Thursday, June 14, 2018

How Analytics can be Used to Fact Check News Items

Companies have been focusing on the capture of big data using tools such as Hadoop for a few years now. However, it appears that many of them still do not identify big data as a strategic resource worthy of enterprise wide analysis. As a result, while there is much data available, it is being used in scattered ways by various departments operating in silos.

Some of the major analytical tools - Cloudera, Hortonworks and Map R have responded with high level and sophisticated offerings using artificial intelligence and machine learning techniques. They feel this will make the tools easier to use and more powerful.

A good example come from Cloudera, in the form of their application Reuters Tracer. This remarkable tool is used by Reuters News Agency for analyzing twitter feeds, fact checking them and producing results in a matter of milliseconds.

They recognize that Twitter has become a major news source but that it is difficult for people to sort through all the "noise" and determine what is true and what isn't. Reuters Tracer "processes about 13 million tweets daily, capturing events as they happen and determining: is an event true, is it newsworthy, and what is the scope and impact of that event."

"If a tweet is an opinion, Reuters Tracer can determine whether it comes from a recognized expert, and is therefore of news value. In delivering its results, it provides journalists and businesses with a 'newsworthiness score' for each event that rates its assessed level of accuracy and credibility." These results can be produced in as little as 40 milliseconds - basically real time.

Fact checking in the old sense has become something of an industry Reuters Trace can automate, if not  all, much of the fact checking needed to provide a sound basis for decision making.

Many companies are considering applications like this for their own business purposes, perhaps with a big data source like customer or supplier activity with analytics embedded to focus on key strategic decisions. Auditors can definitely use tools like this to improve the analytical techniques used in audits - something that is badly needed.

For more, check out these references - A recent article on the subject and the Cloudera website.

Monday, June 11, 2018

Digital Transformation requires BPR

In the current frantic push of enterprises to digitize their operations, in the form of digital transformation, there is one old process they can't get away from and that's Business Process Reenginering (BPR).

BPR has been around forever, but really came into prominence during the heyday of big ERP (Enterprise Resource Planning) implementations in the 80s and 90s. Those implementations were very difficult and costly and it soon became obvious that BPR was necessary in order to fit the technology and the business together and at the same time make best use of the technology to optimize the business.

Now, the situation of ERP systems is very different. They are well established in, and in many cases, central to the processes of the business. Where once they were the disruptive technology, now they are the legacy systems. Many companies are moving them to the cloud.

Cloud based ERP systems are different from those legacy ERP systems. Partly because ERP has evolved in recent years, and partly because of having transformed to cloud applications, which require new and different operational and security processes.

In the process of digital transformation, many organizations are now using DevOps, which involve automating the processes of software development and IT teams. Since the IT teams must necessarily be concerned with BRP, the DevOps processes must be consistent with the BRP efforts, particularly where they meet.

All of this means that digital transformation can be a tremendously complex affair.

Here's another article on this general topic.

Thursday, June 07, 2018

Blockchain and the Accounting Revolution

It is being said that blockchain will revolutionize accounting, because it enables an independent record of all transactions in a separate distributed ledger which is available, shared, independently recorded and unchangeable. Essentially, the entries would flow from the record of smart contracts, under which commitments entered into by parties to a transaction would become part of the shared distributed ledger and then the settlement of that contract would be automatically implemented by the contract and also recorded in the distributed ledger. Thus all parties to the contract would have a record of the entire transaction stream from beginning to end. Since these entries flow from the agreed contract and are then generated by that contract independently of the parties, it forms a tremendously valuable part of the audit trail for those transactions. Some have even suggested that this would eliminate the need for auditors, and although this is an overstatement of its effect, there is absolutely no doubt that it will transform the way that auditors work.

The aspect of blockchain that involves creation of the distributed ledger has been referred to as triple-entry accounting. For those with some knowledge of accounting history, this is a jarring nomenclature, as it evokes memories of Yuji Ijiri, the noted professor at Carnegie Mellon University who published a monograph of that name in 1982 along with a paper in The Accounting Review in 1986 outlining the nature of triple-entry accounting. Some academic writing has focused on this similarity and asked the question is the triple-entry accounting of Ijiri the same idea as that of blockchain? Some have said no and others yes, at least conceptually.

