Part three: Changing the nature of business: the

Fourth Industrial Revolution

Preface: by Tristia HarrisonChief Executive Officer of TalkTalk

Technology has radically transformed how we work. In fact, the change it continues to bring about is so profound that many experts believe we are in the midst of a Fourth Industrial Revolution, defined by the increasing prevalence of automation and artificial intelligence, as well as the remodelling of workforces across organisations and indeed entire industries.

The pressure on organisations to adapt in order to compete in this new technology-driven age is enormous. Still, most struggle when it comes to understanding which innovations are nothing but hype and which ones have the potential to change the way we work in the decades to come. However, to thrive in the connected age, businesses will need to get much better at identifying the tools and processes that will help them thrive in this highly competitive, always-on era.

In addition, we live in an age where the first crop of digital native employees is entering the workplace. These are people who have never known a world without the internet. They see the news as it happens, watch what they want when they want on Netflix and Amazon Prime, stream music on Spotify and make friends on Snapchat and Instagram. Today’s young employees divide their attention across multiple devices and digital technologies, at home and at work,

and are as comfortable collaborating with people in the same room as with those thousands of miles away. They expect the world around them to be automated, on demand and always-on.

Yet, the workplace is where this life they are accustomed to starts to change. Work technologies still lag behind those used by consumers. To this digitally savvy generation, stepping into an office is often like an archeological expedition into decades past. One where jobs were done manually, collaboration was only ever face-to-face and clouds were a possible sign of a rainy day. They are hampered by outdated devices that are often controlled by an archaic and slow-moving IT department. They have no choice but to step into the past in order to get work done, all the while knowing that the very devices and technologies they are forced to use are holding back their productivity.

There must be a better way. To remain competitive and continue to attract top talent, the workplace has to adapt. This is why we wanted to know how business leaders and their employees understand the impact of workplace innovation today, and how they believe technology will affect workforces in the future. To do this, we worked with YouGov to survey 500 UK executives and 2,000 UK consumers on the benefit of technology for the workforce of the future.

With a view to tomorrow, and to help contextualise our findings, we’ve also recruited industry-leading futurist Graeme Codrington. He will help explain what our findings truly mean for enterprises of all sizes, and the opportunity technologies such as artificial intelligence (AI), virtual reality (VR) and automation will have on businesses in the future, as well as steps they can take today to start preparing for the future of work.

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This report begins by outlining where British businesses are today, and what they can do to start preparing for the future now. Then, we will set out an exciting vision for the future, placing technology front and centre, and helping you understand how to future-proof your business for the Fourth Industrial Revolution. We will then provide helpful tips for how businesses can close the digital distance between their workforce and technology.

The world is changing, and it is an exciting time to talk about innovation in business. Technology is the way to empower people for a more productive and motivated workforce, and I strongly believe technology will make British businesses stronger and better.

We hope this report will leave you feeling as excited and inspired about the future as we are. While creating the workforce of the future may seem daunting, it is extremely rewarding to draw a clear path for the years ahead, with an understanding at every junction about how to maximise and leverage all of the wonderful innovations around us. We speak from experience, as at TalkTalk, we have heavily invested in our own workforce, not least with the recent opening of our new Soapworks office in Salford Quays. It is a future-proof space that gives employees the ability to flourish with the right technology and a flexible approach to working.

The future certainly looks bright, and we are looking forward to showing you what it will look like.

Welcome to:

“The world is changing, and it is an exciting time to talk about innovation in business. Technology is the way to empower people for a more productive and motivated workforce.” Tristia Harrison

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Foreword: by Graeme Codrington

A few years ago, I tried to introduce my three young daughters to classic movies of my youth: Ferris Bueller’s Day Off, Home Alone, and the like. Like most people in their 40s, I view the 1980s as the pinnacle of cultural achievement in music, movies and the arts and I fully expected my daughters to fall in love with these cultural artefacts I dished up. They didn’t. They hardly even connected with the premise of these movies, and I realised just how much technology had ensured that they have lived very different lives to mine.

