HfS Network

Ready for bible class on Tuesday?

December 08, 2017 | Phil Fersht

So this Tuesday, you'll be able to hear about the finest book written since the first version... The new, slightly improved RPA Bible. 

You'll get a chance to digitally and audibly meet the authors of the Bible, David Brain and myself for a conversation moderated by Ian Barkin on December 12th at 10.00am EST, 3.00pm GMT, to learn the 8 Elements of Successful RPA Orchestration. Click here to register.

Posted in: Robotic Process Automation



Images from FORA.... we could have packed this out three times over!

December 07, 2017 | Phil Fersht

Thanks to all of you for supporting the cause... and a terrific day's debate =)

Posted in: Digital Transformation



Images from HfS FORA... An Exponential view on AI from Azeem Azhar

December 07, 2017 | Phil Fersht

Have we already passed the singularity?

Posted in: None



Images from FORA... a power panel packing a power punch

December 07, 2017 | Phil Fersht

Terrific discussion from the FORA leadership panel featuring (from left to right) Mihir Shukla, Automation Anywhere; Dawn Tiura, SIG; Jesus Mantas, IBM; Cliff Justice, KPMG; Leslie Willcocks, London School of Economics; Mohit Joshi, Infosys and Ahmed Mazhari, Genpact.

Posted in: None



See you at our debut London FORA Summit tomorrow!

December 05, 2017 | Phil Fersht
The "Future of Operations in the Robotic Age (FORA) Summit" at the Andaz Hotel, London 7th December is tomorrow!
This is a valuable opportunity to mingle with the industry elite grappling with the critical issues facing operations today, and debate how to develop strategies to find value from the emerging automation and AI solutions in the marketplace.  
This is an unvarnished "Chatham House Rules" occasion where you'll get to share war stories with operations and automation leads in other organizations and hear from the CEOs of the leading solutions vendors.  
Not to mention you get to hear from our keynote featuring Azeem Azhar, Warren Buckley, myself and the HfS analyst team. 
The place is sold out and packed to the rafters... so if you missed out here, we hope to see you in New York in March (apply for your spot here),

Posted in: None



What $1000 invested in these firms ten years ago would be worth today

December 05, 2017 | Phil Fersht

As a wise man once said: “It has been a mistake living my life in the past. One cannot ride a horse backwards and still hold its reins.”  Well, if you'd listened to this horse, you may have turned a pretty profit =)

Kudos to HfS analyst Martin Gabriel for a very interesting analysis of how rich (or poor) we just could have been: 

Click to Enlarge

Posted in: Business Process Outsourcing (BPO)Cloud ComputingIT Outsourcing / IT Services



Infosys repeats history, but this time goes for a services man in Salil Parekh

December 03, 2017 | Phil Fersht

Over three years ago, the Infosys board made the brave decision to look outside of its organization to bring in an "outsider" to transform its business and ready itself for whatever wave of disruption was coming to challenge a services model that still makes ~20% profit margins and grows ~5% a year.   Yes, they appointed Vishal Sikka, and we all know about the ensuing soap opera that followed...

The decision to look outside was made in 2014, and that hasn't changed

Hindsight is a terrific practice to follow, if all you really like to do is chew on historical occurrences to learn for the future. However, in the case of Infosys, the only real lesson to be learned from the whole Vishal saga is the firm needs a leader who understands how to grow, divest, acquire and lead a technology services and consulting business.  Vishal provided the dreams, the style, technical prowess and the cultural impact... what he failed to deliver was being able to apply these skills effectively to a traditional services business. 

Vishal was a software guy and that is the world he lived in - building very expensive platforms and hiring very expensive Californian executives to run them. Having said all that, Vishal did drive a huge amount of change, and most of it was positive - the only major negative was the fact he departed the firm, and everything he contributed left the firm in a state of paralysis.  The only saving grace for Infy has been the confused state of the services industry in 2017, where most of Infy's competitors have been too busy chugging down the Digital Kool-Aid trying to come across as a facade of flashy vernacular, rather than staying true to the secret sauce that

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Posted in: Analytics and Big DataBusiness Process Outsourcing (BPO)



Ten predictions for 2018 that will all come true!

