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5 AI predictions for 2020 and beyond

February 11, 2020 BI News and Info

I spend a ton of time immersed in the work that RapidMiner users are doing, and I like to think that I have my finger on the pulse of artificial intelligence, from cutting edge developments to challenges and problems. This often leads to pondering what the future of AI looks like. Although even the best machine learning models can’t predict the future of data science, that doesn’t stop us humans from trying to figure out what’s coming. In this post, I’ll give you five predictions for trends that I think are going to have a significant impact on the future of AI and machine learning.

1. Models Controlling Other Models

Given the number of models that are fueled by machine learning (ML), I expect an increase in the training of models to detect a misfit between a production model and changing world circumstances, and possibly even correct those issues. What’s more, because a mismatch between a model and the real world is also the cause of model bias, models that can identify these issues would be a huge step toward ethical data science.

Because the world is constantly changing—in terms of behavior, technology, economics, costs, etc.—if models don’t change with the world, the resulting misfits will render them inappropriate for implementation. This is why I expect that to see a shift towards developing models tracking the misfits in other models, and implementing corrections as needed.

2. Democratization of Auto Deep Learning

Automated machine learning is not enough. Automated ML was a big trend in 2018, and then came deep learning (DL), which is great for highly unstructured data. Using a categorical or numerical input, with DL you can create a dynamic, complex output – for example, images of dreams based on EEG signals. But the power of deep learning comes with a downside: these models are harder to optimize, and the complex structures require specific forms of user interfaces.

As a response to these restrictions, in 2020 I anticipate that a democratization stage of automated deep learning will occur that will enable DL to be more readily and accurately applied to solve data science problems by creating more complex outcome models.

3. Training Without Labels

The most successful models use supervised learning, where we know what we want the model to predict from our previous real-world experience, which allows data scientists to easily validate the model’s results. However, finding or generating the data necessary to train these models can be a costly, challenging undertaking.

To get around this issue, data scientists have developed a number of ways to create models without having access to lots of training data. In active learning, for example, models create data points that will help refine their predictions, and then ask a human for a decision on those impactful cases. We can also transfer models between different industries or applications areas, and then tune the model for the new use case, although this obviously introduces its own problems. In the manufacturing industry especially, however, I expect a rise of the use of digital twins—virtual representations of complex processes that are created from both historical and live data—to generate simulated training labels.

4. Accountability is the New Accuracy

A cultural change in the data science community is coming where the focus shifts from creating the most accurate models to ensuring data science teams are held accountable for the impact that their models produce. Every newly deployed model will create business impact, whether it’s good or bad.

For decades, we’ve been over-investing in tweaking models to prioritize accuracy. But when we tweak our models to boost accuracy as high as possible, we’re only making them accurate for that particular moment in time. But because the world is constantly changing, model accuracy will decrease over time. In order to avoid nasty surprises when models go into production, we need to shift to creating more “resilient” models that can keep high accuracies for a longer time. A resilient model might perform with less accuracy than other models at certain times but be able to keep its accuracy for longer without tweaking.

Holding data science teams accountable for this long-term resiliency and business impact is going to change the way that both business and data scientists view the models that they build. Optimizing for accuracy is important, but accuracy alone cannot be the only way that we think about model impact in the future.

5. Ensemble 2.0: Deep Features and Explainable AI

Ensemble model take multiple distinct ML models, get predictions from all of them, and then use those to generate a single prediction in the hope that they perform better than any one individual model would. You’re essentially taking advantage of the “wisdom of crowds” but your “crowd” is a bunch of ML models.

For example, if you take a candy jar and ask several individuals to guess the number of candies in the jar, it’s most likely that the average of all the answers collected will be more accurate than the closest individual guess. The current trend in ensembles goes beyond the modeling and takes feature engineering into account as well. You can combine “deep features” that are derived from a DL model with a more understandable model like a tree-based model. This gets you the best of both worlds: the predictive power of complex DL models combined with the understandability of simpler types of models.

Deep features is an area of DL where this approach is particularly valuable. With deep features, you use algorithms from DL just for identifying features within your dataset. Say you feed images of various animals into a DL network. Instead of saying this is a lion and this is a dog, the deep features process takes the more complex animal features like a tail or a long snout or short ears and then combines them with a decision-making model to create a smarter, more easily interpretable model.

We’re (finally) heading into a world where we understand model bias and drift, and we’re developing ways to address and account for these issues. While data science and the models created within this realm of business operations can automate decisions, there still needs to be a greater responsibility and accountability for operating under the limits of human society and law. Bias and model misfits are not technical problems but real-world problems, and they create issues that will continue to exist within data science models and ultimately impact business and society. But with an increasing rate of accountability among data scientists, I’m confident that we are headed into a decade of more human-centric, responsible, and ethical data science practices.

If you’re looking to get started on a new machine learning project, check out our latest whitepaper, A Human’s Guide to Machine Learning Projects.

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Healthy Choices & Guest Engagement Flavor Restaurant Predictions for 2020

January 19, 2020 NetSuite

Posted by Brady Thomason, NetSuite Solution Manager, Restaurant & Hospitality

Change swept through the restaurant industry in 2019 and it’s not about to stop. Among the many developments in 2019 were a large decrease in meat consumption (and subsequent plant substitutes), major waste reduction strategies and non-traditional business models like ghost and virtual kitchens and food halls.

So, what’s on the horizon for 2020? Continued momentum in the developments of 2019, a reflection of snowballing health concerns among consumers, and the centralization and reigning in of restaurant operations.

Consumer health concerns drives menu strategy

It used to be much easier to ignore the difference in fat, calories and nutrients between a meal eaten at a restaurant and one cooked at home – but not anymore. Today, restaurants are much more likely (and sometimes required) to provide accessible nutritional content for consumers.

Health-conscious restaurant patrons are more aware of what and how much they to want to put into their bodies. And with the increase in food allergies over the past 30 years, the stakes of not knowing what’s in your food are even higher.

At the same time, many consumers are looking to food – either to include or exclude in their diet – to cure their ailments. According to the National Eating Trends Health & Wellness Service, roughly 25% of respondents report that they are actively managing a medical condition through food consumption.

Examples abound in the mainstream media, like husband-and-wife nursing team Karen and Steve Wickham. Both semi-retired nurses, the Wickhams teach locals in Grundy County, Tenn., how to manage and reduce their Type 2 diabetes with dietary changes and the introduction of exercise

Overhauling kids’ menus

For one, restaurants in 2020 will start offering healthier options on their childrens’ menus. Hudson Riehle of the National Restaurant Association predicts that kids’ menus in 2020 will begin to shift towards whole grains.

Children can explore more diverse flavors and get higher nutritional value from their food – a must for many health-conscious parents. And this isn’t just a prediction: in a handful of communities across the U.S., more healthy childrens’ menus are now mandated by law.

Reducing portion sizes

Those “healthier” menu items like bowls and salads can still pack in as many calories as a traditional burger or sandwich. A seemingly-innocuous house salad at Sbarro will set guests back 950 calories, with the same fat content as 5 ½ Twix bars (!). Panera’s Baja and Mediterranean grain bowls, both with calorie counts clocking in at 690 or less, each pack in half of daily recommended sodium content.

And ingredients aside, look out for the increased food prices expected in 2020. Joanna Fantozzi of Nation’s Restaurant News predicts that portion sizes at many fast-casual restaurants will shrink to cut calories, costs and food waste.

Expanding non-alcoholic beverages

Almost half of consumers want to reduce their alcohol consumption due to health concerns, and the restaurant industry is adapting. Introducing the sober bar: a place where you can grab a drink and socialize, sans alcohol.

