WORKING DRAFT Last Modified 23/03/2017 10:56 GMT Standard Time Printed 22/03/2017 12:45 SA Pacific Standard Time CONFIDENTIAL AND PROPRIETARY Any use of this material without specific permission of McKinsey & Company is strictly prohibited The Future of Work – Next Generation Automation Discussion document | Paris, March 23, 2017
22
Embed
The Future of Work Next Generation Automation - Contextorcontextor.eu/wp...Next-generation-automation-vFinal-Presented.pdf · CONFIDENTIAL AND PROPRIETARY ... Next Generation Automation
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
WORKING DRAFT
Last Modified 23/03/2017 10:56 GMT Standard Time
Printed 22/03/2017 12:45 SA Pacific Standard Time
CONFIDENTIAL AND PROPRIETARY
Any use of this material without specific permission of McKinsey & Company
is strictly prohibited
The Future of Work –
Next Generation Automation
Discussion document | Paris, March 23, 2017
2McKinsey & Company
Introductions
Rodrigo Chaparro
Partner
Paris
• Leader in McKinsey’s Digital
Services practice
• Expertise in large-scale
transformations, capability
building programs, and next
generation optimization
• Served multiple
transformations across
different industries in
Europe, North and South
America over the past 11
years
Associate Partner
London
• Core member of the Digital
Service practices
• Expertise in structuring and
building capabilities to
deliver large-scale, multi-
level transformations
• Set-up Next Generation
Optimization programs at
leading global banking and
insurance clients over the
past 8 years
David Taylor
3McKinsey & Company
Contents
Overview of the opportunity
Case examples
Achieving impact at scale
4McKinsey & Company
Text
50%automated by currently available technology, additional 10-15% will
be automatable in the near future as technology continues advancing
of activities individuals are paid for can be
1.2 BillionThe equivalent of
workers could be affected
$ 14.6Trillion in annual wages
Potential global impact of automation by
adapting currently demonstrated technology
Next Generation Automation will dramatically reshape the global economy
with half of the tasks people perform today already automatable using
existing technologies
SOURCE: McKinsey analysis
5McKinsey & Company
24
34
35
35
35
36
39
40
40
43
43
46
48
49
50
52
55
56
60
64
Information
Agriculture, forestry, fishing and hunting
Management of companies/enterprises
Administrative/support/waste management
Transportation/warehousing
Health care/social assistance
Retail trade
Arts/entertainment/recreation
Finance/insurance
Real estate/rental and leasing
Educational services
Manufacturing
Federal, state, and local government
Mining
Construction
Professional, scientific, and technical services
Accommodation/food Services
Utilities
Wholesale trade
Other services
There is 30-50% of automation potential across numerous industries
Impact of automation by industry
SOURCE: BLS 2014; O*Net; Global Automation Impact Model; McKinsey analysis
FTE weighted percent of technically automatable1
activities by industry
Percent
All industries
are likely to
have significant
share of
automatable
activities
However the
share varies
across
industries –
35% in
healthcare vs.
56% in
agriculture
1 We define automation potential by the work activities that can be automated by adapting currently demonstrated technology
6McKinsey & Company
However, the majority of efforts are focused on customer-facing processes
and not on capturing the 30% saving possible in back-office automation
SOURCE : McKinsey Global Institute, McKinsey CBF Practice
100
55
45
Technically
Automatable1
45%
60%
Economical to
Automate
50%
50%
Strategic
back-office
activities
Transactional
back-office
activities ~30%
~20-25%
1 Based on MGI assessment of automation potential where 90% of Fully Automatable, 60% of Highly Automatable, 30% of Somewhat Automatable, and 0% of Difficult to Automate tasks
were included as Technically Automatable
Typical
Savings
Share of
activities
7McKinsey & Company
Next Generation Automation programs are enabled through a portfolio of five
types of technologies
Machine
learning
Natural language
generation
Smart
workflows
Robotic process
automation
Cognitive
agents
Automate routine tasks
through existing user
interfaces
(e.g., data extraction
and cleaning)
Identify patterns
in data through
supervised and
unsupervised learning
(e.g., decision
algorithms)
Integrate tasks
performed by groups of
humans and machines
(e.g., month end
processes)
Synthesize textual
content by combining
data and analytic output
with contextualized
narratives (e.g., data to
story translation)
Build a virtual workforce
capable of supporting
employees and
customers
(e.g., employee service
centers)
SOURCE: McKinsey Corporate and Business Functions Practice; Company Websites
8McKinsey & CompanySOURCE: McKinsey analysis
Next Generation Automation tools mimic all human capabilities involved in
day-to-day work activities
Generating novel patterns/
categories
Logical reasoning/problem solving
Optimization and planning
Creativity
Information retrieval
Coordination with multiple agents
Output articulation/presentation
Natural language generation
Natural language understanding
Recognizing known patterns/
categories (supervised learning)
Cognitive
capabilities
Social and emotional
reasoning
Social and emotional
sensing
Emotional and social output
Gross motor skills
Navigation
Fine motor skills/dexterity
Mobility
Social and
emotional
capabilities
Physical
capabilities
Sensory perceptionSensory perception
9McKinsey & Company
Most automation focuses on client-facing processes, leaving
> 50% of the bank's FTEs in the back office largely untouched
SOURCE: McKinsey team analysis at large universal bank
Distribution of FTE across business area and function, percent
Customer-
facing sales
Internal
support functionsMain E2E processes
Other
back-office
processes
Retail and
wealth
Finance
HR
Risk
IT
Utility functions
Commercial
Wholesale
Insurance
24% 53%
92%
75%20%
51%12%
44%9%
12% 11%
100%
100%100%
100%
8%
5%
13% 24%
11% 36%
BANK EXAMPLE
10McKinsey & Company
Next Generation Automation technology focuses on untapped opportunities
in the “long tail” of automation
Au
tom
ati
on
im
pact
Specialised
Process
Specialisation
Generalised
Typical scope of
Digital/STP/BPM
Typical scope of Rapid Process
Automation (Lean + Robotics)
Managed by Digital/IT
team
Managed by Operations teams
with light IT governance
• Rapid process
automation
integrates Lean
and Robotic
Process
Automation to
address the long
tail of automation
potential
• The approach is
ideally suited to
back-office
environments with
repetitive
operational
processes
The ‘long tail of automation’ potential
11McKinsey & Company
Over half of the tasks in the back office can be fully or mostly
automated
Difficult to
automate
Fully
automatable
12%
100%48%
20%
20%
Total tasksMostly
automatable
Somewhat
automatable
No human
intervention
Most work
managed by
technology
Most work
managed by
humans
Few
technology
applications
Potential for automation
Percent of tasks
Record
to Report
DIAGNOSTIC CASE EXAMPLE
Where IPA can help drive
automation at scale
Focus of traditional
automation efforts
12McKinsey & Company
Contents
Overview of the opportunity
Case examples
Achieving impact at scale
13McKinsey & Company
There are a number of automation use cases that are common