The opportunity of digital labor, or the automation of labor and tasks by leveraging digital technologies, appears boundless, according to KPMG’s The Creative CIO’s Agenda: Six big bets for digital transformation.
The reason? A historic coupling of the availability of powerful but cheap processing power on demand, combined with advances in artificial intelligence, natural language processing, and exponential growth of data.
Substituting for or augmenting human labor with digital labor kicks the door wide open for businesses to reduce costs, boost quality and ramp up speed across all industry sectors. It is also a catalyst for disruption, with offshore service providers already feeling the impact and, over the long-term, affecting a host of knowledge worker roles.
Digital labor, however, is not a single entity and must be understood as a spectrum of technologies at different states of maturity, evolving at different rates and providing a range of capabilities. The most basic is robotic process automation (RPA), with its simple, explicit steps. The next level is to introduce more complex machine learning systems around natural language and artificial intelligence (AI). Finally, the most advanced opportunity — though the most expensive and difficult to get benefits from — is in Cognitive Automation, which includes sophisticated autonomic/cognitive technologies that think and learn like humans, including cognitive machine learning, artificial intelligence (AI), language processing and big data analytics.
Two different roles for the CIO
Not surprisingly, of course, CIOs are on the front lines of digital labor’s future: They must understand the breadth and depth of this new technology landscape, with a directional sense of where it’s going and a roadmap to take advantage of it. That’s because they serve two major roles in the business. One is as a functional executive that runs the IT department — for example, a virtual service desk might be created to respond to routine requests, automating testing in support of continuous delivery, automating operations, and automating IT service management.
But the other crucial role for the CIO is as a technology leader in the business that has the unique ability to help digital labor pull the business forward.
“The CIO has the opportunity and a responsibility to help the people in the business understand the technology, its challenges, its implications, where it’s ready to move ahead and where it isn’t, and where the opportunities are for the business,” says KPMG principal, Marcus Murph. This role is particularly important because people in the business are already wading into this river of capabilities, engaging automation vendors themselves without the involvement of IT. The CIO needs to demonstrate to the business that they need the right foundation of technologies so the best opportunities of digital labor are not missed.
“The CIO needs to lead here,” says Murph. “What you don’t want is the business out ahead of you, getting point solutions that don’t provide the maximum value at the enterprise level.” The CIO needs to drive that adoption and make investments are leveraged and optimized across the organization, he explains — what works for one business unit can work for other business units as well. In addition, there is a fiduciary responsibility to make sure that when investments are made issues around things like security, privacy and architecture compliance are taken into account.
Without that effort, the business can unwittingly create exposures — which can be easy to do when there are vendors talking to business users offering solutions that look great in their marketing literature but may have other ramifications.
“CIOs and technology executives need to make it clear that they have the experience to see through marketing hype and understand the implications that people in business may not have been exposed to,” he says. “It’s easier to be out in front and put that stuff in place, rather than fix it after the horse has left the barn, so to speak.”
The top benefits of digital labor
To invest in and deploy digital labor capabilities in a way that accelerates the organization’s transformation, the CIO needs to gain buy-in from the organization’s executives, focusing on several core benefits including:
1. Quality. Digital labor offers significant improvements in reliability and consistency — software robots eliminate human error, perform as commanded and perform their tasks the same way every time. The more you can automate and put in place self-service capabilities, the faster and more consistent response you can get with people when need help or have a problem.
2. Efficiency. Estimates have found that software robots cost about one-third of an offshore full-time employee and as little as one-fifth of an onshore employee. This can be highly beneficial to organizations that employ large numbers of back-office people performing repetitive manual processes. In addition, digital labor allows for a lower capital intensity – Bots don’t require cubicles, desks, restrooms, break rooms, PCs, or telephones, significantly reducing the facilities footprint and related costs.
3. Customer and employee satisfaction. Digital labor frees up staff from mundane, repetitive tasks to do more strategic work that’s not impacted by geographical location, resulting in higher job satisfaction and morale.
Coming Out of the Shadows
In a way, the prospect of digital labor on the business side is quickly adding to shadow IT, creating a unique dilemma for the IT organization: IT teams may find themselves caught in their own legacy, frustrating the business with design-build-run models that don’t run at the speed of today’s business, while digital labor opportunities allow business users to go out on their own while finding creative ways to hide or twist what they are doing so it doesn’t look like an IT project.
In a world of digital transformation, the stakes are higher than ever. The CIO needs to step up and lead to make sure that digital labor does not become a risk and threat to IT. On the other hand, the CIO also needs to help the business take advantage of significant opportunities — while many of these use cases lie in the distant future, early adopters are generating tangible ROIs from their efforts.
“The business is more tech-savvy than ever and is not going to wait for the IT organization to catch up,” says Murph. “This is a trend that is not going to stop.”