3 tips for accelerating digital transformation in telecoms

The telecoms industry is no stranger to change. After all, the leading players in this sector have delivered network connectivity and devices that sit behind many of the world’s game-changing digital innovations. Take digital pioneer Uber as an example; it simply wouldn’t exist without the proliferation of smartphones and underpinning mobile network engines. But there’s a problem for the telecoms companies providing the networks and devices enabling these new business models. These telco giants need to accelerate their own digital transformations but, unlike digital start-ups, they have made massive investments in legacy IT over the past few decades and can’t simply ‘switch on digital’.

Nonetheless, business leaders recognise that, as consumers increasingly demand a digital customer experience, one that offers instant gratification, they must embrace the digital economy. Failure to become a truly digital company, is not an option. You only have to look at the number of big name companies that have gone out of business in recent years because they couldn’t, or wouldn’t, transform.

So, how can traditional telecoms companies survive in today’s fast-changing digital economy? Not known for their agility, how do they forge ahead quickly with digital transformation programmes that ensure their business models and operations are fit for the future? There are many recommendations for accelerating transformation, embracing technical, operational and process change, but I’m going to focus on just three in this blog.

Tip 1 – Modernise legacy applications, rather than dispose of them

At Sopra Steria, we encourage those clients with a heavy investment in legacy assets to modernise what they’ve invested in over the years, while ensuring they also keep pace with modern, cloud-based developments. It’s clearly not feasible to replace decades-old systems and applications in their entirety. That’s especially so in an industry experiencing significant pressure on revenues and margins (e.g. decreased roaming revenues, commoditisation and price erosion) and needing to continue investing in their networks (SDN/NFV & 5G, etc). So, my recommendation is to adopt an evolutionary approach. Ask what you need to do to extract more value from existing IT assets in line with a digital strategy. Then look at the real business triggers for legacy applications to become redundant or the option to replace with new, cloud-native ones. Be selective in your investments and opt for projects that give a rapid ROI. Modernisation offers a quick win as you accelerate your digital transformation.

Top 2 – Use Agile coaches to turn DevOps from theory into reality

We all know that speed to market with new services and products that give customers the digital experience they’re looking for is vital. To achieve this, organisations recognise that they need to transform their software development processes. Traditional lengthy waterfall-style development must be replaced with a DevOps culture that enables rapid, frequent releases through Agile sprints. This is typically a strategic top-down decision that sounds good in theory. The message is clear: we need to release fast, often and with assured quality; and we need to be agile so that we can respond quickly as the market changes. Yet that message becomes lost as it filters down through the management layers and those people expected to put theory into practice struggle to make it happen. I’ve seen enterprises overcome this by embedding Agile coaches at different layers of the organisation. These are people with practical experience of DevOps and Agile, able to lead and demonstrate this new way of working. This is a case of ‘don’t just tell us how to do it, show us as well’.

Tip 3 – Address adoption challenges with a defined vision and value position

Even with Agile coaches embedded in the end-to-end DevOps cycle, we still see instances where an organisation has implemented a new system or launched an innovative app that fails to gain traction with users. Let’s say, for example, you want to launch a mobile-front end on your Oracle DB system, enabling your employees to access what they need, where and when they need it. Or you might have invested millions in a new cloud platform for better visibility and control. If you want to avoid this being money down the drain, you must encourage user adoption. This requires communication of the ‘vision for’ and ‘value of’ your investment. So, it’s not just a case of communicating what the new capability is for (the vision), but clearly articulating the benefit it will bring both to the business and the users themselves (the value). If it’s a sales application, why would your salespeople use it if they perceive that’s it’s just a management tool for tracking what they do? How much more enthusiastic would they be if they understood how it will help them to sell more, faster? It sounds a simple tip for ensuring successful adoption of new digital tools, but the lack of a defined vision and value proposition can so easily stand in the way of you achieving your desired business outcomes.

Get in touch

The above three tips are just a flavour of the new thinking and approaches that telcos must take on board to survive in today’s digital economy by accelerating their digital transformations.

