There’s been way too much obsessing about how AI and machine learning will eliminate jobs. In just one example, on Sunday January 13, 2019, 60 Minutes on CBS ran a feature about artificial intelligence venture capitalist Kai-Fu Lee, another one of many stories predicting the elimination of jobs and a dystopian takeover of the world (it seems) by machines.
Lee is a persuasive voice having been educated in the US but now residing and working in China. He’s also well published with titles on Amazon like, “AI Superpowers: China, Silicon Valley and the New World Order.” On 60 Minutes, Lee said that in 15-20 years 40 percent of our jobs would be “displaceable.” Being diplomatic and unwilling to buck Chinese policies he was unwilling to go all the way to saying the jobs would evaporate.
For the interview go here
But the reality of how AI and machine learning are and will continue to penetrate modern life is much more complicated than a Chicken Little reaction like, “The machines are coming!” To get the subtlety you might not be able to do better than pay check out Salesforce’s Commerce Cloud announcements from the National Retail Federation show in Manhattan this week.
What will surprise you is not that AI and ML are definitely making inroads into retail but, at the same time, they aren’t taking jobs away from humans. In retail, at least, machines are creating niches that only they can fill.
Here’s what I mean. There are lots of jobs in retail that could exist but they might add so much overhead that they’d eat up profits, also they could not be done timely i.e. in a few seconds within a transaction with a capricious customer. These functions form a niche that AI and ML fit nicely into. Back at the dawn of retail, vendors were product light, meaning there weren’t many choices. You bought in bulk or you bought cloth and not clothing, and, of course many product categories simply didn’t exist. Henry Ford’s famous dictum that customers could have a car in any color they wanted, “As long as it’s black” typified retail for many decades.
But today the situation is reversed. Amazon pioneered the infinite store shelf making it possible to carry ridiculous assortments and many retailers, even traditional brick and mortar ones, see no alternative but to follow. Their models have hybridized with options like buy on line but pick up and return in store—a software mediated work of art if you ask me.
Retail has gone through at least three iterations that can be summarized as, being assisted by a clerk, self-service, and now, being assisted by a machine. For example, the Einstein Recommendations API that Salesforce announced at NRF enables merchants to embed product recommendations in their ecommerce apps. Yes, the recommendations are based on what the machine knows about a customer, what they’ve bought, sizes and the like. Also, Einstein Visual Search enables users to send a picture through a merchant site to identify their product needs. In this the machine “sees” a picture and finds things that correlate. Who doesn’t want that?
Both of these services are human-ish jobs that improve the customer experience and ought to increase sales but that retailers can’t afford to supply. Nevertheless, tools like Einstein can easily provide such services at low cost and timely. And if you’re new to all this, Einstein is Salesforce’s AI functionality. To see the full press release go here.
To my way of thinking this is all confused with terms like customer experience but that’s what merchants are delivering with these AI and ML driven tools, an experience, and a good one. Imagine how seductive it is to want to purchase something and have the very item provided without the hassle of wrong size, wrong color, or wrong location.
But wait a minute, let’s also consider a situation in which the item is in stock but at another location and that it can be sent to you overnight. That would be thanks to the new Salesforce High-scale Inventory Availability Service. This platform service enables companies to see in store and fulfillment center inventory as one to facilitate sales.
My two bits
These and other products announced at NRF are either in beta or pilot meaning they have no prices yet. But it’s reasonable to expect that in nine months or so, in time for Dreamforce that is, these products will have their own place in price lists and cool demos on the main stage.
So to all the critics that worry about the decline of work for the masses and fret that we’ll need some form of universal basic income, wait a moment. The jobs being eliminated are either those that no one will want in the future or they’ll be machine generated services that were never considered for humans to begin with.
A century ago ocean-going passenger liners and cargo ships ran on steam power. Humans in the bowels of the ship literally shoveled coal into furnaces that made the steam. Less than 50 years later the laborers were gone. Ships still ran on steam but the furnaces were fired by oil that was mechanically fed to the burners. No one minded.
If Kai-Fu Lee is right and 40 percent of jobs could vanish in a couple decades let’s not fret. My research shows that such has happened 6 times since the Industrial Revolution and we’re at the end of number six. Disruptive innovation, what Schumpeter called creative destruction, has a way of back filling.
I’ve been writing a forecast column every year at least since W was president. Nothing’s wrong with that, lots of people do. But I often find that my forecast is more of a wish list than a true prognostication so this time I’ll dispense with the fiction of analytical rigor and just say what I think needs to happen.
Platforms and leaders
First, the industry is consolidating. The big and successful companies are competing on a different plane than the smaller ones. The smaller guys are working harder than ever and some are realizing they need niches, that they’re not going to be able to cover the whole CRM landscape.
