Will AI Take Your Job? – Skill Shifts and AI Adoption


By: Van Leaming
Date: February 21st, 2019

Most of the information in this blog post comes from the McKinsey Global Institute’s discussion paper on Skill Shift Automation and the Future of the Workforce. I encourage you to take a look for yourself and see how artificial intelligence (AI) and machine learning are going to change your business.



Past Skill Shifts

The Industrial Revolution and the Spinning Jenny.

Before we talk about how AI will shape the world, let’s talk about how the Spinning Jenny changed the world. In the late 18th century (around 1722-1778), James Hargreaves created the Spinning Jenny which was a revolutionary machine that could manufacture multiple spools of thread at once. Up until its creation, the only people that made spools of thread were entrepreneurial households that would spin spools of thread by hand. This one invention took the hard work of entrepreneurs and put it in the hands of any unskilled person. It increased the number of spools created in an hour by 8x while simultaneously increasing the profitability through efficiency and decreasing the knowledge needed to do the job. And overnight, there was a skill shift.

Future Skill Shifts

  1. What will AI affect? Blue Collar, White Collar, or a New Collar?

Short answer, we don’t know. But, McKinsey Global Institute (MGI) does a great job of predicting what should happen. Potentially, we could see a skill shift like the one that we saw with robots and computers. Robots and computers allowed one person to do the job of 10 people. Manufacturing, mining, and almost every business now use robots or computers. This shift, that started in the 1970s, was completely different from the industrial revolution. Instead of increasing the efficiency of low skilled workers and expanding job possibilities for blue collar workers, the creation of computers and robots reduced blue collar/middle-wage jobs. According to MGI, those middle-wage households declined by 18% from the ’70s until 2015. Physical and manual skilled jobs decreased from 61% to 50%.  These blue collar/middle-wage households were affected dramatically in just a few years. This skill shift change was noticeable, to say the least.

What about more recently? MGI has found that the US will have a skill shortage of up to 250,000 data scientists in the next couple of years. Where are these companies, that rely on data scientists, going to find who they are looking for? Education, continually learning and utilizing employees that don’t currently have those skills. But that’s easier said than done. According to MGI, 23% of the UK doesn’t have basic digital skills even though 90% of new jobs require these skills. That’s a scary number that is hard to conceptualize especially when everything we interact with being digital.

  1. Early Adopters of AI and Machine Learning


The largest increase in technological skills will be basic digital skills and advanced IT skills (69% and 91% increase respectively). With most jobs being automated, the workforce is going to have to be retooled. Even specific skills are going to be eliminated. Financial reporting, accounting, actuarial sciences, insurance claims processing, credit scoring, loan approval, and tax calculation can all be easily eliminated by AI and machine learning. In just the financial reporting field, at one bank, processing was cut from 10 days to just four days and 70% of jobs were automated according to MGI. These numbers are staggering given the business model of a bank. With all those jobs going to AI and machine learning, you would think that the number of employees went down, but it didn’t.

It turns out that while AI and machine learning has the potential to eliminate jobs, it also has the potential to create the same, or even higher, number of jobs. According to MGI, 77% of companies that responded to their survey says that the adoption of AI will have no effect on their number of employees. Only 6% of responders think that it will decrease their number of employees. Why would this be the case? Well, thanks to the efficiency of AI and machine learning systems, employees will be free to add value to the company in many other ways.

In the energy and mining industry, the skill shift change from AI and machine learning has already taken place. Those that have already adopted the new tech have seen increases in tapping into new reserves, increasing extraction efficiency, and optimizing material and equipment flow according to MGI. Some companies are already moving to fully automated extraction operations and they are benefiting from it greatly. MGI says it’s very possible that there might be a “winner take all” scenario that could happen around AI and machine learning. Companies that are early adopters could reap all the rewards and gain market share from the increased revenue, decreased user interface, and better forecast equipment maintenance.

So how much should you invest in AI and machine learning technologies? 66% of the companies that are considered early adopters in MGI’s survey said that they invest more than 25% of their investment budget into AI and machine learning tech. Among those early adopters, 77% reported revenue increases by more than 10%. Combine ROI and the “winner takes all” scenario and it’s an easy choice whether you should invest in AI and machine learning technologies.

CXO Nexus and AI

Here at CXO Nexus, we help you work toward this “winner takes all” scenario. We provide our clients with a purpose-built tool that utilizes AI and machine learning to gain real-time transparency into your IT through our visualized CIO heat map. Current financial systems do not have the ability to organize and categorize vendor spend data. Using our Visual Fusion Engine™ (VFE™), we classify, standardize, and normalize your IT vendor spend data.

According to MGI’s survey, up to 20% of executive teams lack the skills to implement AI and machine learning into their operations. Over time, these teams will be able to retool and build a business model around AI implementation. In the meantime, our Visual Fusion Engine™ allows any organization to quickly implement AI and machine learning intelligent systems. The CXO Nexus AI based platform accelerates CXO effectiveness to make increasingly smarter and faster decisions with less risk.  Save money, grow and innovate.

