From Looking Digital to Being Digital

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Robert J. Thomas, Alex Kass and Ladan Davarzani BEING DIGITAL Edge-Centric Decision-Making Human & Digital Recombination Real-Time Adaption Experiment-Driven Design

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Table of Contents Being Digital: Foreword ..................................................................................................................... 5 ................................................................................................................................ 6 Executive Summary ............................................................................................................... 9 Chapter 1: The Deep Shift ........... 15 Chapter 2: Emerging Work Practices in the Digital Enterprise ............................. 23 Chapter 3: Choice Points on the Road to Being Digital ............................................................ 33 Chapter 4: The DNA of a Digital Enterprise Conclusion .................................................................................................................................................... 40 3 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Being Digital: Foreword Companies are finding it challenging to capture the full value of revolutionary breakthroughs in digital technology. Many have used digital technology to drive down costs and get more efficient, which is akin to “looking digital,” an important but surface-level change. Some, however, are taking things further and transforming data into new revenue and new sources of value. This more pervasive change is what we mean by “being digital.” To move from looking digital to being digital, companies must engage in a deep shift in the way they do business. For business leaders, that shift requires as much attention to culture and organization as it does to the technology itself. Companies that want to lead in the digital era—no matter what their industry or their location—must rethink the way they get work done. Just as buying a rowing machine won’t make you fit, simply installing digital technology will not change the way your company works. For senior executives, this presents several critical challenges. Data will have to be available to many more people, not only within the organization but also with ecosystem partners. In seeking out talent, leaders will need to focus on four areas that don’t often show up in resumes or performance evaluations: the ability to experiment, to learn, to exercise judgment, and to collaborate. Perhaps most importantly, they will have to place even more trust in first- and second-level management. This report, the result of a significant collaborative effort between Accenture’s Institute for High Performance and Technology Labs, will help executives understand the key issues and get started on the deep shift of digital transformation. Shawn Collinson Chief Strategy Officer 5 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Executive Summary Over the next five years, new digital • Rich digital representations: Software making will increase employee autonomy technologies promise to dramatically that translates physical objects into data and engagement and allow companies change work outcomes and work files that can drive programmable tools, to more precisely respond to changing experiences for employees of all sorts— robots and 3D printers. market conditions, thus resulting in higher manual workers, knowledge workers and • Cognitive augmentation: Technologies customer satisfaction and sales. managers alike—across a wide array of that learn by observation and offload industries. The digital difference—or what routine knowledge work to automated Real-time adaptation we refer to as the difference between assistants. Digital technologies will help companies “looking digital and being digital”—derives • Physical augmentation: Advanced robotic respond to changing business conditions from the ability of a new generation of devices that sense and adapt to their in real time. Pervasive digital connections technologies to augment, rather than to environment and that are small, safe, between systems, people, places and replace, the cognitive, collaborative and and flexible enough to be inserted into things—sometimes referred to as the the physical capabilities of human beings. human workflows. “internet of everything”—will produce However, research undertaken jointly by • Collaborative augmentation: Software a dynamic flow of digital information the Accenture Institute for High that directly improves the ways about where machines and people are, Performance and the Accenture Technology employees coordinate work and co-create what they are doing, and how they are Labs suggests that to reap the benefits new products. doing. Intelligent assistants will use this of digital technologies managers must be information to help employees make prepared to undertake shifts—deep shifts— These technologies are coalescing into smart decisions even when they cannot that are as much cultural as they are “intelligent digital processes” that change calculate the implications of all that data technical in nature. the key aspects of work design, including themselves. The potential for dynamic the who, when, where, and what of how and speedier decision-making will bring work gets done (see Figure 1). greater levels of operational flexibility and Digital is transforming productivity to industries. the future of work Emerging work practices Human and digital recombination Digital refers to an ensemble of new Advances in digital technology—including technologies that enhance the collection With the diffusion of intelligent digital robotics, software and machine learning, and analysis of information in ways that processes, four new work practices will sensors and analytical tools—will lead dramatically augment the capacity of become much more prevalent in the next to newer and more creative ways for human beings. Six underlying components five years. humans to work in concert with intelligent of digital will have the greatest impact machines. Humans will be able to “project” on the design of work: Edge-centric decision-making themselves into a wide variety of situations Information and decision-making authority through remotely-controlled avatars • Ubiquitous data streams: Physical and formerly the exclusive domain of a and vehicles. Moreover, flexible robots virtual sensors combined with high centralized authority will increasingly be will participate directly in human work capacity networks that make it possible pushed out toward the boundaries of the processes by sensing and adapting to their to process and store many large streams firm where intimate knowledge of context shared environment. of data. resides. Empowered by intelligent tools, • Advanced analytics and modeling: Tools employees will combine rich data streams Experiment-driven design that transform information into scalable with their contextual knowledge to make As digital modeling and simulation make process improvements. significant decisions—about inventory, design iteration less expensive, work pricing, and even product design—at a local level. Decentralized decision- 6 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work processes will increasingly be structured Developing and deploying the right talent to encourage responsible experimentation, around a series of “design-build-test” Four core talents will prove vital to being deal with inevitable failures or breakdowns cycles that generate early feedback to digital: the ability to experiment, the that experimentation produces, and uncover risks quicker and better align to ability to learn and adapt, the skill to translate strategic direction into user preferences and needs than traditional exercise judgment and the power to operational action. Indeed, the transition design approaches. As a result, work will collaborate. Being digital presumes of management to “being digital” means become more fluid, with higher levels of that employees are able to absorb new giving up tight controls, granting a improvisation and experimentation. knowledge and data, adapt as needed, measure of autonomy to operators and experiment and learn. Intelligent digital designers, shifting the focus from one of processes will have the greatest impact rule-following to value-finding, and getting Becoming a digital enterprise when employees are motivated to use comfortable with experimentalism (the requires deep shifts data to improve products and practices foundation of a data-driven culture). rather than merely to execute rules and Research on early adopters strongly procedures handed down from above. The benefits of being digital are clear. suggests that becoming a digital enterprise However, the deep shift from looking requires deep shifts—changes that crosscut Evolving the right management mindset digital to being digital is predicated on skills, roles and even culture. Three The biggest shifts may be the ones required intentional efforts to employ the new dimensions are key to the move from of management. Managers will need to digital tools in new ways, to develop and looking digital to being digital: employing be both literate and numerate if they are deploy the right talents, and to drive new the right tools in the right way; developing going to support employees in making management mindsets. Therein lies the and deploying the right talent; and the most of available data. They are going challenge for leaders: to recognize that a evolving the right management mind-set. to be called upon to exercise judgment deep shift is necessary and to start building in reconciling what the intelligent tools the foundation for it right away. Such Employing the right tools in the right way recommend and what history, culture organizations will become truly digital Enterprises need to empower workers at and customers demand. They will need faster and more effectively. all levels by providing them with the data and the tools with which to make sound business decisions. Moreover, organizations need to get more comfortable with Figure 1: Work design under a regime of intelligent digital processes decisions being made in real time, in a distributed way, with emphasis on Intelligent digital consistent and informed decision making rather than centralized planning and 1. Who makes decisions about the Managers and employees closer to control. The net effect of these shifts will organization of work processes? the work, with information and analyses be to replace dominant paradigms that that are broadly shared emphasize up-front planning and then sticking to the plan with the ability to 2. When are decisions made? Closer to real-time in order to adapt re-plan frequently in response to new to changing conditions data and changing conditions. Making this change means having a much higher level of comfort with ambiguity and uncertainty 3. How is work structured? Through a continuous process of and a willingness to move in the absence experimentation and adjustment of complete agreement. 4. Where is work located? Remote work (via robots or remotely controlled drones) and work that is distributed across geographies becomes much more common 5. What skills are required (including Collaboration, experimentation, management skills)? testing, data interpretation, judgment and value-creation 7 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Chapter 1: The Deep Shift Many companies today “look” digital. Few actually are. Sure, they’ve learned to convert paper into electron streams. They make available, and even use, video chat, social media, and a host of online tools via an internal portal. But “being digital” requires much more. Reducing paper flows—that’s a useful but Consider what this means for the future of Further, organizations will have to ultimately superficial change. Companies work, and for work processes. To transform accelerate the empowerment of must dig well below the surface. Those that processes, organizations will have to employees—front-line staff, managers truly want to be digital need to engage in combine three things: rivers of data about and executives alike—by augmenting their a deep shift in the way they do business, transactions, searches, physical movements, abilities, with the help of technology, in which the primary goal is to transform price changes and a host of other so that people can do work that is both data into new revenue and new sources activities; intelligent tools like simulations, creative and flexible. Again, translating 1 of value. And that transformation is as models and advisory applications; and that into practice won’t be easy. much about culture and organization as local knowledge in the form of experience, it is about the wonders of technology. judgment and intuition. Expressed in a sentence, maybe that doesn’t sound too difficult. It is, and it will be. 9 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work And yet, while this deep shift in the way human and machine as mutually exclusive technology will not accomplish the task people work may not be obvious to the sources of knowledge. That’s why, in both any more than buying exercise equipment untrained eye, it’s already going on in some instances, veteran employees with working will make you healthy. Technology by itself companies. Take, for instance the changes knowledge—know-how—find digital won’t enable a company to keep pace that have happened in recent years in technology a source of stimulation, with rapid change in product markets. two very different industries: retailing and not insecurity. But technology is