“Disruptive Innovation”, a term coined in 1995 by Harvard scholar Clayton M. Christensen, can wreak havoc and displacement upon markets, organizations, and product lines. New technologies such as Cassette Tapes, CDs, and MP3 files, are examples of innovations which disrupted the music industry, upending the existing order. Many people are predicting that automation, artificial intelligence, and machine learning could generate the same chaos. However, Ian Barkin Chief Strategy Officer for Symphony Ventures, preaches a contrarian viewpoint of positive disruption to his clients.
In Ian’s view, existing infrastructures should not be replaced by innovations like AI, but rather melded together, creating a new digital operations reality. He’s found numerous instances where the “non-cashable” benefits alone from this approach outweigh the “cashable” ones, and often in unexpected ways. Ian talks with us about positive disruption, the “extra hour scenario”, and why we must reform our education practices starting at the pre-school level in order to prepare our youngest generation for a future of work which will rely much more on creativity than doing routine tasks.
Guy Nadivi: Welcome everyone. Our guest today on Intelligent Automation Radio is Ian Barkin. Ian is the Co-Founder and Chief Strategy Officer of Symphony Ventures which is a leading global consulting, implementation, and managed services firm specializing in automation and artificial intelligence, two topics we’re very keen on here. Ian’s focus at Symphony Ventures is to design digital operation strategies for clients implementing global transformation efforts centered around these technologies and we’re really delighted to have Ian with us today. Ian, welcome to Intelligent Automation Radio.
Ian Barkin: Thanks, Guy. Delighted to be here.
Guy Nadivi: Ian, as the Chief Strategy Officer for Symphony Ventures, you’ve described part of your job as enabling positive disruption for your clients with regards to AI, automation, the future of work etc. There’s a lot of buzz about these topics today so it could be very challenging to separate the wheat from the chaff. For CIOs, CTOs, other IT executives listening, what do you recommend should be their first step on the journey towards digitally transforming the organization?
Ian Barkin: That’s a great question. I often say that I spend a lot of my time story-telling but much of it trying to be pragmatic and really as you say separate wheat from chaff just because there’s a great deal of excitement and I do not argue that some of the promise of the future is exciting, but I spend a lot of my time working with the C-suite to understand the art of the possible and what’s enterprise grade today from a tool set perspective so that some of the more interesting and esoteric promises of machine learning and AI, while very much on the roadmap aren’t necessarily the technologies that will solve the problems that they have operationally today, and so I spend a lot of time with them on that.
And then even more importantly I spend a lot of time on just the foundation, on just basically the education and alignment and change management and stakeholder management and communication plans within an organization because you could have the best, shiniest, most capable technology in the world, but if the troops aren’t aligned and clear what the destination is, you’re not going to get there.
Guy Nadivi: Right. I read also that you tell your clients there are seven benefits to automation that Symphony Ventures identifies when working with them and that you categorize them as “cashable” or “non-cashable”. The cashable benefits are kind of obvious I think with regards to cost savings, but I think it would be very interesting for our audience if you talked about what the non-cashable benefits are, which you described as potentially orders of magnitude more impactful to an organization.
Ian Barkin: Certainly. This dates back really to the earliest days of our exploration with several different classes of automation tools, and obviously it’s because as you said the cashable components, and really to cut right to it, the concept of headcount reduction that allows you to take cost out of an organization. That often is what gets projects funded.
You need that in your ROI calculation and your business plan. But it’s very primary and so what we came across and in some of it was frankly a surprise and an exciting one at that, were the secondary and tertiary benefits and so as you say we’ve described them as cashable and non-cashable because impacts like better visibility into an enterprise’s operations often very complex operations.
Better ability to control and to comply in highly regulated industries where audit is often a concern, and one of the ones that I’m most excited about is just the class of experience benefits, and that can be experience for your customers or depending on the industry you’re in, your patients, your citizens. It can also be experience for your employees, for your partners.
And the benefits of those while harder to quantify often end up materializing themselves in bigger ways. Reduced churn, higher just general retention, word of mouth, higher net promoter scores, reduced likelihood of audit fees and compliance credits. And so those are the sorts of opportunities we make a point of emphasizing for two reasons. One just because we know that those cashable benefits still are going to be the ones that often get projects funded so we don’t want enterprises to forget about the other opportunities.
But also because we want to encourage enterprises to really baseline and understand what good is, set that vision for themselves and then chase it by leveraging the class of automation tools that does more than simply reduce initial primary costs out of their operation.
Guy Nadivi: You mentioned regulated industries a couple times there, and in particular, we run into that a lot with industries that have a very strict compliance regime that they have to adhere to. I’m curious which industries are you seeing that are being impacted most profoundly by the changes that automation and AI are delivering?
