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@passingthru
https://www.forbes.com/sites/mollybohannon/2023/06/08/lawyer-used-chatgpt-in-court-and-cited-fake-cases-a-judge-is-considering-sanctions/
ChatGPT has already been shown to fabricate citations when it couldn't find real ones. AI Large Language Models are not precise systems, they're trained to produce or infer/suggest a solution. It's not a silver bullet to every problem, and in my opinion there's a lot of hype around the use-cases. It will do a lot, in time, but mostly as an assistant to work, not to take over work.
Separately, while I was at Capita there was a wave of optimism around chat bots etc, but in reality they deflected about 5% of contacts entirely. What they do quite well is to take initial information from users about the nature of their query, their accounts numbers etc, and speed up skills based routing of contacts to the correct team of advisors. In reality, human contact is king for customer service - it's what people want.
@DDD
I always find your posts really insightful ....
For me - AH needs to cut the middle management fat and get this dinosaur of a business (that's been run like a Government Dept by JL) to think and operate like a private sector company (which is what it is).
Many moons ago I was working at BT and they had the same problem (post privatisation) where the employees couldn't understand they were private sector employees and not public sector.
It's going to take time to instil that into the workforce but aggressive cost cutting in the mid / senior management level will not only save the company a fortune it will also make future decision making much more dynamic.
I suspect - right now - AH will feel like he is wading through treacle trying to get things done at Capita having previously worked at Amazon.
But I do think he's up to the job - I do think the fat trimming will lead us back to profitability and I think AI is the cherry on th cake ....
Before we get to the AI cherry - let's get the cake baked and iced!
That's why I've invested in Capita!
Saw somewhere recently Chat Bot (not AI) had saved 700 jobs cannot recall how many humans were employed but the savings are massive and Chat Bots are in use today - AI will in time take it further dealing with more complex cases into call centres but they need to be trained in your organisations' processes and practices you cannot just buy them in and turn them on - AI will do away with a lot of roles Chat GPT has already passed the bar exam in several US states - Low level law work is easy for them to deal with so lot less graduates required by legal firms, same with auditors, doctors not just low level clerical work hence why I am investing in the likes of NVDIA and MSOFT and staying away from this dead duck
@Divan
Interesting that cost of running automation/AI is so high.
Not knowing the figures I would have assumed savings were greater than 1/3 of a salary bearing in mind no need to pay holidays,pensions,sick pay, National insurance, Human Resources etc
I'm not so sure the AI/Automation gain is clear cut.
1. Remember Capita's staff in the majority are client, or client-customer facing.
2. Quite a number of contracts are FTE-based, not everything is transactional.
3. They can't go willy-nilly changing the nature of Data Processing Agreements to put automated decision making in, nor can they wholesale start putting client data in the cloud without authorisation - particularly government data.
4. Bringing in AI isn't a short term project, and the costs of running AI are actually quite high
Where AI 1.0 and Automation (RPA) was part of a transformation in my Capita time, this was typically a gain-share model negotiated with the client, so they see some upside from assuming the risk of machine-augmented decision making. So you bring in the headcount at current costs, and transform over 2-3 years.
Automation has a run cost, AI a much higher run cost, so that has to:
1. Be delivered at scale.
2. Be agreed with clients, who will want a slice of the gain.
The rule of thumb for RPA is that at modest scale, the cost of running and maintaining your robots is 2/3 of the cost of the relevant workforce. I don't have costings for AI, I haven't been involved, but there's a high entry point, so I'm gonna stick with about 2/3 for now. If your client wants half the savings, that leaves you with 1/6 of a saving on your fully loaded FTE.
A fully loaded Capita FTE is probably in the region of £45k. If they manage to replace 10% of FTE, that's 5000*£45000*1/6 in savings = £37.5m.
They might well achieve 30% reduction in headcount and hit that 100m, if AI delivers on it's early hype/promise, but that will take 5 years of contract (re)negotiation and client churn to hit that saving.
Savage & Simpiles, thanks for those insights and logical analysis. But why would they move from India, which is supposed to be more cost efficient operations in terms of wages skills sets etc. I thought it should work on the opposite direction. You think politics needs to play a part.
AH mentioned 100m further cuts but didn’t specify what these were. Probably mostly staff but may be other areas too
The job losses in Capita will be made in the following areas!
Automation
Capita has many manual processes, and the current governace process stops changes in this area. This is changing and those managers that enforced the current governance process need to go as well. Savings and change are required in this area!
Withdrawel from certain services where Capita is not cost effective!
AI
Lastly Ai will affect staffing numbers and reduce the size of Contact Centers.
I also expect a change from India back office functions to South Africe and Poland. This will be a gradual change, but it is coming!
This is just my opinion but most people will aggree it makes sense!
What should the UK support India when India supports Russia!
Cost savings yep, which will then be spent on a combo of servicing debts, making investments to grow the business and maybe something extra on divi's here or there.
Savage, you are correct. Redundancies will come at CPI. Wont that benefit in cost savings?
The textbook hypothesis of 'AI leading tonjob losses' is just a rehash of the textile Mills making hand crafted fabric workers redundant or the computer making typewriter employees redundant. Yes, no one would employee a typewriter today but... all those people secured other work on keyboards instea.
Being a Tech expert AH, unlike JL, will /should use AI in his efforts to reduce cost. Though it may result in massive job losses , overall there will be benefits to all. The fact that he announced cost savings of £100mn just after assuming duties, even before scrutiny of the functioning of CPI,speaks volumes. More cost cuts to come.
The Article below speaks of 8 mn job cuts, roughly 25% of the work force. Apply this to CPI, it is massive- even with a smaller percentage.
Good times ahead.
https://news.sky.com/story/ai-risks-up-to-eight-million-uk-job-losses-with-low-skilled-worst-hit-report-warns-13102214