making possible a iron ore mining. Convenience stores like radical leap in the way work gets done in 7-Eleven and mining companies like Rio Unless you work for Rio Tinto or 7-Eleven, organizations. We call the enablers of this Tinto share little in common when it comes you’re probably not aware of these change “intelligent digital processes.” to the things they sell. But a look behind changes. You can easily see the impact of the scenes reveals surprising similarities. digital technology on consumer products like cars. Slip into the driver’s seat and The emergence of Both scan huge databases with you’re quickly familiar with things like intelligent digital processes sophisticated algorithms in search of dashboard data centers, iPod hookups and clues to hidden treasure: underlying electronic stability control. Less visible The chief way that companies “look customer preferences for 7-Eleven and are the huge behind-the-scenes changes digital” without “being digital” is through veins of iron ore for Rio Tinto. Both equip that are revolutionizing automotive design the process of digital substitution: frontline employees with intelligent tools and manufacturing. gradually replacing physical processes 3 that allow them to make decisions that with equivalent digital ones. Make no improve performance based on contextual These include digital tools that compress mistake, this change does bring about knowledge. In the case of the retailer, the time it takes to create and test product improvements in speed and cost without employees select inventory best suited designs; that both enable and demand the need to dramatically re-architect to local conditions; in the case of the intimate collaboration between marketing, the workplace or the workforce. miner, they adjust mining technique engineering and manufacturing groups based on seismic data, satellite images rather than “over the wall” exchanges; Digital documents replace the paper and on-the-ground operator experience. that link robots and humans in flexible variety, making it easy to share and modify Finally, both organizations rely on people production teams; and that employ them. People can access all kinds of digital and computers working together—one analytics to give managers the ability to artifacts—not just documents but photos, augmenting the other—rather than viewing experiment in real time with more effective music, videos, spreadsheets and more— ways of working without disrupting the from multiple places at once, making it 2 flow of production. possible for teams of far-flung members to collaborate with speed and efficiency. Based on research we’ve conducted over the past year, one conclusion is clear: being digital changes work in fundamental ways. Companies that want to lead in the digital era—no matter what their industry or their location—must rethink the way they get work done. Buying and installing digital Technology is making possible a radical leap in the way work gets done in organizations. 10 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work But companies that limit themselves to this Intelligent digital processes resolve the sort of digital mimicry are only scratching crisis of complexity by accomplishing the surface. They’re not just limiting their two things simultaneously: generating potential to find new revenue-generating and analyzing masses of information and opportunities; they’re also hurting their augmenting human capabilities. (See ability to anticipate upcoming industry “Key components of intelligent digital 4 disruptions. Music companies that were processes”). On the surface, that may not intently focused on the transfer of digital sound particularly revolutionary, but on information to CDs, for example, missed closer examination it turns out to be a the fact that CDs would someday be game-changing development. usurped by digital information that could be streamed to tiny mobile devices. The bigger breakthroughs are coming Figure 2: The path to intelligent digital processes from efforts that go beyond mimicry and The evolution from ad hoc to intelligent processes is not unlike the way experts in isolated optimization to intelligent digital everything from chess to basketball develop mastery: from a hit-or-miss beginning, to the processes. These processes represent the repetition of basic moves that lead to a greater sense of mastery, to the variations based next stage in the evolution of work. on having absorbed the basic moves, to developing the ability to improvise and actively experiment—and, finally, to creating breakthrough innovation. One way to understand intelligent digital processes is to trace the evolution of work. (See Figure 2.) First came the Intelligent craftsman who labored over a pair of processes shoes in an ad hoc or artisanal process; by its very nature the artisanal mode was Crisis of difficult to scale. Next came the Industrial complexity Revolution with standardized parts and repeatable processes, vastly improving Adaptive productivity but at the expense of variety processes and flexibility. More recently, the norm has been adaptable processes, in which Crisis of rigidity the same people and equipment can be adapted to provide more variety. Enabled erformance P Repeatable by IT systems that more effectively linked processes supply and demand and coordinated “islands of automation,” adaptable processes nonetheless became fraught with Crisis of scale complexity—often a product of the fact that much more information is generated Ad hoc Industrialization Information Digital than can be comprehended and usefully processes technology capabilities deployed. Each stage in the evolution of Enablers work processes has reached a crisis that Time was resolved through the discovery and implementation of a new technology. 11 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Key components of intelligent digital processes Start with information. Intelligent digital processes are embedded with sensors that monitor every action—from a wheel An ensemble of new technologies makes Cognitive augmentation: Technologies spinning in a pump to a clerk scanning possible intelligent digital processes. can augment thinking by offloading a box—and feed those observations into Together, they collect and analyze routine knowledge work to automated sophisticated models that allow people and information and augment the capacity of assistants. These tools will only become software to make real-time adjustments human workers to make rapid adjustments increasingly sophisticated thanks to voice and decisions. They exploit the connected and exploit opportunities. There are six recognition, natural language processing, nature of devices—both within and key component technologies: and other technological advances, and between organizations—to establish a data the line that separates a tool from an web that is both active and interactive. Ubiquitous data streams: New physical assistant—or even a teammate—will and virtual sensors combined with high start to blur. Add in analytics. Powerful modeling capacity networks make it possible to techniques search for patterns in the process and store many large streams of Physical augmentation: This comes data—some based on hypotheses, others data. These tools systematically sense about thanks to advanced robot dredged out of the data itself—that bring (and remember) both internal (workstream) technologies that are small, safe, and a level of self-awareness to seemingly and external (ecosystem) events at flexible enough to be inserted into isolated activities. Models make it possible enormous scale. human workflows. These new robots to establish a virtuous cycle of constant can sense and adapt to their improvement, fed by continuous feedback. Advanced analytics and modeling: environment, enabling them to interact But, even more important, they can identify Big-data analytics provide new ways to directly with people to create a hybrid opportunities for adaptation (for example, transform data into insight. These analytics human-robot workflow. a revenue opportunity such as a niche in can also be used to automatically discover the market or a reconfiguration of the which process variations have resulted in Collaborative augmentation: value chain), analyze tradeoffs and clarify higher performance so that companies can Technologies can improve the ways decision alternatives, and then adapt faster replicate those practices elsewhere. in which employees coordinate work and more efficiently. Reports that used to and co-create new products. Among describe “what happened” last quarter or Rich digital representations: Increasingly, these technologies are systems that yesterday are now active conversations physical objects that are intermediate or enable social networking, discussion between machines as they react to isolated final work products are also being replaced forums, online file sharing, real-time events as well as to trends. by digital representations; these are videoconferencing, and virtual task and translated into physical form as late in the project management. Next, enrich with visualization tools. process as possible by programmable robots Advances in the visual display of and 3D printers. information—fueled in part by parallel developments in electronic gaming and aviation—make it possible for operators Intelligent Digital Processes and managers to literally see systems rather than tables in a report. The same tools that now enliven social networking Ubiquitous Data Streams Advanced Analytics & Modeling sites are migrating to the factory floor and to office environments—not just to enable communication but to support real-time work flow adjustment, as well. Rich Digital Representations Cognitive Physical Collaborative Augmentation Augmentation Augmentation 12 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Finally, move to augmentation. Intelligent company decisions about what kind of The benefits to be derived from intelligent digital processes augment human turbine to purchase set real constraints on digital processes are certainly attractive. capabilities on three levels. With cognitive plant managers and crews. From a cost and Companies should beware, however, that augmentation, they enhance the alertness liability perspective, operating conditions the technologies themselves are merely of human beings to new developments, were either inside or outside the specified the tip of the iceberg. Beneath the surface tee up alternative courses of action and parameters; there wasn’t a lot of gray area. are huge changes in the ways that work make it possible to test alternatives is organized and managed—changes that or even to experiment via simulation. In the era of intelligent digital processes, require a dramatic modification in mindset. Intelligent digital processes also employ other options are available to plant The employees and managers of 7-Eleven new generations of communication and operators. Equipment manufacturers like and Rio Tinto, for example, work very workflow tools to connect people across GE now routinely put sensors all over the differently now. Their jobs and roles have time and space—that’s collaborative turbines they sell (and usually all over fundamentally changed. Being digital is a augmentation. And, finally, through the power plant, in pumps, relays, cooling transformation, not an installation. physical augmentation, they extend human equipment and condensers). As a result, capabilities and perspectives by means of they are now constantly collecting data To better appreciate the nature of the deep next-generation robotics. about all the components and how they shift, we need to look more closely at how operate under all manner of conditions. work practices are changing in the era of With advanced analytics they are able intelligent digital processes. In Chapter 2, Intelligent digital to develop sophisticated algorithms and we highlight four emergent work practices. processes at work models to optimize assets and operations. Standard operating parameters are now Consider the operation of a contemporary just a starting point. power plant. Before the advent of intelligent digital processes, power plant From the company’s perspective, intelligent operators focused almost exclusively on digital processes have made the system operational efficiency rather than, say, more agile. The speed of decision-making exploiting market opportunities. Service can improve by an order of magnitude. contracts for key equipment like turbines Because intelligent digital processes are specified operating parameters; power driven by data derived from both upstream and downstream sources, they make it possible to optimize an entire system rather than just a series of work islands. Intelligent digital processes optimize an entire system rather than just a series of work islands. 13 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Chapter 2: Emerging Work Practices in the Digital Enterprise Intelligent digital processes open up new options in work organization. Some of these options were not practical a few years ago. Some were inconceivable. All of them, however, challenge traditional management mindsets. In the course of our research, we’ve seen Take the work of product engineering in The most sophisticated companies four emerging work practices that radically the automobile industry. As recently as five used digital design software and online break with conventional approaches. years ago, engineers toiled away in a maze collaboration tools so that engineers could Individually and in combination, these of subcomponent design groups. These work together on virtual teams spanning practices stand to become the hallmarks of teams relied on complex committees and time zones. But the work of design a new era of work organization. management layers to translate the voice remained fundamentally an assembly line, of the customer into design parameters much as it had been for the past 50 years. and then to integrate the disparate parts With the advent of intelligent digital designs into a vehicle. processes, however, the work of product engineering is undergoing a revolution. 