Eyeing the value in 2017's technology wave
An economy based on platforms, algorithms and bots is emerging, yet many business leaders are still currently underestimating the challenges and opportunities these will bring. Those businesses are sitting on untapped cost savings and new revenue sources.
Optimising an organisation’s middle- and back-office operations can be a hidden goldmine for cost savings. Companies such as TriZetto are using software robots to decrease healthcare payer costs by as much as 90% for some middle-office business processes. Others such as Blue Prism are applying bots to handle risk, fraud, claims processing and loan management in banking to save millions.
Denying these savings is essentially a self-imposed tax. Automation of processes within business reduces costs, and smart leaders are using that newly freed digital dividend as investment fuel for innovation.
If businesses were to invest in only one new technology in 2017, they’d be wise to earmark artificial intelligence (AI) for this cost. The majority of business leaders see AI combined with analytics as the leading driver of business change in the next two to five years.
Businesses can apply AI to change the way work is done and how customers engage with a business throughout the entire value chain of an organisation, process by process. AI technology is redefining entire job functions — from call centre processes to manufacturing and logistics functions. In the long term, AI should create more meaningful work and more value.
Analytical, communication and learning skills, as well as the ability to relate to other people, are still all vital for business success and will never be replaced by robots.
Investing in AI technologies will actually empower workers, helping them to enhance specific skills and focus on tasks that are more interesting and ultimately add more value to the business. Freed from administrative tasks, staff can be redeployed to value creation activities rather than service functionality.
Organisations that are behind the technological curve face a ‘laggard penalty’ — the difference in both cost and revenue performance due to technological disability. Laggard penalties exist across all industries. In financial services, for instance, digital laggards, on average today, have a total economic impact of about 3.1% of all costs and revenue.
How can organisations turn this around? A first step is to benchmark against others in the same industry, and then get a rough idea of whether or not technology can drive profit in terms of both saving on costs and delivering new revenue opportunities. This analysis will help create the much-needed financial justification for taking the bold steps needed towards becoming digital.
Business leaders in APAC expect an average of 116% return on their digital investments by 2018. These strategic investments can help organisations win new markets, innovate and improve efficiencies, while also helping to initiate critical internal change.
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