Unlocking Innovation Through Intelligent Automation
Enterprises are entering a challenging time in this era of automation. They must be able to answer some very demanding questions:
- Do the in-house teams have the ability and motivation to really embrace automation?
- How can they embed a culture of innovation?
- How do they look beyond RPA to other technologies such as Artificial Intelligence, which has the ability to deliver value orders of magnitude greater than RPA?
- How, eventually, can they bring their BPO providers on board, as they surely must do if they are to realize the full benefits of automation?
None of this is easy, and many of the answers will depend on how the BPO providers themselves respond to the challenge.
The State of Automation and Its Future
In a survey carried out by Symphony Ventures, buyers of RPA software and services said that the technology was very close to its tipping point – i.e. when it becomes business as usual – and that this would happen in the next two years or so. Right now many companies are implementing RPA, either as pilot projects or as relatively small scale ‘toe in the water’ programs. A few are marching ahead and implementing robots at scale, which means they are now grappling with the challenges of creating operations teams to support the automated processes, nd Automation Centers of Excellence to drive the benefits across their organizations.RPA will, inevitably, reach that tipping point soon. Those businesses that have taken the initiative quickly and ambitiously, will be the winners. They will industrialize automation within their organization and eventually start to impact the outsourced services as well. Whether they do this with their BPO provider or to their BPO provider will be down to the
RPA will, inevitably, reach that tipping point soon. Those businesses that have taken the initiative quickly and ambitiously, will be the winners. They will industrialize automation within their organization and eventually start to impact the outsourced services as well. Whether they do this with their BPO provider or to their BPO provider will be down to the type of services and the sort of relationship that they have with each other. What is clear is that those BPO providers that can’t, or won’t, respond to the challenge will see their pipeline drying up. Just think – if a large percentage of a service-based department can be automated, then the business case for outsourcing, which relies on economies of scale, will be eroded very quickly. In the provider space, the race will be won by those existing firms that adapt fast or new entrants that can deliver an ‘automate-first’ strategy.
As well as RPA, a few businesses are looking at how Artificial Intelligence can help them. Some established vendors are already providing enterprise scale solutions to customers. For example, all emails to one of the major UK train operators are read and analyzed by Celaton’s inStream software so that they can be efficiently forwarded to the right person in the organization, resulting in an 85 percent reduction in personnel required for this task. Others are implementing chatbots to deal with customer queries through a chat interface; Enfield, a UK council, has started using IPSoft’s Amelia program to interact with its residents, day or night.
But with AI, it’s not all about efficiency gains – often the insights that AI systems can open up are far more valuable than replacing FTEs. The most common example today is where AI is used for fraud detection – identifying anomalous patterns in large amounts of data – but its ability to extract structured information from unstructured data means that previously hidden value can be exploited. The same system that can ‘read’ customer emails can also be applied to data warehouses full of freeform documents; once the metadata has been extracted by the AI, this can be analyzed to identify insights that
will help do better business in the future.
Woodside Engineering is using AI to capture crucial knowledge from their engineers. Swiss Re is training their underwriters using AI. Telefonica is minimizing customer churn using AI, and Just Giving is helping people raise more money for charity using AI. It’s clear that the exploitation of AI is still at the early stages, but, with plenty of real-world examples, it is only a matter of time before the technology dominates the way companies do business.
So, the potential benefits from automation are huge, but delivering this sort of innovation into any business can be a real challenge. Let’s return to those tricky questions that are facing customers and providers of automation alike as they try to exploit RPA and AI.
Do the in-house teams have the ability and motivation to really embrace automation and embed a culture of innovation?
This is probably the biggest barrier to unlocking the benefits of automation. Some companies will be lucky enough to have a culture of innovation already (and, of course, these companies will have worked hard to create that luck). But many don’t. And they will have to think hard about the approach that works best for them.
One strategy that has clearly worked well over the past few years is to have a good understanding of where you want to end up. Nobody is going to know all the answers, but having a roadmap, just as in any business plan, is crucial to building momentum and delivering benefits. In the early days of RPA, companies automated one process at a time, without a strong idea of where they were going; although they achieved some good benefits from automation they weren’t nearly as great as they could have been.
Businesses embarking on an automation program today have the benefit of the learnings from all of the previous companies that have tried it (especially if they use an implementation partner) and can create an automation strategy early on. This piece of work details what the likely benefits could be and where they will come from. It sets out the journey that will need to be embarked on and the infrastructure and organization that will be needed to support it. It must align with the organization’s business strategy – automation can deliver much more than simple costs savings, and will gain momentum much quicker if it enables the overall business plan. Once approved, the automation strategy acts as a mandate for innovation, and allows the benefits to be measured and evaluated against the bigger picture.
Another challenge that RPA programs often face is a lack of momentum – they can start off in a big fanfare but quickly stall as detractors start to chip away at the benefits, and simple things such as getting servers set up can delay the benefits being delivered, thus reducing overall confidence from the business. And RPA can be its own worse enemy – unlike outsourcing, processes can be automated one at a time, which means that, with incremental benefits, they rarely find themselves above the radar. Creating sufficient noise and momentum in the business, enough that senior management takes notice, is crucial to avoid that slowdown.
