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The better the question. The better the answer. The better the world works.

Is technology coming before your people ?

2

Digital and robotic technology is changing our working world faster than ever before

Do you really understand the opportunity?

Have you readied your organisation?

Is your workforce equipped?

Conclusion

Is technology coming before your people?

Is your workforce equipped? ConclusionContents Introduction Do you really understand the opportunity? Have you readied your organisation?

3 Is technology coming before your people?


By adopting these ever-evolving technologies, organisations across all sectors are seizing the opportunity to transform business models, products, services and the experiences of the consumer and employees. The pace and force of change has the potential to fracture or significantly enhance organisational models and commercial outcomes.

Once viewed only through the lens of process improvement and as the domain of the Chief Information Officer (CIO), we are now seeing business leaders across all functions embrace the potential to digitise other aspects of the value chain. This is a major catalyst for growth, competitive advantage and a means to unlock efficiency and effectiveness.

At the same time, the world of work as we know it has changed. Traditional work and work patterns are being replaced by more dynamic arrangements and the traditional team is being supplemented by digital and increasingly, freelance workers.

How ready is your organisation?There is no ‘one size fits all’ approach. Scale, culture, existing technological maturity, and consumer and employee profiles all determine which technologies to invest in and which are likely to repay that investment.

Having supported organisations to start, continue or rapidly accelerate their digitisation, before undertaking a digital and robotic transformation we encourage business leaders to challenge themselves to consider:

1. Do you really understand the opportunity? Be clear on the technologies best suited to your unique organisational circumstances and the opportunities they present.

2. Have you readied your organisation? Have you considered how the whole organisation will be impacted or will need to evolve to maximise the benefit and best integrate the new technology? This includes your people, culture, structures and models.

3. Is your workforce equipped? Digital and robotic technologies can be hugely transformational, but also disruptive. Are you properly prepared to engage, lead and drive change in new ways?

Leaders and staff across the front, middle and back office and in both private and public sectors will be impacted by the ripple effects of digital disruption.

Digital and robotic technology ischanging our working world faster than ever before



Be clear on the technologies best suited to your objectives and understand the benefits.Do you really understand

the opportunity?

Digital technology creates both the greatest opportunity to reinvent your organisation and the greatest risk of being left behind.Change is inevitable. Right now organisations have a choice: to strategically prepare, embrace and implement digital technologies ahead of the curve, or wait and see. Whichever path is chosen, business leaders need clarity about which technologies will support medium-term business imperatives.

Numerous transformative technology options exist. For example, Robotic Process Automation (RPA) uses digital workers (robots) to perform routine, manual activities, freeing up human workers to focus on higher-value, customer-focused activities that create competitive advantage.

RPA creates a virtual workforce of software robots that can process and manipulate data and trigger responses with very limited human participation.

Recognise the competitive advantages availableDigital technologies offer new ways of working, creating different and new roles within organisations. Winners will be first movers who automate quickly and change the way they discover, train and retain talent.

Significant efficiency and effectiveness benefitsRPA has received a lot of hype, but there are some fundamentals that make this a compelling process and efficiency tool for many organisations.

The significant efficiency benefits from increasing automation of traditionally high-cost administrative processes are well documented. However, this is just the first stage. With RPA, when human workers are better enabled to focus on customer service, risk identification and management, organisations can achieve major effectiveness and productivity gains.



Applying digitisation to large scale operational processes can dramatically reduce cost and processing time while still supporting a quality digital customer experience. Benefits also include:

• Flexible scaling, to reduce backlogs during demand spikes.

• Improved processing accuracy with reduced errors and rework.

• Enhanced focus on customers, significantly improving customer satisfaction.

• Release of people to refocus on complex and higher value tasks.

What separates RPA from many other technologies is that it achieves high return on investment by working within and across legacy systems environments and processes.

Already, many organisations are experimenting with and developing novel RPA applications, with successful implementation being seen in core business operations, IT, human resources, finance, customer service and supply chain.

An effective deployment plays to both robotic and human strengths:• Robots deliver repetitive, deterministic, high-volume

tasks efficiently.

• People build relationships, provide subjective judgement, deliver low-frequency and exception tasks, and manage change and improvement.

• RPA duplicates human behavior and requires minimal change to existing IT systems as RPA is an application which does not require any integration.

• As there is no integration or deployment of new IT platforms, RPA can often be rolled out in weeks rather than months or years and support costs are minimal.

Just because we can, doesn’t mean we should!Knowing where to start, which processes to pilot and which to automate, is critical. The technology exists to automate any number of processes, but determining which ones, at what level and the involvement of human judgement still needs to be considered.

It’s worth testing whether the time and effort to automate a task be better spent on other larger automation opportunities.

What are the quantifiable benefits of RPA?

