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The Services Research Company
Getting Smarter with Process Automation A Webinar Discussion Advancing the Conversation
June2nd,2016
Host:
PhilFersht,CEO&ChiefAnalyst,[email protected] @pfersht#hfsresearchWeb:www.hfsresearch.com |Blog:www.horsesforsources.com
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Overview:• 20years’business experienceintheglobalITandbusiness process
outsourcing andsharedservices industry• Coined the“As-a-Service Economy”in2014• Industryanalyst,author,speaker,strategistandblogger• Advised andcogitatedon100’s ofglobalITservices, BPOandshared
services engagements• Meddleswiththelargestglobalnetworkofenterpriseservicesand
operationsprofessionals
CareerExperience:• PracticeLead,ITServices&BPOResearch,Gartner,Inc• GlobalBPOMarketplaceLeader, DeloitteConsulting• Consulting PracticeLead,IDCAsia/Pacific• ITMarketsPracticeLead,IDCEurope
Education:• BSwithHonorsinEuropeanBusiness &Technology, CoventryUniversity,
UnitedKingdom• DiplômeUniversitairedeTechnologie inBusiness &Technology fromthe
University ofGrenoble, France
[email protected]
Phil Fersht, CEO and Lead Analyst, HfS Research
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• World’slargesttaxicompanyownsnoTaxis:• Uber• Themostpopularmediaownercreatesnocontent:• Facebook• Largestaccommodationproviderownstorealestate:• Airbnb• Largestphonecompaniesownnotelecominfrastructure:• Skype,WeChat• World’smostvaluableretailerhasnoinventory:• Alibaba• Fastestgrowingbankshavenoactualmoney:• SocietyOne• Theworld’slargestmoviehouseownsnocinemas:• NetFlix• Largestsoftwarevendorsdon’twritetheapps:• Google• Themostpopularemergingresearchfirmdoesn’tsellresearchreports:• HfS
Data is Eating our World!
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Senior Management Driving Customer First Thinking
PleaseindicatewhetheryouagreeordisagreethatSourcingofexternalas-a-Servicemodelswillbedrivenbya“CustomerFirst”strategy
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
51%
46%
SVP+ VPandbelow
Overhalfofuppermanagement(51%)viewthisasimpactingsourcingmodel
changeandstrategymorethananyotherbusiness driver
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2020 Vision: The “Intelligent OneOffice” will emerge from Digital + Automation
TheDigitally-DrivenFrontOffice
Mobile, Social/Interactive,Real-timeactionable data,DesignThinking
DigitalUnderbellyIntelligentAutomationofmanualprocessesDigitizationofdocumentsIoT
IntelligentDigital SupportFunctionFrontoffice-alignedIT,Finance,HR,Procurement,SupplyChain
IntelligentDigitalProcessesPredictive&OperationalAnalytics,Cognitive.
TheCustomer-firstDigitalOrganization
TheEnablingIntelligentOneOffice
The Nervous System, incepting & Processing
all Inputs
The Neural System
The Circular System
©HfSResearch2016(Proprietary)
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Howenterprisebuyerswouldimprovethequalityandoutcomesfromtheircurrentservicerelationships…
28%
13%
9%
45%
4%
2%
Lettinggoandgivingupmorehigher-valueworktoourserviceprovider(s)
Threateningtoentertaincompetitivebid(s)toforceyourcurrentprovider(s)touptheirgame
Bringbackmoreworkin-houseandimproveitourselves
Rolloutanautomationstrategyintandemwithourprovider
Bringinaspecialistadvisortorecalibrateourrelationship(s)andgetusontherightcourseforAs-
a-Service
Notalot– wepaidfor“cheapandcheerful”andthat’swhatwe’restuckwith
Source:TheHfSWorkingSummit forServiceBuyers,December2015(Sample53enterpriseoutsourcingleads)
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©2016HfSResearch
ServiceProvidersOverallRPAActivityinF&ABPOas%ofDealsNumberofContracts=267LiveContractsin2015
RPA use focused on IT currently, with F&A in a high adoption swing
8%
8%
8%
9%
8%
8%
10%
6%
9%
10%
17%
17%
18%
17%
19%
21%
19%
23%
23%
23%
HumanResources
Procurement
Industry-specificProcess(i.e.claimsprocessing)
Sales
SupplyChainandLogistics
CustomerService/SalesSupport
Marketing
FinanceandAccounting
ITapplicationmaintenance&development
ITandNetworkinfrastructure support
FullscaleRPA Implementing/usingRPAactively
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
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©2016HfSResearch
RPA 1.0
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HfS Research has been writing about Intelligent Automation for 4+ years
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Over the last 4 years we have seen the following emerge:
nAnactivemarketforthirdpartyIntelligentAutomation(andmixedresultsforserviceproviderdevelopedproprietarytools)
nAnincreasinglywidespreadunderstandingofthethebasebusinesscaseforRoboticProcessAutomation(RPA)inenterprisesandserviceprovidersbutcontinuedconfusionoverCognitive
nTheinclusionofIntelligentAutomationinnewsolutionproposals(andalmostallrenewals/re-bids)
nEarlyadoptersofIntelligentAutomationtakingaleapoffaithindeploymentsandbydoingsobeginningthechangetheservicesindustry
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©2016HfSResearchLtd.
