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Ethical Tech: Myth or Reality?

New technologies continue to shape society, albeit at an accelerating rate. Decades ago, societal change lagged behind tech innovation by many years, a decade or more. Now, change is occurring much faster as evidenced by the impact of disrupters including Uber and Airbnb.

Central to much of the change is the data being collected, stored and analyzed for various reasons, not all of which are transparent. As the pace of technology innovation and tech-driven societal change accelerate, businesses are wise to think harder about the longer-term impacts of what they’re doing, both good and bad.

Why contemplate ethics?

Technology in all its forms is just a tool that can be used for good or evil. While businesses do not tend to think in those terms, there is some acknowledgement of what is “right” and “wrong.” Doing the right thing tends to be reflected in corporate responsibility programs designed to benefit people, animals, and the environment. Doing the wrong thing often involves irresponsible or inadvertent actions that are harmful to people, whether it’s invading their privacy or exposing their personal data.

While corporate responsibility programs in their current form are “good” on some level, ethics on a societal scale tends to be missing.

In the tech industry, for example, innovators are constantly doing things because they’re possible without considering whether they’re ethical. A blatant recent example is the human-sheep hybrid. Closer to home in high tech are fears about AI gone awry.

Why ethics is a difficult concept

The definition of ethics is simple. According to Merriam Webster, it is “the discipline dealing with what is good and bad and with moral duty and obligation.”

In practical application, particularly in relation to technology, “good” and “bad” coexist. Airbnb is just one example. On one hand, homeowners are able to take advantage of another income stream. However, hotels and motels now face new competition and the residents living next to or near Airbnb properties often face negative quality-of-life impacts.

According to Gartner research, organizations at the beginning stages of a digital strategy rank ethics a Number 7 priority. Organizations establishing a digital strategy rank it Number 5 and organizations that are executing a digital strategy rank it Number 3.

“The [CIOs] who tend to be more enlightened are the ones in regulated environments, such as financial services and public sector, where trust is important,” said Frank Buytendijk, a Gartner research vice president and Gartner fellow.

Today’s organizations tend to approach ethics from a risk avoidance perspective; specifically, for regulatory compliance purposes and to avoid the consequences of operating an unethical business. On the positive side, some view ethics as a competitive differentiator or better yet, the right thing to do.

Unfortunately, it’s regulatory compliance pressure and risk because of all the scandals you see with AI, big data [and] social media, but hey, I’ll take it,” said Buytendijk. “With big data there was a discussion about privacy but too little, too late. We’re hopeful with robotics and the emergence of AI, as there is active discussion about the ethical use of those technologies, not onlyt by academics, but by the engineers themselves.”

IEEE ethics group emerges

In 2016, the IEEE launched the IEEE Global Initiative on Ethics of Autonomous and Intelligent Systems. Its goal is to ensure that those involved in the design and development of autonomous and intelligent systems are educated, trained, and empowered to prioritize ethical considerations so that technologies are advanced for the benefit of humanity.

From a business perspective, the idea is to align corporate values with the values of customers.

“Ethics is the new green,” said Raja Chatila, Executive Committee Member of the IEEE Global Initiative on Ethics of Autonomous and Intelligent Systems. “People value their health so they value products that do not endanger their health. People want to buy technology that respects the values they cherish.”

However, the overarching goal is to serve society in a positive way, not just individuals. Examples of that tend to include education, health, employment and safety.

“As an industry, we could do a better job of being responsible for the technology we’re developing,” said Chatila.

At the present time, 13 different committees involved in the initiative are contemplating ethics from different technological perspectives, including personal data and individual access control, ethical research and design, autonomous weapons, classical ethics in AI, and mixed reality. In December 2017, the group released “Ethically Aligned Design volume 2,” a 266-page document available for public comment. It includes the participation of all 13 committees.

In addition, the initiative has proposed 11 IEEE standards, all of which have been accepted. The standards address transparency, data privacy, algorithmic bias, and more. Approximately 250 individuals are now participating in the initiative.

Society must demand ethics for its own good

Groups within society tend to react to technology innovation differently due to generational differences, cultural differences, and other factors. Generally speaking, early adopters tend to be more interested in a new technology’s capabilities than its potential negative effects. Conversely, laggards are more risk averse. Nevertheless, people in general tend to use services, apps, and websites without bothering to read the associated privacy policies. Society is not protecting itself, in other words. Instead, one individual at a time is acquiescing to the collection, storage and use of data about them without understanding to what they are acquiescing.

