Autumn Statement 2015: How artificial intelligence can help the government's spending woes
This week, George Osborne takes to the despatch box to present his combined Autumn Statement and Comprehensive Spending Review.
Bringing government spending into sharp focus, the Chancellor has pledged to get the economy in surplus by 2019/20, with some departments expected to face cuts averaging 24 per cent.
Spending waste has been a hot issue for the UK government this year, particularly in the NHS. A report by Lord Carter in June found that cutting the number of product lines from 500,000 to 10,000 and being better at procurement could save the NHS up to £1billion by 2020.
But it’s not just the public sector that can be better at spending its money. Businesses are wasting billions each year and many would be surprised to hear what passes through their accounts unnoticed.
Imagine how easy it would be to sign off on an order of stationary or computer equipment with a decimal point in the wrong place. A 10p biro could easily end up costing £100, or a £4.50 computer mouse £450.
Imagine the price difference when two divisions of a company are buying heavy machinery, one from a a supplier who makes 50 per cent margin and one from another who makes 20 per cent margin.
Those rogue invoices could be worth tens of thousands, or even more in a bad year, but spotting them is extremely time consuming and hard to do with the human eye. Enter artificial intelligence.
We increasingly rely on technology to ensure smooth, efficient financial processing systems, with electronic invoicing now mainstream. A PwC survey estimated the time saved per invoice with e-invoicing is as much as 10 minutes, with a minimum cost reduction of 60 per cent.
These computer-led systems open up a huge amount of data that can help improve future business, but this data is so vast it is impossible to analyse manually. Each entry simply cannot be checked with the naked eye, and therein lies the flaw.
Last year, Tungsten’s e-invoicing platform handled invoices worth $187 billion, which is a lot of data and why we have developed a spend analytics platform that allows businesses to analyse where and how they are paying their invoices.
This streamlining can go further with the help of artificial intelligence which can be used to cross-check every invoice. If something seems slightly amiss, such as a stationery item at 100 times its normal price, flags are raised and it can be checked by a real person, who can quickly rectify the mistake.
We believe artificial intelligence has a lot to offer and so far we have only scratched the surface. That is why we have launched a new research partnership with Goldsmiths University to delve into what can be done to help improve businesses everywhere.
The new Tungsten Centre for Intelligent Data Analytics will support three senior Professors and fund PhD and post-doctoral research programmes, with artificial intelligence applications expected for Tungsten Analytics and other commercial solutions within 18 months.
Of course, it’s going to take more than artificial intelligence to deliver the full savings resulting from this week’s Spending Review. Tough decisions will need to be made, but if it sharpens attention on eliminating waste and improving efficiencies, it can be no bad thing – indeed for businesses too.
Andrew Nichols is the Head of Analytics at Tungsten Network.
UK office space slashed as hybrid working looks set to stay
With hybrid predicted to be the working model of the future, and businesses both large and small announcing that WFH will continue for employees into the future, the traditional office space is being re-thought.
Businesses are both questioning how much space they need for a hybrid working future, especially if it means they can potentially save money, and what form that space should take.
UK firms slashing office space
Back as early as February, HSBC – whose real estate footprint currently stretches to around 112 football pitches worldwide – said it would be cutting its post-COVID office space by half globally and by 40% in London over the next few years, as it looks to implementation of a hybrid working model in light of the pandemic.
Lloyds Bank followed suit. Following an internal survey where 77% of employees said they wanted to continue to work for 3+ days a week post-pandemic, the bank announced it was also moving to a hybrid model, and so looking to cut its office space by 20% over the next two years.
In fact, the latest research from consulting firm PwC reveals that a third of organisations surveyed (258 of the UK’s largest companies) believe they will reduce their office footprint by more than 30%.
The findings of PwC’s Occupier Survey indicate there is likely to be a sizeable fall in occupied office space with half of executives surveyed saying that despite taking into account mass vaccinations, employees will continue to work virtually 2-3 days a week.
And companies continue to announce the hybrid working model for their employees. Accountancy firm EY has just announced that its 17,000 employees are moving to a hybrid way of working, WFH for at least two days a week. This follows PwC which in March said workers could stay at home for half the time and KPMG which this month said it would expect employees to only work two days in the office every week.
More collaborative work spaces
However, what’s also clear from PwC’s research is that the role of the office is not going to disappear completely, but instead adapt to a new way of working, with half of all organisations with more than 100 employees saying they have a real estate and workplace strategy that considers the long-term impact of COVID-19.
“We may see an increased demand for flexible space as many businesses operating models may well need that option if holding dead space is to be avoided,” says Angus Johnson, UK Real Estate Leader at PwC UK.
According to the survey, more than three quarters of respondents said they are likely to reconfigure existing office with 43% of financial services firms stating that they are extremely likely to do so as a result of the pandemic.
“It’s also clear that the nature and purpose of office space is going to change. As occupiers seek new, different space to meet their accommodation needs, environmental aspects will be increasingly important. If the real estate sector is to truly succeed as a more dynamic, greener industry it’s imperative that creative thinking comes to the fore.”
And companies are already thinking creatively how they can utilise office space in a hybrid future. So while HSBC is cutting a significant amount of office space, it is not downsizing its prestigious Canary Wharf headquarters, and instead reimagining the space. In April, CEO Noel Quinn announced the firm was embracing an open plan floor, with no designated desks or private offices, and instead using hot-desks in line with the future hybrid working style. “My leadership team and I have moved to a fully open-plan floor of the building in east London with no designated desks,” he said on LinkedIn.
Lloyds also reported it was adapting its office space, so that rather than individual offices, it will have a more collaborative workspace. And just last month, KPMG announced it too was ditching desks and individual offices, and replacing them with meeting rooms and conference halls for a more collaborative workspace.