Drop just a single mobile phone into any 80s movie or TV plot, for instance, and everything changes. Kevin is left at home, alone? No problem, just phone the family and they’ll come back for him (or possibly order him an Uber to get him to join them at the airport). Ferris is not at school? Just send round a few WhatsApps. Or wait for him to upload the Instagram memories of his day, because you know he would have. And someone please give Thomas Magnum and TC mobile phones, so they don’t have to constantly drive that Ferrari up and down the Hawaii coastline, chased by a helicopter that doesn’t know where he is. You get the point: my daughters just couldn’t connect. They live in a world of mobile phones, connectivity and uploading all your memories instantly.

Those movies did raise some fascinating questions for my daughters about “the olden days” and led to a conversation about what their children might be baffled by, 30 or 40 years from now.

We concluded that the most baffling thing would be rush hour traffic. Why does everyone - and by “everyone”, it does feel like every single one of us - try to get to work at the same time every morning, and then leave the office at the same time in the afternoon? It makes no sense. And future generations will shake their heads in sad amusement at our expense. The answer is quite simple, isn’t it? In fact, there are many answers: flexible work hours, work from home, and remote or virtual offices could solve rush hour traffic in an instant. And it wouldn’t even have to cost employers that much because today most of your staff have better personal phones, computers and data connectivity at home than they do at the office anyway.

If we could somehow resurrect a manager who retired just before the 1980s into today’s workplace, they’d be amazed at the technology, at the speed at which things move, the ubiquity of information and at the

complexity of the decisions that need to be made. But the management techniques and organisational structures of today would be familiar. Big leaders make decisions for more junior leaders to implement; and these strategies are largely unchanged from the last century.

I have a suspicion that all of this is about to change. This part of the Workforces 2025 report will explain why. It’s fascinating, and I hope motivating for you to pre-empt and get ahead of some of these changes in your organisation and team. Don’t be like me and my movie preferences, and be stuck in the 1980s. It’s time to look to the 21st century and beyond. Right, I’m off to watch some modern science fiction movies.

I think I’ll start with TomorrowLand.

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Vast changes are being shaped by technology around the world, leading many to dub this wave as the “Fourth Industrial Revolution”. Whilst different people have different explanations of which Industrial Revolution started when, it’s worth looking into the phases through which industry has travelled. Why are the new technological advances we are currently seeing in the workplace just as significant as those that came before and defined previous Industrial Revolutions?

The first is the one just about every schoolchild will recognise as the “Industrial Revolution” – when mechanisation started take over in the UK and humankind got the machines to do the heavy lifting. The second is a little different, and refers to the period in which mass production became significant. “Rightly or wrongly, I suppose Henry Ford is the iconic picture we think about in the Second Industrial Revolution,” says Futurist Graeme Codrington. “We learned you can’t just take the machine and replace the people to get the benefits. It was in the second revolution that we realised that machines can do things people can’t, so to get the benefit you have to redesign the process.”

The Second Industrial Revolution was as much in the head as in the mechanics. Codrington comments that the full mechanisation that happened in this era led to things like the production line, which you can’t do with people alone.

The Third Industrial Revolution was the digital one, starting half a century ago with the introduction of new technologies like the transistor and robotics, which led to computers, the Internet and mobile phones.

Codrington considers that we’re living at a similar time to the Second Industrial Revolution. We’ve lived with new technologies for a while, but now we need to start redesigning systems, processes and indeed, the way we live and work, to take account of these inventions. This is the Fourth Industrial Revolution: a time in which the machines can take over entire repetitive processes through robotics, whether physical or software. And just like a century ago, we’ll discover it isn’t about the machines taking over, it’s about finding new ways for us to work with them. TalkTalk Business’ research has plenty to say about what it’s going to look like and it’s obvious that companies will have to prepare for completely new ways of working.

Part three: Changing the nature of business: the Fourth Industrial Revolution

Mechanisation.

The Four Industrial Revolutions

Mass production.

The digital age.

Automation.

1st

2nd

3rd

4th

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The shape of a revolutionSomething that’s already happening is that the nine to five culture is giving way to flexible working practices and the workforce is going to be dispersed. Ultimately this will lead to the liberation of the employee without any sacrifice of productivity. Just under half (42 per cent) of employees are expecting the end of the nine to five working culture. As we previously said, this is going to throw out challenges to managers and employees who will have to work with and manage people who are not physically present, but ensure they still feel part of the team and remain productive.

