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CIOs keen to drive consequential-innovation

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A couple of weeks ago I chaired a Global CIO Institute conference, hosting a dinner, various talks, and round table discussions with CIOs.

What has struck me during all these interactions was the marked contrast between these CIOs at the coalface and the topics obsessed upon by LinkedIn/academic/journalistic style discussions. While CIOs are interested in topics like digital transformation, AI, robotics, data-lakes and lakehouses, the API-economy and the rise of ChatGPT (the usual LinkedIn fare) these were not what drove them. Their interest was much more on safely driving consequential innovation within their company’s line of business.

Of significant interest within this was the need to manage various forms of risk. Risk was not to be “avoided” – or as Robin Smith (CISO) at Aston Martin put it, we need to promote “positive risk taking” for innovation. All intervention generated risk. For some this manifested as needing guard-rails around IT innovation so creative and innovative staff were not constrained by the risk of a catastrophic failure. This was particularly true as low-code and citizen development expands. For CIOs, developing a culture of innovation demanded systems that allowed innovations to fail safely and elegantly.

Risk-taking behaviour within innovation was only one risk they face. Sobering conversations concerned external sources of risk and the need for business resilience in the face of pandemic, war, and cyber-security challenges. Any innovation in digital technology increases the potential surface-area that companies can be attacked through. This demands ever more sophisticated (and expensive) technical countermeasures but also cultural changes. While attention is driven towards the use of AI (like ChatGPT) for good, nefarious actors are thinking about how such tools might be used for ill. For example, attackers can use emails, telephone calls, and deep-fake video calls to sound, and even look, like a company’s CEO or top customer asking for help[1]. How can CIOs ensure their staff do not fall foul of these and various more technical scams? How can trust be established if identity is hard to prove? What happens when AI is applied to exploring possible attacks through Public APIs?

Also of significant concern was keeping-the-lights-on with their ever more demanding and heterogenous estate of products, platforms and systems. One speaker pointed out the following XKCD cartoon which captures this so well. The law of unintended consequences dominated many of their fears, particularly as organisations moved towards exploiting such new-technologies in various forms.  

 Source/: https://xkcd.com/2347/ (cc) XKCD with thanks).

What was clear, and remains clear, is that we need to have a view of the enterprise technology landscape that balances risk and reward. While commentators ignore the complexity of legacy infrastructure, burgeoning bloated cloud computing estates, and the risks involved in adding more complexity to these, those tasked with managing the enterprise IT estate cannot. 

These thoughts are obviously not scientific and are entirely anecdotal. The CIOs I met were often selected to attend, the conversations were steered by agenda etc. But they did remind me why CIOs are not as obsessed with ChatGPT as everyone might think.

[1] An executive from OKTA gave the example of this for Binance exec says scammers made a deep fake hologram of him • The Register

Header Image “Business Idea” by danielfoster437 is licensed under CC BY-NC-SA 2.0.

Recruitment: LSE Fellow in Management (Information Systems and Innovation)

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Come join our group of Information Systems Researchers for a year: LSE Advert copied below.

LSE is committed to building a diverse, equitable and truly inclusive university

Department of Management

LSE Fellow in Management (Information Systems and Innovation)

Salary from £36,647 to £44,140 pa inclusive with potential to progress to £47,456 pa inclusive of London allowance

This is a fixed term appointment for one year

The Department of Management at LSE seeks to appoint an outstanding candidate in the area of Management – Information Systems and Innovation. The department’s faculty and research strength is centred in Employment Relations and Human Resource Management, Information Systems and innovation, Managerial Economics and Strategy, Marketing, Organisational Behaviour and Operations Management. The department’s faculty members are engaged in research and scholarly activity across LSE, through research centres such as the Centre for Economic Performance, the Behavioural Research Lab, and interdisciplinary institutes.  The department’s own portfolio of degrees includes the BSc Management, one-year and two-year MSc in Management, and six specialist one-year MSc programmes. 

The post holder will contribute to the Department’s teaching (postgraduate and/or undergraduate) and research activities in the discipline of Management – Information Systems and Innovation.

