HfS Network

IBM partners with Automation Anywhere: Great for AA, but IBM’s cognitive automation strategy just got more confusing

July 14, 2017 | Phil FershtTom ReunerOllie O’DonoghueSaurabh Gupta

If you’ve been covering the legacy world of Business Process Management (BPM) software and the emergence of Robotic Process Automation (RPA) software for the past two decades, it’s fascinating to see the two solutions to mesh together, as customers need the full gamut of automation help:  the digitization of manual work, the scripting, and integration of static data that provide the foundation for the automation of the digital processes.

Then you can get to the really exciting stuff of recognizing data patterns, taking advantage of machine learning to make systems self-remediating, and, ultimately, the injection of intelligence to make them absorb everything around them to become predictive and human-like in the way they operate. This is why we’re seeing the likes of Pega peering into the RPA space, Blue Prism partnering with Appian and AutomationAnywhere now partnering with IBM’s BPM software solution.  We’re also seeing some novel approaches, such as intelligent automation provider WorkFusion donate free RPA software to the world to bridge the divide between the manual and the digital quandary.

Yes, people, there appears to be a fair bit of life left in the HfS Intelligent Automation Continuum. Despite some critics who believe RPA is a very separate solution than digital autonomics, machine learning, cognitive and AI, the fundamental thought-process behind the HfS Continuum model still rings true: all the approaches illustrated are both overlapping and interdependent:

Notwithstanding all the feverish excitement on RPA and Cognitive, we still need to include all the less exciting - but critical – activities, like runbooks and scripting, and how these approaches must be integrated into broader digital process workflows. True Digital OneOffice only works when all breakpoints and silos are effectively automated.  If you truly want all touchpoints and processes across your organization focused on executing your vision of customer experiences and building foundational capabilities that support this entire philosophy, you have to address the entire Intelligent Automation Continuum if you want a data backbone that operates in synch across your customers, partners, and employees.

This is the context in which the announcement of IBM’s partnership with AutomationAnywhere comes in.

As part of the agreement, the two companies plan to integrate Automation Anywhere’s RPA platform with IBM’s portfolio of digital process automation software. The main focus will be on integrating Automation Anywhere with IBM’s Business Process Manager and Operational Decision Manager. Crucially, integration is meant to be on code level and therefore goes beyond more loosely integrated partnerships between BPM and RPA players. These enhanced products will be part of IBM’s software catalog. And lastly, both companies plan to build out a Center of Excellence around Automation Anywhere’s RPA capabilities. Condensed and in plain English, this means that IBM is planning to expand its BPM offering through RPA capabilities. Thus, it is a defensive move against Pega’s acquisition of OpenSpan that has seen the integration of BPM, RDA (Robotic Desktop Automation) and RPA. At the same time, we’re seeing the rise of more loosely integrated partnerships such as Blue Prism and Appian.

IBM needs to develop a holistic corporate strategy for RPA

While the partnership makes a lot of sense for IBM's BPM division, from a narrow BPM angle, from a corporate and market facing point of view this announcement raises many questions. As part of its Cognitive Process Automation strategy, the GBS side of IBM has a focused and strong relationship with Blue Prism. It is unlikely that executives at Blue Prism (or GBS) are overly-pleased with these developments as it could curtail their mindshare among stakeholders. If anything, in contrast to most of its peers, GBS had chosen a single partner in order to scale its RPA deployments. Almost all of IBM’s peers have moved to a portfolio approach on RPA by offering and integrating a broad set of tool providers. In our discussions with IBM executives there appeared to be a lack of understanding as to the different RPA strategies of the various business units, let alone a nuanced understanding as to how RPA is being discussed in the broader market. In a nascent market with blurred market communications and relentless marketing rhetoric, this could add to the reluctance of customers to engage on a larger scale and a more holistic approach around RPA.

For those already engaged in RPA activities, questions begin to crop up about the firm's current RPA engagements. Can clients expect to continue on their journey with BluePrism or should they anticipate a migration over to Automation Anywhere solution in the long-term? Of course, this is dependent on the level of exclusivity surrounding the partnership alongside other factors. In recent engagements with HfS analysts, the firm has championed its vendor and IP agnosticism, offering customers the opportunity to broker a broad range of solutions and services through them to find the best fit for the client business. We will continue to monitor this space to see if this partnership also signals a move away from this philosophy. If there’s one thing for certain, the deal may make commercial sense to IBM, but it opens them up to a lot of questions about current and future engagements for RPA, alongside broader IBM services.

And where does this really leave Watson?  While the rest of IBM grapples with the digital underbelly of pulling the pieces together in a way that makes sense for the process wonks, the engine that is Watson, with all its cognitive analytics grunt, is nowhere to be seen in this story.  Surely IBM needs to pull together all these internal factions (and from within the Watson group itself) to develop an integrated data orchestration story that the industry can actually understand.  Talk to anyone about Watson and noone is particularly clear where this is all headed, even from within Blg Blue. 

For Automation Anywhere it is all about scale

The RPA market is still lacking scale. Most deployments are client specific and on sub-process level. In a nascent market that might not be surprising, but more fundamentally there is a lack of education as to how to get to scale with deployments. Against this background Automation Anywhere could leverage IBM’s know-how and IP to understand better how data is being transported and what the critical bottlenecks are. This could provide a critical differentiation in a nascent market that lacks an understanding how those innovative toolsets are impacting process chains and workflows. The talent with such an understanding is extremely scarce and is difficult to keep in an organization. However, for Automation Anywhere scale is also important from another angle. The main strategic objective is still moving toward an IPO. Therefore, the leverage of IBM’s sales channel could conceivably reach many new customers which in turn would enhance Automation Anywhere’s valuation by financial stakeholders. To achieve that goal, Automation Anywhere needs to mitigate any potential negative reaction by its other main partners. Suffice it to say one could argue, that Blue Prism’s close relationship with IBM has not harmed its potential, yet with more scale and consequently value, the balancing of partner interests could become more intricate. Having said all that, should the partnership prove successful, M&A rather than an IPO might be on the cards.

