HfS Network

It's here, it's real... it's the 2017 RPA Blueprint deal!

February 22, 2017 | Phil FershtTom Reuner

At a time where alternative facts and fake news open doors to a parallel universe, where global labor markets are being disrupted by various flavors of travel bans to the United States, the specter of a wall being built at the US-Mexico border that costs more than the entire Space-X program, a reform of H1B visas that could likely dismantle the traditional outsourcing model, and a curious thing called Brexit that could change the global trade landscape forever, one might be forgiven for feeling slightly disoriented.  Yes, people, we've arrived at a time where the very foundations for service delivery models across the industry are being put at risk, where there is no written rule book for how to get ahead of this. So what better time than to add a sprinkle RPA into this global potpourri of disruption? Maybe a food dose of process automation will give us all something to cling onto during these heady days?

Against this slightly perturbing background, what is the state of the RPA market, the emergence of the virtual workforce - and how will it affect the broader markets? Is RPA the silver bullet to overcome many of these issues and obstacles? Back in December, we already chartered the service provider capabilities around RPA. As a result, we not only got a strong endorsement for our findings, but stakeholders were asking us to provide a similar assessment for the RPA tool providers themselves. To get more clarity on these pressing issues, we have sent our automation overlord Dr Tom Reuner back into the RPA community to separate the wheat from the chaff... the bots from the clots.

Based on his findings, Tom and I went into conclave, compared notes and war stories, as well as cranking the numbers for the evaluation. And finally, we have white smoke. Thus, we are pleased to share the new 2017 RPA Blueprint grid and the key findings with you.

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Phil Fersht, CEO and Chief Analyst: Despite all the noise, many stakeholders still struggle to comprehend what RPA is all about. Tom, can you help these lost souls to get up to speed before we dive into the details?

Tom Reuner, SVP Intelligent Automation: I wish that would be so easy, Phil. Despite all the noise RPA is still an undefined market. To make matters worse, the IT juggernauts, the service providers, and management consultancies are only very gingerly educating the market. Two key reasons for that. On the one hand, it is still a nascent, albeit fast maturing market. On the other hand, it is a classic case of Innovators Dilemma: The large service providers still make more money with system integration and labor arbitrage. A cross-industry working group under the leadership of Lee Coulter and AJ Hanna from Ascension Health under the umbrella of the IEEE standards body, with the participation of the leading RPA tool providers and consultancies, is doing sterling work to drive a taxonomy and common understanding of the different building blocks of Intelligent Automation and thus also RPA. Yet, it will take considerable time until these suggested definitions will be adopted by the broader industry. The IEEE definitions of RPA are a useful reference point to describe the scope of this Blueprint evaluation: "Robotic Process Automation (autonomous)": Preconfigured software instance that uses business rules and predefined activity choreography to complete the execution of a combination of processes, activities, transactions, and tasks in one or more unrelated software systems to deliver a result or service with human exception management.”

While nothing is defined in the context of automation, the common denominator of all the approaches to automation is decoupling routine service delivery from labor arbitrage. This is not only the common denominator but also the cause for the widespread disruption that we are expecting, largely on the supply side. But the providers are not always helping either. The biggest misconception and confusion is caused by the related proposition of desktop or Robotic Desktop Automation (RDA). It is here where there is so much smoke and mirrors in the industry. In simplistic terms, RDA has evolved from screen scraping in the front office where disparate sets of information were integrated to support call center agents. Thus, RDA is focused on quick deployments on desktop level, typically customer contact agents. In RDA, activities are being automated, while in RPA (back-office) processes are automated. On the danger of over-simplifying, in RDA the agents are passing on tasks to robots, while in RPA the robot passes on tasks to agents. And as we are on the topic of subterfuge, it is difficult to ascertain how much scripting and coding is actually needed to get solutions off the ground? Many contracts are largely a Managed Services agreement. This is confounding what automation and RPA should be all about, namely the decoupling of routine service delivery from labor arbitrage.

Phil: So, clear as mud. Against this background, what really is going on in the RPA community?

Tom: Well, yes. But I think the reason for so much smoke and mirror is that there is so much at stake. The large service providers fear an erosion of their profits, while the RPA providers have often banked their pension pots on the success of their companies. Looking at it from a more positive angle, most providers are evolving their offerings toward the notion of operational analytics and the broad bucket of cognitive. In particular, the integration of semi-structured content through Machine Learning or through partnerships with providers like Celaton or Loop AI who help to create patterns in unstructured environments.

Aligned with this maturation in the market, we see more funding coming through. The latest example is WorkFusion who raised $35m in January. However, the biggest shift in the market, underlining the increasing maturity, is the shift of mindset from RPA as a non-invasive turn-key solution that marked the early phase of market development to the notion of RPA as a conduit for transformational projects, looking at end-to-end processes rather as a short guarantor for cost takeout. And RPA as an enabler for transformational projects is the cornerstone for our evaluation of RPA providers.

Phil: So Tom, what was your methodology behind putting together the 2017 RPA Blueprint Snapshot?