The successful applicants must have completed or be very close to completing by the post start date, a PhD in the area of Management including Information Systems and Innovation or a discipline relevant to the post.  A developing research record in well recognised peer reviewed outlets, and a clear and viable strategy for future research in the field of Management – Information Systems and Innovation is essential; as is relevant teaching experience and excellent communication and presentation skills.

For further information about the post, please see the how to apply document, job description and the person specification.

We offer an occupational pension scheme, generous annual leave and excellent training and development opportunities.


If you have any technical queries with applying on the online system, please use the “contact us” links at the bottom of the LSE Jobs page. Should you have any queries about the role, please email dom.facultyaffairs@lse.ac.uk.

The closing date for receipt of applications is 8 August 2021 (23.59 UK time). Regrettably, we are unable to accept any late applications.

An LSE Fellowship is intended to be an entry route to an academic career and is deemed by the School to be a career development position.  As such, applicants who have already been employed as a LSE Fellow for three years in total are not eligible to apply. If you have any queries about this please contact the HR Division.

I’m recruiting: Research officer in Information Systems and Innovation (IRIS Project)

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We’re recruiting for the IRIS research team at the LSE!

Research Officer in Information Systems and Innovation (lse.ac.uk)

The post holder will work on the EPSRC funded project: Interface, Reasoning for Interacting Systems (IRIS). The IRIS project is a collaboration between University College London, Imperial College of Science, Technology and Medicine, Queen Mary, University of London, and the London School of Economics and Political Science.

The successful candidate will manage all stages of the research process. This will include coordination of data gathering; research production; dissemination and communication of research findings; demonstrating the impact of the research; and contributing to applications for further research funding.  The post holder will co-author outputs for the projects and will likely co-author the academic papers.

Candidates should have expertise and research interests in Information Systems and Innovation.

A completed PhD, or close to obtaining a PhD, in Information Systems or a relevant related field by the post start date. Proven ability or potential to publish in internationally excellent publications; and experience in qualitative research method skills.

For further information about the post, please see the how to apply document, job description and the person specification.

 If you have any technical queries with applying on the online system, please use the “contact us” links at the bottom of the LSE Jobs page. Should you have any queries about the role, please email W.Venters@lse.ac.uk  

The closing date for receipt of applications is 7 June 2021 (23.59 UK time). Regrettably, we are unable to accept any late applications.

DIIESL Seminar Series – Innovation in the interface economy – APIs, business value and ecosystems

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DIIESL

Please join us for the next seminar in the DIIESL Seminar Series to be held online on Thursday 28th May 2021, details below.

DIIESL Seminar Series

Innovation in the interface economy – APIs, business values and ecosystems

Thursday 27th May 2021 

3.00 – 5.00pm (British Summer Time = GMT+1)

This is an online seminar, please click to register

Application Program Interfaces (APIs) arguably sit at the heart of innovating in this digital era. They allow the integration of cloud services, enable containerised applications (e.g. via Docker) to operate in new ways within Cloud environments, allow developers of all levels to innovate new services quickly and at low cost, and enable new business models such as product platforms and service ecosystems. For example, the explosion of AI technologies is, to a significant degree, enabled by APIs connecting cloud-based Machine Learning ‘Lego’ bricks to create ever new services at the point of need. In this way APIs are underpinning ‘combinatorial innovation’ (Yoo, Boland et al. 2012) of the modern cloud-based world.

Our third DIIESL seminar will bring together insights from academics working on Interfaces, APIs, modularity, and innovation.

Chairperson: Dr Will Venters, LSE

Speakers: 

Prof Nigel P Melville, University of Michigan, “Generating Business Value from Machine Interfaces: Models of Efficiency, Focus, & Transformation”.

Dr Roser Pujadas, LSE, “The role of interfaces in fostering digital ecosystems: A study of the online travel service ecosystem”.

Prof Hans Berends, KIN, Vrije Universiteit Amsterdam, “Innovation ecosystems and systems of use: the role of intermediary platforms and users in creating complementary value”.

For abstracts and speaker bios and for more information about DIIESL’s forthcoming and past seminars, please visit www.diiesl.org

(Image by Denny Müller on Unsplash)

LSE Sprint Week – in Covid times.

