The Services Research Company
Business Process Re-imagination in the Cognitive EraAn HfS Research Webinar Discussion with IBM and Waterfund
August4th ,2016
Host:
PhilFersht,CEO&ChiefAnalyst,[email protected]@pfersht#hfsresearchWeb:www.hfsresearch.com |Blog:www.horsesforsources.com
©2016HfSResearchLtd.
A webinar by HfS Research and IBM
Business Process Re-Imaginationin the Cognitive Era
Jason Kelley VP & Partner, Global Business Solutions, Design and Innovation, IBM
Dr. Chitra Dorai IBM Fellow & VP, CTO Cognitive Services, IBM
Scott T. RickardsPresident, CEO and Founder, Waterfund LLC
Overview:
• 20years’businessexperienceintheglobalITandbusinessprocessoutsourcingandsharedservicesindustry
• Coinedthe“As-a-ServiceEconomy”in2014• Industryanalyst,author,speaker,strategistandblogger• Advisedandcogitatedon100’sofglobalITservices,BPOand
sharedservicesengagements• Meddleswiththelargestglobalnetworkofenterpriseservicesand
operationsprofessionals
CareerExperience:• PracticeLead,ITServices&BPOResearch,Gartner,Inc• GlobalBPOMarketplaceLeader,DeloitteConsulting• ConsultingPracticeLead,IDCAsia/Pacific• ITMarketsPracticeLead,IDCEurope
Education:
• BSwithHonorsinEuropeanBusiness&Technology,CoventryUniversity,UnitedKingdom
• DiplômeUniversitairedeTechnologieinBusiness&TechnologyfromtheUniversityofGrenoble,France
Phil Fersht, CEO and Chief Analyst, HfS Research
The “Intelligent OneOffice” will emerge from Digital + Automation
TheDigitally-DrivenFrontOffice
Mobile,Social/Interactive,Real-timeactionabledata,DesignThinking
DigitalUnderbellyIntelligentAutomationofmanualprocessesDigitizationofdocumentsIoT
IntelligentDigitalSupportFunctionFrontoffice-alignedIT,Finance,HR,Procurement,SupplyChain
IntelligentDigitalProcessesPredictive&OperationalAnalytics,Cognitive.
TheCustomer-firstDigitalOrganization
TheEnablingIntelligentOneOffice
The Nervous System, incepting & Processing
all Inputs
The Neural System
The Circular System
The Service Providers will Bifurcate into two groupings
BackOfficeOutsourcersEfficiency,Automation,LaborArbitrageandScalability
OneOfficeEnablersDataOrchestrationandHumanCollaboration
How buyers would improve the quality and outcomes from their current service relationships…
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:TheHfSWorkingSummitforServiceBuyers,December2015(Sample53enterpriseoutsourcingleads)
One-in-Four IT Outsourcing Buyers contemplating switching their Provider (Half Moving to As-a-Service)Whatareyourplansregardingyouroutsourcing/managedservicesagreementsyouhaveforanyofthefollowing?
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
6%
8%
7%
9%
7%
11%
10%
11%
12%
14%
3%
4%
6%
5%
7%
4%
7%
5%
10%
12%
9%
13%
13%
14%
14%
15%
16%
17%
22%
26%
FinanceandAccounting
Sales
HumanResources
Marketing
SupplyChainandLogistics
CustomerService/SalesSupport
Procurement
Industry-specificProcess(i.e.claimsprocessing)
ITapplicationmaintenance&development
ITandNetworkinfrastructuresupport
Likelytochangeproviderorgoouttocompetitivetenderwithsimilarcontract
Likelytochangeproviderorgoouttocompetitivetenderwithanas-a-servicestylecontract
Intelligent Automation is the Place to Start for well over half of Enterprises Whatisthemostimpactfultimingtobegintheseactions?
