AI and Digital Platforms Are Changing the Way We Work

A Conversation with Derek Bang, Crowe Chief Strategy and Innovation Officer

Business leaders today are being challenged to anticipate the ways in which their operations will be disrupted by technological change. The digital transformation brings exciting possibilities: data, automation, and artificial intelligence (AI) can make companies more efficient and effective, while also freeing up employees to engage in more meaningful work. However, positioning for these changes is expensive, and executives have to make choices about how they will make use of new technology to stay relevant.

Derek Bang, Crowe chief strategy and innovation officer , discusses the implications of the digital transformation and what steps Crowe is taking to prepare for a future where automation and AI play a role in industries across the economy.

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Digital transformation is being talked about everywhere. What does it mean to you?

Derek Bang: It’s a catch-all term, and industry analysts all have their own definitions. To me, it’s simple: technology is changing everything. The pace of change, the speed of development, the way the markets are evolving, all of these are constantly accelerating. Leaders need to step back and look at their core businesses, and ask themselves how susceptible they are to technological disruption, whether from existing competitors, a tech startup, or a new, nontraditional competitor in their space. Successful business leaders will need to think about how to adapt their existing products, develop new product opportunities adjacent to their core businesses, or develop completely new products. And they have to think about how they allocate resources and investments accordingly.

My observation has been that spending on technology is sort of a bottomless pit. You can spend unlimited amounts of money on any of those three things (adapting existing products, adjacent revenue opportunities, new product opportunities). Facing these three options is challenging, because each can involve tremendous spending, and all have upsides and downsides. But you only have so much capital to deploy – not to mention resources, people, bandwidth, and time – so making choices is important.

Digital transformation is saying, “What do I want my business to look like in five years in the face of digital disruption?” Many are putting their heads in the sand and saying, “Someone else will figure this out for me”; or, “My market position is safe”; or, “My customer relationships are solid, so I don’t need to change.” But others are thinking, “Wow, how can I use technology to enhance my core business?” Or, “How can I create a new business or new revenue streams that no one is thinking about?” To me, the latter is the most exciting – in part because it’s really hard and really expensive to change an existing business.

As the chief innovation and strategy officer, what are you seeing successful companies do to thrive in this digital age?

Derek Bang:

These companies are the poster children for successful digital business models. While many of these were born digital – and so didn’t have to transform to become digital – all of them are going through business model transformations in some way, shape, or form.

Microsoft has gone from selling licensable, downloadable programs to selling programs in the cloud, and directing more of their products toward businesses. Apple is also moving toward selling cloud-based software and services. These are examples of companies offering adjacent products and services. Google owns the search business – their product is ubiquitous – so where do they go to find growth? The same goes for Amazon and Facebook. In many cases, they are finding growth in entirely new and different product areas – think groceries for Amazon, or self-driving cars for Google or Apple. Microsoft is also creating some new things, like HoloLens™ or other types of mixed-reality tools that may or may not end up being profitable.

The strategies are different for each company, but all share data and AI at their core. Today, that’s the road map for success.

Crowe has had an innovation function for some time now. What is the firm doing to adapt to the changing business needs of healthcare and other industries?

Derek Bang: There are two elements. One is how we are adapting our innovation model itself over time to make sure it’s effective and relevant. And then there’s the actual product itself: What are we developing, and how does it adapt to changing business needs? The most significant change we’ve made over the past five years is our investment in data science, AI, and digital learning. These technologies will factor into everything we do in the future, and we think that’s a really critical investment for us to have the resources, capabilities, tools, and solutions that will allow us to really power what we do.

I think of work functions as I once read: simple, complicated, and complex, where simple is like baking a cake, complicated is launching a rocket into space, and complex is raising a child.¹ Whether it’s our clients or Crowe employees, people don’t go through education so they can come out and verify insurance information or do journal entries. They want to use higher-level skills and do higher-level tasks.

In the past, we have taken things that are simple or complicated and built solutions around them. Now we’re having to build products that solve complex problems as well. It’s not easy and will require a blend of AI, platforms, networks, and various forms of technology. Incidentally, I don’t use the word “autonomous,” because it has a connotation that people are not needed. This isn’t the case at all. We see a future where jobs that are simple or complicated are replaced with jobs that can focus on the complex. There are a lot of jobs we haven’t even thought of today because we are spending so much time and effort on getting the simple and complicated things done.

Crowe has built a strong innovation business model over the last two decades. We have the advantage of the innovation infrastructure, deep industry professionals, advanced data scientists, and access to data. We are on a journey to develop a digital platform to enable Crowe to serve as a network orchestrator or connector of people in the industry. For example, within healthcare we have a strong network of healthcare industry participants who have their own knowledge and data based on their own experiences. Crowe will allow people in the industry to analyze and share data.