Remember that 70’s movie “Logan’s Run” when, in the 23rd century, the population and the consumption of resources are maintained in equilibrium by killing everyone who reaches the age of 30? They found a simple fix to solve their problems. Today, we seem to be entering a similar situation with employment and intelligent automation: why not just retire everyone at 40 to protect those valuable employment resources? It sounds far easier than building a ridiculously long wall or pretending all these magical new jobs will appear from nowhere in a couple of years…
Everyone, seemingly, is obsessing with the current swirl of anxiety infecting our whole career outlook, with relentless discussions raising our stress levels as we figure out how to “adapt” ourselves to a world where bots are going to do so much of our work at some indefinable moment in the future.
It’s just not cool to be normal anymore…
Whether we’re mindlessly getting our hourly endorphin rush from those lovely social media sites that keep pulling us in, or dozing through yet another mind-numbing panel on the “impact of intelligent automation” at some horrendous conference we just had to go to (listening to people who previously had nothing to do with “automation” and have since become overnight luminaries), or simply chatting with colleagues in the office… there is now a constant angst that the world is becoming a digitally-scary place, and the only way to deal with it is to keep trying to learn more and keep talking to colleagues and peers in other firms about how to get ahead of this. Suddenly, we have become disposable assets and we need to keep reinventing ourselves to keep sounding like we’re up on all the new stuff. Suddenly, we live in a world where everyone else is about to be transported to the scrapheap of legacy professionals who can’t be retrained to do anything meaningful anymore.
The current swirl of hype is driving a new behavior and energy: more partnering, knowledge sharing… and an obsessive curiosity about the future
We are subjected to a constant barrage of articles, some lamenting our woes and talking about desperate measures like a universal basic wage (Karl Marx would be impressed), and we are increasingly being subjected to declarations of unbridled optimism, where jobs will be miraculously created as a result of these incredible advances in artificial intelligence (which rarely have any sensible facts to prove the philosophies, they just spout some big theory and then the talk track fizzles out somewhere… you know them well by now I hope!). However which way we look at this, the real answer is that we simply don’t actually know what the future has in store for our careers, our companies, our economies, politics and our children, but what we can do is keep understanding the facts and keep sharing knowledge with other like-minded people… and the future will unravel before our eyes as we keep trying to make sense of it all.
OK that’s enough of a philosophical discussion for a Monday. Let’s look at some actual new data to understand what skills our enterprise leaders are looking for today – our new study on Intelligent Operations, conducted with the support of Accenture, which covers the views and dynamics of 460 global 2000 operations leaders, gives us some real insight into this shift towards the creative, curious types, with a thirst to learn and an obsession with networking and partnering:
The focus heavily shifting to dynamic individuals who understand how to define outcomes and work to align their business operations with them
So if we’re one of these obsessively socially curious animals with a penchant for constantly knowledging-up on all the cool new stuff – and we love to talk partnerships with other companies in our network, the near future is actually pretty encouraging for us: our skillset now tops the list for what global 2000 leaders are looking. Leadership is under intense pressure to change the norm, to align their operations with the direction their customers are taking them. The wonks who spend all day staring at spreadsheets, focused on execution “left-brained” activities are less in demand – they need to learn how to wrap the needs of the business into broader processes that can cater to customers and support management decisions in real-time. Essentially, if your operations are not in sync with the customer-driven front office, you will likely fail.
Yes, it’s the people who connect the front office to the back are the ones emerging from this maelstrom of noise, angst and uncertainty. This is why we have developed the Digital OneOffice Framework, where teams function autonomously across front, middle and back office functions to promote broader processes with real-time data flows that support rapid decision making, based on meeting these defined outcomes. Hence, emerging technologies like automation and AI are significant enablers in helping enterprises meet their ultimate goals, where front, middle and back offices will cease to exist: they will be, simply, OneOffice:
The Bottom-line: This is the new normal – leaving our comfort zones and getting out there to make stuff happen
It really is as simple as that – we’re all leaving that big comfortable world where all you had to do was turn up for work, do the same routine activities each day, go to the same mundane meetings and keep the lights on. We all know those days are leaving us behind, and if you’re under the age of 55, it’s unlikely you can plot that sneaky escape to early retirement… we’re living in a world where we need to learn about new technologies (you don’t need to code anymore), we need to share experiences and use cases with peers across the industry, and we need to reach outside of our cosy internal networks to talk through smart partnerships with tech firms, supply chain partners, customers etc.