One logical inevitability is the technology that will be required; 46 per cent of employees reported in the survey that having a secure and reliable Internet connection at work that can handle increasing demands for speed and data transfer was crucial. You can combine that with the notion of flexibility; “at work” inevitably now means “wherever I happen to be working”.

The nine to five culture is giving way to flexible working practices ...

...“at work” inevitably now means “wherever I happen to be working”.

Employees are expecting the end of the nine to five working culture.

42%

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A growing number – 36 per cent according to the survey - said this is likely to increase and want flexibility in the types of technology they are allowed to use in the workplace. This could indicate that schemes like Bring Your Own Device will increase and technically there is no reason they shouldn’t.

More than ever, work will be a collaborative affair with real-time document sharing via cloud tools. Just over a quarter of all employees want to get at their documents from anywhere and increase their use of cloud storage and collaboration tools like DropBox, Box or the various alternatives. Meanwhile, exactly a third believe that in the future they will have flexibility in their work preferences so that they can function remotely and in-office.

As our recent Ovum study revealed, the use of consumer-grade collaboration apps is on rise as employees look to fill the gaps of corporate IT. Web conferencing and document or filesharing apps are being used most prolifically, by 77% of the employees surveyed, as they seek to work in a way that best suits their needs.

Whilst there is a will to accommodate employees in this way, it is critical to make their environments secure. Over half employers in our research want to equip employees to work securely and efficiently from anywhere. Almost six in ten will actively encourage employees to work in a way that offers the best work-life balance possible. There is equilibrium to be found in the collaboration so desired by employees and the employers want it too, as 25 per cent emphasise hiring employees with good collaboration skills. Reassuringly, as we’ve mentioned before, automation is not likely to see many jobs go away, with most employers not planning to reduce headcount.

Those are the hard expectations of what’s going to happen immediately. There is also the small matter of where it may be heading in the longer term.

The new revolution arrivesEven before the Fourth Industrial Revolution arrives, businesses today are already experiencing the replacement of repetitive processes with automation. Bringing more IT and Artificial Intelligence to bear on this, it can be seen that the workplace is going to need re-tooling completely.

Managers will still be managing but their employees may on occasion be robotic, whether software or hardware, rather than human every time. New skillsets will need to be acquired.

Different industries are already realising that there are systems in place which won’t gain any value if they are simply digitised. They need to be completely re-thought. The use of chatbots can be transformative; Zoom.ai notes that a large accounting firm with which it was working had started using chatbots to organise meetings and other administrative tasks and had saved $48m* a year or five hours per month per employee.

Key to understanding the employee’s outlook is understanding their background at home. Their expectations of AI are going to be built by devices like those incorporating Amazon’s Alexa or Google Home. If they can make a diary entry or ask a simple question by voice in their living room, there will be frustration when they can’t do the same thing in the office. This mismatch is going to build pressure for change even as organisations remain conservative in their appetite for it. A surprising amount of retailers even in the past year have been discussing not how they should get into online sales, but whether it’s even worth doing.

25%

of all employees want to get at their documents from anywhere and increase their use of cloud storage and collaboration tools.

25%

of employers emphasise hiring employees with good collaboration skills.

A large accounting firm had started using chatbots to organise meetings and other administrative tasks and had saved $48m* a year.

*Read Zoom.ai article: https://www.b2bnn.com/2017/11/zoom-ai-chatbots-enterprise/

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A second major consideration is, (and this bears repeating,) that people should not be afraid for their jobs in every case. The initial part, says Codrington, is likely to be very positive. “Employers are saying they can do better for their employees and employees are not saying they want to stay at home to work less. Each wants to do more with the same amount of time and they’re excited by it.”

Businesses that are prepared to do more than ‘digital-wash’ existing processes are likely to get the best out of this. The next consideration will be to ensure people have the right resources – and this is where a potential grey area can emerge. Let’s say an employee wants to work from home or somehow remotely, using their own equipment. The employer, arguably, can’t logically be held responsible for a poor Internet connection if it is in premises they don’t own and on a device they haven’t purchased, but what about accountability when it comes to the security of this device? The question of who has the responsibility will be important and yes, employers will have to be involved if their business depends on being able to work from anywhere securely.