We stand on the brink of a technological revolution that will fundamentally alter the way we live, work, and relate to one another. World Economic Forum, 2016

RPA works with the existing IT landscape

Robots can be trained by existing business users

Speed and accuracy of process execution improves significantly

A robot is 1/10 of the cost of an off-shore FTE — return of investment within 6 months

An unattended automated solution that has the potential to work 24/7, without complaint

Double-digit reduction in error rates — robots never forget their training



Digital transformation will ripple through organisations, from top to bottom. But, to fully realise the potential efficiency and effectiveness benefits from digitisation, the business must be readied for the change and the software enabled by the right business structures, organisational design and talent strategies.

Create opportunity across the operating modelOrganisations facing a major transformation need to consider how capabilities can be embedded in their culture. Those that thrive use disruption to strengthen their business by:

• Redesigning their business model, disrupting themselves, entering adjacent markets and delivering breakthrough enhancements to existing products and services.

• Relentlessly focusing on customer experience to create consumer pull that in turn generates engagement and loyalty.

• Building platforms that dominate the industry value chain, provide competitive economies of scale and anchor ecosystems of innovation.

• Tuning their approach to change delivery so they can be first to market and fastest to respond to new competitive realities.

Evolve the organisation’s structures and talentOrganisations may have to change the overall design of their business to be more effective in the future working world. Technologies like robotics, artificial intelligence and other emerging automation tools may modify how many levels need to exist within an organisation, managers’ span of control, team composition and degree of centralisation. The opportunities that digitisation presents will only be realised if the organisational design is aligned with the future state of the business.

How does your organisation, its people, culture, structures and models need to evolve to integrate technology and realise the benefits?

Have you readied your organisation?



Integrate the capability planOrganisations will need a mid-to-long term integrated capability plan. This includes workforce and role-type planning, and aligning talent strategy and employment arrangements to mitigate risk and cost. Capability planning should consider human and digital workers, how to re-deploy effort in this environment and how to manage supply and demand in a new workforce.

Leaders must be equipped with new skills and abilities to lead and optimise the output of both their human and digital workers, and be rewarded accordingly. Leadership capability will play a vital role in maximising the opportunity that digitisation presents and shifting the organisational culture to facilitate the change.

Manage the risks

With this unprecedented level of change comes uncertainty. Likely risks to prepare for and manage include:

• Temporary decrease in productivity

• Disruptive employee relations

• Employee sabotage and / or scepticism

• Brand reputation impacts

• New compliance, cultural and ethical risks driven by new technologies

Strategy

Customer experience

IT

Supply chain and operations

Risk

Finance/legal

HR

Drive agility and innovation

Enhance customer experiences leveraging technology

Establish a more agile digital supply network

Streamline the digital ecosystem

Manage risk as business transforms

Automate processes and controls

Evolve the HR Operating Model

Align the operating model for the digital world

Collect intelligence across touch points and media channels

Manage in-house and third party providers

Fully enable digital systems

Keep pace with increasing privacy risks and cyber attacks

Digitise invoices and documents

Re-design the organisation to fit the digital age

Engage the landscape without boundaries

Deepen customer relationships and insights

Leverage new technologies to enhance operations

Balance digital innovation with IT maintenance

Understand broader risks of new technologies

Evaluate digital tax operating model effectiveness

Intelligence led Workforce Transformation

Understand threats and opportunities

Leverage technology to better integrate among functions

Respond quickly to market changes

Integrate front-office apps with back-end systems

Provide digital trust and privacy

Address legal and regulatory requirements

Integrate digital technologies to empower people



Previous technology-driven change projects such as ERP implementations, offshoring or other system projects – were often multi-year programs. These programs usually had a high-level design developed before the scale of change was announced and they came with a sufficient time window to manage change gradually.

With the current pace of transformation, there isn’t time to manage change ‘the old way’. Digital and robotic technologies have short implementation cycles. For example, a four to six month RPA implementation leaves at most two to three months to reorient and reskill your people.

Businesses don’t have years to transform, they now have months. Technical implementation is rapid, yet dealing with the people impact is much slower.

The challenge, particularly in large organisations, is to reorient your people to new skills and roles in tight timeframes without costly disruption.

Anticipating and proactively managing your employees’ reactions and anxiety levels, as well as remaining agile, can support rapid and recurring transformation.

Acknowledge potential automation anxietyPeople can and do adapt quickly to technologies that deliver clear benefits, such as the convenience of smart phones, the internet of things and tablet computers. In a work environment, the personal benefit of adapting to new technology can be less obvious.

Each person in the organisation will fall somewhere on an adoption appetite spectrum. Some will be excited about digital integration as it eliminates mundane tasks and gives them time for more interesting and rewarding work. Others may be fearful of losing their job, unsure of how their future will look.

Organisations will need tailored approaches to reassure and encourage people to embrace digital opportunities in their roles1.