It’s not a simple issue. The essence of Ijiri’s model was the introduction of a new measure of performance called momentum and a Statement of Force that shows the rate of change in the organization. The addition of the Force Statement to the traditional Balance sheet and Income statement gives rise to the triple entry concept.

In blockchain, the third element to the accounting process arises from the creation of the distributed ledger that shows a complete record of all transactions in the enterprise – a very different concept.

However, the distributed ledger could easily be used to create Force Statements as it contains verifiable dates of all events through cryptographic methods. So, a logical conclusion is that the Ijiri and blockchain concepts are very different but at the same time that the two are very compatible. Will the Ijiri concept make a comeback? Who knows?

Blockchain is being adopted quite extensively, particularly in situations where smart contracts make sense. And an industry is forming around it. But it has not reached the level of general adoption across the spectrum of accounting. Whether it will remains an open question. But there is no question that it will be a major force in accounting providing new and better accounting controls and perhaps leading to the extension of accounting into new dimensions, like those of Ijiri, or something like that.

Wednesday, May 16, 2018

Digital Transformation Driving Companies Back to the Basics

Digital Transformation is the latest mantra for companies; the latest big buzzword.

Of course, it's more than that. There's reality to the phrase as a survey recently released by PointSource confirmed. "At least a quarter of companies plan to invest more than 25% of their budgets in artificial intelligence (AI), blockchain, voice-activated technologies or facial-recognition technologies. Yet over half of these organizations (53%) feel that they’re unprepared to effectively use the technologies they plan to acquire."

This is a telling finding. The companies recognize the potential of these technologies, and are jumping into their acquisition, but have not clearly determined how exactly they are going to use them.

The most basic element of strategic planning, whether it be corporate planning or IT planning, is to study the overall objectives of the organization and develop a plan that is consistent with those objectives - a plan that helps the organization to achieve those objectives.

Yet, Greg Ng, vice president of digital engagement at PointSource, points out that "Digital solutions and strategies exist to solve so many of the problems companies face today. But decision makers consistently struggle to parse down to just the digital capabilities that are right for them."

Therein lies the problem. finding those solutions that actually fit with the corporate objectives and will help to achieve them. It's an old problem, and the solution has been around for years - focusing on that aspect of corporate strategic planning that begins with defining the objectives, identifying the potential solutions, analyzing which solutions are likely to work the best, and writing action plans that will make them a reality. It's not as simple as it sounds, and not as romantic as re-imagining the company, but it's as essential an approach as it ever was, perhaps even more so. For more, see this article and the related study.

Friday, May 11, 2018

Fully Integrated Corporate Reporting

There has been a great deal of change in corporate reporting to shareholders and other stakeholders in recent years. Notable has been an increased reliance on the investor relations section of websites and inclusion on the sites of data oriented disclosures that encourage and facilitate downloading select data for analysis.

There are other changes that have been regularly promoted by various people and organizations but not yet widely adopted. This would include integrated reporting, under which sustainability and financial reporting are combined in an integrated fashion to provide a wholistic picture of the operations of the company.

Some companies provide a separate integrated report, whIch leaves the company with a situation in which they have three different reporting vehicles out for consumption – the integrated report, the traditional annual report and the IR section of the Website.

While these companies deserve recognition for their efforts to innovate, nevertheless, this multi-report world seems an inefficient and wasteful approach.

Perhaps it would make more sense to integrate all three into one single IR Website. At present, the annual report is usually included as a PDF in the Website. Sustainability and governance disclosures are usually included as separate sections of the website, separate from the IR Section. But it is never integrated. This despite the fact that the annual report is a relic of the age of print, and people rarely read the print version any more. Also, it is in most provinces not a legal requirement.

Although companies are usually tight for time in simply complying with legal and regulatory requirements and don’t have a lot of time for innovation, nevertheless innovation of this kind, where the number of reports could actually be reduced, would seem to be a form of innovation that could be very viable.