This is mostly a good thing because it clarifies the mission and lowers the costs of being in the market. I can also mean better and more verticalized software. But there are two basic kinds of these companies—those that have credible platforms and those that don’t. Among those that do I’d list several including Oracle, Salesforce and Zoho.
Oracle and Salesforce should not surprise but Zoho might. They’ve spent decades building a global solution and platform. There is only some overlap between the two with Salesforce attacking the really big enterprises and offering a huge ecosystem. But Zoho is a powerful solution for the small to mid-enterprise. It also has a good ecosystem. One of the big differentiators is how much ERP functionality you’re likely to need and where you plan to get it. Salesforce integrates well and has ERP partners like Financial Force. But Zoho offers good back office apps as a part of their service as well as having that ecosystem.
Another vendor in the mix is NetSuite which has been setting sales records since Oracle bought and significantly invested in them. NetSuite’s idea of CRM is eCommerce though, so customers will self-select.
So on the flip side, there are small-ish vendors still working on their own platforms and whose development teams are measured in the hundreds. The market leaders have thousands of developers in contrast, which is why it’s time for these vendors to find a niche and try to excel. With that comes a decision point about their platforms.
Next, we’ve had years of AI and social media, and even years of integration. I think it’s time for a year of integration on major pharmaceuticals. We need better networking and this needs to be led by the biggest names. A consortium including Microsoft, SAP and Adobe announced the Common Data Initiative (CDI) last year which I still think is not only too little, its major purpose is more aimed at slowing the advances of Oracle and Salesforce. Oracle’s autonomous database and enhanced security present a major challenge to other DB vendors. Salesforce is drafting behind the Oracle RDBMS on this one and has that advantage.
CDI focuses on building a common CRM data model and that sounds good, but it has too many moving parts as in potentially every vendor in the industry. Smarter people have said the better approach to making everything talk is to facilitate the communication at the API level. I agree. No surprise, some of the vendors conspicuously left off the Microsoft, SAP, Adobe invitation list, are pursuing the API approach, like Salesforce, and I think 2019 will be a banner year for more API centric networking.
We need that approach too, not just in CRM but throughout the tech world as we continue to build what will be a true information utility in the not too distant future.
Taking social seriously
Social media has deep roots in CRM—recall the year(s) of social CRM—and because it does, I think there’s subtle pressure in Silicon Valley for the likes of Facebook, Twitter, and all the rest, to clean up their acts and mature their business models and security plans.
Recent reporting shows that virtually every social network has either been compromised or willingly gave access to private information to entities that shouldn’t have had it. You can’t do CRM if customers get worried about how their data is being used. CRM is an unwilling victim of social shenanigans and they don’t want to be seen as willing partners, so the pressure is on.
Foolish social leaders will think they can wait out the federal government on regulation but that approach could backfire when the feds deliver a set of regulations that don’t work. Remember, many of the people who would pass this legislation are in their 70’s and have an archaic understanding of tech. Smart leaders will see this and volunteer to define what’s possible.
My two bits
I’m looking forward to 2019. I don’t think it will be a time of runaway growth and major innovation in CRM though I would be pleased to be proved wrong. In a consolidating world, there will be some losers too so be prepared.
I think the year ahead will impress by showing unprecedented innovation, of people and companies doing some unexpected things that make a lot of sense. I’m looking for the second or third tier of companies to be more aggressive in the mergers and acquisition arena in a bid to become more competitive. After a lot of years in this seat, I’m still having fun and I appreciate you letting me share my views.
No, no, no, not the Patriots! Gotta wait a couple of weeks for the Super Bowl to say that.
But! Late last week CRM Buyer published an annual listing of the top 20 CRM blogs by Chris Bucholtz, something he’s been doing since the earth cooled and well before he began his sojourn at ‘Buyer. That’s important because I write a soft for CRM Buyer every week and the two are separate.
This year Chris has selected this blog as his top finisher for which I am extremely grateful and honored. The list is full of great CRM minds like Kate Leggett, Chuck Schaeffer, and Paul Greenberg just to scratch the surface, so this is a great honor. I hope you’ll check out the article and investigate some other CRM voices, any of whom could easily be in the top spot in the future.
By Cary Fulbright
Recently Denis wrote about the state of document management systems, including the licensing pain point that is slowing wide adoption within the enterprise. Digital transformation and the move to digital document management has become crucial to organizations of all size and across all industries. One impetus for the shift to digital is the use of cloud technologies. It allows instant, always-on access to the most recent version of documents, reducing errors and enabling employees to be productive throughout their day.
Without efficient document workflows, simple tasks like creating, sharing and signing documents can become both challenging and costly. One report from IDC estimated that document challenges are costing organizations more than 20 percent of overall productivity. The firm put that cost at nearly $20,000 per employee every year.
