Accenture, KPMG, Cognizant, Atos and TCS lead service delivery on Microsoft AI and Google AI Platforms

July 22, 2019 | Phil FershtReetika Fleming

We've reached a stage where we can start to assess the capability of leading service providers to deliver comprehensive services across key AI platforms, especially Microsoft's Azure AI platform and Google's emerging AI platform suite.  So without further ado, let's ask HFS' Research Vice President, Reetika Fleming, how she fared leading the two major Top 10 efforts this year...

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Reetika - how are services around AI platforms progressing?  And specifically, what have you learned with regards to Google and Microsoft platforms?

We’re continuing to see AI ecosystems evolve around the big cloud vendors – Microsoft, IBM, AWS, and Google. From our recent deep-dives into the AI services alliances developing around Microsoft and Google, I can tell you that there are different strategies at play here. Google and Microsoft themselves have their own strengths and priorities, and the SI and consulting alliance partners are collaborating with them in different ways.

  • Google’s portfolio of AI components, such as text-to-speech and computer vision, is a great starting point for a fundamental development layer. Google’s AI R&D leadership is well respected among clients and service providers alike. What has been missing are combined applications of these technologies to solve specific business challenges for major business functions and industry verticals. This is where service providers have a critical role to play, and they are filling the gaps by building solutions either in collaboration with Google developers or with clients in selected industries that are ready for AI.
  • Microsoft is emerging as the most ‘enterprise friendly’ AI ecosystem. As enterprise clients grow more comfortable with AI initiatives using the Azure technology stack, the services market is quickly developing around client demand. We expect this market to pick up significantly in the coming year as AI services and technology as a whole see greater adoption and as Microsoft and its services partners make more concerted efforts to bring more relevant and timely AI solutions to large enterprises.

Large service providers, including IT services firms, boutiques, and consulting houses, have established or expanded their ecosystem alliances to work with MS and Google on AI. Joint go-to-market activities are taking the form of:

  • capability development (POC and pilot funding, talent development);
  • market awareness creation and sales planning (joint account planning, campaign work such as Microsoft’s “Make AI Real” workshop series); and
  • technical collaboration (joint research, IP creation).

What is driving firms to invest in AI - is it a real desire to meet newly designed outcomes, or more a compelling need to keep on top of emerging tech?

Most of the clients we’ve spoken to in the last year have gone through the learning curve of viewing AI simply as the shiniest new toy the need to be seen to have a strategy around. This is finally starting to become about plugging real business problems and tapping into new opportunities using the evolving range of AI technologies.

Here’s an anecdotal indicator of how things are skewing towards business – at least half the number of AI leaders and sponsors we’re speaking to are business stakeholders, whereas this was squarely an IT/Digital/CoE skewing peer group in years past. Enterprises in our research are certainly looking at business outcomes from their AI investments, including driving up customer experience with AI-enabled apps with virtual assistant support, improving the quality of anomaly detection in manufacturing equipment, and reducing turnaround time on invoice processing. This is good validation for our thinking earlier in the year that AI needs to be driven by the business, with IT as a key partner.

What type of services are you seeing drive the AI industry right now?  Is it more service providers delivering "support" work for clients who've already figured out what they need, or are you seeing real "co-innovation partnerships" where provider and enterprise work together to design new process flows to achieve pre-defined business outcomes? 

The last few years has seen many services firms go from completely opportunistic AI exploration to the formal development of AI practices. This is no small feat considering:  

  • the technologies are still evolving, at a point where new academic papers are leading to breakthroughs all the time
  • the talent is “thin on the ground” for both technical skillsets in data science, applied ML engineering, and distributed computing, and non-technical understanding of the application of AI into business
  • the range of capabilities needed to make enterprise AI a reality require massive amounts of collaboration within a service provider’s organization (and their clients) going from data, analytics, cloud, infra support, business domain expertise, consulting, design thinking, product development…

Pure support work is still a norm today, as many clients will test the waters with service providers at the execution level on a project or two. But doing pilots and POCs on repeat can only take a service provider so far. They have learned over time that they need to bring a multi-disciplined team together with industry-specific solutions to actually “collaborate” with their clients.

A few market-leading service providers have certainly developed these types of co-innovation partnerships with their strategic clients. They jointly ideate and vet AI opportunities, and are able to connect across business and IT stakeholders within these firms because of their reach. Here’s how you know these engagements are really partnership-driven - the service provider will be as invested as the client organization in helping the client develop their own AI capabilities, whether that’s through training talent, setting up CoEs, advising on governance and control, or investing to solve unique client problems.

How are you seeing AI impact enterprise "experiences" in terms of customers and employees?  How do you see this advancing as AI evolves?  

We’re seeing tremendous interest in using AI to drive better experiences, particularly to improve customer relationships. Phil, you talk about the hyperconnected future state where enterprises need to not just respond to but anticipate customer needs. AI technologies are perhaps the biggest catalysts for hyperconnectivity, because of their ability to “hyper-personalize” customer experiences.

I love the concept of AI ultimately becoming invisible or just natively being built into the process. You don’t know you’re using it, don’t need specialized skills or training, you just get the benefits, whether you’re a customer, partner, or employee. The best experience in these terms is either delight (e.g. this company knows exactly what I want) or effortless engagement (e.g. it doesn’t take me what feels like a million years to serve this customer!) We’re going to start to see new standards emerge for major enterprise platforms and systems in the next few years for AI-driven user experiences based on this concept. It’s no coincidence that the SAPs and Salesforces’ of the world are pouring millions into AI. 

Casting your eye ahead 2-3 years, who do you see winning in the services space - will it be one of these early leaders, or can you see new players emerging with a different approach?

As we see the further formalization of the AI services market, we’ll need to watch for: 

  • Who can find the most successful talent models for AI? Whether that’s crowdsourcing a la Wipro-Topcoder, EY’s “Badges” program to recognize employees’ new skills, or TCS’ investment with Cornell Tech through their new innovation hub in NYC… there’s different strategies on AI talent development for the future, and not all will pay off.
  • Who is able to develop and successfully sell digital change management to clients – we see this all the time right? Change management is set to the side because clients believe they can do it all internally, but change management for AI is fundamentally different than other initiatives – you have to alter job roles, the workings of entire processes and decision-making points, establish and continually monitor governance and transparency of new models, and so on. Not everyone can firstly sell digital change management along with AI implementations, and then deliver successfully, and it can be what makes or breaks AI engagements.
  • Who is able to make AI easy to develop and scale – internally and for clients. Centralizing and creating libraries of reusable assets, investing in “autoML” type of capabilities that can compress the data prep and training time, containerization of capabilities and existing platforms…these are all indicators of prioritizing scalability for AI.
  • Who is able to bring an integrated approach to automation technologies like AI? It’s an easy tell when a service provider’s RPA team has no idea what their AI practice is doing. As we always say, clients want to buy outcomes, so the more service providers can bring a holistic set of capabilities to the table, the more their AI pitch will actually land.
  • Who is able to partner with technology vendors most effectively? This includes joint account planning, joint go-to-market and product engineering AI specialists like kore.ai and of course the cloud vendors.

I see the market leaders in these early days pulling ahead, but there will also be a few new logos on the board in the next 2-3 years because of these factors. The service providers in the middle might be left doing some of that support work you referenced earlier.

