Digital leaders - ‘copilot technology demands careful navigation’

Mark Chillingworth Profile picture for user Mark Chillingworth March 12, 2024
Summary:
Business technology leaders debate the ethical and business value challenges and opportunities of the plethora of copilot technologies

Chatbot assistant conversation, Ai Artificial Intelligence technology concept. Casual business man chatting with chatbot via mobile smart phone application while working on laptop computer © TippaPatt - Shutterstock
(© TippaPatt - Shutterstock)

Having chaired a debate on Microsoft Copilot, I was asked by digital leaders to convene a meeting to discuss the wide range of copilot technologies available from enterprise vendors. Perhaps naively, I expected a discussion on the SAP Joule, Salesforce EinsteinFreshworks Freddy or the Copilots from Workday and Siemens. But it is not these technologies that are taxing the brains of digital leaders; it is, rightly, the business impact of copilots as a new epoch in enterprise technology. 

The vendors claim copilot technology will increase productivity, tackle skills shortages and improve customer and employee satisfaction. These are the daily challenges facing digital leaders and the reason why AI and copilot technology is garnering a great deal of interest from the CEO and stakeholders. But bolting in a new technology is rarely, if ever, the solution. 

Digital leaders, who by nature embrace new technology, are also business people - and expressed concern about the copilot Return on Investment (RoI) at the London meeting. As one CIO in financial services voiced, there is no cost analysis that compares the RoI of a copilot to that of a human being. This poses yet another question to digital leaders: as AI technology continues to impact the economy, traditional measures of productivity will be called into question. Historic metrics such as man-hours are on shaky ground. Former CIO and target operating model advisor Adrian Wakefield said: 

How will we re-imagine the business model to take into account the fact that we are producing outcomes on compute hours.

Ian Cohen, Chief Product & Information Officer at Acacium Group, a health services firm, added: 

Copilots are now integral parts of your procurement. Salesforce has baked in the Einstein costs, Microsoft does the same, so the question is: if the costs are baked into the platforms, then how will you derive value from the underlying investment.

The answer, inevitably, is within the business and its intentions rather than the technology. Given the headlines, you could be forgiven for thinking that digital leaders who do not implement copilot technology will fall behind. However, a report by global business advisory firm Oliver Wyman finds that 20% of employees are using generative AI, and they say that it has not increased their productivity. As a result, the report concludes that the full potential of generative AI is six to 10 years away. 

Digital leaders are, therefore, having to moderate the pace of generative AI and copilot adoption. Despite the hype, Chief Digital Information Officer at the Chartered Insurance Institute Mat Mallett says organizations and their leadership teams are not ready: 

Most businesses have more than a couple of years in their favor as they are based on a pre-existing bricks-and-mortar business model. Pivoting to a fully digital business takes time and needs to be fully explored.

Fellow financial services CTO Matthew Oakeley agreed and said digital leaders have to not only promote technology-led change, but also sometimes be the calming hand that stops an expensive head-long rush: 

We also need to be the stop-and-pause merchants, as the CEO needs wise counsel that tells them not to get hung up on the FOMO. Everyone else is not about to accelerate their business into the stratosphere and leave you behind. If you wait a bit longer, you will not have missed the opportunity; you will have saved yourself money.

That said, generative AI adoption is going at a pace. John Romeo, CEO of the Oliver Wyman Forum, said of their research:

ChatGPT achieved mass adoption in less than one year, a stark contrast to the Internet, which took 17 years, smartphones 21 years, and electricity, which took three decades. But training is not keeping up, and we are facing an AI productivity disconnect.

Interestingly, the research finds that India leads employee adoption of generative AI, with 83% of survey respondents reporting daily use of generative AI in their work. With inflation hitting Western economies, anecdotal evidence suggests to me that demand for Indian outsourcing has increased, and digital leaders may want to pause for thought on whether copilot usage by outsourced economies fits with their data security policies…and is it the RoI they expect? 