With the rise of the wellness mindset, consumers are evaluating the role of alcohol in their lives. The “sober curious” don’t aim to eliminate alcohol entirely, but to make more conscious choices around their usage of it. Restaurants and bars are jumping on the bandwagon, offering mocktails in addition to alcoholic beverages, sometimes going alcohol-free, and generally helping to destigmatize those who choose to abstain from alcohol.

Restaurants leverage technology to strengthen bonds with patrons

In the past few years, the explosion of meal delivery services like GrubHub, Favor and Doordash has transformed the restaurant industry. Not only are these companies providing much-needed delivery services, they’re now branching out in the restaurant space and creating branded ghost kitchens.

Direct-to-consumer trumps mainstream meal delivery

However, restaurant owners are not particularly keen to relinquish the guest experience to a meal delivery company. It severs ties with consumers and can make for a poor guest experience if food arrives late, cold or with incorrect items, not to mention the enormous impact to the restaurant’s bottom line. And yet, with 51% of patrons ordering directly from a restaurant’s website, it appears that the connection is quickly eroding.

Noah Glass, founder and CEO of Olo[NF1] , predicts that restaurants will put more energy into driving patrons to their own websites, where they can keep tabs on the relationship and avoid the commission fees.

Point-of-sale (POS) becomes unified command control

In addition, restauranteurs are looking to centralize all of their guest data, inventory, and process management into one system. The foundation for that one unified system is the already-entrenched point-of-sale (POS), which is transforming into command control of restaurant operations, according to Saleem Khatri, CEO of Lavu[NF2] .

POS systems are gobbling up smaller platforms that perform functions like business intelligence, inventory management, payroll, data analytics and marketing. POS manufacturers are also doubling down on R&D in the next five years, with digital ordering as a key component of that unified strategy.

In 2020, restaurants will continue to play a part in a healthier, more connected lifestyle.

This concept of “healthy” includes both people and the planet. In addition to reduced portion sizes, more well-balanced kids’ menus and the overall reduction of alcohol consumption, expect to see greater food transparency across the board.

That means more open kitchens in restaurants, an increased desire to eat locally (while reducing our carbon footprint), and more precise food tracking throughout the supply chain. And the connected part means that restaurants will continue their focus on maintaining and strengthening their bonds with their guests.

Learn about NetSuite’s software for restaurants.

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The NetSuite Blog

2020 Predictions For Procurement, Supply Chain, Business, And More

January 16, 2020 SAP

As we turn the corner to a new decade, businesses are looking for ways to address ever-increasing customer expectations: high-quality products and services delivered on demand, without negative impact on the environment or society — and at a reasonable cost.

We asked our global leaders for their perspectives on what to watch for in 2020. Here is what they had to say.

Data moves from an analytical to a decision-making tool

Mike Eberhard, president of SAP Intelligent Spend Group: “In 2020, the shift to leveraging data for real-time decision-making will accelerate for a growing number of business functions.

“For example, through intelligent platforms and network ecosystems, companies will access more and more data sets to shed light on such things as a potential supplier’s financial capability to fulfill a contract. Data can also be used to make budgetary decisions informed by the current status of each and every area of a company’s spending. Organizations possess, and can access, much or all of this data today – with the right tools.

“With an increasing number of data-points uncovered by Internet of Things (IoT) and machine learning, there is more information than ever before to help drive results. This allows organizations to make better sense of what’s happening, what’s coming, and, ultimately, make more intelligent decisions. In the coming year, many more organizations will start to realize the potential of their data to intelligently guide business decisions and leverage it to reach even greater levels of success.

“Looking even further into the future, they will eventually be able to determine whether potential suppliers’ policies adhere to international laws and social ethics, and be able to use data to identify, in advance, a host of potential supply chain disruptions, such as a small number of suppliers concentrated in a region vulnerable to weather or man-made disasters.”

Businesses embrace sustainable procurement

Pat McCarthy, senior vice president and general manager of SAP Ariba and SAP Fieldglass: “We’re entering a ‘greener’ decade spurred by people worldwide demanding innovative solutions to a changing climate, and a year that will feature a resolution to Brexit in Europe and ongoing trade negotiations between East and West. Addressing these and other challenges, including the global movement to end forced labor in supply chains, enterprises are seeking to align their brand values with those of like-minded trading partners.

“As we enter 2020, we can expect to see an uptick in adoption of intelligent spend management solutions as enterprises increasingly reap their benefits – operationally, reputationally, and sustainably. The best solutions, both for the procurement of direct and indirect goods and for external workforce management, guide users through an intuitive process, and leveraging third-party content, prompt them about any upcoming issues or challenges so they can make better-informed decisions. Meanwhile, these insights also enable enterprises to procure with purpose.

“These opportunities, made possible by cloud-based digital networks, are extending competitive advantages and fueling sustainable procurement at a scale never previously imagined – a phenomenon that is only gathering pace as we head into the new year.”

Adaptability and flexibility key

James Lee, chief operating officer of SAP Ariba and SAP Fieldglass: “In times of economic uncertainty, it becomes even more important for businesses to focus on cost-efficiency, compliance, and working capital management.

“To prepare for this uncertainty, in 2020, more organizations will think more strategically about how they spend business cash – investing in better spend management strategies that not only cut costs but also create new revenue-driving opportunities to grow and quickly scale. Adaptability and flexibility will be key to recession-proofing, so procurement leaders will need to embrace technologies that can integrate with intelligent technologies and analytics to improve decision-making, speed, and efficiency.”

A new normal for how work gets done

Arun Srinivasan, general manager of SAP Fieldglass: “With digital disruption reshaping industries and unemployment at record lows, talent is, and will continue to be in the coming decade, in short supply. Many of the skills companies need to compete today aren’t available in the traditional workforce market. The composition of the workforce has forever changed. There is an increased reliance on the external workforce, which comprises contingent workers – think independent contractors, freelancers, and temporary labor – and services providers such as consulting firms, IT outsourcers, and marketing agencies.

“To get work done, organizations will increasingly look beyond their traditional employee populations and turn to the external workforce for the skills needed to thrive in the digital economy. These are skills needed not just to keep up with the pace of change today but also to drive innovation around artificial intelligence, machine learning, data science, process automation, robotics, and more.

“Looking ahead to 2020, expect to see greater engagement of the external workforce as a significant source of competitive advantage. The winners of the war for talent will be the companies paying attention to the demands and desires of all workers – internal and external.”

Profound shift for procurement

Darren Koch, chief product officer at SAP Ariba: “As a new decade approaches, businesses large and small are seeing an increasingly clear connection between embracing intelligent spend management – an approach that brings together every source of spend and buying channels and draws upon vast reservoirs of operational data to manage risk, yield, contextual insights, and fund innovation through savings – extending competitive advantage.

“Where is intelligent spend management headed in 2020 and beyond? Toward systems that can carry out end-to-end procurement processes for all types of spend within parameters strategically set and overseen by humans. In the coming years, we can expect to see intelligent technologies give rise to autonomous functionality, with cloud-based, artificial intelligence (AI)-enabled applications revealing detailed insights, providing prescriptive recommendations, and unshackling talented procurement professionals from the tedium of low-value administrivia. I believe that, in time, autonomous functionality will represent a profound shift for procurement in much the same sense that autonomous vehicles do for transportation.”

Purpose in procurement drives environmental, social, business impacts

Padmini Ranganathan, global vice president of Risk and Sustainability at SAP Ariba: “There has been a general awareness of environmental and societal issues for decades, but now we are seeing a sense of urgency and demand for real change – propelled by easy-to-share information, compliance requirements, and growing demand for transparency. Consumers will vote with their dollars, and because of this, companies are leveraging their impact on issues such as climate impact, forced labor, and impact on livelihood and job opportunities as a part of their brand promises.