So which side of this wave do you want to be on? All the research is pointing towards AI and machine learning being the wave of the future where early adopters prosper as well as those with a technological skill set.


Send us an email or a message on LinkedIn to learn how our AI and machine learning systems are helping companies prosper.

CONTACT

Steven Hackenburg

Chief Development Officer

shackenburg@cxonexus.com

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Barrington Young PH.D.VP Data Sciene & Machine Learning

Barrington Young, Ph.D. is an applied technology researcher skilled at proof-of-concepts and pilots for financial applications, a seasoned expert in right-time business intelligence solutions, an advocate of innovative uses of the human-machine interface for the development of intelligent systems and adept at extracting, distilling, enriching and codifying expert knowledge for automation.  Dr. Young was formerly the Business Intelligence Engineer / Data Scientist for Amazon, the Principal Data Scientist for USAA, the Principal Data Scientist for Schwab, Principal Data Scientist at Alight Solutions, the Business Intelligence Architect for Boeing, and the Computational Intelligence Expert for IBM at AK Steel. He is also a professor at St. Edward’s University in Austin, Texas. 

Becky Klein PMP, CSMSenior Project Manager

Becky Klein is a PMP certified senior technical project manager and Certified Scrum Master with extensive experience within the financial services industry managing complex regulatory reporting projects and initiatives, and digital banking solutions.

Cross Business Collaboration

You lead IT spend and determined that the best solution for your company’s overall data mining needs is a solution with DataFox for $1.2 million.

Unbeknownst to you, your European subsidiary purchased data mining solutions from Rialto for $900,000.

You know that the solution your department purchases and manages could solve for the European marketing’s team needs.

With this knowledge and insights, you can streamline your overall company spend on data mining and marketing and get even better solutions and value out of your vendor, for less.

Eliminate Excess Vendors

Using the CXO Nexus InCight™ dashboard reveals that you are paying four unique security companies, three of whose contracts you believed had expired.

Their contracts had automatically rolled over and you realize that you are paying for redundant vendor services.

Ensure Regulatory Compliance

You realize you are spending 800% more on a regulated vendor than you were aware, due to multiple resellers and geographical spend discrepancies.

(Not uncommon).

You are now at risk with regulatory agencies for inaccurately reporting and for spending more on a riskier vendor.

Gary GuanSoftware Engineer

Gary Guan is a full-stack software engineer who is adroit with MERN stack development. Gary differentiates himself with his creative solutions to technical challenges, garnering attention from former employers such as Bank of America Merchant Services and Mine Sweeper.

Identify Business-Led Spend

Business-led IT investments can be additive (they don't divert money away from the CIO's budget) and they often focus on collaboration tools, analytics and technologies to engage customers or improve, whether it's a new CRM tool or social media analytics.

If spent wisely, these investments can give a competitive advantage to a specific part of the business, whether finance, marketing or sales.

Business leaders are seeking out their own tools to analyze and present data. But these tools are only valuable if employees have the skills and judgment to use them effectively for decision making. 

As long as the CIO retains oversight and can educate the rest of the business about the risks, it can often be a better, cheaper way to achieve the goals of the IT department, especially when it comes to new innovations.

Irene BykovskySecurity Operations Engineer

Irene Bykovsky is our Security Operations Engineer, who has been a senior IT professional with more than 10 years of extensive experience, specializing in cloud architecture/computing, application programming, deployment and maintenance, project lifecycle analysis and development, software evaluation and selection, managing technology groups of people and projects through all phases of the system’s life cycle.Irene was the Principal AWS/DevOps/SR Engineer at Aspect, and prior to that she was the technical lead for NBC Universal and a software engineer for Walt Disney/ABC Network (ABCNews.com).

John LindsayChief Financial Officer

John Lindsay brings over 35 years of experience at Financial and Research Enterprises. He served as EVP and CFO of The451 Group Research and has held senior finance roles at AMEX & Saatchi & Saatchi.

KEN MALEFounder & CEO

Ken Male, CEO - has over 25 years of leadership positions in IT and Internet Research working across the C suite, from Gartner to Jupiter to Apptio. Founder & CEO of IT Research firm TheInfoPro (TIP), acquired by The451 Group in 2011. Prior to that, Ken was SVP of Global Sales for Jupiter Research and was active in their 2000 IPO. He led Benchmarking & Data at Apptio from 2013-2015.

Leif EastersonGlobal Integration Lead

Leif Easterson is the global integration lead working with clients to implement our solutions. He is a technology financial/business management and sourcing executive in the global financial services for IS, Risk Control, Application Development, and Technology. Leif has been a consultant in Info Security, Vendor management, Risk management, App development and tech Infrastructure at Citi, and a senior contracts manager at Northrop Grumman prior to joining CXO Nexus.

