Paul Roehrig, VP & Global Managing Director, Center for The Future of Work, Cognizant Technology Solutions
Countless apps now make our lives more convenient and fun, but – let’s be honest – they haven’t really improved the more important elements of our lives, like how we bank, stay healthy, insure our families, educate our children.
But this is changing. Digital technologies – including AI, algorithms, bots, smart devices and big data – are beginning to impact not only things that are fun, but also work that matters. This includes game-changing productivity improvements that compress weeks-long processes into a blink, customize services that morph as we do, lead to more accurate diagnoses and predictions – the list goes on.
These trends are making it essential for decision-makers to get beyond the digital hype and find real answers to the questions of the day: What is digital? How are businesses really embracing new technologies? What is the real economic impact of digital? Where are robots adding real value (and not just leading to sci-fi fears)? What do new technologies mean for leaders setting strategy over the next three years?
To gain insight into the opportunities and risks posed by digital, Cognizant’s Center for the Future of Work surveyed 2,000 top executives at leading companies around the world. Along with insights, we’ve uncovered some tactical guidance and meaningful steps you can begin to take right now.
Here are five key takeaways from our Work Ahead study that can help you thrive in the new digital reality:
- Recognize that digital is no longer “tomorrow’s problem.” According to study respondents, digital experiences by 2018 will drive growth, shaping 11 percent of revenue. That’s about $770 billion in revenue per year. Extrapolated across all industries we studied, the revenue attributable to digital transformation will total $20 trillion in just a few years’ time. What this means is, digital is not just a technology shift; it’s a revolution in how businesses will create value. If you think this shift is just hype or something that will all blow over, it’s time to wake up and smell the bots.
- See your back office as a hidden treasure chest. For leaders across the globe, there may be “gold on the screen” from a revenue perspective, but there’s also wasted cash on the floor of their call centers and logistics departments. Many are missing the massive opportunity to apply process automation – AI “robots” taking over certain jobs and job tasks – to hollow out costs. To get ahead, follow the lead of companies such as TriZetto (a Cognizant healthcare software subsidiary), which uses software robots to decrease healthcare payer costs by as much as 90 percent for some processes, or Blue Prism, which is applying bots to risk, fraud, claims processing and loan management to save millions of pounds. Leaders who don’t use technology to lower costs — now — will not be able to pay for the innovation needed to win in the digital economy.
- Don’t pay a “Laggard Penalty.” Some organizations are doing better than others with new technologies. Being worse than your peer group, however, comes with a high economic price. Companies behind the curve are paying a large annual “laggard penalty” – the difference in both cost and revenue performance due to technology. The penalty varies by industry, region and maturity, but suffice to say, if you are not getting at least 11 percent of your revenue from digital in the next few years — and investing significantly to “become digital” – prepare to “pay” anywhere from tens to hundreds of millions of dollars in lost economic value. Over time, being behind is enough to change – or end – a company.
- Don’t keep thinking of AI as a laboratory experiment. There’s no longer any debate: AI is changing how we do work in nearly every major enterprise. We found that virtually every business leader, from every corner of the world, believes AI, coupled with big data and analytics, will be the number one driver of business change through 2020. So, how do you get started? First, recognize that the starting gun has already gone off. If you aren’t taking steps now to plan and act for 2020, much less 2025, you’ll very quickly find yourself fighting a 21st century war with 20th century weapons. Second, winning systems – Waze, Predix, Palantir, Google, Lex Machina, Apple Pay, McGraw-Hill’s ALEKS and so on – succeed because they are aligned with a specific experience or task. Pick your spots with a process-by-process assessment to identify how work tasks can be changed with AI.
- To beat the bots, be a better person. In every economic revolution, one of our most pressing questions is: What about me? What about my job? Robots are here because of the economic benefits they deliver. We learned that in a digital world, activities that humans do better than machines will become even more important than they are today. Software can’t dance, sing, adjudicate a trial, comfort a patient, ask insightful questions, teach a child or lead a team. They can help, but they can’t do it. Uniquely human traits such as analytical thinking, collaboration, communication and creative problem-solving will become more essential than ever. To stay relevant, we need to double down on activities where we have – and will continue to have – an advantage over silicon.
Digital gets a lot of press – some good, some bad – but our findings show just how far we’ve come and how fast we are moving. Although the digital revolution is 70 years old (the first general-purpose computer, ENIAC, was launched in 1946), the “digital” revolution is just warming up! Our work ahead will be to reimagine – and re-build – work that matters to create value in our new digital economy.
About the Author
Paul is a Vice President and Global Managing Director at the Center for The Future of Work at Cognizant, a leading provider of information technology, consulting, and business process services. He is a co-founder of Cognizant Digital Business and also – along with Malcolm Frank and Ben Pring – a co-author of Code Halos: How the Digital Lives of People, Things, and Organizations are Changing the Rules of Business and the forthcoming What To Do When Machines Do Everything: How to Get Ahead in a World of AI, Algorithms, Bots, and Big Data. He can be reached at firstname.lastname@example.org and followed on Twitter @paulroehrig.
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