With the Rise of Intelligent Automation, Ethics Matter Now More than Ever

Todd Lohr, Principal, Technology Enablement & Automation, KPMG
Todd Lohr, Principal, Technology Enablement & Automation, KPMG

If you read the hype, intelligent automation is breaking bad, biased algorithms are everywhere, and no one seems to care.

But it may be too early to declare the death of socially-responsible automation.

The truth is, ethical expectations are rising faster than ever.  Turns out that 76% of consumers say they would decline to do business with a company if it supported issues that conflicted with their beliefs.

To keep up with expectations, to stay relevant, to win consumer trust, to attract and retain the best talent, major brands are responding to ethical calls to action.

Google, for example, has chosen to adopt a new code of ethics for artificial intelligence.

Amazon has chosen to push for more governance of facial recognition technology.

And Microsoft has called on Congress to regulate how and where smart tech gets used.

In other words, if intelligent automation plays a role in your organization, ethics is probably something you should be thinking about.

How does an aspiring CXO step up to ethical calls to action in a time of exponential growth in intelligent automation?

Expert insight helps.

Which brings us to Todd Lohr, Principal, Technology Enablement & Automation at KPMG.

Lohr leads KPMG’s US practice for process automation, including business process management, robotic process automation, and cognitive technologies.

Appian sat down with Lohr for a conversation about ethical considerations in the age of intelligent automation.

Hope you enjoy the conversation.

Appian: Everybody’s talking about the technology behind the explosion of intelligent automation. But you’ve also focused on the ethical side, the human side of the story?

Lohr: 

Well, one of the things we’re focusing on at KPMG is the human side of digital transformation. And one of the areas that I think is gaining a lot traction with CXOs is the ethical use of AI and intelligent automation.

You know, if you read the hype, 50% of the workforce is at risk of disruption from intelligent automation. The important question is, what does that mean for workers and society?

And as a senior exec, what are your social obligations to bring your workforce through the disruption?

The other area that I specialize in is technology convergence.

Combining Technologies to Solve Big Problems

Appian: Aside from tech ethics, one of the other areas you specialize in is tech convergence. Can you break that down for a non-tech senior exec?

Lohr:

You’re no longer seeing organizations bringing in a single technology to overcome a business challenge. But organizations are asking: “How can I combine multiple technologies to solve problems and take advantage of business opportunities.

Like Appian with its low-code, quick application development platform. It has a backbone that allows you to hang off technologies like robotic process automation with Blue Prism, and call Google with APIs that enable you to use machine learning.

This approach allows you to solve increasingly complex problems, using more and more technologies that are architect-ed together. So, you’re seeing that kind of convergence in the market, where things are really starting to come together to provide powerful solutions.

The Human Side of Automation

Appian: Speaking of solving complex problems, how hopeful are you that CXOs will be able to navigate the workforce disruption that will come out intelligent automation?

Lohr: I generally have more of a Utopian view. We talk a lot about automation and intelligent automation, and we lose sight of the fact that there’s also going to be a lot of augmentation of human labor as well.

Appian: What do you mean by augmentation? And how will that impact future work?

Lohr: You’re going to see automation create new ways of working and creating value. And what that means for business is that you’re going to see a shift to people working on higher-value tasks.

Freeing Up People to Do High-Value Work

Lohr: We’ve seen this with the Industrial Revolution, we’ve seen it with the automation of factories, and now it’s happening in knowledge work. Automation isn’t new. But it’s coming after jobs that I think people didn’t think would be impacted. That’s because most of us grew up in an age where we knew that manufacturing was going to be automated, but not my desk job.

But this also means that automation is going to free up capacity to more value-added things. Companies are going to change their business models to provide better, faster customer service. It’s going to drive more insights around your sales channels and operating models, and the day-to-day management of the business.

Does Your Workforce Have the Skills to Win?

Appian: So, for senior execs, what are the big challenges that are going to come out of this disruption? What are some of the big questions that business and IT leaders must be prepared to answer?

Lohr: The challenge is going to be: If you look at your workforce, do you have the right combination of skills and talent?

In 5 to 10 years, when automation is fully ingrained, will your workers still have the skills your organization needs?

You’re going to see a need for more people to drive creativity, more person-to-person interaction, and a need to free up capacity to drive more personalized customer service to individual customers. You’ll see changes like this in many industries across the board.

Appian: And it’s not going to be just the traditional blue-collar jobs that will be disrupted, but white-collar knowledge workers as well.

Lohr: Yes, even when you look at what happened 10 years ago with outsourcing, where it was coming after pseudo-white-collar jobs like data entry.

But intelligent automation is coming up the stack quite rapidly, and coming after lawyers, doctors and consultants.

Which is what I do, right?   I take a lot of information, ingest it, and form hypotheses for my clients. And that’s really what intelligent automation can do.

So, you’re going to see disruption in every industry where knowledge work is happening—especially in service industries.

The conventional wisdom was that this kind of automation was relevant only to the production of products.

Are You Ready for Workforce Disruption?

