Observations on Cloud and Artificial Intelligence use across Professional Services
For the last five years I have been working with the big 4 in professional services across the UK and Europe as the European Chief Technology Officer for Professional Services. These are some observations based on my experiences around how Cloud, Data, AI and Innovation are playing growing part in all their businesses. These are personal views and observations and not those of my employer.
The Power of Three
I often get asked to talk about Cloud, Data or Artificial Intelligence and while all important in their own right, in isolation none are truly transformative. The real disruption and business advantage comes from using all three in combination.
It’s All About the Data! But More Data Doesn’t Mean More Value and Insights
There are currently more than 21 billion devices connected to the internet, three times more devices than people on our planet. Each of those devices producing data, of this data and the other data we create, the estimation is we are only able to capture and store around 12%, and I would argue we only get value and insights from a small percentage of that 12% of stored data.
One of the big challenges faced by professional services (and all businesses) is to get value from their data, from collecting and storing, to ensuring data quality and consistency, and finally analysing and interpreting. Luckily advances in Artificial Intelligence make all of these tasks easier and we see the rise of the Citizen Data Scientist, or business users that are able to use tools to manipulate and interpret their own data.
You Want What, When? Customer Expectations Rise as Profits Fall
Estimations are that the profit margins in professional services 10 years ago were just below 30%, move forward to today and margins have dropped to just below 20%, with an estimate in the next 5 years of being below 10%. Against this backdrop of decreasing profit margins, customer expectations continue to rise, in terms of both time to deliver and value for money.
In order to address this challenge all of the big 4 are looking to do more with less, and whilst automation (such as Robotic Process Automation, (RPA)) can play a part of that solution, intelligent automation and artificial intelligence solutions are needed to achieve the order of magnitude savings needed. In this instance Automation is not about replacing people but releasing them to perform higher value function tasks.
The Cloud – Both Opportunity and Threat
IDC predicted that Cloud computing spending would be 6 times that of traditional IT spending by 2020, and there are few companies that haven’t at least dipped their toe into the world of Cloud computing. All of the big 4 have made significant investment into Cloud based technologies, initially seeing the benefit of an Opex cost model and moving traditional servers to Infrastructure as a Service, but more recently realising the benefits of reduced cost and management overhead of the Platform and Software as a Service models.
Whilst the Cloud model offers them many opportunities, it is also seen as a threat as the low cost, easy provision service is equally accessible to small and medium business who for no or little capital outlay, can provide competing services, that can scale as required to compete with the largest of enterprises.
This article gives a flavour of some of the challenges being faced by Professional Services, but really applies across all sectors / industries. In future articles I will expand on the challenges, but also go deeper into the solutions and what is proving to work, and what is not. If you have particular topics of interest, please do let me know and you can find me on twitter (@nigewillson) and LinkedIn (nigel willson)