You only have to look at the reason 200 executives showed up at the HfS FORA Summit in New York last month to understand motivations have changed in an anonymous poll: they are going out to get educated and share experiences with peers. The days where conferences were all about job hopping are over – it’s more about how to stay relevant and ahead of the game.:
In essence, there is no written rulebook where this all leads – the world has become an uncertain place politically and we have yet to experience an economic downturn for many years. However, what is clear is sitting in a quiet office all day staring at your email is unlikely going to get you where you need to go next in your career. This is the age of getting networked, getting smart and learning from collective experiences. The only comfort zone is the one you make for yourself – being comfortable with the impact of change agent technologies and the experiences you can have working with them.
Whiplash alert: You may have noticed how Gartner recently flipped its core messaging from automation/AI being a seismic job destroyer to being now a job-creator. And both times, they just can’t seem to back up the rhetoric with actual facts. Plus, they don’t even seem to be able to define consistently what they actually mean by “AI Automation”.
Remember when Gartner claimed that automation and AI were not only going to replace a third of jobs by 2025, but many of us would be reporting to a robo-boss at some stage this year? Well, guess what folks, they’ve now performed a complete 180-degree flip, claiming that millions of new jobs will be created after 2020, far outweighing their previously predicted gargantuan job losses (courtesy of LinkedIn). Wow:
Let’s dare to look back in time to hold Gartner to account
Peter Sondergaard, Gartner’s Head of Research, predicted one in three jobs will be converted to software, robots and smart machines by 2025. Yes he actually said that at his own Symposium, and even added, “New digital businesses require less labor; machines will make sense of data faster than humans can.” However, unlike the good old days when analysts could get away with all flavors of outlandish grandstanding soundbites to spice up a conference, these predictions tend to hang around the internet these days. While many people love to keep spinning new headlines everyday, in the hope #fakenews is now the #realnews, some of us still have memory banks that last longer than one week, especially when CIOs spend billions of dollars for this type of council.
And then who can forget this almighty whopper from Fran Karamouzis, a vice president and distinguished analyst at Gartner:
By 2018, more than three million workers globally will be supervised by “robo-bosses”. Excellent, so Fran’s surely keeping her fingers crossed that the robo-boss takeover is even more imminent than Donald Trump’s interview with Robert Mueller…
Gartner’s new claim why AI and Automation will create this massive net gain in jobs
When Gartner put out this far more positive news, I was so excited, and couldn’t wait to hear their new rationale:
“Many significant innovations in the past have been associated with a transition period of temporary job loss, followed by recovery, then business transformation and AI will likely follow this route,” said Svetlana Sicular, research vice president at Gartner. AI will improve the productivity of many jobs, eliminating millions of middle- and low-level positions, but also creating millions more new positions of highly skilled, management and even the entry-level and low-skilled variety.
Great! So there it is. Svetlana goes on:
“Unfortunately, most calamitous warnings of job losses confuse AI with automation — that overshadows the greatest AI benefit — AI augmentation — a combination of human and artificial intelligence, where both complement each other.”
Right, so all the stuff you colleagues were declaring is now calamitous and confusing? Oh, they are talking about “automation” and you are talking about “AI”. So why, Svetlana, do you call your new data forecast “The Impact of AI Automation on Jobs”. Surely you mean “AI Augmentation“. I’m sorry, but I am even more confused that I was before…
When we get into the reasons why automation and AI suddenly have become job creators, I give Gartner some credit for actually trying to give this claim some credence, but then they fail to provide a single real example of how this “new work” is being created:
Craig Roth: research vice president at Gartner: “Companies are just beginning to seize the opportunity to improve nonroutine work through AI by applying it to general-purpose tools. Once knowledge workers incorporate AI into their work processes as a virtual secretary or intern, robo-employees will become a competitive necessity.”
