Tag Archive: future of the workforce

Make Digital Literacy a Strategic Workforce Priority

Published by

Leslie Chacko

If there is one word that is capturing the new normal pace of the age we are in, it is acceleration. We are accelerating into the digital era, thanks to the explosion of data, accessibility of cheaper computing power, and broad adoption of technologies like machine learning and the growing web of connected devices composing the internet of things. An increasing number of companies are taking advantage of these trends to develop more innovative and compelling experiences for their customers, drive better and faster decisions, streamline their operations, and proactively reduce operational risks within their eco-system.

But while digital transformation promises accelerated innovation and economic advantages, the shift often creates unprecedented challenges for many companies steeped in legacy culture, process, technology, and ways of working. Not surprisingly, business model disruption and technology disruption are ranked as the top trends impacting their company over the next 12 months by the most recent 2017–2018 NACD Public Company Governance Survey. While board members are grappling to understand the implications of these changes for their organization, they must also turn their attention to the digital literacy and preparation of the company’s workforce to prepare it to face new challenges.

One critical challenge that can’t be ignored is the company’s role in preparing its workforce for intelligent automation. The World Economic Forum’s Future of Jobs Report predicts that 7 million jobs could be lost over the next five years through redundancy, automation, or disintermediation, with the most significant losses in white-collar office and administrative roles. Others argue the job losses could be less over the long term and there is much debate among economists, historians, and think tanks on the level of job destruction and creation that will come from automation. But two things are certain: one, in the near-term, we expect much workforce force disruption; and two, as artificial intelligence algorithms increase in sophistication and computational power, the pace of intelligent automation is likely to accelerate and push the workforce to focus on higher value activities. To meet that challenge, the workforce of the future will need to acquire a new set of skills rapidly in order to interact with the future of intelligent systems.

Unfortunately, many companies aren’t entirely equipped to assess and prepare their workforce for this disruption, especially in corporate functions like finance, treasury, risk management, and human resources. Research suggests these critical functions are still struggling to understand the full scope and impact of new technologies. For example, the 2018 AFP Risk Survey, supported by Marsh & McLennan Companies’ Global Risk Center, polled over 600 senior-level treasury and finance executives. The majority of respondents to the annual survey cited artificial intelligence, robotic process automation, and data engineering as technologies that could expose their companies to some risks, including disruption to business operations and regulatory risks. Only 14 percent of the same group surveyed say they are “significantly prepared” to manage these changes effectively and more than half (54%) say they are only “moderately prepared.” Similarly, the 2017 Excellence in Risk Management report, by Marsh and the Risk & Insurance Management Society (RIMS), found an awareness gap among many risk managers on the use of disruptive technologies by their organizations. The survey also found that more than half of organizations have not conducted risk assessments for disruptive technologies.

It is clear that the need to invest in re-tooling the workforce couldn’t have come at a more critical time. At the heart of this investment should be access for the workforce to a digital literacy program. Digital literacy is notably separate from computer literacy. Rather, it should be a focused program that educates employees in emerging fields such as big data, machine learning, process automation, blockchain, and the internet of things. The program would provide practical applications that are contextual to the employee’s role.

Thanks to advancements in online technology, there is now an array of learning opportunities available to employees and to board members alike. For example, Massive Open Online Courses offered through companies like edX and Coursera offer an array of courses, as well immersive, state-of-the-art educational content developed by top technology companies. Many of these platforms cater to the needs of individual enterprises and can customize digital literacy pathways for employees based on their industry and current skillsets. A small but growing number of companies are exploring these platforms as an avenue to accelerate learning within their organization.

A subset of technology companies is also opening up access to core technology courses beyond their employee population as a way to shore up interest in the technology used at the company and to close the skills gap. Microsoft recently announced the Professional Program for Artificial Intelligence for aspiring engineers and analysts with to a basic introduction of AI to mastery of the skills needed to build deep learning models for AI solutions that exhibit human-like behavior and intelligence.

Last but not least, there are more traditional ways to close the digital literacy gap. AT&T Corp., for example, sponsors a low-cost online master’s degree in computer science from the Georgia Institute of Technology’s school of computing and offers a variety of courses to retrain its employees who work in jobs that will become obsolete, such as landline installation and repair.

The concept of digital literacy is still at an early stage, but it is a critical foundational step that companies need to take to prepare their workforce for their future. Technology is disrupting everything in its path—including the demand for, and demands on, the workforce—and it’s not slowing down. The question boards need to ask is whether their organization is prepared to oversee the transformation of their company’s workforce proactively or passively react to the inevitable technological progress that will disrupt down the road.

