IoT testing: how to become more flexible

Even before IoT testing, the automation and repeated execution of tests have been integral aspects of our day-to-day work as software developers. Continuous delivery and DevOps would otherwise be unimaginable. What are the advantages of test automation? Development teams receive speedy feedback on modifications to software code. They can also spend less time on manual testing. As a result, developers can truly streamline development in the name of agile processes.

Illustration that shows what happens when the IoT meets agile software development and DevOps.

With its billions of connected devices and continuous flows of data, the IoT has substantial non-functional requirements. But frameworks such as agile software development or DevOps also need different approaches to testing: teams must choose appropriate tools for their unique test scenarios and automate testing whenever feasible.

Developers have traditionally focused on automating functional tests. But as the Internet of Things (IoT) becomes more important, non-functional tests are also gaining in significance . Considering that billions of devices are interconnected, software must not only perform as expected, but also do so reliably under heavy load . I now want to explore the greatest challenges in this regard.

The top 3 challenges of IoT testing

The Internet of Things consists of billions of interconnected devices. This generates tremendous amounts of data but also places heavy loads on key IoT components. How can IoT testing automation be available on demand, while scaling to meet ever-growing demands on test infrastructure and IoT tooling requirements?

Challenge 1: Development teams must be able to integrate non-functional tests into their continuous tool chains, without needing to administer the requisite test environments themselves.

If load testing is to be as realistic as possible, it has to simulate the behavior of tens of thousands – if not hundreds of thousands – of sensors. Clearly, using such quantities of real sensors is essentially out of the question. This makes it necessary to virtually generate an appropriate number of sensors using a device simulator or similar test tool. Such pilot projects require a lot of hard work from development teams, which can only rarely commit enough resources. Before actual testing can even begin, teams must consider the personnel costs. The necessary infrastructure also costs money. What’s more, the teams have to procure and integrate appropriate systems into the network. Although such effort and expenditure is key to software quality, it also slows down development considerably. Due to this, teams might postpone tests to late stages of a project – or even cancel them altogether, which is much riskier.

Illustration that shows that non-functional testing entails considerable investments of time and money.

Non-functional testing requires tools and infrastructure that entail considerable investments of time and money before the very first test can even be run. In addition, the infrastructure must scale up or down to meet the latest requirements or test scenarios.

Challenge 2: It is impossible to predict which tools will be used to test a certain software artifact. For this reason, integrating new tools such as device simulators has to be a speedy and simple process.

Test infrastructure is not the only thing that must be versatile. Indeed, the range of potential test tools is truly diverse: from device simulators developed in-house to generic load generators, there is a suitable test tool for practically any pilot project.

Challenge 3: IoT testing environments and test systems are not static. Teams must be able to test their systems in and from various networks and at different geographic locations.

Even though IoT software platforms are available globally by definition, and despite agile development processes touting potentially shippable product increments, new software artifacts are often tested in internal networks. Instead, it should be as convenient as possible to switch between different test environments.

How to take a more flexible approach to IoT testing

Some aspects of the challenges above have already been mastered in practice. First, there are many providers of Infrastructure as a Service (IaaS) such as Amazon or Microsoft, which allow companies to rent computing power at the push of a button and make it available just as quickly. Second, nearly any software program can be installed automatically using configuration management (CM) products such as Chef or Puppet. Regarding a system under test (SUT), the two aforementioned partial solutions must be combined to make an easy-to-use solution.

Motivated by the challenges of the IoT and agile processes, the Bosch Software Innovations test center created a generic tool for fully automated testing. All Bosch divisions can use this tool to quickly and easily integrate testing tasks into their own development processes. The methods and approaches for this generic tool are the outcome of quality-assurance measures executed during development of the Bosch IoT Suite and Bosch projects for IoT applications:

Illustration that shows how the AUTOMATED TESTING SERVICE works.

The AUTOMATED TESTING SERVICE serves as the one and only touchpoint for test automation; it also coordinates the entire process and collects test artifacts. The tester simply initiates execution of testing and then waits for the results.