Tom: Rather than taking a function and features centric evaluation that is more appropriate for software products, we are taking a market-led approach which we feel is more aligned with the need of buyers in the sourcing industry. The RPA Blueprint Snapshot is building on and expanding the discussions with stakeholders as well the research of HfS’ Intelligent Automation practice. Our Blueprints are based on multiple client interviews, interviews with advisors, service providers and internal analysts who have experience working with the RPA platforms.  Our scoring system only allows for 10% of analyst judgment, where we made the case for your strong innovation.  Our weightings are partially based on importance criteria we glean from our State of Industry survey with KPMG which covers over 450 major enterprises. As RPA is not yet commonly defined, we are taking a strong steer from the evolving RPA strategic partnerships of the leading system integrators and BPOs.

Against this background, and in addition to the above inputs, we have reached out to the RPA providers with an RFI set out to help us evaluate them against a set of criteria across both execution and innovation. As we have outlined above it is not an easy undertaking as there is so much smoke and mirror in the market. But given the strong endorsement for both our Intelligent Automation Blueprint and our RPA Premier League Table, we are confident that our approach is providing stakeholders with relevant information and guidance.

Phil: Not beating around the bush, who is standing out as RPA performer?

Tom: There are many ways to look at the RPA market given the caveats that we have called out. But painting with a broad brush, the companies in the Winner’s Circle - AutomationAnywhere, Blue Prism, UiPath, and Pega - are the providers of choice for the channel partners focusing on transforming back-office processes. Behind this leading group, the positioning is becoming decidedly more blurred. The best way to think about it is to be clear about the use cases and requirements to add more specific providers for tender or RFI. Be it WorkFusion for broad cognitive capabilities, NICE for front-office activities, Redwood for ERP-centric automation or OpenConnect for a focus on operational analytics. Almost below the radar, there are providers like Jidoka with core RPA capabilities who carved out a niche in the Spanish-speaking world. Similarly, Contextor who are evolving from an RDA position to broader RPA capabilities, have a strong position in the French market. Beyond a geographical focus providers like Kryon Systems or Softomotive have made significant progress evolving from attended to unattended scenarios, while KofaxKapow through acquisitions offers a broad portfolio from OCR capabilities to process analytics.

Drilling down into the specifics, the market is dominated by the “duopoly” of AutomationAnywhere and Blue Prism. AutomationAnywhere is strongest in F&A, offshore delivery centers, and the US market. Conversely, Blue Prism is leveraging the first mover advantage with strong partner relationships, having the strongest impact on industry specific services, headquartered CoEs and the UK market. Behind the two market leaders, UiPath is growing strongly as clients cite the effective partnership culture and attractive commercial terms. Thus, for mature clients, UiPath is increasingly seen as the third strategic option in multi- vendor environments next to AutomationAnywhere and Blue Prism. Adding to this mix, iPega is being credited for its the quick deployments as well as the integration of both RDA and RPA in attended or un-attended scenarios. At the same time, Pega offers broader functionality by extending bots to it BPM suite.

However, the biggest surprise in our evaluation was AntWorks that thus far have been below the radar of industry’s stakeholders. Their value proposition is about linking core RPA capabilities with machine reading including semi-structured content such as handwriting in forms as well as broader cognitive capabilities including pattern recognition, even in images. Furthermore, similar to providers like RAVN, AntWorks has Enterprise Search and Machine Learning functions to support extraction of data from legal documents. The combination of Computer Vision and pattern recognition allows AntWorks to provide one solution where many service providers have painstakingly integrated different tool sets. Even though around the broader cognitive capabilities, AntWorks is competing with IBM Watson, it goes without saying that AntWorks is still early on their journey and therefore needs to demonstrate client references to the broader market.

Phil: Despite the market being nascent, albeit maturing market, WorkFusion has announced a free RPA product. What do you think will be the impact?

Tom: When WorkFusion announced a free RPA product dubbed “RPA Express” back in December, many executives in the automation community went pale. In defiance, and sometimes confusion, executives were quick to suggest that WorkFusion does not have a “proper” enterprise grade RPA product. There are many different ways of looking at this announcement. First of all, credit where credit is due: WorkFusion has one of the best, if not the best, marketing programs in the Intelligent Automation community. And sometimes there is a hint of jealousy creeping in when we discuss WorkFusion with their peers. More pertinently to the RPA discussion, while WorkFusion might lack the enterprise-grade capabilities in core RPA that the providers in the Winners’ Circle have demonstrated, they have strong credentials in adjacent capabilities such as crowdsourcing, the integration of Machine Learning or enhancements to the RPA Object Library such as the capability to drag and drop entire processes (e.g., “KYC,” “corporate actions,” “OCR”). What is boils down to in the end is to get access to the table where the sourcing discussions and decisions on automation are being taken. WorkFusion has successfully demonstrated exactly that. Not having enterprise grade core RPA capabilities has thus far not harmed their revenue stream. Thus, the announcement might not disrupt the market, but it still might end up negatively impacting valuations of RPA providers as many look for an exit strategy.

Phil: Gazing into a crystal ball, what can we expect for 2017?

