- 16th April 2018
- Posted by: Manolis
While AI is already revolutionising the way consultants explore data, the industry should be mindful of their business needs rather than adopting technology for its own sake, according to industry experts present at the 2017 Alternative AI conference. The impact of AI on graduate intake and regulatory compliance were also discussed at the event, which took place in London, gathering industry leaders, experts, academics and journalists to consider digital innovation in the UK professional services community.
Around 300 delegates from the professional services industry have attended an event aimed at aimed at informing accountancy, consultancy and law firms of the potential of Artificial Intelligence (AI), both in terms of commercial opportunities as well as its potential to transform their own operations. The programme, which took place on the 27th of November, featured a broad mix of strategic plenaries, panel debates, case studies and round table discussions, and showcased how consulting industry players such as PwC, KPMG, BearingPoint, JLL, Capita, EY and Deloitte are presently incorporating AI into their solutions.
With growing appetites for the use of technology across industries as diverse as manufacturing and healthcare solutions, as many as 5% of global jobs could be set for complete automation in the coming years. Digital disruption is threatening to overwhelm unprepared companies who attempt to leverage revolutionary automation technologies without a long-term plan, however, and so many global companies have been seeking help on the matter, leading to a booming digital consulting market.
However, while top professional service industry players are usually quick to recommend long-term digital strategies to clients, they are also prone to be underprepared themselves, and could well be missing out on the full potential of AI in their own business structures. According to PwC’s UK AI Leader, Euan Cameron, one of the many industry leaders speaking at the conference, consulting is the victim of its own success – as for generations, it has relied on caution to deliver top results. Cameron contended, “Traditionally, conservatism has generated value in the professional services industry. Now, though, once the evidence has been collected [to show clients], AI could add huge value to the sector.”
The event was hosted in London, a location of prime significance, as the UK’s capital has recently witnessed an explosion of start-ups leveraging technology, with as many as 100 law tech start-ups in the city, alone. According to Richard Goold, Global Head of Tech Law at Big Four firm EY, firms which previously had no direct relation with professional services (PS) are moving into the sector now, and have the potential to “eat the lunch of bigger firms,” should industry incumbents fail to adapt to digital technology.
Look before you leap
To that end, conference organisers aimed to give delegates the tools necessary to make informed decisions about AI in a rapidly changing market environment – leaving with reinforced knowledge of the opportunities, threats and potential impact on professional services at the front of their minds.
One of the key themes of the day that run through multiple talks was the need for experimentation. Amid the heating competition across global markets in all industries, it would be easy for consultants to succumb to pressures to commit hard and early to a particular method or technology in order to get a leg up on competitors. However, numerous sources at the conference warned against leaps of faith, instead favouring periods of experimentation to yield best results.
Speaking in the opening discussion, Peter Waggett, an Emerging Technology Director at IBM, said firms would do well to take a step back to consider their business needs, stating, “What not to do, is just rush out and buy AI. Organisations must research the needs of their business before investing. While the work to adopt AI should begin now, professionals should first work out the right strategy to go forward.”
An industry example of how to get this right was supplied by JLL IT Development and Delivery Services Director for EMEA, Andrew Crow, who spoke about AI-driven valuation tools implemented by his firm. On the subject of putting the cart before the proverbial horse, Crow said, “we absolutely fell into that trap with AI learning,” continuing that JLL had initially let leveraging innovative technologies get ahead of them, before they returned to re-evaluate their business’ needs to build a solution around it.
According to Crow, who said the property consultancy were lucky enough to see the error of their ways after early experiments had not yielded the results they needed, “firms need to be clear about what they have before they think about changing their business model.” In the use case in question, JLL now leverage an AI analysis system in order to drastically streamline workloads. The real estate consultancy advises on client portfolios which can be from anything between 1 and 100,000 properties, which traditionally took professionals weeks to analyse. Now, the AI system can compile client data, JLL data and external data into an Azure platform, which scales the information to client demand, using big data statistic algorithms to identify value for those clients. The more the models are used, the more accurate they become, with the machine learning ability of JLL’s system enabling advisors to compile detailed client reports and valuations much more quickly, with greater accuracy, while enabling them to concentrate only on areas of interest, focusing their talents where they would be best applied.
Needles in data-stacks
Following on from this, another running theme at the conference was of AI’s potential to weed out points of interest from the glut of data most firms face in the age of digital information. IBM’s Peter Waggett, who also introduced himself to the conference as a former rocket scientist, gave an example of his time examining climate data, stating, “A lot of the data that has been put out there is not curated, like when a hole was discovered in the ozone layer above Antarctica. I looked at that same data for three years and never saw it,” whereas now, Artificial Intelligence could have sifted through that data en masse relatively quickly to point scientists toward the anomaly in question.