To find out more please contact me – jason.butcher@soprasteria.com 

Confronting the M&S challenge – why data is the solution

The impact of digital on the retail sector hit home at the end of May when M&S announced that it was accelerating its digital transformation following plunging profits. That one of the UK’s best-known retail brands had clearly failed to keep up with digital consumer trends may have come as a shock to many. I wasn’t surprised, however. I’ve recently written a paper on this very topic. In ‘Why data is the new retail battleground’ I look at one of the key reasons why traditional retailers are struggling to compete with their digital competitors – data.

For me, the challenge is not that these retailers have failed to invest in online commerce channels. Indeed, many are doing well in this respect. What’s holding them back is that they’re still using decades-old back office systems and processes governing Product Lifecycle Management (PLM), Product Information (PIM) and Product Master Data Management (MDM). These retailers, and especially those with a catalogue heritage, retain a large legacy of systems, processes and cultural norms that are not aligned to the expectations of today’s customer. They’ve typically expanded into digital channels to meet the consumer appetite, but they’re being hindered by operating models that remain wedded in their legacy data management principles.

The Amazon effect

To compete with the likes of Amazon and other digital retailers, traditional companies must transform – and they need to do this fast. The ability to capture the right product information quickly and accurately, then push it out to the relevant operational (Finance, Warehouse, Transport, Order Management, etc.) and commercial (Merchandising, Marketing, Pricing, etc.) systems will be critical for this. However, these processes are typically not well managed, or even automated, by many traditional retailer organisations today. Everything from data input, data cleansing and data matching, data enrichment and data profiling, through to data syndication and data analytics, is still dependent on disconnected and largely manual operations.

It’s clearly time to automate those areas of data management that are tying up valuable human resources in manual repetitive tasks. Trying to do what they do now without automation will not work for traditional retailers. In my paper, I describe a set of automation best practice that all retailers should be considering in this respect.

A strategic choice

I also point out that this isn’t just an IT challenge. It is a strategic choice to build a single source of data truth on which product decisions can be made. This is built on an understanding that to remain competitive with responsive and agile operations, every day, organisations need to bring about both technology and cultural change.

Like many traditional retailers, M&S clearly has a number of digital challenges to confront, such as those described above. After announcing its 62% drop in pre-tax profits, the retailer declared it would be modernising its business through ‘accelerated change’ to cater for an increasingly online customer base. I hope it puts data at the heart of this transformation.

Read my paper for more on how to move to a new data-led operating model in today’s fast-moving retail environment.

Community Matters Week at Sopra Steria is here: here’s how (and why) we’re doing it

Each year hundreds of Sopra Steria people support their local communities and local, national and international charities by volunteering and raising money for them.  For one special week, we do as much volunteering and fundraising together as we can.  This is what we call Community Matters Week, and today, 18 June, is the first day of our 2018 campaign.

Corporate community initiatives have become commonplace.  Almost all large companies and many small ones have some sort of philanthropic or charitable initiative.  If you ask us why we do it (we are for-profit entities after all), we will tell you that it is the right thing to do, and it is.  Companies must give back.  But there’s so much more to it.  Organisations that only think of community impact as the right thing to do, won’t do it as well as they could if they thought about it as a real business imperative, as important as (and, as I’ll argue later, in fact intrinsically linked to) the focus on profitability, the talent war, and pretty much any aspect of a company’s corporate strategy.

The problem with ‘the right thing to do’

When companies only think about community impact as the right thing to do, they aren’t forcing themselves to be imaginative and innovative; a reasonably sized cheque written out to a charity that may or may not have anything to do with the company’s objectives – or more importantly, its role in society and its capabilities – is often the sum total of its community impact work.  Certainly supporting the vital work charities do is important.  But these organisations miss the opportunity to have a much greater impact on the world while also benefitting themselves.  Furthermore, if cheque-writing is the main way a company seeks to make a positive difference, those cheques might get smaller when times are tough; organisations will want to continue to do the right thing, but it often becomes harder in lean times.  In short, this doing the ‘right thing’ mindset is not very sustainable.

Serious impact takes imagination… and critical business thinking

I like to think of developing a strong community impact programme in the same way we might think about choosing careers when we’re young.  We are encouraged then to think about what we’re good at, as well as what we enjoy, and the ultimate career path chosen should build on both aspects (probably with a slightly greater emphasis on what we’re good at).  For example, as a teenager, I really loved dance, but I wasn’t good enough to make a career out of it (don’t worry, my ego survived!).  It wouldn’t have made sense for me to pursue dance, just as, perhaps, it doesn’t make sense, for example, for a technology company to focus all its community impact resources on activities that have nothing to do with technology.