Step 0: The tester makes a REST request to initiate execution.

Step 1: The AUTOMATED TESTING SERVICE automatically requests the necessary virtual machines in the IaaS.

Step 2: The CM system rolls out the test configuration, consisting of simulators or test tools, to the virtual machines created in step 1. Testing then starts.

Step 3: The test artifacts are automatically transmitted from the IaaS to the AUTOMATED TESTING SERVICE.

Step 4: The AUTOMATED TESTING SERVICE automatically releases all computing power that it no longer needs.

Step 5: Via a REST request, teams can now retrieve the test artifacts locally from the AUTOMATED TESTING SERVICE and evaluate test results.

Wrap-up and outlook

Thanks to the integration of IaaS providers, teams no longer have to maintain their own test systems. What’s more, they pay only for the computing power that they actually use. And REST-based execution facilitates integration into existing toolchains. IaaS and the CM product make IoT testing considerably more scalable and versatile . It is easy to add more machines or other tools simply by modifying the REST request.

Illustration that shows the benefits of the AUTOMATED TESTING SERVICE.

The AUTOMATED TESTING SERVICE helps you significantly reduce your investments of time and money in test infrastructure. You pay only for what you actually use.

So, what’s next? Dr. Jürgen Kraus, system engineer at Bosch Software Innovations, summarizes: “We know that, as we dive even deeper into the world of things, more challenges lie ahead. By relying on the approaches presented here, however, we feel confident about tackling and mastering these challenges.”

What has been your experience with conducting IoT tests?

The post IoT testing: how to become more flexible appeared first on Bosch ConnectedWorld Blog.

Bosch ConnectedWorld Blog

Bristol overtakes London to become UK’s leading smart city

Bristol has overtaken London to become the UK’s leading smart city, according to Huawei’s latest UK Smart Cities Index.

The study, commissioned by Huawei and undertaken by Navigant Consulting, saw the top two switch places from 2016’s report, with both remaining the only designated ‘leaders’ in the analysis.

The 2017 report has doubled its scope to 20 cities analysed, with 12 cities in the ‘contender’ bracket, four in the third ‘challenger’ bracket and two designated as ‘followers’. New cities in this year’s analysis include Cambridge, the only new entry to break the top 10, as well as Edinburgh, Belfast and Cardiff.

Bristol’s move to top spot came as a “direct result of it taking significant strides to extend its innovation programmes and more closely integrate those initiatives into city strategy,” in the words of a University of Bristol press release. The university works alongside Bristol City Council as part of the Bristol Is Open project, which was launched in 2015 and aims to be an incubator for the city’s innovations.

The study examines cities on 10 criteria, from vision to digital innovation, and from environmental impact to community reach. Bristol was particularly praised for the latter, with one element being the ‘Damp Busters’ pilot initiative where sensors are used to gather data around damp in homes.

“UK cities are demonstrating an impressive commitment to service and technology innovation,” said Eric Woods, research director at Navigant Consulting and study leader in a statement. “They are now embedding smart city ideas into city planning and operations. They are also preparing for the impact of the next wave of technologies, including 5G, autonomous vehicles, and machine learning.

“The growing contribution that local universities are making to these programmes further emphasises the importance of advanced technologies to the future of UK cities,” Woods added.

The full list of cities is: 1. Bristol, 2. London, 3. Manchester, 4. Birmingham, 5. Leeds, 6. Milton Keynes, 7. Glasgow, 8. Nottingham, 9. Peterborough, 10. Cambridge, 11. Oxford, 12. Aberdeen, 13. Edinburgh, 14. Newcastle, 15. Belfast, 16. Sheffield, 17. Reading, 18. Liverpool, 19. Cardiff, 20. Exeter.