Leslie Chacko is a director in Marsh & McLennan Companies Global Risk Center and leads research on emerging technologies. He has over 14 years of experience in advising clients in the financial services and high tech industries at the intersection of strategy, technology and risk.

Robotics and Automation: The Fourth Industrial Revolution Begins

Published by
Anthony Caterino

Anthony Caterino

Robotic process automation (RPA) is among the hottest topics in today’s enterprise. RPA simplifies business processes by mimicking human actions and automating repetitive tasks without altering existing infrastructure and systems. Nearly every day, we hear stories of organizations streamlining operations and optimizing costs with RPA.

Why is this technology gaining such attention? Because it has the potential to make enterprise-wide business transformation a reality.

As directors continue to rethink and address their organization’s strategy, RPA should be considered as one component of an array of emerging technologies that are changing the game. These solutions include artificial intelligence, cognitive computing, and machine learning. Many call this the Fourth Industrial Revolution, and for good reason. Nearly half (47%) of US jobs could be impacted by computerization, according to a 2016 report authored by Oxford University and Citibank.

Sitting on the sidelines is no longer an option. Robotics technology has moved beyond proof of concept, and the business benefits are increasingly clear and attainable. In a recent example, EY worked with the Robotics Center of Excellence for a major U.S. bank to scale robotics on a global level. Results included a significant reduction in full-time employees (FTEs) across back- and middle-office business processes and decreased runtimes for automated processes. Leading organizations will focus on the long game, planning for scale, speed and pace of adoption on the automation journey.

Boards will play an important role in helping organizations seize automation’s full advantages—reduced redundancies, improved accuracy, speed to market, and the ability to free human staff for high-value work. Vigilant corporate governance will help promote the establishment of a robust operating model and provide oversight of controls and risk management. From the highest levels, the enterprise must successfully manage changes in technology, processes, and people to seize opportunity while enhancing risk management.

The Need for Strategic Vision

Boards looking to enhance oversight of corporate strategy in response to these disruptive forces can learn from the industry’s early successes and failures.

Despite industry promises of rapid, low-cost success, automation is not a one-size-fits-all journey. The board must guide leadership to make certain that a robust operating model exists for leveraging the best-fit technologies to meet the organization’s needs.

The operating model must adapt to support a hyper-agile implementation approach. EY recently worked with the C-suite of a leading financial services corporation to design a centralized automation strategy. This strategy established a common framework to support its federated environment. Ensuring that the company has adopted the right operating model is key to accelerating technology adoption and streamlining change management to succeed in an environment that is continually evolving.

The automation journey should also be results-driven, with an emphasis on return on investment. For one global insurer, EY developed a proof-of-value to explore opportunities to automate labor-intensive back-office processes. The results helped management make an informed decision based on tangible outputs. When implemented, robotics cut the cost to deliver high-frequency tasks in half. If properly designed, the automation journey can be self-funding using a laddered process, with the cost savings realized on initial programs used to fund successive initiatives. This contrasts with the enterprise-wide implementation model common with many legacy solutions.

A robust operating model can also help mitigate risk. For example, because many automation solutions are engineered to work with current enterprise software, the operating model must account for changes in an organization’s software layer. If changes are made without considering the automation tools, they can quickly crash important processes.

The Human Equation

Along with planning for the technology changes, boards must foresee the human elements of transformation and embrace the workforce of the future.

It is not uncommon for today’s powerful RPA technology to reduce the number of humans needed on a data-intensive process from 50 people to five. A robot costs approximately one-third the price of an offshore FTE and as little as one-fifth the price of an onshore FTE, according to the Institute for Robotic Process Automation. Boards must think strategically about a company’s entire workforce mix—from where people are located to who (or what) performs specific roles.

Yes, the opportunity for cost optimization exists. But forward-thinking companies will seize the advantages of reallocating and retraining people currently in rote functions to higher-value tasks that generate business insight. The board should set clear expectations for managing human capital beyond layoffs—to leverage people to gain a competitive advantage.

The bottom line is that workforce transformation enabled by automation is coming quickly. In fact, it’s already happening. The boards that realize this soonest and come prepared to lead management on a journey that optimizes both technology and people will position their organizations to win in the long run.


Anthony Caterino is vice chair and regional managing partner of the Financial Services Organization at EY. Steve Klemash is a leader in the EY Center for Board Matters in the Americas.