Ian Barkin: Right. I’d like to think it’s a little bit more interesting and creative than this, but often you find the industries that are well financed and that have a real imperative to change are the ones that adopt somewhat earlier. And so in our history, we’ve been lucky enough to develop a really robust portfolio of partners clients in financial services and in healthcare, and so we’ve got a lot of banking, financial service and insurance firms who use automation across the board.
This is horizontal and vertical applications of it. Everything from the horizontal HR, finance, and accounting processes to the more specific to their industries like anti-money laundering, know your customer, mortgage processing, and maintenance, et cetera. And then in healthcare as well, just the security around data, both patient data, and financial data is high, and yet the dynamics of the healthcare industry are such that that’s an industry that badly needs change, badly needs transformation and cost reduction. And so we’ve been lucky enough to work with a lot of organizations in that industry to help them understand how to better run their businesses and optimize their operations.
Guy Nadivi: So can you please provide us with an example of a project you’ve been involved with where automation, AI, etc. had a profound impact on cost reduction both cashable and non-cashable operation efficiency, and other critical metrics?
Ian Barkin: Yeah, my pleasure. The great benefit of having done this for a while is I’ve got a wealth of examples to choose from. I’ll pick one that I think really resonates broadly with the wide audience just because I imagine most people have been hired for a job and paid for a said job. There was one solution we did within an HR shared services operation. Just so happens it was for a very large healthcare organization.
But this HR shared services function that they had centralized had several different roles but one of them was around what they called work absence management, and it was the basic concept of at a certain point in your career, you’ll need to step away either for disability or for maternity or paternity leave or bonding or family medical leave.
There’s a long list of reasons, and when you do that in the United States, there’s a convention in which you get paid by multiple sources, effectively insurance in state, and you need to integrate that pay. And so they had a team that was handling and coordinating that. That pay integration. Ultimately as you, if you look under the hood and try to figure out the components and the complexities of the process, it’s actually a massively complex process for a few reasons. One, because this was a union shop, so all of these different employees belonged to different unions who have different negotiated fee structures and relationships and contracts. And then you have the different leave types. You have whether it’d be maternity or disability or any of the others. And then you also had job grade, job type, location, tenure, salary level that really was this multi-variate equation of parameters that needed to be calculated correctly, hopefully, to handle this pay integration.
Now the result of that was these processes took a while. They had service levels of often two weeks or slightly longer to complete a transaction for someone who was home on disability to make sure that their paycheck was integrated correctly and so that meant they had a team. The team was quite busy. It was doing a very complex role. It took quite a long time to train the people to do correctly, and retention is always a challenge in shared services environments.
And so there was inherent cost in friction and experience issues if the pay was either calculated slowly or incorrectly, etc. So that’s the backdrop. And so the solution that we helped this enterprise deploy was one in which we automated a lion’s share of that process because while it was a very complex process, it was still just a lot of rules. That multi-variate equation was still an equation, it was rules.
And so the outcome was a few fold. One that the pay, the time it took to transact went from two weeks down to approximately two hours which is extraordinary in and of itself. And then there’s all these secondary, tertiary benefits I referred to. If it takes not two weeks but two hours to get your paycheck. If you’re home on disability, you’re not sitting there waiting, wondering where your paycheck is, or wondering if it’s correct, and therefore you’re not any longer calling a call center.
And so the secondary benefit was a few fold. One, the call center volume went way down. The experience for employees went way up and then if you want to carry this through as a story, the tertiary benefits were that people who were on leave had the right information, felt supported, the call center was able to be more proactive in outbound, so called you to say is everything okay, how can we support you, it looks like you’re scheduled to come back to work at this particular time. And so people came back to work on time.
And so experience was higher, retention was lower, and so it was extraordinary to watch this happen just because you automated a core process and the SLAs were shrunk way down, quality went way up, experience exploded, and so that was really game-changing, and obviously the financial benefits of not needing as many people in that transactional team focused on that particular scope of work was compelling as well. Long story. But one I’m really passionate about because it really did manifest itself. It’s all sorts of different blooming benefits as this thing blossomed as it went.
Guy Nadivi: That’s an extraordinary optimization to go from two weeks to two hours. When you mentioned now the support team had quite a bit of the call volume burden shifted off of them. I’m going to guess that that freed them up to work on other more important things that probably had been stacking up then. Would that be correct?
Ian Barkin: Absolutely. I call that “the extra hour scenario” and what I mean by that is if you walked into any organization, anywhere in the world, and you said “What would you do if I gave you an extra hour in your day?” I would chance a guess that no organization would say to you “You know what? We don’t need it. We’re pretty good. We got everything covered. You can have it back.” There’s every organization the world over has those tasks that they’ve been meaning to get to, they know are valuable, and obvious, and often create greater experience and yet they’re not able to get to them because they’re just so busy keeping the lights on, or the ship afloat, etc. Hitting the SLAs in doing the necessary transactional processes. So I love those extra hour scenarios and you’re absolutely right. They have other very highly value adding things to spend their time on.
