The world was already at a tipping point where the convergence of a bunch of different technologies was having a fundamental impact on the way that business is done, according to IBM Services Australia/New Zealand managing partner and Asia Pacific vice-president Doug Robinson.
But the COVID-19 pandemic has acted as a further accelerant. The convergence of general technologies like artificial intelligence, blockchain, automation, internet of things, 5G and edge computing were already changing business models and reshaping industries. That process is now going faster and deeper.
Those accelerated changes are not a short-term response to the pandemic, but rather a reshaping of industries, Mr Robinson said. IBM has been calling it the ‘Cognitive Enterprise’ for some time as the kind of organising principle that describes the aggregation of internal data, the automation of decision-making and business processes together with the addition of a deep well of external data.
“The Cognitive Enterprise is really about how do you use additional external data with these emerging technologies and tools that can crunch through that data in a way that makes a real competitive difference,” Mr Robinson said.
The response to the pandemic had really taken place in three stages. The first was triage, the shocking moment when CEO and business owners were all-hands-on-deck just trying to work out how they could keep the business operational.
The second stage, which is where we are now according to Mr Robinson, is working out how do we optimise our business with what we have.
“Right now, we are exiting that phase and businesses are looking at what it’s going to look like in the future for their sector. The next 18 months to two years will be in companies navigating to the new,” he said.
And that is where the acceleration has come from. Companies are saying that they don’t expect that their industry will look the same in a couple of years. It will be structurally different. It is not a small thing that some of largest companies are saying their digital plans have been brought forward by a decade.
For IBM Services, Mr Robinson said the changes have led to opportunity and the company has hired additional staff since the beginning of the year.
That local growth is on the back of companies in Australia and New Zealand – IBM clients – moving quickly. The reshaping of the market has policy implications for government and will almost certainly place huge demand on skills.
But it is an opportunity for Australia to be an early mover in the recovery, and to take a global view of reconfigured industries.
“The skills requirement around new technologies to drive the cognitive enterprise and the transformation is going to be in high demand,” Mr Robinson said.
“The demand will be for the data scientists, people that have an AI background, IoT – these are the kinds of cornerstone skills for getting into this kind of cognitive enterprise play,” he said.
“So, from a policy perspective, it is probable that the forced reinvention and disruption from COVID is going to put a huge draw on available skills.”
The tools in the data sciences and AI and IoT and 5G that will enable the Cognitive Enterprise will cause fundamental realignments across industries.
Mr Robinson said the labour supply chain issues that led to business process outsourcing moving offshore will be influenced by the process automation of the Cognitive Enterprise – such that the work may come back onshore, even if it is executed in an entirely different, automated way.
This includes in the area in which IBM operates. “In what we do – we sell professional services and expertise – that is a supply chain that has shifted, and there has been a lot of talk about services that had moved overseas for labour arbitrage may return to shore.
“We will see more of that because the efficiency that can now be gained offsets the labour arbitrage that occurred in the first place. The technology has allowed that.”
The reality, Mr Robinson says, is that the confluence of general technologies that enable the automation of internal processes with the addition of pools of disparate external data will change industries.
“With a total reset globally, there is an opportunity for Australia and New Zealand to jump back into growth mode if it leans into a couple of areas to prepare for it. Everything is up for grabs.”
The skills to drive the new Cognitive Enterprise are centred in the data sciences, Mr Robinson said, but they are not exclusively technology skills.
“How you experience the data is really important. When we think about the Cognitive Enterprise, the humanity of it is probably the most important part. Taking really complex data and making it simple and digestible, that UX design, remains one very important skill.”
IBM is a member of the InnovationAus Leadership Council.