From AI to biometrics to the dark web… here’s a taste of what directors need to be across when guiding their organisations into the future. Beverley Head reports.
The pace at which new technologies emerge makes it tempting to grapple with each as they come. The real value lies in recognising how together they form a powerful mosaic, providing opportunities for better ways of doing business.
For example, conversational commerce uses the voice-recognition capabilities of Artificial Intelligence (AI). The device used is an Internet of Things (IoT) connected speaker. A payment can be triggered using the biometrics of a voiceprint, activating a blockchain contract. And, of course, everything shifts up a gear when the quantum-computing era dawns — though that is a work in progress.
Here are 12 topics you need to be across.
1. Articifical intelligence
By 2020, most new software will feature elements of AI. Technology research and advisory company Gartner predicts that AI augmentation — using AI to boost worker capability — will generate US$2.9 trillion of business value and recover 6.2 billion hours of productivity by 2021. AI embraces technologies such as machine learning, computer vision and voice recognition — it’s being deployed now and applied to everything from reviewing legal contracts to giving investment advice.
Woodside Energy has a cognitive assistant called Willow that helps staff access its analytics databases. It has also used IBM’s Watson to ingest 600,000 pages of engineering information. Packaging company Pact Group is using Microsoft’s AI in a proof of concept to monitor workplace behaviour through a safety lens. Amazon Web Services’ Rekognition allows companies, including Airtasker and Domain, to track and recognise people and objects.
Opinions diverge about attempts to digitally mimic human behaviours. Fuelled by recent reports about the “AI arms race” between the US and China, some posit a dystopian future where wars are waged by cyborgs and workers replaced by robots.
The Autonomy, Agency and Assurance (3A) Institute at the Australian National University, led by Professor Genevieve Bell, intends to build a new applied science around the management of AI data and technology and their impact on humanity.
While that develops, though, there is plenty to exercise the attention of the AI user. The ACCC is keeping a close eye on the AI-heavy algorithmic economy, using powers awarded through last year’s Competition and Consumer Amendment (Competition Policy Review) Act 2017 (Cth) to ensure that the algorithms’ owners are held accountable for any anti-competitive behaviours.
When Amazon Go opened for business in Seattle, in January, people queued around the block to try the friction-free shopping experience. Armed with a smartphone app and Amazon account, customers enter the shop, select the goods they want and walk out. Cameras track them in the store and their account is automatically billed.
Meanwhile, New York-based startup DeepMagic has demonstrated the Quick pop-up store; eventually people will be granted access by facial recognition and automatically billed when they take a product out of the store.
Biometrics allow an individual to be identified by a range of characteristics such as face, voice, iris, fingerprint or vein pattern. For high-security applications, it’s part of a three-factor authentication process, matching something you have (say, a swipe card) with something you know (a password or PIN) and something you are (your biometric).
Building such systems is complex, with an onus on heavy security, but two major initiatives are underway. The Federal government is testing its Govpass digital identification service, which has a biometric component, and Australia Post is adding a biometric to its Digital iD service.
Parliament is considering the Identity-matching Services Bill 2018 (Cth) while the Council of Australian Governments will allow law enforcement agencies to share passport, visa, citizenship and driver’s licence biometrics.
Companies that need to be assured of the identities of customers, particularly for anti-money laundering, will find that know-your-customer compliance and biometrics could add additional assurance. Already used to identify smartphone users, bank customers, Centrelink clients and travellers through the SmartGate system, biometrics are becoming part of the nation’s digital fabric.
While there are strong opponents, such as the Australian Privacy Foundation, their voices are not resonating as loudly as they did in the mid-1980s with the Australia Card.
3. Big Data Analysis
The planet’s data collection will top 44 zettabytes — or a trillion gigabytes — by 2020. More than enough to digitally store every word spoken by humans since the dawn of time. Data is coming from traditional written sources, from sensors, and from biometrics. It’s being fed through AI and machine learning engines, which spit out actionable recommendations that can be put to work by humans or robots.
As NSW chief data scientist Dr Ian Oppermann notes, many modern businesses “live and breathe their data — no data, no business”.
A former CSIRO researcher, Oppermann is also CEO of the NSW Data Analytics Centre. He says directors need to understand the impact of the mandated data breach notifications legislation and the EU’s General Data Protection Regulation (GDPR).
They also need to value their data. “It really should go on the balance sheet, but there is no accounting standard for data,” says Oppermann.
He notes, however, that work is underway to help value data reserves, particularly a framework developed by Gartner researcher and author of Infonomics, Douglas Laney, to help monetise, manage and measure data.
In the race to exploit data, Oppermann cautions directors to be vigilant about how data changes depending on what happens to it. Companies developing smart services may, for example, safely link two anonymous data sets. When they add in more data sets, however, it may be possible to triangulate a user’s identity and, therefore, stray into the area of personal information and privacy.