Appian: Do you think C-suite execs are putting a high enough priority on being prepared for workforce disruption? Is it at the top of their priority list?

Lohr: I think some are. But universally, I’d say no.

I think some organizations, broadly speaking, are not prepared for the impact of intelligent automation.  Specifically, I’m talking artificial intelligence, machine learning and all of the emerging technologies that are coming in the next 5 to 10 years.

Appian: So, it sounds like you’re talking about a relatively short time horizon of years, not decades.

Lohr: This is what I always tell business leaders. It’s going to happen within our working lifetimes. And we need to be prepared for it.

I think there’s a mindset of: “AI is still just science fiction.”  People have been talking about AI for 50 years.

And people look back at the last 20 years and say: “This topic came up decades ago, and nothing has really happened.”

The Last 20 Years Will Look Nothing Like the Next Five

But the challenge with that kind of thinking is that AI is on an exponential growth curve.

So, if you look at the last 20 years, it will look nothing like the next five, because we’re at the inflection point of the exponential growth curve.

This means the technology is going to come into the marketplace a lot faster.

Appian: Which is a good segue to the topic of education, and how we’re educating future workers. Are our schools teaching the right skills for the jobs of the future?

Lohr:

Our schools are educating for the jobs that are here today, and the jobs that were here yesterday. They’re not educating for the workforce or the jobs of tomorrow. So, the biggest challenge is going to be the speed at which we can turn this situation around.

I think senior execs and policy makers conceptually get it. But I don’t know that they’re prepared for how fast it’s going to happen.

And I don’t know that people buy into how widespread it’s going to be, and how impactful it’s going to be to their business and operating models.

Chatbots Catch on in Customer Care

Appian: Back to the human aspects of intelligent automation, how do you see intelligent automation impacting the customer experience? How will it change how organizations interact with their customers and clients?

Lohr:

One of the things you see right now with customer service interactions—on the sales and post sales side—is a lot more intelligent assistance and automation in the form of digital assistants like Alexa and Google.

So, you’re seeing people starting to demand service in a different way. Before, it was self-service. Now, it’s moving to voice recognition as the most natural of all interfaces.

Appian: There’s also a lot of buzz about the rising adoption of chatbots in customer service.

Lohr: Yes, you’re seeing chatbots in that market. You’re seeing lots of technologies coming up to drive automation.

What’s different now than before, is that when organizations looked at their contact centers, and how to drive benefits there, they kind of looked at it two ways: What is the cost of this?  And how can we move the needle on customer service, loyalty and lifetime customer value.

And usually taking cost out of that function resulted in a degradation of customer service, right? You’re seeing an inverse now, where automation is providing a higher level of service, and more personalized self-service at a fraction of the cost of live agents, without putting customers on hold for 20 minutes.

This going to change the economics in that space.

The Social-Responsibility Approach to Automation

Appian: Earlier you talked about the ethical considerations of intelligent automation. I’d like to talk about that from the decision-makers’ standpoint. What guidelines would you give to CXOs to help them better decisions about automating work?

Lohr: Yes, I think many organizations have guiding principles and ethos on how they make corporate decisions. What I don’t see, is how that translates to how you adopt technology.

I tend to look at the ethics of making automation decisions the same way “green” initiatives impact corporate decisions. It’s in the same vein.

Appian: That sounds like a corporate responsibility approach.

Lohr:

Yes. Organizations are going to be looking at how they adopt automation technology in terms of how it’s going to replace workers, augment them, or fundamentally change the makeup of their workforce.  I think you’re going to see a lot of corporations thinking about the corporate responsibility of that, because studies show that consumers want and will only do business with socially responsible companies.

Think of all the social media that’s happening today. And just imagine that you start a tweet storm, because your organization is replacing 10,000 workers with robots. That kind of stigma is a reality for a lot of organizations, and I think they’re going to have to address it in a socially responsible way.

Bringing Workers Through the Digital Journey

Appian: So, you’re saying that it’s not just the economics that will drive automation…

Lohr:

I’ve had many senior execs say that they feel responsible as a leader to help bring their workers through the digital transformation journey.

Large organizations are going to put in programs to upscale their workforce. And they’re asking questions like: How do I think about my organization’s talent in a very different way.

What is my strategy to prepare people for new categories of work? How do I take care of workers that are going to be impacted?

I think you’re going to see a lot of discussions like these in large organizations.

So, when you think about the ethics of AI, there’s definitely that kind of social responsibility aspect to it.

Beware the Risk of Regulation

Appian: I’ve seen many news reports about the large percentage of the work we do that could be automated with technology that exists today. If that happens, what will it mean for business and society in general?

Lohr: First, it would change the very makeup of every organization. It would create large implications for our society as a whole. And if corporations don’t start managing that, I think you’ll see governments start to get involved, to slow the pace of change, to regulate, like the regulation discussed in Europe to tax automation.

That kind of regulation would change the economics and slow the rate of automation. I think you’re going to see a lot more of that kind of thinking in the U.S.