Tom: Phil, if I would have all the answers, I should probably change my job and could make a lot of money. But here are three scenarios that I am seeing for 2017:

  • RPA will remain undefined. Over the next 12 months, the perception of RPA will remain blurred. RPA capabilities will fold into broad propositions such as Digital Workforces or Cognitive Automation. This is adding to the continuing confusion around RDA. Extending on that, in 18 months we won’t talk about RPA anymore. Most of the leading technology providers will have been acquired and RPA is a reality in the back-office.
  • M&A through ISVs. Buyers will have to do scenario planning for acquisitions. While this might bring broader capabilities, licensing costs are likely to increase as well. Pega’s acquisition of OpenSpan is the template for such developments. Beyond the tool providers, the automation pure plays such as Symphony and GenFour are likely to be equally absorbed by larger consultancies.
  • The emergence of an Automation Ecosystem: We already have seen the impact of Watson, as it is starting to evolve into an ecosystem. Suffice it to say, IBM could be the driving force to extend those capabilities, as we have argued some time ago. But it could equally be one of the tool providers significantly expanding its reach. As stated, we are seeing the providers in the Winner’s Circle moving toward the notion of orchestrating much broader automation capabilities. At the same time, we are seeing providers like Blue Prism and UiPath being deployed in IT-centric scenarios such as IT Help Desk and Application Management, pointing to a convergence of scenarios and tool sets. 


HfS premium subscribers can access the RPA Blueprint Snapshot here.

Posted in: Cognitive ComputingRobotic Process AutomationIntelligent Automation

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Sticking to his education NIIT-ing... meet Arvind Thakur

February 20, 2017 | Phil Fersht

There's never been a better time than this for the specialized midtier services partner which isn't dragging around billions of dollars of legacy contracts and isn't reliant on massive people-scale deals to sustain its growth and profit margins.  Clients are increasingly looking for shorter, sharper engagements - with immediate impact - that drive executives and their staff back to the classroom... the type of engagements which may simply not be attractive enough for a Tier 1 service provider which isn't built for smaller, focused engagements that require higher level talent to lead real change management programs.  In addition, most clients today do not want to drop millions of dollars on consultants to change things for them... they would rather have someone come in who can teach

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Posted in: Digital TransformationIT Outsourcing / IT Services

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NASSCOM 2017: Indian IT services paralyzed by Trump, but being a deer in the headlights is not an option

February 17, 2017 | Phil Fersht

When, in history, has there existed a market that keeps relentlessly growing at 5-10% each year, with profit margins consistently at a 15-20% level; and for well over a decade? Yet you attend the annual flagship Indian IT conference only to experience an atmosphere of acute paranoia and paralysis.  Is change really that frightening?

Even most clients are openly declaring they haven't had their budgets reduced - many simply aren't ready to make investments while there is such uncertainty surrounding the market because of an unpredictable US President.  Even NASSCOM itself adds to the uncertainty by deferring its usual business outlook... 

However, acting like a deer in the headlights is not an option.  The smart strategy is to expect the worst and make measures now to get in front of it.... don't let the juggernaut, that is a protectionist US administration, squash you flat in your tracks.  

Breaking out of this paralysis cycle

However negatively this could turn out for some of the Indian IT services industry – here are six simple ways to break out of this paralysis and reinvest some of these bloated warchests, before greedy investors who got rich off your spoils demand to cash in their chips...

1) Invest internationally beyond the US.  Those Indian IT majors in the strongest position are those that are least reliant on their US clientele for future growth.  In fact, HfS estimates $7 Trillion in B2B digital expenditure by 2020 - with only $2bn being in the US (traditionally 50% of worldwide IT spend came from the US, but digital spending - both B2B and B2C - is changing that picture dramatically). For example, the British PM is already deep in discussions with Modi about closening UK/Indo ties even further in the wake of Brexit. The UK has the potential to become a major digital hub, fuelled by Indian talent.  While Brexit appears like a terrible idea on paper, change forces action and these actions will be all about increasing the flow of trade and talent with emerging nations and creating new wealth. We also see a real appetite for digital business model investments and automation by Australian businesses - and many of the Asian nations are only too happy to move from zero to hero to take advantage of the humongous digital B2B expenditure in Asia/Pacific and the rest of the world.  

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In addition, many of the European regions, such as Nordics and Germany, are now rapidly exploring more global resources to support their digital growth. If America - as it appears - is on the path of becoming a protectionist anti-globalization country for the next four years, perhaps its time to broaden your horizons?  

2) Invest in a smarter onsite/offshore model that gets you closer to your customer's customer.  Yesterday's IT services model was all about helping legacy traditional enterprises keep their lights on by maintaining clunky old ERP implementations keep operating, adding extra sauce to spaghetti code and keeping an eye on server outages from afar.  Tomorrow's winners have moved all this stuff into the cloud and automated much of their infrastructure management.  The future growth is working much closer to your customers to help them design and implement digital business models by building mobile applications, testing customer sentiment, forging partnerships and developing APIs with new digital business partners and communities.  Technology skills such as DevOps, Agile, Hadoop, Blue Prism and AutomationAnywhere are the watchword, and a global race is on to access these skills.  Moreover, the developers need to be closer to the business designers and customer strategies of the clients to make this effective.  So Indian IT majors need to focus on developing these skilled resources where all their clients are situated, in addition to India itself.  This will require re-investing some of that lovely cash sitting around - and, heaven forbid - take a small margin sacrifice for a few quarters.

