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16 May 2017

Every 25 years a major technology shift takes place which portends disruption for mankind for the next 50 to 100 years. We are currently witnessing the powerful impact of a new disruptor and it is simply called Automation. The words that might give you a sense of the disruption to come are "Internet" circa 1990 and possibly "Personal Computer" and "Digital Camera". Automation has the power to upend the traditional ways of doing things and could swiftly change the economic balance the world rests on today. Automation does away with issues like Immigration, lack of manpower, lack of scale for a small country like Singapore and unleashes the power to conquer large markets just like Amazon has done in Retail and Uber is doing to Transport.

The technologies required to automate repetitive tasks have been around for some time but have only recently acquired the ease of use needed to scale a technology. In 1989, Singapore had one port to push out all the Internet traffic from the entire country and it was through a company called Tata Elxsi Pte Ltd. Look at where Singapore is now.

Automation of repetitive tasks can eliminate nearly 25-30% of a company's workforce and at a cost of between US$3000-10,000 a year recurring and a one-time capital investment of US$2000-10,000. This is a no-brainer since most companies are over-flowing with standard processes to handle Customers, Suppliers, Investors, Employees. Why would you not automate them if your average annual fully loaded cost of employees doing these jobs exceed the costs of a Bot. Remember the BOT performs at more than 99.5% accuracy, does not take any form of leave, needs to be trained once, cannot leave the company and does not ask for a raise each year.

The next part of Automation is to use Machine learning combined with Artificial Intelligence to teach our Bots how to move up the value chain and take on more complex jobs where a Human is applying some discretionary decision making powers eg. should we approve this loan to this person or company. If the process is logical and can use a lot of data it is not difficult to automate these processes. What you cannot automate is anything that works on relationships. But if there is no physical contact between the 2 persons in questions then the process is ripe for AI/ML enabled automation which will cost more but the person being replaced also costs more. We expect 20-30% of tasks in companies can be automated over time using sophisticated AI and ML tools from the Open source domain to keep costs under control.

Automation in the IT services space has the power to disrupt on an unimaginable scale. The Automation of testing, Infrastructure monitoring and eventually Code development, integration and deployment to the Cloud can be done today with the plethora of tools available primarily in the Open source domain.

It is the imperative for every CEO and Board of Directors to ask the question: What is my company's plan to harness the power of Automation for the next 10 years in every aspect of my business? Hardware automation through Robots and Software/Services automation through Bots. The CEO of a famous technology company quipped in 1990 that the Internet was overhyped and was a short term fad. Little did he realize the forces it was to unleash in the next 26 years. I am confident that Automation has the power to do the same and MUST be discussed at every strategic review of every single company/country in the world. It could raise serious social issues with job losses, ethical issues as the Bots get super intelligent, monopolistic practices as the Automation giants swallow everyone else. People said the same things about the Internet and look where we stand today.

The next 10 years promise to the ride of our lives as Automation drives unimaginable change across companies and countries and not discussing it's implications today would be the most severe mistake anyone could ever make. There was a company called Kodak that never took the threat of Digital cameras seriously and we all know what happened to them!