“To be credible, the smart ones will shift from focusing just on cost savings and compliance to true value creation and avoid greenwashing. Squeezing suppliers on cost just doesn’t cut it anymore. Buyers and suppliers are coming together to create value for their mutual customer – and where else can this happen but from the beginning of the procurement process when sellers come calling with their business cards or buyers scan the globe for the best suppliers? In 2020, watch for more and more businesses to focus on developing transparent, sustainable relationships that have positive impacts on both the environment and society.”

Partnerships bring more value in 2020

Sean Thompson, senior vice president of Business Network and Ecosystems at SAP Ariba and SAP Fieldglass: “With the rapid rate of technological change and disruption in the marketplace, 2020 will see partners moving beyond the traditional role of strategic advisor to that of business collaborator and innovator. This collaboration will increase the diversity of business networks and allow companies to take advantage of open APIs to solve critical business challenges. Ultimately, the name of the game is co-opetition, where partnerships allow for doing more for customers together than alone.

“We’re also going to see greater efficiency and ease across networks and network-to-network collaboration. All business is global, and companies with varied and diverse supply chains need to rely on clear and concise information to make real-time business decisions across borders and geographies. Data-driven insights will allow buyers and suppliers to think differently about how they source or sell. A continued focus on compliance and reduction in supply chain risk will demand simple, clean, and transparent procurement solutions. The impact will be significant, driving innovation as never seen before.”

Artificial intelligence fully integrated into supplier management

Drew Hofler, vice president of Portfolio Marketing at SAP Ariba and SAP Fieldglass: “In 2020, businesses will extend and accelerate output of existing intelligent technologies, such as AI, by applying them to different business operations and integrating them with one another. The supply chain is a great example of this. For instance, AI will disrupt the manual, error-prone process of managing vendor contracts by automating the process and applying intelligent algorithms. And, AI will be integrated fully into the supplier management process, helping identify high-risk suppliers before purchases are made to ensure suppliers are financially, environmentally, and ethically sustainable.”

Businesses adopt a value-driven approach to procurement

James Marland, global vice president for the SAP Center of Excellence for Spend Management at SAP Ariba and SAP Fieldglass: “In 2020, businesses will start to seriously take account of the ethics and values of their customers to drive procurement decisions. As issues such as sustainability, diversity, and working conditions increasingly displace price in the buying decision, businesses will need to adopt a values-driven approach to spend management to ultimately address them. It’s an exciting time to be in procurement – breaking out of the back office and getting to the front lines.

“One example of where businesses will look to make a tangible difference is with plastics. Redirecting even a small portion of global spend on packaging to precertified suppliers of recycled plastics and alternatives can have a tremendous impact. These suppliers can then grow, reaping benefits from economies of scale, and then start to lower the costs of their products. Ultimately, this practice will make sustainable materials more widely available and economical for buyers. In the next year, inspired by their customers, businesses will leverage spend management and business networks to make a dent in these intractable issues.”

This article originally appeared on SAP News Center and is republished by permission.

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Digitalist Magazine

Predictions from 1986

January 7, 2020 Humor

Posted by Krisgo

About Krisgo

I’m a mom, that has worn many different hats in this life; from scout leader, camp craft teacher, parents group president, colorguard coach, member of the community band, stay-at-home-mom to full time worker, I’ve done it all– almost! I still love learning new things, especially creating and cooking. Most of all I love to laugh! Thanks for visiting – come back soon

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Deep Fried Bits

4 Big 2020 Sales Enablement Predictions

November 23, 2019 CRM News and Info

Now is the time when growth-minded organizations and their sales leaders begin to evaluate this year while looking ahead to the next. It’s a time to identify opportunities for improvement, anticipate industry changes, and solidify a sales strategy that will align with the evolving expectations of business-to-business buyers, emerging technologies, and the company’s business goals.

Read on to discover what you can expect in 2020 on topics like the sales development rep role, decision making around tech adoption and implementation, sales leaders as online influencers, and more.

The Changing SDR Role: Real or Robot?

Prediction No. 1: In 2020, look for AI to increasingly help augment sales teams but not replace them.

2020 is not the year of the robot. While we’ve let artificial intelligence infiltrate many areas of our personal lives via smart home assistants that tell us when to wake up, workout and buy milk, it hasn’t quite made its mark on the B2B sales organization yet.

By 2020, 30 percent of all B2B companies will employ artificial intelligence to augment at least one of their primary sales processes, according to Gartner. This means an overwhelming majority of sales orgs are not yet on board.

AI is just starting to realize its promise of improving sales organizations through increases in efficiency, reduction of costs, and improved revenue streams.

We’ve made a great deal of progress since I first started in sales, and technology has been the biggest driver of that progress. I know the rate of iteration increases forever, but we still have a long way to go before the average company would trust its brand and reputation to full automation.

Why? Because technology — as it stands today — cannot replace a human connection. While AI may be faster and in many cases smarter, it can’t pick up the phone and build rapport, and most of the time it can’t close a high-ticket sale. We still need people for that.

Techstacks Continue to Grow

Prediction No. 2: In 2020, the tech stack will continue to grow, rather than shrink, as long as efficiency follows.

In 2020, I see less focus on the “cost” of sales tech and more emphasis on the return on investment, or outcome.

The average annual spend on sales technology was US$ 4,581 per rep per year and spans an average of 5.2 categories of sales tools per rep, according to InsideSales. The top categories of sales tools include CRM, social prospecting, presentations, pipeline management and data/list services. New sales tools launch every day, it seems, with promises to increase sales productivity, leads or closes.

While cost always will be a factor, what really counts is that these tools help enable sales reps to make touches faster and spend more time focusing on strategic, relationship-based sales activities. We’re starting to have more respect for the multiplier effect or efficiency gains you can get from these tools.

A New Generation of Tech Buyers Has Emerged

Prediction No. 3: In 2020, if brands don’t make a significant change in how they do business with millennials, they’ll surely fall behind.

Millennials — now in the 23-38 age range — make up more than
a third of the workforce.

Members of this generation commonly are involved in making Software as a Service purchasing decisions.

More than 45 percent of the 430 B2B technology buyers TrustRadius surveyed for its B2B Buying Disconnect research study were millennials — the most of any age group looking into B2B products and services.

I know that some brand teams today are designing content and messaging specifically for the “new” generation of technology buyers, but for me it’s more an overall shift in the way we do business in the sales industry. I can’t imagine the older generations in my family doing business the way modern sales teams do now.

The entire dynamic has changed, and I think that makes it really easy for us to fail to realize this messaging/tactics shift already has begun in earnest.

Case in point: “Vendors who were very influential during the purchasing process were twice as likely to be open about product limitations and connect buyers with current customers,” the TrustRadius report found. This is a fundamental shift away from how most of us are used to selling.

Sales Leaders to Make Their Brand Personal

Prediction No. 4: In 2020, if your No. 1 delivery method is still just standing up on that soapbox and screaming your message, you’re missing the mark and the ideal opportunity for brand building.

In 2020, successful sales leaders are sales influencers. The way humans interact with and consume information has changed. We’re mobile, always connected, and using technology to share and ingest massive amounts of data.

It may be a cliche, but the fact is people buy from those they know, like and trust. Today, the best way to get to know, like and trust someone is by consuming their content online.

Look at sales Influencers like
John Barrows,
Max Altschuler, and
Becc Holland.

They frequently post written, visual and audio content to build their brand and expertise. I predict a rise in the trend of sales leadership following suit to further elevate their companies, as well as their personal brands.

Look for more sales leaders to write thought leadership articles, appear on podcasts, create videos, and find other interesting ways to share their ideas online, solidifying their subject matter expertise to their core audiences.

Agility Matters

The B2B sales industry is changing rapidly, thanks to emerging technologies, a growing tech stack, a new generation of B2B buyers, and changes in the way we consume data, build trust, and make purchasing decisions.