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On this last day of term I thought I would take a moment to reflect on the online teaching of “Innovating Organisational Information Technology” at the LSE with Carsten Sorensen and, in particular, the hugely popular LSE Sprint Week; a week long sprint following Jake Knapp’s influential sprint book which I organise and run.

Old Sprint Weeks

Usually this involves ~100 students working together in a huge hall around tables and whiteboards (see left). But this year, with only a couple of weeks notice, I had to move this entirely online. 110+ students, 21 parallel Sprints, various technical and administrative challenges, a real-world business problem, and world-class consultants judging on Friday afternoon. All online.

The week starts with a presentation from VISA of a significant challenge our students must address: this year it was various scenarios of fraud using the fast-payment infrastructure. Having received the challenge I released the my pre-prepared MURAL.co templates for each group to follow. The templates set out exactly what each group needed to do each day and were vital to ensuring groups could self-manage the week. Mural is a whiteboarding solution allowing you to zoom right into tiny post-it notes or images (see below). The groups would then use the templates adding their work collaboratively during the week and submitting their design via the red box on Fridays template. The template contain everything the groups needed including templates, instructions and forms.

The template was thus designed to be followed without outside facilitation by faculty and with each student in each group taking the role of group-facilitator for one of the days. In addition, dice were thrown to see who would be the “Decider” in the group – the group-CEO who could be called upon to make any tricky decision. Dice work well for this – ensuring the role is not always allocated to the loudest and most confident in the group.

One useful feature of MURAL is the ability to create rooms for shared collaboration around whiteboards. I therefore created seven rooms and clustered the groups into these allowing them to each see two other groups Mural-whiteboards. Clusters allowed groups to compare, discuss and peer-review each others work, and reduced the stress on groups as they could see how two other groups were struggling or overcoming the challenges and ask them questions. It also increased drastically social interaction among students. Each day Carsten and I met with each cluster for 30minutes – providing feedback and answering questions. This was important as it allows us to review each group quickly and maximise the time we had. Zoom was used for these meetings. We also held short “All-Hands” meetings every morning to share learning with the whole 110 students.

Outside speakers are major part of the Sprint Week and we were delighted to have Jake Knapp himself join us on two days to present and answer questions. This proved important as it reinforced that, despite not having a face to face sprint week, this was just as intense, innovative and important an experience for our students. This message was reinforced by VISA’s innovation team who have used Mural.co all this year, and by Roland Berger’s Spielfeld Digital Hub GmbH team who joined later in the week. Thanks to sponsorship from Roland Berger we could provide students with a copy of the book as well! [Jake is 4 along, 2, down, myself 2,1, Carsten 4,1].

Jake proved amazing at lightening the mood and helping the students realise that online sprints are certainly possible, and can easily be useful, innovative and fun – reinforced by organising a zoom dance session.

Scheduling

With so many moving parts during the week scheduling was vital. Outlook calendar proved the best tool available for this. Sharing my calendar with my admin support, and sending meeting invitations to all the students, either on-mass or in their clusters, allowed us to schedule the whole week. This also allowed dynamic changes during the week to be shared quickly with everyone and, crucially, handled time-zone challenges for those working overseas (though many of these students had decided to shift their body-clock for the week and so worked nights). Below is the final schedule for the week. Notice that during Wednesday and Thursday we had sessions where Roland Berger consultants mentored each group. This consultant feedback, (including from some who were our Alumni), was vital as it give industry-relevant feedback and reassured groups that the skills they were gaining were relevant to industry today! Finally we bought a cheap mobile phone and through this provided a WhatsApp, WeChat, Voice and Email helpdesk (manned by Dr Boyi Li) throughout the week.

Evaluation

During a face-to-face sprint it is easy to gauge the mood of the teams and adjust the week accordingly – indeed this is one of the key skills of a facilitator. But for twenty-one online parallel groups this was impossible. As such I devised a daily “check-in” form using Microsoft Forms which each student needed to complete nightly and which I reviewed each morning. This was helpful in showing minor points for improvement, and also extremely satisfying to see the overall rating for the the week:

Marking:

The students received two forms of feedback for Sprint Week. The first was on Friday when I invited industry experts (from Visa and Roland Berger, PA Consulting, Government and Salesforce) to form a “Dragon’s Den” to watch the video pitches each group had prepared and judge the winners based on innovativeness of the pitch. This was a wonderful experience for groups and unveiled the “winners” of sprint week – who will go forward to present their ideas to VISA’s innovation labs next year.