Lastly, we’re in the final phase of analysis for our comprehensive Enterprise AI Services Top 10 report, so check back with me in a few weeks for more on this.

HFS Premium Subscribers can click here to access the 2019 Microsoft AI Services Report and here for the 2019 Google AI Services Report

Posted in: IT Outsourcing / IT ServicesArtificial Intelligence

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Want to survive the AI era? YOU have a simple choice to make...

July 07, 2019 | Phil Fersht

When it comes to staying relevant in today's workforce, let’s get to the heart of the matter – YOU have a simple choice to make:

  • Do nothing and be part of the “Frozen Middle”. Decide you can’t be bothered to learn anything new, so make sure your firm has the same attitude (or has a thin veneer of innovation masking a cesspool of lethargy and love of perpetuating legacy processes and business practices). And ride this next wave of hype out for a few years before you can quietly ride off into a comfortable sunset, or…
  • Become a change-driver. Decide you have to get ahead of emerging technologies and their massive impact on business ecosystems and make sure your firm has what it takes to sponsor your burning ambition to drive cultural changes, new learning and ability to rethink how business processes and practices are wired.

Once you decide which of these two categories which you wish to belong, then make sure you’re in the right company to execute your survival plan… otherwise, leave and find one that is.

Because the data from the recent World Economic Forum jobs study shows half of enterprises are being held back because their staff fails to understand the disruptive changes in their industry, and an alarming 37% of enterprise leaders do not feel their current

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Posted in: Digital OneOfficeGlobal Workforce and Talent

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Is your Robotic Software really supporting business transformation at scale beyond piecemeal projects? Time to have your say...

July 06, 2019 | Phil FershtSaurabh GuptaElena Christopher

Are you as confused are we are with some of the recent analyst matrices floating around the industry this year?  Some products are performing completely differently depending on the analyst and how they "define" the market and whatever methodology they used to score each product.

However, one thing is clear:  at HFS we ensure we rely on a lot more than a briefing and a handful of rose-tinted clients served up by the suppliers themselves.  We reach out across our global network of power users (enterprise clients, advisors, and service providers) to get the true unvarnished experiences of robotic software. 

This is why we scrapped the 2x2 matrix last year and went for a direct ranking of suppliers, based across three critical variables:  execution, innovation and the voice of the customer.  HFS subscribers can click here to access the full 2018 RPA Top Ten report. 

On 2018, we introduced the "Voice of the Customer" to rank the leading RPA products across the experiences of 352 power users

In short, there are growing questions about whether "RPA" can deliver transformation on the promised ROI and outcomes, especially as most RPA initiatives continue to be small and piecemeal, with truly scaled RPA deployments are rare (only 13% of client boast any true scale to date). The industry is still struggling to solve challenges around the process, change, talent, training, infrastructure, security, and governance - hence our shift to re-categorizing and

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Posted in: Robotic Process AutomationRobotic Transformation Software

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The present and the future is... Robotic Business Outsourcing

June 24, 2019 | Phil Fersht

BPO (Business Process Outsourcing) grew up because of all the exceptions enterprises have to process that were not able to be absorbed into the standard ERP software.  Yes, we found people equipped to do this work at lower wages housed by efficiently run service providers.  And that work we couldn’t initially send to the BPO providers we just found manual workarounds to get it done until we eventually found an outsourcer who would find a model to take on that work for you.

However, just as many enterprises were running out of places to find (yet) more and more hidden costs they could quickly remedy through (yet) more outsourcing, along came their perfect new toy to unearth costs they had never thought possible to eliminate: RPA.  

Yes, folks, this stuff is just the thing to keep you occupied for the next few years to keep your greedy CFOs at bay - and even includes the word "robot" to conjure up images of human work

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Posted in: Business Process Outsourcing (BPO)Robotic Process AutomationRobotic Transformation Software

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Blue Prism buys Thoughtonomy. Clearly a great deal for…Thoughtonomy

June 20, 2019 | Miriam DeasySaurabh GuptaElena ChristopherPhil Fersht

Blue Prism yesterday announced the acquisition of Thoughtonomy, a SaaS-based integrated automation platform with Blue Prism RPA baked into its core. After six years and much flirting with potential suitors, Terry Walby’s Thoughtonomy successfully exits into the welcoming arms of Blue Prism. This was always the logical end-game for Terry's business, which he bootstrapped from day 1 and tirelessly pushed at the automation world. HFS was particularly inspired with the firm's work at the UK's National Health Service (NHS) (which you can read here). 

Essentially Thoughtonomy is RPA + cognitive capabilities + cloud. Net-net, Blue Prism is buying a cloud (SaaS) wrapper for its own product; arguably, it could have (and should have) built that itself, but decided instead to pay a tidy sum. However, this cloud wrapper puts Blue Prism in the ring with Automation Anywhere's V12 cloud product, which is drawing a lot of plaudits from enterprise users (our forthcoming Robotic Transformation Software Top Ten will reveal its performance across several hundred enterprises). More importantly, it increases Blue Prism’s attractiveness as an acquisition target itself by upgrading its cloud-readiness from “available cloud reference architecture” to a legitimate SaaS-based offering.  We touted Blue Prism as a potential target for IBM three years ago, and with a scalable cloud story and IBM/s major pivot around Cloud with its RedHat acquisition, surely this Cloud-ifying of Blue Prism makes the firm even more attractive to them.

Finding the synergies to justify the price tag – cloud with a potential side of cognitive capabilities, but the focus is too UK centric

Now, Blue Prism can contend with Automation Anywhere’s claim that “BotFarm is the first and only enterprise-grade platform for scaling bots on demand”. The midmarket can benefit from Blue Prism’s RPA technology, with very little setup cost or initial investment.  Mid size companies that considered automation out of their reach can enjoy the democratizing effects of cloud, avoiding the hassle of on prem infrastructure.

The shopping basket also contains Thoughtonomy’s gross assets, reported at 31 May 2018 as £5.6m and established relationships with Thoughtonomy’s big-name clients including NHS, AEGON, and Sony. Partner implementation and reseller arrangements are in place across many of the usual suspects in SI and consultancy such as Computacenter (from where Terry Walby moved to IPsoft before setting up Thoughtonomy).

Like Blue Prism, Thoughtonomy is UK based so there’s not much by way of additional footprint synergies to be realized. Blue Prism, therefore, will only be adding a limited new channel and will have to rely on its existing sales and delivery channel to make this acquisition pay off. The US market is where the bulk of new demand for automation solutions is surfacing, and Thoughtonomy isn't adding to Blue Prism's US team, which is under huge

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Posted in: Robotic Process AutomationArtificial IntelligenceRobotic Transformation Software

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She's bright and breezy... HFS hires Miriam Deasy!

June 18, 2019 | Phil Fersht

Miriam Deasy (see bio) joins HFS as Research Director, Integrated Automation 

Just when you thought this little analyst firm wouldn't dare add another rock star brain into our "Triple A" coverage (analytics, automation and AI) we've gone and done it again, adding Miriam Deasy to our global analyst team (based in UK) to cover integrated automation and AI platforms, alongside the likes of Elena Christopher, Reetika Fleming, Tapati Bandopadhyay, Melissa O'Brien, Saurabh Gupta, Ollie O'Donoghue and myself.  Miriam has develop a career across the world of technology and services with roles at EDS (HP) and Amdocs back in the day, before taking out time to raise two boys and a girl William (12), Kayleigh (10) and Darragh (9) before making her move to the analyst world with IT and telecoms firm Ovum three years' ago.