You can find out more here.

iottechnews.com: Latest from the homepage

How to Become a Game-Changing Leader

In recent years, we have come to believe that it is increasingly important for business leaders to learn how to build companies that are simultaneously purpose-driven, performance-focused, and principles-led. We developed this point of view from two quite different perspectives: One of the authors is an academic and adviser to C-suite executives on building enterprise leadership capability, and the other is an executive, board member, and CEO coach who, as CEO and president of Ford Motor Co. from 2006 to 2014, led a successful turnaround at that company.1 (See “About the Research.”)

At a time when the pace of change in business is faster than ever, we believe that building organizations with these three characteristics is no longer a choice. Being performance-driven is clearly essential to success; continuous disruption, rapid technological innovation, and turbulence require that today’s leaders build agile organizations with resilient employees in order to achieve superior performance.2

But focusing on results alone is not enough. Demographic, cultural, and technological changes have led to a workforce that demands a set of operating principles characterized by core values such as transparency, trust, inclusion, and real-time collaboration to help guide behaviors and decision-making in companies.3 Finally, studies have shown that millennials are deeply motivated by corporate social responsibility and a compelling sense of purpose.4 Together, these forces make the case that companies that fail to aspire to align purpose, performance, and principles will also fail to attract the best talent. Furthermore, to achieve the kind of transformations that today’s fast-moving economy often requires of businesses, executives need engaged, committed employees who have opportunities to contribute their knowledge. Purpose and principles can help engage employees in support of high performance.

Aligning Purpose, Performance, and Principles

What does it take to align purpose, performance, and principles? Consider the examples of two business leaders who took on that challenge: Dave McKay of Royal Bank of Canada (RBC) and Isadore Sharp of Four Seasons Hotels Ltd.

Articulating a Sense of Purpose at RBC

In 2014, Dave McKay was appointed chief executive officer and director of the board of Toronto-based Royal Bank of Canada, a leading financial services company. At the time of his appointment, McKay had several critical strategic and operational priorities: growing RBC’s emerging businesses, revitalizing some mature businesses, and preparing employees to take on the challenges of the emergence of digitization as a core element of the bank’s business model.

But there was something else important on McKay’s agenda — something that had less to do with the bank’s bottom line, at least in the short run. McKay felt that, despite an enviable record of financial performance and a set of core values that guided managerial decision-making, RBC lacked a compelling statement of its core purpose. The new CEO read an article that one of us had written several years earlier5 that illustrated how some companies had harnessed a sense of purpose to forge a powerful collective ambition to lead them through difficult transformations. He felt this was needed to inspire employees to take on the bank’s new challenges as a team.

McKay’s desire to make RBC’s purpose explicit was initially met with a healthy dose of skepticism from some senior leaders. Shouldn’t the bank focus on its strategic and operational challenges first? Shouldn’t it continue its digital transformation and then perhaps senior management and employees would be more open to embracing the “softer issues”? But McKay pressed on and persuaded the top executive team and key stakeholders to embrace the process. The leadership team started to hold dialogue sessions, asking a few simple but powerful questions: Why does RBC really exist as an enterprise? Is it just to make money? Whom do we really go to work for every day? What gap would there be in the world if we didn’t exist?

Employees responded positively to these questions and to being asked to help shape RBC’s purpose statement.6 The results included a considerable uptick in employee engagement and a higher percentage of employees understanding and identifying with RBC’s strategic direction.

Creating a Performance-Driven Culture at Four Seasons

At Four Seasons, Isadore Sharp faced a different challenge in the summer of 2008: He was pondering his next move to save his iconic Toronto-based company, Four Seasons Hotels Ltd. “Issy,” as he is known by many, had founded Four Seasons in 1960 and built the Four Seasons brand around his vision of creating one of the world’s premier hospitality businesses as well as around a set of guiding principles that involved treating others with dignity, respect, and professionalism.7 This values-based business model served Sharp and Four Seasons well; the brand’s reputation grew, and Four Seasons hotels were able to command among the highest rates in the industry.

But when the global financial crisis started to unfold in 2007 and deepen in 2008, the high-end business-travel market dried up considerably, and the company’s business model was seriously threatened. The power of the Four Seasons brand and its high margins had covered up a number of performance gaps and operational inefficiencies, and the recession brought those problems under a glaring spotlight.

