tyagarajan. "Pushback — both internal and external — is inevitable during times of transformation, especially at the beginning."

Leaders need to be transparent and accountable. This begins with keeping employees in the loop when it comes to how and when the company plans to apply AI and automated systems. Employees need to know that while the robots are coming for some jobs, it is possible to retrain and reskill to work alongside them.

"Developing reskilling and education programs is absolutely key to helping employees feel empowered — rather than threatened — by the rise of robots at work," said Tyagarajan. "[These] programs should focus on teaching human employees how to create, use and maintain the AI systems they will be working alongside."

Workers should also keep in mind there are many areas where humans still outperform machines — such as any task requiring negotiation, judgment or creativity.

"By helping human employees build on these strengths, leaders will help employees accept machine teammates as valuable supplements to human talent, rather than insidious replacements," said Tyagarajan.

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