By Darren Roos, CEO of IFS
The technology gains of the past decade have been tremendous, with this era being dubbed the Fourth Industrial Revolution.
This is due to new innovations fundamentally changing the way we live, work and engage with one another in society. The technologies leading this transformation are Blockchain, Cloud Computing, Internet of Things and Big Data Analytics, but it is since Artificial Intelligence became accessible that I have seen some of the most dramatic productivity improvements of my 25-year career in Information Technology (IT).
Spending on AI-based software will grow from $35.5 billion to $97.9 billion by 2023, according to the International Data Corporation (IDC). In IFS’s latest AI study, industrial automation was the most commonly reported area of investment in the years ahead at 44.6 percent.
When I meet with business leaders in our focus industries, I encourage them to acquire an ‘AI mindset.’ By this I mean: don’t just look at the technology itself. Instead, focus on the potential you want to unlock in your business and staff. Think about the processes the technology can streamline, what data it makes visible and what decisions it automates so your resources can be deployed most effectively.
The role of the C-suite
In my experience, one thing has been consistent in effectively executing a digital transformation project: secure management buy in early in the process, and clearly define what success looks like. Getting the C-suite involved from the outset builds the right level of support and momentum that will increase the likelihood of the project meeting or exceeding the business’s goals.
There is industry-wide acceptance that this level of engagement is becoming a necessity. A 2018 Gartner study of more than 3,000 Chief Information Officers in 98 countries representing all major industries revealed that 95 percent expected their jobs to change or evolve due to digitalization. The two major transformations the respondents cited were becoming a change leader, followed by assuming increased and broader responsibilities and capabilities.
Once you have the C-suite engaged in an AI project that will drive value for your business, then turn your focus to building the right pool of talent, both internally and externally, to execute the project and deliver that vision. The right ERP provider will play a leading role in achieving this by working collaboratively with your team to establish exactly how an investment in this technology will impact your business, and how it will drive value for your company. At IFS, we call this process Business Value Engineering, and it has enabled many of our customers to see the benefits of our solution before making an investment, while giving the project teams a clear plan to execute against.
Never Underestimate Human Talent
There are clear categories of skills where AI can outperform humans, including tasks that involve process-oriented and quantitative reasoning skills. Even though this technology can bring exciting potential gains for a business, human decision making will always have an important role to play in any business environment.
It is true that the job landscape will change as a result of AI. Over the next decade, more than 80% of process-oriented tasks will be done by AI systems. The machines taking over these roles have been dubbed ‘no-collar’ workers, and include identifying fraud, administration role, stocking shelves and other jobs with routines that can be automated. As natural language processing improves, robotic customer service agents will also be able to understand customers, diagnose problems and determine actions based on a large range of pre-set customer queries.
However, this does not mean that society is facing an unemployment disaster. Where jobs require more social abilities, creativity and cross functional reasoning, humans will continue to do more than 80% of work. Areas such as defining a strategy, managing people, designing a mindset, emotional intelligence and conflict resolution remain uniquely human, and we will see workers with these skills become increasingly competitive in the job market of the future.
Our customer Cheer Pack, a packaging company based in the United States (US), deployed a fleet of AI-powered autonomous vehicles to robotize material movements in its US factory, taking orders from an Enterprise Resource Planning (ERP) system controlled by IFS. Company executives anticipate that automating the process of identifying and retrieving items helped them achieve $1.5M a year in savings and didn’t cost anyone their job. Instead, employees on the shop floor were trained up into more specialized roles.
Engage All Stakeholders
We have seen many headlines covering the incredible transformational potential of AI, including estimates that it will contribute to $15.7 trillion in global gross domestic product (GDP) gains by 2030. While the potential benefits of investing in AI are very significant, I encourage business leaders to focus instead on short term achievable gains for their business, establishing confidence in what these technologies can deliver and scaling from there.
Leaders need all stakeholders to believe in the digital transformation process, whether it is the first time a company is engaged in such a project or just the latest iteration.
In this context, explainable AI is ever more critical for real-world application. It refers to the tools and frameworks that are used to help humans understand and predict the outcomes of AI in any given project. For instance, you can use algorithms that are able to clearly show why a prediction or decision is being made. The expectation that all stakeholders – technocrats and non-technical specialists alike – should understand how AI technology is being applied has gained industry-wide acceptance over the last few years because it is so valuable in building trust in the systems, which makes their success much more likely.
Collective Gains Ahead
The Fourth Industrial Revolution is just getting started, but AI is already set to change the world forever. For enterprises with a unified vision of the future that all stakeholders can buy into, the potential gains are massive, and I look forward to being part of that journey for our customers.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.