Miriam adds to our growing Irish contingent (from one to two), brings deep sense of wit and

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Posted in: Robotic Process AutomationEnterprise Integration PlatformsArtificial Intelligence

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Wipro needs a bold and differentiated strategy to elevate its middling market position post-Premji

June 12, 2019 | Phil FershtJamie SnowdonSaurabh GuptaTapati Bandopadhyay

We all remember when Jack Nicklaus played his last Masters, and when Sir Alex Ferguson managed his last game for Manchester United. These guys were godfathers of their trades, not unlike Azim Premji has been for IT services, the man who oversaw a firm which diversified from diapers and vegetable oil into one of the largest IT services firms in the world. However, when they retired, they left a legacy that enabled many to follow in their footsteps (albeit noone has come close yet). Premji's legacy, which forever is written into the annals of IT services folklore, is still unfinished, which may be a good thing for his successors... there is still a lot of work to do to get Wipro to the place Premji always envisaged. 

The current market situation facing Wipro's leadership

To recap, Wipro’s Executive Chairman, Managing Director and philanthropic champion Azim Premji is retiring by end July. His son and Wipro’s Chief Strategy Officer, Rishad Premji will

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Posted in: IT Outsourcing / IT ServicesOutsourcing Heros

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When did you earn the right to stop learning new skills and abilities?

June 02, 2019 | Phil FershtOllie O’Donoghue

When you have to listen to literally hundreds of people a day spouting advice about reskilling, unlearning, change management, relearning etc., I am going to respond with “great, so what are you doing yourself to stay ahead of today’s digital environment and increase your value as a superstar worker?”  You may love to pontificate constantly weird definitions of digital transformation on twitter and harp on about today's digital talent needs, but do you truly practice what you preach?

Is it just me, or have we entered an environment where everyone loves to talk about change, but most aren't actually doing anything (themselves) about it?

I mean, if your accountant hadn’t bothered to brush up on the latest tax changes, or your personal trainer didn’t know how to use a Fitbit, you probably would seek to replace those relationships in your life.  So what gives IT professionals the right not to learn Python, or learn how to deploy data management / automation tools?  And what gives business executives the right not to learn how to use non-code analytics tools to help their decision-making, or social media products to help them communicate in the market?  And operations executives the right not to learn low-code automation and AI apps that can help them free up people-hours on work that adds no strategic value to the business?  And who told sales and marketing executives it was fine to ignore really learning the products / services they were selling because all they had to do was to follow a set of pre-defined processes to do their job effectively?

Why have so many of us become so complacent?

It just seems that the majority of workers today just think they need to learn to follow a few processes and that’s all they need to do to command a tasty salary and remain employed for years and years…. so few people actually realize that the whole nature of people value is changing for enterprises – they just love to do things the same old way they have always done them, and simply cannot be expected to learning anything new.  "We just don't have the talent in-house to do that" is the constant whine we hear from enterprises; and "our IT managers are project managers, not consultants" is what we hear from service providers.  Then why don't you train them?  Is our agonized response.  Why does everything have to stay paralyzed in this constant vacuum of sameness

Much depends on the approach our enterprises take to driving change

The biggest problem with enterprise operations today is the simple fact that most firms still run most of their processes exactly the same way as they did decades years ago, with the only “innovation” being models like offshore outsourcing and shared service centers, cloud and digital technologies enabling those same processes to be conducted steadily faster and cheaper.  However, fundamental changes have not been made to intrinsic business processes – most companies still operate with their major functions such as procurement, customer service, marketing, finance, HR and supply chain operating in individual silos, with IT operating as a non-strategic vehicle to maintain the status quo and keep the lights on.

As our Hyperconnected journey illustrates, many industries have now reached a place where they have maximized all their delivery methods for getting processes executed as efficiently and cheaply as possible.  They have tackled the early phases of digital impact by embracing interactive technologies to help them respond to their customer needs as those needs occur, whether electronic or voice.

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In short, most enterprises have been able to keep pace with each other without actually changing the underlying logic of processes.  Simply doing things the same old way has been enough for many, until a competitor comes along with an entirely unique way of servicing your

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Posted in: Digital OneOfficeRobotic Process AutomationEnterprise Integration Platforms

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The Life of Brian: Prettying up a baby that's got a bit ugly

May 11, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

What has happened to the Indian-heritage IT service provider that stoked fear into every Accenture client partner?  “They think like we do” was the declaration one of Accenture’s leaders made at an analyst briefing in 2016.  Well, the slide from grace has been alarming, leading to the appointment of a new leader to stem the bleeding. 

However, when the problems cut this deep, you can’t just apply lipstick to the pig, you need to reconstruct the whole farm, or you can quickly find yourself in the zombie services category alongside the likes of Conduent and DXC, where finding any sort of direction and impetus would be a major accomplishment.

Yes, it could really get this bad, as Cognizant has posted its slowest revenue growth and worst dip in profit margins. Ever. A mere 5% annual revenue growth, when in its heyday it was posting well over 40% (and slipping below double digits was unthinkable until last year). Yes, declining revenue growth is one thing, but declining profit margins is when the panic button gets pressed.

Frank should have left when Elliott came along to poison the well

It’s clear to see why Francisco “Frank” De Souza, the poster boy CEO of the emerging power of the Indian IT Services industry, jumped ship (or more accurately was made to walk the plank a burnt out husk due to the unenviable pressure Elliott Management placed him under to keep the gravy train on the tracks and kick back billions to shareholders.)  If anything, Frank should have considered making a move in 2017 as Elliott started squeezing Cognizant’s margins at a time is needed to keep pace with Accenture’s aggressive digital investments.  He’d grown the firm to over $15bn by then and could have exited with a legacy no one could rival in the tech business. 

And in his place comes IT Services newbie Brian Humphries – well we’re sorry to say this Brian, but the baby you just adopted has got a bit ugly, and is screaming for attention. Let’s just look at the numbers– now we’re going to be generous and forgive Cognizant’s dip in margin, a likely result of a reclassifying activity to meet fresh regulations. But the sinking revenue growth is much harder to look past:

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In 2012, Cognizant invented the Digital concept before everyone else jumped on it.  They were that cool...

In a punishingly competitive market, it looks like Cognizant has started to lose traction. Back in the good old days, the firm could do little wrong by challenging Accenture’s strategy – driving a hard-digital bargain and bringing in design consultancies along with their pony-tailed

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Posted in: IT Outsourcing / IT Services

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15 initiatives UiPath and its competitors must take to prove they are serious about transformation

May 07, 2019 | Phil FershtSaurabh GuptaElena Christopher

We've been pretty vocal regarding the unfocused direction the industry which has called itself "RPA" has taken, and the obsession some of the firms are having with their self-declared valuations. So let's change the story from how much these firms actually believe they are worth to where they need to invest their funding to show they are serious about being part of a transformative industry.  

Don't get us wrong, in software world, it's common practice to get attention that your company is valuable and investors are falling over themselves to hurl money at it - this is common practice in markets that are very focused on selling to IT executives.  And we've seen far more ludicrous "valuations" than the 35x earnings ones the robotic software firms are claiming (just look at Blockchain and AI). 