19%
18%
19%
20%
24%
21%
23%
31%
33%
33%
32%
30%
34%
34%
30%
32%
29%
26%
30%
28%
26%
15%
11%
13%
16%
12%
10%
12%
6%
6%
7%
5%
4%
7%
4%
Accomplishcreativeproblemsolving/"DesignThinking"
Retrainexistinginternaloperationstalenttoredesignprocesses
Investinspecializedchangemanagementsupporttoreorientoperationsstaff
InvestininternalITtalenttohelpusmigrateawayfromlegacysystems
Investineffectiveanalyticstools&skills
Identify/hireatransformationalleader/changeagent
Investinintelligentautomation
Now Withinthenextyear Within3years Within5years Never
Source: “Intelligent Operations" Study, HfS Research 2016Sample: Buyers = 371
Overview§ Waterfund develops financial risk management products for the
water industry and is best known for its partnership with IBM to create a Global Water Cost Index. Scott has been based in both the Middle East and Latin America as a hedge fund investor and developer of financial products.
§ He was most recently Senior Business Development Executive at the Dubai Multi Commodities Centre (DMCC), an agency of the Dubai Government, responsible for Dubai Commodity Asset Management, a hedge fund and ETF investment platform licensed by the Central Bank of the United Arab Emirates.
§ Scott earned his BA from Columbia University and holds an MA in International Economics from the Johns Hopkins School of Advanced International Studies (SAIS) having studied in Bologna, Buenos Aires, Zaragoza, and Washington, D.C.
https://www.linkedin.com/in/scott-rickards-aa73464
Scott T. Rickards, President, CEO and Founder, Waterfund LLC
Overview§ Jason Kelley provides global leadership for the solutions, design,
and innovation business in IBM’s Global Business Services. He is responsible for working with enterprise clients to ensure IBM brings high valued business innovation that differentiate them from their competitors. His teams bring endless energy, creativity, and client focused outcomes for IBM clients around the world. Shaping, developing, and delivering unique business capability with the marriage of analytics, automation/robotics, Watson, and cloud technologies Mr. Kelley brings together the best of one IBM team.
PreviousExperience§ Prior to his current role, Mr. Kelley was the CTO and design leader
for the IBM Business Process Outsourcing business and previously had responsibility for managing IBM’s Analytics and Big Data business in North America, China and Asia Pacific. For more than 20 years Jason has provided collaborative executive business leadership inside and outside of the IBM company.
§ Additionally, as well as founding and leading a successful marketing services firm prior to joining the global team at IBM Mr. Kelley has continued to start new businesses within the IBM corporation.
Jason E Kelley, VP & Partner, Global Business Solutions, Design and Innovation, IBM
https://www.linkedin.com/in/jason-kelley-599330
Overview§ Industry Expert (Banking, Customer Care, Financial Markets, Digital
Media), Globally Renowned Thought Leader and Scientist. Deep R&D expertise in: Cognitive Computing, Industry Analytics, Computer Vision and Machine Learning. Extensive IBM client engagement experience. Formerly at IBM Research, now the CTO of Cognitive Services in IBM's Global Business Services unit.
§ 25 years of R&D experience and extensive portfolio of research work in Computer Science: Cognitive Computing -- Computer Vision, Industry Analytics (Banking, Media & Entertainment, Financial Markets), Multimedia Systems, Machine Learning, Stream Processing, and Cloud Computing.
§ Speaker on Cognitive Computing panel at HfS cognition-themed New York Service Buyers Convention in September
Dr. Chitra Dorai, IBM Fellow & VP, CTO Cognitive Services, IBM Global Business Services
@ChitraDorai
https://www.linkedin.com/in/chitra-dorai-7793162
©2016HfSResearchLtd.
Can you summarize the key items and recap on where we left off in the last webinar?
Technology forces …
Analytics and cognitive CloudMobile Internet of Things
… are creating new experiences …
Experience journey Digital ubiquity Omnichannel
… and disrupting operational models. Traditional value chain Ecosystem
Social Security
Disruptive technologies are driving creation of new business models and digital ecosystems.
©2016HfSResearchLtd.
Can you summarize the key items and recap on where we left off in the last webinar?
• RadicalCollaboration• EmpathyfortheEnterprise• Outcomesfocused
Global Water Supply Investments through Superior Financial Analytics and Insight
Can you very briefly explain the journey Waterfund is on and how you are looking to reshape the company?
