Optimizing User Experience AND Customer Satisfaction with AI?

Let me tell you a true story. A couple of weeks ago I received an email reminding me to renew my motor (auto) insurance. I wasn’t best pleased as the premium had increased considerably. So I called the insurance company. Speaking to the agent he offered me 5% discount, as if it was a personal favour he was doing for me. I said, “that’s exactly what happened last year. Why don’t you just build that discount into the rate for long term customers?” And I continued, “But more importantly, even with the 5% off the top, the premium has now increased by over 20% in two years!” The agent said basically, “take it or leave it.” I asked for the case to be escalated on the basis of being a long standing customer, but he became just a little stressed. So I wrote an email to the firm, stating my case; and after two days I received a standard reply saying, sorry nothing doing. You might be thinking, why didn’t you look around – and I did, but I have several policies with this firm and I want to keep the multi-policy discounts.

At this stage the renewal is coming within 7 days, and the very next day I receive an email making me some amazing offers if I renewed; would you believe a €200 holiday voucher, or a three month cinema pass, or fully funded family fun day, or a round of gold on a leading course. Now none of these would really cost the insurance company €200, but they would still involve serious cost, even if the uptake rate post renewal was low.

So I called the company again and spoke to another agent, “why not just cut the cost of my premium by say half of what the special offer would cost?” Predictably the answer was in the negative. Oh just not possible. Nor was it possible to talk to someone who might just be interested in what a customer had to say!

I make no apologies for the shaggy dog story because it highlights an essential truth about how large businesses operate. They fail to coordinate marketing and operations in both cost and policy. So when business analysts talk about cross channel user experience are they simply figuring out the mechanics? Do they ignore the policy separation and customer behavioral impact? Clearly that’s what happens in this big insurance company, and I would bet they are typical. They take a view that they will lose a certain percentage of their base on renewal each year and work on new business strategies to compensate. As opposed to looking at the overall problem from the customer behavioral perspective!

What’s this got to do with AI? Well you might say that your AI based system is only as good as your policy set and your ability to drive policies and strategy from an understanding of customer behavior. We have all complained down the years about the literally terrible call center agent experience; but very often this is not down to skills, it’s down to policy implementation, not allowing the agent to operate as a human by taking responsibility for some discretion. So in an AI context the question is with what sort of intelligence will you aim to replace your agents? And how much do you really understand about your customer behaviors so you can implement customer responsive policies?

To conclude, user experience (UX) must be more than just the mechanics of allowing the customer to renew a policy, place  an order, manage a process etc. It’s got to respond to real customer needs in a manner that improves the business performance and customer satisfaction. And this won’t happen without major change in the way you track customer needs and develop policy. And surprise, surprise, this will lead to AI getting a bad name, not just for destroying jobs but also being totally unresponsive as more and more barriers are put in place between the organization and it’s customers.

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Remembering Lawrence Wilkes – SOA Pioneer

I am deeply saddened to report that my long-time business partner and friend Lawrence Wilkes has passed away after a short illness.

I first met Lawrence 30 years ago when I joined James Martin Associates (JMA) in Wimbledon. Lawrence was in pre-sales and we collaborated intermittently on tool demos and sales to my consulting customers. In the early 90s (then part of Texas Instruments) I moved into marketing as product manager and as Lawrence was marketing manager he and I forged a close partnership that would last for nearly 25 years.

When I set up the company in 1997 that was eventually to become the CBDI Forum Lawrence joined me without hesitation, and together we became well known as highly influential technology evangelists and methodologists in Service Oriented Architecture (SOA). At that time we went where other analysts and consultants couldn’t go – providing practice level guidance on the use of the rapidly emerging service technologies. Initially we guided big tech vendors like Intel, IBM, Microsoft, Sun etc and rapidly evolved to support major corporations including banks, insurance companies, oil majors, retailers etc. It’s no exaggeration to say we were flying right at the leading edge of best practice and we made up a lot of the guidance as we went. And here Lawrence’s skills as a problem solver and communicator were extraordinary, creating structure around our ideas that provided a coherent and practical framework.

Soon we were joined by others particularly John Dodd and Richard Veryard and we forged a high performing team that ran forum meetings all around the world, providing consultancy and developing education products and documenting our thinking in the monthly CBDI journal. We didn’t call it an Agile process in those days, but that’s what it was, moving incredibly rapidly, constantly delivering useful products to market and evolving the products in a continuous stream of guidance for our architect practitioner customers.
We really believed in what we were doing. Some would say we continued the JMA ethic, breaking new ground and finding that customers came with us because they adopted our belief system along with the methodology. A vital part of this was communications and Lawrence drove the delivery of the knowledge base, without which we would have been just another disorganized consulting shop. And he combined that role with problem solving, developing better methods and education delivery platforms.
After we teamed up with Everware our products evolved rapidly as we actually delivered services.