So why aren't we seeing firms like UiPath shift the focus to the investments and changes they intend to make to propel a truly transformational value proposition with their products?  Especially where the prime target for growth is the business executive who is far less accustomed to a world where his/her suppliers are obsessed with how much they're worth, as opposed to how they can help you take your business through painful change.

It's critical now to shift the vision to reality of making these bot dreams come true

UiPath, more than its competitors, has always pushed the vision of democratized IT. Literally, RPA or a “bot for every worker” and not just a sanctioned crew of IT professionals (or even a sanctioned crew of enterprises) is a brilliant marketing gimmick. However, with UiPath’s hypergrowth and rapid-fire funding, the time has come to connect the dots between a folksy vision and how UiPath can truly enable the transformation of work.

As HFS recently articulated in our blog “RPA is dead. Long live integrated automation platforms”, RPA is being used to automate tasks and prop up legacy processes. Broad business transformation is decidedly lacking and arguably cannot be achieved without supporting tools like artificial intelligence and analytics as well as digital change management to address how change is driven, managed and perpetuated. The one perhaps notable shift in the change winds is the on the democratization front – RPA is being bought and consumed primarily by business units not central IT. However, as enterprises push towards integrated automation, with a higher order of technical complexity of tools and data challenges, IT once again becomes essential. Integrated automation may drive the ultimate democratization – the balance between IT and business operations.

Despite its growth and funding, UiPath is a very long way from achieving this vision

Our recent survey work with "power-users" of robotic software products (what we were calling RPA and RDA) clearly highlights the top three strengths and challenges of the UiPath solution (with sampled comments):

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The Bottom-line: To democratize technology and drive business transformation beyond task-oriented robotics activities, here are 15 key initiatives UiPath (or its competitors) must take on:

1. Must bring IT and business visions together as one integrated approach. Education must focus for technical and non-technical resources – into communities and educational institutions globally

2. Must shift focus to integrated automation – expansion of functionality beyond RPA/RDA to AI and smart analytics. Badging everything as RPA is definitionally incorrect and gives clients no roadmap to follow to advance beyond basic repetitive task, desktop and document automation

3. Must drive digital change management – help enterprises grapple with transformation with its services investments.  Relying purely on Big 4 advisors and service providers for change management will cost clients a fortune and drive many away.  This is a key area UiPath needs to take the lead on.

4. Must include unattended and attended processes (not just focus on attended)

5. The developer ecosystem must be expanded to extend functionality, libraries etc.  Commit to specific goals for how much of the UiPath codebase will be available on Github to build an industry solution skewed against technology-vendor lock-in

6. Demonstrate commitment to building a stronger QA team, and fully transparent local customer support and customer success teams to drive customers (as per the number 1 challenge outlined above)

7. Commit specific sums to meaningful partner relationships with leading service providers and consultants, including opensource partner technical support systems, events, education resources and people to help the industry grow

8. Commit to funding UiPath local academies (building on their online academies) especially in blighted neighborhoods near its biggest offices to bring young coders and potential customers together with UiPath employees for on the job real-world training

9. Must get focused on core business processes by industry, such as supply chain in manufacturing, core banking in BFS, underwriting in insurance, billing in telecom etc

10. Revisit its client engagement model to ensure it is best serving its customer base – its rapid growth in salespeople may expand capacity, but if sales lacks vision, then clients may not be well served (as per comments in our recent survey above)

11. Commits to drawing down technical debt (Every SW company has it, some more than others.  As illustrated above, our customer surveys point out which elements of the UiPath platform and solution are known to need immediate re-engineering and investment

12. Identify and subsidize hands-on automation industry experts and influencers whose independent thinking deserves funding and not just focus on checking boxes with legacy analysts.  The automation industry is being impacted by many unique stakeholders.

13. Kick off an enduring and sustainable initiative modeled after Salesforce's 1-1-1 program (of which the Notre Dame announcement by Daniel Dines was a great a start) 

14. Invest in cross-technology customer events that will expand overall value creation, for example partnering more aggressively with the likes of Salesforce, Microsoft, Amazon, Google etc.

15. Spearhead an Automation Industry Manifesto that shows a clear path for enterprise clients to progress from basic robotic task automation through to integrated automation and then to achieving genuine AI value

Posted in: Robotic Process AutomationEnterprise Integration PlatformsRobotic Transformation Software

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RPA is dead. Long live Integrated Automation Platforms

May 02, 2019 | Phil FershtSaurabh GuptaElena Christopher

The biggest problem with enterprise operations today is the simple fact that most firms still run most of their processes exactly the same way as they did 20/30/40 years ago, with the only “innovation” being models like offshore outsourcing and shared service centers, cloud and digital technologies enabling those same processes to be conducted steadily faster and cheaper.  However, fundamental changes have not been made to intrinsic business processes – most companies still operate with their major functions such as customer service, marketing, finance, HR and supply chain operating in individual silos, with IT operating as a non-strategic vehicle to maintain the status quo and keep the lights on.

Enter the concept of Robotic Process Automation (RPA), introduced to market in 2012 via a case study written by HFS and supported by Blue Prism, which promised to remove manual workarounds and headcount overload from inefficient business processes and BPO services.  However, despite offering clear technical capability and the real advantage of breathing life into legacy systems and processes, RPA hasn’t inspired enterprises to rewire their business processes – it’s really just helped them move data around the company faster and require less manual intervention.  In addition, most “RPA” engagements that have been signed are not for unattended processes, instead, most are attended robotic desktop automation (RDA) deployments. Attended RDA requires a loop of human and bot interplay to complete tasks.  These engagements are not the pure form of RPA that we invented – they are a motley crew of scripts and macros applying add band-aids to messy desktop applications and processes to maintain the same old way of doing things. Sure, there is usually a reduction in labor needs - but in fractional increments - which is rarely enough to justify entire headcount elimination. Crucially, the current plethora of “RPA” engagements have not resulted in any actual “transformation”. 

The major issue with RPA today is that it is automating piecemeal tasks.  It needs to be part of an integrated strategy

Real research data of close to 600 major global enterprise shows just how not-ready we are to declare any sort of robo-victory. In our recent survey of 590 G2000 leaders, only 13% of RPA adopters are currently scaled up and industrialized. Forget about leveraging RPA to curate end-to-end processes, most RPA adopters are still tinkering with small-scale projects and piecemeal tasks that comprise elements of broken processes.  Most firms are not even close to finding any sort enterprise-scale automation adoption.

RPA provides a terrific band-aid to fix current solutions; it helps to extend the life of legacy. But does not provide long-term answers. The handful of enterprises that have successfully scaled RPA across their organizations have three things in common:

  1. A unifying purpose for adopting automation,
  2. A broad and ongoing change management program to enable the shift to a hybrid workforce, and
  3. A Triple-A Trifecta toolkit that leverages RPA, various permutations of AI, and smart analytics in an integrated fashion.

So HFS is calling it as we see it. RPA is dead! Long live Integrated Automation. And by integrated we mean integrated technology, but also, and all importantly, we mean integration across people, process and technology supported by focused objectives and change management. Integrated Automation is how you transform your business and achieve an end-to-end Digital OneOffice.

Integrated Automation is not about RPA or AI or Analytics. It is RPA and AI and Analytics.