OK – so how will new jobs get created? Sounds like AI is helping knowledge staff cut back on interns here! Gartner continues…
Leveraging technologies such as AI and robotics, retailers will use intelligent process automation to identify, optimize and automate labor-intensive and repetitive activities that are currently performed by humans, reducing labor costs through efficiency from headquarters to distribution centers and stores. Many retailers are already expanding technology use to improve the in-store check-out process.
Great – so retailers are able to use intelligent process automation (whatever that is, I thought we were talking about AI augmentation) to fire humans. They just laid that our pretty plain and simple. No jobs created there then…
“Retailers will be able to make labor savings by eliminating highly repetitive and transactional jobs, but will need to reinvest some of those savings into training associates who can enhance the customer experience,” said Robert Hetu, research director at Gartner.
So some of the savings from sacking transaction staff will be reinvested in more customer aligned people. But that tells me less people will be reemployed, not more. Where is the net gain here?
And Robert goes even further: “While many industries will receive growing business value from AI, manufacturing is one that will receive a massive share of the business value opportunity. Automation will lead to cost savings, while the removal of friction in value chains will increase revenue further, for example, in the optimization of supply chains and go-to-market activities.”
So automation will save them money and make them richer because they will function better. But why will this cause them to hire more people? Where is this assumption coming from that those companies who make higher profits through automation will reinvest in people? Again, there is zero evidence here of a net gain in hiring… c’mon!
And to cap off this wonderful analysis, here’s the pièce de résistance:
“AI can take on repetitive and mundane tasks, freeing up humans for other activities, but the symbiosis of humans with AI will be more nuanced and will require reinvestment and reinvention instead of simply automating existing practices,” said Mike Rollings, (another research vice president at Gartner).
Great, so Mike finally mentions that money will be spent on the reinvention of new processes, as we see these wonderful new nuances of humans and machines come together. Cool… tell me more:
“Rather than have a machine replicating the steps that a human performs to reach a particular judgment, the entire decision process can be refactored to use the relative strengths and weaknesses of both machine and human to maximize value generation and redistribute decision making to increase agility.”
Awesome, Mike. So we’re talking about optimizing the best qualities of both human and machine. I love it, and completely agree with Mike. So maybe we can have an example of this in reality… and maybe even a decent explanation of what really inspired Svetlana to forecast these millions of new jobs that are going to be created? Just one example? Please… pretty please?
The reality: half of firms’ staff will be impacted by automation and 40% of them have no idea what to do with them
So here’s the biggest issue facing enterprise operations in the next couple of years: what to do with staff impacted by automation. Our brand new 2018 State of Operations study, conducted with KPMG, over half the Global 2000 firms surveyed believe transactional roles will be significantly impacted by automation within just a two-year timeframe:
So we thought we’d poll the 120 enterprise buyers at the HfS New York FORA summit last month, and we asked them what they intended to do with their impacted staff:
While a good portion are already thinking about “retraining” their impacted staff to take on analytics work (21%) and help manage new tech such as RPA and ML (16%), the vast majority (40%) are just honest and reveal they just don’t know.
Bottom-line: Please let’s stop trying to confuse everyone. As analysts, we have a responsibility to speak from real facts and real evidence
The technology industry has thrived on the hype for decades, but in the past, it was usually based on established technologies and their real impact on business, proven through many client experiences and tested through time to help us all understand the ultimate impact on business models. Suddenly, many leading experts are making judgments based on possibilities, not realities. The tech suppliers love the hype because it convinces clients to invest, but the more confusing this all becomes, the more dangerous this hype becomes in turning off smart C-Suite executives who need to see real results before making real investments.
Careers are on the line with automation and AI, and the more embedded these technologies become in organizations, the more clients need real data and real evidence to create their roadmap for them. Outlandish claims like this are getting shot down faster than ever, and we need, as an industry, to stop pandering to the marketeers and panic-mongers and start having a realistic conversation.
Fed up with even the hype being so overhyped, that even The MIT Media Lab is severing ties with a brain-embalming company that promoted euthanasia to people hoping for digital immortality through “brain uploads”? Yes really.