Digital and robotic technologies can be hugely transformational, but also disruptive. Are you prepared to engage and drive change in new ways?

Is your workforce equipped?

1 Heath, Chip and Heath, Dan, “Switch: How to Change Things when Change is Hard”, 2010



‘Automation anxiety’ – the fear of being replaced by technology – can cause employees to withdraw from work. The worry ‘they will be next’ can cause disruption and loss of productivity. We have seen this reality at one global organisation where after announcing the launch of a significant automation strategy, leaders observed that the office lifts became busier later in the morning and earlier in the afternoon as workers started keeping shorter office hours.

Reduce anxiety How should organisations reduce automation anxiety and engage people in imagining and preparing for the future? By creating certainty. Organisations should be willing to manage the workforce differently, by prioritising building trust. Instead of trying to minimise disruption by leaving people in the dark about changes until the last minute, organisations should develop new leadership practices to encourage the workforce to be part of the change. Provide the workforce with the certainty that they will be on the journey at the same time as the leadership team.

Although the future can’t be predicted, this will help the workforce feel prepared.

Combat automation anxiety:• Build awareness of technology and its possible impact on

your sector early, long before the change is close to occurring. This can help keep the workforce more open to examining possibilities and less concerned with the imminent future of their role.

• Find ways to demonstrate the benefits of technology, how it can expand productivity, enable accuracy and remove mundane and frustrating parts of roles. Support a small-scale RPA pilot to demonstrate how time can be made available to contribute to value-adding work.

• Educate people on the capabilities and skills that are needed to go along with these changes, including how to lead people who are focused more on creative work and problem solving.

• Ensure leaders are telling an inspiring story of growth and innovation through technology, with enhanced working conditions and more engaging work – not a negative or subdued story of cut backs, obsolete skills and experience.

• Involve people in developing the digital roadmap for existing functions.

• Invest management time in developing an agile mindset across your business by incorporating agile thinking exercises into leadership meetings2.

2 Meyer, Pamela, “The Agility Shift: Creating Agile and Effective Leaders, Teams, and Organisations”, Bibliomotion, Inc 2015

Digital operations open an array of opportunities to augment, improve, create and replace jobs over the next decade.

To fully realise the opportunity, organisations need to prepare their people and leaders now.



Practice adaptive transformation Adaptive transformation helps organisations to see change as vital to survival – not a threat.

As technology becomes cheaper and easier to implement, not managing the people side of this evolution may become the most common issue holding organisations back. People may not like having their routines disturbed or the feeling of anxiety that comes with an uncertain future, but when properly equipped they can successfully adapt.

Embrace agility as the new normIn a digital world, your current workforce may not have the skills your organisation will need to succeed in the future. You need to:

• Prime the organisation to be change-ready before the specific change is even a business case. This means that individuals are already part-way through their change journey. At a minimum they should be aware of what change is coming and have acquired some of the new capabilities needed.

• Sharpen change practices so change can be implemented faster and more effectively. Most organisations can improve their:

• Capability development to maximise effectiveness and minimise time ‘off-the floor’.

• Manager capability to lead change and have difficult conversations.

• Alignment of change templates and processes to new technologies. You need a multi-speed change management approach to catering for both rapid agile digital sprints, and more traditional enterprise program implementation cycles.

Businesses don’t have years to transform, they now have months.

Is technology coming before your people?11


Digitisation will ripple through the organisation, from top to bottom, impacting every employee and business process.

Do you know how to maximise this opportunity and ensure your people understand and champion digitisation?

Or will digitisation fracture your business model and create fear among your employees?

Find out how to embrace the fast approaching waves of change and thrive in the future working world.

Change is inevitable. Right now businesses have the choice to strategically prepare, embrace and implement digital technology for opportunities to improve customer experience, maximise efficiency and effectiveness, or wait and see.

Conclusion

Contacts:

Juliet Andrews People Advisory Services Partner EY Oceania Tel: +61 2 9248 5168 [email protected]

Louise Rolland People Advisory Services Executive Director EY Oceania Tel: +61 3 9288 8377 [email protected]

Andy Gillard Advisory Partner EY Asia-Pacific Tel: +61 2 9248 4096 [email protected]


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© 2016 Ernst & Young, Australia. All Rights Reserved.

APAC No. AU00002866 M1630115 ED NONE

This communication provides general information which is current at the time of production. The information contained in this communication does not constitute advice and should not be relied on as such. Professional advice should be sought prior to any action being taken in reliance on any of the information. Ernst & Young disclaims all responsibility and liability (including, without limitation, for any direct or indirect or consequential costs, loss or damage or loss of profits) arising from anything done or omitted to be done by any party in reliance, whether wholly or partially, on any of the information. Any party that relies on the information does so at its own risk. Liability limited by a scheme approved under Professional Standards Legislation.

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