2020 is the beginning of a new decade, and sweeping changes lie ahead. Sales teams that adapt to evolving customer expectations, while leveraging tools and technology to increase productivity, will gain a competitive advantage over those that remain stuck in their ways.

Joe%20Caprio 4 Big 2020 Sales Enablement Predictions
Joe Caprio is VP Sales at
Chorus.ai.

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CRM Buyer

Financial Crime Compliance Predictions 2019: Stop the Scandals!

January 18, 2019 FICO

Despite advances in customer due diligence, including the addition of advanced analytics to compliance officers’ toolkits, the scandals of 2018 confirmed that many banks are struggling to bring their operations up to regulators’ standards, to say nothing of best practices. While my colleagues have offered predictions in areas such as payments fraud and cybersecurity, I’m going to focus on what needs to happen in financial crime compliance next year, in two major areas.

Know Your Customer

What’s happening now:

The AML scandal in the Baltics has shown that banks do not know their customers as well as they should. A Russian customer illegally laundered money through trading securities, the bank did not have proper awareness and the reputational damage was so significant that it hit the bank’s stock price.

Another scandal related to KYC underscored the fact that banks do not use all available data sources (like the Panama Papers) to know their customers. It also showed that monitoring internal activities is vital, since the bank’s employees facilitated the client’s tax evasion. The bank will have to re-check their clients, as required by the regulator BaFin.

What needs to happen:

International committees like FATF and the Basel Committee on Banking Supervision as well as national regulations like BSA (USA) and EU directives all require a sound KYC program. Many financial institutions have already implemented such one, but there is room for improvement.

What will happen in 2019:

I foresee that the pressure from regulatory fines and the publications of leaks will force financial institutions to enhance their KYC processes. That includes an automatic risk classification due to the risk-based approach leveraging any available data source, with full integration into the bank’s processes, especially its compliance processes.

Detection and Alert Handling

What’s happening now:

Banks are being overwhelmed by a huge volume of false positive alerts. The natural response to this is to hire an army of AML investigators — but this approach is not scalable, and won’t fix the problem. When it came to Credit Suisse, FINMA (the regulator of Switzerland) recognized that and urged the bank to improve their financial crime compliance processes. Many financial institutions, however, still take this manual approach.

What needs to happen:

A more sophisticated process is required. AI is helping to improve the result of transaction monitoring in two ways:

It can prioritize the huge volume of alerts by ranking them in order of risk, making sure investigators can deal with the alert volume.
It can detect previously undetected patterns, using a combination of supervised and unsupervised machine learning models.

What will happen in 2019:

Due to all the fines and scandals in 2018, I am convinced that AI will play a more important role in financial crime compliance. We at FICO have taken the lead in this area, and believe that it’s absolutely critical if we’re going to help compliance departments cope with tight or reduced budgets, new regulations and money laundering activities.

Last year we saw many financial institutions choose an automated system leveraging robotics and a configurable case management system. In 2019 that trend will accelerate and more and more financial institutions will benefit from that improved solution set. Watch this space for more on financial crime compliance!

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Cyber Predictions 2019: The Year of Cyber Insecurity

December 23, 2018 FICO

It’s an understatement to say that 2018 was a year of blockbuster data breaches: Facebook, Marriott, Ticketmaster and British Airways, to name just a few. As mega-breaches have become the norm, the crescendo of clamor can no longer be ignored; the reality of the true state of threats (immense) and companies’ preparedness (inconsistent, at best) is setting in.

Thus, a couple of weeks from now we’ll ring in 2019, the Year of Cyber Insecurity: 52 weeks in which companies of all sizes and industries will experience a new level of fear – and in some cases panic – in realizing their vulnerability to data breaches, hacking and other cybercrimes.

The good news is that 2019 will also provide a tipping point: these same organizations will be shocked into taking a more clear-eyed assessment of their cyber security posture, and strong actions to improve their cyber defenses. Here are three ways they’ll work to cure their cyber insecurity.

Get a Reality Check, Continuously

It starts with increased awareness. Last year I predicted there would be huge uptake in cyber risk assessment tools like the FICO® Cyber Risk Score. That became particularly true when FICO and the U.S. Chamber of Commerce announced the first national cybersecurity assessment, called the Assessment of Business Cybersecurity (ABC). The ABC provides an overall metric for the private sector economy, as well as other comparison points for organizations by size and sector. The U.S. Chamber noted:

The ABC is based on scoring more than 2,500 U.S. companies using the FICO® Cyber Risk Score, an empirical standard for assessing cybersecurity risk
The U.S. Chamber and FICO are using the ABC to raise awareness of cybersecurity risk levels, and to provide an ongoing benchmark for tracking trends in cyber threats and encouraging improvement in organizational cyber posture

By getting a free Cyber Risk Score subscription and tracking their individual score against the quarterly ABC, organizations in the U.S. can, for the first time, get an empirical reality check on the efficacy of their cyber defences — and receive clear direction on areas to improve. That’s the best way to deal with cyber insecurity.

Just Say “No” to Biometrics

I’ve long thought that securing services through biometric credentials is, at best, a flawed notion. I still do.

In my predictions blog for 2017 I wrote, “Biometric security data may become the biggest security vulnerability of all.” My 2018 predictions blog forecast, “We’ll See Our First Biometrics Hack in 2018.” We did, when cyber criminals breached India’s Aadhaar identity database big-time in 2018, which has led to some tragic outcomes.

While I expect that the growth in the application of biometric authentication schemes will continue, I also expect the most forward-thinking companies to start re-thinking their investments in biometrics. Why? Again, I’ll refer to the predictions blog I wrote last year:

Biometrics are nothing more than the stored digital interpretation of a biological feature, which is then associated with your account credentials. Those digital files can be spoofed, stolen or simply rearranged to point to a digital identity other than your own.

Biometrics are neither fool-proof nor fraud-proof. And when someone replaces the digital interpretation of your retina with their own, and does a sufficient job covering their tracks, good luck proving that you are really you! The honeymoon of confidence in biometrics is undeserved, and it won’t last.

Improve Cyber Hygiene

It’s a well-publicized fact that internal errors are a major factor in data breaches. In some industries, it’s the biggest. The 2018 Verizon Data Breach Investigations Report said that internal actors are responsible for 56% of breaches in the healthcare vertical. The report also said that errors cause 35% of healthcare data breaches: “Errors (i.e. mistakes) caused more data breaches in healthcare than any other type of action. Examples of errors include misdelivery, misconfiguration, and disposal errors. Healthcare also had more than three-times more data breaches attributed to errors than any other vertical.”

This damning information can be caveated by noting, “…as with the public sector, this comparison is likely skewed by Verizon’s sources for data breach information and also the stringent reporting requirements of industry regulations.”

At the end of the day, cyber security is really a people problem. We make mistakes, we fail to follow policies, we overcommit resources, understaff projects, and we sometimes put people into jobs they are not ready for. In our research around cyber risk quantification, FICO has learned conclusively that the most predictive features in modeling future cyber outcomes are behavioral, not conditional.

In other words, how and how well you manage your network is more correlated with breach outcomes than the presence of specific vulnerabilities. My point here is that companies need to focus at least as much on training, awareness, policy, and policy adherence as they do on technology and infrastructure. That’s a great New Year’s resolution for everyone.

Best wishes for a cyber-safe 2019, and a cure for your cyber insecurity. Follow me on Twitter @dougclare to keep up with FICO’s latest cyber developments. Cheers!

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Salesforce Einstein now powers over 1 billion AI predictions per day

March 1, 2018 Big Data

Salesforce announced today that the company is now delivering more than 1 billion AI-driven predictions to its customers every day. Those predictions are powered by the company’s Einstein-branded capabilities, which include sales and service forecasting.