15 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work At Audi, for example, design engineers The difference between traditional and General Motors were among the pioneers engage in web-based, real-time exchanges contemporary approaches to product in math-based design. But being high-tech with customers as they experiment with engineering—between adaptable processes and being digital are not the same. To get 6 new infotainment system options. What and intelligent digital processes—ought the benefit of intelligent digital processes, might in the past have appeared to be a not be reduced to a distinction between you need to think differently about the bureaucratic shuffle of blueprints between “low tech” and “high tech.” The automobile organization of work. different functions and departments industry has been a high-tech industry now more closely resembles a spirited for many years. Companies like Ford and conversation between communities of 7 experts. Teams of software, instrument and mechanical engineers and marketing professionals rapidly iterate through new approaches, assimilate customer feedback New thinking and old in work design and preferences, and submit new options in a matter of days, rather than months. Companies may no longer have a formal to search for the “one best way” to Digital files containing their designs are work-design department, but executives, organize work. A legacy of scientific distributed at light speed to other groups, managers, and engineers are constantly management, that goal remained the including test engineers, who assess their making choices among the different central pursuit in many industries well 8 implications for cost, weight, durability, ways to translate business objectives and into the 1980s. and integration with other control systems. market conditions into processes, tasks and jobs. Their choices are influenced by Toward the end of the twentieth century, Speed is not the only thing that’s changed. both business and technological factors, companies began to seek more flexible In the realm of design, companies now but cumulatively those choices have a approaches to work organization, such as rely on engineers to master the intelligent powerful influence on the performance lean manufacturing and socio-technical tools, and on algorithms to interpret of people and processes. Think of it like design. Both lean and socio-technical massive volumes of data and to evaluate the design of a racing yacht: the designer approaches start from the assumption the manufacturing implications of a design may not sail the boat, but his or her that successful implementation of a new change. In some instances an “app” is choices about things like the size and technology requires a mutual adaptation considered a team member. shape of the keel, the hull and the sails of technology and people. The same have a huge influence on what the yacht basic technology, for example, can be is capable of doing. Carrying the analogy implemented in very different ways— a step further, the “work” of sailing a with very different work-design racing yacht has changed a great deal outcomes. Consequently, instead of as a result: contemporary America’s Cup seeking “one best way,” companies boats use sensors to monitor the wind began to organize their work processes and adjust the carbon fiber wing that’s by considering the broader context of replaced the fabric sail; crew members business and organizational culture scan LED screens as much as they do alongside task and technology. the physical horizon; and data captured Proponents of these approaches call during a race is reviewed repeatedly in for “smarter systems” that combine the preparation for the next heat. right technical solutions with the most effective and engaging methods of 9 For decades, work organization was organizing human skills and judgment. guided by the legacy of scientific Avant-garde thinking has incorporated management—so-called Taylorism. the “entanglement perspective,” which Industrial engineers, for example, views human beings and technologies focused on standardization, repeatability as inseparable: each has the capacity to 10 and process control. This led companies augment and extend the other. 16 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Work in a new light experience of work (including ergonomics) people who actually do the work tends while at the same time boosting to be discounted when it comes to work Workplace architecture has changed a productivity. Time and motion studies are design. It’s rare for collaboration among great deal in the past century—witness no longer overt, but work monitoring and co-workers to be seen as anything Google headquarters, Bloomberg’s measurement is as popular as it’s ever been. more than accommodation to formal fishbowl offices and the explosion of process definitions—or worse, as a kind home workstations—but a surprisingly However, there is growing evidence that of rate-setting that limits improvement large fraction of our thinking about work digital technology is changing the nature opportunities. Information about the organization hasn’t changed much in of work design. It helps to start with the performance of a given work process tends the past century. (See “New thinking and five central questions of work design: who, to be circulated only to those with a need old in work design.”) Division of labor, when, how, where and what. (See Figure 3.) to know. chain of command, span of control, serial workflows and the relentless pursuit of In contrast, emerging practice under a efficiency are perennial concerns that drive Who makes decisions? regime of intelligent digital processes “work design”—a somewhat intuitive but tends to involve employees in a much more specialized term that, at a simple level, The dominant practice under a regime direct way, in large measure because digital refers to efforts to improve employees’ of adaptable processes tends to be top- technology makes it much easier to push down, driven by managers and technical relevant information to a broader spectrum experts from R&D, process engineering, of people. People use intelligent tools vendors, or consultants. Implicit knowledge (know-how) carried in the heads of Figure 3: Work designs under the adaptable and intelligent digital regimes Adaptable Intelligent digital 1. Who makes decisions about the Managers and experts at the corporate Managers and employees closer to organization of work processes? center, based on information and analyses the work, with information and analyses that are closely controlled that are broadly shared 2. When are decisions made? Long-lead evolution—after extensive Closer to real-time in order to adapt planning and analysis, in line with annual to changing conditions budgeting and capital allocation processes 3. How is work structured? Through a plan-driven approach Through a continuous process of experimentation and adjustment 4. Where is work located? Concentrated in work centers (factory Remote work (via robots or remotely complexes, major offices and campuses, controlled drones) and work that is laboratories) with satellites; distributed distributed across geographies becomes virtual teams that have a single hub much more common 5. What skills are required (including Rule-creation and rule-following; Collaboration, experimentation, management skills)? incremental improvement; capital testing, data interpretation, judgment substitution to maximize cost savings and value-creation 17 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work that augment analysis or collaboration to When are decisions made? With sensors monitoring the performance make decisions about how best to address of machines and people, managers can customer needs and desires—in many cases, Work processes must adapt and change identify opportunities to rapidly alter or much closer to the customer or much more over time. Under the adaptable process reconfigure a work process to respond immediately between the customer and regime, the dominant practice for altering to various contingencies such as supplier the producers. Collaboration and implicit a work process tends to require time- prices, spikes in customer demand, and knowledge are increasingly recognized consuming analyses, considerable upfront fluctuations in the weather. Recall the as vital elements of work design—not planning, and long lead-times. This is power plant example, where operators aberrations—because they add flexibility partly due to the technologies themselves, can alter the work process to take and make it possible for complex systems which evolved slowly in the past or were advantage of market opportunities 11 to recover more quickly from disturbances. proprietary with limited functionality that without having to invoke higher levels was difficult to change. Another factor in the chain of command. For example, employees in the far-flung was the relatively long payback periods stores of a retail company now have the for technological investments. As a result, ability to utilize analyses of sales data to companies resisted large-scale changes How is work structured? customize the mix of products on their without a major triggering event, such as shelves in response to local consumption a dramatic shift in product technology or Adaptable and intelligent digital processes patterns or weather conditions. And customer demand. take starkly different approaches to the they can do so without sacrificing the structuring of work. Under the adaptable economies of scale in purchasing and In contrast, under the intelligent process regime, work structuring tends distribution that led to the chain-store digital regime, adaptation can occur in to be linear and top-down, going from concept to begin with. real-time as a process is being executed. high-level designs to more detailed models. Revising work processes can be prohibitively expensive especially after Work evolves through a continuous, prototypes have been built. iterative process of experimentation In contrast, in the intelligent digital regime, work evolves through a continuous, and adjustment. iterative process of experimentation and adjustment. This approach is made possible by easy access to relatively inexpensive digital models and workflow templates. In the healthcare industry, for example, 18 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work new work processes for the management Under a regime of intelligent digital return on investment. Moreover, thanks of patients’ electronic records can be processes, companies no longer need to to advances—in sensors, software and simulated on a computer, deployed, and co-locate work and workers. As in the machine learning, robotics, and analytical updated on a continuous basis rather mining industry, entire complexes of tools like advisory systems—humans and than launched once and revised only after machinery and equipment can be operated machines can now interact in much more long implementation cycles. Moreover, from distances of hundreds of kilometers. productive ways. Robotic technology companies can now undertake experiments Real-time transmission of data and is increasingly able to learn from and in real-time. In the past, companies virtually instantaneous response times augment human beings. would have had to conduct experiments make this possible. off-line or in a simulated environment Different answers to traditional questions... (in a pilot facility appended to an R&D and answers to questions we never thought organization, for example) and then scale What skills are required? to ask. Digital technology has huge up before implementing changes in the implications for the kinds of skills needed core of their operations. The relationship between humans and under an intelligent digital regime. For technology is being transformed in the era example, field-service technicians once of intelligent digital processes. Adaptable needed to commit a lot of knowledge Where is work located? processes drive toward automation: to memory; people needed to know simple replacement of human inputs by a lot. Now, with digital technology One major assumption behind adaptable mechanical devices, robots and software making information (and even remote processes is that work and workers should that have limited functionality. This reflects collaboration) available as needed, it is be located in the same place. While the economic logic of using dedicated more critical for the technician to be able virtual teams have become increasingly capital assets to improve productivity. to absorb new knowledge quickly, to form commonplace over the past decade, It also reflects the historical legacy of sound judgment and solve novel problems. organizations continue to think about scientific management and its emphasis Rote knowledge is less critical. Likewise, supervision and control in traditional on simplification and enhanced control. managers of intelligent digital processes ways—for instance, one person or group need to be far more comfortable asking “owns” the data, is responsible for a Increasingly, however, digital technology— questions of the models they have at hand, process or, more commonly, the outcome and robotics in particular—are