icm2re logo. icm2:re (I Changed My Mind Reviewing Everything) is an 

ongoing web column edited and published by Brunella Longo

This column deals with some aspects of change management processes experienced almost in any industry impacted by the digital revolution: how to select, create, gather, manage, interpret, share data and information either because of internal and usually incremental scope - such learning, educational and re-engineering processes - or because of external forces, like mergers and acquisitions, restructuring goals, new regulations or disruptive technologies.

The title - I Changed My Mind Reviewing Everything - is a tribute to authors and scientists from different disciplinary fields that have illuminated my understanding of intentional change and decision making processes during the last thirty years, explaining how we think - or how we think about the way we think. The logo is a bit of a divertissement, from the latin divertere that means turn in separate ways.


Chronological Index | Subject Index

No bit for blame: the OxCheek and SmartAss story

About contractual terms and risks of algorithmic extortions

How to cite this article?
Longo, Brunella (2017). No bit for blame: the OxCheek and SmartAss story About contractual terms and risks of algorithmic extortions . icm2re [I Changed my Mind Reviewing Everything ISSN 2059-688X (Print)], 6.2 (February).

How to cite this article?
Longo, Brunella (2017). No bit for blame: the OxCheek and SmartAss story About contractual terms and risks of algorithmic extortions. icm2re [I Changed my Mind Reviewing Everything ISSN 2059-688X (Print)], 6.2 (February).
Full-text accessible at http://www.brunellalongo.co.uk/

Preamble

London, 11 October 2017 - I would like to say this is a story about business re-engineering. But the term is so in disuse that can be misleading. In fact, it was furiously fashionable in the early 1990s, a looming and exciting age of automation and interconnection of functions, departments, processes and, of course, data all across the worlds of manufacturing and services.

We emerged from that full immersion with some clever and promising concepts - the matrix organisation, the learning organisation, the openness of the internet to commercial interests to name a few. I do not have any particular inclination to nostalgia for those years but for the optimism of the 1980s and the early 1990s: technologies of information and communications (ICT) and those who had the skills required to bring them into the offices, from R&D to administration and accounting, were seen with a very positive attitude by boards of directors and decision makers.

Long gone those days, there is now much more excitement because of the consumers’ role in democratisation and pervasiveness of the same ICT technologies but, sadly, it is easier for consultants and executives to talk about adverse targeting and failures acceleration than about design. Organisations are increasingly seen as boots needed to gallop from an idea to the next, from a unicorn to another one, and it is often more convenient to replace them than to keep them going and repair them - until they crash against the evidence there is no replacement available and they do have to stick with what they have to survive. Thousands of hight potential, creative and innovative firms do not find the magic of venture capitalists’ investments and do depend on the old fashioned skills of relationships with the right customers, marketing and sales.

Let’s say then this is a case of extreme automated inventory management, turned out to be the critical activity in a partnership between two companies, critical up to the point that it can cause them to fail very rapidly - and everything depends on how they manage the consequences of a pitiful mistake made in an algorithm. OxCheek is a very mature medium sized firm that provides human expertise in IT and project management through a national network of professionals. It is mostly active in training, event management and media productions but it retains also customers from the 1990s and early 2000s when they also offered websites developments. SmartAss is a startup, a sort of Uber for IT rentals that has reinvented this type of service providing not only IT equipment on demand but also a communications and administrative software platform useful for internal, customer services and marketing communications, and all the associated functions (logistics, the bookings system, the software needed to assure repairs, software upgrades, maintenance and stock rotation) in a compacted very effective dashboard.

OxCheek’s consultants agree jobs and take orders through a simple app, book IT and media equipment, deliver their services and return the equipment. It sounds quite simple, and in fact it is. The genius guys at SmartAss have managed to simplify and automate almost everything: their system takes the orders 24/7, they pack and deliver laptop computers, routers and other network devices, smartphones, cameras and other stuff needed as early as in 24 hours, they also manage to pick up everything, to ensure systematic maintenance and to provide accounting and invoicing services as well.

This is their story - I changed the names of the companies and omitted some peculiar aspects of their business circumstances in order to protect their privacy.

John, there is no money left

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Defining change as a problem

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A warning for smart factories?

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The tough get going

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Conclusions

We not only managed to fix the crazy interest rate bug but re-tested the whole system in terms of cyber security resilience against risks of frauds and ransom-ware.

But after all, we built up the first layer of a common culture of “working together”, thanks and through automated operations. At the centre of the SmartAss system there was an aggressive and exceptionally efficient new way to automate inventory management and stock rotation but OxCheek’s people did not possibly need all that perfection.

I felt humbled and honoured to work with brilliant mathematical minds, that tend to think whatever iterative project and interaction in computational terms but also disconcerted to have to teach them how to exactly calculate how many minutes they are going to delay a task if they keep on chatting or if they go for another drink before office close - that mental calculus is a skill quite useful to cook perfect spaghetti al dente as well as to promptly spot algorithmic abnormalities!

I am sure that intervening on the “way of working” or on existing specifications with a corrective approach is going to be a huge area of change management demand in the next decade, and particularly in the Industry 4.0 area.

Experts have started looking into the abstract and yet essential distinctions about the role that algorithms play into private commercial negotiations and contractual agreements. We do not know yet what type of competences will succeed in preventing major breakdown due to superficial when not absent incorporation and translation of good requirements in terms and conditions and service level agreements.

Consequences of algorithms’ performance can spread widely and affect also employees rights, third parties, public goods and services. A very important distinction in terms of legal liabilities is the one between software programmes used as tools or employed as intelligent agents (that is now the “new normal” in financial markets dominated by computer trading as well as in the Bitcoin community).

A moment of collective learning was reached in 2010 when it was clear that “flash crashes” may suddenly happen anytime in any sector, as it happened when the Dow Jones Industrial Average dropped by 9% causing millions of dollars to be lost in few minutes. Nobody was able to understand what caused such crash, but to see there is an enormous gap of accountability and transparency that can lead to unrecoverable damages. These risks can become endemic in the digital economy well beyond the securities market and compromise operations up to hazards and disasters. At the same time, on a more positive note, again from the world of innovative finance, researchers have noted people increasingly trust what has been called “algorithmic authority” that turns often free from bias, errors of judgement, corruption and inequalities compared to human decision making. Until it fails dramatically.

Intellectual property rights and privacy laws shield algorithmic contracts in any sector not only from public scrutiny but also from a legitimate and fair demand for accountability on the side of customers, regulatory bodies, employees and contractors.

Not everybody in the corporate world is culturally and technically prepared as Claude and John to deal with the challenges of an extra-lean organisation in which the authority of algorithms takes over operations’ supervision and decision making, and can even lead to risks of extortions and litigations, with nobody knowing exactly what to do - because there is nothing wrong to be fixed in their own particular remit. The devil is not yet in a detail (the calculus error) but in the way the detail affects all the interconnected algorithms.

Claude - and in some disruptive ways also John! - have gone through the complexities of implementation of ERPs on a global scale in their career, they know pro and cons of having different functions and sub-systems integrated - or not. They saw in the interest rate error not only a software bug but also the danger of an organisational tsunami that could compromise their strategic partnership and cause huge losses on both sides.

Their story is such an unusual tale of successful human management that I though it must be told… before it is too late for others to copy it.