This was not however the judgement of academic success, and after Sprint Week Carsten and I carefully marked each groups project based on the following criteria (listed on each groups MURAL) for their academic grade:

Having an academic grade for Sprint Week has been important in ensuring groups feel the stress of caring about their design. Each group then received a feedback form with a few paragraphs explaining the rational for the marks and outlining any limitations in their design – thus ensuring they learnt from the entire experience.

Teamwork support

Before the week started teams were encouraged to organise a meeting and use the Team Canvas to understand their working practices and plan the week. I also held a 1hr introduction to Mural so the students would know how to use the tool effectively prior to Sprint Week.

Video Conferencing equipment:

Finally I was also lucky enough to have very good quality equipment to run Sprint Week . I used an ATEM Mini Pro video switcher and my own good camera and microphones for meetings. These tools proved invaluable during the teaching as, within zoom calls, I could add overlays with information (e.g. lower-third messages about the day) and professionally switch between devices (e.g. my video camera, an overhead camera for drawing/whiteboarding, images, my tablet as a white-board, even my phone to show a Time Timer app). During meetings for example I could put my phone as a timer in the corner of my Zoom video images to keep students to time. This technology, while expensive and complex to use, improved the professionalism of my teaching this term and, perhaps, along with the work above, helped reassured students that they were still receiving an LSE quality sprint experience online.

My “Lecture Theatre” during Sprint Week! (the tin foil on the window was to stop the camera overheating in the sun)

Recruiting: LSE Information Systems and Innovation Group – Associate and Assistant Professor levels.

Dr Will VentersLeave a comment

Fancy joining the LSE Information Systems and Innovation Group? We are recruiting an Associate Professor and Assistant Professor. Adverts below.

Any questions about this then Susan Scott is the best first contact! 

https://jobs.lse.ac.uk/Vacancies/W/3493/0/283924/15539/assistant-professor-in-management-information-systems

https://jobs.lse.ac.uk/Vacancies/W/2117/0/283916/15539/associate-professor-in-management-information-systems

Photo by Clem Onojeghuo on Unsplash

E-Governments and Governing in the Digital Age: Diiesl.org Seminar next week.

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E-Governments and Governing in the Digital Age

I am pleased to promote the following seminar (part of the Diiesl.org seminar series):

Online Seminar – to register your attendance please click here

Tuesday 24th November 2020

2.00 – 3:00-5.00pm (GMT) (note change of time!)

Governments and international organizations have increasingly been adopting digital technologies in the provision of public services in the last decades. The opportunities provided by digital innovations have hugely impacted the way the public sector has been transformed. E-government has been increasingly studied as a way to reach goals of efficiency, production and participation. Despite these improvements, governments seem to be struggling to make sense of the opportunities and challenges provided by digital technologies; they have been blamed for poor governance practices, discarding stakeholder concerns, and failing to consider the social implications of relying on digital technologies. 

With public sectors worldwide likely to be more than ever dependent on technology, there is a need for a nuanced account of how digital technologies impact on the provision of public services, and on the economic, political and social consequences that can result from this. 

In this workshop, we would like to reflect on e-government and governing in the digital age. Topics for discussion include: 

· E-government and the opportunities of digital technologies and platforms for public sectors 

· The potential social implications of implementing digital technologies and the role of policymakers 

· Accountability in the digital age: how to deal with risk, trust, participation and the production of value 

Chairperson: Dr Wendy Günther 

Speakers 

Dr Beth Kewell – Exeter Business School (INDEX): “UKRI Funding for Blockchain Research: Directions of Travel (Both Real and Imagined)” 

Dr Francesco Gualdi – London School of Economics: “Law, technology and policies: a complex negotiation to generate value”. 

Prof Rony Medaglia – Copenhagen Business School: “AI adoption in the public sector: opportunities and challenges”

iSChannel Journal 2020 – 15th year anniversary.