Meanwhile in the November 2017 Budget, the Chancellor of the Exchequer said poor productivity was harming the entire economy. There is at least a contributory link. Alongside this, a quarter of employees will be using communications apps that haven’t been vetted for corporate-level security. With this in mind it’s reasonable to suggest this element of the workers need more support and training.

Let’s say an employee wants to work from home or somehow remotely, using their own equipment. The employer, arguably, can’t logically be held responsible for a poor Internet connection if it is in premises they don’t own and on a device they haven’t purchased, but what about accountability when it comes to the security of this device?

Meanwhile, 25% of employees now think that their employer should contribute to the cost of their home broadband.

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Re-engineered processOnce again, it’s likely that processes as well as technologies will have to evolve. Simply duplicating what happened in the office and sending it to people’s homes is not going to change things much, let alone for the better. People making the first move and retooling their entire culture around a flexible workforce will reap instant if temporary advantage.

The sort of innovation that’s possible will of course need guidance and advice on the type of opportunity available, which is where a solid platform and infrastructure provider has a role as a trusted advisor. It’s likely to be increasingly difficult for companies to evaluate every phone or app on the market, so they will need partners that can help.

Where do your people work?In the shorter term at least, it’s likely that the technology and its deployment will lead to a lot more flexible working. This doesn’t automatically mean working from home or even working away from the office but in the place where a task will be accomplished the best.

For example, an accountant or writer might benefit from the home environment; the travelling sales representative will work well seeing the people he or she needs to see, so having live access to the order and accounts system on the road will be a major benefit. A telesales team, on the other hand, might thrive from being in a lively office together with a lot of buzz so the intelligent thing to do might be to deploy them exactly where they are; meanwhile security compliance needs to be considered for roles which require the use of strategic telephony e.g. call centre and customer service agents, when operating in a flexible working environment.

Employers will have to consider how to manage and incentivise those roles while the employees see their colleagues taking days working from home.

The key to all of this working to the advantage of a business or other entity is to ensure that the technology eliminates rather than builds in complexity. The right security and trust levels are of course a given; this is achievable through management decisions and implementable through technology.

Rock solid Internet connections so that a Virtual Private Network (VPN) can be established where necessary is also vital, and mobile communications with as few dropouts as possible is essential.

The other thing is the idea of managing a remote workforce well while also abandoning processes that no longer work in the new circumstances. People in the Second Industrial Revolution stopped simply automating the older processes and built entirely new ones.

It may be too early to say exactly what’s going to change and what the new processes will be, but a few ideas might include:

• working flexible hours so that an employee gives their time when they can use it best

• managing by outputs rather than the time spent on a task

• increased collaboration across premises

In the concluding part of Workforces 2025, we look at how business leaders create a smarter working future and take action to close the digital distance between their employees.

Things are changing. There is a revolution going on and if you’re not part of it, you’re going to be left behind. Biggest change is going to be the relationship between humans and machines.

So how’s that going to work?

There is a revolution going on...

Biggest change is going to be the relationship between humans and machines.

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For more insights visit www.talktalkbusiness.co.uk/workforces2025 or join the conversation at #workforces2025

About TalkTalk BusinessTalkTalk Business is one of the fastest growing B2B telecoms providers in the UK, serving the needs of business and public sector customers nationwide and working with over 600 partners. We deliver a full range of business-grade communications products and services, including Connectivity and Networking, Hosted Solutions, Mobile, Voice and IP telephone systems. We thrive on innovation, looking for ways to disrupt the market and deliver value back to our customers.

Following an investment of over £600m, TalkTalk Group operates one of the largest Next Generation Network, with 100% coverage, 95% on our own network, offering 99.995% reliability. Built for business, its network can deliver to over 3,000 exchanges, on-net for EFM and Fibre Ethernet, giving them circa 60% more local exchanges than BT.

With over 20 years’ experience providing support to customers, from national retailers to sole traders, and with future-proof, scalable technology, dedicated support, TalkTalk Business provides a full range of communications solutions aimed at making Britain’s businesses better off.

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