November 30, 2017 | Phil Fersht

Here are ten big predictions for 2018.  And they will all come true (apparently):

1.…The Digital Operations Industry has Emerged

2.…There is only OneOffice that really matters

3.…Enterprise Automation and AI will reach $10 billion

4.…Enterprise Blockchain Services will surpass $1 billion

5.…We'll see many new “Big impact” deal announcements, but mechanics and metrics will be vague

6.…The power of AND to solve business problems

7.…The rise of change management for digital labor

8.…The war for creative talent

9.…Traditional outsourcing makes way for ‘True Partnerships’

10.…The realization that there is no time for digital complacency


View the recording and download the slides (HfS subscribers) here

Posted in: Analytics and Big Data



For goodness' sake, it's Jim Eastlake!

November 30, 2017 | Phil Fersht

Ever wondered how you can get your coffee maker to turn on the airconditioning, while your robotic dog pressure-cleans your car... all with a couple of clicks on your iPhone?  Well, here is the man to give you the lowdown on all embedded intelligence across all connected devices, the man who practically invented the term "IoT" for Gartner during a distinguished career with the Borg, before joining the HfS rebel forces as VP, IoT Technology and Services Research.... Jim Eastlake:

Jim - it's just terrific to be working with you at HfS! Can you share a little about your background and why you have chosen research and strategy as your career path? 

Hi Phil. I think that I can sum that up in one phrase….. 'The Big Picture'.  I began my career at Texas Instruments in 1981. It was a good place to learn the semiconductor business, but TI was very introverted in those days. So, after 6-7 years I decided to join Dataquest, THE preeminent chip research firm. It would only be for a couple of years, then I’d join another semis company. Little did I know that I would become hooked. I loved the opportunity to talk to senior management and strategists from across the industry (Gordon Moore, Charlie Sporck and Jerry Sanders amongst them), focus on the big issues…… and try to figure out what was going on. I’d then formulate my thoughts in research reports that I hoped would educate and inform, and, amazingly, I got good feedback.   

Why did you choose to join HfS... and why now?

The world has changed just a bit since then! We now stand on the cusp of the next industrial age, Industry 4.0 and all that. It is the Professional Services firms that are performing THE vital task of stitching hardware, software and services together. They enable a myriad of “digitalization” projects that deliver huge benefits to society. So, what better place to continue my lifelong exploration of the big picture than at HfS.   

Where is the industry right now, Jim? Are things really that different than five years ago when you started covering IoT?

We’re following a classic saturation curve Phil, and it’s very early days. Things change fast. The industry takes big strides forward all the time. In the past five years, much has changed: platform architectures, security, edge computing, contact T&C’s, formation of industry standards - just everything.

So what can we expect to see from you at HfS... can you give us a little snippet of what you're going to be working on?

Most certainly Phil…… 

After two weeks with the company, I’m deeply into my first IoT Blueprint, scheduled for February publication. We’ve had a wonderful response from participants, so it will be an insightful report. However, feedback from our clients is also focusing my research thoughts on some meaty topics for 2018:

  • What are the top obstacles to IoT adoption, and how can Service Providers help overcome them?
  • What IoT platforms are winning out, and why? And, is there a trend to using “standard” platforms as opposed to a Service Providers’ proprietary offering?
  • What reasoning lies behind the Edge vs Cloud computing decision in a project?
  • Why do customers choose different Providers for different projects?
  • What comprises a true end-to-end IoT solution?
  • What proven business benefits of IoT are emerging in each of the industry Verticals?

And finally, is the analyst industry as exciting as it was 10 years' ago?  

Immeasurably more so, I’d say. Simply because of Digitalization. Change has always represented an exciting time for the industry observers, there’s not been a time like this during my, nearly 40-year, career in the industry. Everything from semiconductors to Services is involved in enabling change that is Societal in scale. Also, on a practical matter, it is now so easy to communicate with clients and to get research to them. Social media, chat rooms, Webex, Skype and the likes provide us with a much more effective communications conduit.  

Jim - it's terrific to have you join us and can't wait to hear about the convergence of OT and IT!

Posted in: IT Outsourcing / IT ServicesThe Internet of Things



Who said change management was critical?