“I think the practical aspect comes down to transparency and honesty,” said Bill Franks, chief analytics officer at the International Institute for Analytics(IIA). “However, individuals should be aware of what companies are doing with their data when they sign up, because a lot of the analytics –- both the data and analysis –- could be harmful to you if they got into the wrong hands and were misused.”

Right now, the societal impacts of technology tend to be recognized after the fact, rather than contemplated from the beginning. Arguably, not all impacts are necessarily foreseeable, but with the pace of technology innovation constantly accelerating, the innovators themselves need to put more thought into the positive and negative consequences of bringing their technology to market.

Meanwhile, individuals have a responsibility to themselves to become more informed than they are today.

“Until the public actually sees the need for ethics, and demands it, I just don’t know that it would ever necessarily go mainstream,” said Franks. “Why would you put a lot of time and money into following policies that add overhead to manage and maintain when your customers don’t seem to care? That’s the dilemma.”

Businesses, individuals, and groups need to put more thought into the ethics of technology for their own good and for the good of all. More disruptions are coming in the form of machine intelligence, automation, and digital transformation which will impact society somehow. “How” is the question.

Machine Learning’s Greatest Weakness Is Humans

Machine learning– deep learning and cognitive computing in particular– attempt to model the human brain. That seems logical because the most effective way to establish bilateral understanding with humans is to mimic them. As we have observed from everyday experiences, machine intelligence isn’t perfect and neither is human intelligence.

Still, understanding human behavior and emotion is critical if machines are going to mimic humans well. Technologists know this, so they’re working hard to improve natural language processing, computer vision, speech recognition, and other things that will enable machines to better understand humans behave more like humans

I imagine that machines will never emulate humans perfectly because they will be able to rapidly identify the flaws in our thinking and behavior and improve upon them. To behave exactly like us would

From an analytical perspective, I find all of this fascinating because human behavior is linear and non-linear, rational and irrational, logical and illogical. If you study us at various levels of aggregation, it’s possible to see patterns in the way humans behave as a species, why we fall into certain groups and why behave the way we do as individuals. I think it would be very interesting to compare what machines have to say about all of that with what psychologists, sociologists, and anthropologists have to say.

Right now we’re at the point where we believe that machines need to understand human intelligence. Conversely, humans need to understand machine intelligence.

Why AI is Flawed

Human brain function is not infallible. Our flaws present challenges for machine learning, namely, machines have the capacity to make the same mistakes we do and exhibit the same biases we do, only faster. Microsoft’s infamous twitter bot is a good example of that.

Then, when you model artificial emotional intelligence based on human emotion, the results can be entertaining, inciting or even dangerous.

Training machines, whether for supervised or unsupervised learning, begins with human input at least for now. In the future, the necessity for that will diminish because a lot of people will be teaching machines the same things. The redundancy will indicate patterns that are easily recognizable, repeatable and reusable. Open source machine learning libraries are already available, but there will be many more that approximate some aspect of human brain function, cognition, decision-making, reasoning, sensing and much more.

Slowly but surely, we’re creating machines in our own image.

The Trouble with Data About Data

Two people looking at the same analytical result can come to different conclusions. The same goes for the collection of data and its presentation. A couple of experiences underscore how the data about data — even from authoritative sources — may not be as accurate as the people working on the project or the audience believe. You guessed it: Bias can turn a well-meaning, “objective” exercise into a subjective one. In my experience, the most nefarious thing about bias is the lack of awareness or acknowledgement of it.

The Trouble with Research

I can’t speak for all types of research, but I’m very familiar with what happens in the high-tech industry. Some of it involves considerable primary and secondary research, and some of it involves one or the other.

Let’s say we’re doing research about analytics. The scope of our research will include a massive survey of a target audience (because higher numbers seem to indicate statistical significance). The target respondents will be a subset of subscribers to a mailing list or individuals chosen from multiple databases based on pre-defined criteria. Our errors here most likely will include sampling bias (a non-random sample) and selection bias (aka cherry-picking).

The survey respondents will receive a set of questions that someone has to define and structure. That someone may have a personal agenda (confirmation bias), may be privy to an employer’s agenda (funding bias), and/or may choose a subset of the original questions (potentially selection bias).

The survey will be supplemented with interviews of analytics professionals who represent the audience we survey, demographically speaking. However, they will have certain unique attributes — a high profile or they work for a high-profile company (selection bias). We likely won’t be able to use all of what a person says so we’ll omit some stuff — selection bias and confirmation bias combined.

We’ll also do some secondary research that bolsters our position — selection bias and confirmation bias, again.