THE WATERFUND PRODUCT PLATFORM
INSIGHTSA dashboard of cloud-based financial applications based on proprietaryWater Cost Index (WCI) values, developed in conjunction with the Accelerated Discovery Lab at IBM. Powerful analytical tools for governments, corporate water managers, and investors.
INVESTMENTSInfrastructure opportunities sourced and operated by Waterfund in a wide range of water projects and utilities. Game-changer for water investors
WATER COST INDEX
Waterfund and IBM Research created a platform for calculating the all-in cost of water in hundreds of cities and projects around the world – the Water Cost Index (WCI)
IBM and Waterfund now have an asset (WCI) that can be used by regulators, inves-tors, water agencies, and others as a tariff benchmark, an indicator of investment per-formance, and a cost savings
WATER COST INDEX = Total cost of productionTotal delivered freshwater volume (m3)
TOTAL COST OF PRODUCTION is calculated as the sum of operating costs, capital costs, and identified subsidies.
TOTAL DELIVERED FRESHWATER VOLUME(in m3)is the amount the producer reports as delivered, and excludes water lost either due to system leakage, pilfering, or other forms of loss. This penalizes producers with a large fractionof production volume being lost due to system inefficiency.
Overtime,cognitivesystemswillsimulatemoreofhowthebrainactuallyworksandhelpussolvetheworld’smostcomplexproblemsbypenetratingthecomplexityofBigData.
käg-nə-tiv (adjective): of,relatingto,orinvolvingconsciousmentalactivities(suchasthinking,understanding,learning,andremembering)
Cognitivecomputingandcognitive-basedsystemsaccelerate,enhanceandscalehumanexpertiseby:
Understandingnaturallanguage(orsensorydata)andinteractingmorenaturallywithhumansthantraditionalprogrammablesystems
Reasoning- forminghypotheses,makingconsideredarguments,planning
Learningandbuildingknowledge
Can you help define cognitive solutions for us?
©2016HfSResearchLtd.
Cognitive systems have three key capabilities that open new doors for innovations in business process services
Createnewinsightsandnewvalue
Providebias-freeadvicesemi-autonomously
Interactandassistthroughunderstandingandreasoningofbothcontentandcontext
Discovery
Decision
Engagement
Source:IBM,GlobalTechnologyOutlook
©2016HfSResearchLtd.
Can you help define cognitive solutions for us?
Desktop Automation
Cognitive Automation
Simple Transactional Data
Autonomic Process
Automation (
Structured Data/ Simple rules
Unstructured Data/ Complex Rules
Variety of Data
Desktop Automation
Robotic Process Automation
Cognitive Automation
§ ERP Scripting§ Workflow § Macros§ Screen scraper§ Auto eMailer
§ Extensible and adaptive pre-built process object libraries
§ Global robotic command center and dedicated SMEs
§ IBM/partner resilient, secured virtualized infrastructures
§ Autonomous decision-making (“reasoning and remembering”)
§ New insights and data discovery (“learning”)
§ Personal and interactive support (“engagement”)
§ Insight-driven knowledge
§ E.g. Industry-specificvirtual assistants,Cognitive Buy Assistant
§ Extension of RPA capabilities by addressing common obstacles of unstructured data and complex rules
§ E.g. Datacap driven unstructured data processing with WPM(Watson Policy Manager) enabled automation for complex rules
HigheststageintheIntelligentAutomationContinuumtotransformbusinessprocesses
©2016HfSResearchLtd.
Can you help define cognitive solutions for us?
HelpclientstoprogressontheAnalyticstoCognitivejourneytocaptureincreasingvaluethroughoutcome-driven,actionableinsights
Dataexploration
Prescriptivemodeling
Descriptive/reporting
Predictivemodeling
Datafoundations
Cognitivecomputing
OptimizedforScale
§ Integratingdatasources
§ Assessingdataquality§ Addressingdata
governance§ Broadeningthe
definitionofenterprisedata
§ “Democratizinganalytics”—facilitatingaccesstoquickinsight
§ Buildingadata-drivencultureinorganizations
§ Actionableinsights§ Testinghypotheses§ Gainingbusiness
stakeholdersupportandadoption
§ Embeddinganalyticsintodecision-makingprocesses
§ TrackingROIondata-drivenLoBprograms
§ Elevatingexperienceformaximalbusinessbenefits
§ Servingupreal-timeinsightatkeypointsofengagement
§ Creating“singlesourceoftruth”reporting/structuredKPIs
OptimizedforInnovation
©2016HfSResearchLtd.
