What’s disrupting almost every industry in every country?
Across all of the sectors Hoggett Bowers operates in, we hear a consistent theme of how technology is impacting on organisations; from greater levels of automation and digitisation that will cut costs, drive efficiencies and, simultaneously, improve the customer experience, to the increasing use of robotics and AI. Given the eclectic nature of the industry sectors who were represented at our latest regional event we asked our guests to share some thoughts and insights on how current and future technology is likely to affect their organisations.
People want to deal with financial services anytime, anyplace, anywhere.”
Our discussion was opened by the Chair of a well-established local manufacturing firm, still based on the site it was established upon and with a 110 year history. He said they are updating their IT and old legacy systems, which date back to the 1980’s, in order to engage with modern society and so are introducing things like electronic ordering. He wanted to make two points, firstly, the quality of IT software is extremely poor and secondly, security – and questioned whether to trust data that is held in the cloud or would it be safer on their own server locked up in a bombproof vault?
A banking CEO reminded us all of the recent big issues surrounding Equifax relating to cyber security [only in September 2017 did their US parent announce it had been the victim of a criminal cyberattack back in May impacting on 143 million U.S. customers. Although the UK business was not breached, the attack compromised the personal information of some UK consumers]. He said cyber security is the biggest new threat whatever sector you’re in and they are not alone in investing heavily in defences around that. One thing for sure is that you have to be better than those who set out to attack you. He sees fintech as both a threat and an opportunity, people want to deal with financial services anytime, anyplace, anywhere and if you’re not investing in the technology to allow them to do that, the business will get left behind and it will cost a lot of money to catch up again.
Another financial services guest agreed, saying that cybercrime is one of the biggest threats to all industries, organised crime is not bound by the usual codes of governance like a bank and hence they can react faster and get people quicker than they can. Scarcity of resource, skills and ability as well as the pace of change is a real threat and banks need to invest money in finding and training people.
AI is most powerful when it is used with intelligent people
The CFO of a technology led conglomerate which provides cloud services agreed that companies must ensure all software is current and up to date in order to protect against crime. If you try and do it yourself it is extremely risky as you will need to put enough resource behind it to constantly be updating your software to keep ahead of the hackers, but if you put it in the cloud your provider will be changing and updating their security software on an hourly basis. It can also be more cost effective as the cloud provider or IT consultancy will have made the big balance sheet investment and will only pass on a subscription. Cyber threats are not just for businesses but also in the home environment, you can hack into a washing machine or fridge freezer and will be able to hack into a driverless car, so the risk is everywhere. The banking CEO responded to a further question from our Chair, around using technology to enhance the customer experience. He said that banks have been computerising their business over 30 years starting with credit scoring. They are now looking to migrate customers who only do low value transactions on to a computerised self-service platform so that they can release staff to concentrate on those customers with more complex needs and give them a different level of service. He believes technology won’t take jobs away, as theirs is a growing business, so they will always have more work than people but they’ll just need to retrain them in different areas.
Our guest from an organisation set up to give a platform for disruptive technology in the UK automotive sector said that there are big changes taking place in his sector right now. People are talking about two themes; 1) Decarbonisation of road transport (i.e. Electric Vehicles (EVs)) and 2) Connected & Autonomous Vehicles (CAVs). We may not own many cars in the future and we’ll see more shared ownership models. He believes there will be a massive battle between the technology companies and car manufacturers as to who will own the relationship with the customer.
The CEO of an infrastructure delivery organisation commented that it is very difficult to know how autonomous vehicles will develop as there will certainly be some disrupters which we can’t yet foresee – will CAV drive up or down the volume of vehicles on our roads? We do know that ‘Big Data’ will have a major impact and presently look at how busy the roads are and predict what routes will be quickest and when and how long a journey will take if you leave at different times. However, the problem comes when 10,000 people decide to jump in their cars at the same time on the same route – that could add 10 minutes or more on to the journey time. So this data is being combined with other data, such as the weather forecast or when schools are back from holidays etc., and without technology this wouldn’t be possible.
People will still be needed but with different skills
A MD from another infrastructure organisation that designs, builds and operates in this space, noted how interesting advancement in global connectivity is, as to them it means that the way in which they deliver projects has changed. Global to local connection can be made where different design offices, anywhere in the world, are responsible for delivery, for example different aspects of a detailed design which are seamlessly integrated into the overall design package. Use of virtual reality and 3D simulations allows clients to visualise more clearly the end solution. They can also manage the costs better by choosing a lower cost centre, e.g. Madrid over New York, thereby passing on cost savings to the customers by using different office locations.
The infrastructure CEO continued by saying, automation and on-site GPS will change the way in which we deliver civil engineering contracts in the future, with the introduction of driverless cab technology their earthmovers can shift huge volumes of soil, and with centimetre precision, which will result, quite literally overnight, in the changing of the landscape to accommodate for the introduction of complex road and rail networks. Technology will also allow for modularisation in civil engineering projects to build a bridge, for example, by selecting from a catalogue and in a series of clicks a bridge will be designed in half an hour. This will also mean you no longer require the expensive skills set of so many engineering PhD’s!
The Chief Customer Officer from an insurance company asked what the impact of AI and machine-to-machine learning will be, will it reduce human skill levels or does it meant that other skills will evolve and adapt in the future? Is the limiting factor on technology the human brain?
Cybercrime is one of the biggest threats to all industries
The infrastructure MD interjected that 3D printing will be developed further and could even be used to build houses with robots spraying concrete. Trials are already underway in Japan. This will lead to very significant cost savings. People will still be needed but with different skills. He likened it to when CAD was introduced into the design world, it was thought that it would be the end of an office with 30 designers but in fact they still had 30 people, just doing different things. They are also using drone technology, for instance to assist in building roads in the middle of deserts.
The CEO from the automotive industry stated that AI is most powerful when it is used with intelligent people. Computers can crunch large and complex data sets in a way the human brain could never do but scientists will be needed to build the hypotheses to look at the data.
Our technology guest mentioned that the police force already have cameras that record what they see and this will soon have facial recognition software added to identify people with an existing criminal record and download their history for the police to see.
Our final comment was made from the automotive CEO who reminded us that this is the 4th industrial revolution, the 1st used water and steam power to mechanize production, the 2nd used electric power to create mass production, the 3rd used electronics and information technology to automate production and now the 4th is characterised by a fusion of technologies that is blurring the lines between the physical, digital and biological spheres. Compared to the previous three 3 the 4th is evolving at an exponential rather than a linear pace. The 1st three took longer and we had time to retrain people and they had time to develop more skills and capabilities but this is a much faster pace of change than has ever happened before. Moreover, it is disrupting almost every industry in every country and the breadth and depth of these changes herald the transformation of entire systems of production, management and governance.
In conclusion…. There is unprecedented change taking place across all business sectors fuelled by technology that is disrupting the norm and making us all question the way in which we approach everyday life, both from a personal and business perspective. So as leaders we need to question what can technology do for us and for our business, are we moving at such a pace to embrace change and capitalise on its benefits and do we have the right people with the necessary skills to move the technology agenda forward to ensure that we remain competitive in ever evolving Global markets?