Then, we’ll combine the results of the survey, the interviews, and the secondary research. Not all of it will be usable because it’s too voluminous, irrelevant, or contradicts our position. Rather than stating any of that as part of the research, we’ll just omit those pieces — selection bias and confirmation bias again. We can also structure the data visualizations in the report so they underscore our points (and misrepresent the data).

Bias is not something that happens to other people. It happens to everyone because it is natural, whether consciously or unconsciously. Rather than dismiss it, it’s prudent to acknowledge the tendency and attempt to identify what types of bias may be involved, why, and rectify them, if possible.

I recently worked on a project for which I did some interviews. Before I began, someone in power said, “This point is [this] and I doubt anyone will say different.” Really? I couldn’t believe my ears. Personally, I find assumptions to be a bad thing because unlike hypotheses, there’s no room for disproof or differing opinions.

Meanwhile, I received a research report. One takeaway was that vendors are failing to deliver “what end customers want most.” The accompanying infographic shows, on average, that 15.5% of end customers want what 59% of vendors don’t provide. The information raised more questions than it answered on several levels, at least for me, and I know I won’t get access to the raw data.

My overarching point is that bias is rampant and burying our heads in the sand only makes matters worse. Ethically speaking, I think as an industry, we need to do more.

 

Analytics Leaders and Laggards: Which Fits Your Company?

Different companies and industries are at different levels of analytical maturity. There are still businesses that don’t use analytics at all and businesses that are masters by today’s standards. Most organizations are somewhere in between.

So, who are the leaders and laggards anyway? The International Institute for Analytics (IIA) asked that question in 2016 and found that digital natives are the most mature and the insurance industry is the least mature.

How Industries and Sectors Stack Up

IIA’s research included 11 different industries and sectors, in addition to digital natives. The poster children included Google, Facebook, Amazon, and Netflix. From Day 1, data has been their business and analytics has been critical to their success.

The report shows the descending order of industries in terms of analytical maturity, with insurance falling behind because its IT and finance analytics are the weakest of all.

Another report, from business and technology consultants West Monroe Partners found that only 11% of the 122 insurance executives they surveyed think their companies are realizing the full benefits of advanced analytics. “Advanced analytics” in this report is defined as identifying new revenue opportunities, improving customer and agent experience, performing operational diagnostics, and improving control mechanisms.

Two of the reasons West Monroe cited for the immaturity of the insurance industry are the inability to quantify the ROI and poor data quality.

Maturity is a Journey

Different organizations and individuals have different opinions about what an analytics maturity model looks like. IIA defines five stages ranging from “analytically impaired” (organizations that make decisions by gut feel) to “analytical nirvana” (using enterprise analytics).

“Data-first companies haven’t had to invest in becoming data-driven since they are, but for the companies that aren’t data-first, understanding the multi-faceted nature of the journey is a good thing,” said Daniel Magestro, research director at IIA. “There’s no free lunch, no way to circumvent this. The C-suite can’t just say that we’re going to be data-driven in 2017.”

Others look at the types of analytics companies are doing: descriptive, predictive, and prescriptive. However, looking at the type of analytics doesn’t tell the entire story.

What’s interesting is that different companies at different stages of maturity are stumped by different questions: Do you think you need analytics? If the answer is no, then it’s going to be a long and winding road.

Why do you think you need analytics? What would you use analytics to improve? Those two related questions require serious thought. Scope and priorities are challenges here.

How would you define success? That can be a tough question because the answers have to be quantified and realistic to be effective. “Increase sales” doesn’t cut it. How much and when are missing.

One indicator of maturity is what companies are doing with their analytics. The first thing everyone says is, “make better business decisions,” which is always important. However, progressive companies are also using analytics to identify risks and opportunities that weren’t apparent before.

The degree to which analytics are siloed in an organization also impacts maturity as can the user experience. Dashboards can be so complicated they’re ineffective versus simple to prioritize and expedite decision-making.

Time is another element. IT-created reports have fallen out of favor. Self-service is where it’s at. At the same time, it makes no sense to pull the same information in the same format again and again, such as weekly sales reports. That should simply be automated and pushed to the user.

The other time element — timeliness whether real-time, near real-time, or batch — is not an indication of maturity in my mind because what’s timely depends on what’s actually necessary.

How Valuable Is Your Company’s Data?

Companies are amassing tremendous volumes of data, which they consider their greatest asset, or at least one of their greatest assets. Yet, few business leaders can articulate what their company’s data is worth.

Successful data-driven digital natives understand the value of their data and their valuations depend on sound applications of that data. Increasingly venture capitalists, financial analysts and board members will expect startup, public company and other organizational leaders to explain the value of their data in terms of opportunities, top-line growth, bottom line improvement and risks.