But today, the topic of Intelligent Automation is in danger of becoming overheated, overhyped and confused
nEnterprisesandserviceprovidershavebecomefixatedonpotentiallyunattainable%savingstargets
nToomanyenterprisesare”Lockingdown”processesastheyaretodayratherthanreinventingprocessesaroundthetechnology
nManyIntelligentAutomationdeploymentsarefocusedonthesub-process(“granular”)ratherthanbeingenterprise-wide(“holistic”)
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©2016HfSResearchLtd.
The HfS Service Buyer Summits…
www.hfsevents.com/new-york-2016
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©2016HfSResearchLtd.
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The focus on efficiency and effectiveness should be across the HfS Continuum of Intelligent Automation
triggerbased
Characteristicofprocess
rulesbaseddynamiclanguage
rulesbasedstandardized language
Structured
Characteristicofdata/information
Unstructured withoutpatternsUnstructured patterned
DataCenterAutomation:
RunbookScriptingSchedulingJobcontrolWorkloadautomationProcessorchestration
SOAVirtualizationCloudservices
RPACognitiveComputing
ArtificialIntelligence
BPMWorkflow
ERP
Autonomics
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What’s Hype versus Reality?
WhatdoyoubelievetobethemostimportantcomponentsofthevaluepropositionforIntelligentAutomation?(ChooseTop3)
Source:"Idealsof As-a-Services"Study,HfSResearch2015Sample:Total=716;EnterpriseBuyers=178;Advisors/Consultants=176;ServiceProviders=372
65%
50%
38%
35%
32%
29%
24%
21%
18%
3%
Drivingmorepredictabilityandhigherqualityin theprocesses
Speedingup thetimetocomplete theprocesses
Freeingupstafftomovetodifferentprojects
Reducingcostsonacontinual basis,beyondthescopeofthecontract
Creatingmorereliabledatasetsforanalytics
Increasingthestandardizationofprocesses
Enablingustomovetobusiness-outcomesvs.FTEpricing
Eliminatingstaffpositions
Increasingcontrol/visibilityofend-to-endprocesses
Gainingacompetitiveadvantageinmyindustry
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What does “Smart” mean?
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SPAcombinesallofthetoolsnecessarytoautomateacomplexbusinessprocessfromendtoend:
OCR WebScraping
TextAnalytics
InfoExtraction
MachineLearning-enabledsolutionstoreplacepreviousgenerationtech
Business ProcessMgmt.
RoboticProcessAutomation
Foundationalcapabilitiestoturn ITprojectsintobusinessinitiatives
OrchestrationofHumanLabor
Toolstofindthebestworkers,andsendtheworktojusttherightpersonviagreatUX
CognitiveAutomation
Shiftcognitiveloadtomachines,re-deployhumanworkerstohigh-valuework
InsightsDon’t speeduptheprocess,refactortheprocess
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It’simportanttounderstandthetypeofmanualworkthat“Robotics”and“Cognitive”eachautomate:
Handwork
Robotics“aka”RPA
i.e.enteringdatafromoneapplication intoanother
Headwork
CognitiveAutomation
i.e.extractinginformationfromunstructuredsources
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Cognitive automation uses machine learning (ML) to train on a process by watching humans on a worker interface:
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TheML-poweredcognitiveapproachlearnsandimprovesalgorithmaccuracyasmoredatacomesin.
