KPMG warns executives must move beyond ‘lip service’ to address AI-driven job loss

More than half of business executives plan to implement some form of artificial intelligence within the next 12 months, according to the 2019 State of Intelligent Automation report released today by KPMG International in collaboration with HFS Research.

KPMG defines intelligent automation as a collection of terms and practices under the artificial intelligence umbrella — ranging from deep learning to robotic process automation, cognitive computing, and smart analytics.

One of the challenges the report highlights is difficulty moving AI implementation beyond pilot projects. In fact, only 17 percent of respondents said they have scaled up or industrialized AI implementation in their organization.

The survey also pointed to a less-than-clear understanding of the financial investment needed to scale AI. Still, more than 50 percent of executives surveyed expect to scale intelligent automation at the enterprise level within the next two years, while over 30 percent are investing more than $50 million in AI, primarily toward costs like cloud computing. The survey also found that organizations are likely to underestimate costs beyond the tech needed for AI adoption — such as those related to human resources or retraining employees.

Other insights include:

• More than 60 percent are applying multiple forms of intelligent automation tech, but only 11 percent are using an integrated solution or a company-wide approach to coordinate efforts across an organization.
• About 1 in 4 said they want to use AI to drive revenue growth, while 30 percent said they want AI to help them improve the quality of interactions with customers.
• Organizations in quick-moving industries that need to remain agile have seen the most benefit from AI adoption, while legacy organizations used to operating in a specific way can bring baggage to their AI initiatives.
• The majority of AI initiatives are headed by IT departments. Less than one-fifth of businesses have an approach that brings together both IT and business leaders in a company.

Fundamental shifts in workplace culture are necessary to achieve results from automation beyond cost savings, according to the authors.

“If all an organization gains through IA [intelligent automation] is incremental cost savings, it is missing out on IA’s full potential. To get the most from IA efforts beyond cost savings, broad-ranging transformation is needed, not just in a piecemeal way,” the report reads.

Near 600 business executives in 13 countries in North America, Europe, Asia, and Africa participated in the study and subsequent interviews to elaborate on survey responses. Participating companies include Ericsson Group, InterContinental Hotels Group, and USAA Bank in the United States.

The study also found that virtually all organizations need help preparing employees for changes ahead.

“Change management strategies and plans are typically inadequate, and too much lip service is being paid to talk down the potential for job loss, as well as the potential for retraining and reskilling,” the report reads.

To succeed in bringing AI services to a business, the report suggests a “top-level champion” be appointed to spearhead initiatives, someone who understands the value of AI within the organization.

The study also suggests organizations begin conditioning their employees to understand that their jobs are going to change as part of their AI strategy. About 3 out of 4 organizations surveyed expect intelligent automation to significantly impact 10 to 50 percent of their employees in the next two years.

While acknowledging that robotic software can partially or fully eliminate many work roles in an organization, the report notes that only 1 percent of executives surveyed said their goal with AI adoption is to eliminate full-time employees.

Despite tension about job loss, the authors implore businesses to continue to deploy AI since they found a correlation between speed of intelligent automation implementation and company success.

Nearly 65 percent of the best-performing companies surveyed will scale AI use this year, while nearly 60 percent of poor-performing companies plan to scale AI use in the next two to five years.

KPMG survey results mirror a study commissioned by Microsoft and released earlier this month that stresses the need to change company culture in order to successfully implement AI and also notes the correlation between AI adoption rates and the performance of high-growth businesses in the United States and Europe.

“It takes patience when pushing forward with IA efforts, especially given [that] the whole transition may face resistance from managers and staff, who may naturally resist and feel threatened by change, especially when it might lead to job loss and changes to roles and operating models. Despite these challenges, organizations must press ahead with their IA efforts,” the report reads. “Intelligent automation will span quickly across all industries and will disrupt businesses at an accelerated pace. The competitive businesses of the future will be far along the IA curve of development.”

The study also refers to AI as not just as a potential job disrupter or killer, but key to addressing skills shortages in countries with aging workforces, like Japan, the United States, and Europe.