For example, venture capital firm Mercury Fund recently analyzed SaaS startup valuations based on market data that its team has observed. According to Managing Director Aziz Gilani, the team confirmed that SaaS company valuations, which range from 5x to 11x revenue, depend on the underlying metrics of the company. The variable that determines whether those companies land in the top or bottom half of the spectrum is the company’s annual recurring revenue (ARR) growth rate, which reflects how well a company understands its customers.

Mercury Fund’s most successful companies scrutinize their unit economics “under a microscope” to optimize customer interactions in a capital-efficient manner and maximize their revenue growth rates.

For other companies, the calculus is not so straightforward and, in fact, it’s very complicated.

Direct value

When business leaders and managers ponder the value of data, their first thought is direct monetization which means selling data they have.

“[I]t’s a question of the holy grail because we know we have a lot of data,” said David Schatsky, managing director at Deloitte. “[The first thought is] let’s go off and monetize it, but they have to ask themselves the fundamental questions right now of how they’re going to use it: How much data do they have? Can they get at it? And, can they use it in the way they have in mind?”

Data-driven digital natives have a better handle on the value of their data than the typical enterprise because their business models depend on collecting data, analyzing that data and then monetizing it. Usually, considerable testing is involved to understand the market’s perception of value, although a shortcut is to observe how similar companies are pricing their data.

“As best as I can tell, there’s no manual on how to value data but there are indirect methods. For example, if you’re doing deep learning and you need labeled training data, you might go to a company like CrowdFlower and they’d create the labeled dataset and then you’d get some idea of how much that type of data is worth,” said Ben Lorica, chief data officer at O’Reilly Media. “The other thing to look at is the valuation of startups that are valued highly because of their data.”

Observation can be especially misleading for those who fail to consider the differences between their organization and the organizations they’re observing. The business models may differ, the audiences may differ, and the amount of data the organization has and the usefulness of that data may differ. Yet, a common mistake is to assume that because Facebook or Amazon did something, what they did is a generally-applicable template for success.

However, there’s no one magic formula for valuing data because not all data is equally valuable, usable or available.

“The first thing I look at is the data [a client has] that could be turned into data-as-a-service and if they did that, what is the opportunity the value [offers] for that business,” said Sanjay Srivastava, chief digital officer at global professional services firm Genpact.

Automation value

More rote and repeatable tasks are being automated using chatbots, robotic process automation (RPA) and AI. The question is, what is the value of the work employees do in the absence of automation and what would the value of their work be if parts of their jobs were automated and they had more time to do higher-value tasks?

“That’s another that’s a shortcut to valuing that data that you already have,” said O’Reilly’s Lorica.

Recombinant value

Genpact also advances the concept of “derivative opportunity value” which means creating an opportunity or an entirely new business model by combining a company’s data with external data.

For example, weather data by zip code can be combined with data about prevalent weeds by zip code and the available core seed attributes by zip codes. Agri-food companies use such data to determine which pesticides to use and to optimize crops in a specific region.

“The idea is it’s not just selling weather data as a service, that’s a direct opportunity,” said Srivastava. “The derivative opportunity value is about enhancing the value of agriculture and what value we can drive.”

It is also possible to do an A/B test with and without a new dataset to determine the value before and after the new data was added to the mix.

Algorithmic value

Netflix and Amazon use recommendation engines to drive value. For example, Netflix increases its revenue and stickiness by matching content with a customer’s tastes and viewing habits. Similarly, Amazon recommends products, including those that others have also viewed or purchased. In doing so, Amazon successfully increases average order values through cross-selling and upselling.

“Algorithmic value modeling is the most exciting,” said Srivastava. “For example, the more labeled data I can provide on rooftops that have been damaged by Florida hurricanes, the more pictures I have of the damage caused by the hurricanes and the more information I have about claim settlements, the better my data engine will be.”

For that use case, the trained AI system can automatically provide an insurance claim value based on a photograph associated with a particular claim.

Risk-of-Loss value

If a company using an external data source were to lose access to that data source, what economic impact would it have? Further, given the very real possibility of cyberattacks and cyberterrorism, what would the value of lost or corrupted data be? Points to consider would be the financial impact which may include actual loss, opportunity cost, regulatory fines and litigation settlement values. If the company has cybersecurity insurance, there’s a coverage limit on the policy which may differ from the actual claim settlement value and the overall cost to the company.

A bigger risk than data loss is the failure to use data to drive value, according to Genpact’s Srivastava.

