By Kelvin Chungu
WHAT is your value proposition as an individual or business? Let’s consider this.
The world has passed through several revolutions from the agricultural age, the machine age, the internet age and now to the data age. Yet, the pace of change keeps accelerating and the James Bond movies that seemed so surreal and exhilarating, the stuff of science fiction is now a reality. These hastening trends in a combination of artificial intelligence (AI), Internet of things (IOT), cloud computing and robotics, suggests the future is going to be filled with substantial unprecedented social and economic disruptions.
The potential negative social impact portends future danger and the fact that this will happen in our life time is more demobilising particularly that the intensity of change is not at pace with Africa’s industrial evolution.
Although these changes are supposed to bring about more optimism than dread, the tendency is for the inverse, because it is unavoidable not to imagine a world where humans are replaced by machines, when machine learning is a subject of discussion. After all, while a lot has been written about the need to embrace this new world, there is just as many interpretation about what the potential effect on the future of work will be. It is yet unknown what direction it can be expected to take eventually.
The recent World Economic Forum gathering held in Davos envisages considerable changes to white collar employment as a consequence of technological advances, in contrast to past revolution and automation, where only lower level clerical jobs were affected. AI, other than just enabling the automation of tedious repetitive tasks, will help to see automation begin to climb up the corporate analytical ladder. No job is spared.
Perhaps what has not been said as often and as repeatedly as possible is how imminent these changes will impact various careers. It is been said that by 2018, the robots will likely be deployed in some homes and perhaps in a lot more homes by 2025 and It is hard not to think of the disruption to domestic work opportunities that will befall household helpers space.
The changes look more profound every way, we look. In the accounting world, the voices are divided. There is potential doom depending on who you listen to. For instance, Mark Cuban, the billionaire owner of the Dallas Mavericks and who was often the opposition face to Donald Trump during the run-up to the US election in 2016, once projected on CNBC that accountants are an endangered species on the way out.
This statement would seem to understate the resilience and flexibility that the accounting profession has demonstrated, from the days of paper spreadsheets to the inception of desktop computers. Most recently, we have seen the almost unison acceptance of cloud-based services by accounting firms as they try to tap into the unlimited storage capacity that a desktop couldn’t provide. So it is fair to say, even as artificial intelligence ventures into machine learning, that there is great hope if the past is any indication. That accounting firms will embrace machine learning to enhance the information value and efficiencies in their work.
Just as an example of the current trend in the embracing of artificial intelligent, between March to May 2017 this year, EY made three important announcements that set the agenda for where the audit world is moving.
Firstly, EY announced that it was expanding its digital audit footprints when it launched a global proof of concept (POC) system, which will expand the use of drones in inventory observations signalling that future accounting staff recruitments will be scaled differently.
According to EY.Com, “The cloud-based asset tracking platform, powered by an Internet of Things (IoT) sensor network, will analyse inventory quantities in real-time by reading Quick Response (QR)/barcode/rack labels and feeding this information directly into EY Canvas – the EY Assurance global audit digital platform that seamlessly connects more than 80,000 auditors.”
EY.com also notes that the POC will be first deployed in the manufacturing and retail sectors. “Audits for automotive manufacturers, for example, will use the drones to conduct an automated count of vehicles at manufacturing plants. In retail sector audits, for a warehouse stock count, the drones will work autonomously while using variable image and object recognition tools such as optical character recognition and QR/barcode/rack labels to collect inventory information, especially during off-hours to minimize audit stakeholder risk and improve efficiency.”
Secondly, EY according to EY.com, announced that it plans to enhance its suite of automation and artificial intelligence offerings with the opening of its first Artificial Intelligence (AI) Centre in India. According to Mr Milan Sheth, Partner – Advisory Services and Technology Sector Leader, EY India, “The launch of the AI Centre, aims to lead the next step of this transformation journey by helping enterprises combine AI’s autonomous reasoning with systemized learning opportunities.”
Thirdly, EY launched its flagship global network of growth and innovation centres called “Wavespace centres” to help its clienteles catch the next wave in radical breakthroughs in business transformation by tapping into innovative thinking across EY disciplines, experience and industry sectors and is focused on specific disruptive growth strategies and technologies impacting industries.
According to the EY.Com, “All locations will feature a shared methodology and platform that combines EY’s experience in areas including disruptive technologies such as artificial intelligence, robotics process automation (RPA), blockchain, data analytics, digital, customer experience and cyber security, and EY’s deep industry domain and regulatory experience.”
In the automotive sector, the Driverless future website carries various forecast by major car manufacturers, which includes a deployment date that removes the mystery from their inevitability.
In 2013, Nissan predicted that it would have driverless cars in the showroom by 2020. In 2012, Google estimated that it would have its driverless cars on the market no later than 2018. In 2014, Jaguar and Land-Rover projected that they would provide fully autonomous cars by 2024.
In 2015, Ford estimated that its fully autonomous cars will be available on the market by 2020. In the same year, the Uber CEO, Travis Kalanick, predicted that the Uber’s fleet will be fully driverless by 2030 and that car ownership will be obsolete. This is not a too distant future and it is likely that such automated vehicles will not see light in Zambia until five years of the reported forecast. It will nevertheless happen and one need not think further about the social upheaval that could befall the transport sector in Zambia.
That the world is changing is not in dispute, but how it is going to find us is a loaded question. For instance, in Zambia in 1991, we saw the effect of massive unemployment brought forth by the liberalisation of the economy. We saw the unfolding debate about protectionism as several economic experts lent their voice.
The result however, years later show that a significant block of informal sector was created overtime (perhaps generating revenue in excess of a few billion dollars per annum) although it is yet to be fully harnessed. This is thanks in part to the non-protectionism stance that successive government regimes took. So it is important to understand that we will not be able to self-protect by legislation, our key to succeeding in this unfolding disruptive world will be to understand our value proposition and in turn, harnessing it.
To understand our value proposition, certain key questions will need to be asked, 1) what is our competitive advantage over our competitors? 2) What is our fundamental unique capability or selling point? etc., to convey to the customer the unique benefits of doing business with our company, and it can’t be superficial.
Creating a non-superficial value proposition requires the understanding of the business fulfilment operating model (how we go to the market) and revenue model (what we are selling). And it is not necessarily as easy as what is obvious, for example, Google revenue model is the multitude of people that visit Google sites and its main operating model is monetising its ‘crowd pull’ through advertising. Perhaps it is best simplified by repeating what EY stated in the “2016 Upside of disruption” publication.
In it, EY proposed a list of five question for those looking to seize the upside of disruption. The first and most important is challenging long-held assumptions about matters as fundamental as what the entity’s business is.
The second is about understanding who your customers are because disruption has a way of changing the very business that companies are in and therefore clarifying the company’s core activity must be the first step in reinventing the business model.
Further, because disruption more than empowering customers, creates entirely new customer segments with different needs and expectations that should be met.
The third question is about what your value proposition has become to be able to respond to the new customer expectations which may be different from the company’s traditional customers.
The fourth question to ask is who your competitors are because responding to disruption requires making the right comparisons, including comparing yourself with the appropriate competitors since disruption attracts non-traditional entrants from other sectors.
The final question to ask is what the risk of standing still is since we tend to underestimate the speed of revolutions and make cost benefits analysis in the context of a world similar to todays, when the more meaningful comparison is against the environment that will exist in the near future.
So there is no escaping the question because it is inevitable, what is your value proposition as an individual or business?
.Kelvin Chungu is an Associate Director in the Assurance and business development service department of EY Zambia and can be contacted on Kelvin.Chungu@zm.ey.com.