Sharp and his management team knew they had to make some radical decisions. However, they didn’t run from their powerful sense of purpose. In fact, Sharp and his top leaders doubled down on emphasizing the importance of the company’s mission and core values to employees. But they made it clear that it was time to also place a premium on achieving the company’s financial and operational performance objectives by instilling discipline in managerial decision-making, cutting spending, and reducing its workforce — something unheard of in the Four Seasons family. Management made the tough call to build a high-performance culture by making key staff changes and reducing the company’s cost structure — thereby helping Four Seasons return to its industry leadership role within a few years. The leadership team thus added a heightened performance focus to a company that had long been grounded in purpose and principles.

A Complex Challenge

When we look at these two brief examples, we begin to see the threads that must be woven together to form companies that are simultaneously purpose-driven, performance-focused, and principles-led. On the surface, the aspiration to align purpose, performance, and principles seems rather simple and straightforward. One might ask a series of questions: “Who doesn’t want to work for a purpose-driven enterprise?” “Who doesn’t want to work for a company that consistently achieves high performance?” “Who doesn’t want to work for a company that has a strong set of core values and guiding principles?” But to see how complex the challenge really is, a more telling question to ask is: “Who works for a company today that is consistently purpose-driven, performance-focused, and principles-led?” The first set of questions would most likely yield responses that are unanimously positive, while the question about the current status of one’s employer might yield a far lower positive-response rate.

It is quite simple for executives to say they aspire to build companies that are simultaneously purpose-driven, performance-focused, and principles-led. But it is remarkably difficult to actually achieve that. We and other researchers have cited the challenges facing leaders in trying to reconcile the tensions between purpose and profits.8 In fact, in speaking to thousands of managers around the world, we have never had even one person state that this is an easy venture. Why is it so hard to realize this ambition?

The answer has to do with embracing the reality that in companies, as in life, people see events and actions through different lenses and sometimes with conflicting goals. For example, if you’re Dave McKay at RBC, you spend a good deal of your time on cross-enterprise matters. You try to fit the puzzle pieces of the bank together. It’s your job. However, a mid-to-senior-level manager at the bank’s retail division has a more limited scope and sense of context — he doesn’t consider thinking and behaving with broader enterprise considerations in mind as part of his job. As a consequence, the retail manager hears the call for cross-business collaboration yet knows that his bonus is tied to hitting the performance targets for his unit. In this example, performance targets are clashing with collaboration, a core value that the CEO is conveying as important to the bank.

Similarly, in the case of Four Seasons, consider a property managing director who had grown up in a company that literally treated her like a member of the family and spared no expense to fulfill the company’s purpose of being the premier luxury provider in the hospitality industry. All of a sudden, she was being told to cut costs and reduce head count to achieve new performance standards. In that situation, purpose and principles were clashing with the newly articulated, urgent focus on performance.

We use these two examples because they reflect the real problems facing clear-minded, well-intentioned leaders in successful organizations. There is no immunity from hard-wired tensions, even in the best of companies.

What Transformation Requires of Leaders

How can executives align purpose, performance, and principles so that they can lead their organization through major changes? Both our research and our experience suggest that task requires a particular set of skills and mindsets. (See “The Skills and Mindsets Transformation Leaders Need.”) It also requires the leader and his or her management team to commit to a relentless process of rigorous implementation.9

Five Essential Leadership Skills

Exceptional transformation leaders bring a particular set of competencies to the challenge of shaping and integrating a company’s purpose, vision, strategy, and guiding principles. They establish the discipline to execute, to learn from their mistakes, and to continuously refine the efficacy of their companies’ execution efforts. Our research and experience has led us to identify five core skills that are essential for such leaders.10