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I am proud that our MSc MISDI students have worked to publish our student-led academic journal the iSChannel this 15th anniversary year despite the COVID challenges. Below is the journal’s editorial. Take a look!

https://ischannel.lse.ac.uk/19/volume/15/issue/1/

EDITORIAL – From the Associate Editor

In its 15th year of publication, the iSChannel again focuses on social aspects of information systems. The contributions therefore take neither technologically deterministic perspectives nor purely socially constructive viewpoints, but instead provide socio-technical analyses. This year we have
again received a large number of submissions and are delighted to publish seven excellent papers.

Two articles focus on data privacy. In her highly topical article, Amy Vatcha examines contemporary forms of digital employee surveillance which in Corona times and massively increased remote work have gained high importance. Andrei Volkov discusses decentralised identifier systems as a new technical possibility for individual data control. However, they have to be modified to overcome the two key challenges of scalability and interoperability.

Three further articles concentrate on big data. In her critical literature review, Lisa Schaefer analyses big data in smart cities from a bounded technical-rational and a socially embedded viewpoint. The benefit of increasing cities’ efficiency must be balanced with inherent privacy issues. Sanveer (Sunny) Rehani analyses how the technical infrastructure of social media platforms advances filter bubbles. Especially personalisation algorithms favour filter bubbles and thereby amplify opinion polarisation. Keisuke Idemitsu examines socio-technical problems of mining social media data to create economic prediction indicators. The author substantiates his analysis on the example of the Japanese government using Twitter and blog data to predict industrial production.

The three remaining articles centre around socio-technical consequences of datafication developments. Yiduo Wang describes in her critical literature review how the abundance of automatically collected big data has triggered an epistemic change within research theory generation. Jiao (Joanna) Peng summarises two opposing theories on business-technology alignment, namely rationally planned and improvised alignments. Christian Poeschl analyses how the adoption of a new technology transforms decision-making processes in the public sector. Based on the novel digital German tax declaration system Elster, he finds that decision speed and discretionary power are changed and a more formalised as well as homogeneous decision-making process emerged.

We would like to thank all authors and reviewers for their outstanding contributions for this year’s 15th anniversary edition. Additionally, we would like to thank Will Venters, our faculty editor and the previous long-term senior editor, Marta Stelmaszak for their support in creating this issue. Covid-19 has considerably changed our studies at LSE and digitised our student community and campus life. It did not prevent us from jointly creating this issue, though, which we hope will find curious and kind readers.
Barbara Nitschke, Associate Editor

The leadership challenges of homeworking.

Dr Will VentersLeave a comment

Our notion of work and the office have changed forever. Whilst a positive experience for some, research shows we shouldn’t discount the benefits of an office environment. Will Venters and Enrico Rossi explain.

One lesson in leadership is not to make long-term decisions based on short-term experiences, while remaining ever mindful of world events. The last couple of months have provided many amazing examples of the success of homeworking and have certainly dispelled many criticisms. In the most part the technology works, we can meet people via Zoom and Microsoft Teams with relative ease (though we have also coined the term “Zoom-fatigue”) and most office work has continued well. But companies who see this as a tectonic shift towards a world where office-space is rendered unnecessary may be disappointed. While process and transactional work seems effective, the socialising, team building, learning and networking have been drastically reduced.

Our ongoing research has been examining how a very large global company’s high-level customer support staff went from being co-located in an office to all working from home. The lessons, based on numerous interviews, are stark with some staff hoping never to return to the office (often those with caring responsibilities at home, a long commute, or extensive experience), others desperate to get back (often those with small homes or partners also working from home, and with social or learning needs).

Not all workers enjoy the same conditions at home, and this can reintroduce disparities and injustices.

Two key changes are around learning and knowledge sharing. In offices, lots of knowledge is shared through serendipity; chance meetings in corridors or by the water cooler, the tea-break, the lunchtime chat[1]. These are crucial for knowledge sharing, generating new ideas, and bringing new staff into communities of shared practice and developing their identity as team-members[2-4]. Another form of informal efficient knowledge sharing is the “quick question”, where workers lean-back in their office chair and ask the people around them for help (a reason financial traders sit so closely together). These two forms of informal knowledge sharing have proved hard to replicate online. They are not however, always wanted in the office as they can be distracting (particularly for experienced staff who are constantly asked) and stressful (e.g. when managers constantly check their team). The transition to homeworking, and the consequential loss of informal knowledge sharing, was therefore perceived as a negative for some, but as a liberation for others.

