Lessons from the frontier of digital labor | KPMG | GLOBAL

Lessons from the frontier of digital labor

Lessons from the frontier of digital labor

How to be well positioned to integrate automation into today’s workforce.

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KPMG in Japan

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The future is already here in Japan. Unique demographics, coupled with a long history of innovation in automation, have put the country ahead of the curve on digital labor. Today Japan is well positioned to integrate automation into its workforce – and not a moment too soon.

Seismic forces

Two seismic forces have converged:

  • There’s less and less human labor available in Japan. The country’s population is aging rapidly and the birth rate has slowed. Facing depopulation, Japan has few domestic growth opportunities.
  • To continue growing, Japanese companies are expanding their operations to Southeast Asia. However, they need to improve productivity, decrease downtime and increase accuracy in the region – all benefits of digital labor.

Companies in Japan are making a point of getting their workers comfortable with digital labor. Part of the task is made easier by sheer familiarity: Japan has the most industrial robots of any country, with an estimated 309,400.1 Only South Korea has a higher ratio of robots to humans.2

Now the scope of robotic application is rapidly moving from the automation of simple and routine processes, to the automation of less routine processes, to – in just the next few years – highly cognitive automation, where robots will imitate humans in making decisions and processing complex tasks.

Critical issues

As this progression occurs, Japanese companies are asking us to advise them on:

  • Operating model changes. What business processes best lend themselves to automation? Whether it’s procurement or sales or human resources (HR), for instance, the answer will differ for each company. The key is to design a business case that delivers quantifiable benefits in a reasonable period of time. For example, we see a big future for cognitive automation in finance and HR technology, in areas such as compliance.
  • Technology implementation. What are the most effective ways to implement technology on a digital transformation journey? We define a road map and then support the implementation of hundreds of robots for middle- and back-office processes, often within a single company.
  • Change management. In a culture of lifetime employment, what’s the best way to integrate digital labor? Our approach is bottom up – helping employees understand how digital labor can benefit them – rather than top down by management fit. We recommend gradual implementation: managers work with employees to determine the best ways to shift them into new, more value-added positions where possible and provide the necessary training.
  • Minimizing risk. Maintaining quality, managing risk and complying with regulations are top of mind in a digital labor world. Cloud solutions are beginning to be seen as an effective way to minimize operational risk.

Back to the future

Japan’s prowess in robot technology stretches back to the 1950s, when the country made innovation in automated assembly lines a cornerstone of its competitive strategy.

Though the challenges in Japan today are significantly different from those facing other economies, the country can potentially do what it did more than a half-century ago: use its experience with robotics to help educate and lead other countries. From that perspective, advances in digital labor couldn’t be happening at a more auspicious time.

Footnotes

1World Robotics Organization, 2013.

2International Federation of Robotics, Feb. 28, 2013.

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