At this point and for the last few years Lawrence was highly instrumental in the architecture and development of what I believe should be viewed as our most valuable contribution to service oriented computer science – the specification portal. This capability enables the comprehensive specification of services independent of technology, and through pattern based code generation implements a platform approach to service delivery and evolution that massively improves quality and productivity. But even more important automates governance over the code that ensures ongoing architecture integrity. Now it’s true to say that the product that Lawrence and the team worked on is more than a little industrial; it’s nowhere near a mass market user experience. But customers that have used it have enthusiastically embraced it because they understand the business value it delivers – a business level specification that governs architecture and code.
This is what we should remember Lawrence for – he articulated the vision of service architecture realized through business specifications independent of design and technology, and worked on realizing the vision – delivering on the goals of “diagrams to code” in a practical manner. Lawrence was writing and speaking about that opportunity very early on and he had the persistence to see it through. While the current spec portal product is not widely used, I fully expect these ideas will not be lost; they will in time become pervasive best practice for delivery of enterprise level services.
I remember back in the early days, the marketing communications people we worked with would often get exasperated with Lawrence; they would say to me, “We’ve got deadlines to meet, can you hurry him up?” What they didn’t realize was that Lawrence was using his lateral thinking capabilities to come up with great ideas, new concepts and ways of thinking; and that takes time. And I would say, “don’t worry, he will deliver.” He always did. Over the years he demonstrated time and time again the ability to translate and communicate difficult problems into solutions; to help others deliver better solutions. He will be remembered and missed.

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H-1B Fracas Could be the Trigger for Distributed Teaming

It’s widely reported that Donald Trump is about to go after skilled guest worker programs, particularly the H-1B, with an executive order aimed at ensuring American workers take precedence and that guest workers are genuinely highly skilled. However, like all of Trump’s executive orders issued in the past few days, this one will also cause chaos because there’s many different use cases and the devil’s in the details.

Anyone who has worked in larger US corporations’ offices like I have over the past few years will have observed the huge shift to employment of Indian IT staff on contract via organizations such as Wipro, Infosys or TCS.  In some cases it’s obvious that local staff have been made redundant to make way for cheaper, very average resources. However my experience is this is the exception. Many of the Indians are really very highly skilled and frequently are as or more effective and skilled than indigenous staff. And it’s the latter point – better skilled. It’s very common that permanent staff are employed on legacy systems and technologies and contractors are employed on new development. This reflects reality that core systems usually run on mainframes and many of the permanent staff are expert in these; but more importantly they are often older and well versed in older languages such as COBOL or PL1, and technologies such as CICS. Or older proprietary package languages such as ABAP. In contrast the contractors are younger and highly skilled in Java and C++ and all the open source frameworks. Obviously this isn’t universally true, but it is a significant trend.

Whilst cost may be a factor, there’s also a real issue with transferring skills from older mainframe environments to the modern frameworks. It’s not just about language, it’s a real paradigm shift from procedural to object oriented design and many people find that very hard indeed. It’s also about process, moving from waterfall projects to Agile development environments that are small, empowered, multi-skilled teams. And again making that shift can also be hard.

So issuing an edict that makes it harder to deploy contractors on H-1B visas is a very simplistic solution. The root problem is skills availability, skills development and resource flexibility both in the educational system and within the corporate environment. And this isn’t a problem for which there’s an instant fix. It will take years.

If the Trump administration goes ahead with visa restrictions in some form, it seems more likely that the tech industry will innovate, as they always do, by finding solutions that address the core blockers. I would predict a return of offshoring models but with a 21st century twist based on use of better telecommunications including telepresence, desktop sharing, remote pair programming tools, and massively improved life cycle automation that dramatically simplifies Agile project management and dependency. And maybe it should be referred to as “distributed Agile teaming” which allows skills to be more easily deployed wherever they are, in domestic USA, India, China or Australia.

This isn’t such a large step; we already have all the technology and process building blocks in place. Corporate employers have maybe been lazy, insisting on all staff being “onsite”. However I and many others like me have been working cross time zone and continent effectively for years, and necessity will be the mother of invention in this situation. In fact my experience is that remote working demands better discipline and governance and therefore brings real benefits as well as potential for reduced costs and round the clock working for faster delivery.