3) Partner with digital agencies to get it done.  Be realistic for once and accept the fact that most customers are not going to come to you to design highly creative digital business solutions.  You have an IT services brand, not a creative digital brand.  Most clients will go to the advertising firms, the Design Thinking consultancies and the digital specialists for that work.  However, all those firms are pretty clueless when it comes to actually communicating their business designs to technology firms and having them just get it done. This is where you can really do well - by working with these agencies and consultancies as their IT partner - bring them into your clients and they will being you into theirs!  Believe me, most the digital firms worth acquiring have already been hoovered up by the Accentures and Deloittes... most the stuff left on the market is overpriced, too small, and most their nose-ringed designers will jump ship the moment you buy them. 

4) Become great intelligent automation intermediaries to manage broad automation and analytics environments for enterprises. Clients are crying out for providers to partner with them on their automation journeys – in fact, 45% of buyside operations leaders, when polled privately, view rolling out automation in tandem with their service provider as adding the most quality to their service relationship (see below). Several of the leading Indian heritage IT services firms are making impressive strides with their enterprise analytics and automation solutions – such as Infosys with MANA, TCS with ignio and Wipro’s Holmes – the key now is their ability to twin their solutions with the cream of the third party intelligent automation apps, such as AutomationAnywhere, Blue Prism, Pega, UiPath, Workfusion, Redwood, Antworks etc to become their clients’ intermediary for automation and analytics value. While some proprietary tools and bots can add great value, especially when aligned to specific industry processes, clients want to have the choice of adding their own independents tools to enjoy the biggest impact on their process value. The Indian IT leaders need to become great partners and facilitators in these emerging environments – they have the development talent in spades and the passion to bulldoze their way to the front of this market.

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5) Keep investing in start-ups. One of the best cultural shifts in the Indian IT industry in recent times has been the emergence of the start-up scene in Delhi, Mumbai, Bangalore and other areas. Ambitious Indian IT talent is no longer desperate to walk that slippery steep treadmill of the IT juggernauts – many of whom are already too big, clunky and corporate for their own good. Moreover, tech investors are fed up having to invest $20-100m in US start-ups to develop one product or technology, when you can get the same value from the likes of India, China or Eastern Europe for a fraction of the cost. Having heard about the 400+ emerging startup firms who are already members of Saurabh Srivastata’s network (the original founder of NASSCOM), it gives me real hope for India’s future that the next generation of IT talent is already being healthily incubated.

6) Just make a plan and stick to it.  The one big element of NASSCOM which I found most infuriating was the lack of a plan from most of the service providers.  Most are simply playing a game of denial and react.  This is a recipe for failure.  Accept the fact there will likely be some uncertainty for six months before some new draconian measures are forced on businesses seeking to do business with the US.  Net-net, it'll be more expensive to deliver services to US clients and also harder to send your own talent over there to train US staff and manage projects. So set aside funds to hire more people in the US and budget for a margin squeeze on future US contracts.  And forecast a 10-25% hit on deal flow due to longer decision cycles and US clients veering away from using highly visible offshore services suppliers.  

Bottom-line: Take the tough blows now to roar to the front of the global IT industry when sanity returns

While the global IT world waits with baited breath, paralyzed by the ramblings of an unstable and determined US President, our beloved IT services firms can either remain numbed by fear, or actually use this opportunity to make some key strategic investments and initiatives. Those mountains of cash need to be used sensibly before those greedy investors demand their piece back, so act now, swiftly and decisively to organize an IT business that isn’t so reliant on lifting and shifting labor to and from the US, and puts you in the driving seat to lead in the $7 trillion dollar digital world, where automation is native and access to skills absolutely critical. India has a great shot at emerging as the world’s great IT pioneer, and so much more than a low cost labor provider for greedy legacy US corporates. Trump won’t be around forever, and he might actually be doing India a massive favor without ever realizing it…

Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services

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See you at NASSCOM!

February 13, 2017 | Phil Fersht

Am looking forward to seeing many of you in the warmer climes of Mumbai this week... so having some "Beef Wellington" to protect myself against what threatens to be a mudslide of confusion this week! I hope many of you can attend our opening session "“The Digital OneOffice - Getting Ahead of Today's Disruption”... cheers PF

Posted in: IT Outsourcing / IT ServicesOutsourcing Events

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Is there any sanctuary left from the robot these days?

February 08, 2017 | Phil Fersht

Posted in: Absolutely Meaningless ComedyRobotic Process AutomationIntelligent Automation

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Unveiling the first ever Digital OneOffice Premier League (Webinar Replay)

February 06, 2017 | Phil Fersht

WATCH THE REPLAY

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Posted in: Business Process Outsourcing (BPO)Digital TransformationIT Outsourcing / IT Services

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Four Golden Rules to save the Indian IT Industry from Trump

February 04, 2017 | Phil Fersht

You must read my LinkedIn post and join in the discussion. Click here to access... go on, you know you want to =) 

Posted in: Policy and Regulations

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Harman, Accenture and Atos are bossing emerging IoT Services, but we need real IoT algorithms and security standards

January 28, 2017 | Phil FershtPareekh Jain

I plugged my iPhone into my new (fuel-emission friendly) VW this week and - for the first time - my car was connected to by digital life.  Siri (finally) came alive and started sending my contacts voice to text messages, my favorite Spotify soundtrack was arranging itself in all its glory on my vehicle dashboard, and I didn't have to worry about tuning radio stations, pairing devices that barely talked to each other, or getting stuck using some horrible proprietary technology my previous car had forced me to use, or those awful attempts at being "appy" from the cable TV providers that look nice, but require months of frustration to figure out.