It’s a major milestone for both Salesforce and Einstein, showing the potential of artificial intelligence’s interaction with business users and the appetite for intelligent predictions based on business data. Salesforce launched the platform in the fall of 2016 with a great deal of fanfare from CEO Marc Benioff. Since then, the company has been building on its AI offerings.

What’s not clear from this announcement is how distributed these predictions are across Salesforce’s user base. A spokesperson for the company refused to answer questions about how many customers are using Einstein, or roughly how broadly it’s being used. Einstein features can cost extra to implement above a company’s existing subscription to Salesforce’s software-as-a-service offerings, which can stymie adoption.

Even without that clarity, this is good news for Salesforce as it vies with a host of other companies to dominate the business software market. AI fever has gripped the field of enterprise SaaS, with companies like Microsoft, Oracle, and SAP all touting their own AI capabilities, with varying degrees of maturity. To compete, Salesforce unveiled a series of major improvements at its Dreamforce conference last year, such as the ability to create custom predictions.

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2018 Predictions, Pt. 3: Digital Business Accelerates With Robotic Process Automation, Voice User Interface, And Agile Micro-Factories

January 18, 2018 BI News and Info

When members of Lowe’s Innovation Labs first began talking with the home improvement retailer’s senior executives about how disruptive technologies would affect the future, the presentations were well received but nothing stuck.

“We’d give a really great presentation and everyone would say, ‘Great job,’ but nothing would really happen,” says Amanda Manna, head of narratives and partnerships for the lab.

The team realized that it needed to ditch the PowerPoints and try something radical. The team’s leader, Kyle Nel, is a behavioral scientist by training. He knows people are wired to receive new information best through stories. Sharing far-future concepts through narrative, he surmised, could unlock hidden potential to drive meaningful change.

So Nel hired science fiction writers to pen the future in comic book format, with characters and a narrative arc revealed pane by pane.

The first storyline, written several years before Oculus Rift became a household name, told the tale of a couple envisioning their kitchen renovation using virtual reality headsets. The comic might have been fun and fanciful, but its intent was deadly serious. It was a vision of a future in which Lowe’s might solve one of its long-standing struggles: the approximately US$ 70 billion left on the table when people are unable to start a home improvement project because they can’t envision what it will look like.

When the lab presented leaders with the first comic, “it was like a light bulb went on,” says Manna. “Not only did they immediately understand the value of the concept, they were convinced that if we didn’t build it, someone else would.”

Today, Lowe’s customers in select stores can use the HoloRoom How To virtual reality tool to learn basic DIY skills in an interactive and immersive environment.

SAP Q417 DigitalDoubles Feature3 Image2 2018 Predictions, Pt. 3: Digital Business Accelerates With Robotic Process Automation, Voice User Interface, And Agile Micro Factories Other comics followed and were greeted with similar enthusiasm—and investment, where possible. One tells the story of robots that help customers navigate stores. That comic spawned the LoweBot, which roamed the aisles of several Lowe’s stores during a pilot program in California and is being evaluated to determine next steps.

And the comic about tools that can be 3D-printed in space? Last year, Lowe’s partnered with Made in Space, which specializes in making 3D printers that can operate in zero gravity, to install the first commercial 3D printer in the International Space Station, where it was used to make tools and parts for astronauts.

The comics are the result of sending writers out on an open-ended assignment, armed with trends, market research, and other input, to envision what home improvement planning might look like in the future or what the experience of shopping will be in 10 years. The writers come back with several potential story ideas in a given area and work collaboratively with lab team members to refine it over time.

The process of working with writers and business partners to develop the comics helps the future strategy team at Lowe’s, working under chief development officer Richard D. Maltsbarger, to inhabit that future. They can imagine how it might play out, what obstacles might surface, and what steps the company would need to take to bring that future to life.

Once the final vision hits the page, the lab team can clearly envision how to work backward to enable the innovation. Importantly, the narrative is shared not only within the company but also out in the world. It serves as a kind of “bat signal” to potential technology partners with capabilities that might be required to make it happen, says Manna. “It’s all part of our strategy for staking a claim in the future.”

Companies like Lowe’s are realizing that standard ways of planning for the future won’t get them where they need to go. The problem with traditional strategic planning is that the approach, which dates back to the 1950s and has remained largely unchanged since then, is based on the company’s existing mission, resources, core competencies, and competitors.

Yet the future rarely looks like the past. What’s more, digital technology is now driving change at exponential rates. Companies must be able to analyze and assess the potential impacts of the many variables at play, determine the possible futures they want to pursue, and develop the agility to pivot as conditions change along the way.

This is why planning must become completely oriented toward—and sourced from—the future, rather than from the past or the present. “Every winning strategy is based on a compelling insight, but most strategic planning originates in today’s marketplace, which means the resulting plans are constrained to incremental innovation,” says Bob Johansen, distinguished fellow at the Institute for the Future. “Most corporate strategists and CEOs are just inching their way to the future.” (Read more from Bob Johansen in the Thinkers story, “Fear Factor.”)

Inching forward won’t cut it anymore. Half of the S&P 500 organizations will be replaced over the next decade, according to research company Innosight. The reason? They can’t see the portfolio of possible futures, they can’t act on them, or both. Indeed, when SAP conducts future planning workshops with clients, we find that they usually struggle to look beyond current models and assumptions and lack clear ideas about how to work toward radically different futures.

Companies that want to increase their chances of long-term survival are incorporating three steps: envisioning, planning for, and executing on possible futures. And doing so all while the actual future is unfolding in expected and unexpected ways.

Those that pull it off are rewarded. A 2017 benchmarking report from the Strategic Foresight Research Network (SFRN) revealed that vigilant companies (those with the most mature processes for identifying, interpreting, and responding to factors that induce change) achieved 200% greater market capitalization growth and 33% higher profitability than the average, while the least mature companies experienced negative market-cap growth and had 44% lower profitability.

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Looking Outside the Margins

“Most organizations lack sufficient capacity to detect, interpret, and act on the critically important but weak and ambiguous signals of fresh threats or new opportunities that emerge on the periphery of their usual business environment,” write George S. Day and Paul J. H. Schoemaker in their book Peripheral Vision.

But that’s exactly where effective future planning begins: examining what is happening outside the margins of day-to-day business as usual in order to peer into the future.

Business leaders who take this approach understand that despite the uncertainties of the future there are drivers of change that can be identified and studied and actions that can be taken to better prepare for—and influence—how events unfold.

That starts with developing foresight, typically a decade out. Ten years, most future planners agree, is the sweet spot. “It is far enough out that it gives you a bit more latitude to come up with a broader way to the future, allowing for disruption and innovation,” says Brian David Johnson, former chief futurist for Intel and current futurist in residence at Arizona State University’s Center for Science and the Imagination. “But you can still see the light from it.”

SAP Q417 DigitalDoubles Feature3 Image4 2018 Predictions, Pt. 3: Digital Business Accelerates With Robotic Process Automation, Voice User Interface, And Agile Micro Factories The process involves gathering information about the factors and forces—technological, business, sociological, and industry or ecosystem trends—that are effecting change to envision a range of potential impacts.

Seeing New Worlds

Intel, for example, looks beyond its own industry boundaries to envision possible future developments in adjacent businesses in the larger ecosystem it operates in. In 2008, the Intel Labs team, led by anthropologist Genevieve Bell, determined that the introduction of flexible glass displays would open up a whole new category of foldable consumer electronic devices.

To take advantage of that advance, Intel would need to be able to make silicon small enough to fit into some imagined device of the future. By the time glass manufacturer Corning unveiled its ultra-slim, flexible glass surface for mobile devices, laptops, televisions, and other displays of the future in 2012, Intel had already created design prototypes and kicked its development into higher gear. “Because we had done the future casting, we were already imagining how people might use flexible glass to create consumer devices,” says Johnson.