The question we ask ourselves at Sopra Steria is, ‘how can we make best use of our capabilities and resources to make a difference?’  We know that we will have a bigger impact when we do what we’re good at.  This will be true for other organisations as well.

The second step is to think big.  Too frequently, community programmes aren’t as innovative as the organisations that run them because they’re seen as something separate from the rest of the company.  This is another pitfall of the ‘right thing to do’ mentality because the ‘right thing to do’ can be anything (there is so much good work that needs to be done, so this is understandable), and the programmes don’t draw on an organisation’s innovators and strategists.  When companies think big about community impact, they follow up the question above, with another question: ‘what are the world’s most pressing challenges?’, and they get others to input: sector directors who work with customers and have a deep understanding of the things businesses are trying to address; strategists; and, of course external stakeholders, such as academics and organisations focusing on sustainable development).

It is important that this is the second question, and not the first because there are so many pressing challenges that it will be too difficult to answer this in any meaningful way.  With your answers to the first question in mind, you can identify some areas that your company, no matter its resource limitations or industry focus, could actually make a difference in.

The third and final step is to whittle down the long-ish list of ideas that will have emerged from the first two questions by testing which ones will integrate with and support your corporate strategy.  Ideally, your community programme will actually transform your corporate strategy, making it stronger by bolstering organisation mission and purpose.  Organisations stuck in the ‘doing the right thing’ mentality bristle at the idea that community impact should be a part of corporate strategy and therefore yield business benefits, but those that do not will be constantly at risk of being cut, and if they’re cut, they become less effective, have less of an impact, and that is not what anyone wants, surely.

Some help on the third question

It might not be possible to do the third step above well if you don’t have the business case for community impact programmes well established.  Although this will vary from industry to industry, there are some universal truths:

  • Communities are part your infrastructure and your future: they are the potential sources of your near and long-term future workforce and supply chain, so supporting effective, inclusive education and strong, inclusive local economic growth benefits everyone.
  • Community impact programmes provide competitive advantage both in terms of talent attraction and retention, and in winning business. Employees and customers alike want to work with companies that are making a positive difference in the world.  Employees want to be able to contribute to that in their work.
  • Community impact programmes are lenses through which to spot innovation and development opportunities: because of the point made above – that people want to have the opportunity to do good in their work – some of the most compelling innovations come through well thought-out community programmes that encourage employees to develop solutions to the problems in the world they care about.  For example, in France, a Sopra Steria employee has developed a solution to help homeless people keep digital copies of their important documents and photos so they are not damaged when they are sleeping rough.  Now we are taking this to market.  Furthermore, employees who work on such projects are developing valuable skills they can use in their jobs.

This week at Sopra Steria

All of this is informing what we are doing during Community Matters Week.  Last year we introduced a new Community Strategy that focuses on four areas:

  • Digital inclusion
  • Educations, skills & employability
  • Entrepreneurship
  • Employee engagement

Entrepreneurship and employee engagement are at the heart of Community Matters Week: all of our volunteers are using entrepreneurial skills to find new, more effective ways of fundraising for the charities we’re supporting.  They are marketing, selling, building relationships, sourcing products (for example to go in raffles and auctions), and managing projects.  Employees have a say in how Community Matters Week is run, helping to choose which organisations we support and to develop and run their own activities during the week.  All Sopra Steria people get paid time off for volunteering, too.

This year we have more digital activities than ever before.

Our Digital Innovation team has developed a new app that will be used by dozens of employees to track distances walked, run, and cycled in our Step Up for Scholars Challenge, which will raise money for scholarships for young poor people in India to go to university.

We have an eBay-style e-auction that will enable our large, distributed workforce to get involved wherever they are during the week by bidding on great prizes, with all proceeds going to charity.

We will be live-streaming events, again, so all employees everywhere can join in the goodness.