  1. They tell compelling stories. Great transformation leaders understand the power of a story well told.11 They don’t dwell on the past, but they appreciate the importance of linking their companies’ heritage to its desired future state and then framing their organizations’ current challenges as the bridge between the two. That’s why McKay strongly believed that his organization needed to craft a powerful purpose statement to complete RBC’s transformation story. He believed that by crafting a powerful purpose statement together with the bank’s employees, employees’ commitment to customer centricity and dedication to RBC’s principles would grow considerably.
  2. They build a collective leadership capability. No matter how smart, accomplished, or charismatic they are, transformation leaders understand that they will achieve their objectives only through mutual accountability and collective ownership of their companies’ future challenges. They also understand that high-value employees want to take part in a leadership capability that is distributed throughout the organization rather than concentrated only in the C-suite.12 Transformation leaders don’t tolerate petty “siloed” behavior but instead call for cross-boundary know-how exchange, cultivating a positive climate of mutual reliance.
  3. They install disciplined processes to drive innovation and growth. At Four Seasons, Sharp and his management team knew they had a capability gap between their company’s current performance and its future potential, but they hadn’t installed the rigorous processes and discipline to manage that gap. So when the financial crisis hit, they were unprepared to drive deep change. They were a purpose-driven, principles-led company without a deliberate emphasis on building a high-performance culture. But Sharp and his team soon learned that requiring crisp execution of their company’s strategy was good not only for its bottom line but also for customers, because a high-performing Four Seasons enabled the company to reinvest profits into enhanced quality and services, thus reinforcing its core purpose.
  4. They align promises made with metrics and rewards. If we looked at all the companies we have advised or led, we’d argue that the biggest danger that threatens a company’s ability to sustain a major business transformation is a lack of trust among employees about whether the CEO and top executive team have the managerial courage and will to see the transformation through. When a leader lays out a vision of a collaboration-based business model, that leader had better reward collaborative behavior and offer negative consequences for siloed, zero-sum behavior. Great transformation leaders align their messaging with a series of metrics, milestones, and rewards that are consistent with those messages.13
  5. They build vibrant talent factories. A company with a vibrant, forward-looking talent strategy has a built-in engine for growth, revitalization, and renewal.14 Such a talent strategy will include the scanning capability to examine skills requirements in a turbulent economic environment. It will have the capacity to turn that scanning capability into an effective talent-acquisition strategy. The strategy will ensure that the organization’s culture and climate is inclusive, collaborative, and high-performing. It will provide ample opportunities for network cultivation to employees, who in today’s world insist on such an environment. Continuous, just-in-time learning will be the norm.

Mastering Dualities: Five Essential Mindsets

Possessing the leadership skills outlined above is essential, but insufficient to bring about transformational change. We have seen leaders who tell great stories, have execution plans and metrics in place, and have installed a sophisticated human capital strategy, yet still have not been able to move their organizations to a higher plain. The reason for this has little to do with the story not taking hold, or deficient plans and metrics, or having a professional yet misguided human capital system.

The reason is simpler. It has to do with the tone, approach, and sense of perspective executives bring to the table when leading major organizational change initiatives. Managing the complexities of building organizations that are simultaneously purpose-driven, performance-focused, and principles-led requires not only the skills we’ve identified above but also the mindset of a leader and leadership team who understand that the world is rarely clearly defined. It requires leaders who see the forest and the trees, who see complexity not in a zero-sum manner but rather through the yin and yang lenses of dualities.15

So, in addition to the skills (what great transformation leaders do), we have identified five dualities that make up the mindsets (how they go about actually doing it) we believe executives must master to lead their organizations through major change. (See “The Skills and Mindsets Transformation Leaders Need.”) We provide examples of each below; in addition, in a sidebar, one of the authors (Alan Mulally) describes how he embraced the five dualities while leading a successful turnaround at Ford. (See “Leading a Transformation at Ford.”)

1. Urgency and Patience

Most CEOs and top executive teams take pride in being decisive, with a get-it-done-now attitude. So imagine telling such a group that their business transformation is going to take a minimum of three years to take hold. Most executives will state emphatically that they don’t have three years: They want this done now. Wise transformation leaders, however, combine that sense of urgency to get moving with the patience it takes to gather the right stakeholders together, seek their input, look for the systemic problems that might run deep into the cultural fabric of the organization, and address the root causes of the blockage rather than the surface factors.16 Patience doesn’t mean that one acts slowly but, rather, deliberately, with a sense of context and perspective.