Because future planning relies so heavily on the quality of the input it receives, bringing in experts can elevate the practice. They can come from inside an organization, but the most influential insight may come from the outside and span a wide range of disciplines, says Steve Brown, a futurist, consultant, and CEO of BaldFuturist.com who worked for Intel Labs from 2007 to 2016.

Companies may look to sociologists or behaviorists who have insight into the needs and wants of people and how that influences their actions. Some organizations bring in an applied futurist, skilled at scanning many different forces and factors likely to coalesce in important ways (see Do You Need a Futurist?).

Do You Need a Futurist?

Most organizations need an outsider to help envision their future. Futurists are good at looking beyond the big picture to the biggest picture.

Business leaders who want to be better prepared for an uncertain and disruptive future will build future planning as a strategic capability into their organizations and create an organizational culture that embraces the approach. But working with credible futurists, at least in the beginning, can jump-start the process.

“The present can be so noisy and business leaders are so close to it that it’s helpful to provide a fresh outside-in point of view,” says veteran futurist Bob Johansen.

To put it simply, futurists like Johansen are good at connecting dots—lots of them. They look beyond the boundaries of a single company or even an industry, incorporating into their work social science, technical research, cultural movements, economic data, trends, and the input of other experts.

They can also factor in the cultural history of the specific company with whom they’re working, says Brian David Johnson, futurist in residence at Arizona State University’s Center for Science and the Imagination. “These large corporations have processes and procedures in place—typically for good reasons,” Johnson explains. “But all of those reasons have everything to do with the past and nothing to do with the future. Looking at that is important so you can understand the inertia that you need to overcome.”

One thing the best futurists will say they can’t do: predict the future. That’s not the point. “The future punishes certainty,” Johansen says, “but it rewards clarity.” The methods futurists employ are designed to trigger discussions and considerations of possibilities corporate leaders might not otherwise consider.

You don’t even necessarily have to buy into all the foresight that results, says Johansen. Many leaders don’t. “Every forecast is debatable,” Johansen says. “Foresight is a way to provoke insight, even if you don’t believe it. The value is in letting yourself be provoked.”

External expert input serves several purposes. It brings everyone up to a common level of knowledge. It can stimulate and shift the thinking of participants by introducing them to new information or ideas. And it can challenge the status quo by illustrating how people and organizations in different sectors are harnessing emerging trends.

The goal is not to come up with one definitive future but multiple possibilities—positive and negative—along with a list of the likely obstacles or accelerants that could surface on the road ahead. The result: increased clarity—rather than certainty—in the face of the unknown that enables business decision makers to execute and refine business plans and strategy over time.

Plotting the Steps Along the Way

Coming up with potential trends is an important first step in futuring, but even more critical is figuring out what steps need to be taken along the way: eight years from now, four years from now, two years from now, and now. Considerations include technologies to develop, infrastructure to deploy, talent to hire, partnerships to forge, and acquisitions to make. Without this vital step, says Brown, everybody goes back to their day jobs and the new thinking generated by future planning is wasted. To work, the future steps must be tangible, concrete, and actionable.

SAP Q417 DigitalDoubles Feature3 Image5 2018 Predictions, Pt. 3: Digital Business Accelerates With Robotic Process Automation, Voice User Interface, And Agile Micro Factories Organizations must build a roadmap for the desired future state that anticipates both developments and detours, complete with signals that will let them know if they’re headed in the right direction. Brown works with corporate leaders to set indicator flags to look out for on the way to the anticipated future. “If we see these flagged events occurring in the ecosystem, they help to confirm the strength of our hypothesis that a particular imagined future is likely to occur,” he explains.

For example, one of Brown’s clients envisioned two potential futures: one in which gestural interfaces took hold and another in which voice control dominated. The team set a flag to look out for early examples of the interfaces that emerged in areas such as home appliances and automobiles. “Once you saw not just Amazon Echo but also Google Home and other copycat speakers, it would increase your confidence that you were moving more towards a voice-first era rather than a gesture-first era,” Brown says. “It doesn’t mean that gesture won’t happen, but it’s less likely to be the predominant modality for communication.”

How to Keep Experiments from Being Stifled

Once organizations have a vision for the future, making it a reality requires testing ideas in the marketplace and then scaling them across the enterprise. “There’s a huge change piece involved,”
says Frank Diana, futurist and global consultant with Tata Consultancy Services, “and that’s the place where most
businesses will fall down.”

Many large firms have forgotten what it’s like to experiment in several new markets on a small scale to determine what will stick and what won’t, says René Rohrbeck, professor of strategy at the Aarhus School of Business and Social Sciences. Companies must be able to fail quickly, bring the lessons learned back in, adapt, and try again.

SAP Q417 DigitalDoubles Feature3 Image6 2018 Predictions, Pt. 3: Digital Business Accelerates With Robotic Process Automation, Voice User Interface, And Agile Micro Factories Lowe’s increases its chances of success by creating master narratives across a number of different areas at once, such as robotics, mixed-reality tools, on-demand manufacturing, sustainability, and startup acceleration. The lab maps components of each by expected timelines: short, medium, and long term. “From there, we’ll try to build as many of them as quickly as we can,” says Manna. “And we’re always looking for that next suite of things that we should be working on.” Along the way certain innovations, like the HoloRoom How-To, become developed enough to integrate into the larger business as part of the core strategy.

One way Lowe’s accelerates the process of deciding what is ready to scale is by being open about its nascent plans with the world. “In the past, Lowe’s would never talk about projects that weren’t at scale,” says Manna. Now the company is sharing its future plans with the media and, as a result, attracting partners that can jump-start their realization.

Seeing a Lowe’s comic about employee exoskeletons, for example, led Virginia Tech engineering professor Alan Asbeck to the retailer. He helped develop a prototype for a three-month pilot with stock employees at a Christiansburg, Virginia, store.

The high-tech suit makes it easier to move heavy objects. Employees trying out the suits are also fitted with an EEG headset that the lab incorporates into all its pilots to gauge unstated, subconscious reactions. That direct feedback on the user experience helps the company refine its innovations over time.

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Make the Future Part of the Culture

Regardless of whether all the elements of its master narratives come to pass, Lowe’s has already accomplished something important: It has embedded future thinking into the culture of the company.

Companies like Lowe’s constantly scan the environment for meaningful economic, technology, and cultural changes that could impact its future assessments and plans. “They can regularly draw on future planning to answer challenges,” says Rohrbeck. “This intensive, ongoing, agile strategizing is only possible because they’ve done their homework up front and they keep it updated.”

It’s impossible to predict what’s going to happen in the future, but companies can help to shape it, says Manna of Lowe’s. “It’s really about painting a picture of a preferred future state that we can try to achieve while being flexible and capable of change as we learn things along the way.” D!

About the Authors

Dan Wellers is Global Lead, Digital Futures, at SAP.

Kai Goerlich is Chief Futurist at SAP’s Innovation Center Network.

Stephanie Overby is a Boston-based business and technology journalist.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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2018 Predictions, Pt. 2: Tele-Healthcare, Remote-Control Cars With Bedside Manners, And The Journey To Mars

January 1, 2018 BI News and Info

In the tech world in 2017, several trends emerged as signals amid the noise, signifying much larger changes to come.

As we noted in last year’s More Than Noise list, things are changing—and the changes are occurring in ways that don’t necessarily fit into the prevailing narrative.

While many of 2017’s signals have a dark tint to them, perhaps reflecting the times we live in, we have sought out some rays of light to illuminate the way forward. The following signals differ considerably, but understanding them can help guide businesses in the right direction for 2018 and beyond.