Source the data
Produce the output
Create the model Refine the model
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CASE STUDY
Globalfinancialinstitutionachieves80%smartautomationand100%complianceforainvoiceprocess
1
Situation§ Aglobalfinancialinstitutionwasmanually
reviewingandapprovingasamplingofvendor invoices
§ Only10%ofthousandsofinvoiceswerereviewedduetoresourceconstraints
§ Eachinvoicerequired5-8minsofhumanwork
Approach§ WorkFusion’shuman-in-the-loopOCR
improvedaccuracytoover99%§ Roboticautomationdeployed fordesktop
UIs§ Machinelearning(ML)cognitive
automationdeployed forcategorizationandextractionwork
§ Exceptionsautomaticallyescalatedtohumansforprocessesandcontinuousalgorithmoptimization
Results
Smart ProcessAutomation Rate:
80%Achieved Accuracy Rate:
99.6%Projected FTE Reduction in 2016:
55%
SmartAutomation
80%
100%
80%
60%
40%
20%
0%InitialState Robotics Cognitive Human
30%cognitiveautomation
5%humanworker
UXimprovements
TargetStateofInvoiceProcess(TraditionalRPAvs.WorkFusion)
45%robotic
automation
25%Additional GainsviaOCR+Digitization
20%TraditionalRPA
AchievedTo-Date TargetState
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Questions?
[email protected]
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What does “Smart” mean
in 2 years’ time?
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What does “Smart” mean
to the Enterprise?
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How important is Natural Language Processing to the
evolution of automation?
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What has to change to make this a reality?
(In technology, enterprise behavior, the market overall, the economy)
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Is Intelligent Automation the Place to Start?What isthemostimpactfultimingtobegintheseactions?
16%
19%
18%
19%
20%
24%
21%
23%
28%
31%
33%
33%
32%
30%
34%
34%
33%
30%
32%
29%
26%
30%
28%
26%
18%
15%
11%
13%
16%
12%
10%
12%
5%
6%
6%
7%
5%
4%
7%
4%
Replaceyourexisting(legacy)serviceprovider(s)with“As-a-Service”drivenproviders
Accomplishcreativeproblemsolving/"DesignThinking"
Retrainexistinginternaloperationstalenttoredesignprocesses
Investinspecializedchangemanagementsupporttoreorientoperationsstaff
InvestininternalITtalenttohelpusmigrateawayfromlegacysystems
Investineffectiveanalyticstools&skill
Identify/hireatransformationalleader/changeagent
Investinintelligentautomation
Now Withinthenextyear Within3years Within5years Never
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
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What types of skills do we need now versus the future?Towhatextentarethefollowingtalentrequirementsincreasinginimportance,inordertogainmorevaluefromyouroperations? (Increasingsignificantly)
32%
34%
34%
36%
36%
39%
27%
27%
29%
27%
29%
36%
Analyticalprowesstoimproveoperations/productivity
Exploringnewwaysofpartneringacrosstheservicesecosystem
Understanding/usingdigitaltechnologytoimprovebusinessperformance
Proactivelyidentifyingnewwaysofdoingthingsthatbreakoldhabits
Understanding/usingautomationtoimprovebusinessperformance
Definingbusinessoutcomes
VPandBelow SVP+
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
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Where do we see greater value? Software or the
services around it?
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About HfS ResearchWecoinedthe As-a-ServiceEconomy termbecauseweseeaprofoundchangeunderwaythat ismoreall-encompassing than
asimplebusinessmodelorproductline. It'saglobalshiftthatwillleavefewsectorsofbusinessorsocietyuntouched.
TohelpourclientsandthemarketgettotheAs-a-ServiceEconomy,weservethestrategyneedsofbusinessoperationsandIT leadersacrossfinance, supplychain,humanresources,marketing,andcoreindustryfunctionsinorganizationsaroundtheworld.HfSprovidesinsightfulandmeaningfulanalystcoverageofbestbusinesspracticesandinnovationsthatimpactsuccessful businessoutcomes, suchasthedigitaltransformationofoperations,cloud-basedbusinessplatforms,servicestalentdevelopment strategies,processautomationandoutsourcing,mobility,analytics andsocialcollaboration.HfSapplies itsacclaimed BlueprintMethodology toevaluatetheperformanceofserviceandtechnologyintermsofinnovatingandexecutingagainstthosebusinessoutcomes.
HfSeducates andfacilitates discussionsamongtheworld'slargestknowledgecommunityofenterpriseservicesprofessionals,currentlycomprising100,000+subscribersandmembers.HfSResearchfacilitates theHfSSourcingExecutiveCouncil,theacclaimed elite groupofsourcingpractitionersfromleadingorganizationsthatmeets bi-annuallytosharethefuturedirectionoftheglobalservicesindustryandtodiscussthefutureenterpriseoperationsframework.HfSprovidessourcingexecutivecouncilmemberswiththeHfSGovernanceAcademyandCertificationProgramtohelpitsclients improvethegovernanceoftheirglobalbusinessservicesandvendorrelationships.
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