Finally, Community Matters Week isn’t where our Community programme ends – it’s just the mid-year celebration of all the things we do throughout the year.  For example, coming up soon we’ll be driving greater digital inclusion through coding clubs for girls, gadget surgeries for older people in libraries, and support for the digital skills curriculum at local training colleges.  Watch this space for further updates on how we’re going beyond ‘the right thing to do’ and making a bigger difference to communities because of it.

The Promise of Platforms – Joined up outcomes and better value

One of the often-quoted benefits of digital transformation is the improvement in the ways government departments interact with citizens and business. Departments aim to use the same systems and shared data to avoid time consuming and repetitive tasks. But the reality often falls short of expectations. So, in this blog I take a look at why cross-cutting activity is rare and how digital platforms might help.

Why are public services so siloed?

The current departmental structure brings together and manages most areas of government business through a top down, vertical management structure. This approach is highly effective in delivering many of the government’s key priorities. It provides a single, clear line of accountability and keeps tight control over resources.

However, vertical structures also have many disadvantages:

First, issues or problems which straddle departmental boundaries are neglected. Budgets tend to be allocated on a departmental basis rather to policies that cross boundaries. And mechanisms for reconciling conflicting priorities are weak.

The result is that policy makers can take too narrow a view of the issues. They fail to look at problems from the perspective of the user. And they focus on what is easiest for government to supply, not what makes sense to the service user.

Second, departments also fail to recognise that local authorities have separate lines of accountability to local voters and may not share their priorities. So, departments tend to be overly prescriptive, in specifying the means of delivery as well as the ends.

And third, there are real obstacles to effective cross cutting working on the ground. It involves complex relationships and lines of accountability. Costs tend to fall on one budget while the benefits accrue to another. If appraisal systems are incapable of identifying and rewarding a contribution to a successful cross cutting project, the risks are one way.

So how do we join up government?

My experience is that cross cutting interventions work best when government makes clear their priorities and when champions at Ministerial and Permanent Secretary level (and / or chief executive and senior management team in local government) have a lasting effect on behaviour.

Also, with these supportive conditions, the adoption of digital technologies will enable cross-cutting work. For example, emphasis in UK government is now quite rightly focussed on how digital can support business transformation through, for example, the creation of shared components (such as Verify, Pay and Notify) and common workplace tools . The common link is, of course, information technology: co-ordination involving multiple providers that both depend on compatible IT systems and common data collection and architectures.

But perhaps just as significantly, digital approaches can promote dialogue with citizens and service users.

There are two aspects to this dialogue. First government needs to provide digital channels for information and views to reach them, which are not constrained to departmental silos – people and organisations should not have to tailor their views to fit Whitehall’s structure. People often want to be involved in shaping services, particularly at a local level, not just choosing between them. Open source methods that involve users in designing services have become commonplace in business and have always been common in civil society.

And second, government needs to shift the quality of the relationship between citizens and the state, so services are shaped around the individual’s needs rather than being too standardised. The commitment to make services more personal can mean little more than having someone – a teacher or a doctor – to talk to face to face. But it can mean a different curriculum and programme for every pupil. Or a different pattern or modular options of care for every patient.

Where are we see the benefits of joined-up government?

The harbingers of the future can be found where governments face the most intense pressures. This includes the increasing incidence of chronic conditions, as an ageing population and changes in societal behaviour are contributing to a steady increase in common and costly long-term health problems. Mental illness is equally significant, accounting for over 30% of all GP consultations and 50% of follow up consultations.

As a result, in the UK we now spend over £24 billion on disability and incapacity benefits for over 3.5 million working age people.

Chronic and other complex conditions are not easily administered or treated either through a traditional clinical lens or prescriptions. Much of the care is provided by families and friends and is too expensive to be provided by formal structures and by highly paid doctors. Most of the most important knowledge about how to handle these long-term conditions resides with other patients rather than just doctors.

So, part of the answer lies with giving people control over how money is spent and support structured to meet their needs. This means giving service users direct power over money and new structures of advice, often through simple but powerful online platforms/

At its best, these approaches bridge the bottom-up and top-down, paying attention to the worlds of daily experience rather than seeing people as abstract categories. Networks and platforms can help the state track behaviours, highlighting ‘what works’, and make it easier for people to band together and take control of their care.

