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February 15, 2016updated 04 Sep 2016 10:14pm

Capgemini CTO: It’s inevitable that automation will lead to job losses and unemployment

C-level briefing: Consulting firm has seen a rapid change in the way it deals with businesses caused by the pace of technology.

By James Nunns

The rising demand for automation technology in order to save costs will mean that job losses are inevitable.

That is according to Lee Beardmore, CTO, Capgemini business services who told CBR that: "There is a sort of moral obligation on organisations to consider the implications of where automation is heading."

Asked whether he thought job losses were inevitable he said: "I think there is an inevitability that, that will happen."

Although he says that job losses caused by automation won’t happen overnight, organisations have an obligation to help their employees to transition to something that is more taxing, more valued added and in the end probably more rewarding for the staff.

"A huge amount of the work that can be automated is in the mechanistic and mundane, that is not a motivating activity for the vast majority of individuals but it’s what they have to do day in day out," said Beardmore.

Robotic Process Automation is one area where the consulting firm says it can already drive 50% productivity gains, and it is something that is quick to implement and works alongside existing systems. This means that there aren’t system integration challenges for corporate IT to deal with.

It was once said to me by the CEO of Apcera Derek Collison that: "The only thing that is getting more expensive in IT is people." So it is perfectly understandable for businesses to be increasingly looking at automation for a way to drive cost savings, but the repercussions of that need to be looked at.

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The development of technology as a way to replace human tasks isn’t something new, Beardmore said that when businesses first got SAP it effectively meant that a lot of people had nothing to do, because it was done by SAP.

"I think we are going through the next iteration of that kind of evolution," Beardmore said.

He went on to say that in the Business Process Outsourcing space the conversations he has with clients is all about taking cost out.

"Use automation to take cost out, we hear about robotics – please tell us how to use robotics to take cost out," he said. The same goes for Artificial Intelligence and while he says that taking the cost out is great, there needs to be a change in attitude towards not just talking about cost out but about looking ahead and thinking of the opportunities to do things differently.

"You can only batten down the hatches for so long before you come up for air, so you may as well look at taking cost out as a natural part of continuous improvement," he said.

Beardmore takes the rise of the Internet of things as an example; while it is a fascinating development most of it is focused on the front-end, the sensors and the impact it will have on production lines.

There is little attention to how it will help businesses to become more agile through transforming finance functions and optimising things like inventory, warehousing and other areas.

This is where the likes of Capgemini comes in with its ability to advise businesses on the path they are taking, a role which he says is changing as quickly as the technology.

As the buying power has increasingly switched from the CIO to the line of business (LOB), the consulting firm, which is 180,000 people strong, has had to change how it operates and remove the hype from reality when it comes to technology.

The switch to the LOB, Beardmore says, has been enabled by the likes of Salesforce which has flourished in the environment. This is because it is the LOB that has a pressing need to more forward and so will go and buy a solution because it allows them to progress.

What this means is that Capgemini’s interactions are much more focused on line of business executives and their teams, focusing purely on outcomes that it can deliver to those divisions and removing the need for generic consultancy.

Keeping up with the rapid pace of technology innovation is something that Beardmore calls unprecedented, something that both businesses and Capgemini itself is finding it hard to keep up with, and helping businesses see past the hype is something that Capgemini is working hard to achieve.

"I think technology and the marketplace that surrounds the tech is always overhyped and it’s really difficult to distil out the reality from the hype – organisations are struggling," he said.

Beardmore said that from a client perspective they are looking for a direct correlation from everything they hear about in tech marketing and what they are actually trying to achieve.

He said that there is usually a "gulf" between someone saying faster time to market and actually saying: "If you use this you can achieve faster time to market for this product for these reasons because we can do X, Y and Z. It’s that domain expertise that’s required in a much greater quantity than it has been over the past 5 years."

To its credit, the tech industry has been more proactive in developing solutions that are industry specific, making it easier to use and giving the line of business an easier understanding of how exactly it solves their problems.

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