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Trend #47: Technology's Impact on Business Ops

Technology is reshaping organizations across the spectrum. June’s Action Brief explores high-tech business operations and how companies are striving to make sure their workforce is prepared to manage the convergence of people, operations, and technology.

The use of technology in business operations can increase productivity and reduce deviations in standard processes.  In the last decade software costs have dropped, capabilities have increased, and the speed of delivery has improved. But, businesses are also finding that implementing new technology can be expensive, time-consuming, can bring about new security risks, and may leave their employees ill-prepared to function in the new environment.

Innovations in technology are changing operations in some of the following ways:

  • Artificial intelligence (AI) is advancing rapidly and becoming a mainstay in consumer and business applications. GEICO, Staples, and Macy’s are using IBM’s Watson in customer service operations. Einstein assisted 70,000 H&R Block tax professionals in filing over 11 million tax returns this past spring. Einstein, Salesforce’s version of AI is being used to provide “out of the box” sales insights that once required coding and customization to obtain.
  • Robots are replacing some workers. They are increasingly used in manufacturing and warehouse operations and are becoming increasingly sophisticated and being programmed to absorb data, recognize objects, and respond to environmental changes with more accuracy.
  • Robots at Amazon fulfill “one-click” orders in less than 15 minutes which is about one-fourth of the time it takes a human to complete the same task. Kiva robots have reduced Amazon’s operating expenses by about 20 percent. Lowe’s is now rolling out customer-helping robots (called Lowebots) in 11 stores in the San Francisco Bay Area.
  • Transportation management systems (TMS) are maximizing efficiencies in supply chains. They are becoming more affordable for small and mid-sized companies with the advent of cloud computing. Being able to track shipments on a 24/7/365, real-time basis is close to becoming a common reality. Most companies utilizing TMSs are realizing five-to-ten percent freight cost reductions. Last October, Anheuser-Busch and a company owned by Uber teamed up to deliver 2,000 cases of beer via a self-driving truck.
  • Inventory processes are being revolutionized by the advent of real-time tracking systems that are updated every time a product makes a move. The technology is especially helpful for retailers with hybrid or multichannel models.
  • Risk management areas are relying heavily on bots to predict potential problems with quality and compliance.
  • Supervisory Control and Data Acquisition (SCADA) systems use the Industrial Internet of Things (IIoT) to monitor and control entire operations, improving efficiencies and decreasing operational downtimes.
  • Bitcoins, blockchains, virtual/digital assistants, bots to track customer algorithms, and improved anti-fraud software are all creating major shifts in the retail world. A Kroger store in Ohio is using technology they developed (QueVision) to reduce waits in check-out lines. They have combined the use of QueVision with infra-red sensors at store entrances to reduce average wait times from four minutes to about 30 seconds. 

How can businesses prepare for changing roles and requirements as new technology is adapted?

  • Manage the changes from both short and long-term perspectives.
  • Make changes in automation gradually—without sacrificing core capability. Understand and plan for the overarching impact of the changes to manage them effectively. At the same time, keep in mind that change is happening rapidly across the board, and innovation through technology can sometimes define winners and losers almost overnight. Being nimble and ready to adapt to new technologies are keys to success.
  • Remember the soft side of automation. New leaders and managers will need to be experienced “business/technology hybrids.” These individuals will need to be able to shift seamlessly between managing people and managing experiences and technology. If they are not, gains to be made through automation could be lost. Partnerships between people and machines are growing more rapidly than machine-only operations.
  • Evaluate what skills need to be retained and or enhanced to prepare your workforce for the changes in automation. Many low-skilled and entry level retail workers are losing their jobs due to the increased use of technology. Unlike the manufacturing industry, retail has not been successful with helping workers make the shift to higher tech jobs. Walmart is one exception—they have an academy that helps employees advance their technological skills. They train about 250,000 employees per year and have the goal of joining forces with other large retailers to develop training standards that can be applied industrywide.

Classroom Implications

Successful business leaders need to be experts at managing both machines and people interchangeably. The following ideas can help students consider how business and technology are intertwined:

  • Ask them to view this video about Kroger’s line-reducing technology, and ask them how technology is shifting the world around them—in ways that may not even be noticeable to them:
  • Ask them to consider the advantages and disadvantages of the closer relationship between business and technology. Some people are pushing to “keep jobs human.” Ask students to talk about the “right” balance between humans and machines.
  • Suggest that students complete a case study of a major retailer (i.e., Walmart, Kroger, Amazon, Target, etc.). Have them evaluate how those retailers have changed their approach to the marketplace based on technology. This article highlights some of the challenges in retail.
  • For those of you addressing project management in your curriculum, make sure students understand the difference between waterfall and Agile development/management models.
  • Schools are changing the way they teach business to include more of a technology focus. Information technology education is also shifting to include business foundations. Ask students to think about their education pathway. Are they preparing for a future that allows for the close relationship between business and technology?