Perhaps reporting companies should include fully integrated reporting in their set of objectives for their business reporting activities.

Wednesday, May 02, 2018

How to Build a Smart Decision Making System

You want a smart decision making system? OK, it goes like this. Start with a body of good solid data. Not necessarily big data but data that is comprehensive in a particular important aspect of your business. Then, identify the business decisions that are prime subjects for automation. Add advanced data analytics that can be used to identify trends and dominant features of the data. Blend in some AI, that uses machine learning to identify the trends, anomalies and other characteristics and spit out optimum courses of action to advance business interests. Finally, identify the business processes that are used to make those decisions. Integrate the technology with the business processes, adjusting and modifying the processes where necessary.

Right away, we see some of the challenges. How good, really, is the data. Is it readily available, balanced, nuanced, rich? Is it in usable format and platform independent? Are the data analytics reliable, accurate and consistent? Will the decisions reached with the AI be consistent with business policy and culture? Fundamentally, how well can the data, analytics, AI and processes be integrated? What if any will be the role of people? How will we manage the changes in people activity?

With this quick glance at the landscape, it's easy to see why AI implementation is proceeding slowly. Management can envisage the benefits. But the devil is in the details.

Nevertheless, there is a lot of activity in the business world developing smart decision making systems. We can expect to see a lot more over the next few years.

Monday, April 30, 2018

Plan Carefully in Moving to the Cloud

Various surveys show that a priority of many IT Directors is to move applications to the cloud. We also know that a great many companies have a large number of legacy applications, which means they will be faced with the issues around moving those old applications to the cloud - often referred to as lift and shift.

In some cases, this will mean that significant advantages of the cloud will be sacrificed, notably that of scalability. This could mean you pay more for less.

Selecting the right cloud vendor is one of the early and most important decisions. As is the selection of an IT migration specialist to help wth the transition. And then there's establishing suitable and effective channels of communication, especially if there is a high volume of data, as there usually is with business applications.

High volumes of data also raise the issue of storage cost, which can be a substantial part of the overall cost of cloud based applications.

Of course, moving applications to the cloud usually is a significant project, requiring extensive and careful planning and execution, not to mention maintaining security. These few comments are the very top of the tip. Suffice to say that established pre-conceptions about the benefits of cloud computing cannot be taken for granted.

For more detail on this topic, check out this link.

Friday, April 27, 2018

Priorities Among IT Professionals Not What You Might Expect

Solarwinds has released its 2018 survey of IT professionals. This time, they contacted 803 professionals from North America, the UK and various other points around the globe as to their views on IT priorities now and in the near future.

The conventional wisdom as to priorities focuses on artificial intelligence (AI), machine learning (ML), and blockchain. But there is a hype cycle at work here and with some of these, the cycle has not yet reached the stage of disillusionment. Nevertheless, C-Suites are trying to explore these technologies and how they might help them in their businesses.

IT Professionals, on the other hand are those charged with the job of inplementing technologies, and have a huge say in what ultimately goes live. The survey reveals that Cloud/hybrids are the top priority for this group. Second is the more general category of automation and third is big data analytics. Maybe these technologies are further along than others in the hype cycle. At the bottom of the heap are AI, ML and Blockchain.

What the survey indicates is a certain dissonance between what the C-Suite is looking at and the priorities of the IT Professionals. However, these two groups have a common goal - using technology to maximize productivity and efficiency. The survey may simply be indicating that some technologies are less advanced in terms of implementability than others.

Solarwinds recommends that organizations continue to focus on the development of cloud/hybrid technologies. In particular they emphasize implementation of Containers, which are technologies that improve the abilities of operating systems to share applications most efficiently.

As the report puts it, "investment and skills development perspective. IT professionals must remain grounded in the here and now, understanding that containers represent lower-hanging fruit in terms of investment, requirements, and barrier to consume. Specifically, containers enable application portability and promise consistent deployment, scalability, and development agility—all of which are key benefits in hybrid IT environments."