Given this it was unsurprising that the very experienced staff we interviewed saw their productivity rise. One told us “I do more work at home… my workload has gone up massively” because in the office people were always coming up to her asking for help. Another told us “I am hitting targets more… without the office distractions…”,  “[in the office] I have nowhere to go because they ask face to face”. With homeworking, this person can choose which queries on the Instant Messenger app to answer and disengage herself whenever she feels the need to focus. Consequentially though, less skilled staff must spend more time finding the answer from the manuals and support tools which slows them down. As a junior person explained:

“[homeworking has] pushed me to educate myself more on what I don’t know… search for the information rather than just going ‘do you know this’…. It sinks in more if I have to find the knowledge myself”.

From a leadership perspective this feels very positive by fostering self-reliance, but the impact on new staff needs managing. More effort is needed to help them become part of the community at work. And, as online training proved less productive and harder to deliver, so more time is needed for training. Ideas like mentoring and regular-checkins seems sensible leadership responses here.

Our research also revealed the double-edge nature of digital technologies: they encourage people to share problems with a wider community (beyond their local desks) through platforms such as Microsoft Teams and Instant Messaging, but it also allowed workers to disengage and disconnect themselves from the wider social context by simply ignoring the chat, or putting it “in mute”- free riding on others. It was also harder for managers to keep track of staff – in particular, managers could not see the stress on people’s faces at home and so step in to help. And the lack of visibility increased pressure on some staff who felt the need to “prove something”, whist others were relieved and “liberated” from oversight.

Leaders should think about how to build a complex homeworking and office-working mix which maximises efficiency, equity and innovation.

Homeworking is also a great leveller – everyone had the same access to each other which proved a boon for staff who are usually located away from the main office. At the same time, not all workers enjoy the same conditions at home, and this can reintroduce disparities and injustices. Their work was impacted by different family and personal conditions (e.g. caring responsibilities, disabilities), different IT facilities (e.g. internet connection and hardware), but also physical facilities such as space for a desk, amounts of light, and whether other family members were trying to work from home at the same time. Leaders need to balance the disparity between equality of work for both office environments and homeworking. Consider, for example, the married couple we interviewed who are both now homeworking – the husband cooped up in the bedroom working for a bank, his wife downstairs in the open-plan living space. Neither could enter the room when the other was working and both worked long-shifts.

In summary, when designing physical office space architects consider balancing the need for efficient transactional work with socialised knowledge sharing and such design is linked to a wide range of factors such as the role and personality of the workers. For example, silicon-valley technology companies favour innovation over transactional work and so invest in fancy fun offices which foster interruption and informal gatherings and interaction. In contrast, many call-centres are physically organised to limit this kind of innovative interaction and focus staff on processing transactional work. When planning homeworking arrangements, the same thought for architecture, team-structures and support are needed. It is almost certainly not enough to simply replicate the same team and office structure online.

In the long-term, leaders should think about how to build a complex homeworking and office-working mix which maximises efficiency, equity and innovation, and should realise that this will vary considerably from individual to individual.

References

1. Fayard, A.-L. and J. Weeks, Photocopiers and Water-coolers: The Affordances of Informal Interaction. Organization Studies, 2007. 28(5): p. 605-634.

2. Orr, J., Talking about Machines: An Ethnography of a Modern Job. 1996, Ithaca, NY: IRL Press.

3. Wenger, E., Communities of practice : Learning, meaning and identity. 1st ed. Learning in Doing: Social, Cognitive and Computational Perspectives, ed. R. Pea, J.S. Brown, and J. Hawkins. 1998, Cambridge: Cambridge University Press.

4. Wenger, E., Communities of Practice and Social Learning Systems. Organization, 2000. 7(2): p. 225-246.

Feature image by Annie Spratt on Unsplash

What automation can do for small businesses

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What does automation mean for small businesses? And what processes can they automate today using current technologies?

Cloud computing provides small businesses with direct access to a huge range of automation solutions. But rather than automating their existing admin processes, small businesses may be better examining whether standardised processes already exist in the cloud through specialist tailored services.