Reframing Digital Inclusion: going beyond basic

Basic digital skills and access to the internet are essential for living well in today’s world, issues of too much screen time and the like aside. People with even basic digital skills earn more money, save on household expenses, have access to better employment opportunities and can stay in touch with distant friends and family. For the last decade, digital inclusion initiatives in this country have been focused on ensuring all people have the skills, confidence, and access to technology to get online.

While we must continue to get as many people to that basic level of digital aptitude, it’s time for those of us working on digital inclusion to think bigger. We are facing a perfect storm: an increased need for advanced technology skills as digital permeates everything (and the business understanding that will be needed to take advantage of sophisticated, disruptive new digital technologies), and a growing skills shortage.  Add to this a serious diversity problem and the growing understanding of the knock-on effect of unconscious bias in programming (e.g. of AI), and it’s clear we have a problem. But these challenges also present brilliant opportunities for the industry.

With this in mind, digital inclusion itself must become more inclusive; we must think bigger. I offer a new definition of digital inclusion that also acts as a mission statement in our sustainability work:

Digital inclusion means ensuring all people have basic digital skills and access to technology and the internet now, while expanding opportunity for gainful employment through more advanced digital skills attainment now and in the future.

To achieve this vision, we must start:

  • Investing in the next generation of tech talent now, and not just with coding education
  • Finding and training non-tech workers wherever they are now
  • Transforming our industry’s culture and image so different kinds of people can see themselves in it

Investing in the next generation of tech talent now

Already many of us in the industry, including Sopra Steria, are working with schools, colleges and other organisations to supplement curricula with various STEM learning initiatives.  But, as a society, we need to go further and think more broadly.  Coding clubs are hot right now, and have contributed to changing perceptions of our industry for the better.  However, we have fallen behind in investments in core education: a large proportion of schools report that their teachers do not feel prepared to teach using digital tools, and even computer science tutors aren’t confident when it comes to teaching coding.  Furthermore, connectivity is still a problem.  As of 2014, two-thirds of primary schools and half of secondary schools said they didn’t have adequate WiFi provision.

We also need to continue to reposition STEM (Science, Technology, Engineering, and Maths) subjects, ensuring they are part of core curriculum throughout schooling, not spinning off computer science modules as elective subjects.  The level of technology education today’s students will need tomorrow is much greater than it ever has been, and so related subjects should be treated as sacred as English and Maths are.

I would argue the same is true for arts education…or at least creative education.  The STEM acronym is emerging in a revised version: STEAM (A for Arts), and for good reason.  As computers evolve to become more self-sufficient (i.e. more programming being undertaken by computers themselves), some coding careers will become obsolete.  The more advanced jobs in this space will be for not just the cleverest programmers, but the most creative minds among them.   (Recall the Albert Einstein quote “Imagination is more important than knowledge…” for a reminder that creativity has always been a part of brilliance in science).  But creativity and imagination won’t just be important for the techies of the future: the promise of many of the technologies on the horizon is that we will all be able to use them for better outcomes of all kinds.  We are told doctors shouldn’t fear being replaced by robots, because they will have their work enhanced by AI and big data.  The same goes for lawyers, scientists, social workers, and so many other kinds of workers.  We will become (even more) augmented humans, and augmented humans will only reach their potential if they know what questions to ask their computers.  That takes imagination and creativity.  Likewise, these skills will continue to play an outsized role in dreaming up how technology can be applied to solve current and emerging challenges, be it business challenges that lead to the creation of the next Uber, or societal challenges like solving plastic waste.

Finding and training non-tech workers wherever they are

There is still too much reliance on people finding their way to us in tech.  That is, people who benefitted from the education system and recruitment pipeline that is still plagued by unconscious bias, and an industry culture that, although cooler than it used to be, is still not welcoming to all potential talented people.  We can’t afford to wait for those who are in school now to join us, so we must transform our talent search and employment offer.  There is much to be done – and, to be fair, a lot being done, including offering more flexible working and setting objectives for diversity in recruitment and performance management – but I see two main hurdles not getting enough attention: reliance on traditional talent pipelines (including elite universities), and stubborn insistence on non-essential skills.