The Federal government has signalled plans for a Consumer Data Right, giving individuals more agency over their personal data.
A response to the Productivity Commission’s recommendations in its Data Availability and Use report, this will initially apply to banking, electricity, and phone and internet transactions. Companies will be obliged to provide a standard easy-to-access format that consumers can use.
While it represents a technical challenge for many organisations, it creates an opportunity to create new classes of business that leverage personally held data assets.
4. Conversational Commerce
What gender is your company? Are you male or female? Any company that wants to engage customers or suppliers using voice — banks, insurance companies and retailers have signalled they do — need to address this.
Using smart speakers or smartphones, consumers or suppliers can place an order or pose a question. Voice recognition then makes sense of the conversation and a transaction can be initiated.
Massachusetts Institute of Technology Professor Brian Subirana says that the leaders in conversational commerce — Amazon and Google — are building personalities for their brands so that people feel comfortable with them and start to build emotional attachments.
Demand for voice-triggered action is taking off. MIT, Capgemini and Intel note, in a joint report — From UX to CX: Rethinking the Digital User Experience as a Collaborative Exchange — that demand for smart speakers is growing 600 per cent a year — much faster than the rate at which smartphones took off. It is estimated 190 million such devices will be in US homes by 2019.
Conversational commerce requires a rethink of technology, processes, and data. It collects great screeds of data that needs to be collected, analysed, acted on and stored. Consumers effectively create a “digital twin” that can become their personal servant — knowing what to buy, what to share, and when to pay. The same digital twin concept works for companies — where IoT devices are used to digitally capture data about the physical company and then use that for optimisation. Gartner predicts that by the end of the year 48 per cent of companies using IoT will embrace some form of digital twin strategy.
The first conversational commerce challenge, however, is to make sure that your voice is heard.
5. Internet of things
The IoT is shorthand for how organisations can sense, source, and share data at a very granular level. Frank Zeichner, CEO of the IoT Alliance Australia, says sectors with the most to gain from early forays are transport, water, energy, food and agriculture, cities, manufacturing and health.
IoT data is the key to linking information technology and operational technology, driving out inefficiencies. It is, he acknowledges, “early days” and an IoTAA survey reveals that more than half of Australian businesses have only been thinking about IoT for a year or so. There are, however, outliers.
Dulux has spent $165 million building a smart factory in Melbourne that has IoT at its core and, says Zeichner, has delivered improved workflow.
While optimistic about the transformational impact of IoT, spurred by the falling cost of sensors and connectable devices, he notes that “what is uncertain is the quality, reliability and security” of some devices.
Attacks on IoT networks by the Mirai botnet (malware) signal the disruption that can befall companies that lower their guard.
Security is also an issue for organisations that deploy IoT solutions as part of an “edge computing” strategy where more processing is conducted away from head office. The challenge is to ensure the edge is as secure as HQ.
6. 5G mobile networks
The advent of 5G mobile networks, starting next year, will prompt a massive increase in network connections from sensors and connected things (autonomous vehicles, monitored cows, and all manner of sensors), lower latencies and higher speeds (download a movie in a second). The very high bandwidth promised by 5G and low power requirements open up new opportunities.
The immediate issue for directors is when to sign off on new capital spend. Associate Professor Mark Gregory, a specialist in network engineering from RMIT, warns that the first 5G-ready devices will emerge later this year; buying today’s equipment risks investing in obsolescence.
Beyond that, he says organisations need a transition plan. Gregory warns that although 5G will be expensive early on, there can be a first mover advantage for businesses with compelling business models. Access to 5G networks will start in the major cities and metropolitan areas through 2019–20. Regionally based businesses may have a far longer wait for 5G — these are the parts of Australia where 3G networks persist today. Gregory says, “4G was the pinnacle of connecting people. 5G is all about connecting everything else.”
Autonomous transport, smart cities, a range of wireless health services, smart homes and Augmented Reality (AR) applications will all require 5G network connectivity.
7. Robotic Process Automation
Robotic Process Automation (RPA) has sped up and streamlined routine tasks such as reconciliation — both in-country and cross-border.
RPA can speed things up, reduce error rates and enhance compliance — and new cloud-based services put them within reach of small and mid-size businesses and not-for-profits. By some estimates, RPA can be 65 per cent cheaper than hiring humans to perform the same task, causing some boards to reconsider business-process outsourcing and offshoring in favour of automation.
While some RPA applications have been labelled “fancy macros”, the emerging field of robotic and process/cognitive automation (RP/CA) steps things up a notch.
Deloitte strategy consultant Tom Hughes explains that, while RPA is focused on automating repetitive routine and rules-governed tasks, RP/CA nudges into territory where human judgement is generally exercised. “Should we give this person a loan?” “How should we allocate this capital for investment?”
Using machine learning to analyse potentially hundreds of thousands of similar decisions taken by humans, an RP/CA system can either take action itself or make a recommendation to a human employer.
