Thomas Preston-Werner, the American billionaire founder and former CEO of GitHub, once famously said “You’re either the one that creates the automation or you’re getting automated.” Corporations around the globe are clearly heeding this admonition. The current frenzy of POC’s, pilots, and other projects underway to automate various aspects of enterprise operations using AI & Machine Learning is staggering. What about the results though? Are organizations seeing the kinds of returns on automation that justify the investment? And what about the impact to employees whose jobs are affected by automation?
To answer these and other questions, we turn to Tom Ivory, Head of Intelligent Automation, Digital Operations, North America for Capgemini. Tom’s role affords him a global perspective on the digital transformation enterprises are undergoing as a result of these automation projects. In this episode, we’ll learn that whatever jobs are lost due to digital transformation will be more than replenished by new positions including many that don’t currently exist, why every business that wants to remain viable must become a digital business, and how a college student studying art history might be just as qualified to become an AI expert as a computer science major.
Guy Nadivi: Welcome everyone. My name is Guy Nadivi, and I’m the host of Intelligent Automation Radio. Our guest on today’s episode is Tom Ivory, Head of Intelligent Automation/Digital Operations North America for Capgemini and according to consulting.com, Capgemini which is headquartered in Paris, France and has over 200,000 employees in more than 40 countries, is the world’s second largest consulting firm by revenue. So Tom brings a truly global perspective on intelligent automation to our show.
Guy Nadivi: Tom, welcome to Intelligent Automation Radio.
Tom Ivory: Hi Guy. Thank you for having me on the show. I’m excited to talk with you today.
Guy Nadivi: Tom, even though our show is focused on intelligent automation, that term can be a bit ambiguous in some people’s minds. So my first question for you is, how do you define intelligent automation?
Tom Ivory: Right. Yeah. It is an ambiguous term. I agree. When we look at automation, we’ve been doing automation across the technology and services industry for decades now. But we’ve added this adjective “intelligent” to it. I think that separates from what we’ve done in the past, to what we’re achieving to do now as a result of using new emerging technologies, like the cloud. Like machine learning. The ability to analyze unstructured data in a more rapid rate. So adding intelligent to automation is enabling us to do things that we weren’t able to do when you say “business process management” for example.
Tom Ivory: You know that’s been around for awhile and we’ve looked at trying to automate processes but it was a very rules-based process where we looked at how to take existing patterns and use technology in order to create workflows. But now with intelligent automation we’re moving beyond just basic process automation, to harvesting data and automating that unstructured data in a way that can achieve business outcomes for us that we weren’t able to do in the past.
Tom Ivory: So when Capgemini looks at intelligent automation, we’re looking at the spectrum of robotic process automation, chat bots, virtual assistants, adding machine learning to give the ability to organizations, our clients, to teach software how to think for itself and reach this Nirvana that we’re all trying to achieve, this holy grail of artificial intelligence, where we can mimic human thinking, human behavior, without human intervention.
Guy Nadivi: So you’ve mentioned artificial intelligence and you’ve stated that “AI has quickly evolved from simply a tool to reduce costs to a strategic solution that enables our clients to re-imagine their business for accelerated growth”. Can you share with us some quantified examples of the accelerated growth you’ve seen AI provide?
Tom Ivory: Yeah absolutely. Capgemini has done a number of studies recently on intelligent automation including the journey to artificial intelligence. We’re seeing a huge impact with regards to enhancing customer service for example. We’ve looked at engagements where we’ve rolled out intelligent automation, maybe even implemented conversational commerce. The ability for their consumers, their clients, to engage with the organization has increased exponentially. We’re looking at upwards of 80 to 100% gains on their ability to leverage customer interactions for revenue opportunities which is a massive opportunity I think for organizations across the board. You know but even in the smaller engagements, where our clients are just starting out on their road map for intelligent automation.
Tom Ivory: Starting with robotic process automation, we’ve worked with a life sciences company in the last couple of years, who adopted RPA. We helped set their Center of Excellence up for them, and looked at what processes we can optimize and automate across their enterprise. Running from finance to procurement, to supply chain and more specific life sciences based processes around compliance and the GXP regulations that they need to adhere to. We were able to take out several hundred, and I think the number was actually 320 FTEs as a result of them adopting RPA and enabling them to take on this technology, which was equivalent to around $7 to $8 million dollars in savings.