being used designing experiments and interpreting the of a process, and teams (and tasks) tend in much more creative ways. Rather than data they get back, and making judgments to be arranged hierarchically. focusing solely on the replication of human based on a combination of data, direct motion, digital technology offers flexible observation and experience. tools that can be reconfigured for multiple purposes—not just physical but also cognitive and collaborative augmentation— while still generating an attractive 19 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work intelligent tools that make it possible to use real-time weather and navigation data Emerging work practices combine rich data streams with contextual to adjust ship-board entertainment, meal 12 In terms of work practice, the “who, when, knowledge—of specific countries, cities preparation and staffing. With intelligent how, where and what” receive different or even neighborhoods. They can thus digital processes, people and organizations answers if one is talking about intelligent make decisions about how to best serve can now do much more than react to digital processes rather than adaptable customers, whether they are retail change: they can anticipate it, even exploit ones. That’s why a new set of work consumers or businesses and governments. it to achieve unprecedented results while practices have emerged recently to take And, rather than pandemonium ensuing, minimizing risk. advantage of new possibilities. the rest of the organization will see and understand the improvisation happening at the edge and, where necessary, replicate it Human and digital recombination Edge-centric decision-making or accommodate it. Advances in machine vision and software Centralized corporate managers now controls for robots are behind new command terabytes of data. So, as Real-time adaptation approaches to work design that are masters of the data, they should control growing in popularity and impact. The decision making when it comes to work The evolution of sensor technology has first is relatively familiar: Humans “project” organization, right? Well, yes, up to a point. brought with it the opportunity to exploit themselves into situations that are hostile But technology that gathers localized data the pervasive digital connections between or toxic through remote control robots— can empower local decision making, or systems, people, places and things— bomb disposal, for example. Increasingly, what we refer to as edge-centricity. sometimes referred to as the “internet another sort of remotely guided vehicle is of everything.” The promise resides in showing up in medical and even educational With edge-centricity, information and rapid awareness of change based on applications. Telerobotics enable doctors decision-making authority are pushed a dynamic flow of digital information to “visit” patients by maneuvering a robot out to the most customer-facing points about where machines and people are, equipped with a camera and video screen in the organization where intimate what they are doing, and how they are through hospital corridors. Children sick knowledge of context resides. It means, for doing. An oil pipeline leak can be detected at home can still participate in classrooms example, that employees are armed with immediately and repaired. Fluctuations in through similar devices. the performance of a jet engine can be monitored and failure can be prevented long before it might occur. A cruise line can The rest of the organization will see and understand the improvisation happening at the edge. 20 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work The second approach is more novel. Small, reimagines the design process as a way to flexible robots interact with human workers surface design options and risks earlier than by sensing and adapting to their shared traditional processes do. We use the term environment in real time. The two can learn “experiment-driven design” to describe a from each other and together create a family of approaches that includes iterative division of labor that captures the cognitive design, iterative development, rapid power and creativity of human beings and prototyping, or rapid iteration. the physical dexterity and endurance of 13 machines. Two impacts of experiment-driven design are paramount. First, the work of design can be much more fluid, iterative and Experiment-driven design discovery-oriented (leading to a much more intensive use of data generated by Using digital technology to dramatically increasingly sophisticated experiments). increase the speed and flexibility of design And, second, the design of work can be processes (while at the same timing changed immediately and dramatically. reducing design risk) represents more than With flexible tools and software, it is just the pursuit of digital efficiencies. It also possible to imagine greater improvisation reimagines the design process as a way to occurring in even the most capital intensive surface design options and risks earlier than and regimented work settings. traditional processes do. We use the term “experiment-driven design” to describe a family of approaches that includes iterative design, iterative development, rapid prototyping, or rapid iteration. Using digital technology to dramatically increase the speed and flexibility of design processes (while at the same time reducing design risk) represents more than just the pursuit of digital efficiencies. It also 21 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Chapter 3: Choice Points on the Road to Being Digital We offer detailed examples of the choices faced by a cross-section of companies as they seek to leverage the digital technology and the new work practices we just described. Companies can push decision-making to Edge-centric number of companies, valuable insights are the front lines (edge-centric decision- decision-making traveling from the edges to the core and making); they can make those decisions from edge to edge. For example, a decade in real time (real-time adaptation); ago leading-edge practices focused on they can recombine human labor with Ten years ago, analysts challenged the providing customer service representatives advanced robotics in novel ways (human US Department of Defense to distribute with greater information about clients and digital recombination); and they can “power to the edge,” that is, to empower so that they could be more responsive deploy a continuous, iterative process “individuals at the edge of an organization to their needs. Today, a newer and more of experimentation and adjustment to provide access to available information radical form of decentralization is taking (experiment-driven design). Pursuing any and expertise and to eliminate procedural place, giving individuals who might be 14 or all of those practices is a matter of constraints.” Since then, technology has far removed from the corporate center a choice that deserves careful consideration. evolved to such an extent that power—or level of “situational awareness” that was at least information—has indeed moved previously restricted to managers further 15 to the edge in many organizations. Not up the chain of command. only that but the authority to make decisions is moving to the edges along with that information. And, in a growing 23 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Such edge-centric decision-making More recently, each store has been given A distinguishing feature of 7-Eleven’s means that employees who are at the access to a Mobile Operation Terminal, edge-centricity is the fact that humans 16 frontlines of the organization can have the commonly referred to as a MOT. A MOT remain very much “in the loop.” Availability information, the tools, and the authority is a wireless specialized table that gives of this much data at the hands of sales with which to make decisions and, in each sales associate data about sales associates doesn’t necessarily guarantee some cases, to formulate strategy. And, trends and inventory levels of each SKU at better results on its own. So 7-Eleven has rather than chaos ensuing, the rest of the their store, as well as other relevant data taken further steps to improve odds of organization will accommodate and learn such as impending threats to the supply success. The first step is a cultural change. from this improvisation, even replicating of given products. MOT uses visualization Sales associates are now trained to place certain practices elsewhere. techniques to show highly granular data “sales forecasts” as opposed to “sales that can be used to forecast sales for the orders.” The former emphasizes the need Consider 7-Eleven, Inc. the international next ordering period. The effort to balance to evaluate data and make a conscious and chain of convenience stores. Nearly a central and local paid off for 7-Eleven, better-informed forecast (judgment) while decade ago, the company implemented a making it one of the most successful the latter refers to the traditional practice global IT system to centralize inventory convenience store chains in the world. of repeating last week’s order. information and to consolidate its supplier base. In today’s terms, it was hardly a In an effort to accelerate the development In addition, to foster responsibility revolutionary effort. But what distinguished of innovative, customer-focused products and ownership, 7-Eleven has moved to 7-Eleven even then was its goal of and merchandising, the company has “Certified Order Writers,” that is, store sales optimizing its supply chain while allowing begun sharing shopping cart-level data personnel who are trained to write orders store managers and employees to capitalize with an expanded network that includes and can advance to run part of the store. on their knowledge of local markets in corporate procurement staff, suppliers, These individuals are assigned specific order to generate additional revenue. store operators and their employees. categories of each store. As a result, they The common database—described as can gain deeper expertise in the line-up Specifically, transactional data transmitted “one version of the truth”—provides of the products offered in that category. from point-of-sale terminals to a central unprecedented visibility into what items The sales associates can better understand data repository gave 7-Eleven the ability to should be stocked and supplied to local local-market demands for products in their 17 identify purchase and restocking patterns— stores. Such moves are a signal that categories, form hypotheses about it (for information that was key for company 7-Eleven and companies like it are example, “I think there may be demand buyers to gain bargaining leverage with becoming increasingly digital by moving for larger packaging of barbecue flavored suppliers. At the same time, the system information, decision-making responsibility, chips”), and then validate it using data allowed store managers to customize their and innovation to the edge. tools at their disposal (“how has this item orders to account for local conditions. fared in other stores?”), so they can make a decision as to whether the demand is worth the shelf-space. Sales associates Sales associates are now trained feel a sense of ownership about their categories and their performance. To to place “sales forecasts” as opposed to “sales orders.” 24 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work further strengthen this, MOT shows sales Real-time adaptation can dramatically associates their own store’s profit goals as well as gross profit achieved when reduce (or even eliminate) the time lag they are placing forecasts, so not only are they cognizant of the importance of their between modeling a complex system forecasts, but they also feel a sense of completion about achieving their goals. and changing it. The implications for work design are significant. The story of digital technology at 7-Eleven is about technology line. For example, according to a General Real time-adaption can dramatically reduce empowering workers rather than displacing Electric study, rail operations costs could be (or even eliminate) the time lag between them; it is also about “up-skilling” rather reduced between 1 percent and 2.5 percent modeling a complex system and changing than “de-skilling”. In fact as new versions with the use of real-time system controls— it. New forms of machine learning, of the inventory system come online, sales netting between $27 billion and $67 billion automation and augmentation—cognitive 18 associates will have access to far more in savings to rail operators over five years. (in the form of powerful algorithms that data than ever before. For example, with extract answers to immediate questions) “Perpetual Inventory” technology currently The evolution of sensor technology has and collaborative (in the form of intuitive being tested, employees can see at any brought with it the promise of networked tools for information sharing)—now enable given minute of the day what levels of machines, data and people—what GE has locomotive engineers, network operators 19 each SKU were on hand during the last labeled the “industrial internet.” The and transport analysts to eliminate waste; week. This data allows sales associates promise resides in rapid awareness of schedule train movement to optimize to know that they ran out of chocolate change thanks to a continuous flow of track usage; regulate speed, acceleration donuts at 12:22 PM last Sunday—currently, digital information between machines and and braking of train engines; and make they would only know that they ran out people. General Electric, among the world’s strategic tradeoffs—between speed and fuel sometime in the afternoon). As a result of leaders in locomotive technology, has consumption, for example. these changes 7-Eleven expects that its targeted rail transport as an industry open most successful sales associates will be to the benefits of real-time adaptation. According to a GE study, instrumented increasing analytical and data-savvy. trains and tracks make it possible to closely 20 The core of real-time adaptation is the monitor over 250 operating parameters. ability to collect, analyze and model data In addition to allowing the rail yard Real-time adaptation about the performance of machines—things operators to optimize schedules, data like motors, switches, pumps and wheels— collected from these sensors is also used This work practice has the potential to and then to integrate that with knowledge to augment the operator’s ability to make bring speedier decision-making and greater of context to make and enact decisions real-time adaptations to the network. operational flexibility to industries where that can lead to previously unimaginable a fraction of a percent improvement in revenue opportunities. Complex systems productivity can add greatly to the bottom suddenly become manageable. Local knowledge which previously stayed local can now be accessed globally. Parts of a system that were previously optimized to the (unintended) detriment of the whole can now be managed as a system. 