The chief executive of technology giant IBM has urged Australian business leaders to plan for dramatic changes to their organisations and the workforce caused by artificial intelligence and advances in quantum computing.
Ginni Rometty, who has run the $US120 billion company since 2012 and is in Australia to sign an AI deal with Woodside Petroleum and attend other customer meetings, said business leaders must change their approach to hiring or risk being left behind.
Ms Rometty gave a keynote address at a cloud computing conference in Sydney on Tuesday, alongside Woodside chief executive Peter Coleman who told the event he expects AI technology to slice maintenance costs in its plants by 30 per cent a year – or around $300 million.
Mr Coleman said this is one of several applications being developed with IBM that also include automating production and improving cybersecurity. Westpac Banking Corp chief executive Brian Hartzer also spoke at the event.
Ms Rometty said AI was already changing the way companies performed many tasks and these would get more advanced and that quantum computing-based calculations would be in production environments in three years.
But she said crippling skills shortages in key areas such as systems design and cyber security showed that corporate hiring policies weren’t keeping up.
While most commentary around the future of work has focused on whether automation will lead to mass unemployment, Ms Rometty said it was more important for companies to properly understand how they will work in the future and repurpose their workforce accordingly.
“You absolutely have to change the way work is done. Don’t just sprinkle AI on top of it … probably number one on almost everyone’s mind is you have to underpin it with a relevant workforce,” she said.
“We have a strong point of view that 100 per cent of jobs will change in the future. I didn’t say be replaced … they will change, and they will be changed because of AI.
“An average skill, particularly in technology, has got a half life of three to five years. So what do you do? You actually won’t hire for skills any more, you will hire for propensity to learn.”
The Australian government is in the late stages of developing a national strategy for AI, looking at writing a roadmap to help the broader societal transition, which has included corporate trials of AI ethics principles.
This has included ensuring that AI does not entrench bias, for example when it is used in the job hiring process.
Ms Rometty advocates tackling the skills shortage by looking at different demographics for workers, and assessing people based on their capabilities rather than their qualifications.
For example, IBM had found military veterans had a lot of the talents needed for working in cyber security roles.
IBM’s core business remains in the supply of computing hardware, software and services, and Ms Rometty asserted that most businesses in general were at the “start of chapter two” in the digital changes that have occurred due to the advent of cloud computing.
She estimated that just 20 per cent of corporate technology tasks had been moved into cloud-based systems, with more complex operations still tethered to older legacy platforms.
Ms Rometty said successful companies would be the ones that could successfully match the zippier customer-facing applications that have already been developed, with agility in the back-end systems.
“Often new work or the low-hanging fruit [has been moved into the cloud first] and on the one hand we have had some great new customer experiences, but on the other hand I’ve had clients tell me that they have random acts of digital everywhere,” she said.
“As an example a company can provide an insurance quote in a second, but when I go to file a claim I hit against these back-end systems that are pretty brutal and they don’t operate at the same speed of change as the front end.”
Mr Hartzer from Westpac and Woodside’s Mr Coleman are examples of IBM clients who were already working with its more advanced systems.
Despite Westpac chief information officer Craig Bright earlier saying some of its systems would be moving out of IBM’s private cloud facilities, it remains a key supplier to the bank and Mr Hartzer said its AI chatbots were dramatically changing its customer service.
He said its customer service chatbot Red – which runs on IBM’s Watson technology – had handled more than a million chats on its mobile app in the last year, and that 70 per cent of times a customer’s inquiry was being completed without human intervention.
“It’s really starting to scale up and creating a whole new way of delivering personalised service, and the way I think about it is we’re trying to recreate the experience of the old-time bank manager, but do it using technology,” Mr Hartzer said.
Mr Coleman, meanwhile, explained how AI systems being used in site inspections were expected to save Woodside around $300 million a year by spotting problems before expensive maintenance was required.
The company has taken a progressive approach to AI alongside IBM and Mr Coleman said this was a result of adopting an internal culture, similar to that espoused by Ms Rometty in terms of committing to “big bets” about the importance of investing in AI.
“We have tried to create a culture of change where uncertainty is a welcome visitor to your door,” he said.
“That is so counter-cultural in today’s engineering world because of the heavy regulation … So you’re trying to try to move organisations in a different direction to what the external environment is actually encouraging them to do.”
Asked what she believed were the most important areas for the future of business technology, Ms Rometty described the “ABCDQ” of technology as being: AI, blockchain, cloud computing, data and quantum computing.
On blockchain, she said by next year 25 per cent of all organisations globally would have participated in some sort of blockchain trials, and in some industries the infrastructure was already rolling out.
By the end of the year, she said it was expected that 60 per cent of all cargo containers in the world would be managed on blockchain infrastructure.
“It is about networks,” she said. “Blockchain can do for trust what the internet did for communications – it will do it for transactions.”
Source: Financial Review