Mohammad FalakmasirSenior Engineering Manager

Mohammad Falakmasir, Ph.D. Candidate in NLP and a Machine Learning Scientist and full-stack engineer, formerly worked for Astound and was the Data Scientist at LegalSifter and Pearson. Mohammad manages the product development team.

Monthly Expense Reduction Opportunities

A Fortune 500 spends $1M+ on a team that includes 12 data scientists + hired consultants to understand spend data. After 3 months, the data is inaccurate, un-actionable and only relevant at that moment in time.

With CXO Nexus:

> Redundant spend on Cisco is identified as multiple resellers are identified as selling across multiple departments.

> Vendor Rollup feature reveals you’re spending $7M more with Dell than you thought because you didn’t realize that Dell acquired VMWare and you weren’t leveraging your combined spend with both companies.

> This Visibility gives you the negotiation leverage for a discount saving you millions.

> Your cost savings from these insights enable investment in the latest Cybersecurity and mobile, driving higher revenues and performance

Negotiation Leverage

You negotiate with Pivotal believing that you spend $1.5M each year with them per year.

You learn that Dell has acquired them, and between Dell, EMC, VMWare and Pivotal, that you are spending an annual $14M with all of them under the Dell umbrella.

You bring this leverage into your negotiations and drive much better terms across all of these vendors.

Peer Comparison

You are in the midst of a major cloud migration.

You are considering a serious upgrade to your systems.

You are assessing whether to stay committed to your primary storage vendor, but through the CXO Nexus Peer InCights, you see that spending is down significantly with this vendor by your peers, and that many are investing in a newer solution from another vendor.

This performance insight spurs you to research further into competitive developments, patent filings and macro trends.

Real Time Spend Categorization

You spend $10M/year with Cisco, but you have no idea how that spend breaks down. 

Your procurement system identifies this spend as networking, but you realize that 20% of that spend is on networking, 15% is on Wireless and Mobile, 40% is on security, 17% is on Data Centers, and 8% is on Analytics.

This information will change your needs analysis and the way you negotiate with your vendors in the upcoming year.

Reduce Vendor Risk

You have identified vendors who are no longer in compliance with your regulatory needs, but because you have not audited your vendor list recently, you realize that several of your vendors no longer satisfy your security requirements.

You realize that some of these contracts extend out for years.

You can begin mitigating this risk by shoring up other vendors who meet your risk standards.

Shelley AlgerVP Corp Development

Shelley Alger brings over 25 years of business startup strategy, business development, operations, investor relations and strategic growth experience. She was the first employee and managed business development for Critical Path, one of the first SaaS companies, and later co-founded a food technology company. She is an advisor to several early stage and social impact companies.

Sir DraftonSenior Software Engineer

Sir Drafton is a senior software engineer with 15+ years in development, design, management, testing and implementation of various applications and systems. Sir is experienced with all stages of the development cycle for projects, producing solutions, systems and applications that give CXO Nexus a competitive edge with results for our customers. Sir has been a senior software engineer for Bank of America, TweetConnect and co-founded BitBot, a chatbot platform to optimize engaging experiences on social media.

Steve HackenburgChief Development Officer

Steve Hackenburg has more than 10 years excelling in sales leadership within the global IT infrastructure market, at Tier1 Research and The451 Group. Steve is a proven leader and accelerator of sales and business development.

Suzanne FavaSenior Designer, UI/UX

Suzy Fava brings over 20+ years of design, creative consulting and front end developer experience. Founder of Ideatek Design, a small agency supporting clients technology and design needs. Suzy brings a broad base of knowledge and a problem solving mind to the development of the CXO Nexus line of products.

Theran LeeFounder & CTO

Theran Lee drives the product vision of CXO Nexus. He brings 30 years of technology and leadership positions in IT, Telecom and Financial Services. Most recently served as VP of Infrastructure (Architecture, Network, Workplace, Mainframe, ITSM, Storage, Database) at Schwab. Prior to that, Theran was the Regional Director Systems Engineering at a Fortune 20 Telecom Company building Internet backbone and Commercial connectivity & security solutions, where he was voted Rookie of the Year and Engineer of the Year. Theran has had Leadership and Development positions at leading Open Source Financial Accounting, and Investment Banking software firms as well.

Vince TotoroTechnology Finance

Vince Totoro is an experienced executive with demonstrated accomplishments in financial planning, analysis, reporting & control, expense management and cost efficiency initiatives. He has a built a strong career creating, managing and re-engineering business processes to support financial reporting, budgeting, forecasting and allocation/charge-back methodologies. Vince was formerly the Vice President of the Corporate Finance Division for First Data, was the Managing Director and Chief of Staff for End User Technology and the CFO for Enterprise Technology for JPMorgan Chase & Co., as well as the Technology CFO and Executive Director of the Technology Division of Morgan Stanley.