Earlier this year, a colleague of mine introduced me to her partner, who is responsible for automation in a highly competitive product and service based business. My mind automatically went to “how do robots work in a product & service business?”. My mental model was manufacturing, where robots perform repetitive tasks predictably or to a modern warehouse where robots are literally picking up shelves and moving them in easy reach of people to fulfil customer orders faster and cheaper.
I was surprised to learn after meeting him, that automation in a product and service based context refers to robotic process automation (RPA), where bots are deployed to automate tasks that are highly repetitive and stop the staff doing what they do best, that is, engaging directly with customers and delivering a high level of customer experience. The business introduced bots at a time when they were launching a new product and set about redefining their processes to ensure that they would deliver an exceptional customer experience without adding significant costs that may not have added the proportionate value.
This example highlights one of the core themes in the MIT Sloan Short Course on AI: Implications for Business Strategy. That is, what is the business strategy or business problem that you are trying to solve? AI is a technology, a set of algorithms or rules that are programed by humans, to work on specific tasks that humans assign them to.
We have all worked in businesses where executives love “shiny new toys” and adopted a new technology for fear of being left behind. AI has the potential to be one of these new toys. To ensure AI or digital technologies are aligned to your business strategy and solving real business problems, here is a framework, adopted from How to Define your Machine Learning Problem, for defining an AI application:
- Step 1: What is the problem? Clearly state the problem that needs to be solved. It needs to be aligned to the broader business strategy. In the example above, the business problem was “How do we launch this new product with an exceptional customer experience more efficiently than our competitors?”
- Step 2: Why does this problem need to be solved? What is the business rationale for why the problem needs to be solved? What are the benefits? How will the solution be used? In our example, the problem that needed to be solved, was to ensure the new product was launched in a competitive market, delivering an exceptional customer experience, to ensure customer advocacy, at a competitive price. The bots didn’t manage the end to end customer experience, they were deployed in predefined parts of the customer engagement process, that were predictable (that is learnable by the machines) and that didn’t result in customers dropping out of the engagement process.
- Step 3: How would I solve the problem? This is the part of the process where you need to get your process experts in a room and map out the end to end process manually and collate all the data. It is important that you also include people who understand your customers and how they deal with the organisation, so you can map their responses too.
To extend this area of thinking further, think about the application of virtual assistants (think Siri, Alexa), to an organisational automation context. Google has been developing Google Duplex, (check out the video on YouTube) which I believe has incredible application in business. Notice how Google is focusing on making the machine more human by adding phrases such as “Mm-hmm” within the conversation.
AI and any digital application will require a re-think in terms of organisational capabilities. Talent of future organisations will need to be flexible and able to learn. Organisational culture and leadership will need to be different. BCG’s research into Digital Transformation found that the impact of culture was event greater than that of two other levers: investing in digital initiatives and recruiting digital talent.
Adopting digital technologies to transform your business will require deliberate practices to build culture and organisational capabilities. Stay tuned as we will continue to explore these capabilities.
Bruce McCowan – Partner Performance