2. Collective Leadership and Individual Accountability

Most leaders understand the conceptual promise of building a collective leadership capability, but few bring that perspective to work every day. Effective transformation leaders understand that collaboration is less a management technique than it is a leadership philosophy. It’s a belief characterized by statements such as “When we commit to working together, we lay the foundation for winning together.” But these leaders also know that to win together, each individual must accept accountability for delivering excellence.

3. Developmental Coach and Relentless Performance Driver

Great coaches know that developing expertise takes practice and time for the lessons learned to result in more-natural, repeatable behaviors. They take on the challenge knowing that positive change will often not come immediately, but they are there to lend a helping hand and guidance when needed. At the same time, leaders must be demanding by establishing ambitious performance standards and holding both the team and the individuals on it accountable. They also know that sometimes those whom they are coaching are not going to be able to make the transition from acceptable to exceptional performer, and they are prepared to make the tough calls to remove underperforming individuals from the team.17

4. Perpetual Student and Inspiring Teacher

Larry Fink, the cofounder, chairman, and CEO of New York-based asset management firm BlackRock Inc., is fond of calling himself a perpetual student. Recent research18 finds that one indication of effective CEOs is their capacity to continuously gather important information on customers, competitors, their organizations’ cultural climate, and the external environment by asking high-quality questions. Fink is no exception. He is highly skilled at getting to the root of a problem first by asking penetrating questions and then asking further questions of those around him concerning how to best solve the problems identified.19 Yet, while Fink is a superb student, there is also no better representative to teach BlackRock’s guiding principles or to use the company’s powerful purpose statement as a learning vehicle for building passion and commitment among employees.

5. Humble Servant and Bold Change Catalyst

When we’ve seen leaders tell their companies’ stories, those stories are often filled with emotional moments. We hear about the relationship between a pharmaceutical company’s purpose statement and a patient being cured of cancer, or why safety is now a guiding principle at an oil company after a CEO had to attend the funeral of a company worker who died from a lapse in the company’s safety procedures. When authentic, these emotional connections matter deeply to a company’s leaders and its employees. The leaders of such companies bring a sense of deep humility, service, and stewardship to their roles. Perhaps ironically, that sense of service is often what motivates these leaders to be bold change catalysts when they feel that such action is warranted. They are not driving deep change and revitalization to build their personal brands but to bring a sense of vitality and freshness to the companies they feel honored to serve. Through that sense of deep belief in their companies’ purpose and principles comes the drive to catalyze change to boost performance — because the company, its employees, its customers, and its shareholders deserve nothing less.

A New Perspective on Leadership

In the face of rapid change and increasing digitalization, many leaders of established, successful companies are finding themselves and their organizations falling suddenly behind — and that is an unaccustomed, uncomfortable feeling. Senior executives need to not only summon the courage and the will to transform their organizations for a new era but also be prepared to embrace a different way of doing business.

To succeed in leading organizational transformations, executives need a new mindset — a fresh way of looking at their industries, their businesses, their customers, and the best way to deliver differentiated value to customers. The biggest challenge is to embrace a different style of leadership. (See “Are You a Game-Changing Leader?”)

Leaders of large, complex organizations can gain this new perspective by embracing the embedded tensions they face. Executives must learn to reconcile these tensions by mastering a series of conflicting yet complementary dualities: urgency and patience; collective and individual accountability; coaching and driving performance; student and teacher; and humility and boldness. Leaders who can master those dualities skillfully will be well-equipped to build organizations that are purpose-driven, performance-focused, and principles-led — and then to guide those organizations to new successes in an ever-changing business environment.


