Technology Always Replaces People While Augmenting Others

May 8, 2023 Timothy Prickett Morgan

If there is one rule of technology, it is that technology always replaces some people while augmenting others. And like religion and politics or how much money you make, it was not discussed in polite company. With the advent of machine learning-driven AI and the modern and often impolite world it was born into, this may not be the case anymore. People are talking. IBM among them.

When IBM launched the System/360 mainframe in April 1964, it was a transformative thing for what was yet to become the computer industry. Early on, with the advent of data store and database management systems, the focus of the sales force at Big Blue was to talk up how many of the functions that were performed by human beings in enterprises large and small could be automated by these massive electromechanical marvels and this thing called “software” that ran on them.

Very quickly, IBM learned to stop talking about the people replacing aspects of its systems, but the theme has always been there from the beginning of the commercial processing era, from the moment there was a high level programming language that allowed these card-walloping tabulators to do something more than mathematical manipulation of datasets. As soon as there was a line of machines that spanned a wide range of performance and budgets that could literally encapsulate the workflow and operations of a business and drive that operation – something that people had previously done with their own minds and their own hands and their own voices – then the jig was up for some people in the enterprise. Whole swaths of jobs were automated out of the enterprise, even though no one talked about it that way.

Again and again and again, wave after technology wave, we have seen this same pattern repeating as new groups of functions are automated in business and sometimes in our personal lives. We are seeing the pattern once again as generative AI, which has been a long time coming and which could evolve into something called general artificial intelligence within a couple of years perhaps, takes the imagination of business managers and IT suppliers and startups by storm. And whether we want to talk about it or not, AI is already replacing people. And uncharacteristically, as if to prove it has cred in AI and experience in replacing people with algorithms, IBM is actually breaking its own taboo of nearly six decades and it is talking about it. This may be a bellwether of things to come across all industries and employers.

I brought this up a few weeks ago when discussing Big Blue’s financial results in the first quarter of 2023 at my other day job, The Next Platform, in a story called IBM Starts Walking The Hybrid Cloud And AI Talking. As you know, that publication has a slightly different target market and editorial focus, so I didn’t bring up what IBM chief financial officer James Kavanaugh said at the time. But given some comments that his boss, IBM chief executive officer Arvind Krisha, said to the press last week, it has become more broadly relevant.

Let’s start with what Kavanaugh said on a call with Wall Street analysis three weeks ago:

“Think of IBM as client zero. We are driving G&A efficiencies by reimagining and transforming the way we work. This includes optimizing our infrastructure and application environments as well as redesigning our end-to-end business processes.”

“Across IBM’s IT environment, we are realizing the value of hybrid cloud,” Kavanaugh continued. “We reduced the average cost of running an application by 90 percent by moving from a legacy datacenter environment to a hybrid cloud environment running on Red Hat OpenShift. We have been simplifying our application environment. By standardizing global processes and applying AIOps, we are reducing our application portfolio by more than 35 percent. We have automated over 24 million transactions with RPA [which is IBM’s Robotic Process Automation tool], avoiding hundreds of thousands of manual tasks and eliminating the risk of human error. And we are deploying AI at scale to re-engineer our business processes. We are doing that in areas like HR and talent, finance, and end-to-end processes like quote to cash and source to pay. For example, in HR, we now handle 94 percent of our company-wide HR inquiries with our AskHR digital system, speeding up the completion of many HR tasks by up to 75 percent. These productivity initiatives free up spending for reinvestment and contribute to margin expansion.”

Every single company president/owner all the way up to the chief executives of the Global 2000, and the various governments and academic institutions of the world, are thinking the same way. Which is natural enough. That some jobs will be eliminated by AI and others will be augmented by it is not a question, but the rate at which changes come to the workforce and the economy could be unprecedented and very disruptive.

Krishna provided some context for the changes wrought by AI adoption within IBM in an interview with Bloomberg last week, saying that of the 26,000 back office jobs that do not face customers, he could “easily see” that 30 percent of the people doing these jobs could be “replaced by AI and automation over a five year period.”

At 260,000 employees worldwide, IBM has 10 times as many workers than is in those back office jobs. And it is hard to say what the rate would be for outright replacement across the entire workforce at Big Blue, the truth is as some people are given augmentation capabilities, others are going to be eliminated. This has always happened in every aspect of business that has ever been modernized, starting with the plow, which gave the economic surplus that shifted us from hunting and gathering to agriculture. (And gave us alcohol, too. Thank heavens. . . .) As it is, IBM is cutting around 5,000 jobs in 2023 so far as part of its normal “resource actions” and “workload rebalancing,” as IBMers call it, and has hired around 7,000 people for different positions in the first quarter alone.

There is going to be a lot of movement, churn, and change for people to deal with, if IBM is any indication. And we think that it is. The interesting bit is that driving such change at your business is IBM’s business now. Just like it was 60 years ago.

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