My car was finally seamlessly connected with my personal apps that run my life, and my suicidal urge to text and drive has been cured by Siri finally doing it for me! While it's been pretty cool to program the air-con using a mobile app or have automated replenishment of new coffee capsules... being able to take your digital life into your moving vehicle is what IoT is all about. It's high-time to get past the buzz about IoT being bigger than IT itself - it's really about sensors, data and most importantly what we can do with this data, and how we can create digital experiences outside of our traditional mobile and laptop screens.  

So, without further ado, let's take a look at the 2017 landscape for IoT service providers and have a chat with report co-author and manufacturing-engineering analyst guru himself, Pareekh Jain, about the emerging landscape for IoT services...

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Phil Fersht, Chief Analyst and CEO, HfS: Pareekh, how do you see the IoT market evolving and what are the key IoT trends you have been observing?

Pareekh Jain, Research Vice President, HfS: Phil, the current state of IoT revolves around sensors and data collection and its use in sub-process or process optimization, but there is not enough visible thought or action by IoT service providers in exploiting the potential of data for the business reimagination of the Digital OneOfficeTM. Take the example of Amazon Go – the concept store where there will be no checkout queues (seriously). Shoppers can pick... and just go. The combination of IoT with artificial intelligence and machine vision is what makes Amazon GO possible. This is just one of the business reimagination possibilities of IoT, where these true digital experiences come alive, and we're finding this kind of conversation depressingly absent in our discussions with some of the service providers.

Having said that, we do see real progress with the foundations of IoT over the last couple of years and are observing five key trends in our IoT research.

1) IoT is for real, but is limited in scale and scope at present. We found many examples of PoCs and actual customer engagements. The customer engagements are small and limited in scope to a couple of business or geographical units. The organization-wide IoT strategy and implementations examples are rare. 

2) IoT update is pervasive and use cases are cropping up across all industry sectors. The highest number of IoT examples we have seen are in manufacturing or Industrial IoT, smart cities, and connected cars.

3) Efficiency or cost optimization are the major drivers in IoT projects at present. This is

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Posted in: Digital OneOfficeInternet of Things

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Offshore has become Walmart…as Outsourcing becomes more like Amazon

January 21, 2017 | Phil FershtJamie Snowdon

In the post-digital world, no one cares much about “offshore” as a strategy - it has become part of the fabric of managing a global operating model, where operations leaders just tap into whatever global resource they need to achieve their desired outcomes. This doesn’t mean that traditional “offshore” global delivery locations, such as India and the Philippines, are going bust overnight. But it does mean the playing field is leveling out as the need for emerging skills trumps the desire simply to reduce labor costs.

Our new State of Industry Study, conducted with KPMG (see above) of more that 450 major global enterprises – shows an increasing majority of customers of traditional shared services and outsourcing feel they have wrung most of the juice offshore has to offer from their existing operations, and aren’t looking to increase offshore investments.  When we compare enterprise aspirations for offshore use between the 2014 and 2017 State of the Industry studies, we see a significant drop, right across the board, with plans to offshore services. Organizations are now either looking to make their existing offshore operations more effective, or even reduce them where they can (especially in F&A and HR), using new technologies and smarter process management.

It’s all about future scalability without the linear resource investments

The difference between new style of automation-rich intelligent operations and offshore-centric traditional operations is growing. It’s a bit like comparing the growth of Walmart to that of Amazon – (although it has started to change with its belated online strategy and acquisition of Jet.com), for many decades, the success and growth of Walmart has largely been tied to

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Posted in: Business Process Outsourcing (BPO)HfS Surveys: All our Survey PostsIT Outsourcing / IT Services

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2017: The year people are forced to learn new skills... or join the Lost Generation

January 13, 2017 | Phil Fersht

Let’s cut to the chase – there have never been times as uncertain as these in the world of business. There is no written rule-book to follow when it comes to career survival. The “Future of Work” is about making ourselves employable in a workforce where the priority of business leaders is to invest in automation and digital technology, more than training and developing their own workforces.

As our soon-to-be-released State of Operations and Outsourcing 2017 study, conducted in conjunction with KPMG across 454 major enterprise buyers globally, shows a dramatic shift in priorities from senior managers (SVPs and above), where 43% are earmarking significant investment in robotic automation of processes, compared with only 28% placing a similar emphasis on training and change management. In fact, the same number of senior managers are as focused on cognitive computing as their own people… yes, folks, this is the singularity of enterprise operations, where cognitive computing now equals employees’ brains when it comes to investment!

My deep-seated fear for today’s workforce is that we’re in danger of becoming this "Lost Generation" of workers if we persist in relying on what we already know, versus avoiding learning new skills that business leaders now need. We have to become students again, put our egos aside, and broaden our capabilities to avoid the quicksand of legacy executives no longer worth employing. We need to become hybrid corporate animals.

So let’s give some examples of these "new skills" we need to develop for ourselves:

Sales people: it’s no longer just about selling and relationship development, it’s about understanding evolving business models, understanding the impact of technology and the importance of smart marketing. You need to be a trusted consultant, not simply good with a 9-iron. Clients needs are increasingly complexifying and you need to be the arbiter of helping them simplify their requirements. Understanding business models is what will make you successful in the digital world.