There’s no silver bullet

No single equation can accurately assess the value of a company’s data. The value of data depends on several factors, including the usability, accessibility and cleanliness of the data. Other considerations are how the data is applied to business problems and what the value of the data would be if it were directly monetized, combined with other data, or used in machine learning to improve outcomes.

Further, business leaders should consider not only what the value of their company’s data is today, but the potential value of new services, business models or businesses that could be created by aggregating data, using internal data or, more likely, using a combination of internal and external data. In addition, business leaders should contemplate the risk of data loss, corruption or misuse.

While there’s no standard playbook for valuing data, expect data valuation and the inability to value data to have a direct impact on startup, public company, and merger and acquisition target valuations.

Why Operationalizing Analytics is So Difficult

Today’s businesses are applying analytics to a growing number of use cases, but analytics for analytics’ sake has little, if any, value. The most analytically astute companies have operationalized analytics, but many of them, particularly the non-digital natives, have faced several challenges along the way getting the people, processes and technology aligned in a way that drives value for the business.

Here are some of the hurdles that an analytics initiative might encounter.

Analytics is considered a technology problem

Some organizations consider analytics a technology problem, and then they wonder why the ROI of their efforts is so poor. While having the right technology in place matters, successful initiatives require more.

“The first key challenge is designing how and in what way an analytics solution would affect the outcome of the business,” said Bill Waid, general manager of Decision Management at FICO. “We start by modeling the business problem and then filling in the analytic pieces that address that business problem. More often than not, there’s a business process or business decision that needs to be incorporated into the model as we build the solution.”

Framing the business problem is essential, because if the analytics don’t provide any business value, they won’t get used.

“Better than 80% of analytics never end up being used. A lot of that stems from the fact that an analysis gets built and it might make sense given the dataset but it’s not used to make something happen,” said Waid. “That’s probably the hardest element.”

Placing analytics in the hands of the business requires access to the right data, but governance must also be in place.

“[T]he technical aspects are becoming easier to solve and there are many more options for solving them, so the people and the process challenges that you’ll face obviously have to come along,” said Bill Franks, chief analytics officer at the International Institute for Analytics (IIA). “In a non-digital-native company, the people and process progress does not match the technology progress.”

Operationalizing analytics lacks buy in

Many analytics initiatives have struggled to get the executive and organizational support they need to be successful. Operationalizing analytics requires the same thing.

“When you operationalize analytics, you’re automating a lot of decisions, so the buy-in you require from all of the various stakeholders has to be high,” said IIA’s Franks. “If you’re a digital native, this is what you do for a living so people are used to it. When you’re a large, legacy company dipping your toe into this, the first couple of attempts will be painful.”

For example, if an organization is automating what used to be batch processes, there need to be more safety checks, data checks, and accuracy checks. Chances are high that everything won’t be done right the first time, so people have to get comfortable with the concept of iteration, which is just part of the learning process.

Analytical results are not transparent

If your company operates in a regulated environment, you need to be able to explain an analytical result. Even if you’re not in a regulated industry, business leaders, investors and potential M&A partners may ask for an explanation.

“We refer to it as ‘reasoning code’ or ‘the outcomes,’ but in AI it’s a form of explainable AI where you can explain to a business owner or a business user why the analytics came to the conclusion it came to,” said FICO’s Waid. “The second thing that you need to provide the business person with is some kind of dashboard for them to be able to change, adjust or accommodate different directions.”

4 Ways Companies Impede Their Analytics Efforts

Businesses in the race to become “data-driven” or “insights-driven” often face several disconnects between their vision of an initiative and their execution of it. Of course, everyone wants to be competitive, but there are several things that differentiate the leaders from the laggards. Part of it is weathering the growing pains that companies tend to experience, some of which are easier to change than others. These are some of the stumbling blocks.

Business objectives and analytics are not aligned

Analytics still takes place in pockets within the majority of organizations. The good news is that various functions are now able to operate more effectively and efficiently as a result of applying analytics. However, there is greater power in aligning efforts with the strategic goals of the business.

In a recent research note, Gartner stated, “Internally, the integrative, connected, real-time nature of digital business requires collaboration between historically independent organizational units. To make this collaboration happen, business and IT must work together on vision, strategy, roles and metrics. Everyone is going to have to change, and everyone is going to have to learn.”

All of that requires cultural adjustment, which can be the most difficult challenge of all.

There’s insight but no action

It’s one thing to get an insight and quite another to put that insight into action. To be effective, analytics need to be operationalized, which means weaving analytics into business processes so that insights can be turned into meaningful actions. Prescriptive analytics is part of it, but fundamentally, business processes need to be updated to include analytics. A point often missed is that decisions and actions are not ends in themselves. They, too, need to be analyzed to determine their effectiveness.

