Sixteen years ago, the Deep Blue supercomputer developed by IBM defeated – in a rematch – Russian world champion Gary Kasparov in a chess match. Today, a chess program running on a cell phone can consistently beat a master player.
Those results suggest that we humans are getting seriously schooled in the man vs. machine competition. But consider this: Soon after Deep Blue’s victory, Kasparov organized a team where a group of humans and computers played together. Through collaboration, they were able to defeat any single human player or any computer program on its own.
This story, shared via a Ted Talk delivered by Erik Brynjolfsson, Professor of Information Technology and Director of the MIT Center for Digital Business, holds an important lesson. According to Brynjolfsson, we should worry less about racing against machines and focus instead on racing with them.
The idea is hugely relevant to the outsourcing industry, which today approaches a transformational crossroads. Routine and repeatable jobs performed by humans are increasingly being replaced by software tools that automate tasks and functions. As a result, while traditional outsourcing derived cost efficiencies through labor arbitrage and moving jobs to low-cost labor centers, today’s emerging model employs labor automation to largely remove wages from the equation.
Does this mean outsourcing will become irrelevant? Not at all. Rather, service provider success will increasingly hinge on the ability to integrate increasingly complex service delivery chains that involve multiple providers. As automation gains traction, solutions will emerge to address specific human functions – such as, for example, reviewing x-rays or assessing loan applications. The task for service providers will then become to integrate those specific solutions into a tightly knit end-to-end supply chain.
Another optimistic theme Brynjolfsson expresses is that our days of innovation are far from over. Advances in digital technology, he argues, coupled with exponential growth in computing speed, are driving “combinatorial” advances, where innovations in one area serve as building blocks for additional innovation. Case in point: one of his graduate students developed an app that – thanks to distribution on Facebook – attracted over a million users. Facebook, he points out, was enabled by the web, which grew from the Internet.
Brynjolfsson will be the keynote speaker at ISG’s upcoming Sourcing Industry Conference in September in Dallas, where he will address the themes of “disruption, integration and growth.” I’m looking forward to learning more about his engaging views, and to hearing his responses to the provocative and challenging questions that are sure to arise. I hope to see you there.About the author
Kimberly Fey is a Director at ISG and has responsibility for ISGs Sourcing Industry Relations. In this role, Kimberly leads the relationship development with the service provider and law firm community. Kimberly has created platforms that promote dialogue and education with the other industry influencers. Through this program, ISG has regular interaction with all the leading multi-national, India heritage, geographic and niche service providers. Kimberly has developed relationships with the top executives at these firms and orchestrates relationship development between ISG executives and their industry, functional and geographic counterparts. She manages the only advisor industry event, Sourcing Industry Conference, that allows for candid, open dialogue with the service provider community about the industry issues, challenges and opportunities.