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When a team of psychologists, linguists, and software engineers created Woebot, an AI chatbot that helps people learn cognitive behavioral therapy techniques for managing mental health issues like anxiety and depression, they did something unusual, at least when it comes to chatbots: they submitted it for peer review.

Stanford University researchers recruited a sample group of 70 college-age participants on social media to take part in a randomized control study of Woebot. The researchers found that their creation was useful for improving anxiety and depression symptoms. A study of the user interaction with the bot was submitted for peer review and published in the Journal of Medical Internet Research Mental Health in June 2017.

While Woebot may not revolutionize the field of psychology, it could change the way we view AI development. Well-known figures such as Elon Musk and Bill Gates have expressed concerns that artificial intelligence is essentially ungovernable. Peer review, such as with the Stanford study, is one way to approach this challenge and figure out how to properly evaluate and find a place for these software programs.

The healthcare community could be onto something. We’ve already seen instances where AI chatbots have spun out of control, such as when internet trolls trained Microsoft’s Tay to become a hate-spewing misanthrope. Bots are only as good as their design; making sure they stay on message and don’t act in unexpected ways is crucial.

SAP Q417 DigitalDoubles Feature1 Image3 2018 Predictions, Pt. 2: Tele Healthcare, Remote Control Cars With Bedside Manners, And The Journey To Mars This is especially true in healthcare. When chatbots are offering therapeutic services, they must be properly designed, vetted, and tested to maintain patient safety.

It may be prudent to apply the same level of caution to a business setting. By treating chatbots as if they’re akin to medicine or drugs, we have a model for thorough vetting that, while not perfect, is generally effective and time tested.

It may seem like overkill to think of chatbots that manage pizza orders or help resolve parking tickets as potential health threats. But it’s already clear that AI can have unintended side effects that could extend far beyond Tay’s loathsome behavior.

For example, in July, Facebook shut down an experiment where it challenged two AIs to negotiate with each other over a trade. When the experiment began, the two chatbots quickly went rogue, developing linguistic shortcuts to reduce negotiating time and leaving their creators unable to understand what they were saying.

The implications are chilling. Do we want AIs interacting in a secret language because designers didn’t fully understand what they were designing?

In this context, the healthcare community’s conservative approach doesn’t seem so farfetched. Woebot could ultimately become an example of the kind of oversight that’s needed for all AIs.

Meanwhile, it’s clear that chatbots have great potential in healthcare—not just for treating mental health issues but for helping patients understand symptoms, build treatment regimens, and more. They could also help unclog barriers to healthcare, which is plagued worldwide by high prices, long wait times, and other challenges. While they are not a substitute for actual humans, chatbots can be used by anyone with a computer or smartphone, 24 hours a day, seven days a week, regardless of financial status.

Finding the right governance for AI development won’t happen overnight. But peer review, extensive internal quality analysis, and other processes will go a long way to ensuring bots function as expected. Otherwise, companies and their customers could pay a big price.

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Elon Musk is an expert at dominating the news cycle with his sci-fi premonitions about space travel and high-speed hyperloops. However, he captured media attention in Australia in April 2017 for something much more down to earth: how to deal with blackouts and power outages.

In 2016, a massive blackout hit the state of South Australia following a storm. Although power was restored quickly in Adelaide, the capital, people in the wide stretches of arid desert that surround it spent days waiting for the power to return. That hit South Australia’s wine and livestock industries especially hard.

South Australia’s electrical grid currently gets more than half of its energy from wind and solar, with coal and gas plants acting as backups for when the sun hides or the wind doesn’t blow, according to ABC News Australia. But this network is vulnerable to sudden loss of generation—which is exactly what happened in the storm that caused the 2016 blackout, when tornadoes ripped through some key transmission lines. Getting the system back on stable footing has been an issue ever since.

Displaying his usual talent for showmanship, Musk stepped in and promised to build the world’s largest battery to store backup energy for the network—and he pledged to complete it within 100 days of signing the contract or the battery would be free. Pen met paper with South Australia and French utility Neoen in September. As of press time in November, construction was underway.

For South Australia, the Tesla deal offers an easy and secure way to store renewable energy. Tesla’s 129 MWh battery will be the most powerful battery system in the world by 60% once completed, according to Gizmodo. The battery, which is stationed at a wind farm, will cover temporary drops in wind power and kick in to help conventional gas and coal plants balance generation with demand across the network. South Australian citizens and politicians largely support the project, which Tesla claims will be able to power 30,000 homes.

Until Musk made his bold promise, batteries did not figure much in renewable energy networks, mostly because they just aren’t that good. They have limited charges, are difficult to build, and are difficult to manage. Utilities also worry about relying on the same lithium-ion battery technology as cellphone makers like Samsung, whose Galaxy Note 7 had to be recalled in 2016 after some defective batteries burst into flames, according to CNET.

SAP Q417 DigitalDoubles Feature1 Image5 2018 Predictions, Pt. 2: Tele Healthcare, Remote Control Cars With Bedside Manners, And The Journey To Mars However, when made right, the batteries are safe. It’s just that they’ve traditionally been too expensive for large-scale uses such as renewable power storage. But battery innovations such as Tesla’s could radically change how we power the economy. According to a study that appeared this year in Nature, the continued drop in the cost of battery storage has made renewable energy price-competitive with traditional fossil fuels.

This is a massive shift. Or, as David Roberts of news site Vox puts it, “Batteries are soon going to disrupt power markets at all scales.” Furthermore, if the cost of batteries continues to drop, supply chains could experience radical energy cost savings. This could disrupt energy utilities, manufacturing, transportation, and construction, to name just a few, and create many opportunities while changing established business models. (For more on how renewable energy will affect business, read the feature “Tick Tock” in this issue.)

Battery research and development has become big business. Thanks to electric cars and powerful smartphones, there has been incredible pressure to make more powerful batteries that last longer between charges.

The proof of this is in the R&D funding pudding. A Brookings Institution report notes that both the Chinese and U.S. governments offer generous subsidies for lithium-ion battery advancement. Automakers such as Daimler and BMW have established divisions marketing residential and commercial energy storage products. Boeing, Airbus, Rolls-Royce, and General Electric are all experimenting with various electric propulsion systems for aircraft—which means that hybrid airplanes are also a possibility.

Meanwhile, governments around the world are accelerating battery research investment by banning internal combustion vehicles. Britain, France, India, and Norway are seeking to go all electric as early as 2025 and by 2040 at the latest.

In the meantime, expect huge investment and new battery innovation from interested parties across industries that all share a stake in the outcome. This past September, for example, Volkswagen announced a €50 billion research investment in batteries to help bring 300 electric vehicle models to market by 2030.

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At first, it sounds like a narrative device from a science fiction novel or a particularly bad urban legend.

Powerful cameras in several Chinese cities capture photographs of jaywalkers as they cross the street and, several minutes later, display their photograph, name, and home address on a large screen posted at the intersection. Several days later, a summons appears in the offender’s mailbox demanding payment of a fine or fulfillment of community service.

As Orwellian as it seems, this technology is very real for residents of Jinan and several other Chinese cities. According to a Xinhua interview with Li Yong of the Jinan traffic police, “Since the new technology has been adopted, the cases of jaywalking have been reduced from 200 to 20 each day at the major intersection of Jingshi and Shungeng roads.”

The sophisticated cameras and facial recognition systems already used in China—and their near–real-time public shaming—are an example of how machine learning, mobile phone surveillance, and internet activity tracking are being used to censor and control populations. Most worryingly, the prospect of real-time surveillance makes running surveillance states such as the former East Germany and current North Korea much more financially efficient.