The same is the case for consultants and professional services players. AI has the potential to find needles amid haystacks, as more and more data is gleaned. These functions would take weeks or even months for professionals to examine before points of value could be identified and advised on, however, now technology can point to these areas after minutes of analysis.
Beyond the application of data, though, another important point made by numerous speakers was the potential for AI to bolster legal compliance efforts, amid a shifting regulatory environment. As they handle an increasing amount of data, firms have become especially vulnerable to major legislation changes, such as the infamous GDPR. EY’s Richard Goold said that the digital trust and ethics questions underpinned by AI presented a major opportunity – as well as a threat – to firms as the regulation of data looks to become more stringent as of May 2018.
Goold argued, “Some medium and even larger companies may even cease to exist because they fail to handle user data appropriated,” but that while some companies potentially undermined their entire operations with such failures, it presented a key chance for start-ups wielding AI to make waves in multiple markets, with more reliable handling of data handled by innovations such as blockchain.
Vijay Rathour, a Partner in the Digital Forensics group at Grant Thornton, gave the use case example from the consulting world of his company using AI to prevent fraud and revenue leakage. According to Rathour, the majority of fraud in the UK is procurement-based, which ultimately ends up on consumers’ plates, or impacting on their wallets. Grant Thornton’s use of scalable AI investigation tools means the accounting and consulting firm can help detect incongruities amid huge data piles.
Rathour said that rather than the traditional, time-consuming, and limited manual procedures of looking through recent records, now, “working with AI, we can examine years of behaviour before focusing human talent on their points of interest it finds.”
Professional Service Changes
Adopting such revolutionary technology into the heart of firms will not occur effectively without some significant structural changes, though. While the price of established technology tends to fall quickly, with the potential of AI still being realised, leveraging it can be costly – a price that consultants and professional services firms are keen to avoid passing on to their clients.
KPMG’s Shamus Rae, who is the firm’s UK Head of Innovation and Investment, summarised the strains on firms to provide value for money amid a slowed post-crisis economy, “Pricing hasn’t gone up in the past ten years, and it has been a problem. So why do we think that now we can put prices up in order to recoup investment on AI?”
While services firms might feel justified in commoditising their output due to the upped quality of work, then, they may still struggle to convince clients of those benefits in a UK economy that continues to enjoy sluggish growth, at best. Subsequently, another area that could be considered for absorbing the cost might well be headcount. While speakers were at pains to downplay the size of this scale-back in recruitment, PwC’s Euan Cameron notably stating that such fears were “overblown” – and that if the base of the pyramid of organisations does shrink, it will not be by much – others seemed to suggest there would be a decrease in trainee and graduate intake of some kind.
Shamus Rae said that over the coming years, client demand will mean intake will have to be maintained. He contended, “CEOs think that there will be more change over the coming three to five years than the past 50,” stating that businesses would have to consult external expertise, and that firms would therefore have to hire to keep up with the glut of digital transformation work.
In the concluding round-table discussion on how AI might change the partnership model, Deloitte UK’s Director of AI & Cognitive Computing, Matthew Howard echoed this, arguing, “Consultants have a key role to play in fulfilling the demands of the market as part of the AI ecosystem – marrying business needs with technology.”
One change that he did, hypothetically, foresee, was that AI and technology would see widespread change to the partnership model – albeit without a total overhaul. “Perhaps,” Howard pondered, “we will see the first data scientist partnerships soon.”
However, beyond that, the future might well see less work at firms in admin and other entry-level areas due to AI. As such low-level work becomes increasingly self-service oriented for clients, who can receive such provision via subscriptions to AI solution platforms, this would also imply a declining need for the graduates and trainees currently assigned that low-level workload. With the increasingly competitive UK graduate scene proving a popular recruiting ground for professional services firms, such speculation may give rise to concern among future university leavers.
However, the implementation of AI might also help to soften the impacts of Brexit on the industry. Leading firms are currently large-scale beneficiaries from the free movement of top consulting talent across EU member states. With that supply suddenly threatened by a no deal scenario, or hard Brexit, Artificial Intelligence may be key to taking up slack, while a new generation of professionals are trained to replace a potential exodus of EU nationals.
In line with this, the UK Government’s autumn budget set aside £75 million for the development of AI – as well as funding of 200 new PhD positions in the field. The budget also saw a further £76 million pledged to boost skills in the digital and construction industries. The developments followed recent criticism that most UK secondary schools did not offer a Computer Sciences GCSE.
Embattled Chancellor Philip Hammond’s spending plan centres on making Britain a technology hub following Brexit, in order to avoid economic shrinkage following the lengthy separation from Brussels. While Hammond suggested the nation already was a “world leader” in cutting edge technology, a new report from the Organisation for Economic Co-operation and Development said the UK was in decline in both terms of top-cited scientific research, and AI inventions.