25 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Robots learning from humans Human and digital and humans interacting seamlessly recombination with computers are hallmarks of In conventional automation, the objective is to become cheaper and faster by intelligent digital processes. replicating human work that is repeatable and programmable. In an era of intelligent digital processes, the relationship between machines and humans is more For example, suppose a train’s engine the system, re-routing others, and speeding complementary, with the two often being sensor detects overheating. In the some trains up while slowing others recombined in novel ways. pre-digital world, the train operator down, in order to maximize the overall would slow the train down to mitigate profitability of the network. The objective of human-digital the overheating problem, which would recombination is to enhance productivity cause, mostly unpredictable levels of As in the case of edge-centric decision- by multiplying the effects of human disruption to cascade throughout the making, real-time adaptation challenges physical and cognitive capabilities, enabling network. Network operators would be key assumptions in work design. Most managers and employees to make better more or less in reactive mode. Now, by important among them is the growing judgments. This recombination—with combining data about the operating need for “transdisciplinary” skills—that robots learning from humans and humans conditions of all the trains, along with is, an understanding of the behavior of interacting seamlessly with computers—is other relevant data, such as the nature of complex systems that makes it possible one of the hallmarks of intelligent digital the each train’s cargo and cost of delays, for a train operator and a network processes, and the need for such flexibility the network operation center is able to operator to share both understanding is great in industries as different as mining play an advisory role. This system helps and control of a sophisticated web of and online retailing. 21 the network operators make real-time people and machines. Rather than insist adaptations to the network, which may on rigid lines of demarcation between One of the most interesting examples mean taking some lower-priority trains off jobs or professions, real-time adaptation of human-digital recombination can be encourages a blurring of knowledge found in mining, an industry that predates domains and a greater emphasis on the dawn of the computer age. Today in systemic knowledge and systemic roles. 26 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work companies like global mining giant Rio The Operations Centre is exactly what it traditional mining know-how. And, it Tinto, skilled operators, data analysts and sounds like: a facility where equipment provides a hugely important link between engineers guide the intricate interplay of operators sit in a command centre the company’s growing staff of quantitative gigantic drills and excavators, gargantuan hundreds of miles away from the mine. analysts and the mines themselves. earth movers and dump trucks, and trains pulling hundreds of cars headed to ports Built originally to provide a more attractive The Operations Centre has already and refineries around the globe. But, by work environment for always-scarce skilled demonstrated clear and impressive contrast to traditional automation—where workers, the Operations Centre has brought results: increased efficiency, improved the objective is to replace direct labor with operators face-to-face to share common reliability, decreased variability and better more consistent, accurate and repeatable screen views of the mine and its environs, identification of performance issues. mechanical processes—Rio Tinto’s engineers and to orchestrate their work in response and managers have adopted a systemic to changing conditions like weather, truck Analysts, many of whom are scientists view: where the objective to achieve a breakdowns or major equipment moves. and mathematicians with only a passing quantum leap in performance comes about Physical proximity encouraged operators knowledge of mining, grind through by more effectively combining human and to collaborate and mutually adjust. As one massive databases generated hourly by machine intelligence. senior executive put it, “they could finally sensing equipment in mines throughout look each other in the eye and know that the world and make recommendations Rio Tinto introduced its Operations Centre the other person is going to make good on to operators in the Operations Centre in 2010 as part of its Mine of the Future™ a commitment.” about new approaches to their jobs. programme to service its iron ore business Common dedication to improving system in Western Australia. The Operations Centre More importantly, the Operations Centre yield—whether in the mines themselves in Perth is “Mission Control” for Rio Tinto’s has turned out to be an essential ingredient or through timely maintenance of entire Pilbara network that consists of in the transformation of mining operations. equipment or the avoidance of delays in 15 mines, up to 1,500km of rail, and 3 It serves as an operational hub and as a the ports—complements common access port terminals as well as power and other rich repository of mining, transport and to the operational data. The net effect is infrastructure. supply chain experience. In many respects a remarkably productive combination of it represents the optimal combination human and machine talents. of high-tech work environment and 27 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Recombination of human and machines Kiva warehouse robots combine machine mine more effectively. Observation of the is also integral to Amazon.com’s ability to intelligence and learning with a human behavior of robots and algorithms reveals deliver an extraordinary variety of retail capacity for spotting improvement equally powerful insights into how to goods—including in some cases perishable opportunities. Like the delicate interplay organize warehouse inventory. groceries—on-time with accuracy and between remotely operated mining low-cost. As a result of its acquisition equipment, warehouse robots can be With regard to the idea of separate and of Kiva Systems in 2012, Amazon now choreographed to move in complex and distinct universes for people and machines, operates one of the world’s largest fleets shifting patterns based on fluctuations in work designers are coming to learn a lesson of industrial robots in its warehouses. market demand, improvement suggestions that game designers learned years ago: made by kaizen teams of warehouse that human beings increasingly experience These devices, resembling turtles because employees or continuously updated supply the world through computers, not versus of their low center of gravity and broad chain data. For example, during the days computers. This insight flows against backs, are guided by computers to pick up leading up to Valentine’s Day, racks with the long-standing view (or caricature) of pallets, deliver them to central stations relevant items such as chocolates in heart- humans treating computers and robots as where employees select items in line with shaped boxes are automatically moved alien. Today, by contrast, everything from 23 a pick list, and return pallets to their closer to packing stations. wearable computers (like Google Glass) to previous location—saving miles of walking handheld accessories (like smartphones) on the part of fulfillment center workers. Human-digital recombination challenges and ubiquitous access to search assumes As Amazon senior vice president Jeff Wilke a number of assumptions in work design. that humans and computers don’t just explained, “Technology is unlocking human Prominent among those challenges is coexist, they collaborate. potential. Technology is allowing humans the rejection of an impenetrable divide to spend less time doing non-valuable between humans and machines. The things like walking to spend more time on challenge surfaces two ways. In the Experiment-driven design process improvement for customers and first instance, the practice of real-time 22 the company.” adaptation assumes that humans and machines can learn from each other. For Experiment-driven design is a work example, at Rio Tinto data analysts and practice that generates feedback as early machine operators have a new appreciation as possible, to uncover user (customer or for the behavior of the machines with worker) preferences, catch design flaws, which they work. Data generated from and create a better end product than dozens of mines and hundreds of pieces of equipment reveal vital clues as to how to Human beings increasingly experience the world through computers, not versus computers. 28 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Experiment-driven design can iteration, especially early on, is less about nailing down the “right” design and more eliminate the need for the most about exploring the design space, testing new ideas (usually by exposing customers expensive kind of rework. to them), and systematically gathering data that will inform later iterations. As such, the most successful early design iterations are those that uncover the most useful the original design vision would have The work of design information to inform the ultimate design. produced. It represents a shift away from When implemented properly, experiment- having a design fully fleshed out up front, In industries where the product itself is driven design can eliminate the need for before building commences, and toward digital—like software or web-site design— the most expensive kind of rework, namely an approach in which a series of rapid we have witnessed a shift over the past the unplanned redesign that happens late “design-build-test” cycles is used to evolve decade from linear to non-linear, iterative in the overall process after major design the design. design processes, with dramatic increases flaws are uncovered. in the speed of product development and The potential of this emerging work equally impressive reductions in design Experiment-driven design is not relevant practice is perhaps best captured in the risk. Perhaps the most familiar evidence of only in software. In fact, its influence in words of Luana Iorio, who oversees General this shift has been seen in companies like automobile design has also grown rapidly Electric’s research on three-dimensional Google and Facebook, where engineers are in recent years. A case in point: Audi’s printing: “The feedback loop is so short encouraged to eschew lengthy waterfall Virtual Lab and crowdsourcing initiatives now that in a couple of days you can have approaches to design and iterate rapidly, are quickly changing the tempo and the 25 a concept, the design of the part, a test get feedback and improve. flow of design engineers’ work. Audi’s as to whether it’s valid, and within a week 24 you have it produced.” In other words, Slogans like “fail fast” and “move fast experiment-driven design is important for and break things” might seem like both the work of design and the design endorsements of chaos and inefficiency, but of work. in practice the opposite is true. Iterations are used effectively to acquire information about the suitability of the current version of the design. The objective of each 29 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Virtual Lab, first used to co-create Audi’s paid off: Audi recently won awards for Pharmaceutical companies, for example, software-based infotainment system, is its infotainment systems, including being now use combinatorial chemistry, an online network that automatically named “connected car of the year,” and for bioinformatics, and other technologies to 30 evaluates R&D prototypes based on crowd- its R18 Ultra Chair. generate and test potential new drugs in 26 sourced responses from customers. a fraction of the time of more traditional The design of work methods. In other words, not only has the The crowdsourcing component of Audi’s product changed, but so too has the work. online Virtual Labs system asks customers The second aspect of experiment-driven For example, scientists