Appian: On a related note, there’s a school of thought that focuses on the ethical concerns about the problem of building bias into the development of AI and machine learning. What do you make of that?

Lohr:  

Yes, there are ethical concerns about bias in AI. So, for example, as we teach AI and machine learning, how do you keep bias out of the process? There’s also a concern around how we monetize AI and democratize it, so that it doesn’t end up in the hands of just a few.

These are some of the topics that I think are resonating most with C-suite execs right now.

Specifically, if I’m going to automate large pieces of my workforce, what are the responsibilities I have to my workers?

How do I bring my talent through this? What can I do as a leader to bring my organization along for the journey?

Automation Myths Debunked

Appian: In your conversations with CXOs, what are some of the biggest misconceptions about intelligent automation?

Lohr: Probably the biggest misconception is… first of all, there’s just a lot of hype in the marketplace. I would start there.

The way we look at intelligent automation is that it’s not a single technology but a spectrum or a continuum of technology from more basic, rules-based automation all the way up to true artificial intelligence.

And I think there’s more complexity in considering which technologies are here and now and what’s coming.

So, there’s robotic process automation that’s really hot right now. And people are starting to grasp that.

Appian: So, what does that mean, and where does machine learning fit into this? And where does AI fit into your intelligent automation strategy?

Lohr: That kind of goes to the spectrum concept. We call it intelligent automation.

But there’s a lot of technology in the marketplace that’s not super intelligent. Much of it is more traditional rules-based automation. It’s just gotten better in the last several years.

The Software Selection Conundrum

Appian: One of the biggest challenges for CXOs is to cut through the hype and select the right software. Making the right choice could determine whether you succeed or fail.

Lohr: 

You have thousands of vendors in the intelligent automation marketplace. There are so many now that we’ve created a machine learning algorithm to track the machine learning companies (laughter) on the internet.

So, we have an automation trend index that tracks the marketplace for us, because we can’t keep up with the speed and change in the marketplace.

And this drives complication as well—all of these different technologies and what they can do, and the constant change. It means that as soon as you set a strategy, it’s not current anymore.

Appian: So, how do you cope with that? How can a CXO figure out what she needs to be thinking about and doing to stay ahead of the curve?

Lohr: So, I think the big challenge is to understand the technologies that are here and now. And, they should be investing in and managing them as a portfolio. In other words: Here’s my portfolio of disruptive technologies. And here’s how it’s going to impact my business and operating model.

Here’s what I’m doing over different time horizons. Here’s what I’m doing to manage disruption in the short time. And here’s what I’m doing to manage it over the next three years.

Time to Rethink Your Automation Playbook

Appian: We’ve talked about the need for CXOs to find their ethical compass for investing in intelligent automation. But you’ve also been quoted as saying that we need to make a fundamental shift in how we think about technology. What did you mean by that?

Lohr:

We’re moving from a paradigm of people building technology to automate work to people that build technologies that build technologies that automate work.

And that’s the transformative value of making a fundamental shift in how we think about technology and automation.

Today, if you said “Todd, I want to automate this department.” I’d bring a bunch of people in with me. And we would build a bunch of systems.

We’d configure the technologies we’re going to use. If you’re going offshore, we’d build the solution to automate that.

So, that’s how we look at it today with the notion of people building technology to automate work.

Fast forward a couple of years, and I’m going to install some desktop software that’s going to watch everybody work.

Over time, it’s going to understand what you’re doing. And then it’s going to start augmenting you.

It’s going to say, “Todd, I think this is what you’re going to do next.” And I’ll say yes. And I’d train it. And six months from now, it’s going to be able to automate that work.

So, our role as technologists will be to build the technology. And the technology’s role will be to build the automation. And that’s the fundamental shift that’s going to drive the speed of transformation.

Machine Learning: The Next Big Trend

Appian: Last question. As you look at 2018 and beyond, what are the big trends that CXOs should be paying attention to?

Lohr: Real adoption tends to follow the hype cycle by about a year. So, 2017 was kind of the peak of the robotic process automation hype cycle.

And now we see most large organizations adopting RPA that’s keyed to operational improvements and taking costs mostly out of the back office.

2018 will be the year of the chatbot.

So, throughout the rest of this year and 2019, you’re going to see a lot of organizations transforming, fundamentally, their customer service organization, or their sales capabilities, in a very digital way with Alexa or Google, or what we’re calling intelligent interactions.

Beyond that, 2020 and 2021 will be the years of widespread adoption of technology predicated on machine learning.

And you’ll start to see machine learning finding its way into all parts of your business.

Hear More from Todd Lohr

To learn more about getting the most out of intelligent automation, check out the insightful conversation in the podcast below featuring top experts:

  • Todd Lohr, Principal, Technology Enablement & Automation at KPMG,
  • Neil Ward-Dutton, Research Director at MWD Advisors
  • Anne McClelland, Vice President, Global Technology Partnerships at Blue Prism
  • Malcolm Ross, Vice President, Product Marketing at Appian.
Introduction to Intelligent Automation - A Strategy Based on RPA, BPM and AI Technologies

 

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