For a decade now, my two blogs have been yin and yang. New Florence keeps me excited about new technologies, Deal Architect keeps me level headed about the economics of technology and the slow adoption rates in most enterprises.
That balance has been handy in the last few weeks as I research the impact of automation technologies on various occupations and industries. I see many of my peers excited about machine learning or 3D printing or autonomous vehicles but unrealistic about adoption timelines. The collective effect is we are creating panic scenarios about job losses. Add to that the opportunistic talk of politicians during a Presidential year and we are creating unnecessary pessimism about jobless futures.
Take Elon Musk’s recent comment that you should be able to summon a Tesla from across the nation in a couple of years. I am seeing extrapolation to Uber with driverless cabs and the end of parking lots. Forget that Musk went “wink-wink” about the timeline as he said ““ I might be slightly optimistic on that.”
A much more established car company, Mazda is betting people will never give up their love of driving. Audi’s new Q7 SUV has 35 features to protect a driver from human failings. They are betting humans will be driving for a long, long time. Many city speeding budgets are counting on that. Many insurance companies are counting on that. History is on their side – see how many millions of drivers around the world have not adopted automatic transmission, an invention which dates back to 1921!
Two Oxford professors analyzed over 700 occupations in 2013 and rated them by “susceptibility to computerisation”. Their category of “Bookkeeping, Accounting and Auditing Clerks” shows a 98% probability of likely impact. Again they did not try to estimate how long it would take for such impact. Of course auditing is different from the first day I stepped into Price Waterhouse. Most clients now have ERP systems, there are Big Data tools and forensic technologies for auditors to use. But will audit firms overnight quit recruiting young accountants? Not for a while, and they are already working with universities to develop much more tech, infosec-savvy accounting majors.
My research is showing there are several “speed-breakers” to too much automation
a) The tech hype cycle – something Gartner has talked about for decades also applies to most automation technologies. The technology being peddled is often 2-3 generations away from industrial grade application.
b) Enterprise adoption cycles – are always slower than you expect even when the payback analysis appears compelling
c) Customers inconsistently embrace automation – stick shift cars, print copies of books, branch banking, cashiers at stores – decades after we thought they would disappear they continue to flourish.
d) Labor adapts to automation – nothing like the hostility the Luddites showed to machines in the 1800s, but today’s labor has tacit knowledge which often makes complete jobs difficult to automate. Individual tasks can be automated and labor evolves.
e) The Gig economy – Profound changes are taking place in the employer-employee relationship way beyond what automation is influencing. Companies are dramatically changing with their own digital transformations. Workers with multiple employers, crowdsourcing etc are changing the labor economy.
Every profession is becoming more digital, “smarter”. Four years ago, when I wrote The New Technology Elite I observed that in just about every industry : The lightbulb has gone on in even savvier CEOs. “If the consumer lives in the world of iPads and Kindles, can our own product be rethought to be more appealing to this tech-savvy consumer?”
Surrounded by smart cars, smart homes, smart everything, we are similarly seeing every occupation become “smarter”. The man-machine balance is changing but man is not disappearing in most of them.
So let’s focus on letting machines make our jobs less repetitive, less dangerous, less wasteful – and quit working ourselves into a froth about jobless futures
Super Tech Waste Bowl
Nearly half of next Sunday’s Super Bowl 50 Host Committee's 18 primary sponsors are tech companies — Google, Hewlett Packard Enterprise, Intel, Intuit, SAP, Seagate, Yahoo and Verizon. Lots of corporate parties expected to be hosted by tech companies in the Bay Area this week. Many of the commercials during the game, and in social media before and after will be from tech startups, mobile carriers and auto companies showing off plenty of tech. It is an understatement to say tech will dominate this week for a number of business executives.
To balance out all the marketing they will be exposed to, executives should read sobering feedback about technology and lack of productivity coming out of the recent bigwig WEF event in Davos. BusinessWeek “Annual productivity growth in the U.S. averaged 1.5 percent from the first quarter of 2008 through the same period in 2014. That’s less than half the 3.5 percent rate during the previous boom, which lasted from 1996 to 2003.” Time : “We all use cool new technologies, and a handful of companies are making out like bandits on them, but we simply don’t see the effects yet on productivity and growth across the board,”
You don’t need to be an economist to see that. You go into a hospital and even though they have spend billions on electronic medical records, you see tons of paper with scribbled hand writing. Try getting much detail on what the hospital allows you to see on line on your own records. Any one trying to get paid by a corporate AP department can see the convoluted processes they follow. Oh, it probably saves them some interest in delayed payments but I am willing to bet the cost of the process inefficiencies way outweighs the savings with interest rates so low. Cloud vendors have delivered some efficiencies but largely in some back office and IT infrastructure areas. They have had little impact on industry specific processes.
So, as an antidote to the marketing you will hear this week, I encourage you to re-read SAP Nation. $ 300 billion a year after relentless year in overpriced hosting, MPLS circuits, outsourcing and countless other charges. Not to mention spectacular IT project write-offs. And even if you are not a SAP customer you can extend the findings to most other corporate IT areas. Then look at how your business processes have stubbornly remained the same in spite of all the IT spend, and you can see why the productivity numbers are so dismal.
And to help with some antacid to offset partying, Amazon will be offering starting this Tuesday, the Kindle copy of SAP Nation at $ 4.99, half off the list price. The promotion will run through the Monday after the Big Game.
Read it and resolve to reduce your IT waste.
January 31, 2016 in Industry Commentary | Permalink | Comments (2) | TrackBack (0)