MIT Sloan Management Review

When Jobs Become Commodities

Thomas H. Davenport is the President’s Distinguished Professor of Information Technology and Management at Babson College and a Fellow at the MIT Initiative on the Digital Economy.

We don’t typically think of the jobs that we perform as commodities. The Merriam-Webster entry on commodity describes it as “a mass-produced unspecialized product.” But most of us view our jobs as specialized or somehow differentiated. We typically believe that we do them differently, and often better, than anyone else with the same job. In fact, we’d probably argue that no one does exactly the same job we do — that we perform at least a slightly different set of tasks, or perform them in a slightly different way, than any coworker.

We may well be right about that, but the world of business and management increasingly feels otherwise. Jobs are increasingly viewed as undifferentiated and interchangeable across humans and machines — the very definition of a commodity. Outsourcing — exchanging internal employees for external ones, often offshore — was a big step toward commoditization for many companies. Many recruiting processes lean toward commoditization, with, for instance, the automated scanning of résumés. You may think you are unique, but companies increasingly view you as just one of many people who can do whatever your particular skill is, from writing Python code to managing financial assets.

Just as there are low-value and high-value commodities, there are low-value and high-value commoditized jobs. Sand is a low-value commodity, and truck driving is a low-value commodity job. Gold is a high-value commodity, and financial trading is increasingly becoming a high-value commodity job (more on this later). For many jobs, the value is driven less by their intrinsic worth but rather by market demand. A recent Bloomberg Businessweek visual analytic suggests that jobs that disappeared in the first four months of 2017 compared with the same period in 2016 were not lost to automation, but were lost because fewer customers wanted to buy the products and services they produce. They include jobs in wired telecommunications, department stores, and coal mining.

For many organizations today, the next big driver of job commoditization is automation driven by smart machines. Simply put, if a job is viewed as a commodity, it won’t be long before it is automated. My research on automation through artificial intelligence (AI) or cognitive technologies suggests that if a job can be outsourced, many of the tasks typically performed by the jobholder can probably be automated — even by relatively “dumb” technologies like robotic process automation. Many global outsourcers are working desperately to create their own automation capabilities that could replace human jobs with machines.

Financial services are a ripe area for automation, given that many activities are relatively structured and there is relatively little product differentiation (it’s all money!). There are low-value and high-value commodity jobs in that industry, and some of the low-value ones, such as bank tellers and mutual fund accountants, have been disappearing for a while, albeit slowly.

Now, however, some of the high-value jobs are being commoditized as well. Sophisticated algorithms have begun to replace financial traders and hedge fund managers, and one-third of hedge fund assets are managed in that way, according to Hedge Fund Research Inc. based in Chicago. The “robo-advisor,” a machine that recommends investments to customers, has begun to replace human financial advisors. As customers increasingly turn to mutual funds, exchange traded funds (ETFs), and other “passive” investments, it’s relatively easy to determine an appropriate portfolio for consumers, rebalance it for asset allocation preferences, and harvest tax losses — all with little or no human intervention.

In short, even traditionally well-paid financial jobs are becoming commoditized. Since most financial markets are digital, machines can easily determine which investments perform best. Intuition and personal experience in picking investments count for little.

The key for financial professionals and other workers whose jobs have traditionally seemed safe is to make themselves less commodity-like. Automation is a game of large numbers, and it’s not economical to automate unique activities. As long as human workers’ capabilities are differentiated from machines’ capabilities, then machines can’t easily replace them — and few organizations will be tempted to automate that niche.

In financial asset management, for example, picking the right ETF is commoditized, but advising on other investments isn’t. If you’re a university investing your endowment, and want to put it into alternatives like timber or oil, you will probably need some expert advice. If you want to invest in esoteric debt like apartment leases, you will probably need wise (human) counsel as well. In this industry, then, astute asset managers should focus on assets that are not well-understood and not traded easily and digitally. Rishi Ganti, a hedge fund manager, argues in a recent Bloomberg Businessweek article that his future is in managing so-called “esoteric assets” that require human help — what he terms “high human capital” — to manage. “It’s like dark matter,” Ganti says. “They dwarf the visible stuff lit up by markets.”