Elite universities produce many talented people, to be sure, and they should be in the recruitment mix.  But they shouldn’t be the only avenue, or even the most significant one.  First of all, we will never get enough candidates if we only target students coming out of top universities.  Second, these univiersities won’t help fix our diversity issues.  People from ethnic minority backgrounds and of lower socio-economic status are severely underrpresented here.  This in itself will perpetuate the lack of racial and socio-economic diversity in our sector, if we rely on these universities for our candidates too heavily.  But the problem goes deeper: the pervasive homogeneity within these institutions could mean that organisations that rely on them too heavily for talent will not only have diversity problems as described above, but they will also have a lack of diversity of thought and experience.

Drawing up a job description for a recruitment advertisement is not fun, and if you can reuse one you’ve already got, you’re probably going to do that.  The problem is, the one you’ve got is probably a wish list instead of a job description.  It’s much easier to just list everything you can think of that your ideal candidate might be able to, than to take the time to seriously challenge yourself to identify and prioritise a few skills and qualifications that you absolutely cannot do without.  (The old quote “I’m sorry I wrote such a long letter, I didn’t have time to make it shorter” springs to mind).  But we absolutely must start to do this.  For one, we know that women are likely to rule themselves out for a position if they feel they don’t meet 100% of the criteria, whereas men will tend to apply for the role if they feel they meet a third of them.  Going beyond gender, I believe we could also find untapped talent pools if we took up the practice of examining our real needs and priorities, and considering training and reskilling options.   Could a construction worker become a project manager?  Could an artist become a UX designer?  Could a stay-at-home mum who worked in tech 10 years ago jump into a sales role?  The answer is maybe, but not if we weigh down our adverts for roles with too many non-core criteria.

Being imaginative about where we’re going to find talent now and in the short-term is also crucial to preparing for any displacement that emerges from greater automation.  We will have to be better at seeing skills and competences that are transferrable, and spotting potential for non-technical people to become more technical.  And we have to commit to real retraining programmes.  Done right, retraining should be a better option than letting people go and trying to find talent in this tight market.

Transforming our industry’s culture and image

Despite progress, our industry’s culture and image continue to be barriers to addressing the skills gap.  If people don’t want to come to work in the industry because they don’t see others like themselves, or because some actors are contirbuting to a bad reputation, we will struggle to get the people we need.  The transformation will take place in our workplaces and in our work with schools and colleges, with new recruitment and talent management practices and culture change initiatives, and school outreach with a focus on diversity.  Again, though, we must think more creatively about the kinds of skills we want the future workforce to have.  We can’t train the kids of today for jobs that will be obsolete by they time they enter the jobs market; we have to help them develop problem solving skills, creativity, critical thinking skills.  If we do this, it will have a knock-on effect on our culture and image, because we won’t just be bringing in the old school geeky types from the same backgrounds.

Finally, we can do more to inspire the people we want to attract.  Technology is playing a huge role in addressing some of the world’s greatest challenges, such as climate change, social isolation, and access to healthcare.  I’ve seen firsthand in our work with schools and colleges how talking about technology as a force for social and environmental good captures imaginations and gets kids’ interest.  People of all ages want to make a positive difference in their work, and ensuring we offer those opportunities to our workers now and in the future is the right thing to do and a good way of attracting people.

It’s a lot of work.  Is it worth it?

The benefits to us in business should be clear enough: we can solve our skills shortage over time and address our diversity issues, and improving diversity brings with it its own business benefits. But this is also important on a people level: almost all jobs will require tech skills of a level higher than is required today, and the best jobs will continue to be in tech (yes, I’m biased). Enabling more people to work effectively in the most rewarding jobs could help to turn around the trend towards growing economic disparity in developed countries, and will foster stronger, fairer economic growth.  It will also make those of us in the industry better at what we do: right now we are at risk of creating flawed products because we don’t have enough people from different backgrounds contributing to their creation.

So, yes, the challenge of becoming truly digitally inclusive in the terms described above is a big one.  But we don’t really have a choice if our industry is going to continue to be the engine of economic growth and innovation that it has been.  Let’s get to work, and more importantly, let’s get others to work with us who aren’t yet!

AI – The control problem

When designing a system to be more intelligent, faster or even responsible for activities which we would traditionally give to a human, we need to establish rules and control mechanisms to ensure that the AI is safe and does what we intend for it to do.