For more information and additional use cases:ibm.biz/Doraiblog
Can you help define cognitive solutions for us?
WatsonPerfectOrderAssistforOrderManagement
Watson ContactAssistforO2CCollections
CognitiveInquiryAssistinInvoiceProcessing
§ TracksandpredictsthePerfectOrderIndex(POI)andlinkstodrivers/rootcausesofperformance
§ Industry: CPG,Manufacturing,LifeSciencesandTelecom
§ TracksandpredictsA/Rbalancesandlinkstodrivers/rootcausesofDSO
§ Industry-agnostic
§ Understandsnatural languageinquiry,launchesreal-timeanalysisofpaymentdataandallotheraspectsofinvoiceprocessing
§ translatesontheflyasneeded,andpresentsresultsfromrootcauseanalysisrelatedtodelays/issue
§ Industry-agnostic
New Order to Cash cognitive services focus on your customer to offer insightful customer engagement, enhance operator expertise and drive intelligent processes
©2016HfSResearchLtd.
Can you provide us with some other real world examples of where and how enterprises are transforming their functional operations - in Finance, Procurement, HR, etc. through the lens of cognitive solutions?
Blue HoundPricing IQ
Contracting
Supplier risk management
Supplier evaluation & qualification
Cognitive Solutions for Procurement Operations
Supplier IQ
User experience journey
Cognitive Procurement Assistant
Procurement
Pricing negotiation
Supplier lifecycle management
Supply Chain Risk Insights
Deep supplier insight Dynamic pricing info Instant contract analysis
Predictive risk mitigation insights
Requisition Purchase
Trusted, delightful user experience
Empowered consumers
Changingregulations
Changing demographics
Product redesign / demand
Supplier resiliency
Spend reduction
Process standardization
Policy compliance
Cost optimization
Adherence to contractual terms
©2016HfSResearchLtd.
Can you provide us with some other real world examples of where and how enterprises are transforming their functional operations - in Finance, Procurement, HR, etc. through the lens of cognitive solutions?
Is this activity largely driving what you see as being the 'next generation of service delivery?'
Key requirements for 'next generation of service delivery'
Theinnovatorandoperatorskillsetsneed
toco-exist
Redesignworkflowstoachieveuserdelight
endtoend
AgiledeliveryofcomposablesolutionsusingBPaaSplatforms
Apartnerwhocaninnovate,design,implementandoperatesharedservicescollaborativelytoachieveend-to-endoutcomes
Adesign-thinkingledapproachtoreimagineworkflowsusingRobotics,AnalyticsandCognitivecapabilities
Apre-builtsetofreusableassets,solutionsandtechnologiesexposedviaAPIsforseamlessintegrationandrapidpersonalization
©2016HfSResearchLtd.
Global Water Supply Investments through Superior Financial Analytics and Insight
Can you share with us what motivated your company to start your journey, how is it impacting the business, and what outcomes are you anticipating?
INSIGHTS AND INVESTMENTS: A VIRTUOUSCYCLE
Continually refine and hone WCI based not only on public
data, but also on water production assets owned by Waterfund
WCI delivers superior insights into true cost of
water production
Identify and acquire industry outperforming
water production assets
Glean detailed operational data on cost inputs based on asset performance and public data
WATERFUND INSIGHTS SERVICE
FACILITATING TRANSPARENT AND EFFICIENT WATER INVESTMENTGreater insight into outcomes: enables a holistic view of the financial costs and impact of owning and/or using water-related assets.
Greater efficiency in decision making: widens knowledge of water use impact and demonstrates immediately the benefits of operational behaviour changes.