November 28, 2017 | Phil Fersht

Posted in: Absolutely Meaningless ComedyRobotic Process Automation



Welcome to the era of Shock and Awe automation deals... it's the only way

November 23, 2017 | Phil Fersht

Isn't it amazing how history has this habit of repeating itself?  Especially when it comes to services engagements, where the buyer hopes to shed loads of cost and the providers hope to make a handsome profit, while building a utility model to resell similar engagements to many other buyers.

And that is what we're seeing, as the services industry evolves from engagements deriving value from lower wage costs to one which combines lower wages with the RPA arbitrage of repetitive tasks being computerized in software recording devices.  As one analyst firm once famously declared exactly five years ago: "Welcome to Robotistan, Outsourcing's Cheapest New Destination".  Or is it?

The difference these days, is that many of the emerging services engagements are being based more on hope than certainty, where many buyers (often naively) think this is going to be just as easy as lumping the work offshore, and many providers simply have little choice but to sell them the dream, and live through the hell with them, if they want to stay relevant in this market. How else can you build an effective automation-led services model, if you don't have the guinea pig clients to join you on that nice packaged holiday to Robotistan... And, let's face it, how else are both buyers and providers supposed to behave, when there are so few historical benchmarks to set baseline metrics that both parties know are achievable?  Yes people, welcome to the era of Shock and Awe automation deals... it's the only way.

So let's skim over the first phase of RPA:  The discovery phase: "What is RPA?", "Do I use AA, BP or UiPath?", and  "This stuff is easy, let's just PoC it by ourselves". And don't forget the "Our attempts at CofEs always fail, but this time will be different because we've learned from our outsourcing and shared services experiences".  Let's begin the new automation-led journey at the phase where they've selected their products, appointed the CofE lead, and signed a deal with a service provider daring to escort them to the pearly gates of Robotistan:

Click to Enlarge

The issues that are starting to unravel in this robotic age, is the simple fact that most clients avoided the painful transformation to their data processes and people, during their earlier efforts to source work to lower cost global locations.  They were pretty much able to delight their CFOs with 30%+ savings, without having to do much to change their underlying process architectures (the old "lift, shift then transform" approach usually stopped after the "shift").  The reality of moving into an automation arbitrage environment is that you can't just replicate that work into an even cheaper robotic environment without really figuring out how to do this effectively. 

Bot licenses are not cheap, and simply do not make financial sense for a lot of processes, the way they are currently being operated.  You can simply end up paying $8K a year for a bot that only is utilized for 20 minutes a day, when you could streamline that process into a broader workflow and use that same bot to process a lot more work for the same cost.  Looking at several engagements already in place, clients are committing to significant staff reduction within 12-24 month of contract signing, and many are quickly realizing they are facing some serious complications if they are going to meet the metrics their CFOs are expecting.  Either they end up running operations on desperately thin staff numbers, or they own up that they need to rethink that they need a significant transformation on their data infrastructures, processes and people culture, if they are going to enjoy the delightful fruits of Robotistan.  As several early RPA adopters will already tell you: You need to do MDM before you RPA.

When you talk to some of the leading consultancies in this space, they will tell you that they are making more of their revenues on pre-implementation transformation work, just getting clients into a place where they can do this.  They will also tell you the issues are not about the technology, but much more about the change management necessary to deploy the technology effectively.

The Bottom-line: The early RPA adopters are doing everyone else a huge favor by writing the new rulebook

The biggest issue facing the services industry today is that we have run out of silver bullets, BandAids and scapegoats.  In order to get to Robotistan, you need to finally look deeply into your underbelly of messy processes, spaghetti code, manual workarounds and other funky ways of handling exceptions.  Moreover, you need to look at your people and figure out how to foster a culture of inclusion and innovation. Most enterprises have been stagnating for years, but as the guinea pigs find their way through their shock and awe of having to conduct real surgery - and psychotherapy - on themselves, a new rulebook that guides us through the steps we have to take to learn, think, calculate and act, will emerge that many of the laggards will gleefully follow.  

Posted in: Robotic Process Automation



Sumitomo Group announces the largest-ever RPA deal, but is this really all RPA?

November 20, 2017 | Phil Fersht

Japan is currently the only major developed country that is experiencing a population decline and many of its ambitious enterprises are increasingly desperate to find new means to get work done without over-relying on human labor.