An EY presentation stresses the need to operationalize analytics. Specifically, it says, ” The key to operationalizing analytics is to appreciate the analytics value chain.”

Interestingly, when most of us think about “the analytics value chain” we think of data, analytics, insights, decisions and optimizing outcomes. While that’s the way work flows, EY says our thought process should be the reverse. Similarly, to optimize a process, one must understand what that process is supposed to achieve (e.g., thwart fraud, improve customer experience, reduce churn).

They’re not looking ahead

Less analytically mature companies haven’t moved beyond descriptive analytics yet. They’re still generating reports, albeit faster than they used to because IT and lines of business tend to agree that self-service reporting is better for everyone. Gartner says “the BI and analytics market is in the final stages of a multiyear shift from IT-lead, system-of-record reporting to business-led, self-service analytics. As a result, the modern business intelligence and analytics platform has emerged to meet new organizational requirements for accessibility, agility and deeper analytical insight.”

Still, organizations can only get so far with descriptive analytics. If they want to up their competitive game, they need to move to predictive and prescriptive analytics.

Poor data quality prevents accurate analytics

If you don’t have good data or a critical mass of the right data, your analytical outcomes are going to fall short. Just about any multichannel (and sometimes even single-channel) communication experience with a bank, a telephone company, a credit card company, or a vendor support organization will prove data quality is still a huge issue. Never mind the fact some of these companies are big brand companies who invest staggering amounts of money in technology, including data and analytics technologies.

In a typical telephone scenario, a bot asks the customer to enter an account number or a customer number. If the customer needs to be transferred to a live customer service representative (CSR), chances are the CSR will ask the customer to repeat the number because it doesn’t come up on their screen automatically. If the CSR can’t resolve the issue, then the call is usually transferred to a supervisor or different department. What was your name and number again? It’s a frustrating problem that’s all too common.

The underlying problem is that customer’s information is stored in different systems for different reasons such as sales, CRM and finance.

I spoke with someone recently who said a company he worked with had gone through nearly 20 acquisitions. Not surprisingly, data quality was a huge issue. The most difficult part was dealing with the limited fields in a legacy system. Because the system did not contain enough of the appropriate fields in which to enter data, users made up their own workarounds.

These are just a few of the challenges organizations face on their journey.

How AR/VR Analytics May Help Your Business

Alternative reality and virtual reality are gaining traction, and some of the early adopters are already trying to figure out what it means to their businesses. The use cases vary from industry to industry, but the idea is to leverage virtual assets (AR) or create a completely virtual environment (VR) that provide low-cost, yet effective means of accomplishing what is otherwise expensive and difficult in the real world.

The possibilities seem only limited by the imagination; however, adoption numbers underscore the early nature of the products and related analytics among businesses.  For example, a recent survey by IT trade association CompTIA shows that about 21% of the responding organizations had some kind of AR or VR initiative in place.

“Most organizations realize there’s some potential because they saw what happened with Pokémon Go last year, but it’s going to take some time to happen,” said Tim Herbert, senior VP of research and market Intelligence at CompTIA.

Right now, people are focused on the visualization aspects and what that means. Interest in analytics will come later as it becomes clear that what happens in an AR or VR environment needs to be monitored, analyzed and optimized. Right now, most are more focused on the technology aspect and the talent needed.

“VR analytics can empower organizations to better understand and connect with their audiences. It’s about knowing exactly how your audience interacted with your content and, on a psychological level, how emotionally salient they found it,” said Joshua Setzer, CEO of VR/AR solutions provider  Lucid Dream. How you look at it depends upon your own job function and the objectives behind your project. A marketer may want to [understand] which parts of a message resonates with an audience and which don’t. A trainer may wish to tease out the psychophysical signatures of learning to understand which elements of content are being imprinted in memory and which are more likely to be forgotten.”

Companies in different industries are exploring AR/VR technologies to see what impact they have on sales, marketing, HR, product development and more.

“If you think through some of those use cases, you can see how having some of the new streams of data would be valuable to an organization,” said Herbert.

Following are a few things your organization can start thinking about today.

Why Businesses Must Start Thinking About Voice Interfaces, Now

Voice interfaces are going to have an immense impact on human-to-machine interaction, eventually replacing keyboards, mice and touch. For one thing, voice interfaces can be much more efficient than computers, laptops, tablets and smartphones. More importantly, they provide an opportunity to develop closer relationships with customers based on a deeper understanding of those customers.