For the report, check out their site.

Friday, April 20, 2018

How Companies Become Digital Champions

PWC has published a study in which they interviewed 1,155 manufacturing executives in 26 countries to develop an index that ranks companies by digital operations maturity, from Digital Novices, Digital Followers, Digital Innovators to Digital Champions.

Out of that study, they developed a blueprint as to how companies can build themselves into digital champions, a distinction that only 10% of companies hold.

Digital champions are defined in the study as companies that have fully integrated digital technology into their systems end-to-end. They analyzed the data according to four ecosystems, which were Customer Solutions, Operations, Technology and People. It's important to note that these are not separate systems in the conventional sense but rather layers of systems within the company. Integration using digital technology is the key.

"Digital Champions distinguish themselves by advancing their capabilities through all four ecosystem layers, creating an organizational environment that takes the greatest advantage of the opportunities from digitization."

They found that companies in the Asia-Pacific area have the most leaders.

The report is available on the PWC website.

Monday, April 16, 2018

AI - Develop, Outsource or Buy?

A recent Gartner survey showed that 4% of companies have implemented Artificial Intelligence and 46% plan to do so. That shows two things - AI is in it's infancy and interest in it is strong.

How they actually implement is an open question. They can develop it on their own, but that's really expensive and requires a major effort. Or they can outsource it from providers like Amazon or Google. A third approach is to buy it from their software provider, which involves waiting until they offer it, and then determining if it fits their organization.

The latter approach is bound to be quite popular for the larger organizations and many medium ones that use SAP or Oracle, because a great many do use one or the other of these. Also, typically SAP or Oracle as the case may be will usually have invested in learning about the needs of the company and can help develop solutions that will be most likely to be a fit.

Most companies will not build their own AI apps. So either of the other approaches, the issue will be how to establish a competitive advantage.  Forrester Research's Brandon Purcell has the answer to that issue, "Data will be the key source of competitive differentiation in the world of AI -- emerging data sources, innovative data transformations, and business-infused data understanding will lead to better models and ultimately better results from AI.

Once again, data rules the day.

For more, check this article.

Wednesday, April 11, 2018

The Future of Corporate Reporting is Digital

The UK’s FRC Lab issued a deep dive report in December that urges regulators, companies, investors and technology providers to work together to realise fully the potential of XBRL and to respond to the challenge of a new European Single Electronic Format (ESEF) for digital corporate reporting due to come into effect in 2020.

XBRL has become the leading technology in the world for digital reporting. It is required by more than 100 regulators in 70 countries, including the SEC, which last year implemented requirements for foreign private issuers to file their reports in XBRL. That was a significant requirement for all FPIs around the world using the IFRS accounting standards. This includes over 300 companies in Canada, most of its largest companies.

In the EU, the ESEF requirement takes effect in 2020. That requirement calls for the use of XHTML combined with iXBRL to present reports. All EU Companies will be required to follow this approach. In the UK, iXBRL is already required by the tax authority and some 2300 companies must comply. Also, over 2000 companies file their reports in iXBRL with Companies house, the national companies registry.

The deep dive report was triggered by the forthcoming advent  of ESEF and a recognition that preparation is required to make it work properly.

The movements of the US, UK and others towards digital reporting point to the fact that a world where corporate reporting is based on paper is rapidly coming to a close. In an increasingly digital world, where companies are engaged in digital transformation at all levels, the expectation of a continuance of paper based reporting is absurd. Paper reports will survive for some time, but they will be secondary reports, expensive relics of the past.

The deep dive report fully supports the power of XBRL and contains several important suggestions, including:
  • for regulators to work together to align reporting requirements and thereby reduce reporting burden.
  • for executives and Boards to ensure that suitable governance is in place so that digital reports meet the needs of users. Companies need to have appropriate processes and procedures in place to manage disclosure in a digital age.
  • for users to familiarise themselves with Inline XBRl and structured financial statements, to ensure that they can maximise the benefit that digital disclosure of fundamental data can deliver.
  • for software vendors to work to educate the market and to continue to innovate in the delivery of high quality software that is easier, more intuitive and more accessible for the preparer community.
Here is a link to the (PDF!) report.