Guy Nadivi: Yeah, I’m sure for everybody there’s never enough time in the day, so to get an extra hour is significant.
Ian Barkin: Or in this case, dozens or weeks. That’s one of the ways that the industry has taken to quantifying the impact of automation is the hours given back to the business. Partly because it’s less, optically it sounds better than FTE reduction but also it gets to a greater, bigger, more strategic point of what are you doing for the business. How are you adding value beyond simply reducing cost?
Guy Nadivi: Right. Ian, you told the BBC earlier this year that automation “is an evolution of work and the type of work we do will change,” and you followed that up by saying “there’s an urgent need for education reform. People need to learn design thinking, creativity, analytics, programming”. Should that kind of education reform take place in high school or even earlier?
Ian Barkin: That’s a great question. As a father of two young girls who are in now 1st and 3rd grade, I guess my opinion is somewhat slanted or informed by that, but I think that education needs to start as early as education starts. I think we really need to, from kindergarten, pre-school on up be teaching collaborative practices, teamwork. As you said design and iteration and teaching the high schoolers of the future, the employees of the future how to be more creative because ultimately the automation of the routine in mundane tasks will only continue.
The capability of the automation will only continue to get better so that anything that’s character recognition or voice recognition or just the rule base that we spend a lot of our time helping automate won’t be there anymore, and so people get to do the nuance, the judgment, the critical thinking but we need to make sure that they’re prepared to do that.
Guy Nadivi: Yeah. I’ve heard from many quarters, as I’m sure others have, that education is becoming a bottleneck on the path to the future. That we really need to overhaul the curriculum and really change some of the subjects that are taught from an early stage to prepare people for the future of work which is going to be very different. If you look at just 10 years ago, a job like social media manager didn’t exist, and now every company has one or a team of them or a contractor that provides that. Things are going to be changing very quickly along with the technological changes and the education sector definitely needs to keep pace with that.
Ian Barkin: Absolutely. I think it’s such a thrilling topic and somewhat scary topic sometime to explore and discuss, but it’s an imperative one. And I don’t think anyone has necessarily the single silver bullet or right answer. It’s going to be a collection of things. You see some of the educational programs that they have setup for instance in Germany where they’re training in more trade skills. That emphasis needs to come back too. Does everyone need to go to college?
What is the future workforce going to need of us and where won’t it need us anymore, and how do we really strip the curriculum down to the fundamentals and build it back up based on that reality?
Guy Nadivi: Right, maybe instead of shop class, we should be teaching Google Adwords, at the junior high and high school level.
Ian Barkin: Come on, shop’s a great class. I wish they had that more often.
Guy Nadivi: I loved my shop class as I was very distraught to hear that a lot of schools are cutting them out. I think it’s a mistake, but maybe replace them with something perhaps more relevant for the future, everybody can benefit.
Ian Barkin: I think auto maintenance, shop, how to do basic accounting, all that stuff should come back. I don’t know how to do any of those things.
Guy Nadivi: Ian, what is the single most important piece of advice you can offer to executive decision makers that are thinking about plunging into a digital transformation involving automation and AI and machine learning?
Ian Barkin: That’s a great question. I think first and foremost, I would say again approach this, so I’m going to answer with a few things. You said single but I don’t do single well. First and foremost, approach this with pragmatism and a wide open aperture, because the future of work in this automation hybrid is not just pulling on the brand new, it’s actually supercharging capabilities and technologies, and teams that have existed in enterprises for, in some cases, decades.
And I often spend a lot of time saying that there’s very little new under the sun and we really have to appreciate all of the hard work that continuous improvement teams and six sigma black belts have done, and enable them, rather than think that AI can magically replace them. So that’s what I spend most of my time with executives thinking through is just how do you mesh the existing, not necessarily old, that sounds pejorative, but the existing with the new to truly create this digital operations reality for the organization.
I guess if there’s anything else I’d just say be wary of smoke, mirrors, and hype because I think it’s sending too many people on journeys into woods that they realized too late that they just spent a lot of time and money pinning their hopes to things that just sounded too good to be true.
Guy Nadivi: All right. Well, looks like that’s all the time we have for on this episode of Intelligent Automation Radio. Ian, thank you so much for joining us today. I’ve really enjoyed our discussion and thank you again for being our guest.
Ian Barkin: Thank you guys for the thrill. Thanks for having me.
Guy Nadivi: Ian Barkin. Co-Founder and Chief Strategy Officer of Symphony Ventures. Thank you for listening everyone, and remember don’t hesitate, automate.