Despite the popularity of Alexa among consumers, one might assume that voice interfaces are aspirational at best for businesses, although a recent Capgemini conversational commerce study tells a different story. The findings indicate that 40% of the 5,000 consumers interviewed would use a voice assistant instead of a mobile app or website. In three years, the active users expect 18% of their total expenditures will take place via a voice assistant, which is a six-fold increase from today. The study also concluded that voice assistants can improve Net Promoter Scores by 19%. Interestingly, this was the first such study by Capgemini.

“Businesses really need to come to grips with voice channels because they will change the customer experience in ways that we haven’t seen since the rise of ecommerce,” Mark Taylor, chief experience officer, DCX Practice, Capgemini. “I think it’s going to [have a bigger impact] than ecommerce because it’s broader. We call it ‘conversational commerce,’ but it’s really voice-activated transactions.”

Voice interfaces need to mimic humans

The obvious problem with voice interfaces is their limited understanding of human speech, which isn’t an easy problem to solve. Their accuracy depends on understanding of the words spoken in context, including the emotions of the speaker.

“We’re reacting in a human way to very robotic experience and as that experience evolves, it will only increase our openness and willingness to experience that kind of interaction,” said Taylor. “Businesses have recognized that they’re going to need a branded presence in voice channels, so some businesses have done a ton of work to learn what that will be.”

For example, brands including Campbell’s Soup, Sephora and Taco Bell are trying to understand how consumers want to interact with them, what kind of tone they have as a brand and what to do with the data they’re collecting.

“Brands have spent billions of dollars over the years representing how they look to their audience,” said Taylor. “Now they’re going to have to represent how they sound. What is the voice of your brand? Is it a female or male voice, a young voice or an older voice? Does it have a humorous or dynamic style? There are lots of great questions that will need to be addressed.”

Don’t approach voice like web or mobile

Web and mobile experiences guide users down a path that is meant to translate human thought into something meaningful, but the experience is artificial. In web and mobile experiences, it’s common to search using keywords or step through a pre-programmed hierarchy. Brands win and lose market share based on the customer experience they provide. The same will be true for voice, but the difference is that voice will enable deeper customer relationships.

Interestingly, in the digital world, voice has lost its appeal. Businesses are replacing expensive call centers with bots. Meanwhile, younger generations are using smartphones for everything but traditional voice phone calls. Voice interfaces will change all of that that, albeit not in the way older generations might expect. In Europe, for example, millennials prefer to use a voice assistant in stores rather than talking to a person, Taylor said.

“What’s interesting here is the new types of use cases [because you can] interact with customers where they are,” said Ken Dodelin, VP of Conversational AI Products at Capital One.

Instead of surfing the web or navigating through a website, users can simply ask a question or issue a command.

“[Amazon’s] dash button was the early version a friction-free thing where someone can extend their finger and press a button to go from thought to action,” said Dodelin. “Alexa is a natural evolution of that.”

In banking, there is considerable friction between wanting money or credit and getting it. Capital One has enabled financial account access via voice on Alexa and Cortana platforms. It is also combining visual and voice access on Echo Show. The reasoning for the latter is because humans communicate information faster by speaking and consume information faster visually.

“[I]t usually boils down to what’s the problem you’re solving and how do you take friction out of things,” said Dodelin. “When I think about what it means for a business, it’s more about how can we [get] good customer and business outcomes from these new experiences.”

When Capital One first started with voice interfaces, customers would ask about the balance on their credit cards, but when they asked about the balance due, the system couldn’t handle it.

“Dialogue management is really important,” said Dodelin. “The other piece is who or what is speaking?”

Brand image is reflected in the characteristics of the voice interface. Capital One didn’t have character development experts, so it hired one from Pixar that now leads the conversational AI design work.

“Natural language processing technology has progressed so much that we can expect it to become an increasingly common channel for customer experience,” said Dodelin. “If they’re not doing it directly through a company’s proprietary voice interface, they’re doing it by proxy through Alexa, Google Home or Siri and soon through our automobiles.”

The move to voice interfaces is going to be a challenge for some brands and an opportunity for others. Now is the time for companies to experiment and if they’re successful, leap ahead of their competitors and perhaps even set a new standard for creating customer experiences.

Clearly, more works needs to be done on natural language processing, but already, some consumers have been tempted to thank Alexa, despite its early-stage capabilities, said Capgemini’s Taylor.

In short, voice interfaces are here and evolving rapidly. What will your brand do?