Software people: it’s no longer about data management, security and making apps function, it’s also about understanding the desired business outcomes associated with these investments and helping your enterprise stakeholders articulate them better, so you can work with them to

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Posted in: Cognitive ComputingDigital TransformationHfS Surveys: All our Survey Posts

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No more denial for WNS as it makes its concerted procurement play

January 12, 2017 | Phil FershtDerk Erbé

This is era of the emerging BPO provider, as IT services stagnate and clients demand greater personalization and attention from business services firms that have the scale, resources, hunger and technology enablement skills to take on increasing complexity and make sense out of the dataswamps plaguing so many of today's businesses.  

One such stalwart of BPO, quietly going about its business over the years with steady growth and increasing reputation for solid delivery, is WNS (yes, the one that was spawned out of the British Airways captive back in the day).  WNS has performed well over the years, growing business streams in knowledge process domains, finance and accounting, insurance, travel, mid-size banks, contact center and some other areas.  It has oft-threatened to make a grander procurement BPO play, but mostly opted to partner with the likes of Denali when the need arised.

In my view, having solid procurement delivery capabilities goes hand in hand with F&A, so it's refreshing to see WNS snap up one of the best pureplay strategic sourcing providers left in the market, which should make the merged entity a Winner's Circle contender later this year when we rerun the Procurement-as-a-Service blueprint:

Click to view

So let's hear from our Procurement and Supply Chain analyst, Derk Erbé, who's recently emerged from a major analysis of the procurement services market:

WNS + Denali - The Details

To start the New Year with a bang, WNS announced the $40 million acquisition of Denali Sourcing Services. We have covered both WNS and Denali in our December 2016 Procurement As-a-Service Blueprint. WNS is ranked as an Execution Powerhouse, while Denali is a High Performer in the Procurement As-a-Service market.

The acquisition of Denali Sourcing Services is a good move from WNS, and effectively bolsters

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Posted in: Business Process Outsourcing (BPO)HfS Blueprint ResultsProcurement, Engineering & Supply Chain Outsourcing

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2017: The year of the “BandAid Economy” as the new digital world gets smarter and the old one just gets dumber

January 02, 2017 | Phil Fersht

Thank the Lord 2016 is over. It’s easy for any old big head to claim they “were not surprised with Brexit and Trump,” but they would be lying – this surprised even the most brilliant minds and political experts.

Noone saw this coming – but it’s opened the eyes of many business and political leaders that we are living in transitional times and we desperately need to focus on ensuring we transition our economies, businesses, health and educational establishments to a more stable, secure place, where we can all plan for the future, with a clearer vision of where the world is going. Many people voted for change, without much idea what that change was, besides turning back the clock and ejecting politicians they didn’t trust and didn't talk their language. It is my belief

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Posted in: Digital TransformationPolicy and Regulations2017 State of Industry Study

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2016: Goodbye to the year of Ignorance (rant warning)

December 27, 2016 | Phil Fersht

I, for one, won’t be too sad to see the back of 2016… it just felt like the world kept becoming an increasingly ignorant place to exist. The Internet became the medium to block out information, not share facts and data points to foster intelligent discussion. It (almost) became acceptable to be racist; it (almost) became acceptable to talk about women as sex-objects, as long as it was playful “locker room talk”.

2016 became a time people complained about immigrants taking away their jobs – even though they’d never work those jobs in a million years. It became a time when we all finally realized so many of our politicians had lost touch with so many of the population that they got booted out… sadly only in favor of alternatives that didn’t make any sense, but it must have felt good for the disenfranchised to stick the middle finger up at the establishment.

It became a time when many of us decided we could no longer tolerate people as our Facebook friends, because they just refused to listen to rational arguments and get beyond their prejudices. Let’s be honest, it was a pretty ignorant year.

Hello to a year of, er, maybe a little common sense

So if we could have some good things happen next year…. 

Trump becomes a pragmatist. Like so many of you here, I am secretly wishing most the guff old Donald was spouting was just, well, guff. As Bernie Sanders told a private meeting of scientists recently, Trump is a very intelligent man. Plus, I believe the guy is not an idealist, he’s a businessman and a pragmatist. It’s my personal hope that he realizes globalization of business is an inevitable occurrence, but I do like his stance on China, and the fact we’ve

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Posted in: Absolutely Meaningless ComedyConfusing Outsourcing Information

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The real unfiltered truth behind the lack of RPA use cases

December 20, 2016 | Phil Fersht

My good pal, Steve Rudderham, formerly of Genpact, Capgemini and Accenture fame... and recently anointed the great GBS leader at Kelloggs, posed the irresistible question to me on our Robotic Premier League blog:

Phil, One thing we've struggled with is really where the rubber hits the road in terms of credentials. There are a lot of good innovation "stories" around RPA but several of the players on your list have really struggled to articulate savings and examples outside of their own in-house improvements using macros in excel. When do we expect more maturity in this space in terms of client stories that the rest of the industry can get behind? 

Fair enough, Steve, great question... so here's my answer:

@Steve Rudders -

It's early in the morning, the filters are off so I'll just answer your question as bluntly as possible: We live in ignorant times - people are blindly groping for that next vehicle to drive out cost, and RPA currently fits the bill.