Business problems are not entirely solved by one stand-alone technology but by a combination of technologies. While only 11% of the enterprises are currently integrating solutions across the Triple-A Trifecta, there is emerging alignment. The supplier landscape is also starting to realize that clients will buy integrated solutions (see Exhibit 1) and examples below:

  • RPA products are seeking to underpin AI and data management capabilities. WorkFusion was arguably the first to combine RPA and AI with its “smart process automation” capability. Other subsequent examples include Automation Anywhere with its ML-infused IQBot, Blue Prism announced its AI Lab to develop proprietary RPA-ready AI elements, and AntWorks embeds computer vision and fractal science in its stack to enable the use of unstructured data. What these products having in common is their use of robotics to transform tasks, desktop apps and pieces of processes.  Hence, we need to refer to these "RPA" products as Robotic Transformation Software products which is a far more appropriate description.
  • AI and analytics focused products are starting to embrace Robotic Transformation Software, instead of undermining it. IPsoft launched 1RPA with a cognitive user interface. Xceptor’s data-led business rules and AI-based approach to automation leverage RPA to help extend its functionality. Arago is starting to go to the market where it can help orchestrate RPA capabilities within its platform.  
  • Enterprise software products are integrating the triple-A trifecta capabilities in their products. SAP Leonardo aspires to harness the emerging technologies across ML, analytics, Big Data, IoT, and blockchain in combination. It also acquired RPA software company Contextor (late 2018) similar to Pega when it acquired OpenSpan in 2016 adding RPA functionality to its customer engagement capabilities.
  • System Integrators are orchestrating the Triple-A Trifecta across multiple curated products. This typically combines some of their IP and service capabilities. Accenture launched SynOps in early 2019, offering a “human-machine operating engine.” Genpact’s Cora, a modular platform of digital technologies, similar to HFS’ Triple-A Trifecta, is designed to help enterprises scale digital transformation. IBM’s Automation Platform includes composable automation capabilities that orchestrate responses and alerts between Watson and Robotic Transformation Software solutions. KPMG’s IGNITE brings RPA, AI and analytics tools together with KPMG IP and services.

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Integrated Automation is not just about Technology. It is Technology + People + Process.

The real point of Integrated Automation is actually to move beyond the tools. Yes, the Triple-A Trifecta offers more functionality, but it still does not work unless you change your business, your people, your processes.  Integrated automation is the effective melding of technology,

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Posted in: Cognitive ComputingRobotic Process AutomationIntelligent Automation

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Why is UiPath obsessed with this "Funding Arms-Race" when it should be focused on scaling its clients?

May 01, 2019 | Phil Fersht

 At the HFS Summit this week, we asked 200 enterprises if they cared about automation software vendors bragging about self-inflated valuations.  Not a single person did.

The robotic transformation software industry has three problems right now:

i) Defining itself;

ii) Scaling Bots and being Transformational;

iii) Obsessing with this "Funding Arms-Race"... so let's dig in

1) Defining itself correctly... "RPA" is not correct. Most of "RPA" in its current form is incorrectly defined, and this market is dying if it doesn't have a radical overhaul. Only a small portion of "RPA" it is actually “process automation” - most of it is desktop apps, screen scrapes and doc management. RPA in current form is incorrectly labeled and the way forward is to integrate these tools. When we introduced the term RPA in 2012 (with Blue Prism) the focus was on unassisted automation, it was self-triggered (bots pass tasks to humans) and centered on increased process efficiency. Only a small portion of "RPA" today is actually “process automation". Most “RPA” engagements today are not for unattended processes - they are attended desktop automation deployments, a loop of human and bot interplay to complete tasks (not processes). These engagements are not the pure form of RPA that we envisioned back in 2012 – they are a motley crew of scripts and macros applying band-aids to messy desktop applications and processes to maintain the same old way of doing things. We need to refer to these "RPA" products as Robotic Transformation Software products which is a far more appropriate description. Now if these firms cannot partner with their clients and the services ecosystem to support transformative automation as part of an integrated automation platform, this market balloon will burst as dramatically as it got inflated...

2) Scaling bots and finding a transformation story versus a "fixing legacy" one.  The more these robo tools can be used by clients - not only to do things better and more automatically - but also to help re-wire their operations, then we have lift-off to something fr more strategic than merely getting crappy tasks working better and moving data round the company better. If you just work on steady-state fixes without focusing on the real changes needed, we will see many firms stuck in legacy purgatory, unable to switch out bots in the future. Sure, there is usually a reduction in labor needs - but in fractional increments - which is rarely enough to justify entire headcount elimination. Crucially, the current plethora of “RPA” engagements has not resulted in any actual “transformation”. 

As our global study of 590 leaders of Intelligent Automation initiatives, supported by KPMG reveals, barely more than one-in-ten enterprises has reached a place of industrialized scale with RPA - and the word from so many clients is loud and clear that they need help:

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This struggle to get to a point beyond pilot exercises and project-based experimentation could prove to be a serious point of failure for the whole industry.  There needs to be a much stronger melding of enterprises with implementation and consulting capability to fix these issues.  Just like we realized that throwing bodies at a problem does not solve the problem, we need to recognize that merely hurling software at business process will not drive transformation. The real genius lies in understanding what to use when and how. The software also needs to come with support and services. Otherwise, we’re just selling more snake oil and magic. 

3. End this "Funding Arms-Race" obsession nonsense.  Now.  While Automation Anywhere was busy with its Imagine conference in London, on 20th March, "news" about UiPath's self-proclaimed valuation, based on its much-discussed future Series D funding round, was conveniently released the day before, claiming the $3 billion touted last year was now a whopping $7 billion.  It was also widely rumored that UiPath was pushing to announce their Series D during Automation Anywhere's New York event last week.  Here are some snippets from the Business Insider news publication, which was also picked up by Tech Crunch:

So what, pray tell, is the point in all this?

UiPath is putting the whole automation industry under unnecessary pressure. If the UiPath Series D round has yet to be signed, these antics could be placing the negotiating power into the hands of the investors, who can clearly see UiPath's management is obsessed with embarrassing its hated rivals as opposed to focusing on the first 2 items discussed above.  Fortunately for UiPath, they have officially secured Series D this week, but these antics and obsession with fictitious valuations do the industry no favors and put incredible pressures on the automation software companies and enterprise to deliver genuine scale and results on months when the reality is this integrated automation journey will take years.

UiPath is creating the perception that this whole industry is after a short-term cash bonanza.  Our automation industry cares about making these solutions work, and this ridiculous noise about inflated funding isn't adding any value anywhere - this valuation noise only makes most people think these software firms are obsessed with a quick IPO or a quick sale, as opposed to a true long-term journey that will help enterprises enter the hyper-connected age.  I can guarantee you all - right now - that none of today's enterprise operations leaders are basing their robotic software selections off these crazy media-fuelled "valuations".  It is also an entirely separate debate about why robotic software firms with revenues under $200m can claim 35x valuations... stay tuned for that.

I can only hope UiPath CEO Daniel Dines' classy announcement (in Paris) to contribute 1m Euros towards the reconstruction of Notre Dame is an about-turn in this behavior.

Posted in: Intelligent AutomationRobotic Transformation Software

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Forget Brexit...Immerse yourself into the Hyper-Connected Economy at the HFS European Summit

April 24, 2019 | Phil Fersht

 

Date: April 30th, 2019

Venue: Chartered Accountants Hall, 1 Moorgate Place, London

Topic: The Hyper-Connected Economy... How do we immerse ourselves in it?