Tom Ivory: The funny thing is they didn’t just fire all of those employees. They were actually able to redeploy them on more strategic projects, where they were able to use a lot of their skill set that they were doing with more finance transformation or HR transformation. They knew the processes, they knew the manual as is state. And they were able to get “trained up” and start working with some of these more sophisticated AI technologies that the company is adopting in order to help the company transform. So we’re seeing a re-skilling, even with some of the savings that are going on. We can talk about that in more depth throughout the conversation.
Guy Nadivi: Given the broad perspective that you have on AI projects, what have you seen are some of the most unrealistic expectations currently plaguing AI?
Tom Ivory: We’ve seen a number of unrealistic ones. You know this market is obviously attracting a lot of marketing, advertising, and investment dollars, so with that always comes a lot of hype as we’ve seen with popular trends in the past, within the technology industry. So it’s no different. Honestly I think AI is probably one of the more hyped technology trends that I’ve seen in my 20 plus year career. And I think a lot of people have the impression that it’s just going to come out of the box and work like magic. And that’s not the case at all. The technology is getting better out there, but at the end of the day, it really all comes down to understanding the processes and the operations within your organization, and how you can apply robotic process automation and artificial intelligence to those processes and operations.
Tom Ivory: Understanding your business, working with partners that understand your business, at that industry-specific level in order to re-imagine and re-engineer how you’re currently doing business in order to look at opportunities for growth, look at opportunities to impact customer service, how to leverage savings for research and development, and really go into this constant state, this continuous state of embracing innovation. And the tools, the technologies that are out there in the market and there are new vendors popping up every single day that we’re exploring and wrangling through in order to educate our customers to not necessarily just work out of the box and provide this magic road map to achieving artificial intelligence.
Tom Ivory: There’s a lot of preparation that goes with that and I think that’s why there is such a vast ecosystem of software vendors, service providers like us, consultancies, business advisors, and so on in order to make sense of all of this.
Tom Ivory: As it matures, that preparation will probably decrease like you’ve seen with ERP, BPM, and other technology trends that have come along the way, but right now we’re early on and everybody is trying to make sense of what’s available right now in order to put together the blueprint for an organization.
Guy Nadivi: You mentioned a few different areas where automation and AI are applied and that made me curious. If management has to choose one top priority for which to leverage automation and AI, should it be to improve the customer experience or improve internal operations?
Tom Ivory: That’s a great question and one that I’ve been asked many times by our customers. And at the end of the day I think it comes down to your internal operations because you need to get your house in order in order to serve your external partners and customers. If you can transform your finance organization, your IT organization, and all these various functions within the organization, then you can then transform the external world that you’re interacting with, right? But if you’re still doing manual processes and you’re living in ancient history with the way that you’re going about servicing your customers, then you’re not going to be able to achieve digital transformation.
Tom Ivory: So a lot of our customers right now are focused on back office processes. They’re looking at how to apply RPA and AI, use technologies like OCR, image recognition, voice recognition, speech to text. And look at how they can start transforming their HR, their finance, their IT organizations by automating and becoming more lean and nimble and seeing how they can become a “digital core” is what we’re referring to and then be able to take that nervous system and apply that to the external world.
Guy Nadivi: You know one of America’s legendary businessmen Ray Kroc who built McDonald’s into a global empire, used to tell people McDonald’s wasn’t really in the food business like most people thought. They were actually in the real estate business. And a CFO once clarified that by saying “the only reason we sell 15 cent hamburgers is because they’re the greatest producer of revenue from which our tenants can pay us rent.” Now that was a real aha moment for a lot of business people the first time they heard that.
Guy Nadivi: McDonald’s thought of themselves as a real estate company not a fast food chain. I bring this up because you’ve stated that “eventually all companies will become digital organizations that harness the exponentially growing volume of data inside and outside of their companies.” I think that quote can have an even bigger aha potential than the McDonald’s revelation because as you point out, becoming a digital organization applies to just about all companies. So my question for you Tom is – do you think most companies, regardless of industry have had the epiphany yet and realized, the opportunity digital transformation offers them.