Even systems which we wouldn’t typically regard as AI, like Amazon’s recommendations engine, can have profound effects if not properly controlled.  This system looks at items you have bought or are looking to buy. It then suggests other items it thinks you are likely to additionally purchase which can result in some pretty surprising things – like this:

amazon.png

Looking to buy a length of cotton rope?  Amazon might just recommend that you buy a wooden stool alongside it.  As a human, we would not suggest these two items alongside each other.  However Amazon’s algorithm has seen a correlation between people who bought cotton rope and those that also bought wooden stools. It’s suggesting to someone buying the rope that they might want a stool too with the hope of raking in an extra £17.42.  At best, this seems like an unfortunate mistake.  At worst, it’s prompting extremely vulnerable people and saying ‘why not?  This happens all the time?  Why don’t you add the stool to your basket?’.

If this can happen with a recommendation algorithm, designed to upsell products to us, clearly the problem is profound.  We need to find a reliable means to guarantee that the actions taken by AI or an automated system achieve a positive outcome.

Solutions?

Terminal value loading

So, why don’t we just tell an AI to protect human life?  That’s what Isaac Asimov proposed in ‘I Robot’.  Here are the three laws;

  1. A robot may not injure a human being or, through inaction, allow a human being to come to harm.
  2. A robot must obey orders given it by human beings except where such orders would conflict with the First Law.
  3. A robot must protect its own existence as long as such protection does not conflict with the First or Second Law.

They sound pretty watertight.  Adding in no injury through action or inaction seems to avoid a dystopia where AI takes over and lets the human race finish itself off.

Despite how good these laws sound, they don’t work.  Asimov wrote these laws for use in novels, and the novels were much more interesting when things went wrong.  Otherwise we might have ended up with a book of ‘Once upon a time, the end’.

There’s a 4th law, the ‘Zeroth Law’ added by Asimov . This extra rule was supposed to fix the flaws of the other three, the ones that gave Will Smith a bad day. I confess, I’ve not read the book, but I understand that one didn’t go so well either.

The rules don’t even have to refer to people to be a risk.  They could be about something really mundane.  Take the idea of a paperclip maximiser, an idea put forth by Nick Bostrom. This would be a machine made by a hypothetical future human race to manage paperclip creation. Paperclips are just a simple resource and seemingly don’t need a ton of consideration to make them safe, if we tell the AI that it’s purpose is to make paperclips, and that’s just what it does.

But what if we end up with a super intelligent system, beyond our control, with the power to rally the resources of the universe making paperclips? If this system, whose priority is turning everything it around it into paperclips, sees its creators attempts to prevent it reaching this goal, the best bet is to eradicate them.  Even if it doesn’t decide to eradicate them, those humans are still made out of valuable matter which would look much nicer if it was turned into a few paperclips, so turn them into paperclips it shall.

How do we change that terminal value?  Tell the machine to make 1,000 paperclips instead of turning the entire universe into paperclips? Unfortunately, it’s not much better.  That same AI could make 1,000 paperclips, then proceed to use all the resources in the observable universe (our cosmic endowment) to make sure that it’s made exactly 1,000 paperclips, not 999 or 1,001, and that those paperclips are what its creator intended for it to make, and all of the perfect quality to satisfy their desire.

It might not even be fair to give a super intelligent machine such a mundane terminal value– assuming we find a way to make its value remain constant despite becoming extremely intelligent.

Here I am with a brain the size of a planet and they ask me to pick up a piece of paper. Call that job satisfaction? I don’t.

Marvin – Hitchhiker’s Guide to the Galaxy, by Douglas Adam

 

TL;DR – Terminal values don’t seem to work well.

Indirect normativity

Instead of giving a machine a terminal value, could we instead indirectly hint towards what we want it to do?

If we managed to perfectly sum up in terminal value what morality meant to the human race in Viking times, we might have an AI which prizes physical strength very highly.  We might think we’ve reached a higher ethical standard today but that’s not to say 1,000 years from now we will not look back on the actions we are taking were ignorant.  Past atrocities happened on human timescales, with only human level intelligence to make them happen.  Doing it orders of magnitude faster with a machine may well be worse and irreversible.