Then waste no time as we plan to steer you back to some version of reality next week with an unvarnished, unsponsored, unpuffed view of the world, where any spin if countered with a powerful forehand down the line:
If I had a dollar every time an executive bemoaned their firm’s inability to “change their mindset”, to do anything differently to escape their habitual ways of running operations. And if I had a further greenback for every advisor who bemoaned how idiotic their customers are, because they “just don’t have the deep expertise to fix their underlying data structure”, I would have long retired to the Trappist Order to brew very strong beer for connoisseurs with beards (that doesn’t actually taste very nice, but it’s just so beardy).
Surely the perfect desired outcome, even if it tastes like crap
It’s all about bringing the operations closer to the customer, and lacking IT talent is a major impediment to achieving it
Getting to the point here, it’s one thing demanding your employees change how they approach their jobs to benefit your firm from deploying advanced automation and cognitive tools, but entirely another if you don’t have the technical expertise to put them to work. It’s one thing to design a leading-edge digital interface with your customers, but it’s rendered pretty useless if you don’t have the capability to integrate it with your operations to provide customer support, get your products and services to them and harvest their data to keep making smart marketing decisions to stay ahead of demand. It’s one effort to redesign processes around your customers, entirely another to redesign your operational infrastructure to make it actually happen.
We recently interviewed 100 C-Suite executives from major enterprises and split the discussion across both business and IT leaders. While the industry obsesses about whether C-Suites know where to where to invest, what are their desired outcomes etc., we don’t focus nearly enough on the impediments preventing them from achieving these goals. We focus far too much on firms’ short-term spending on tools, and not enough on defining the ultimate outcomes and drawing up real investment and change management plans to get there. As we recently discussed, if we only focus on the means, we will never arrive at the end. To address this, we presented the OneOffice Concept to understand what is holding back both business and IT leaders from reaching the promised land of perfect real-time symmetry of their business operations staying ahead of their customers’ needs:
The Bottom-line: The Right Brain only functions when it’s in sync with the Left Brain
As we have widely discussed, four-out-of-ten customers (see earlier blog) going through initial deployments of RPA software are struggling to meet the business cases and cost savings goals. And when we bring hundreds of enterprise leaders together at our HfS Summits, the story is consistent: business struggling with change, but they struggle even more with aligning the right technical expertise to work alongside their business talent. Simply put, today’s firms are struggling with having IT depth to take their ambitious C-Suites where they want to go. So where do we go from here?
IT is at the heart of C-Suite strategy – it’s a business discussion that only works with the right IT capability. You only needed to eavesdrop on the many C-level discussions at Davos to know the IT discussion is firmly at the core of the business. Being able to satisfy your customer’s digital business needs is where it’s all heading. I was recently talking their the Group Finance Head at HSBC and his whole focus is on two elements – having the best digital app delivery and providing the best customer experience, which is incredibly challenging for any business environment grappling with differing compliance needs across borders, and ever-demanding customers wanting to do all their banking on an iPad. However, while this is a challenge, it is also a massive opportunity for the ambitious who get their business design and IT skillset equation right.
Finding the right partners is more crucial than ever. There is a massive opportunity to lead in the world of IT services, provided you can plug these skills gaps. The challenge is breaking out of the traditional sourcing model to access niche talent across the globe in areas such as crypto-technology, Python development, Lisp, Prolog, Go and C++. While most traditional firms still rely heavily on bread and butter IT services delivered at scale from regions such as India, the emergence of talent in Central and Eastern Europe, China and parts of South America also need to be brought into play. The IT services world will be a very different place in a couple of years as boutique firms offering niche skills come into the fore. Not to mention the emergence of crowdsourcing for IT talent. Having really savvy IT leaders who can cobble together crack teams on-tap to solve their IT headaches is already becoming a huge differentiator for many firms. The will also be a role for the super services integrator, who can pull together teams for clients to work with them on complex projects.
Simplification of business operations is the real key to future success. In short, there is no silver bullet to solve these endemic issues companies are facing to break out of legacy ways of working, but being able to align a determined mindset shift on the business side with smart IT skills to bring it to reality, is the only true way forward for firms who know their days are numbered, if they cannot change their inner workings to get somewhere near a OneOffice end-state. The future is really all about simplifying operations to bring them completely in line with the world of the customer. Hence, successful businesses need IT folks who can think logically to simplify business operations through the use of automation, cognitive, AI and digital. It’s not just about software packages and APIs, it’s about both business and IT staff learning to understand each other’s strengths and challenges better. It’s really not rocket science, it’s about learning to simplify business models to stay ahead of your customers’ needs and not giving your competitors a window to take you out of your market…because that may already be happening to you.