Tom Ivory: I would even go further to say that we’re really at the point in time where digital is becoming meaningless because it’s become so pervasive and adopted throughout the industry. So yes I do think we’ve reached that tipping point where organizations have all had the epiphany for the most part. And if they haven’t then they are most likely facing extinction. We talk about Darwin in the corporate world and how those same principles are applied to survival of the fittest of organizations, and you look at the landscape of the Fortune 500 list, just in the last 10 years. I believe it’s more than 50% of any Fortune 500 company that’s on that list did not even exist or is a new company that was added to the list in the last 10 years.
Tom Ivory: I think most industry experts believe there to be even more catastrophic change in that Fortune 500 list over the next 10 years. So, when we look at that, I think it’s as a result of digital transformation. I think you see organizations that we always pick on like the Ubers and the Netflixes that didn’t exist a decade or so ago, and now they’re digital companies. They are operating in a completely different manner than the Blockbusters did years ago, with cloud based technology, using automation, becoming more intelligent through the use of machine learning, algorithms, and new advanced software technologies that are coming out into the market.
Tom Ivory: So I think the writing is on the wall for a lot of organizations that aren’t. We’re working with blue chip companies that have been around for 100 years. Manufacturers, retail organizations, grocery store chains, healthcare companies that are all achieving digital transformation right now because as I mentioned earlier, we work with a life sciences company that has adopted robotic process automation and their charter these days is no longer to be a medical device manufacturer. They want to be a digital health organization as new technologies emerge, with your iWatch for example that can monitor your heart rate and provide more detailed data that’s coming out on the market such as arrhythmia or risks of heart attacks.
Tom Ivory: We see advances coming right now in terms of diabetics being monitored and linked to their doctor’s office in real time. This type of thing is changing the health care industry by becoming more digital, working with data, and no longer about just going to a doctor’s appointment and taking a few tests and hearing a couple weeks later how everything goes. Everything is more instantaneous. More real time. More data focused. And that’s happening in every industry, not just healthcare. Like I said in manufacturing & elsewhere.
Tom Ivory: Industries also where you don’t even think sometimes, that shock and surprise me with how they are leveraging digital technologies. We see it in the agricultural business. For example, we’ve got firms that you know work with farmers. Clients that have basic business models that have been around for years that are now using digital technologies in order to isolate where they should apply fertilizer and how to avoid particular plants over weeds when they are harvesting crops and some really amazing things on how they are using digital technology. So we see this as definitely the epiphany as being reached, has been reached, I think it will only become a way of doing business here on out.
Guy Nadivi: Not long ago when Capgemini surveyed senior executives from nearly 1,000 organizations around the world that are already implementing AI, some pretty surprising results came back and I’ll just cherry pick a few of them for our audience. Three fourths of your respondents attributed a rise in sales of 10% or more as a result of their AI deployment. Two thirds reported there had been no reduction in overall jobs due to AI, and perhaps what would be the most surprising finding of all for most listeners, four out of five of the organizations surveyed reported that AI had created jobs.
Guy Nadivi: Tom with results like these, why does AI still frighten so many people?
Tom Ivory: It’s a great question. I think again it goes back to my comment earlier about the hype and the confusion around exactly what AI is. A lot of people, even you know consultants, technology professionals, business leaders, have a hard time defining artificial intelligence and don’t really understand the difference between machine learning, deep learning, artificial intelligence, and how to make sense of all of this and then you have a lot of industry pundits, authors with dystopian views that “All of our jobs are going to be eliminated”. Most conferences I go to, there is someone on stage that has just published a book that’s pretty much the end of times in terms of being employed and our economy is going to massively shift in terms of having government paying salaries from here on out.
Tom Ivory: I think that’s pretty extreme. I don’t really believe in that philosophy. I get frustrated every time I see the Terminator or a robot in the opening slides of a PowerPoint presentation. At the end of the day, this is process automation and it can be structured or it can be unstructured, and robotic process automation is the solution for automating repetitive, manual, task-based processes, which nobody wants to do in the first place. Right? So if the does eliminate a job, I do see that as an opportunity for growth, for all organizations, and us as a human race. And that’s an ability for us to do more meaningful things with our careers and I look forward to automation taking away a lot of those mundane activities that nobody really wants to do and enrich their lives as they go to work and get excited about the day ahead.