Monday, April 09, 2018

Need for A Stronger Role for Libraries in Digital Information Consumption

With all the fuss during the past year on the reliability and truth of information, especially that available through the digital media and the news media, has led to renewed interest on how people can be confident about the information they have available to them.

As part of the research on this topic, Pew Research Centre did a survey last year on the types of information available and the feelings and attitudes of people about that information. They explored factors such as the following. "How interested are they (consumers) in the subject? How much do they trust the sources of information that relate to the subject? How eager are they to learn something more? What other aspects of their lives might be competing for their attention and their ability to pursue information? How much access do they have to the information in the first place?"

An analysis off these factors led to a conclusion that two main elements contribute to the level of their enthusiasm about information - "their level of trust in information sources and their interest in learning, particularly about digital skills."

Other studies have shown that people must have some trust in the information in order to be able to use it intelligently. But what to trust in the digital world, particularly that of the internet, is a difficult challenge. Levels of sophistication about information reliability tend to vary with levels of education. Also, gaining access to the information requires a certain level of digital skill with the tools being used. This in turn requires some desire to learn those technologies. This desire to learn varies as well. Often the level of sophistication about the information and the desire for learning follow the same track in tandem.

While the Pew study concluded that there is not a "typical user" out there because of the spread of the variations across the population, there is an obvious possible role for a learning mechanism for those who are at all willing to take part in learning activities, which according to the results constitute a large proportion of the population. Pew points to the libraries as a possible resource in this effort.

AS the Study says, "Library users stand out in their information engagement. Overall, about half (52%) of adults have visited a public library or connected with it online in the past year. Those library users are overrepresented in the two most information-engaged groups. Some 63% of the Eager and Willing were library users in the past year, while this is true for 58% of the Confident. Additionally, both groups are much more likely than others to say they trust librarians and libraries as information sources."

Something to think about, especially for those who think that libraries are obsolete. Here's a link to the Pew Study.

Wednesday, April 04, 2018

What we Mean by Information Integrity

With the growing focus on data for purposes of decision making, whether it be big data or regular internal data, there is a growing need for a focus on information integrity. However, what exactly is meant by information integrity is not widely understood.

In 2013, the AICPA Assurance Services Executive Committee’s Trust Information Integrity Task
Force in conjunction with the Canadian Institute of Chartered Accountants published a paper on this topic. The paper provides a full explanation of the meaning of information integrity.

In that paper, "information integrity is defined as the representational faithfulness of the information to the underlying subject of that information and the fitness of the information for its intended use."

These two concepts - representational faithfulness and fitness for intended use - form the core of information integrity.

Representational faithfulness is determined by how well the information "represents the subject that it purports to represent. For example, a weather report is the representation of the weather. Therefore, the integrity of the weather report depends on how well it represents the weather."

The other concept - fitness for use, is clearly related to the concept of representational faithfulness since if the information does not fairly represent the subject, it will be of little use.  But fitness for use goes well beyond this idea. The paper points out that "information is prepared for a specified purpose and includes: (1) the observations about the characteristics of the specific events or instances to which it pertains, (2) information about the environment in which the events occurred or the instances existed and (3) other information necessary for the observations to be used for their intended purpose."

This additional information is often referred to as meta-information. "Information integrity is determined based on both the information’s consistency with its meta-information and its representational faithfulness. Therefore, information integrity includes the accuracy, relevance, precision, timeliness and completeness of the information and its meta-information. Information that is accurate, relevant, precise, timely and complete for a particular purpose can be termed to be “fit for purpose.”

That's quite a handful to deal with. It requires some dedicated effort by management to assess the integrity of the information it is using, but this effort is crucial to making sound decisions.

The paper has some ideas for how management can obtain the assurance they need, ranging from making sure they understand the context of the information to obtaining an independent report from an information assurance professional. It's an area that deserves a lot of attention. A copy of the ASEC report can be obtained on the AICPA site.