Key Message:  Until we get Brexit sorted, what else should we do to kill the time?

Info on the superstar line-up and how to apply: click here

 

Posted in: Digital OneOfficeSourcing Change ManagementEnterprise Integration Platforms

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RPA is still dead. We talked, you all listened... now smell the integrated automation roses

April 21, 2019 | Phil Fersht

Well, you can't beat a good headline, and you really can't beat it when 50,000 people read the "RPA is dead. Long live Integrated Automation Platforms" blog article in just 48 hours, spending a whopping average of 6.5 minutes actually reading it. Yes, most of you made it further than the headline! 

For those of you familiar with google analytics, I thought I would take the unique step of actually sharing some readership stats from our blog this week, just to show you how the extent of impact our plea to the industry is having to "wake up to enterprise integration and stop festering in obscure RPA":

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So where do we all go from here?

RPA as a term just doesn't make sense anymore, but these terrific brands will thrive as Robotic Transformation Software. We re-badge RPA as Robotic Transformation Software (RTS) because that’s what it is (or what aspires to be). Only a small portion of "RPA" is actually “process automation”... most of it is desktop apps, screen scrapes and document management fixes.  Most “RPA” engagements that have been signed are not for unattended processes, instead, most are attended robotic desktop automation (RDA) deployments. Attended RDA requires a loop of human and bot interplay to complete tasks. These engagements are not the pure form of RPA that we invented back in 2012 – they are a motley crew of scripts and macros applying band-aids to messy desktop applications and processes to maintain the same old way of doing things.  

Integrated Automation Platforms are the Holy Automation Grail (HAG*) if we can make it there.  Automation ultimately needs to support transformation, not legacy. The more these RTS tools can be leveraged by clients - not only to do things better and more automatically - but also to help them re-wire their operations to achieve their outcomes, then we have lift-off.  These tools also need to make enterprises more agile - if you just work on steady-state fixes without focusing on how to make real changes down the road, we will see many enterprises stuck in legacy purgatory, unable to switch out bots in the future. 

*HAG is not an official acronym, I just made it up.  Peace out robo-warriors ✌

Posted in: Robotic Process AutomationEnterprise Integration PlatformsArtificial Intelligence

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Fishing for digital dominance... meet Brian

April 11, 2019 | Phil FershtMelissa O'Brien

Brian Whipple, CEO Accenture Interactive, describes the evolution of the world’s premier experience agency

The term “digital” has become overused, diluted and - in many ways - rendered useless.  After all in 2019, what ISN’T digital, and what’s the point in distinguishing? We have instead moved to a world that’s comprised of integrated and immersive experiences – as consumers, or as patients, as employees, etc – experiences that shape our buying habits and our quality of life. The recent announcement of Accenture's acquisition Droga5 has raised the stakes of creating immersive customer experiences to a whole new level (read our POV here). 

Companies that are really seeking to align themselves to experiences need to break down their silos and better understand what their customers want... and really execute on that.  We caught up with Brian Whipple, Accenture Interactive’s CEO (and recent winner of an HFS Disruptive Award), to learn how his firm’s massive acquisition appetite has helped build a company embracing an entirely new philosophy, helping its clients align to customer needs in the post-digital world.  Accenture is integrating technology, design, commerce and content to help clients develop “living” experiences that meet customer needs today and are ready to evolve in the future – requiring a wide breadth of talent, expertise and even cultures within cultures to deliver on those experiences.  The bits and pieces that have come together at Accenture Interactive over the last several years, most recently with Droga5, are all adding up to Accenture’s mission to “create the greatest customer experiences on the planet for our clients.”

Phil Fersht, CEO and Chief Analyst, HFS Research: Can you talk to us a little bit about how digital came to be, and how Accenture Interactive came in to the space? Because you were really the first of the service providers to coin the "Digital" phrase, and really put it together, industrialize it, etc. Could you give us a brief history about how it came to be, how it got started, and what the original philosophy was, and how that may have changed in the last five or six years?

Brian: Sure. There are three distinct phases to date, for Accenture Interactive. The original philosophy was that the world needed digital diagnostic tools that work in the arena of digital marketing; things like online campaign optimizers, A/B testing it, “I’m going to present offer A, with this creative treatment online, and I’ll test it against offer B,” or, “I’ll move it on a placement

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Posted in: Digital TransformationDigital OneOfficeCustomer Experience Management

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The mid-cap service providers are killing it and LTI, Virtusa and Mphasis are setting the pace

April 09, 2019 | Phil FershtJamie SnowdonMartin GabrielSam Duncan

These are unique times for IT services - at the big-ticket end of the spectrum you have the mega-scale and competitive-cost propositions of the tier 1s vying for greater wallet share within their enterprise clients, while at the other, we have specific technical needs that warrant a lot of close attention that grabs the focus of the "mid-caps", which are much more flexible and can operate at smaller scale, while turning an attractive profit. 

The mid-caps are catering to the "build" needs of enterprises where the Tier 1s often struggle to deliver top talent

I recall just a couple of years ago how many of the big boys arrogantly called time on the smaller providers, but the exact opposite is transpiring; many clients are less brand obsessed as they once were and are more focused on accessing the skills they need with the attention they deserve.  Why settle for a B- team, when you can get a B+ team that's going to go the extra mile and work with you to figure out how to deliver complex requirements?  And the numbers, simply, do not lie:

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 All these providers, with the exception of Luxoft, grew their employee base and 7 out of the leading 10 grew revenues by double-digits 2017-2018:

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The mid-caps can rely on dynamic personalities to win deals

Remember the good ol' hyper-growth days of IT services where the likes of Chandra (TCS), Frank (Cognizant), Nandan (Infosys) and Shiv (HCL) would fly around the world to close deals? Well, those days are long-gone as the top tier providers are simply too large and clients know they can't just pick up the phone to scream at the CEO anymore.

However, they can still do that with most of these mid-caps. We conveniently forget that services is still largely about people and that personal touch from the top is still what most clients really want. One such eye-catching success story has been that of Mphasis, where the impact of CEO Nitin Rakesh (read the interview here) has been nothing short of remarkable:

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Bottom-Line: The success of the mid-caps was not in the script... new rules of services are being written

In the last few years, Capgemini acquired IGATE and Atos acquired Syntel. In both cases, the company being acquired was the leading mid-cap on the market, and both provided some crucial resources for European-centric service providers lacking strong Indian delivery capability.  However, what transpired since has been the door opening for the next tranche to step up up - notably LTI, Virtusa and Mphasis - all of whom have blown past $1billion. While LTI and Mindtree are embroiled in a less-than-friendly merger and Luxoft has already been bolted into the DXC empire, it would be of little surprise if any of the successful ones in this list are snapped up in the coming months as enterprises grapple with their needs for close attention to their creaking IT infrastructures and the dire need to develop agile capabilities, take better advantage of automation and AI tools... and find more sophisticated help to sort out their cloud messes.  And as the latest ones are picked off, it's simply the time for the next wave to step into the void... firms like Zensar, NIIT and Hexaware are routinely discussed these days as strong providers in their own right, and are also potentially attractive acquisition targets, provided the fit is right(despite decades of heritage).  

These are the new rules of the services game... because the simple fact is that there are no rules and we're all writing new ones as the need for rapid, personalized IT salvation becomes more and more a critical part of the C-Suite agenda.