If 20% of the workforce is already using copilot technology, then digital leaders have, in effect, another workforce to manage. Oakeley believes digital leaders are already well placed following the adoption of Robotic Process Automation (RPA) technology and its bots that automated time-consuming manual tasks. Oakeley says: 

You treated it as an employee. An employee with very little imagination, and it did exactly what you told it to do, and it had to report for duty at the start of the day and at the end of the day. A line manager was responsible for its output.

Communicating AI

One thing is clear - copilot and generative AI technology will change the way employees and leaders work and, therefore, the organizational chart of the business, as Mallett said: 

Ten years ago, I didn't have or need a chief data officer. We had some data people in the organization, and they were seen more as administrators. However, fast forward, having demonstrated their real value, they are now thought of as gods.

The insurance sector digital leader is among those concerned that the ease of copilot deployment will, once again, could cause alignment issues for IT. Mallett said: 

Most organizations are behind on their data, with poor data consistency. We say, 'let's get a data policy in place,' and IT is seen as a blocker rather than the voice of reason.

Cohen added: 

If you don't want to be the blocker or the person that says no; you have to quickly shift the conversation to be “yes, and…” . You have to focus the debate on to the business outcomes that can be quickly (and safely) enabled, despite the state of the data, and find new opportunities.

There is a slightly different problem with AI. The pace is faster than recent technologies and it's getting into the mainstream conversation a lot quicker. More people around the board table are hearing about it.

Despite that increased awareness, getting organizations to change the way they work is notoriously difficult. Femi Bamisaiye, until recently, CIO of Aviva General Insurance, said:

If people were using Oracle properly rather than Excel, then the finance team would improve.

In almost every vertical market, applications are not fulfilling their potential as teams, especially in traditional departments such as procurement and finance, refuse to embrace new ways of working. This will test the communications skills of digital leaders. 

Adding to the communications challenge is the fear that AI will lead to large-scale redundancies. This topic is one that digital leaders will need to be acutely aware of. 

Bamisaiye said the adoption of copilots and likely price increases, as has been seen of late from the SaaS providers, will lead the CFO to expect savings. 

Oakeley believes the history of technology will not lead to the employment devastation that some have predicted: 

There is a short-term effect, from threshing machines to the Industrial Revolution. It is not the case that we have ended up with 40% unemployment. Things happen in the short term, and then new jobs are created.

Co-host of the discussion Barnaby Parker, chief executive of Venquis, a staffing firm, said this will create another skills gap, as although organisations will make cuts, there will be a shortage of AI and skills. 

AI ethics

Employees and customers are concerned that copilot technology will alter the ethical standpoint of the organizations they work for or consume from. Digital leaders will need to be deeply involved in the ethical debate. Avril Chester, CTO at the Royal Pharmaceutical Society, argued:

Ethics is subjective. From a company standpoint each is different, there could be shareholder and profit demands versus purpose and advocacy, so then what is the line of ethics you would cross or move?

This will then boil down into the governance structure of the organization, she said: 

At what point do your engineers become the owner of a decision because of what they coded in copilot? Especially when compared to our content owners who are clinically trained.

Copilot, therefore, brings digital leadership into some of the most complex decision-making organizations will have to make. Former CIO, now executive advisor Jason Sahota agreed and added that these ethical debates pre-date AI: 

The ethical issues has always existed whether it was in financial services or a clinical setting; you just trusted it to a human.

Organizations have been ethically caught out without the help of AI, whether it be oil firms paying for misinformation on the climate emergency, the automotive industry writing software that cheated emissions tests or questionable data policies by web giants. As technology becomes increasingly important, digital leaders will need to spend more time considering ethics. Fortunately, they won't have to do this alone; many organizations have a Chief Ethics Officer (CEO?), and digital leaders expect their role to increase in importance. 

My take 

It is certainly interesting how the vendors are trying to make copilots, and AI humanized and personified with names like Freddy, Einstein and Joule. Nice names don't remove the challenges that digital leaders face within their organizations to ensure that copilot technology delivers a realistic ROI, positively impacts the business and doesn't breach the ethical codes of customers and team members. Technology deployment is always the easy part - leadership is hard. Copilots may make it harder unless there is a leadership copilot that can be switched on to navigate the turbulence. 

Loading
A grey colored placeholder image