Digital labor: the next frontier | KPMG | QA

Digital labor: the next frontier in government transformation

Digital labor: the next frontier

Digital labor is an opportunity for governments to offer better services to constituents.

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While digital labor presents a significant opportunity to enable efficiencies that drive transformation, governments must proactively address challenges in realizing its potential to offer better service to constituents and renewed job satisfaction and engagement for workers.

In seeking to drive efficiencies, government has traditionally employed a more cautious approach than the private sector. However, the availability of powerful and inexpensive processing power coupled with advances in artificial intelligence (AI), natural language processing and the exponential growth of data, has created an opportunity for governments to embrace digital labor to help drive long-term transformation strategies.

Digital labor, defined as the automation of labor by leveraging digital technologies to supplement or automate the tasks undertaken by knowledge workers, can be put to work both in evaluating the quality, regulation and consistency of service delivered to constituents and in tackling the challenges presented by continually shrinking budgets and a workforce in flux.

Sector demographics: a changing workforce

Public sector workforce demographics across countries like Australia, Canada, Germany, the UK and the US are undergoing significant change. A recent report from the US Government Accountability Office predicts that over 30 percent of US federal employees will be eligible to retire by 20161. As large numbers of “Boomer” generation employees vacate their positions, the automation of manual roles currently performed by these workers can enable efficiencies and behavioral change to kick-start agency-wide transformations.

The historical reluctance of the public sector to move labor “offshore” due to security and political concerns has also amplified the potential for digital labor. Government now has the opportunity to improve service levels to citizens, elevate job satisfaction for existing workers and inspire a new generation of young talent into public service.

Digital labor and automation

Digital labor spans core technologies such as rules engines and workflow to artificial intelligence (AI) and machine learning that can support cognitive reasoning. This technology is evolving at different rates, providing a spectrum of capabilities ranging from simple, repetitive task automation to machines or ‘bots’ that can learn and adapt.

The potential for deploying automation in the public sector is significant. For example, automation can allow for greater agility in responding to regulatory change, greater consistency and increased access to data.

As cognitive technology improves, automation can provide improved structured insight, allowing public sector organizations to make quicker and more detailed assessments that can inform reactive strategies. These “non-invasive” opportunities mean little or no change to existing agency architecture, allowing organizations to provide better auditing and a higher consistency of work, while maintaining 24/7 availability.

Automation in action

The benefits of automation are already being felt in the private sector, where its deployment is resulting in significant ROI, greater job satisfaction, and better customer service. One example with potential application in a public sector setting is the call center.

Call centers typically perform a high volume of low complexity repetitive tasks, with service agents navigating simple systems and applications while simultaneously taking customer calls. When customers make contact via email or messaging systems, agents then have to jump back and forth between systems. This can slow down service, create repetitive tasks and produce inaccuracies that can impact customer experience. Necessary post-call admin also has the potential to lower agent productivity.

When agents are freed from processing repetitive, manual tasks and can focus on developing customer-centric skills, they can help drive customer satisfaction and long-term growth, in addition to significantly improving service level agreements.

A recent (and ongoing) advisory engagement between KPMG in the US and New York City’s Metropolitan Transport Authority (MTA) has also shown the potential of automation as a change enabler, paving the way for a large-scale, enterprise-wide transformation.

By automating several aspects of the MTA’s procurement Purchase-to-Pay (P2P) process, KPMG has helped the MTA make a significant impact on overall procurement efficiency and effectiveness. Process automation has freed up talent previously focused on the manual cutting of purchase orders to focus on supplier management and ‘internal’ customer satisfaction, driving value for the organization as a whole.

The positive effect has also been felt by finance as more accurate POs upfront have resulted in fewer invoice exceptions. In leveraging automation, the KPMG team has helped create a more streamlined, process-efficient procurement function at the MTA and laid the groundwork for the next phase of the MTA’s wider transformation.

Governments remain in discovery mode

Nevertheless, the wide scale deployment of automation in the public sector presents complex policy challenges. In contrast to the private sector, where large investments are already being made, often speculatively, to drive business, many government agencies remain in discovery mode2 as to the opportunities that lie in digital labor, not to mention the potential implications of its wide scale deployment.

Rolling out automation across the public sector may result in the phasing out of many positions. However, digital labor has the potential to help resolve the problem of an aging workforce whose tasks must be handed over to a new generation, addressing this transformational challenge with an innovative solution. The low cost, non-invasive and richer automation capabilities of digital labor can allow government to use this new technology to enable the automation of processes previously deemed too costly and/or complex to automate. Governments must be proactive in commencing this process, by beginning an open dialogue with employees and offering to retrain or redeploy those affected through specially designed programs.

Our early observations indicate that implementation of digital labor is resulting in higher employee satisfaction, as workers are freed up to focus on the activities that directly impact service users. In certain government and public sector jurisdictions, agencies have already begun incorporating digital labor into their transformation strategies. KPMG in the US recently completed a project with a US Healthcare agency, strategically deploying automation to elevate the efficiency and quality of its data collection and QA processes. As a result of proactive communication between the agency and its workforce, certain employees previously in data aggregation roles are now able to invest their energies on more mission-focused and consumer facing roles in order to provide greater value to constituents.

Roadblocks to change

While automation in large-scale public sector transformation projects already underway, potential roadblocks must still be overcome. Organizational culture remains a significant concern standing in the way of the successful implementation of large scale transformation projects3.

The tendency for employees to resist change can derail a move towards wide-scale deployment of digital labor. Inevitably, wider adoption by government and the public sector will create new roles while phasing out others. Agencies must move to formulate proactive strategies to communicate the change to their workforces and provide a clear path towards new roles, and the delivery of higher value services to constituents.

In the public sector environment, changes in workforce and organizational change management can be a longer cycle, with the potential for discussion surrounding the implementation of digital labor solutions.

Proactive change management is crucial

To be successful, change strategies should establish and reinforce the link between digital labor and continuing employee development, and the ability of new technology to enhance existing roles, while also creating new and engaging ones. Overall, they will reinforce the image of a newly “mission-focused” agency, facilitated by digital labor, which can provide opportunities for employees to deliver tangible value to constituents from the front lines.

Organizations should have proactive and open conversations with employees affected by the change to understand the parts of their current roles that could potentially be automated in order to make their work lives more satisfying and stimulating. In certain circumstances, this may mean the phasing out of a role altogether, and the redeployment of that employee onto a higher value task.

A long road ahead

The potential for digital labor and automation to enable future government and public sector transformation projects is enormous. But the potential for sector-wide deployment of automation will likely not be fully unleashed until governments have completed the public consultations and research to properly understand the opportunities, potential value and concerns.

They will require a high degree of openness and transparency, regular communication and active listening.

The success of proactive change management programs – and the speed at which digital labor and automation can be deployed and profited from - will depend on the support of senior leadership and a secure mandate for change from employees.

Footnotes

1Source: US Government Accountability Office, ‘Key Issues’, Strategic Human Capital Management, 2016.

2Source: Whitehouse.gov, Preparing for the Future of Artificial Intelligence, 3 May 2016.

3Source: KPMG International, KPMG Global Transformation Study, June 2016.

*Some or all of the services described herein may not be permissible for KPMG audit clients and their affiliates.

**The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act upon such information without appropriate professional advice after a thorough examination of the particular situation.

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