We all know that Blockchain has emerged as the world’s leading software platform for digital assets, however, new research is demonstrating its value could go even further than merely digital assets. Blockchain can reinvigorate parts of your infrastructure that have been under-performing for years to have a dramatic increase on the satisfaction of your partners, your customers and possibly even your employees…
HfS research’s new findings indicate that many enterprise back offices are in dire need of a complete transformation in order to come close to achieving the desired outcomes of their partners. Yes, folks, the impact of blockchains is causing many flagging enterprise assets to stand to attention, desperate to reclaim their former splendor and glory. According to one automation governance lead from a major consumer products firm, “Why rip and replace legacy assets when you still have plenty of mileage to glean from your trusted old systems? Ever since we got on the Blockchain Program, we’re rediscovering the ability to perform in a manner I’ve not experienced for at least twenty years.”
As with every technology magic bullet, the conversation always reverts to “hammers finding nails”, as many executives long to revive the glory days of shaving more off their bottom line in order to achieve more attractive results.
To this end, a financial controller of a FORTUNE 20 bank declared, “I had practically given up on ever meeting the demands of my various partners. Every time we were asked to perform, we just couldn’t connect the pieces. We tried every solution on the market, every tool off the shelf, even some special robots… we were a hammer trying to find a nail, but the nail just wouldn’t find the hole. Until we were introduced to blockchain, and suddenly everything changed…”.
There’s something about the nature of a distributed ledger that enables even the most seasoned of industry executives to re-live the days of their youth, a revelation that has put the wind up Pfizer, whose market is the latest to be on the verge of disruption. According to one disgruntled Prizer executive, “We are very concerned about the impact of Blockchain on our business lines. We have been warning customers of the serious side effects a Blockchain is going to have, with its sheer processing grunt depleting energy resources to an alarming extent. We advise affected customers to call their on-demand service provider for urgent support, especially after more than four hours of vigorous non-stop blockchain activity that is showing no signs of slowing down.”
HfS analysts also caught up with a leading executive from IBM, John Holmes, who added, “Thanks to blockchain, there is a huge opportunity to get our firm back on course for some serious straight line growth.”
And when we managed to get Accenture blockchain guru, Peter North, on the phone who revealed, “Blockchain promises high performance delivered and we aim to deliver that high performance. Delivered.”
Even President Donald Trump has confirmed the future potential of Blockchain in a recent series of tweets where he argued ‘It’s the best. The greatest. Just great. I’m so glad I came up with idea before Cambridge Analytica and Facebook. But seriously, Ivanka, is there any way we can delete some of the data on there? Yes those blocks called Stormy, delete them.’
And of course… this was an:
Please, please don’t tell me you fell for this again for the ninth year in a row! …And I know some of you did =)
And while we’re reminiscing about falling for April Fools’ gags, here is 2017’s classic:
The biggest issue with most companies, when it comes to planning their operations, is that most do not have an ideal endstate in mind. They struggle to define success beyond finding some shiny new activity that will get them from where they are today to a state of greater productivity and/or lower operating cost. However, our new research with 100 C Suite execs reveals that their real goals are to get better data to drive their businesses forward while aligning their operations to their business goals. Technology solutions are enablers to achieve these goals, they provide a means, but they do not provide the outcome, which is where so many enterprises are going wrong these days.
Without a defined OneOffice endstate, automation strategies will always run out of steam
Even with offshore outsourcing, the endstate was rarely defined – it was simply to meet the next set of metrics before figuring out the “what’s next”. Were companies really envisaging running their operations in a similar way as before, merely with lower cost resources and some standardization of processes? But at least outsourcing was relatively predictable – it was defining how much work to move to the service provider and how many staff were needed to keep the operation ticking along to meet a desired set of metrics. With automation, entirely new metrics are in play, and it’s currently a random crapshoot how most companies are dealing with this. From manhours per year eliminated, to processing time reductions, to actual headcounts being removed, and even improvements in compliance and data accuracy, the “new metrics” that enterprises are toying with to find that next piece of “success” are becoming foggier than ever to decipher… and trust. And if you can’t trust the metrics, the whole thing starts to fall apart.