According to a 2015 discussion paper by the Institute for the Study of Labor, a German research center, by the 1980s almost 0.5% of the East German population was directly employed by the Stasi, the country’s state security service and secret police—1 for every 166 citizens. An additional 1.1% of the population (1 for every 66 citizens) were working as unofficial informers, which represented a massive economic drain. Automated, real-time, algorithm-driven monitoring could potentially drive the cost of controlling the population down substantially in police states—and elsewhere.

We could see a radical new era of censorship that is much more manipulative than anything that has come before. Previously, dissidents were identified when investigators manually combed through photos, read writings, or listened in on phone calls. Real-time algorithmic monitoring means that acts of perceived defiance can be identified and deleted in the moment and their perpetrators marked for swift judgment before they can make an impression on others.

SAP Q417 DigitalDoubles Feature1 Image7 2018 Predictions, Pt. 2: Tele Healthcare, Remote Control Cars With Bedside Manners, And The Journey To Mars Businesses need to be aware of the wider trend toward real-time, automated censorship and how it might be used in both commercial and governmental settings. These tools can easily be used in countries with unstable political dynamics and could become a real concern for businesses that operate across borders. Businesses must learn to educate and protect employees when technology can censor and punish in real time.

Indeed, the technologies used for this kind of repression could be easily adapted from those that have already been developed for businesses. For instance, both Facebook and Google use near–real-time facial identification algorithms that automatically identify people in images uploaded by users—which helps the companies build out their social graphs and target users with profitable advertisements. Automated algorithms also flag Facebook posts that potentially violate the company’s terms of service.

China is already using these technologies to control its own people in ways that are largely hidden to outsiders.

According to a report by the University of Toronto’s Citizen Lab, the popular Chinese social network WeChat operates under a policy its authors call “One App, Two Systems.” Users with Chinese phone numbers are subjected to dynamic keyword censorship that changes depending on current events and whether a user is in a private chat or in a group. Depending on the political winds, users are blocked from accessing a range of websites that report critically on China through WeChat’s internal browser. Non-Chinese users, however, are not subject to any of these restrictions.

The censorship is also designed to be invisible. Messages are blocked without any user notification, and China has intermittently blocked WhatsApp and other foreign social networks. As a result, Chinese users are steered toward national social networks, which are more compliant with government pressure.

China’s policies play into a larger global trend: the nationalization of the internet. China, Russia, the European Union, and the United States have all adopted different approaches to censorship, user privacy, and surveillance. Although there are social networks such as WeChat or Russia’s VKontakte that are popular in primarily one country, nationalizing the internet challenges users of multinational services such as Facebook and YouTube. These different approaches, which impact everything from data safe harbor laws to legal consequences for posting inflammatory material, have implications for businesses working in multiple countries, as well.

For instance, Twitter is legally obligated to hide Nazi and neo-fascist imagery and some tweets in Germany and France—but not elsewhere. YouTube was officially banned in Turkey for two years because of videos a Turkish court deemed “insulting to the memory of Mustafa Kemal Atatürk,” father of modern Turkey. In Russia, Google must keep Russian users’ personal data on servers located inside Russia to comply with government policy.

While China is a pioneer in the field of instant censorship, tech companies in the United States are matching China’s progress, which could potentially have a chilling effect on democracy. In 2016, Apple applied for a patent on technology that censors audio streams in real time—automating the previously manual process of censoring curse words in streaming audio.

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In March, after U.S. President Donald Trump told Fox News, “I think maybe I wouldn’t be [president] if it wasn’t for Twitter,” Twitter founder Evan “Ev” Williams did something highly unusual for the creator of a massive social network.

He apologized.

Speaking with David Streitfeld of The New York Times, Williams said, “It’s a very bad thing, Twitter’s role in that. If it’s true that he wouldn’t be president if it weren’t for Twitter, then yeah, I’m sorry.”

Entrepreneurs tend to be very proud of their innovations. Williams, however, offers a far more ambivalent response to his creation’s success. Much of the 2016 presidential election’s rancor was fueled by Twitter, and the instant gratification of Twitter attracts trolls, bullies, and bigots just as easily as it attracts politicians, celebrities, comedians, and sports fans.

Services such as Twitter, Facebook, YouTube, and Instagram are designed through a mix of look and feel, algorithmic wizardry, and psychological techniques to hang on to users for as long as possible—which helps the services sell more advertisements and make more money. Toxic political discourse and online harassment are unintended side effects of the economic-driven urge to keep users engaged no matter what.

Keeping users’ eyeballs on their screens requires endless hours of multivariate testing, user research, and algorithm refinement. For instance, Casey Newton of tech publication The Verge notes that Google Brain, Google’s AI division, plays a key part in generating YouTube’s video recommendations.

According to Jim McFadden, the technical lead for YouTube recommendations, “Before, if I watch this video from a comedian, our recommendations were pretty good at saying, here’s another one just like it,” he told Newton. “But the Google Brain model figures out other comedians who are similar but not exactly the same—even more adjacent relationships. It’s able to see patterns that are less obvious.”

SAP Q417 DigitalDoubles Feature1 Image9 2018 Predictions, Pt. 2: Tele Healthcare, Remote Control Cars With Bedside Manners, And The Journey To Mars A never-ending flow of content that is interesting without being repetitive is harder to resist. With users glued to online services, addiction and other behavioral problems occur to an unhealthy degree. According to a 2016 poll by nonprofit research company Common Sense Media, 50% of American teenagers believe they are addicted to their smartphones.

This pattern is extending into the workplace. Seventy-five percent of companies told research company Harris Poll in 2016 that two or more hours a day are lost in productivity because employees are distracted. The number one reason? Cellphones and texting, according to 55% of those companies surveyed. Another 41% pointed to the internet.

Tristan Harris, a former design ethicist at Google, argues that many product designers for online services try to exploit psychological vulnerabilities in a bid to keep users engaged for longer periods. Harris refers to an iPhone as “a slot machine in my pocket” and argues that user interface (UI) and user experience (UX) designers need to adopt something akin to a Hippocratic Oath to stop exploiting users’ psychological vulnerabilities.

In fact, there is an entire school of study devoted to “dark UX”—small design tweaks to increase profits. These can be as innocuous as a “Buy Now” button in a visually pleasing color or as controversial as when Facebook tweaked its algorithm in 2012 to show a randomly selected group of almost 700,000 users (who had not given their permission) newsfeeds that skewed more positive to some users and more negative to others to gauge the impact on their respective emotional states, according to an article in Wired.

As computers, smartphones, and televisions come ever closer to convergence, these issues matter increasingly to businesses. Some of the universal side effects of addiction are lost productivity at work and poor health. Businesses should offer training and help for employees who can’t stop checking their smartphones.

Mindfulness-centered mobile apps such as Headspace, Calm, and Forest offer one way to break the habit. Users can also choose to break internet addiction by going for a walk, turning their computers off, or using tools like StayFocusd or Freedom to block addictive websites or apps.

Most importantly, companies in the business of creating tech products need to design software and hardware that discourages addictive behavior. This means avoiding bad designs that emphasize engagement metrics over human health. A world of advertising preroll showing up on smart refrigerator touchscreens at 2 a.m. benefits no one.

According to a 2014 study in Cyberpsychology, Behavior and Social Networking, approximately 6% of the world’s population suffers from internet addiction to one degree or another. As more users in emerging economies gain access to cheap data, smartphones, and laptops, that percentage will only increase. For businesses, getting a head start on stopping internet addiction will make employees happier and more productive. D!

About the Authors

Maurizio Cattaneo is Director, Delivery Execution, Energy, and Natural Resources, at SAP.

David Delaney is Global Vice President and Chief Medical Officer, SAP Health.

Volker Hildebrand is Global Vice President for SAP Hybris solutions.

Neal Ungerleider is a Los Angeles-based technology journalist and consultant.

Read more thought provoking articles in the latest issue of the Digitalist Magazine, Executive Quarterly.

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