Small businesses should be wary though as costs can escalate. Return on investment (ROI) analysis should be undertaken before committing, and automation services themselves need carefully managing. Small businesses must be particularly careful that they don’t end up locked-into a spaghetti like arrangement of different cloud services with escalating costs. One advantage of automation in the cloud however is that costs are linked to usage and thus scale as the business scales.

Where small businesses have existing processes that need automating, companies like AnotherMonday and UIPath have Robotic Process Automation (RPA) products targeting small business. Similarly, Low-Code providers like Mendix, Pega and even ZoHo support point and click application design. However, the skills needed to use these products are by no means trivial and the challenge is not just building the automation but maintaining and evolving it as business changes. Our own research suggests that many small businesses across Europe choose vendors based on the proximity of support staff during adoption[1].

Is the future of small business management creating entities to help owners/managers better run their businesses?

For decades small business managers have harnessed software such as spreadsheets to manage accounting or word-processors for mail-merges. The difference today is that new software is transforming processes allowing the integration of parts of the business using RPA, Low-Code development and AI. RPA automates robotic-human-processes in the sense that they are most capable of doing things which humans find robotic – the boring, repetitive, easy, precise work. Indeed since research suggests (Willcocks and Lacity 2016) companies do not fire staff when replacing their work with RPA but instead redeploy them to more value-added work, so many employees may welcome RPA as it frees them to do the exciting, interesting and value-creating work rather than the drudgery. I believe the future of small business is about focusing on core-capabilities (the stuff the business does best and adds value) and seeking to streamline the none-core capabilities through automation, cloud services and better organisation.

One way of achieving this streamlining is through collaboration. Small businesses should collaborate to automate capabilities which are not core and build ecosystems of connected services which adds value to all. For example, small UK businesses in a sector might collaborate to produce standard automation for a problem they all face (for example specific customs-related administration post Brexit). These businesses are well placed to understand the specific requirements for the automation solution for their sector and thus develop something which works for all. Government pump-priming support for such initiatives might also be helpful.

What are the key challenges facing the small and micro business owner wanting to use more automation? Isn’t AI and Machine Learning only for big businesses?

Advanced AI and automation are already available as cloud services from the likes of Amazon AWS, Google’s Tensorflow, and Microsoft Azure. While these obviously require some skills to exploit, they do not require a PhD in AI. Indeed, innovative small companies may be better placed to create innovative AI solution as they are unencumbered by legacy IT processes and can move quickly.

There are however five major issues: Data, skills, interfacing and bias:

  • Small businesses will struggle to acquire the data to train machine learning (ML) algorithms whereas big businesses often have data-lakes from which they can use ML to extract insight and value. It is these vast data-lakes which are driving the growth in AI. Small companies may struggle to have enough data to train the algorithms to work effectively.
  • Small businesses may struggle to find the skills even with todays cloud-AI framework. My own research (Venters, Sorensen et al. 2017) suggested 71% of IT departments have lost revenue due to lack of cloud skills alone. Building an AI automation solution requires cloud and AI skills as well as those of analysing the business problem being are automated. Maintenance of the application will also be needed over the long term. Small consulting practices and agencies will likely emerge which are better placed to assist specific types of small business in this work.
  • A solution to the skills and data challenges is interfacing: connecting small company’s systems together to pool the data they have, share the cost of innovation, and build system which, by connecting companies together, can complete with large enterprise. For example, firms within a supply chain might collectively (obviously within the limits of competition law) build automation which, through the collective sharing of production and usage data, improves the production processes of all of them. Managing this interfaced relationship will obviously require work (and is the focus of my own research[2]).
  • One of the significant challenges of AI is that it can only learn from historic data which may embed pre-existing biases, or fail to reflect current (and planned future) organisational realities. Keeping an open mind, examining critically and carefully calibrating AI solutions for today’s reality is vital. Given that organisations will change and evolve this final issue requires careful skills. It is easy to build a successful solution to yesterday’s problem.

Is a bot, or other Machine Learning-based entity, a small business’s next employee?