Tuesday, April 03, 2018

The Need for Trust in Data

The rise of usage of big data, often from outside the company, with the use of data analytics enhanced by Artificial Intelligence in making decisions has led to a confluence of issues around the question of whether the data can be trusted. Since automated decision making can often operate independently of people intervention, and in fact operates along with people, the issue becomes one of governance.

C-suites are beginning to consider this issue since they are in charge of overall governance. They are asking - how does the involvement of machines in decision making affect corporate governance?

In a recent study commissioned by KPMG International, Forrester Consulting surveyed "almost 2,200 global information technology (IT) and business decision makers involved in strategy for data initiatives.The survey found that just 35 percent of them have a high level of trust in their own organization’s analytics."

This is an important issue. Trust is essential in order for people to interact effectively with machine generated decisions. Lack of trust will inevitably lead to the development of informal workaround processes that will not serve the organization well in the long term.

What it means is that machines making decisions need to be managed along with people. So organizational responsibility for data and for analytics needs to be assigned. To establish trust, there needs to be some assurance about the quality and integrity of the data and the integrity of the analytics (models and algorithms) being used.

It's a major challenge. Check out the KPMG Report here.

Wednesday, March 28, 2018

The need for Technology Training

Recent surveys show that managers lack training in the technology they are supposed to be using; in which their organization has made substantial investments, but can't get the full benefit.  For example, West Monroe Partners, a consulting firm, did a survey of 500 corporate managers a few months ago. They found that 44% of the managers received no training in their automation tools. Combine this with the fact most of them are bogged down in administrative tasks, and you can see why this is a problem. Their time for self-learning is very limited.

It's commonly felt that young people grow up with the technology. But they don't grow up with mush that's useful. Facebook, Instagram and Twitter are not core tools for enhancing manager effectiveness.

They learn some of the basics in apps like Excel, Powerpoint and Word in school, and this helps, but it isn't enough for the job market.

Universities generally, with some notable exceptions, have done very little to deal with the lack of training. They often look upon the teaching of technology applications with disdain.

Community trade schools and the like do a good job, and many young people are turning there for necessary life technology skills.  However, the greater burden rests upon the companies and other organizations that adopt new technologies. They need to allocate sufficient resources for training and implementation.  While this has been a mantra for years, clearly they are not doing this. They need to take note.

Monday, March 26, 2018

Blockchain Technologies could Enhance Data Privacy

The recent Facebook data misadventure showed what can happen when data owners give up control of their data. If they did not give up control, then such data misuse could have been forestalled. If the data owners needed to receive assurance from credible sources that the data would be used only for specified purposes, then they could decide whether to grant the permission to use it.

Blockchain comes in two basic varieties - permissioned and permissionless. Permissionless blockchains are open to the public and any participants can join together to create a consensus on the use fo the data. Permissioned blockchain reserves control over the actions in the blockchain to approved participants. Most corporate blockchains currently being implemented are of the permissioned variety.

Facebook did not use blockchain at all, but if they had used permissioned ones, with the data owners as approved participants, then the owners of the data could have had a voice in the use of their data - they could be part of the consensus. If a particular organization approached them to use the data, then the data owners could give them a 'yes' or 'no'. Or they could say 'you can use the data that directly applies to your purpose, but you don't need the data items that do not so relate, such as people's addresses, emails, etc.' The data included in the permissioned activity, in other words, could be screened out to reduce the possibility of misuse.

Blockchain does not provide absolute assurance of proper use of data, because people are still involved. However, it would provide a powerful means of reducing the possibility of misuse. We will be seeing  a growing use of blockchain or perhaps other distributed ledgers for these purposes.

For a good article on this topic, check this out.

Friday, March 23, 2018

The Rise of the No-collar Workforce

One of the ideas put forward in Deloitte's 2018 Tech Trends listing is that of the No-collar workforce. The thought of course is that Artificial Intelligence is taking over a lot of human activities. AI is nothing new, but the power of the AI that is emerging is very new, and raises a lot of important questions.