can now experiment to design their ideal product based on the design involves the design of work. Though with a more diverse array of compounds amount they are willing to spend, creating embryonic, this could have a dramatic while reducing the complexity of individual 31 a simulated purchasing decision similar effect in the next five years. It’s not tests. Without ever entering the laboratory, to what happens at a car dealership. The news to report that novel product designs data analysts can now comb databases system uses rapid data analysis (machine frequently have downstream impacts on composed of the results of hundreds or learning) to continually refine the questions the organization of work; for example, the even thousands of experiments and arrive it asks customers based on existing virtual decision to replace rolled steel with plastic at candidate drugs. prototypes (developed by Audi’s R&D team), or carbon-fiber for the door panels of cars customers’ demographic profiles and their meant a great deal of change for how In the auto industry, manufacturers 27 real-time responses. panels were fabricated and how doors like Audi and BMW now routinely employ were assembled.32 computer simulations of vehicle crashes Audi engineers compare the results to the in order to develop and test new designs 28 prototypes they have already developed. However, the shift to which we refer before—and, in some instances, instead This approach helps engineers identify involves new ways of organizing work of—building expensive prototypes. They and distinguish between “must-have” that are enabled by digital technologies. save millions of dollars each year by not and “nice-to-have” features based on For example, team-based work is rapidly building and then destroying cars and customer demand, which improves the becoming second nature because the cost gain much-needed insight into the behavior 29 next round of simulated prototyping. and complexity of collaboration is being Iterative engagement with customers has reduced (or absorbed) by intelligent tools; so, we are seeing teams being deployed in work processes that previously would have been carried out by solo experts or by groups of people working in isolation from one another. 30 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work of expensive materials and complex another work-organization option: real- Developers, for instance, must get 33 systems. In the healthcare industry, new time adaptation. When a hurricane or accustomed to much faster design cycles, work processes for the management of other adverse weather event is imminent, meaning that a design may still be “half patient electronic records can be simulated for example, the 7-Eleven stores in the baked” before being developed and tested. on a computer, deployed, and updated on affected area can quickly increase their They must also understand how to design a continuous basis rather than launched inventories of batteries, bottled water, for experimentation during early iterations. once and revised only after long and other essential supplies. 34 implementation cycles. In the following chapter, we discuss Whether a company pursues just one or those and other implications in greater Combinations and multiple options for work organization, detail. As we shall see, oftentimes the that choice will have major implications for technological changes are not what implications the organization as a whole. Consider just companies struggle with most; it’s the the practice of experiment-driven design. organizational, managerial, and employee Thus far we have discussed the four Improvements in software development do changes that typically present the largest different work practices individually, not come just from speeding up traditional challenges. That’s why we say that being but we have found that companies will processes. Instead, the bigger wins come digital demands a deep shift. frequently deploy them in different from restructuring a linear process into an combinations in order to tap into the full iterative, experimental one. power of intelligent digital processes. But this necessitates key changes in Take the example of 7-Eleven. The company employee skills and managerial approaches. has deployed edge-centric decision- For one thing, the looping, iterative nature making to empower store managers, of experiment-driven design requires franchisees and employees, and those new thinking about project planning and frontline workers use their knowledge of estimating. Moreover, employees must the local market to make smarter decisions now adopt an experiment-driven mindset, about which products to stock. That has which is not always easy for those who are enabled 7-Eleven to take advantage of accustomed to conventional approaches. The bigger wins come from restructuring a linear process into an iterative, experimental one. 31 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Chapter 4: The DNA of a Digital Enterprise Becoming a digital enterprise requires deep shifts—changes that crosscut skills, roles and even culture. Based on our research, we contend that there are three key dimensions to the deep shift from looking digital to being digital: employing the right tools in the right way; developing and deploying the right talent; and evolving the right management mindset. Employing the right tools performance of a process. Intelligent digital so they could make choices about what in the right way processes deliver real benefit by eliminating to stock for what market niches and how redundancy, accelerating improvement long. At Audi it meant engaging a wider and matching enterprise capabilities with variety of professional communities, as well There’s no question that companies can customer needs. as customers, in an iterative design process. save money and increase efficiency by At Rio Tinto, it meant giving analysts a digitizing paper-intensive processes. But Two of the most powerful—and window through which to view real-time that’s not the same as using technology challenging—features of an intelligent operations and model alternative solutions to extract data that addresses a customer digital process are the ability to make to perennial problems. need (and thus adds value) or using it to data available to a broader spectrum of infuse information into physical objects to employees and to engage in experiments in make them smarter. And it’s not the same the design of both products and processes. as using data to dramatically improve the For example, retailer 7-Eleven handed over data and tools to store-level personnel 33 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work The power of data access comes from the their software industry counterparts as they and more of the work of data collection opportunity it provides for people to make try to identify and explore new products embedded in sensors and intelligent tools, timely and more intelligent and impactful using models, simulations and digital the demand in the years ahead will be for business decisions. The challenge, however, exchanges with customers and suppliers employees who are capable of working comes from making the inner workings of before committing to build anything. And, with data and who are motivated to use the enterprise more visible—to workers, once the decision to build is made, they data to improve products and practices. managers and ecosystem partners—and are using advanced procedures (like limited Based on observations drawn from a therefore to enable more people to ask releases and collaboration with advanced disparate set of cases, we believe that four more questions about why things work user communities) to pressure-test and core talents will prove critical: the way they do and what might be refine those designs, to explore their accomplished by making a change. implications for downstream processes like First, the ability to experiment. This might manufacturing and distribution, and to seem obvious, but the virtual flood of In a growing number of software and move much more quickly to market. data generated by digital tools can easily services companies, access to digital overwhelm any effort at experimentation. assets—in those cases, access to code—is However, making these changes requires a Think of what the first generations of considered an absolute must in order to more open approach to data distribution, enterprise resource systems did to decision- accomplish business objectives. Not so in a much higher level of comfort with making. The dictum of “garbage in/garbage many companies where access to data is ambiguity (such as a willingness to go out” comes to mind. The ability to arrive at still considered to be a source of privilege. with something that’s 80 percent right or testable propositions is crucial even in an The message is clear: if data is the raw directionally correct versus 100 percent era of smart machines. asset, it must be available to those who locked down) and a willingness to move in can turn it into information, knowledge the absence of complete agreement. Whether those propositions are arrived at and value. inductively (through careful observation of events and a search for patterns) or The power of experimentation is evident in Developing and deploying deductively (driven by hypotheses of cause the results that companies like Audi and GE the right talent and effect) matters less than the ability have gotten from high-speed refinement to ask questions of the data that lead and improvement of products and services. Fredrick Taylor, progenitor of scientific to productive answers. This assumes a But the challenge comes in mustering the management a century ago, famously heightened level of numeracy on the part courage to wiggle free from a dominant remarked that all an employer really wants of front-line employees and managers. paradigm of fixed and final designs as the in a worker is a pair of hands and a strong Case in point: store personnel at 7-Eleven only way to move from idea to outcome. back; unfortunately, he argued, the hands engage in experiments on a virtually That explains why companies in the also came with a head. Thinking and daily basis with their inventory choices. automotive and pharmaceutical industries interpreting human beings were anathema The availability of a massive data base, are starting to look more and more like to scientific management. Today, managers smart planning tools and internal business in the digital enterprise need to recognize advisors enables them to test their ideas, that the right heads are essential to being see what works and communicate the digital. Tools are not enough. With more results immediately. The message is clear: if data is the raw asset, it must be available to those who can turn it into information, knowledge and value. 34 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Second, the ability to learn. Experimentation Judgment is often a more difficult is random motion if it’s not fueled by curiosity and the ability to retain what’s feat than action because it demands been discovered. Learning is compulsory in the digital enterprise because the pressure a moment of reflection before hitting to improve performance—both of products and processes—is relentless and will only the go button. become more so. Interestingly, openness to learning is something that has traditionally been they relish the opportunity to do something Judgment is something that companies like regarded as an age-related phenomenon. different, they demonstrate a high level Rio Tinto and GE are rediscovering even That is, we tend to view young people as of ingenuity in solving problems. In other as they strive to bring digital technology more open to learning—indeed, more eager words, the ability to learn is not reserved to a wider expanse of industry. Rio Tinto to learn—than their senior counterparts. to those who’ve grown up digital. managers discovered that bringing remote This view has been reinforced in recent operators together gave an increased years by the attention drawn to differences The third required core talent: judgment. level of flexibility and agility to a highly in learning environments and learning A first-line supervisor we interviewed interdependent set of operations. It also styles among young people, including the made the point succinctly: “You have to gave those operators a systemic view generation that’s grown up with computers have the right information and then you of “pit to port” that made it possible to 35 and smartphones. Research that’s been have to do the right thing… even if it combine computers and people with deep done on these so-called Millennials doesn’t agree with the information.” Doing operational knowledge to make decisions suggests that they expect the latest in the right thing—whether the question is and evolve operating principles that saved digital technology at the workplace and moral, ethical, operational or financial— millions of dollars. are willing to use their own computers, requires the ability to balance evidence tablets and phones in place of the “archaic” and potential consequences, along with The final required core talent is technology they are issued by their a working knowledge of local values. collaboration. The dictionary defines employers.36 To the extent that companies Judgment should lead to action (even collaboration as “working together.” seek to become digital, they will need to if the decision is to not act) and action Strictly speaking, any work that relies on equip young people with the tools that is something we expect from employees the cooperation of two or more people they use to learn with. (especially managers). would qualify as collaboration. However, collaboration in the digital enterprise It is essential to recognize that older, But judgment is often a more difficult feat means something more profound because veteran employees often possess a level of than action because it demands a moment the opportunities that exist for creating curiosity and an openness to learn equal to (or more) of reflection before hitting the go new value through discovery and 37 their younger counterparts. Not only do button. In an environment of rapid change experimentation are so great. That’s why and ambiguity brought on by the drive to we suggest that it is essential to highlight explore more possibilities, judgment will be a truly distinctive feature of collaboration: the talent that keeps the digital enterprise the unstructured and voluntary component on course. Think of it like the brake that of working together. enables you to drive fast—and slow down when you’re about to lose control. 