Whether Trump and co bring in their restrictions or not, I would encourage the tech  industry and its customers to be actively embracing distributed working for resource flexibility. Why wait to be told?

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Artificial Intelligence – Fake News or Alternative Facts?

One of the most worrying developments in 2016 was the rise of fake news. And from the outset of 2017 it appears distortion of reality will become the norm. Perhaps we shouldn’t be so surprised; the marketing industry has always been about changing perceptions, and the technology industry in particular is notorious for generating hype. There are countless examples of hyperbole about new technologies that in the end fail to realize the optimistic predictions. The latest new kid on the block is AI, the development of computer systems able to perform tasks normally requiring human intelligence, such as visual perception, speech recognition, decision-making and language translation which of course also encompasses the whole field of robotics. The rise of robotics and AI has provided copy writers with great material. A Japanese life insurance firm recently announced it is laying off 34 office workers by the end of March as a result of the implementation of an AI based claims adjudication system based on IBM’s Watson Explorer. The system is described as reading tens of thousands of medical certificates, factors in length of hospital stay, medical history and procedures before calculating payouts. This experience clearly supports the 2016 Nomura Research Institute report which forecast that nearly half of all jobs in Japan could be performed by robots by 2035.

Sean Welsh, researcher in robot ethics at the University of Canterbury, New Zealand goes even further making the prediction that robots will replace many humans: perhaps most humans in the workplace. Oxford Business School writers Carl Frey and Michael Osborne predict massive technological unemployment over the next 20 to 30 years. Something like half to three-quarters of existing human jobs are “vulnerable to automation” they say. Martin Ford, author of a popular best-selling book, The Rise of the Robots, predicts an explosion in robotics; his rationale is based on the emergence of the open source robot operating system (ROS) conceived by the Stanford University’s Artificial Intelligence Laboratory, will make the technology ubiquitous.
Last year Professor Stephen Hawkin, one of Britain’s outstanding scientists told the BBC that, “The development of full artificial intelligence could spell the end of the human race.” This view has been supported by Microsoft founder Bill Gates and SpaceX and Tesla founder Elon Musk.
And these examples are a very small selection of the vast amount of media coverage of this technology. With a basic message that is unmistakably threatening peoples jobs and livelihood, many people are not surprisingly very concerned and this reinforces the widespread public opinion in the USA and United Kingdom that in 2016 pushed back against the inevitability of globalization.

So what’s the reality. Will artificial intelligence really eliminate millions of human jobs? Let’s look in just a little more depth at the case study of the Japanese life insurance company and its use of IBM’s AI technology. Over the past few years many insurance companies have been modernizing their claims adjudication systems. For many the trigger for change has been that the existing claims systems are based on mainframe technology, often decades old, and that once elegant software systems have become impossibly complicated by constant change of regulations, change of health and insurance industry standards, new product and plan introductions and the continual mergers and acquisitions that involve systems rationalization. The result is the firms’ ability to respond in a timely manner at reasonable cost to continuing change is dramatically reduced. And just to make the situation even worse, the technology used to build the systems is decades out of date, and the original support staff are now retiring, and younger personnel are not interested in using the older technologies.

The way AI system works is that it searches for similar patterns that have occurred in the past and compares current cases, and where they are common can recommend decisions with minimal or no human intervention. But the AI system requires a vocabulary that describes the claims business policies – and in most firms this is locked into the existing software system, all muddled up with design and computer language specifics. In larger insurance firms it typically requires teams of business analysts working for multiple years to reconstruct the complexity of the firm’s claims policy in a well-structured manner that can be used to guide claims adjudication.

For most insurance firms therefore this requires a significant modernization project. The systems often need to be redeveloped to use the rationalized policy base and AI based decisions. From this description it will be seen that there’s a massive amount of work going on to make all this happen. Existing systems development personnel are typically not skilled in the new development or AI technologies, but they are expert in the existing claims business policy and are commonly employed in developing and managing the business rules base. Similarly claims adjudicators are commonly subject matter experts and play a critical role in these tasks as well as quality assurance, systems testing and governance. The reality is that when the business rules knowledgebase and AI system are operational and mature the number of human adjudicators actually making decisions on claims will reduce. But there are many new roles in the redevelopment and subsequent operational phases that mitigate the overall reduction in headcount.