The broader market is likely to get more confused in the short term

In a market blighted by smoke and mirrors as well as the mis-selling of RPA, without a focused and clearly articulated marketing push, this announcement is in danger of confusing the market at least in the short term. Many stakeholders don’t understand the differences between RPA and RDA, how cognitive is coming into play or even how RPA could be integrated into BPM toolsets. By adding BPM as another starting point to the RPA discussions on top of the front-office centric RDA approaches and the more back-office focused RPA engagements, further confusion is likely. Suffice it to say IBM has the marketing muscle to act as (a long overdue) educator. IBM’s BPM team should urgently leverage the robust insights and capabilities from its peers in GBS.

Bottom-line: The proof will be in the pudding, but the move could give Automation Anywhere real industrial scale

IBM urgently needs to develop buyer stories that demonstrate to the broader market the success of its strategy. A critical component in those narratives needs to be the depiction of how BPM and RPA work together. As it is sold as a product rather than a service, it could follow the many failed RPA projects that neglected a more consultative approach leveraging the specialist capabilities of organizations like the RPA pure plays such as Symphony Ventures, VirtualOperations or Mindfields. Automation Anywhere has less to lose yet more to gain. The understanding of how to scale deployments while simultaneously broadening its client reach is as tantalizing as it could be value enhancing. As the proof will be in the pudding, HfS will follow those developments with great interest.

The big questions marks with the likes of AA and other RPA solutions are whether these products will hold up in situations of industrial stress where they have to cope with very high throughput, high-intensive processing. If AA can prove it can delivery both the RDA and RPA grunt to power the broader IBM BPM solutions, then the firm will be in a strong position to increase its valuation as a bonafide enterprise class solution.  Perhaps even IBM itself wants to have an up-close and personal experience of the AA software in these intensive client environments, before making its own acquisitive move... the future is unraveling, and this is just another piece of a much larger automation jigsaw that is quickly coming together...

Posted in: Cognitive ComputingRobotic Process Automation

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1 Comments

8 Comments

  1. Theo Priestley
    Posted Jul 14, 2017 10:06 AM | Permalink Reply

    IBM damage control now that the wheels are falling off the Watson hype wagon.

  2. James Dening
    Posted Jul 14, 2017 10:21 AM | Permalink Reply

    Smart move for both companies - RPA is a genuine game changer, so why wouldn't IBM want a partnership with the biggest vendor in the space? Especially as MA says with the BPM tiein possibilities.

    James Dening

  3. Jason
    Posted Jul 14, 2017 11:35 AM | Permalink Reply

    IBM spent astronomical amounts of money educating the AI market for other major competitors to enter, deliver and dominate. #sapleonardo

  4. Andrew Rayner
    Posted Jul 14, 2017 11:43 AM | Permalink Reply

    Interesting, Genfour - Specialist in RPA and AI Delivery did a project for a large Danish client over a year ago which integrated IBM's BPM solution with UiPath - Robotic Process Automation. BPM solutions and some automation technologies are extensible to the point this level of integration is pretty straight forward.

  5. Deepak Sharma
    Posted Jul 14, 2017 12:12 PM | Permalink Reply

    IBM is pioneering in AI space but over the years they were never dominant in UI automation product offerings. It was always HP and It's an elephant in the room to know what had been the motivation has been for some of these pureplay RPA products. For scaling up I'd rather look for changes in product strategy- add capabilities that allow enterprise scale implementations as a move away from tactical, provide interface to both Ops and IT, allow collaboration and extensibility, and many more. There is a 15 year history of what has worked and what has not in the market when it comes to UI automation tools. Pureplay RPA is just an application of the same and there are no exceptions.

    Deepak

  6. AM
    Posted Jul 14, 2017 06:51 PM | Permalink Reply

    Phil

    With Watson capable of solving world hunger, or everything short of that, I do wonder why they would partner with AA. Any insight?

  7. Phil Fersht
    Posted Jul 15, 2017 06:25 AM | Permalink Reply

    @AM --

    The IBM BPM team wanted an RDA product - like Pega and Openspan - they seem to have a simplistic view on what RPA is, which is a view some BPM software techies have.

    The IBM cognitive team and GDS and all other groups in IBM are working exclusively with Blue Prism and they understand enterprise RPA is far more involved and much more complex than RDA - but delivers more value at scale and is secure etc. (see recent data on this).

    Watson is an excellent analytics engine with industrial grunt and scale. What it lacks are the basic automation tools and a sensible approach to aligning it to solving business problems (i.e. more focus on adding lipstick to the pig!). It's interesting to see what Microsoft is doing with its AI investments... that could be a real emerging threat to Watson as they can piggy back on all their mistakes, and profit from their relentless marketing.

    What they have achieved is a billion dollar promotion of the potential of cognitive which other firms can exploit with more process-aligned offerings.

    However, the good news is they are clearly becoming more aware of what they need to do and I am expecting them to make sone adjustments to the holstic Watson strategy to make it more "enterprise guts" ready in the next few months... and really address that digital underbelly, not merely the neural area!

    PF

    PF

  8. Ram Sankararamaiyer
    Posted Jul 15, 2017 07:38 AM | Permalink Reply

    Pega leads the pack and set a trend to come with a clear strategy to complement RPA & BPM which is being followed by all 3 top BPM market leaders who is next Opentext, Bizagi ...... Interesting to watch

    Ram

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