Unlike other developed economies, it is not offsetting population decline with immigration, and most its firms have proven very reluctant to engage in offshore labor arbitrage over the years. In addition, Japan has the largest proportion of elderly citizens of any country in the world. In 2014, 33% of the population was over the age of 60 and this percentage is increasing. Hence, getting the most out of its shrinking workforce to keep their enterprise healthy is of utmost importance to a country which loves long-term planning. No joke, but I was once asked to review a 100-year business plan from a major Japanese conglomerate!

Given its shrinking productive population, combined with its wealth, the cost of labor is high. Consequently, its companies are often the first to adopt new technologies, including artificial intelligence and robotics to increase productivity in a market with severe skills shortages. In addition, Japanese firms increasingly struggle to acquire necessary skills to optimize their technology investments which, in turn, raises the cost of these skills. This is leading to increases in spending with third party service providers that help to fill these skills gaps.

A massive automation-led services engagement is announced, placing RPA in a whole new bracket for value and cost impact

Hence, it was no huge shock when major Japanese financial services conglomerate, Sumitomo Group, announced an unprecedented RPA initiative (see the news release), with savings claimed to be in the hundreds of millions of dollars (also see link on UIPath's website). However, while this is a tremendous public endorsement for the potential benefits of RPA, this appears to be a massive corporate restructuring that is using RPA as a catalyst for labor reduction.  We already have discussed (see link) how Japanese firms love to deploy automation to increase productivity and competitiveness - it's in their DNA as a firm with deep technology and manufacturing roots. In short, most Japanese firms do not suffer from the same negative connotations of automation that their Western counterparts - they are proud to be able to infuse quality and efficiency into their processes.

However, we caution enterprises to take some of the grandiose claims with a bucket of salt, as we've not seen anything near these touted levels of productivity gains yet realized, as outlined by HfS analyst John O'Brien in his latest POV.

It’s being touted by some participating suppliers as the largest-ever RPA implementations worldwide, although, ironically, we don’t yet know how many robots are going to be used.

We understand it’s a significant contract in terms of dollar value, and most of the implementation and transformation work is going to IBM. UIPath is doing the (attended) front office RDA automation and the (unattended) back office RPA automation. Blue Prism has also been involved doing some unattended automation in the back office, but SMBC declined to mention them in their press release (see link) which clearly points to UIPath as the prime automation software partner in the engagement moving forward. 

According to SMFG/SMBC, the attended digital workforce supports the group’s front-office centric activities, enabling the staff to develop the automation themselves and to work alongside the robot by exerting direct command over it. Complementary, the unattended digital workforce targets all the high volume processes that do not require the human touch, working 24 hours per day and 365 days per year to sustain high-throughput, high-intensity processing. SMFG/SMBC has endorsed UiPath as ‘highly usable and scalable’ supporting the initiative during this week’s UIPath conference in New York.

Bottom Line: Massive kudos for RPA being demonstrated at scale, but this appears more like a massive corporate restructuring using RPA as a catalyst for change

There’s no doubt that right now this endorsement from SMFG/SMBC is great kudos for the RPA vendors aiming to scale enterprise-wide – the most jaw-dropping initiative yet that takes RPA to the 9-figure level in terms of perceived monetary value.

However, RPA initiatives, in general, have not nearly met cost savings and productivity targets anything near these touted outcomes.  We’re just not there yet as an industry – sure, many of the more mature deals today are yielding value benefits in the $1m-10m range, once they are being managed effectively, but to jump from these levels to the hundreds of millions is massively far-fetched. 

At HfS, while we believe there are genuine intentions from Sumitomo to leverage RPA to free-up and eliminate human labor, there has to be a much broader corporate restructuring plan, way beyond the digital labor initiative, that will get Sumitomo to these lofty targets. It’s also important to point out that these ambitious enterprise-wide deals are already going on in other organizations – for instance, we understand Blue Prism is involved in a number of projects of at least this size across the globe. But these companies are much less willing to share the details of their programs with the wider community – clients, employees, and shareholders are all going to be impacted in some way by the expectations being set, and whether they are realized or not.