So returning to the Japanese case study we might speculate why the press release focused on job losses. First industry experience is that modernization efforts like this are undertaken to reduce and govern claim pay-outs. Labour costs of the operational system are less important. Also, while the press release concentrated on the AI element of the adjudication system, it is quite likely that the company would have been involved in a major effort such as described here, at least to rationalize the business rules involving many people over multiple years to re-establish the existing claims system, and retraining of staff to establish the business knowledge bases and preserve the deep skills and expertise. The case study reported increased productivity of 30%, ROI in two years, cost savings of £1m per year all set against a system cost of £1.4m. These costs seem trivial compared to the real cost of development that most firms in this situation would need to spend.

I note IBM CEO Ginni Rometty spoke last week at Davos, and delivered a clear message to business and political leaders that artificial intelligence will not lead to mass redundancies any time soon. Similarly, in an interview last week Microsoft Chief Executive Officer Satya Nadella said, “Microsoft Corp. and its competitors should eschew artificial intelligence systems that replace people instead of maximizing their time.”

New technologies always cause change in skills and roles. This is entirely natural. However, experience shows that as roles evolve and disappear, new roles emerge. In the early stages of any new technology it’s often difficult to envisage what those new roles will be. However, as discussed experience to date shows that the new technologies always require massive efforts to realize. And skills development and lifelong learning is going to be even more important than it is today. Clearly leaders in some tech companies have got the message that it’s not a good idea to promote their technology as job elimination. Let’s hope the media will reflect that message.

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Digital Transformation Hub – Realizing the Shared Economy

Last week I mentioned to one of my US based colleagues that I would be out of office for three days at the Irish National Digital Week (NDW16), taking the opportunity because the event was being held in Skibbereen, just a few kilometres down the road from my home office. He asked, “Surely an event of that type would be held in Dublin?”  And I replied, “Well there’s a story here that needs to be told; one that will have profound implications for business in Ireland and probably internationally”.

Skibbereen is a small market town in the South West of Ireland. The population is approximately 2000, although there’s perhaps several times that number in the immediate hinterland. It’s not an easily accessible area, you get there by going to Ireland’s second city Cork, and then taking pretty dreadful roads for some 100 kilometres. However the general area is reasonably well known as West Cork, a remote but ruggedly beautiful part of Ireland beside the Atlantic, with peninsulas reaching out into the ocean attracting sailors, divers, kayakers, cyclists, walkers and artists from Ireland, the United Kingdom, America and Germany many who visit, some who make their home here. A cosmopolitan populace that blends indigenous folk and blow-ins in a close knit community. Think of Northern California but 5 degrees cooler.

Over the years numerous leaders in business, technology and the arts have moved to the area or established holiday homes. In 2015 some of these individuals together with local business people established an initiative using private investment to create a digital hub. Notables in the group operating on a pro bono basis include David Puttnam, well known film producer and Ireland’s Digital Champion, Anne O’Leary, CEO Vodafone Ireland, Ronan Harris, VP Sales & Ops Google Ireland and John Field, Director of local retailers. John Field made a suitable building available, once a cinema and latterly a bakery, as the physical presence. Vodafone, in the (ESB/Vodafone) SIRO partnership provided a 1 Gb network, for the hub building and the entire town.  In late 2015 the Hub building, named Ludgate after a 19th Century Irish designer of an analytical engine, opened coincident with the co-located 2015 National Digital Week event.

Last week, the NDW 16 event was once again held in Skibbereen, attended by some 1600 delegates from all over Ireland with 70 speakers and 2 arenas. Speakers included big names such as Google, Paypal, Uber, AirBnB. But what is really interesting about this event is that in spite of the “digital” theme, most of the sessions were about applications, people, collaborations and experiences.


West Cork, like most of Ireland has extensive farming interest. A session that resonated with me was the speaker that showed an image of an obviously recent, top of the range model combine harvester, who quickly went on to show an even newer harvester image, asking the question, “why would I replace a great piece of machinery so quickly, particularly in an uncertain economic climate?” And he proceeded to show the direct cost benefit of the newer model that with GPS guidance and yield data analysis enables huge improvement in cropping precision, efficiency and yield. I never did get to ask when the driverless combine would be available, but we can probably assume it’s not far away. The speaker also commented that this level of technology is fully in production, available to and easily usable by farmers today, and doesn’t just collect big data, but integrates with farm management to instruct fertiliser, treatment and cutting programs. The net effect is to de-skill the farm management task and improve the consistency and quality of outcomes.