Posted in: IT Outsourcing / IT ServicesIT InfrastructureM&A

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Quantum set to destroy blockchain by 2021

April 01, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

For all you blockchain aficionados, you'd better get quantum-savvy asap, or you'll find yourself having to re-skill yourself to do something relevant

This article will discuss some aspects of quantum computing, but - don't worry - we're not going to detail out all of the different uses in one initial education. It’s not going to describe the workings of quantum and we shall avoid using words like qubits as much as possible, we won’t mention quantum supremacy or the theory of quantum entanglement. If you want to know about these things, buy an undergraduate quantum physics textbook and then explore a decent quantum computing book like “Quantum Computing: A Gentle Introduction” by Eleanor Rieffel and Wolfgang Polak. Which we are lead to believe is only gentle to those with a good undergraduate understanding of maths and physics. Although in a review, Physics Today described it as a masterpiece.  But for you blockchain followers, we're sure you can quickly redefine your talktrack to wax lyrical about Quantum for your next Ted Talk.

The difference between quantum and traditional computing is at an eye-wateringly fundamental level. And this requires the knowledge we mention above to have a fighting chance to understand what it is. But is something every business leader needs to at least know about, even if it is just to be able to ignore with confidence. This is because quantum computing is potentially a disruptor with as big an impact as digital computing. And it is not an exaggeration that it can be used to simulate the very fabric of the universe.

The development of a practical quantum computer could have dire consequences for traditional encryption

However, the question still remains: Is practical quantum computing still just a theory, or an impractical experiment with any stable use decades away? Or is it potentially just around the corner poised to disrupt the very core of encryption technologies? Particularly given the (not passing) resemblance to other over-hyped transformative technologies like nuclear fusion and room temperature superconductors. All dreamt up in the golden age after the second world war and without a tangible end-point, with the seemingly constant promise of a miraculous breakthrough in spite of massive investment. Which seems particularly relevant given that current quantum computers need superconductors, and the insane supercooling that currently goes with them, to operate. Making them, to many, expensive, impractical flights of fancy; fuelled by journalist research hyperbole.

So, with that said, is that all you need to know? Your job is just to laugh in the face of any minion that utters the phrase “maybe we should invest in some quantum?” Unfortunately, it is not that simple. The trouble is no one really knows the actual timeframe, even John Preskill, the Richard P. Feynman Professor of Theoretical Physics at CalTech, can’t give you a firm time-frame. With predictions ranging from single to multiple decades and the current wave of “noisy” quantum experiments unlikely to have much practical use. However, this uncertainty needs to be weighed against the serious risk. The development of a practical or at least partially practical quantum computer could have dire consequences for traditional encryption.

The first algorithm set to run using a quantum computer could have seismic, rapid implications

Part of the excitement around the prospect of Quantum computing is the first real application – the first algorithm set to run using a quantum computer could solve the mathematical factoring equation very quickly. This can be used to break existing methods of encryption like RSA and ECC rapidly. So any organizations that use encryption technology need to understand that there is a potential weakness in current systems, which will need to be replaced or strengthened when practical quantum is available.

And recent experiments from Google and IBM have started to erode confidence in the long term predictions and have started to bring forward the prediction from decades to years. With both these firms recent experiments showing that quantum is starting to conform to Moores law. Which, if true, means we will have Crypto breaking quantum in 2 years rather than 20.

 As quickly as 2021, HFS researchers believe we could see a quantum computer capable of breaking RSA encryption of 256 Bits – which would have serious implications for blockchain, given this is the level of encryption currently used. According to HFS academy analyst Duncan Matthews-Moore, "If we don't get a handle on the potential speed of quantum soon, we could see the billions of dollars that have gone into blockchain become as quickly wasted as the vast sums Brexit is costing the UK economy."

Bottom Line – Quantum is the one to watch, particularly if you have any ambitions around blockchain.

Forget RPA, forget AI, forget cloud, forget disruptive mortgage processing - and especially forget blockchain.  Because if quantum can delivery real algos, everything tech that happened before is going to be disrupted like Betamax, like CB radio, like Sonic the Hedgehog.

And of course... this was an:

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Posted in: Digital TransformationBlockchain

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Will Infosys revitalize the mortgage processing market with ABN Amro’s Stater, or is this merely sweating a commodity asset?

March 30, 2019 | Phil FershtReetika FlemingSaurabh GuptaElena Christopher

Infosys has just announced a joint venture with ABN Amro for mortgage administration services, where it will acquire a 75% stake in Stater N.V., a wholly owned subsidiary of ABN AMRO Bank N.V., that offers mortgage services across the value chain including origination, servicing and collections. The transaction is valued at $143.53 million and is Salil Parekh's second acquisitive move in Europe since his appointment as CEO a year ago. Clearly, bolstering its European presence is a big deal for INFY in 2019, gaining more "zero distance" impact with European clients, adding more innovation centers, and strengthening its local footprint and brand across Europe. 

Has Infosys finally gone all "sensible" on us?

Mortgage processing is one of the most commodotized 3rd party banking offerings, where services are heavily outsourced to offshore locations, the technology platforms are mature and robust, with a lot of focus on eliminating manual processes over the last 5-10 years.  In addition, all the major banks have been signed up. So is this the new Infosys?  Making moves

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Posted in: Business Process Outsourcing (BPO)Financial Services Sourcing StrategiesM&A

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Re-platforming the Hyperconnected Enterprise: AI must be led by business operators, not IT traditionalists

March 23, 2019 | Phil FershtOllie O’DonoghueTapati Bandopadhyay

If I have to listen to another technologist promoting “AI as a key component of the CIO’s agenda”, I am going to start getting a little irked… AI is not another app that can be installed and rolled out like a Workday, SAP or a ServiceNow.  I even had to listen to an IT executive asking me whether he should “leave AI in the hands of SAP as part of their S4 upgrade”.  Not only that, I noticed a well-known analyst firm promoting a webcast last week advising “CIOs how to rollout RPA”.

Re-platforming the enterprise is all about crafting the anticipatory organization

The whole purpose of AI in the enterprise is to have business operations running as autonomously and intelligently as possible, which means we need to build enabling IT infrastructure that supports the business process logic and design.  People are talking about “re-platforming the enterprise”… this is really about redesigning IT to support the business needs, to help the business respond to customer needs as soon they occur, and have the intelligence to anticipate the needs of their customers before its competitors can.  

Enterprises need to be as hyperconnected and as autonomous as possible within their business environments if they want to pinpoint where disruption is coming from, where to disrupt and how to keep reinventing themselves in an unforgiving world when we no longer have time to rest on our laurels:

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The problem for IT is that AI doesn’t come packaged in a nice box with an instruction guide

I’m sorry to be mildly offensive here, but AI and automation are only effective when they are designed to solve process and business problems, not check another box on the CIO’s resume. While it is important to keep the IT team in the communication loop so that it is ready to provide the right infrastructure and technology stacks required for operationalizing AI solutions, the steering wheel of any business application of AI must be in the hands of the businesses. Smart businesses  know their key pain areas and can identify the most relevant and feasible business cases. They own the data, they know the context, and how a process should run when it is augmented with appropriate AI techniques.  