35 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Collaboration is vital to creativity and view of people and machines. Moreover, accommodate or even anticipate change. innovation but it cannot be taken for Rio Tinto (along with a rapidly expanding Finally, the role of search expands from one granted. Simply equipping people with cadre of companies) recognizes the that is linear and solution-oriented to one the latest social media or collaboration importance of developing and deploying that is lateral and opportunity-oriented. software will not induce them to use it to competence in the use of social media and generate new products or to find ways to collaboration software in both its younger delight customers. GE has recognized as and its older employees. Evolving the right much when it underscores the importance management mindset of cultivating “adventurous” employees The net effect on skills and competencies who relish the opportunity to invent and of being digital are summarized in Figure In an article written nearly 40 years ago, 38 experiment. Likewise, 7-Eleven and Audi— 4 below. This table captures changes in management scholar Rosabeth Kanter operating in very different environments— the nature of skills required and in the offered a solution to what she foresaw both encourage their employees to engage cadence and even the culture of the digital as an impending “power failure in 39 in dialogue with customers. Rio Tinto needs enterprise. Experimentation assumes that management circuits.” Her observation data scientists and machine operators to one can both follow and question rules applies with even greater relevance today: collaborate in making sense of shared data, using data and method. Working through in an era when companies need (and say undertaking experimental adjustments computers means that the historic divide they want) greater innovation and agility, in the use of extremely expensive capital between workers and machines yields managers need to be willing to relinquish equipment, and in evolving a systemic to collaboration with and through smart control—or release their death grip—on machines. The capacity to live with change work processes. Innovation demands is a shift occasioned both by the nature breathing room—not an abandonment of of the external environment and by the rules, hierarchy or the responsibility that need to adapt and change at work to comes with representing the interests of owners and shareholders—but instead a doubling-down on tools, methods and management practices that give people the Figure 4: What being digital means for skills and competencies room to experiment and take calculated risks without fear of severe reprisal should From To they fail. Follow rules Experiment The case studies bring to light two important issues that arise with being Work with computers Work through computers digital. First, it is entirely possible to increase systemic control while loosening Tolerate robots Team with robots local control. This is the core message from our examples of edge-centricity. If by Expect stability Expect change control we mean the ability to reliably and repeatedly accomplish desired outcomes, Search is a skill Search is a way of life then managers who equip their teams with the tools and the training necessary to Knowledge work Judgment work both do and innovate will extend system control—even if it means that managers whittle back their individual control. 36 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work At one level, there’s nothing especially Why focus on first- and second-level like Rio Tinto look at command and control. new in this insight. We’ve known for a management? Their jobs are likely to Recall that the head of innovation and long time that delegation is essential to change the most in the transition to being technology at Rio Tinto described the role managers’ ability to oversee larger numbers digital. They will need to be both literate of remote data centers as an advisory one of people and more complex processes. and numerate if they are going to support for mining operations, not a command role. However, there’s a dimension here that employees in making the most of available goes beyond simple delegation. That is, one data. They are going to be called upon We expect to see over the next five years of the lessons of the quality movement in to exercise judgment in reconciling what a similar development in digital enterprises. the 1980s and 1990s was the importance the intelligent tools recommend and what But the most significant break with the of measuring and charting the behavior history, culture and customers demand. past will be the exercise of restraint on of complex, end-to-end processes in order They are going to play the essential role of the part of core management. That is, the to bring them “under control”—recall the encouraging responsible experimentation, ability to scoop up data from the edges practice of drawing control charts as part dealing with inevitable failures or will tempt managers in the core to second- of statistical process control. breakdowns that experimentation produces, guess decisions made at the edges and, and translating strategic direction into worse, to usurp those decisions. So, just as The computer power to do that operational action. the Pentagon has marveled at technology automatically did not exist then but it that allows the US President and the Joint does today, and the highly instrumented Military organizations the world over Chiefs to see operations in real-time, it nature of many processes means that it have recognized the critical role of non- has also had to resist the impulse to is possible to “control chart,” model and commissioned officers for centuries. But make decisions at the edges. Figure 5 experiment with much larger segments of it was the emergence of guerilla tactics, below details other changes we anticipate a system than ever before. In fact, the asymmetrical warfare and terrorist attacks seeing in the role of management in the ability to model without intervening means that forced the US military into driving years ahead. we can experiment without shutting down; “power to the edge.” And, when they in some instances, it is possible to got there, they discovered even greater The point is, therefore, relatively simple: experiment even in the midst of routine importance in the role of unit leaders. first- and second-level supervision in operation without introducing undue risk. The military has moved from a centralized the digital enterprise will need to be system of command and control to one in carefully chosen, developed and rewarded. By increasing system control, management which strategic command set objectives Otherwise, the promise of being digital is is not rendered redundant; it’s given a and rules of engagement and leaves likely to wither on the vine. new mission: from a core objective of operational control to unit commanders. controlling processes to one of finding It has also reshaped the way companies ways to unlock value in processes or to create new value by applying well- understood processes in new ways. Figure 5: What happens to management? The second insight from the case studies is much more focused on the behavior of From To a stratum of management that only gets attention fitfully: first- and second-level Control process Unlock value management. These are the men and women responsible for being the universal Process information Make judgments gear that connects line employees and higher levels of management. Plan-check-do Experiment-then-scale React Initiate Deploy apps Listen to apps Manage Inspire 37 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work the challenge in both pictures and words, Self-diagnosis we also seek to highlight the interactions We have tried to capture the subtle as between strategy, structure, culture and well as the obvious elements that make technology. A careful self-assessment can up the deep shift to becoming a digital uncover important topics to address in enterprise in Figure 6 below. By framing the short- and the long-term. Figure 6: Digital enterprise maturity model A deep shift in culture and leadership, as well as technology Organization is structured for continuous innovation and experimentation Data is generated from every product, service and object Business dimension: New digital work options • Strategic context understood by many, Leading • Organization structure practiced by few and work processes • Culture and behavior Enterprise context (i.e. culture) Performing incompatible with emerging technological capabilities Systemic New sources of value Organizations anticipate process uncovered through new and readily adopt new digitization combinations of digital digital work options Lagging and physical capabilities Focus on achieving Systematic use of Automated planning of greater efficiencies digital data to guide process improvement from existing services process improvement based on digital data and strategic priorities Technology dimension: • Technical capabilities • Data content 38 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Lagging Performing Leading Strategic • Technologies meet some, • Technology meets most of the • Technology not only meets all Context but not all, of the needs of needs of strategic priorities of the needs of strategic priorities, strategic priorities • Key workforces have no conflicting but helps redefine them • Incompatible goals/activities objectives, but the objectives may • Key workforces have well-fitting among key workforces reduce be poorly defined objectives and activities potential gains • Value comes from new sources • Value not only comes from new • Value is gained from efficiencies which do not resemble the sources, but is optimized along created through faster, cheaper organization’s existing services, the entire chain ways of delivering existing services and can only be delivered through new combinations of digital and physical capabilities Technical • Digital technology replaces, almost • Digital services are used as • Digital services, as well as physical Capabilities one for one, analog technology or building blocks which can be products and analog are frequently human labor (e.g. online catalog rapidly recombined and connected modified to improve the quality of instead of printed catalog) through APIs to offer new services relevant data • The ability to introduce a new • Technology life-cycle is a function digital service is a function of of service delivery needs technology lifecycle investment • Digital services are offered in isolated hard-to-connect silos Data • Data is generated by a byproduct • Data is generated from every • The organization has a new core Content of traditional processes product, service and object competency: Vertical-specific data. The organization captures every level of data along the entire value chain (i.e. how its products are acquired, produced, delivered, consumed, repaired and recycled) Organization • Organization structure and • Organization structure and • Organization structure and Structure processes, and work design processes, and work design processes, and work design and Work options, are optimized for options, encourage experimentation options, are focused on continuous Processes efficient error-free production with the goal of uncovering and innovation and experimentation. • Work is performed by hyper- delivering new sources of value • Work is performed by allowing specialized groups of workers • Work is performed by workers teams of experts to form around in traditional organizational in and outside the organization, new ideas and experiments in layers and divisions but in traditional organizational non-rigid organizational layers • Decision-making is still top-down layers and divisions • Decision-making processes are • Decision-making is not always optimized at each stage of the top-down; decisions may be made workflow on the edge, in the middle, or at the center, as appropriate for the given workflow Culture and • Some change management in place • Workers at all levels of the • The organization establishes a new Behavior for introducing new technologies organization are supported digital culture—undertaking a deep • Industrial age management beliefs to manage and personalize shift in culture and leadership, as still dominate the organization new technologies in everyday well as technology work processes • New management principles • Traditional management roles introduced for leadership in the evolve as a result of deploying digital enterprise new technologies 39 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Conclusion In 1996, Nicholas Negroponte, then director of MIT’s Media Lab, wrote