The advice is simple – go large. Find that honey pot area that can create relatively big numbers and has managers willing to run with it. The benefits may not all come straight away, but show that there are quick wins and that, over time, the benefits will eventually be huge. Then use that momentum to move on to the next area.
Part of the Automation Strategy will look at what in-house capability will be needed. This will need to consider how the technology and the automated processes will be supported in the future, and how the pipeline of processes will be generated, and then configured in the RPA software. Many firms now are looking at creating Automation Centers of Excellence and recruiting Heads of Robotics (or Chief Automation Officers). While this won’t be for everyone, it certainly provides a focus for automation innovation within the business, nd can give important space for experimentation.
As the in-house capability is being built up, most companies use third party consultancies to help them do the initial tranche of work and train up the team. Not all automation specialists are created equal though, and in a sector that is creating a great deal of publicity and excitement, there is a rush for consultancies and analysts to rebadge themselves as RPA experts. Because momentum is so important in an automation program, the last thing you want to do is help train the consultants, therefore consider carefully who you work with.
How do companies look beyond RPA to other technologies such as Artificial Intelligence?
Probably the biggest challenge facing AI right now is a lack of understanding. Artificial Intelligence can be many things to many people, and the marketing hype that surrounds it doesn’t help in that regard at all. Therefore it is important for businesses to educate themselves on what AI is and isn’t. Often senior management says ‘we must use AI in our business somewhere,’ which is obviously looking at things the wrong way round. It’s much better to understand what the specific issues and pain points are, and then see if AI can provide an answer.
Implementing AI brings different challenges than RPA does. The software requires good and generally large, data sets to be trained on. These data must also be as unbiased as possible. There is no point in using an AI system to help with recruitment if it is to carry the same (unconscious) gender/race/age biases that humans inherently have. Configuring the software is also more of a challenge than RPA and will often have to be done by the vendor itself, or by specialist consultants. But the benefits, as mentioned earlier, can be significantly greater than those from RPA, so it is worth persevering.
As with RPA, AI should be built into the overall Automation Strategy. Although many firms see a progression from RPA to AI, the two can be treated concurrently as the two technologies complement each other very well; AI can turn unstructured data into structured data, which the robots can then action. AI should also be considered in isolation of RPA, as many of the applications deliver significant cost and quality improvements without the need for robots. The market, though, is relatively immature compared to RPA, therefore specialist advice is usually called for in creating the strategy and business
case, and selecting appropriate vendors.
So, it’s clear that the BPO market will continue to be shaken up by automation; from the competition of work between people and RPA software, through the traditional BPO customers doing it themselves, to the threat of consultancies becoming automation-first service providers.
How can enterprises bring their BPO providers on board?
BPO providers tend to exhibit inherent defensiveness when it comes to RPA. But, if they are to retain their clients and win new ones, they must overcome this natural reticence and do what is best for the client. And that means being able to embrace automation, not as an over-engineered ‘automation platform,’ but as an orchestrator of automation tools and services. I’ve seen very little evidence of this in the market so far, apart from a number of new providers that are challenging the traditional model. This is why many businesses start automating their own activities first, to learn the ropes and build momentum in the organization.
Once a client has proved automation on their own turf, the next inevitable step of bringing the BPO provider on board can be a huge challenge. Much will depend on the type of services being provided, the geographies, the length of the relationship and the number of providers being used, but there are a few general rules to approach the challenge.
First is to have already created that Automation Strategy, and to ensure that it captures the benefits available from the outsourced services as well. This may only be a desk-based analysis and estimated from available information, but going into the discussion fully prepared is critical. Also, understand clearly what the contractual commitments are – how easy is it to terminate, or, more likely, partially terminate, services. What exit obligations would the provider have, especially around the transfer of process data? What pricing implications are there? A gain-share model is ideal, as both parties
would share in any automation benefits, but also look at any price increases that may be triggered by partial termination.
Finally, be clear on how important the automation strategy is to the future of the business. All third parties need to be aligned with that strategy otherwise they potentially won’t have a role in the future. It’s likely that having the provider working with you on your automation strategy is the best and least disruptive option, but do be prepared to let go if they prove more of a hindrance than a help.
Where Now for BPO?
So, it’s clear that the BPO market will continue to be shaken up by automation; from the competition of work between people and RPA software, through the traditional BPO customers doing it themselves, to the threat of consultancies becoming automation-first service providers. But the BPO providers still have a little bit of time left to adapt – the innovation challenge that most enterprise organizations face on a day-to-day basis will slow down what should be a tsunami of automation in their companies. Those enterprises that do crack it though will reap the rewards for years to come.
EDITOR’S NOTE: THIS STORY IS REPRINTED IN PART FROM PROFESSIONAL OUTSOURCING, IAOP’S OFFICIAL EUROPEAN MEDIA PARTNER
About the Author: Andrew Burgess is a Director of AJBurgess and a strategic adviser to Symphony Ventures. He has worked in the outsourcing sector for over 15 years and now specializes in disruptive forces such as AI, RPA and legal transformation. For more, visit www.ajburgess.com.