How Automation Is Changing the Workplace

Companies seem to be trying to use the new technologies as a way of enhancing productivity, rather than simply saving on personnel costs. Over time it may reduce the number of workers required both blue and white collar (see Ford's 7,000 employee layoff announcement today).

But the early experience suggests that those combining technology with improved human training will reap the best results. JL


Ezekiel Minaya and Tatyana Shumsky report in the Wall Street Journal:

Software reduces a lot of the labor hours needed. The other benefit is that the remaining work is more rewarding. They’re doing more analytic work.You do need to provide training. We begin to plan what areas of emerging work we want them to move to, and if their skills are not aligned there, we’ll put together training. Then there has to be an effort to get all of the managers and operators and department heads to embrace the idea. If you do that, employees are not as worried about digital transformation.
Shortly after Steve Young took his first job out of college as an accountant at Duke Energy Corp. in 1980, desktop computers began appearing around the office.
“This thing on my desk was going to take our jobs,” Mr. Young recalls thinking. “It didn’t happen at all. It made work better.”
Now, as finance chief, Mr. Young is guiding the company through adoptions of automated digital processes, artificial intelligence and data analytics across the Charlotte, N.C.-based public utility, a highly regulated business that operates gas and electric utilities in seven states and owns nuclear power plants and gas-transmission lines.

Technological change is necessary across the company to stay competitive in an industry that faces challenges on multiple fronts. The goal in his own department, Mr. Young says, is to free up his staff from repetitive, menial tasks and redirect their efforts to more meaningful, forward-looking work.
The Wall Street Journal sat down with Mr. Young to talk about how automation is changing the way he and his department do their jobs. Edited excerpts follow.
WSJ: How much time do you spend thinking about the digital transformation at Duke?
MR. YOUNG: There has to be an initial education, then there has to be an effort to get all of the managers and operators and department heads to embrace the idea. This is challenging when you’ve got to run day-to-day operations.

We started in finance, with a few software robotics that now perform bank reconciliations, account reconciliations and financial-statement compilations. A lot of those tasks were done quickly. So, I could say: “Hey, we’re doing it here in finance. You need to start doing it in your department.”
WSJ: What was the next step?
MR. YOUNG: We set up what we called lighthouse projects, efforts to find a more efficient way to handle a specific task or process, taking advantage of digital and data-analytic capabilities. These technologies are amazing. You can now have in-the-field equipment that can take pictures, immediately ascribe notes, send it back to an engineering lab to take a look as they try to solve a piece of equipment problem. You can utilize robotics with cameras to inspect challenging parts of a power plant where it’s hard physically to get into. We can use drones to inspect solar panels.
WSJ: What kind of benefits have you seen in your own department?
MR. YOUNG: The main benefit for an area like finance, where most of our cost is labor, is that we’ve been able to absorb attrition. We’ve got over 600 people. You’ll see 30 to 35 people a year retire or transferred to other areas, and we’ve been able to take advantage of that and capture the benefits of reducing the labor costs. Software reduces a lot of the labor hours needed. The other benefit is that the remaining work is more rewarding. They’re doing more analytic work, more work to support the business.
WSJ: Are you really not letting anyone go?
MR. YOUNG: We’ve occasionally had opportunities to do volunteer [severance] packages. But we’ve had transactions, mergers and so forth, which give rise to those type of opportunities. But in the finance area, we’ve been able to take advantage of natural attrition to meet our reduced costs targets.
WSJ: If finance people are doing new kinds of analytical roles, do you need to retrain them? Are they still the right people for those jobs?
MR. YOUNG: You do need to provide training for people. We begin to plan what areas of emerging work we want them to move to, and if their skills are not aligned there, we’ll put together training for those folks. If you do that correctly, then the employees are not as worried about digital transformation.
WSJ: Are you hiring accountants differently?
MR. YOUNG: We’re talking with colleges about accounting curriculums to make sure they’re coming out with agile skill capabilities, data-analytics capabilities. But the traditional skills, the hard skills, are still the foundation.
WSJ: What kinds of complaints or resistance do you get to automating finance processes?
MR. YOUNG: You’ll hear initially, “This is a part of what we do. If you eliminate this, what are we going to do?” There are personal concerns, which are very legitimate. That’s why we thought ahead, and said, “We’ve got plenty of emergent work here that we’ll move you to and we’ll train you for that.”
WSJ: How has the technology improved financial-reporting processes?
MR. YOUNG: One example is account reconciliation. People often charge costs to the wrong accounts. We have to go back and check the charges to these accounts.
We’ll do it periodically—monthly, at least quarterly. This is a tedious task that used to be done manually. And it was something that nobody liked to do.
Now we’ve automated 800 account reconciliations, and it has eliminated about 2,000 hours of work. That allows accountants to do more rewarding work in terms of financial-statement analytics.
WSJ: What kinds of new insights are they now able to get via the data and new technology?
MR. YOUNG: I’ve also got responsibility for risk management and making risk assessments. Data analytics can pore through so much more data than sampling or an interview process can do. The data analytics have helped tremendously.
In our audit-services area, where we do internal audits, data analytics now can assess the entire body of data; you don’t have to worry whether your sample was correctly compiled or not, because it can look at every transaction and identify those that are in error. So it’s an amazing leap in risk assessment and audit sampling, giving you a more accurate picture quicker.
WSJ: How does that help you as CFO?
MR. YOUNG: I have more confidence when I talk to the board about what are the risks of the company. I’m looking at nuclear functions, cybersecurity, safety issues for linemen in the field, hurricanes and storm-response capability. And when I better understand that we’ve got more risk of hurricanes coming, that we need to allocate more capital and resources to spare transformers, to having work crews properly trained for these types of emergencies, then I will allocate capital differently as a result of data analytics.