As Deloitte puts it, we have "Humans and machines in one loop—collaborating in roles and new talent models. Is HR prepared to manage both man and machine? As automation, artificial intelligence, and cognitive technologies gain traction, companies may need to reinvent worker roles, assigning some to humans, others to machines, and still others to a hybrid model in which technology augments human performance."

The question being raised here centers around the idea that HR departments may have to manage machines along with humans. This makes a lot of sense. AI capable machines carry a cost with them. If they are going to replace humans, then someone needs to manage the economics of those replacements. Is it going to save money to automate a particular function or not? If a function is carried out by humans, would it make more sense to simply augment those humans with additional cognitive abilities enabled by AI rather than replacing them?

Of course, it is management's job to allocate and manage the use of resources they have at hand and they have managed humans and technology for some time. What's new is that the role of technology is getting closer to the role of humans and more interchangeable. And as more human/machine hybrids become available, it inevitably becomes very much a HR concern. It's likely that the divisions will become more blurred as time goes on.

Just wait until the machines decide to join unions! Why not? The hybrids will already be members.

Wednesday, March 21, 2018

Digital Transformation - A Major Shift

As more and more companies make the move to digitize their entire enterprise, the challenges are coming out more clearly. A recent survey commissioned by Infosys shows that: "At the present time, respondent organizations use digital technologies for core IT management (79%), customer relationship management (62%) and business process management (60%). Moving forward, they plan to use digital technologies for knowledge management (33%), operational intelligence (31%) and product development (28%). Already, 67% leverage big data analytics. More than half of that group have already made deep learning investments."

"Adoption of AI (56%), IoT (42%) and blockchain (30%) are also growing as organizations proceed down the digital transformation path."

Implementation of applications utilizing such technologies as Artificial Intelligence, blockchain and big data analytics, will result in the elimination of numerous jobs, mostly those involving routine functions. But new skills will be needed and the challenge to organizations is to do the required retraining of their people to be able to handle new business processes, as they become more automated using these techniques.

For a great discussion of the challenges, check out this article.

Monday, March 12, 2018

The Web Needs Fixing

Sir Tim Berners-Lee has written an open letter outlining the challenges facing the web today and pointing in very broad terms what should be done about it. First, he points out that this past year saw the internet as being available to more than half the people on earth. This was indeed a big milestone, but nevertheless leaves almost half without access. That has serious social implications, as it is well known that the internet divide feeds into the social divides of poverty and inability to access important resources and participate in social discourse. Sir Berners-Lee says we need to find ways to expand the accessibility to the Web.

Second, he points to the more recent decay in the quality of content. As he says, "we’ve seen conspiracy theories trend on social media platforms, fake Twitter and Facebook accounts stoke social tensions, external actors interfere in elections, and criminals steal troves of personal data."

To address this important issue, Sir Berners-Lee says we need to get more people, including the major tech companies, involved in an effort to re-focus the Web to take into account social objectives, recognizing it is now one of the most important elements of modern society.

These are big issues, and broad solutions, but they need to be considered and acted upon.

Thursday, March 08, 2018

Smart Contracts May Not be Secure

Blockchain has been cited as a major breakthrough for developing smart contracts, ie contracts that execute transactions as agreed between parties automatically. Ethereum is a widely used form of smart contract based on blockchain. For example, if a transfer of funds is agreed upon between two parties to a third party, the smart contract could make this happen as agreed. The idea is that it would be secure because of its transparency. Nobody could get away with deviating from or changing the contract because their actions would always be transparent to the parties to the contract.

Initially, this theory was not tested because blockchain was hardly ever used. However, since its inception, use has grown to the point that meaningful studies can be carried out on their effectiveness and safety.

Recent research is indicating that Ethereum contracts may not be as secure as originally thought.
For example, in 2016 a hacker stole $50 million from the Decentralized Autonomous Organization. Also, some blockchain based electronic wallets have misfired, losing money and availability to users.

Research on this important issue is ongoing, A significant study at University College London led to release of a preliminary report last week and is bound to reveal further weaknesses in blockchain contracts as it moves forward. For more on the research, click here.