Tom Ivory: When it comes to artificial intelligence, that’s all about automating unstructured data and I think that’s where we can see some true, really amazing things that we’ve alluded to here so far in the conversation on industry-specific outcomes that we didn’t even dream of that we’ll be able to do that will lead to curing diseases and doing things that we wouldn’t have been able to do because of time or just trying to find a needle in a haystack or correlating decisions or data that we weren’t able to wrangle before.
Tom Ivory: I think people are scared because of the marketing projection out there, but in the reality we may take a few steps back with eliminating jobs that are only focused on repetitive manual tasks, but in the long run I think it’s going to be a huge opportunity to create jobs that never existed before.
Tom Ivory: I even look at our own organization. So I’ve been with Capgemini for over four years now and when I first came on board, the initial charter I was given was take a look at automation, we want to make sense of this and become a leader in the industry and make it pervasive in all the work that we do for our clients. We want to drink our own champagne so to speak. So for all of our managed services engagements, we wanted to put automation in there for productivity gains, for our customers, make us more competitive in the market, whether it was application managed services or BPO managed services or infrastructure managed services and at first, there was a lot of fear in our organization that a lot of jobs would be eliminated and there wouldn’t be room any longer for a lot of our employees.
Tom Ivory: But what’s actually happened is yes, we’ve been able to eliminate jobs, make our operations, our managed services capability more streamlined and efficient for our customers as we’re managing their ERP and apps portfolio or their business processes around finance and HR. But we’ve created new centers, here in the US and Columbia, South Carolina as well as offshore in India. There are new roles that never existed before. Robotic process automation architects. Machine learning experts. RPA developers. Heads of intelligent automation. Those roles didn’t exist before and I think this is creating just a new pool of talent that will now be able to do a lot more interesting things that will lead to significant business outcomes.
Tom Ivory: We’ll be able to reimagine business and IT processes that will be directly linked to new business ventures and initiatives such as enhancing the customer experience through chat bots and virtual assistants. So I downplay the hysteria out there, because I’m a firm believer in, just like with the internet and technologies before, that it will create more opportunities and enhance our lives more effectively than people realize.
Guy Nadivi: As AI has grown in importance, you’ve been a big advocate for the re-skilling of people and you’ve stated that “the heart of re-skilling is improving the way employees can leverage data to improve customer service, accelerate research and development, and innovate.” So my question for you is what are some of the top skills organizations should be re-skilling their people with to prepare for this paradigm shift?
Tom Ivory: Absolutely. I think communicating with executives is a big thing in our firm, I think that translates to across the board. I think the days of just showing up at work and taking orders and doing repetitive tasks is over. This new wave of robotics, automation, AI, the ability to replace human labor for those repetitive tasks is the new era that we’re in right now. The new skills will require communication, imagination, reinventing, not looking at everything just as it seems but using strategic thinking in order to be competitive and look at how we can apply new technologies to solve those business problems.
Tom Ivory: I always talk about how my kids will adopt to the new world. I have a 10-year old and an 8-year old. Two boys. In the last 10 to 20 years it’s all been about software coding and learning programming languages and I think that is still a very important skill set, but I think the liberal arts education has been downplayed to some extent, and now I feel we’re seeing a resurgence of that mindset, where being exposed to a lot of different things whether it’s learning foreign languages or studying art history, reading novels and classic literature and so forth. Having a well-rounded mind in order to communicate with a lot of different people in this global economic ecosystem, and coming up with new ideas, requires a background like that. So as much as software programming will continue to be important, I think we’ll also see here a rise in the liberal arts education again in order to bring critical strategic thinking that can be applied in a vast ecosystem of initiatives that they may be facing across the organization.
Tom Ivory: So yeah I think this paradigm shift that we’re seeing will make employees more empowered with the different skill sets that they can bring to the table, and I’m already seeing that with some of the college hires that we’re bringing into the organization right now, where they are not just mathematics majors or computer science majors but they may have studied art history in school and now they are learning on how to apply artificial intelligence to business initiatives with our clients and I think that’s very exciting because you need new schools of thought. The corporations really right now are very hungry for new thinking and re-imagining the way that they’re doing business.