The reality is, once certain productivity measures have been achieved, the focus from the C-Suite quickly shifts to the next set of initiatives to achieve an entirely new level of productivity metrics. This is why the emergence of automation has been so significant – it is providing that next stage of productivity improvement that C-Suites are craving, and why RPA is now the leading investment focus to reduce costs in 2018 among Global 2000 firms:
The end-game is about getting better data and aligning operations with the business goals. The end-game is OneOffice, where front, middle and back offices will cease to exist
Emerging technologies like automation and ML are not the “end”, they are just a “means” to get us from one state to the next. Enterprises need to define what is their real endgame, otherwise they are stuck in a perennial loop of finding short-term fixes and losing focus. This is why we have developed the Digital OneOffice Framework, where the organization’s people, intelligence, processes and infrastructure come together as one integrated unit, with one set of unified business outcomes tied to exceeding customer expectations. OneOffice is where teams function autonomously across front, middle and back office functions to promote broader processes with real-time data flows that support rapid decision making, based on meeting these defined outcomes. Hence, emerging technologies like automation and AI are significant enablers in helping enterprises meet their ultimate goals, where front, middle and back offices will cease to exist: They will be, simply, OneOffice:
In a new study we are soon releasing that tests the OneOffice endstate with 100 C-Suite executives, we asked them about the primary benefits of breaking down internal silos between front, middle and back offices – i.e. making them think more about what their real end-game is versus merely how to dig out more cost. And it’s not really all about cost, it’s much more about getting the data they need to stay ahead of the game and to align their operations with the front end of the business. In short, the endstate if about simplifying the business around the needs of the customer and having the data to stay ahead of the competition:
The Bottom-line: Without a defined OneOffice endstate in mind, enterprises are forever meandering from one silver bullet to the next, where the only metric of success is eking out further reductions in headcount to keep their operations functioning
The real key is to define where you want to be, and create a path to get there. In most cases, this endstate is all about enterprises becoming conduits of the data they need to satisfy their customers’ needs in realtime, with a team of smart people who know how to manage these data flows and make smart decisions to keep ahead of the competition. The broader processes become between the customer and the enabling operations, the faster companies can satisfy their needs, and stay ahead of the game. The future is all about simplifying data complexity and having talent that can make creative and intelligent decisions, based on the availability of this data and understanding the customer. This is the very essence of OneOffice – simplifying data flows, bringing the customer and the operation together and aligning your talent with achieving defined outcomes that keep you ahead of your competition.
Now most of you have finally realized that blockchain means something more than some weird disruptive currency you completely avoided buying when it could have netted you millions, we need to get much more familiar with the actual enterprise platforms being developed, where the true potential of this ledger technology can be unleashed on our enterprises, supply chains and industries.
So we asked our blockchain boffins Saurabh Gupta and Mayank Madhur to take a deeper look at the top 5, namely: Ethereum, Hyperledger Fabric, R3 Corda, Ripple, and Quorum. Please note that Bitcoin does not make it to our list of top 5 platforms. In fact, it does not make the top 10 list when we talk about enterprise application of Blockchain.
The objective of our research is to understand blockchain platforms that show promise in solving complex business problems:
“Ethereum is a platform that makes it possible for any developer to write and distribute next-generation decentralized applications.”
– Vitalik Buterin, Co-Founder, Ethereum
Founded by the 22 year old Russian-Canadian Vitalk Buterin, Ethereum is one of the most mature blockchain platforms available today. Known for its robust smart contracting functionality and flexibility, it is used widely across multiple industry use-cases. It has the largest number of use-cases available today (50%+ in our sample set). Along with Hyperledger Fabric, Ethereum has developed a large online support community as well has frequent product updates and enhancements.