that being digital was almost genetic... and that each generation would become more 40 digital than the one that preceded it. Observing developments in a growing number of companies, it is hard not to see the prophetic nature of that remark. There is also something very contingent about it. That is, being digital is a profound shift that an organization is not likely to stumble into or blindly evolve toward. The benefits of being digital may be substantial—as indicated by the case examples laid out in this report. However, the deep shift from looking digital to being digital is predicated on intentional efforts to employ these tools in new ways, to develop and deploy the right talents, and to drive new management mindsets. Therein lies the challenge for leaders: to recognize that a deep shift is necessary and to start building the foundation for it right away. 40 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work About the authors Acknowledgments The authors would like to thank the following people for their Robert J. Thomas, managing director Sponsors insights and assistance: of the Accenture Institute for High Shawn Collinson John McGagh; Preston Chiaro; Mary Performance, is the author of Crucibles Paul Daugherty “Missy” Cummings; Wanda Orlikowski; of Leadership (Harvard Business Press, Matthew Reilly Mark Little; Bill Ruh; Arvind Agnihotri; 2008) and What Machines Can’t Do Yaarit Silverstone Erick Glazer; Evren Eryurek; Israel (Univ. of California Press, 1994). Alguindigue; Brandon Harvey; Bob Suh; [email protected] Supporting authors Bruno Gouraud; Steve Holland; Joe A special thanks to Masoud Loghmani Howard; David Schwartz; Ari Gesher; Alex Kass, a senior research manager, Charlene Tsang Andrew Stevens; Peter Cheese; Ana currently leads the Digital Workforce Richard Amico Dutra; April LaCroix; Kelly Dempski; Mark Innovation Initiative in Accenture Ryan Coffey McDonald; Sanjay Dawar; Robin Murdoch; Technology Labs. Siddhanth Munukutla John Lichtenstein; Rachel Bartels; Khayyam [email protected] Jahangir; Deepak Phatak; Ankit Mehta, Reviewers Florin Rotar; Meena Vembusubramanian; Ladan Davarzani is a research Jeanne Harris Myriam Curet; John DelSanto; John Hindle; fellow with the Accenture Institute David Light Tom Heatherington; Jeff Elton; Andreas for High Performance. Baier; Jim Golden; Susan Mann; Bruno [email protected] Berthon; Raghunath Krishnagiri; Michael Ebels; Jordi Roca; Philippe Guittat 41 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work Notes: and workplace dynamics.” From their 15. Situational awareness is commonly defined 1. McDonald, Mark and Andy Rowsell-Jones, perspective, industrial engineering needs as access to information (about factors The Digital Edge. Stamford, CT: Gartner, Inc, to reconnect with work design in a way like supply, price, competitor behavior, and 2012; Accenture Technology Vision 2013. that bridges big ideas like “collaboration” industry and peer best practices), analytical 2. Ramsey, Mike. “Design Revolution Sweeps or “simplification” with the distinctive tools (with which to make decisions), and features of industries and workplaces. authority (to actually make decisions. It the Auto Industry.” Wall Street Journal, See: Bailey, Diane E and Stephen R. Barley. is described by Alberts and Hayes (See: October 20, 2013. online.wsj.com/news/ “Return to work: Toward post-industrial Alberts, David S., and Richard E. Hayes. articles/SB100014241278873239687045786 engineering.” Center for Work, Technology Power to the Edge: Command, Control 49862128698352/; Anderson, Chris. Makers: and Organization, Management Science in the Information Age. Washington DC: The New Industrial Revolution. New York: and Engineering 37 (2005): 737–752. CCRP, 2003. 15) as one of the “enduring Crown Business, 2012. DOI: 10.1080/07408170590918308 principles” of command and control. In 3. McDonald, Mark. “Creating a difference 9. Eric Trist posed an alternative view in edge-centric organizations, command and between digital, digitize and digitalization.” his sociotechnical systems theory. He control does not disappear; however, the Gartner, Inc. October 12, 2012. http://blogs. suggested that a relationship exists distribution of authority and responsibility gartner.com/mark_mcdonald/2012/10/12/ between technology and social structure changes dramatically. creating-a-difference-between-digital- where social systems shaped technologies 16. Holland, Steven. Chief Technology digitize-and-digitalization/; Jackson, John, and their use. His work inspired many and Chief Digital Officer of 7-Eleven, Inc. Grange, Oliver and Kevin Millan. “From researchers to investigate the role of social Interview by Masoud Loghmani. Phone analog to digital: How to transform the dynamics and technology. See: Trist, Eric. interview. Conducted between San Jose, business model.” Accenture Outlook, 2012, “The evolution of socio-technical systems: Dallas, and Boston. August 30, 2013 and No. 2. http://www.accenture.com/us-en/ a conceptual framework and an action September 9, 2013. outlook/Pages/outlook-journal-2012-from- research program.” Ontario Quality of analog-to-digital-how-to-transform- Working Life Center, Occasional Paper, No. 17. Hayes, Frank. “7-Eleven’s Supply-Chain business-model.aspx 2, June 1981. Robert J. Thomas makes a Effort Will Have Benefits Way Beyond 4. Downes, Larry, and Paul Nunes. Big similar argument with detailed case studies 7-Eleven.” Fierce Retail. April 18, 2013. in What Machines Can’t Do: Politics and http://www.fierceretail.com/story/7- Bang Disruption: Strategy in the Age of elevens-supply-chain-effort-will-have- Devastating Innovation. New York: Technology in the Industrial Enterprise. See: benefits-way-beyond-7-eleven/2013-04-18; Penguin, 2014. Thomas, Robert J. What Machines Can’t Do: “7-Eleven Works With IRI to Create ‘Single 5. Evans, Peter C., and Marco Annunziata. Politics and Technology in the Industrial Version of the Truth’.” Convenience Store “Industrial Internet: Pushing the Boundaries Enterprise. Berkeley: University of California News. April 16, 2013. http://www.csnews. of Minds and Machines.” General Electric. Press, 1994. com/top-story-business_focus 7_eleven_ November 26, 2012. 10. Orlikowski, Wanda. “The sociomateriality of works_with_iri_to_create__single_version_ 6. Bilgram, Volker, and Constance Casper. “How organisational life: considering technology of_the_truth_-63463.html companies tap the potential of innovative in management research.” Cambridge 18. Evans, Peter C., and Marco Annunziata. users: examples from Germany part II.” Journal of Economics 34 (2010): 125-141. “Industrial Internet: Pushing the Boundaries Innovation Management. http://www. DOI: 10.1093/cje/bep058 of Minds and Machines.” General Electric. innovationmanagement.se/2013/01/14/how- 11. Gratton, Lynda. The Shift: The Future of November 26, 2013, P.21. companies-tap-the-potential-of-innovative- Work is Already Here. London: HarperCollins 19. Ibid. users-examples-from-germany-part-ii/ Business, 2013. 7. Innovation: The Missing Dimension. 12. McDonald, Mark and Andy Rowsell-Jones. 20. Ibid; Ruh, Bill. Global Software VP for GE The Digital Edge. Stamford, CT: Gartner, Analytics, Interview by Robert J. Thomas and Cambridge, MA: Harvard University Alex Kass. In-person interview. Conducted in Press, 2006. Inc, 2012. San Ramon, CA. May 28, 2013; Little, Mark. 8. Bailey and Barley argue that the field of 13. Knight, Will. “This Robot Could Transform GE Research and Development. In-person industrial engineering has lost its way Manufacturing.” MIT Technology Review. interview. Conducted in Schenectady, NY. in what we describe as the shift from September 18, 2012. http://www. May 31, 2013. adaptable to intelligent digital processes: “… technologyreview.com/news/429248/this- 21. Davies, Anna, Fidler, Devin, and Marina [D]esigners of modern work systems cannot robot-could-transform-manufacturing/ Gorbis. “Future Work Skills 2020.” Institute apply generic work solutions, but rather 14. Alberts, David S., and Richard E. Hayes. for the Future for University of Phoenix must work from an intimate knowledge of Power to the Edge: Command, Control in Research. 2011. http://www.iftf.org/uploads/ specific practices, processes, technologies the Information Age. Washington DC: media/SR-1382A_UPRI_future_work_skills_ CCRP, 2003. sm.pdf 42 | Accenture | Copyright 2014 Accenture. All rights reserved. ©

From Looking Digital to Being Digital: The Impact of Technology on the Future of Work 22. Jeff Wilke, SVP of Consumer Business, 28. Bartl, Michael. “Co-creation in the 32. For example, metal-stamping was email correspondence to Robert J. Thomas, automobile industry – The Audi Virtual Lab.” replaced by a plastic molding process; June 11, 2013. Michael Bartl. December 2009. http://www. and the work of door construction, painting 23. Venkataramanan, Madhumita. “Disruptive michaelbartl.com/co-creation/wp-content/ and fitting changed dramatically in the by Design: Freakin’ Cool Robots.” Wired. uploads/Co-Creation-Audi_pdf.pdf assembly plants. May 3, 2011. http://www.wired.com/ 29. Bilgram, Volker, and Constance Casper. “How 33. Thomke, Stefan. “Enlightened business/2011/05/disruptive-by-design- companies tap the potential of innovative Experimentation: The New Imperative for freakin-cool-robots/. In the case of Gilt users: examples from Germany part II.” Innovation.” Harvard Business Review. Groupe, a fast-growing online retailer Innovation Management. http://www. February 2001. http://hbr.org/2001/02/ selling high-end fashion apparel and innovationmanagement.se/2013/01/14/how- enlightened-experimentation-the- home goods that employs Kiva robots, companies-tap-the-potential-of-innovative- new-imperative-for-innovation/ar/1; performance improvement teams composed users-examples-from-germany-part-ii/ “Supercomputer makes a big impact at of engineers and packers suggested 30. Stertz, Bradley. “Audi receives 2012 Audi.” Audi. June 19, 2008. http://www. partitioning warehouses into high-speed, telematics update award for innovative audiusanews.com/newsrelease.do;jsessionid robot-only zones and zones of slower- infotainment platform.” Audi. June 8, 2012. =34560091E54266E58EB61C616BC91715? moving and/or odd shaped products that http://www.audiusanews.com/newsrelease. &id=908&allImage=1&teaser=supercomput would be handled by human beings. do;jsessionid=AEF3463343E75EE18B016B er-makes-big-impact-audi&mid=1 24. Friedman, Thomas L. “When Complexity A21533F7D3?&id=2944&allImage=1&teas 34. Elton, Jeff. “Making Personalized Medicine is Free.” New York Times. September 15, er=audi-receives-2012-telematics-update- Value Medicine.” Eye for Pharma. November 2013. http://www.nytimes.com/2013/09/15/ award-innovative-infotainment&mid=- 22, 2012. http://social.eyeforpharma.com/ opinion/sunday/friedman-when-complexity- 115; Stertz, Brad. “2013 Audi S7 Wins column/making-personalized-medicine- is-free.html ‘Connected Car of the Year’ award by value-medicine 25. Like a waterfall, the process moves in one Connected World Magazine.” Market Wired. 35. Gratton, Lynda. The Shift: The Future of direction, from one phase to the next: January 15, 2013. http://www.marketwire. Work is Already Here. London: HarperCollins In the case of software development, com/press-release/2013-audi-s7-wins- Business, 2013. from analysis, to high-level design, to connected-car-of-the-year-award-by- successively more detailed levels of design, connected-world-magazine-1746060. 36. Harris, Jeanne G., Ives, Blake and Iris and then to build, test, and delivery. htm; Venkataramanan, Madhumita. “Audi’s Junglas. “The Genie Is Out of the Bottle: They key concept is ‘phase containment’ chair is built on sensory data from 1,500 Managing the Infiltration of Consumer meaning that once a phase is completed, fidgeting volunteers.” Wired. July 12, IT Into the Workforce.” Accenture. the results are (ideally) set in stone. So 2012. http://www.wired.co.uk/magazine/ October 2011. http://www.accenture.com/ great care is taken to make the needs as archive/2012/08/start/posture-mapping SiteCollectionDocuments/PDF/Accenture- perfect as possible before moving onto high 31. This distinction is intended to help avoid a Managing-the-infiltration-of-Consumer-IT- level design, then to lock that down as confusion that often occurs when the topic into-the-workforce.pdf thoroughly as possible before looking into is the organization of product design. Quite 37. Thomas, Robert J. What Machines Can’t Do: designing component details, and so forth. often, when people talk about product Politics and Technology in the Industrial Each phase is done painstakingly, to avoid design, they refer to the actual shape, Enterprise. Berkeley: University of California expensive problems requiring revisiting functions and attributes of the object being Press, 1994. earlier phases after later phases have begun. designed—not the process by which that 38. Evans, Peter C., and Marco Annunziata. 26. “Audi Virtual Lab: Infotainment.” Audi. product was designed. We are concerned “Industrial Internet: Pushing the Boundaries http://www.hyvespecial.de/audiusa/popup. much more with the latter than with the of Minds and Machines.” General Electric. php?referer=none&login=none. former. Of course, it can be a challenge November 26, 2012. to separate the two. Thus, it will help to 39. Kanter, Rosabeth Moss. “Power Failure in 27. Füller, Johann et al. “Community based remember that we are talking about a new innovation: How to Integrate Members work practice that applies to the process Management Circuits.” Harvard Business of Virtual Communities into New Product of designing things. It allows the design Review. 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