Tom Ivory: We’re doing that right now with a number of customers, from McDonald’s to Coca Cola and bringing digital transformation through new thinking and not just the same old way of doing things and applying the technology and just throwing technology at something, but really using strategic thinking to help them get to that next level.
Guy Nadivi: I’m sure the parents of those art history majors who may have been concerned about their kids’ employment prospects upon graduation, will be overjoyed to hear that there’s opportunities for them in the high-paying field of artificial intelligence.
Tom Ivory: I think you’re right. I think they will. And again it’s not to diminish any of the technology majors out there or the people that are very skilled in software programming but as you see, I mean a lot of the new software that’s coming out on the market, even with robotic process automation, it’s low code or even no code right? So even the software development process is getting automated to quite an extent and DevOps and Agile has advanced that quite a bit. So the emphasis is not just on the coding and nothing against coders out there, but it’s how do we take this software and apply it. I think people in our industry tend to focus too much on the technology sometimes and not as much on how the technology is an enabler for business outcomes.
Guy Nadivi: Tom, what should enterprise executives who have never dealt with AI know before deploying it?
Tom Ivory: Well I think for one, they should know that they need to do it. They need to get on this train. I read a quote by Gartner the other day that just within the next couple of years, I believe 40% of enterprises will deploy RPA software, and that’s up from 10% today. So we are on a big wave of adoption here, over the next 24 months and I see it, being in my seat, demand is through the roof right now for robotic process automation services. And it’s in all phases of maturity, from just downloading an RPA tool and understanding and getting training on how this all works and getting educated on it, all the way through “hey we’ve already deployed 200 to 300 bots and we want more help on how to scale even more”. Maybe they hit a wall and everything in between.
Tom Ivory: So I think it’s important for executives to know that this is real. There are real ROI savings. It’s not easy all the time. You need to work with people that have been in the trenches, that understand all the pitfalls and the obstacles along the way. But this is something that is certainly here and has arrived. I would also tell them that, and I think it follows some of the points that I’ve made in this conversation so far, that it’s not just about the technology, right? So the IT team is very important in understanding how the software will fit in their technology landscape and ecosystem, and things like security and the integrity of bots that are developed and how to ensure that there are no failures because they are going to rely on these bots like they’ve relied on people to show up to work and to be productive and try not to make any mistakes, right?
Tom Ivory: So that’s important to have a technology team that delivers the support and backbone to get RPA and AI initiatives off the ground. But at the same time, the business is instrumental in accelerating and helping scale the adoption of RPA and AI across the enterprise. So we for example work with organizations on process intake as a critical component of this operation. We bring in stakeholders from Supply Chain, Customer Service, Finance, IT, together. You want a program that will bring process intake and their request for automation across the organization and they need to have that seat at the table. Business leaders are instrumental.
Tom Ivory: I think that really supports why the RPA software, the big three vendors for example are receiving such lofty evaluations and investments from venture capitalists right now, because it reminds investors quite a bit, like a Salesforce, where business users are downloading, they’re installing that software, using it, and that’s a different mindset than some other technologies that have been out there where only an IT professional can get access to it. But with these tools, you can just go online and start using it, creating a bot. Like I said before, a lot of it is zero code, or very low code and it’s meant for a business user to be able to adopt it. I think that’s why we’re seeing such huge acceleration here. So my advice again to corporate executives is to bring in those business users that are now looking at this because you’re going to have to get a hold of this and streamline it throughout the organization instead of just having all these islands of automation going on throughout your organization.
Tom Ivory: That’s a different animal that you’re dealing with when you have business users starting to independently look at software to help them achieve some of the efficiencies in their daily jobs.
Guy Nadivi: All right. Well looks like that’s all the time we have for on this episode of Intelligent Automation Radio. Tom, thank you for very much for joining us today and providing some fascinating insights about the market for AI and automation. It’s been a pleasure having you as our guest.
Tom Ivory: Thank you, Guy. This has been fun and I really appreciate you having me on the show. Thank you very much.
Guy Nadivi: Tom Ivory head of Intelligent Automation Digital Operations North America for Capgemini. Thank you for listening everyone and remember, don’t hesitate, automate!