The Ethereum Enterprise Alliance (EEA), a non-profit organization is now over 250+ members strong and connects Fortune 500 enterprises, startups, academics, and technology vendors with Ethereum subject matter experts. Despite its widespread adoption in enterprise use-cases, it’s important to realize that Ethereum is essentially a permissionless (or public) platform that is designed for mass consumption versus restricted access (typical requirement for privacy requirements in enterprise use-cases). It is also PoW (proof-of-work) based which is not the fastest (resulting in potential latency issues) and is an energy-sucker. Though it might change its consensus algorithm to the fast PoS (proof-of-stake) in future versions.
“As new technology develops, there is a call for standards. Participants want to focus on time and effort and investment to build solutions versus worrying about the framework. This is the rationale for open standards…we are pulling together the most exciting portfolio with a multi-lateral developer and vendor community. It’s similar to the benefits that Linux brought to the world of operating systems.”
– Brian Behlendorf, Executive Director, Hyperledger
Hyperledger, hosted by Linux Foundation and launched in 2016, is an open-source collaborative effort to advance cross-industry blockchain technologies. One of its key goals is to create enterprise-grade distributed ledger frameworks and codebases. Hyperledger boasts 185+ collaborating enterprises across finance, banking, Internet of Things, supply chain, manufacturing and technology. Hyperledger Fabric is one of the 8 ongoing Hyperledger projects that was initially contributed by IBM and Digital Asset. It is an attractive blockchain framework for enterprise solutions, given its modular architecture, as it allows plug-and-play components around consensus and membership services. It recently announced the release of Hyperledger Fabric 1.0 that claims to be production-ready for enterprises.
#3. R3 Corda. New Operating System for Financial Services
“Corda has been developed to service the specific needs of financial services with generations of disparate legacy financial technology platforms that struggle to interoperate, causing inefficiencies, risk and spiraling costs.”
– David E. Rutter, Founder and CEO, R3
Launched in 2015, R3 is a consortium of some of the world’s biggest financial institutions that has created an open-source distributed ledger platform called Corda. It’s partner network has grown to 60+ companies. While Corda was designed with banking in mind, other use cases in supply chain, healthcare, trade finance, and government are emerging. There is no built-in token or cryptocurrency for Corda, and it is a permissioned blockchain as it restricts access to data within an agreement to only those explicitly entitled to it, rather than the entire network. Its consensus system takes into account the reality of managing complex financial agreements. It is also known for its focus on interoperability ease of integration with legacy systems.
#4. Ripple. Enterprise Blockchain Solution for Global Payments
“Global payments are undeniably going through a sea change, led by financial institutions adopting blockchain to fix their customers’ broken payments experience. Now more than 100 financial institutions are looking to Ripple as the solution to the problem…”
– Brad Garlinghouse, CEO of Ripple
Ripple was founded in 2012 and was renamed fromOpencoin in 2015. It aims to connect banks, payment providers, digital asset exchanges and corporates through RippleNet, with nearly-free global transactions without any chargebacks. It enables global payments through its digital asset called “Ripples or XRP” that has become one of the most popular cryptocurrency just behind Bitcoin and Ether. XRP is touted to be the faster and scalable than most other blockchains (4 seconds payment settlement versus 1+ hour in Bitcoin with the ability to 1,500 transactions per second compared to 3-6 for Bitcoin). It has 100+ customers with 75+ clients in various stages of commercial deployment across three primary use cases namely: cross-border payments (xCurrent), minimizing liquidity costs (xRapid), and to send payments across various networks (xVia).
#5. Quorum. Enterprise-focused Version of Etheruem
“J.P. Morgan has long used open source software and we are excited to have this opportunity to give back to the community. Quorum is a collaborative effort and we look forward to partnering with technologists around the world to advance the state of the art for distributed ledger technology.”
– Lori Beer, CIO, J.P. Morgan Corporate and Investment Bank
Developed by J.P. Morgan leveraging Ethereum since 2015, Quorum is designed to handle use-cases requiring high-speed and high-throughput processing of private transactions, with a permissioned group of participants. It does not use the Proof of Work (PoW) consensus algorithm but uses vote-based and other algorithms enabling it to process hundreds of transactions per second, depending on how smart contracts and networks are configured. Quorum is designed to develop and evolve alongside Ethereum. It only minimally modifies Ethereum’s core, thus Quorum is able to incorporate the majority of Ethereum updates quickly and seamlessly. Just like Etherue, Quorum is also open sourced, free to use in perpetuity and encourages experimentation.