Greater transparency and auditability: enhanced visualisation allows all stakeholders to observe impacts of water use – managers, shareholders, govt., public
OPTIMISING DATACHOICES
IDENTIFYING OPPORTUNITY AND TARGETING RISK
CASE STUDY | KUWAITENERTECH,AWHOLLY-OWNED SUBSIDIARYOF THE KUWAIT INVESTMENT
AUTHORITY, KUWAIT’S $600 BILLION SOVEREIGNWEALTH FUND,HAS TAPPED WATERFUND TO CREATEAWATERCOST INDEX (WCI) FOR KUWAIT
• The Kuwait WCI will be the basis for a water investment dashboard, a suite of analytical tools created by Waterfund to empower users and optimize policy and investment decisions regarding water security and investment in water technology
• Other users for the dashboard and Kuwait WCI initially will include the Kuwait Foundation for the Advancement of Sciences and the Kuwait Institute for Scientific Research, two leading academic centers for sustainable water resource management in the Middle East and globally
THIS ISAN INITIALSTEPTOWARDS THE CREATION OFAWATERDATACENTER FOR KUWAIT IN PARTNERSHIPWITH WATERFUND
• Waterfund’s Kuwait WCI and data analytics will play an instrumental part in determining water tariffs in Kuwait• Furthers Waterfund’s objective to inform the debate about water pricing and its crucial role in sustainability globally
through superior data and analysis
How do you see the introduction of cognitive solutions altering your company's priorities going forward? And what areas of investment - both from a monetary and a resource/people perspective - are most impacted?
©2016HfSResearchLtd.
For those listening unsure of where to start or where to focus, what advice do you have as someone who has begun the journey to those dipping their toes in the water?
Cognitivecomputingisajourney!1 2 3
Laythefoundation ManagethechangeDefinethevalue
Find the right opportunities for cognitive
Define the value proposition and chart a course for cognitive
Be realistic about value realization
Invest in specialist human talent
Build and ensure a quality data corpus
Consider impacts, business processes, and policy requirements
Ensure executive involvement along the cognitive journey
Communicate the cognitive vision at all levels
Continue to raise the cognitive IQ level of the organization
32 IBM Confidential
Our Approach – IBM Design Thinking with Agile DeliveryHuman Centered framework for inspired innovation and collaboration
Understand
Explore
Prototype
Evaluate
Understand and develop empathy for
users
Explore the process of generating potential
solutions for your users’
problems
Evaluate and decide whether to move forward with an idea or generate alternate solutions
Prototypeideas as concrete
experiences
Key Principlesü A Focus on User Outcomes – “Make the User our North Star”ü Multidisciplinary Teams – “Succeed or Fail as a Team”ü Restless Reinvention- ”Bias towards Action”
©2016HfSResearchLtd.
How does design thinking help teams approach such transformational journeys? What building blocks should enterprises have in place?
Insummary,ourapproachtoBusinessProcessRe-imaginationleveragesinnovativetechnologyacrosstheend-to-endlifecycle.
BPR
Assess
§ Evaluate process designs with analytics-driven assets including BlueWorksLive, TVC, Maturity Models, etc.
§ Identify key work drivers to prioritize improvements
Judgment based automation
§ Apply cognitive analytics to monitor customer, supplier, employee behavior
§ Push prescriptive guidelines to enable team to act on insight
Rules based automation
§ Apply technology to automate end-to-end activities
§ BPaaS, BPM, Workflow, Analytics, Robotics, Mobile Apps
Monitor
§ Track status § Monitor inquiries and
ensure resolution§ Alert management§ Advanced visualization§ Mobile apps
BusinessProcessRe-imagination
©2016HfSResearchLtd.
How does design thinking help teams approach such transformational journeys? What building blocks should enterprises have in place?
©2016HfSResearchLtd.
“Cognitive is the destination, and digital is the necessary path to get there.”
Ginni Rometty, CEO, IBM
About HfS ResearchWecoinedthe As-a-ServiceEconomy termbecauseweseeaprofoundchangeunderwaythatismoreall-encompassingthan
asimplebusinessmodelorproductline.It'saglobalshiftthatwillleavefewsectorsofbusinessorsocietyuntouched.
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