B2B Chatbots are Poised for Explosive Growth

Chatbot use is on the rise, and the use cases are growing. According to Gartner, by 2021, more than 50% of enterprises will spend more each year on bots and chatbot creation than traditional mobile app development.

In a recent blog, Gartner Brand Content Manager Kasey Panetta said, “Individual apps are out. Bots are in. In the ‘post-app era,’ chatbots will become the face of AI, and bots will transform the way apps are built. Traditional apps, which are downloaded from a store to a mobile device, will become just one of many options for customers.”

Chatbots and virtual assistants such as Alexa are being interwoven into consumer lifestyles. KPMG Digital Enablement Managing Director Michael Wolf says his company sees tremendous potential on the B2B side.

“B2B chatbots and virtual assistants could be the interface across multiple systems,” said Wolf. “We’re seeing a lot of growth in that, and the enterprise platform companies are making investments there, either acquiring the capability or acquiring the platforms to do that stuff.”

Implementing chatbots and implementing virtual assistants differs, based on their respective designs and capabilities. Traditional chatbots are script-based, so they respond to pre-programmed inputs. Virtual assistants utilize machine learning to continually improve their ability to understand and respond appropriately to natural language.

“One of the problems with bots is modeling what they think customers want rather than training the system with real people, not just employees and customers, but the person asking the questions. What are they asking?  How are they asking it?” said Wolf. “If you just try to follow your same traditional route paradigms without concentrating on learning and design thinking, you’re going to get less desirable outcomes.”

Expanding B2B use cases

Like other forms of automation, chatbots and virtual assistants are seen as human-augmenting technologies that enable humans to focus on less repetitive, higher-value tasks.

David Nichols, Americas Innovation and Alliance Leader for EY Advisory sees numerous opportunities for B2B chatbots, including internal employee communications, most HR interactions, and everyday interactions such as checking invoice status, delivery status and updates, and customer service interactions.

“The biggest challenge with B2B companies is getting suppliers and customers to use the Chabot functionality,” said Nichols. “Also, B2B companies don’t usually place the same priority on customer personalization as B2C companies. As a result, the customer service interactions at B2B companies don’t usually have the same level of detailed customer segmentation and interaction history. This will present a challenge when developing the use-cases and scenarios for the bot conversation flow.”

In HR scenarios, chatbots provide intelligent means of re-engaging with candidates, specifically sourcing, screening, and updating candidate information.

“[Using] other methods these interactions can take days to weeks for an organization to handle,” said Chris Collins, CEO of recruitment automation company RoboRecruiter. “Chatbots significantly increase the speed and scale that you can operate down to hours and combined with AI can keep the data active.”

That could lead to more positive recruiting experiences for candidates, contract workers, and employers. Similarly, from an outward-facing standpoint, chatbots and virtual assistants could improve brands’ relationships with customers.

It might seem counter-intuitive that an AI-driven chatbot can help companies build relationships with their customers, but remember, the ‘Millennial Mindset’ is quickly becoming the dominant purchasing orientation, and those customers want to efficiently self-service,” said Anthony SmithCEO of CRM solution provider Insightly. “In 2018, B2B chatbots will be utilized not only for lead generation, but also as virtual business assistants and they will handle different tasks such as scheduling and cancelling meetings, setting alarms etc.”

Depending on the enterprise applications chatbots are integrated with, they’ll be able to undertake more complex tasks, such as placing orders, invoicing and other B2B activities that are time consuming and usually require precision. However, there are challenges,

“Integrating chatbots with the major payment systems and with social media is tough and it will probably take time, but once this is covered, chatbots will be able to take orders directly through social accounts and that will be a revolution,” said Insightly’s Smith.

Application integration is critical

Automating business processes requires tight integration with enterprise systems. Exactly how many and which systems depends on the purpose of the chatbot. However, because user experience is vitally important, it’s critical to understand what the users of such systems will want to do with them.

“Some are just trying to redo web and mobile rather than using a design approach to using this,” said KPMG’s Wolf. “There’s an assumption because it’s not visual, it doesn’t involve design.”

In B2B contexts, there are a lot of repetitive tasks that take place within businesses processes, some of which require integrations with different types of systems.

“The injection of the chatbot is allowing consumer-like experiences. ‘I want my ERP to feel like Google

and ‘I want my CRM to feel like Amazon’ is a constant discussion for my customers,” said KPMG’s Wolf. “Applying an enterprise chatbot is obvious in that scenario.”

The end goal for virtual assistants is orchestrating everything necessary to answer a query or execute a request, which can involve a complex web of interconnections among disparate systems.

In short, the best way forward is iterative because requirements, technology and user expectations are constantly changing.

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