The Bottom-line: Blockchain Platforms will Consolidate and Collaborate as Enterprise Adoption Increases
The blockchain world moves at a frenetic pace of innovation with emerging new platforms, additional new features, and new releases, while ambitious enterprises are eager to get ahead of the curve with its disruptive potential
Meanwhile, enterprise adopters face challenges with a lack of standards and inter-operability issues, especially as they try and upgrade from pilots and PoCs to real production-grade environments. The whole development of the blockchain ecosystem is no dissimilar to the Internet for permissionless networks and cloud for permissioned ones, where blockchain is almost akin to TCP/IP as the architectural technology.
Like with any hyped, exciting new technology development, enterprises do not need 1,500+ different platforms and we will quickly see a handful of real players start to dominate and investors get focused and the ecosystem fleshes out. This PoV highlights the current top 5 platform players, but given the nascency of blockchain (almost all of these are merely a few years old), this will continue to evolve. and we will start to see greater collaboration between leading platforms given the market push and pulls. For example, we are already starting to see some evidence of this, with Hyperledger, Sawtooth, and Hyperledger Burrow working together to run the Ethereum Virtual Machine (EVM). The Blockchain Interoperability Alliance was also created in November 2017 to collaborate on researching interchain transactions and communications. Like with every new concept, blockchain is also going through these growing pains.
While we were discussing the confusing realities of the RPA hype at the HfS FORA Summit, we got a sneak preview of the interim data from the 2018 State of Operations and Outsourcing Study, conducted in conjunction with KPMG, where 250 interviews with Global 2000 operations leaders have now been completed.
We asked them where their investment priorities were currently lying when it comes to 2018 cost reduction:
So it’s abundantly clear all the hype about rampant adoption has been warranted, and we can hang our hats on our recent enterprise robotics software and services forecast, which now appears conservative, increasing with 47% growth to $1.46bn this year (click here for full forecast):
The Bottom-line: RPA has succeeded in being positioned as the “easiest silver bullet to target that next wave of cost take-out”. Now let the real fun and games begin…
The real issue, here, is that the majority of enterprises are taking the plunge and investing the dollars, with 81% actually taking RPA seriously, and 53% very seriously. So what’s going to happen in a few months when those ambitious CIOs and CFOs ask to see real, tangible demonstrations of the resultant cost takeout? Can C-Suite leaders quickly learn to love metrics that are tied to growth, value and effectiveness, as opposed to a simple reduction in operating expenses to feel rewarded for those expensive bot licenses? Are operations leaders generally going to be ready to quantify the value effectively? Can they really convince their superiors that there is true value impact beyond merely offering up headcount elimination?
What’s more, what if headcount reductions were promised to offset investments, and adopters have failed to free up the workload that can enable them? And can they reward the staff, who cooperated in the automation work, by getting them “retrained”? Is there really a plan? While the “one human to oversee every 10 bots” is becoming the latest robo-governance rule-of-thumb, how real is this? Or are we just all bull*****g ourselves about the future, and merely circling the hype to stay relevant today? Do we really care about our companies anymore, or are we more obsessed with adding big sexy initiatives to our CVs? Is this really anything different to yesteryear, where you needed to have an SAP rollout on your CV to be a credible CIO, or oversaw a 1000 FTE outsourcing deal to prove you were worth that $1.2m/ year GBS salary (yes, that’s what some get…). In this world of #fakenews, does anything really matter anymore, when we can spin our realities into whatever shiny new thing is out there?
One thing is clear is that the back office needs to be submerged into the value end of the organization. There is little more headcount elimination to be had for most companies – sure, there are still many areas that have too many people working on too few valuable tasks, and technologies like RPA are terrific tools for breathing new life into legacy systems and creating digital process flows, where before there was only spaghetti code, manual workarounds and swamps of data polluting the corporate underbelly.
One thing is clear, it’s very murky out there, and all we can really do is hatch a semi-realistic plan and try and stay on top of it as the future unravels in front of us…