I, personally, thought the hype would die down this quarter as companies struggled to figure out what not to automate. Don't get me wrong, the RPA value proposition is tremendous - taking high throughput, high-intensity processes that require large amounts of unnecessary

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Posted in: Robotic Process Automation

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And here's the 2016 RPA Premier League

December 13, 2016 | Phil Fersht

We did in once, we did it twice... and I bet you never thought we'd do it a third time. Yes, amigos, it's the 2016 airing of how effective the leading service transformation providers are in that beloved RPA space that just refuses to go away...

Source: HfS Research 2016 - Click to Enlarge

Ever since HfS bought the topic to the attention of stakeholders back in 2012, the robotic thrum of RPA throbs louder and louder. With the conference circuit over-flooded with more and more RPA conferences, robotically repeating the same rhetoric, the actual RPA deployments are significantly scaling up and M&A in the space is gaining momentum. Yet, true meaning and definition of what truly constitutes “RPA” are as blurred as ever, as more people jump on the bandwagon who couldn't define cognitive vs digital vs autonomics, if their job really depended on it. Enough reasons to take stock where this industry is at, and add some definition and clarity to this fuzzy world into which we're stumbllng. With that in mind, we asked our analytical Automation Overlord, Tom Reuner, to talk to the industry’s stakeholders who buy, sell, implement and generally go nuts over this stuff... and take a fresh look at the market dynamics.

(HfS subscribers can click here to download their freemium copy of the 2016 RPA Premier League table and analysis, authored by Tom Reuner and Phil Fersht.)

So, Tom, amidst all this noise what is really going on in RPA these days?

Noise is a good way of describing it, Phil. Yet, underneath the surface, we are seeing clear signs of maturation. This maturity manifests itself in different ways. The pace of change in which the suppliers are building out automation capabilities is nothing short of astounding. Most providers are embracing a holistic notion of Intelligent Automation ranging from RPA to Cognitive Computing to AI all the way to self-learning and self-remediating engines. However, we must be careful not to confuse building out capabilities with traction in the market. At the same time the leading tool providers such as Blue Prism, UiPath and AutomationAnywhere are

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Posted in: Robotic Process AutomationIntelligent Automation

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And here are the 2016 RPA pureplay specialists...

December 12, 2016 | Phil Fersht

So who do you call when you want a robot? When we embarked on the 2016 RPL, we had to evaluate all the professional services firms operating in the space - both to help clients develop an RPA roadmap, evaluate the RPA software options and alignment with their processing requirements, and ultimately get some help implementing the solutions, developing out the RPA team and creating a workable robo/human governance structure.  In addition, many clients find themselves in conflict with their BPO providers and need third party help to bring them together to find workable risk-sharing compromises.  

What has transpired is several smart people, mostly working for BPO firms, eyed the RPA value proposition emerging, shortly after time we introduced RPA to the services industry in 2012, and they hatched plans to jump ship, club together and do lots of consulting work to build up their organizations.  

(HfS subscribers can click here to download their freemium copy of the 2016 RPA Premier League table and analysis, authored by Tom Reuner and Phil Fersht.)

Due to the murky, complex - and often very technical - needs of RPA, the demand for skilled expertise from real specialists is unprecedented - which is why we've seen the Big 4 leap into this space - but also why we're seeing some of these small, highly-focused, players in real demand. And they're not only making money working with clients seeing to RPA-ify BPO and shared services environment, they are also training many of the service juggernaut services to implement RPA for their clients.  In short, there's a lot of business to go round and you will often see these curious RPA pureplay folk huddled in the corners of conferences, sharing war stories and even passing business over to each other because they ae simply too overwhelmed with client demands to take it all on. 

So, without further ado, let's take a look at the seven candidates out there in all their naked glory....

Source: HfS Research 2016 - Click to Enlarge

Posted in: Robotic Process AutomationIntelligent Automation

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Here, there, automating anywhere... meet Mihir

December 08, 2016 | Phil Fersht

There's been an awful lot of focus on the emerging Robotic Process Automation (RPA) solutions since we unveiled the concept to the services industry in 2012. While early movers, like Blue Prism, have stolen most of the early headlines in the space, we've seen other very effective tools and platforms emerge, such as Kryon Systems, UIPath, WorkFusion and Nice.

However, one solution has been especially rampant in the BPO space (especially in finance and accounting) - Automation Anywhere - whose team has been working tirelessly with leading providers such as Genpact, Accenture and EXL to streamline processes and drive all the associated benefits of automating high volume, high throughput tasks that were previously plagued by unnecessary and costly manual interventions.

So we felt it time to sit down with Automation Anywhere's brainchild and co-founder Mihir Shukla, to learn a little more about what is driving this unprecedented demand for RPA, and where this is all leading as we venture into curious times...

Phil Fersht, Chief Analyst and CEO, HfS Research: Good afternoon, Mihir Shukla. You've been at the forefront of so much of the new thinking and ideas in RPA and Intelligent Automation in the last couple of years. Automation Anywhere almost came out of nowhere. So I'd love to hear a bit more about your background and how you really ended up leading this firm. What was the journey?

