Digital Labor & Human Capital

 Digital Labor & Human Capital

HOW TO INCREASE THE VALUE OF HUMAN CAPITAL IN A DIGITAL WORLD

By Jonathan Crane

Seven out of ten corporate executives say they are making significantly more investments in artificial intelligence (AI) than just two years ago, according to Accenture’s recent Technology Vision survey. And more than half say they plan to use machine learning and embedded AI solutions extensively. The race toward a digital future has begun and within the next five years, mastering the impact of this technology on future strategy will be a critical task for every CEO.

Computational speed, machine learning and natural user interfaces have all advanced to the point where computers can do jobs that, previously, only humans could do. Intelligent digital labor is set to spark a radical change in labor dynamics, with research from market analyst firm, Gartner, suggesting that by 2030, virtual talent spending will exceed 10 percent of human staff costs.

The digital employees that emerge as a result of AI advancements will need to be integrated into a new, hybrid workforce. This integration is understandably a source of fear, uncertainty and doubt as the people in the human workforce struggle to envision their personal roles in this new future. Strong leadership and vision are urgently required as we enter a period of upheaval as significant as the industrial revolution. CEOs need to take an early lead on communicating a new blueprint for their digitally enhanced organization that maximizes the combined potential of their human capital with their new bank of intelligent labor.

Where Should Organizations Invest in People?

Move people from tactical functions, where there’s very little strategic advantage, into a place where human capabilities are the most valuable.

Many companies have built up structures that compete on costs through labor arbitrage. We are quickly coming to the end of the life span of this strategy because it is impossible to maintain an employee in a tactical function at a wage level that could compete with automating the task.

Take a customer service desk environment in a telecommunications company. The volume of billing and technical queries received on a daily basis consumes vast amounts of time and resources without providing any differentiation for the customer. But digital agents can absorb this routine work at scale, ensuring customers get a near-immediate response to their queries. More importantly still, the support provided by the digital agent will be consistent no matter what time of the day or night the customer calls. If we were to assume that the human agents fielding questions currently spent 80 percent of their time on the basic queries that the agent could take on, and only 20 percent of their time on conversations with clients about expanding or changing a plan to better fit their needs, it’s clear that dedicating 100 percent of the human agent time to the second category of query would deliver much higher returns. Using digital labor to absorb routine, day-to-day tasks and restructure the organization will allow human teams to spend their time planning, analyzing and architecting future services and solutions. It’s about investing people in the right places.

What Value Can Organizations Drive From AI?

Embracing a digital workforce means rethinking operations. Rather than simply speeding up existing processes with AI, companies have the opportunity to use new technology as the means to devise and launch entirely new processes and services.

Shifting the balance from tying up resources in reactive processes to proactive processes is the primary goal. For instance, using IoT data to predict potential faults arising with a dishwasher, and having a digital agent contact the customer proactively to book an engineer visit as soon as possible, cuts out the negative experience of a dishwasher leak for the customer.

Managing the Digital Workforce

AI, robots and automated systems need to be managed, and this is very different from managing people. We will need to get used to having new, inhuman colleagues, and learn how to get the most value out of them. Machines have unbeatable memory and capacity to process vast amounts of information, but do not come close to making the leaps of logic that typify human ingenuity and creativity. Where man was born to break the rules, machines are born to follow the rules; both working in tandem offer an unparalleled acceleration in productivity but, as with managing people, the quality of the output is often only as good as the quality of the brief and objectives. Setting these in the context of automated and robotic systems will be a vital skill.

Automated systems prompt us to document all maintenance tasks and create accurate records for a vast number of processes currently carried out manually, offering little tracking data. When these are analyzed, patterns can be spotted and addressed at a core, structural level to prevent recurring issues. Within IT, for example, personnel work with machines to focus on preempting problems rather than reactively managing incidents, which prevents recurrence of problems and fundamentally improves the performance of a business.

Developing a Pipeline of New Skills

New roles will become increasingly important to AI-enabled organizations. In particular, the Data Intelligence Officer will play a major role in filtering and interpreting the vast amounts of data stemming from automated procedures and transforming it into valuable intelligence. The ability to see the bigger picture and spot trends and opportunities will become a key skill, since it maximizes the varying abilities of both people and machines.

Be prepared to treat IT as a strategic division of the organization, rather than the back office, by recognizing that an IT expert who, for example, develops new algorithms or systemic improvements, has the potential to completely transform the business. Centers of excellence in emerging technology capabilities, such as cognitive computing, will be essential in managing the successful deployment and integration of new digital agents.

Another new, highly sought after job role within technology is that of the Data Scientist — a role that didn’t exist (under that name, at least) ten years ago. Demand for commercially savvy data analysts is already vastly outstripping supply, with companies including Microsoft, Facebook and Google on massive hiring sprees. Individuals who combine skills in mathematical logic with applied philosophy — essentially taking human wisdom and knowledge and turning it into a format that machines can understand — will be in heavy demand.

We need to remember that people’s skills will not be static. Each new technological development creates roles that were unheard of a decade before. For example, the Twitter and Facebook revolution has led to the creation of tens of thousands of social media experts and even entire agencies dedicated to a new business need. As well as battling in the market for expertise, invest in creating a learning culture that supports the individuals within the organization who have the appetite to learn new skills. Their desire to work with machines, rather than against them, will help accelerate a smoother transition to a new digital operating model.

Unleash Top Talent

While it poses many challenges to the status quo, AI-fueled automation offers huge benefits to both employees and businesses as a whole. AI has a similar potential to free up human talent for more creative and value-added roles, as well as inspire wider opportunities for growth, savings, efficiencies and innovation.

As Tom Davenport and Julia Kirby point out in their book, Only Humans Need Apply, individuals can craft career strategies to work alongside digital colleagues. However, it’s important for CEOs to approach the point of departure with a frame of mind that is open to maximizing the possibilities for everyone. Rather than beginning the journey by seeking out what to replace with technology, the richer opportunities that drive real value will be the ones that augment the productivity of their workforce by complementing human and machine strengths.

Jonathan Crane is Chief Commercial Officer at IPsoft, the digital labor company with offices in Austin.

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