Although very impressive, in many ways this farming case study is actually quite ordinary. It’s an application of digital technology that extends existing practices for improved cost benefit. What really caught my attention was the series of presentations on the “sharing economy”. Naturally there were presentations from the big names like Uber and AirBnB, both expressing concerns about government action or inaction preventing growth. For AirBnB certain cities came in for criticism. Uber asserts the Irish government is effectively protecting the incumbent taxi drivers and preventing rollout. Given both firms are very persuasive on the opportunities to create bigger marketplaces and, in the case of Uber, positively impact emissions, I wondered whether both firms would be better served if they worked with unions and governments to demonstrate how the business model and technologies could be used to extend, improve and integrate the old and new.  Maybe using smaller environments such as Skibbereen or Cork to act as exemplars, rather than taking the more confrontational approach casting the incumbents as Luddites.

A really instructive session introduced a seriously mundane application from Kollect, a local rubbish collection operator that has established a digital business offering “on-demand, pay as you go” rubbish collection. The householder uses a smartphone app to communicate his or her instructions for pickup when the bin is full. Kollect then coordinate the request to third party waste disposal companies who make the pickup. You might say a variant on the Uber model for rubbish collection that claims to reduce collection costs by up to 40%. A big deal in Ireland where bin charges are often highly contentious. This demonstrates like nothing else the pervasiveness of digital opportunities.

A similarly instructive session came from a very impressive Dublin not for profit organization, Food Cloud. They started in an incredibly small, local way to try to address the huge amount of food wasted in the retail supply chain by redistributing to worthy causes. Initially they enabled small businesses to communicate leftovers and collection times at the end of the day by smartphone app and then establish demand from charities. This simple idea has been picked up by food giants like Tesco who have integrated the concept into their own instore systems to make donation part of their core process, and now has grown into a significant operation redistributing food from over 1000 stores to over 3000 charities in the UK and Ireland. Here we see digitization enabling collaborative processes operating for the public good, while reducing costs for the retailer.


Anne O’Leary, CEO Vodafone Ireland spoke about how Ludgate is a focal point for digitization in West Cork and how firms have embraced the concept. Larger Dublin based tech firms are now facilitating employees to work remotely out of the hub; smaller, local firms are setting up in the hub to have access to the hi-speed network facilities. Overall the hub is seen as a great success and delivering on the promise of supporting up to 75 people in the creative co-working environment with the long term objective to create 500 direct jobs and 1000 indirect jobs via a sustainable digital economy for Skibbereen and the wider West Cork area. She went on to say that the SIRO partnership views Skibbereen as a prototype, and is now planning a further rollout to establish 50 hub towns across Ireland.

The following day I was sitting in my kitchen with a neighbour – a lecturer in horticulture. He told me he has a project in progress to plant two thousand and twenty apple trees in and around Skibbereen by the year 2020. The idea being to introduce a greener environment with pervasive blossom in the Springtime, adding to the charm of the town. He is harnessing the enthusiasm of his students to identify the sites, make agreement with owners, to clear the ground, plant, nurture and critically to collect data. He plans to collaborate with digital folk in and around the hub to develop an app and website that will monitor and manage the project, and to establish a research base for different varieties of tree, tracking and publishing crop data that will be of great interest to apple growers everywhere. An outstanding example of how the hub is encouraging students in non-technical disciplines to engage with digital transformation, increasing their understanding of horticulture science by using big data techniques for improved plant management, while improving the environment for everyone.

Notwithstanding the “digital” branding, the NDW16 event was actually little to do with technology; it was all about application of technology and the ability of the new technology platforms to support collaboration of multiple parties. The digital hub clearly acts as an accelerator. The network and technology enabled working spaces facilitate new businesses, new business models and improved remote working conditions for larger companies. But the real digital transformation occurs as non-technical individuals and teams apply their current skills and expertise to leverage the technology and develop new improved business models. And the opportunities for new and existing businesses, not for profits, informal groups and individuals, in fact everyone are unlimited. Simply put, the maturity of the technology platforms is such that we should expect the digitization of pretty much everything we do or engage with, will happen very rapidly over the next few years. Of course change isn’t always comfortable for everyone, and the AirBnB and Uber examples remind us that new business models must address sociological impacts. But as the de facto foreign direct investment model in Ireland comes under pressure from political earthquakes in the UK and USA, the idea that Ireland could rapidly grow significant indigenous capability doesn’t seem impossible. Finally, it must be noted that this initiative has been achieved without government support, by voluntary effort, private investment.

NB: This post originally published on Blogger 15/11/2016

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