For many firms, the day they implemented their first ERP was akin to pouring cement into their enterprise

The reality is the ERP system of the last 3 decades is no longer the system of record for ambitious, hyperconnected enterprises. It is a rigid suite of standard processes that keep when wheels on a legacy operation.  The emerging system of record is the data lake itself, when the business leaders have the ability to extract the data they need to make the right decisions, or have systems that can start to help make intelligent decisions for them.

My colleague, Tapati, has been doing some terrific work that looks at the interplay between business and IT with these emerging AI-driven environments and points to 10 prescriptive activities business leaders and IT leaders need to agree on, and put into effect, if they can genuinely develop AI capability that takes them into this hyperconnected state:

The 10 AI activities the business teams must lead to ensure AI success 

  1. Prioritize use cases from AI technology availability. The business team must prioritize AI business use cases from the initially identified list of potential AI application opportunities. The team must demonstrate its process knowledge and desired end-state scenario to help the IT team to ensure effective project coordination and outcome-setting. Using external consultants at this phase can be very effective to ensure the best business/technology fit.
  2. Develop the AI Business case: The most critical step, where the business team must set initial benchmarks, define pre- and post-process improvement metrics, and estimate target benchmarks.
  3. AI feasibility analysis and specification development: Business teams must solicit help from IT teams for their expertise with items such as technical feasibility analysis, infrastructure requirement specifications, and technology stack selection. Other areas are technology cost estimation, deployment, and production release, 
  4. AI Technology cost estimation: Developing estimates for the cost of technology stacks and solution deployment efforts must be the purview of business teams, but it requires significant and detailed input from the IT team.
  5. AI Data preparation and identification: Business teams must ensures success by identifying and preparing the data for training algorithms and building models. The team must solicit assistance from analytics and data warehousing teams.
  6. Coordinate with partners: During design phase of the target process model, the business team should must provide input to implementation partners (both internally and with their consultant/services partner) regarding ontology of the problem domain, the existing process models and rules. Teaming here with IT is essential, but the business team must define and communicate the business and process needs effectively. 
  7. AI Testing: The business team must lead testing the models against the project goals during the early POC and pilot phases
  8. Manage effective AI feedback loops: To make use cases fir for production release, the business team must provide detailed, regular feedback on the accuracy and performance. Again, they need  to work with implementation partners, which may be internal teams from an AI CoE or external partners.
  9. AI Training: The business team must be responsible for budgeting, planning and executing the training for large AI user teams, encompassing all of the staffing resources, external consultant costs, processes and task owners that are involved in the implemented use case.
  10. AI Deployment: Deployment doesn’t end once the use case is in production. The business team must continuously monitor the model’s outcomes, maintenance, and updates during the inferencing phase, and if the problem context changes with new rules or data, the team needs to add new dimensions and models and create new clusters. Users may also require retraining, especially as processes may change over time. There will also be the need to monitor change management issues, potential legal issues with data privacy / staffing impacts etc.

The Bottom-line:  AI is a business issue that must be directed and managed by business executives, supported by technology experts.  CIOs who ignore this will fail

The business team should seek help from IT in terms of infrastructure and tech stack needs, but it needs to own and run the AI projects because it owns the data, context, processes, and rules and understands the pain points.

CIOs will face an existential fight if they don't start genuinely enabling the business. The world where IT was all about mitigating outages and avoiding risk is being replaced by one that demands speed, agility, and a genuine understanding of the business.

Being tech-savvy isn't enough anymore… just knowing where to build a data center is pointless if you don't know what the rest of the business has planned. And this IT obsession of continually trying to upgrade ERP solutions, when most business units these days can handle it. That's the pitfall of the old traditional IT approach - we have to make sure we never get cemented in like that again.

Posted in: Digital OneOfficeIntelligent Automation

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Are call centers cool again? Teleperformance, Concentrix and SYKES lead the first Top Ten for customer engagement operations

March 16, 2019 | Phil FershtMelissa O'Brien

Ever since IBM sold off its Daksh business to Concentrix in 2013, "call center" has been something of a dirty word to traditional service providers and software aficionados alike. 

Since then, traditional IT services have flatlined as the focus has shifted to digital solutions, where the customer is front and center to emerging interactive ("digital") technologies. Having that ability to lead the customer front line and support those customer needs with real-time speed and intelligence is core to business operations.... and service partners which can deliver this has never been so crucial.  So are call center providers back in vogue, or is this merely a blip as we transition to a world where we don't need many human beings anymore?

The contact center operations (BPO) services industry is growing at 4% globally, despite razor-thin margins and intense competition. So, why do pundits declare the call center on the brink of implosion into a piece of software, while the stagnant IT services market escapes criticism for perpetuating a “people-centric” model? While contact center BPO growth is hardly setting the world on fire, it’s been steady over the last several years, even though the majority of contact centers worldwide are still in-house. The fact that there’s still a $65 billion market for outsourcing this work begs the question why these investments are simply going away. Contact center leaders like Teleperformance and Concentrix have recently made sizeable investments in bolstering service delivery (acquiring Intelenet and Convergys, respectively), reflecting the relative importance of this market segment. The recent development in which SYKES acquired Symphony demonstrates the optimism that automation can grow, not cannibalize, the contact center business. The latter, in particular, signals a promise that contact centers can use RPA expertise to scale and complement traditional contact center services business as they pivot to become more strategic providers.

Other large business services firms are gravitating into the customer engagement market, sensing an opportunity to disrupt deals with a hybrid intelligent automation/global talent approach. Most of the Indian-heritage IT services firms with strong BPO delivery arms are gravitating back to contact centers, as they see the potential for aligning intelligent automation and cognitive assistant solutions with their global base of talent for supporting their enterprise customers. Some examples of this are with the likes of Tech Mahindra in telecoms and Infosys with order management. Cognizant, Wipro, and HCL - for example - are also competing for call center work. BPO firms that have been more focused on non-customer centric areas are gravitating aggressively back into the market, such as WNS, EXL, Hexaware, and Genpact. Even IBM has recently flirted with a few opportunities, despite selling its call center business, and we even cam close to featuring Accenture in our new Top Ten, but the firm was very adamant that is did everything but the contact center piece.

Contact centers are ripe for a renaissance, and automation is a big piece of this transformation. The common retort that a contact center with automation is an oxymoron is false. Perhaps it’s our legacy view of contact centers and automation that is oxymoronic—and it’s time to let go of that legacy. When “digital” is ultimately about new ways of doing things, the contact center is in a more precarious and important position than ever. The contact center for companies that want to stay competitive in a hyper-connected economy must learn how to embrace intelligent engagement, using the key change agent of automation to become a strategic hub that empowers both customer service professionals and the customers they support.

Enterprises must navigate the changing of the guard for intelligent customer experience services

There is a changing of the guard happening, as HFS analyst Melissa O'Brien analyzes in her new report Top 10 Front Office Customer Engagement Services, 2019.

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As the dust settles on our latest Top Ten, an assessment of the Customer Engagement Operations market, we’ve been fielding lots of questions about what this ranking means from a competitive standpoint.  Our final top ten chart was chock full of what you might consider to be the usual contact center suspects, but also sprinkled with some interesting up-and-comers, as well as familiar names that aren’t necessarily known for competing in this space --  the intelligent customer engagement services that are evolving out of the contact center. The

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Posted in: Contact Center and Omni-ChannelDigital OneOfficeCustomer Experience Management

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