With indirect normativity we don’t even try to sum up that terminal value; instead we ask a machine to figure out what we want it to do.  Using something like Eliezer Yudkowski’s ‘Coherent Extrapolated Volition’ which asks that an AI predict what we would want it to do if “if we knew more, thought faster, were more the people we wished we were, had grown up farther together”

Rather than following whatever ethical code we have at the time of releasing the AI, we create something which grows and changes as we do, and creates the future which we’re likely to want rather than a far more extreme version of what we have today.

There’s perhaps still some overlap between this system and terminal value loading, and contradictions that the systems would find.  If a machine is asked to do whatever is most valuable to us, and prizes making that correct decision over anything else, perhaps its decision will be to take our brains out, put them on a petri dish and figure out exactly what we meant for it to do.  A clause like ‘do the intended meaning of this statement’ would seem to lessen the concern, but again, to know what we intend the machine needs to be able to predict out behaviour.

A perfect prediction system would look a lot like a ‘Black Mirror’ episode.  Using an application without a second thought to manage your home automation or to find your next date. Not knowing that the machine is simulating thousands of thinking and feeling human minds to make an accurate prediction of your desires and behaviours, including all the pain that those sentient simulations feel when being torn apart from one another on thousands of simulated dates to gauge how likely you are to stay together against all odds.

The control problem is extremely tricky, and looks for answers to questions which philosophers have failed to reach a consensus on over thousands of years of research.  It is imperative  that we find answers to these questions, not just before creating as Super Intelligent AI, but in any system that we automate.  Currently the vast majority of our resources and effort is put into making these systems faster and more intelligent, with just a fraction focused towards the control problem or the societal impact of AI and automation.

Let’s redress the balance.

 

Bridging the gap: how Fintechs and ‘big business’ can work together

by Colin Carmichael, UK Fintech Director

Everyone’s talking about Fintechs – but what does ‘Fintech’ really mean?  It’s a generic term that loosely groups a number of innovative technical organisations within Financial Services.

As the Fintech director for Sopra Steria, I believe I know all about Fintech. To me, Fintech is all about change – introducing new, fresh ideas and ways of working – and making them happen. I’ve worked in financial services across the UK, Europe and further afield for many years – and organisations of all sizes find it hard to change; the bigger the organisation – the greater the challenge. Change means that organisations have to think and act differently to introduce brand new ways of working to deliver desirable services to their customers.  The customer really is king and new products and services need to be built to their wishes (rather than the ‘old fashioned’ way of creating a product and selling it hard). What’s more, new, faster technology and access to huge amounts of data have made this issue more acute as it’s raised customer expectations. Put simply – there’s so much to think about and to do to get ahead and stay ahead.

Organisations need to keep up with the very latest ideas – and still deliver a reliable and robust service. And it’s a fact that incorporating new technology is how they will do it. So why is it so challenging for Fintechs and big players to work together? All too often, Fintechs struggle to get their ideas to the right decision makers – and established businesses are nervous of too much change.

The biggest hurdles are often company politics, internal structures, old processes and course – the difficulty of incorporating brand new ideas into ‘old’ systems. For Fintech’s, it’s tricky to get the right contacts at the right level – and to also ensure their ideas are brought to life safely and securely.  For banks and insurers, introducing new, untried and tested ideas is hugely risky and it can take a long time – as well as effort and money to get it right.

What’s needed is a bridge between the Fintechs and the more traditional organisations – to help them to work productively together. Organisations like Sopra Steria have platforms that are at the heart of many of today’s large businesses – and they also understand existing processes, procurement and politics which often stand in the way of getting things done. By working together, Fintechs, established players and platform organisations can listen to and learn from each other, in order to fast track innovation and get the results they need – quickly and cost effectively.

So, my advice to banks and insurance companies as well as the Fintechs is to work and collaborate with a platform provider from the start. Fintechs can safely test and prove their worth in ‘virtual factories’ using real systems and data – and financial organisations can be confident about bringing the best and brightest ideas to market without huge risk. It puts new Fintechs in touch with established players – and accelerates change. And that’s what we all want.

So, maybe, we shouldn’t be using the term ‘fintech’ to refer to just new and upcoming technology companies. After all – aren’t we all Fintechs? Perhaps instead we should be focusing on partnerships and collaborations between new technology companies, established organisations and the role platform players have to accelerate change.

It really is true. It’s not what you know but who you know that makes all the difference.