As Hughes notes, it’s not the full “intelligence” that’s expected from an AI system — but RP/CA can “mimic human judgement”.
“This automation technology has been maturing over the past decade. We are now seeing enterprise deployment, though there are opportunities at all levels… [along with the prospect of] increased productivity, in a way that we have not seen before,” he says.
8. Quantum Computing
Scientists around the world — including teams at The University of Sydney and UNSW backed variously by the government, IBM, Commonwealth Bank, Telstra and Microsoft — are exploring how the quantum effects of matter can be tamed to create computers in orders of magnitude more powerful than today’s.
While commercial application is believed to be at least a decade hence, these qubit-based systems will be able to tackle huge computing challenges such as the models to address climate change, uncrackable financial systems, and new drug and materials development.
A UNSW team led by 2018 Australian of the Year Professor Michelle Simmons has managed to get two qubits, forged from silicon, to communicate to each other — critical for future commercial application.
The team hopes to build a 10-qubit demonstration device by 2022. Google has unveiled Bristlecone, a quantum processor which it hopes will prove that quantum computers can outperform classical computers, while China is investing US$1 billion in its quantum computing lab.
Commercial application of quantum computing is probably a decade away, but when it arrives it will change everything.
Some organisations are experimenting now — Commonwealth Bank has developed a quantum-computing simulator, providing systems architects and software developers the chance to prepare.
9. Dark Web
The dark web exists in a parallel universe to the internet. When a business is hacked and its data is valuable, it will be sold on the dark web. If the business is hacked and the data is worthless, it will be dumped there, according to Eileen Ormsby, journalist and author of The Darkest Web. Once it’s there, “There’s not much you can do… apart from possibly pay a ransom, and that can be dangerous.”
It’s accessed by special software, ensuring users leave no trace, making it a go-to for pornography and the sale of drugs, and other criminal commerce. Your teenagers may be able to show you the ropes.
Company whistleblowers, she says, also benefit from the cloak of anonymity that the dark web affords to share their secrets — and it is a favourite haunt of WikiLeaks. Company documents can be uploaded to dark web sites that will strip out any metadata that could identify how the document was sourced or who provided it.
While Ormsby says the construction of the dark web precludes it from being policed or regulated, she does expect it will become more closely integrated with the more legitimate parts of the web in the future, as consumers look to reduce their digital footprints so that companies and governments cannot track their movements and motivations as closely as they do today.
10. Augmented Virtual Reality
Australia exports over a million tonnes of beef each year. In the future, an AR system may help grade it. A see-through, head-mounted device — developed by Wiley in association with Meat & Livestock Australia — scans the colour and muscle tone of the meat, helps workers avoid mistakes and enhances the precision of grading.
Boeing is also testing AR so that technicians can use interactive 3D wiring plans and understand where specific wiring is in the context of the aircraft fuselage they are looking at. Deloitte predicts that this year there will be one billion AR apps running on smartphones worldwide. With applications in remote workplace learning and development, and occupational health and safety, workers will know how to react to specific situations or use tools without them having to consult a manual.
Virtual reality is anchored in the entertainment sector, but it has been used also to demonstrate to carers what dementia patients experience, and is being deployed as a teaching tool in universities.
AR is gaining traction faster. The advertising industry is agog at AR advertisements, which can deliver 30-fold engagement compared to standard mobile ads. Retailers are exploring how AR could be used in supermarkets, so shoppers look through their smartphone screens to see gluten-free or low-salt products highlighted on shelves.
And watch out this year for AR dinosaurs — Jurassic Park Alive could prove as big a hit as Pokémon GO, which had children scouring the nation through smartphones to find Pokémon on the loose.
Dr Mark Staples, CSIRO’s Data61 research group leader, likens blockchain today to the internet in the ’90s. Initially the plaything of university staff, few company directors could have foreseen the impact the internet would have on their business in a few short years. “Directors were asking ‘should they have a web page’, and the idea of selling over the internet was being questioned. Now it is the common fabric of so much activity. Blockchain is like that. It is being explored but it has so much potential,” he says.
Staples adds that in 10–15 years the blockchain technology will have had a profound impact on business and business structures.
Blockchain, or distributed ledger technology, is a way of sharing and authenticating information and a means to transfer value. It’s the technology behind cryptocurrencies. Applications include monitoring and managing supply chains, keeping track of digital rights and IP, and intergroup accounting.
While most blockchain deployments are still at the proof-of-concept stage, analyst IDC has forecast that Asia-Pacific investment will almost double this year to US$281m.
Want to know more?
Artificial Intelligence: An executive’s guide to AI (McKinsey)
Augmented Reality: On the cusp of reality (Deloitte)
Data Analytics: Infonomics
Blockchain: Blockchain-based Systems (Data61)
Conversational Commerce: Time to talk (Capgemini)
Internet of Things: (Gartner)
Robotic Process Automation: Automation is here to stay (Deloitte)
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