The world finds itself on the cusp of a new automation and robo advice technology cycle, with disruption heading towards almost all sectors in some form. No longer the preserve of wealth management products, machines advisers have leapfrogged many businesses and now advise us in our homes on a variety of topics.
While full trust in Alexa or Siri still has some way to go, the pace of change and development is dramatic, and consumers are increasingly willing for robots to replace people. Food for thought for businesses who risk being left behind if they are not exploring what automation and robo advice mean for both their internal and externally-facing processes.
Automated advice represents both hope and a challenge
There are obvious applications for externally-facing automated advice, especially in the frontline customer service industry.
Gartner1 predicts for example that by 2022, 40% of customer-facing employees and government workers will consult an AI-powered virtual agent every day for decision-making or process-related support.
Internal usage by organisations will inevitably follow in order to gain advantage through increased accuracy and productivity while lowering costs. McKinsey’s recent research into the implications of automation suggests that humans will progress to adding value to the work being carried out via automation.
Automation represents both hope and challenge. The global economy needs the boost to productivity and growth that it will bring, especially at a time when aging populations are acting as a drag on GDP growth. Machines can take on work that is routine, dangerous, or dirty, and may allow us all to use our intrinsically human talents more fully2
The adoption of Robotic Process Automation
The same research sets out that 60% of occupations have at least 30% of constituent work activities that could be automated but that, (fortunately), although technology will change the jobs that we do, it will not eliminate the ability or need to work. It would be interesting to understand the analysis of their own consulting sector within this total figure.
The consulting industry is worth an estimated £240bn annually3 and within this, much activity that clients pay for is the gathering and interpretation of data. Companies are increasingly adopting Robotic Process Automation, whereby software robots understand and mimic regular, repetitive, data-driven activities across multiple platforms or sources. As a consequence, there will be far less need for junior consultants to spend weeks sifting through company silos to extract and connect disparate sources of data.
Is robo advice sounding the warning bell for consultants?
Organisations may still feel they should pay for the services of ‘experienced’ consultants. Over time however, their experience, itself the product of many years interrogating and responding to data in different business situations, may be eclipsed by what robo advice can offer. This should sound a warning bell for the consultancy industry – how long before a machine can process the same amount of data (or much more) in the fraction of the time and add a layer of interpretation that is trusted by clients?
The accurate assimilation and interpretation of ever-increasing data sets is a key challenge for the modern leader. This ranges from external events such as the banking collapse in 2008, the unfolding implications of Brexit or the misuse of personal data by social networking sites, to the plethora of internal metrics that many businesses review. Organisations are increasingly surprised by what they have to deal with, either because there is a break in expectations that come from situations that are not anticipated or situations do not advance as planned. Having an advisor who can respond to the resulting data without incurring significant cost or lengthy projects would be highly attractive.
What can robo advice do for your business?
The venture capital market recognises the value of investing in automation. According to research from KPMG in January 2018, venture capital investment hit a decade high in 2017 at $155bn of which investment in artificial intelligence and machine learning increased from $6bn in 2016 to over $12bn a year later – a 100% increase.
Fortunately, advances in product development and the arguably open nature of the digital era mean that companies can start to test and learn what automation and robo advice can do for them. From proprietary to open source to cloud-based solutions, for the company that understands the data it has to automate, or the functional problem it is trying to solve, there are solutions available that will, over time, erode the need to pay consultants to advise them.
Sometimes however, consultants are able to identify business issues that leadership teams either didn’t know existed or didn’t prioritise because they didn’t seem important. For this they are seen as the advisor that can help leaders shine a light on what is actually happening within their organisation. Nevertheless, the way that they arrive at identifying such issues is simply by collating data, be this quantitative or qualitative. The consultant internal interview technique is a classic tool by which they collate the ‘story’ behind the organisation’s success or challenges and playing the summation back is a way to earn their trusted status.
Tracking your organisational health
Consultants McKinsey set great store by tracking internal Organisational Health. They have been benchmarking companies in this area for 10 years and in a recent publication4 they set out that the central idea underlying their organisational work has been that the best way to run a business is to balance short-term performance and long-term health.
They now see new, longitudinal evidence that redoubles their conviction that companies that work on their health, not only achieve measurable improvements in their organisational well-being but demonstrate tangible performance gains in as little as 6 to 12 months. This holds true for companies across sectors and regions, as well as in contexts ranging from turnarounds to good-to-great initiatives.
The robots are here
For companies that accept McKinsey’s study and advice, robots are already poised to replace consultants in doing the heavy lifting of almost all data collection and analysis in the field of organisational health analysis. Advances in understanding how the brain makes sense of data and applying this understanding to software models, means that the potential for robo advice to disrupt the consultancy market for organisational health analysis is a clear and present danger for today’s consulting advisers. The robots aren’t just coming… they’re already here.
Footdown is the first Robo Adviser for rapid, non-disruptive organisational health analysis, insight and action planning. Contact us today on 01225 465 640
1 Executive Summary Report – Creating Digital Value at Scale, Gartner Symposium/ITxpo 2017
2 McKinsey Global Institute: JOBS LOST, JOBS GAINED: WORKFORCE TRANSITIONS IN A TIME OF AUTOMATION, December 2017
3 Source: ALM Intelligence via https://www.consultancy.uk/consulting-industry/consulting-market
4 Organizational health: A fast track to performance improvement, McKinsey Quarterly September 2017