A bot or Machine-Learning based entity is not like an employee. But, for this very reason, they need carefully managing by human employees. Bots won’t question their work; they hold no ethical compass; they cannot easily explain how they arrived at a decision; and they cannot understand the biases they might be applying. Further, they work so quickly that the problems they cause can rapidly scale out of control. For this reason, managing bots requires frequent checks to ensure they are working in the company’s best interest and delivering a clear ROI.

As significant may be that the a small-businesses’ future customers may be AI-led bots that negotiate and place orders automatically with complex market analysis. This may change the way small businesses transact their businesses and derive profit.

Will some freelancers and micro business eventually be competing against AI-based services?

It’s easy to overplay the success of AI-services compared to a human. AI suffers from the frame problem (Boden 2016) in that they cannot understand what it is to be human and make human-decisions – they can only apply robotic action or make inferences from existing limited data. The most likely emerging reality then is not that a bot or AI will replace employees, but that employees’ capabilities will be drastically improved by working alongside AI and technology. Seeing human and machine as entwined rather than opposed is a more productive perspective.

What’s somewhat more interesting is how many micro-businesses today are becoming human-intelligence based services (forms of mechanical turks[3]) provided to large AI-reliant platform companies. Consider Uber; for the “micro-business” person driving the car their “company” is entirely controlled by the Uber algorithm which allocates their piece-work contracts to drive. All traditional business functions – marketing, quality-control, advertising, sales etc. that a small mini-cab company might have provided are subsumed into the Uber platform leaving the drive-business reduced to just the intelligent driving skill. Ubers seem closer to self-driving cars than to mini-cab-firms in that the human only provides the driving-intelligence. Similarly, eBay and Amazon Marketplace have reduced retail to mere product acquisition.

What does small business automation look like in 2025?

I think many small businesses will prove highly efficient as their administrative overhead reduces allowing them to complete more easily and efficiently with larger companies. As small business automation matures so the cost of doing business will be reduced allowing more exciting and innovative businesses emerge which are both efficient and agile. The rise of Harry’s Razor for example shows how a plucky start-up harnessing online tools in marketing can build a business to complete with global multinationals.

It would be great to see government departments focused on supporting this innovation. For example, if they used next five years to focus on producing standardised APIs that allow small businesses to easily comply with “red-tape” rather than through mountains of form-filling. This would require considerable change in the way Government built and used their IT[4].

We should also not underestimate the growth of blockchain alongside automation. By providing mechanisms for establishing trust the technology could allow small businesses to collaborate more fluidly with greater safety. Smart contracts, for example, might ensure that payments happen immediately and automatically once a product is shipped.

Physical robots are also rapidly improving and may form part of physical-automation processes alongside digital ones. For example, robots, like the early Baxter, can now safely work alongside humans and are easily trained for repeated activities. If coupled with a process automation application one can envisage such robots undertaken key tasks (e.g. picking, boxing and labelling) unaided. Further out, as robotics takes the place of humans, so the economics of manufacturing may shift in favour of producing closer to the consumer rather than overseas – a move which may benefit small business.

Finally, once automation becomes accepted within the small business community, I think we will see the rise of ecosystems of small businesses working together to take on larger enterprise. By drastically reducing the transaction costs involved in collaborating there is little reason such ecosystems cannot outcompete.

References

Boden, M. A. (2016). AI: Its nature and future, Oxford University Press.

  • Venters, D. W., C. Sorensen and Rackspace (2017). The Cost of Cloud Expertise, Rackspace and Intel.
  • Willcocks, L. and M. C. Lacity (2016). Service Automation: Robots and the future of work. Warwickshire, UK, Steve Brookes Publishing.

[1] Polyviou, Pouloudi and Venters, (Forthcoming),” Sensemaking and proximity in cloud adoption decisions” (Working paper).

[2] https://binaryblurring.com/2017/12/04/win-of-6-million-to-research-digital-interfacing/

[3] https://en.wikipedia.org/wiki/The_Turk also https://en.wikipedia.org/wiki/Amazon_Mechanical_Turk

[4] Fishenden, J., M. Thompson and W. Venters (2018). Better Public Services: The Green Paper accompanying Better Public Services, A Manifesto. Launched at the Institute for Government on 27th March 2018.

Feature image by James Pond on Unsplash. (With thanks).