Consider this finding that came out of a recent survey of 2,000 executives: 80% had a moderate or significant concern that technology will “take jobs from people I care about (and maybe me).”
While digital technologies have grabbed enormous attention in recent years, it’s notable that we’re still only a little bit past the starting line when it comes to progress. In fact, a new study of 2,000 executives by Cognizant, only about six percent of revenues are currently driven by digital technologies. It’s a fast-growing trend, however, with digital-related revenues expected to almost double to 11% within the next two years.
The question, then, is as digital accelerates, will organizations and their people be able to keep up? So far, at the working level, people just aren’t feeling it yet. Close to two-thirds of executives and managers in a recent survey, 63%, do not feel strongly that new technologies would help them keep their jobs. Another 64% do not feel new technologies could help them from being replaced by a robot.
The Cognizant survey sought to track the rising tide of digital channels, skills automation and artificial intelligence. On average, respondents say their organizations are investing 12% of their revenues into becoming digital each year, said the survey’s authors, Paul Roehrig, Ph.D. and Ben Pring, both with Cognizant. They went on to extrapolate that based on the total revenue of studied companies is $7.3 trillion, “this means that the 2,000 organizations in this report will spend, in sum, almost a trillion dollars ($950 billion) on digitization in 2016.” In the next four years, this figure will increase by about 36% to 16.5% annually — rising to $1.445 trillion on digital.
To put this in perspective, Roehrig and Pring point out, historical spending on IT has averaged between five percent and seven percent of revenue. So digital is double that amount. ”Companies understand that a dollar spent on digital is better than a dollar spent on pretty much anything else at the moment. Study respondents expect returns on investment to average out at 86.1% between 2015 and 2018,” they add.
There are notable technologies leading these trends, such as artificial intelligence, which is only starting to emerge as a piece of the digital equation. The Cognizant data shows that around 7.6% of leaders today think AI has had “a significant impact” on their business. Looking ten years down the road, 38% predict it will have a significant impact.
It’s notable that the real value in digital technologies isn’t just in reaching customers in faster and cheaper ways — it potentially can add incredible efficiencies to back-end business processes. “The shiny new app, the groovy website, the sensor-enabled shoe are all fine, and great things are happening,” the Cognizant authors state. “However, leaders are missing the massive opportunity to apply process automation – software robots taking over certain jobs and job tasks – to hollow out costs in the middle and back office. Automation reduces costs, and smart leaders are using that newly freed digital dividend as investment fuel for innovation. Software is not only eating the world, as Marc Andreessen noted; it should also be eating your back office.”
But will employees, managers and entrepreneurs be able to keep up with the changes it will bring — namely, increasing automation of roles, necessitating constant re-invention of these roles, as well as skills refreshes? In the report, the authors tackled these concerns, stating that this “manifest destiny of machines” (cute phrase, by the way) is creating two classes of employees: those who embrace it, and those who fear it.
“Ensuring that you — and your team and your organization — are on the right side of this schism is job 1 for everyone,” they state. “Senior executives believe the future workforce will need to understand how to collaborate with smart machines, but also feel that employees will need to collaborate more with each other and that interpersonal relationships at work will be more valuable because of digital.” They say a mix of both paranoia and optimism is healthy, urging executives to become “paranoid optimists.”
There’s a recognition that digital skills — spanning a range of functions — are the key to future employment success. In the survey, more than 81% of respondents agree that, by 2020, analytical skills will be essential for one’s professional career and for businesses as a whole. But there needs to be holistic business skills to accompany that digital savvy; 74% say strategic thinking and 72% say leadership will be vital. As Roehrig and Pring put it: “AI cannot apply judgment or the human touch; human skills such as creativity, abstract thinking, and adapting to changing conditions will be more important than ever in the years to come.”
This article was written by Joe McKendrick from Forbes and was legally licensed through the NewsCred publisher network.