Another angle for protecting your work from becoming a commoditized job is to focus on the most human aspects of the task — that is, those that are most difficult to automate. In the financial world, this often involves understanding human beings and the silly financial decisions they often make. One of my students described this as “financial psychiatry,” but a more academically respectable name is “behavioral finance.” Financial advisors who understand it can focus not on selecting investments for their clients, but on talking them off the cliff when they’re ready to “sell everything” after a market decline. Or they can address the tricky problem of reconciling the diverse risk tolerances of husbands and wives. These complex emotional and behavioral problems are not likely to be taken over by machines anytime soon.

Ironically, workers in finance and other industries that have high-paying, specialized jobs can also make themselves less commoditized by helping with the commoditization process. If they’re good at structuring decisions and understanding how those are represented in computers, they will have jobs for quite a while. They’ll be able to monitor machine-based decisions, pick up the ball when the machines drop it (because of missing data, for example), and perhaps even improve machines’ decision-making over time.

It’s very difficult to predict how quickly jobs of various types will become commodities, and how quickly the humans that perform them will be replaced by machines. Jobs are comprised of a set of tasks, only some of which are usually automated. Automation often takes longer than we expect because organizational inertia can be high, because all jobs are slightly different from each other, and because people find ways to differentiate themselves. But no matter what your field, it pays to ask yourself whether your job is common and repetitive enough to be done by a machine. If you conclude that it is, it’s time to look for — or create — less commoditized work.


MIT Sloan Management Review

Driverless boats could become a reality in UK trial

Driverless boats could become a reality in South of England

Driverless boats could become a reality after Solent Local Enterprise Partnership (SLEP), a partnership of universities, businesses and public sector organisations in the Solent area of the UK’s south coast invested £1.5 million in designing and delivering a dedicated autonomous systems testing service.

Defense technology provider BAE Systems has been awarded a grant of £457,000 by SLEP as part of the overall investment.

BAE Systems will work with autonomous vehicle specialist ASV Global; unmanned flight research company Blue Bear Systems Research; navigation and communication systems integration provider Marine Electronic Systems; software company SeeByte; and the University of Southampton to provide the service’s infrastructure, with other organizations set to join later this year.

The new service is scheduled to be ready for use later in 2017, and customers should be able to conduct trials and test systems such as unmanned boats, air vehicles and autonomous sensors.

The trials will be based around Portsmouth, Southampton and the South East of Isle of Wight. It will use a maritime communications network and a mobile command and control centre, featuring the same technology that BAE Systems provides to UK Royal Navy platforms.

Read more: Connected transportation is lucrative but vulnerable, says ABI Research

A vital technology

BAE Systems’ combat systems head of technology Frank Cotton said that autonomous and unmanned systems are thought of as vital technology for the future, but said there was a great deal of work that needed to be done to unlock its true potential, and understand how they can be integrated into wider systems.

“A wide range of organisations from the defence and commercial sectors, along with academia, have ambitions for this technology and this unique service will allow them to find valuable ways to use it whilst furthering its development,” he said.

The testing service will go live later this year in a “controlled, but realistic” maritime environment.

While the underlying technology for autonomous systems may be the same in these trials, it will require an attention-to-detail and technical expertise to build specific use cases; a driverless boat will have very different requirements to an unmanned aircraft, for example.

Read more: Land Rover BAR sets sail for America’s Cup victory with IoT

Unmanned Warrior

This is not the first time BAE Systems has worked on autonomous vehicle research. Back in 2016, the company and test service partners worked together on autonomous maritime capabilities in the Royal Navy’s ‘Unmanned Warrior’ exercise – a large scale demonstration of maritime robotic systems.

In October last year, MIT, AMS Institute, Delft University of Technology and Wageningen University, joined forces on the development of a fleet of autonomous boats – named “Roboats” – that will operate in Amsterdam’s canal system.

Read more: Driverless boats to launch on Amsterdam’s canals

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