Mihir Shukla, CEO, Automation Anywhere: Good to talk with you again, Phil. It's interesting when you look back, how you end up with something. I came to the US to do my PhD around the time when the Internet was just coming around. So I got the disruption bug, and it was a lot more fun disrupting different industries than doing a PhD. 22 years later, I look back and I’m fortunate enough to have led five or six large disruptions in various capacities. First, I started at Netscape, where I had a chance to shape the era of the Internet. Then I worked at Infoseek, which was one of the early search engines, where I got to help define how to access the Internet, how you discover things, and we built an early eCommerce platform. Then I had a chance to be an advisor to OmniSky, creating the first Internet-enabled smartphones. I still remember the time when I was one of the 14 guys in Silicon Valley who could go anywhere in the world and find the nearest restaurant. Today, there are a billion of us who can do that.

There was lots of learning along the way. The genesis of Automation Anywhere came from one of my last disruptions, which was at E2Open, where I had the opportunity to integrate the supply chain of the top 10 high-tech companies. At that time I had a chance to use various BPM tools, enterprise application integration tools, and ETL tools. It was during that experience that I saw the challenges faced in trying to integrate a global supply chain that includes hundreds of applications and thousands of people.

I thinking at that time was there must be a better way to do this.

So in 2003, we started Automation Anywhere—and that was a genesis of RPA. Of course, it wasn't called RPA back then. But the idea was to simulate human behavior on a computer and be able to automate everything we do on a computer screen. And 13 years later, we're the largest provider of RPA solutions. So that's how it all started, and that's where we are today.

Phil: So what can you share with us about Automation Anywhere secret sauce? What is it that makes you guys tick? What is it that you feel has been the catalyst to this hyper-growth that you've been experiencing?

Mihir: There are quite a few things that we do very differently, that are unique to us. First of all, we're the largest and most fluent platform on RPA today. We have over 500 enterprise

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Posted in: Outsourcing HerosRobotic Process AutomationIntelligent Automation

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HfS is named analyst of the year by our fellow professionals

December 07, 2016 | Phil Fersht

It's quite the humbling experience when your fellow professionals recognize your achievements. The HfS Research team should be very proud of being awarded both Independent Analyst Firm of Year and Analyst of the Year for 2016 by the Institute of Industry Analyst Relations (IIAR), which covered 170 analysts and all the global and boutique analyst firms. 

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Posted in: None

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Learn about our 2017 research plans: the Year of Making it Real

December 07, 2016 | Phil Fersht

Nothing better to do next Thursday? Fancy spending an hour with the award-winning HfS analyst team, hearing about our research plans for 2017 - and why we are focusing so intensely on the reality of technology-inspired business operations versus the hype? Have nothing better to do than sip on a festive mimosa and hear our happy band of analysts get all excited about their research?  Pray tell... what more could you want... 

Thu, Dec 15, 2016 11:00 AM - 12:00 PM EST

Register now

Digital disruption is no longer new – some industries have already been shaken up by evolving digital business models, while others are in the throes of being impacted. This is the new normal for enterprises, and we need to develop actionable strategies to survive and compete in this post-digital world. In 2017, it’s all about enterprises being digitally capable of engaging their customers in real time using immersive communication channels, supported by intelligent unified operations that can enable their business to pivot to remain competitive. 

The HfS 2017 research theme is all about “making it real”. We will explore the experiences, dynamics, intentions, challenges and opportunities of thousands of enterprises in their quest to align their operations to meet the rapidly changing needs of their clients. 

In this webinar, the HfS analyst team will share our 2017 vision for the industry and our  plans for the 2017 HfS research agenda.

Hear about our plans for 2017 research across the following areas:

  • The Intelligent OneOffice: Taking an “outside-in” approach to Intelligent Operations, breaking down the barriers between the front and back offices.
  • The Post-Digital world for IT Services and Strategy, Business Operations and BPO and Cognitive Automation
  • Industry-specific dynamics for banking, insurance, energy, utilities, manufacturing, healthcare, life sciences, travel and retail industries 

Thu, Dec 15, 2016 11:00 AM - 12:00 PM EST

Register now

 See you next week!

Posted in: Outsourcing Events

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So ISG bought Alsbridge. That happened

December 02, 2016 | Phil Fersht

Can these two newly-weds weather the storm of a stagnant outsourcing industry?

Yes - that happened.  We just had the biggest shakeup in the outsourcing advisory market since KPMG's acquisition of EquaTerra in 2011.

The last two large independent outsourcing advisors (outside of the management consulting firms) realized they needed to stop killing each other and would be far better off becoming one. So now we're left with an even bigger ISG and a few really small shops, like Avasant, Aecus and Everest, to scrap around for the remnants of demand for former EDS executives to negotiate a nice contract for them.

This is a really smart deal for both ISG and Alsbridge.  ISG takes out its prime competitor to monopolize its space, while Alsbridge's prime investor, LLR, makes out nicely on its 2013 investment within the typical 5-year window private equity firms give themselves.

This is a great deal for most the Alsbridge consultants.  Many are welcomed back into the loving arms of their former employer and they have a bigger brand, global scale and presence to hone their craft.

This is a great deal for most the ISG partners.  Now many of them will not have to suffer their fees eroded by a very aggressive competitor (or losing deals to it). They can still easily undercut the Management Consultants' fees, and have access to more talent to win deals, especially in areas like telecom and Robotic Process Automation (RPA), where ISG was previously struggling.

This is not a great deal for all the employees.  Large mergers of like companies always present rationalization opportunities.  The new ISG will surely look to retain the cream of the Alsbridge talent and hive off its lower performers. The outsourcing market is flat and advisory

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Posted in: Outsourcing Advisors

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