This need to recoup productivity costs and increase business agility are driving the digitization of document management. Not only are employees within an organization often collaborating on documents and sharing via email, Slack or other channels, they are working with partners, customers and other third parties. It is important that all relevant parties can collaborate on a document, comment, verify changes, access particular versions, and view or change who has access rights. One prime example of this need is contract management.
At the same time, this data must be secured. Not only from data exfiltration via headline-grabbing breaches, but from tampering and manipulation. This is an emerging threat to businesses in all industries. One study predicts that, by 2020, 50 percent of organizations will have suffered damage caused by fraudulent data and software. A recent CNBC story points to the increasing importance of data integrity.
In November, we saw an altered video of a CNN reporter grab headlines as Americans began to understand that even video could be faked to spread misinformation. Perhaps even more frightening is the “deepfake” AI technology that can digitally manipulate videos to make a new “perceived reality.” As a result, the potential to undermine trust and spread misinformation increases like never before.
Last year, Japan’s third-largest steelmaker admitted falsifying product quality data which could have far reaching implications for projects using inferior copper, aluminium and steel products. This month, the Guardian, among other UK media outlets, reported that dozens of criminal cases are being overturned due to alleged widespread data tampering. A UK forensics lab had manipulated forensics data, affecting more than 10,500 criminal cases since 2014. The investigation has led to a total of 41 drug offense criminal cases overturned, and further 50 investigations dropped.
These cases underscore how an integrated data integrity solution is crucial for organizations. Companies today must safeguard the chain of custody for every digital asset, in order to detect and deter data tampering. For assets such as supply chain audit trails, legal documents, tax records and more, document management systems can ensure data integrity by digitally notarizing any type of data with a product like our Cryptowerk Seal. It enables users to seal that data at the time of creation, and then automatically verify the authenticity of data and digital assets such as a legal document, a scan of a shipment ID code or an e-commerce transaction.
As digital transformation continues to drive businesses forward, the number of workers with digital document management tools will continue to rise. As the number of users grows, organizations will need to better protect those documents from manipulation — or suffer what could be crippling consequences. Document management software vendors should be helping their customers to meet this need and protect against data tampering.
Cary Fulbright is Chief Marketing Officer of CryptoWerk in San Francisco
I did a webinar recently for a client, Nitro, a document management company that focuses on improving paper-based business processes with digital solutions. You know the drill, turn documents into digital images to route them around organizations and the greater vendor/partner/customer community. It saves time and costs, reduces error, and adds a degree of accuracy and precision to the mix.
You might yawn at this point and say been there, done that and want to move on to the next big thing in IT. But working with this company made me realize how incomplete the transition from documents to digits has been. In some ways the move has been locked in a time warp for a couple of decades.
Numerous companies have only made cosmetic changes to their document management implementations since they were installed. Documents might now be stored on conventional storage arrays rather than optical disks since the cost of storage has plummeted. But otherwise, the processes haven’t changed much.
One surprising result has been how piecemeal document handling is in many organizations. For instance, some employees don’t have the ability to capture e-signatures for important documents from customers. This results in the insane process of printing a document in need of a signature or sending it to someone to print and sign and possibly scan and return. Variations on this include using the US mail for the communication. Another gets the paper document back and has the employee do the scanning—days later.
All this sounds trivial but American business uses 12 trillion sheets of paper each year and printing documents that should remain digitized is one of the culprits. If you want to identify why all this happens in “modern times” go back to the cost of document management software. It hasn’t evolved much. Often a business still purchases licenses by the seat which creates the need to identify the employees who need software and those who don’t.
But the reality today is that the advent of document management was highly successful and changed the landscape. Everyone, not just a select few, needs software to capture signatures and participate in myriad business processes, many of which have sprung up since the first implementations of document management.
If you have ever wondered how software revolutions get started this is a good case study. They begin at the grass roots where theory meets reality and nimble vendors identify previously unidentified needs. Many businesses realize they need additional functionality for all employees but the costs are out of line with the benefits. The need in this small part of IT is for licensing across an organization to saturate users with the tools they need and can’t take for granted.
Interestingly, this is not about a technology fix. Instead, it is a story about entrepreneurship at the customer relationship level and it’s fascinating to see a company like Nitro innovating on pricing and licensing in addition to its technology. At the technology level, they’ve leveraged AI to help businesses figure out where in a business process, adjustments to licensing can improve things. This is enabling them to be a lower cost producer which is always destabilizing for an incumbent.
It’s unlikely this scenario will ever compete with the latest discussion of AI and machine learning. But if you’re an IT leader, your costs of mundane things like paper and ink and a general need to speed up business processes keep you up at night. That’s why even in an old market you can always profit from opportunities to improve.