Keeping quiet is often the easier way to avoid the kickbacks when things inevitably go wrong. Whether naïve or not, SMFG/SMBC’s level of disclosure means it's going to be an important test case to assess the success of scaling RPA across the enterprise.

HfS subscribers can click here to view our complimentary analysis on the initiative, by John O'Brien and myself 

Posted in: Buyers' Sourcing Best PracticesCaptives and Shared Services StrategiesRobotic Process Automation



Mike Sutcliff, Digitally Dangerous

November 16, 2017 | Phil Fersht

Accenture's strategy has always been pretty straight-forward:  focusing on its major clients and making sure it stays ahead of the pack, where the marketing is moving. This was pretty much the story when we spoke with Accenture Digital's Group Chief Executive, Mike Sutcliff, two and a half years ago (view blog)... and today all these intentions have been backed up by billions of dollars of bold digital investments, vastly outplaying the competition:

Click to Enlarge

So we hunted Mike down for an update to talk about these massive recent investments and how this Accenture Digital business is shaping up...

Phil Fersht, CEO and Chief Analyst, HfS Research: Good morning Mike - it's been a couple of years since we first discussed the big digital push your firm is making.  Can you share an overview of how the market has evolved since then?

Mike Sutcliffe, Group Chief Executive, Accenture Digital: Sure Phil. Thank you for having me. I guess the first thing I would note is that companies started thinking about digital as a channel or a technology, and then they started to understand that they had to design omnichannel

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Posted in: Digital Transformation



Since when did AI become the job creation antidote to automation's job destruction? Time for an augmented reality check...

November 09, 2017 | Phil Fersht

We seem to have suddenly shifted from the doom and gloom of robots taking our jobs to people proclaiming that AI is going to create millions of new jobs.  And if you haven't endured this latest round of hype, I envy your unique skill in removing fake news from your life.  

Suddenly AI is the antidote to automation!  Really?

Don’t we have a responsibility to inject some reality into this conversation?  Today’s business world is about removing physical touchpoints, about fixing our data, about running processes faster, smarter, more autonomously, and cheaper… So where are the real links between the universities, the politicians, and the businesses?  Why aren’t we really debating this stuff in the senates and parliaments if today's organizations are on an inexorable drive to sub people for better data? Instead, we have academics and "analysts", desperate for attention, making unsubstantiated predictions that are only fuelling the tech firms, desperate to sell their wares without this negative connotation that the real ROI of selling their products is tied to labor elimination.  

Let's just make the call - AI is indirectly and inextricably tied to the elimination of "unnecessary" labor, by nurturing systems that get smarter with each incident and transaction. The smarter and more autonomous your operations become, the more agile and efficient your business becomes. That's not a terrible thing - in fact, you are doing your valued staff a huge favor by keeping them employed and keeping them relevant to your business.  But you are not creating a net influx of jobs into your organization, you are becoming more fluid and competitive.  Sure, you'll probably look to add some Python and R developers, Machine Learning experts, serious data geeks and design thinkers - or you may just pay consultants to do it all for you - but the bottom-line, here, is that you're going to be shedding a lot of your left-brained staff performing jobs that can be artificially automated, at a much faster rate than you'll be adding the data-oriented people you need to digitize your business.  AI is about doing more with less, not more with even more - let's get real.

Don't get me wrong, the possibilities of faster, smarter, touchless data flows between the customer and the operations of the business, are critical to promote competitiveness and survival, but let's stop sugar-coating the true purpose of data driven intelligence - the less businesses need to rely on people and the more autonomously they can run processes, the more nimble and profitable they will become.  Now if these businesses then choose to reinvest their new-found wealth hiring loads more people, I will tip my hat to these purveyors of job hope, but let's fact facts, the companies of the future will be running a lot of smart technology with a smaller group of savvy people to manage it all.  

Let's take our much-loved services industry, which is pretty high up the tech-savvy ladder and comprises firms where efficiency and competitiveness are its very DNA

The global IT and BPO services industry employs 16 million workers today.  By 2022, our industry will employ 14.8 million - a likely decrease of 7.5% in total workers (see our research methodology and full blog here).  This isn't devastating news - we'll always lose this many people through natural attrition, but what this data signifies is this industry is now delivering

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Posted in: Digital TransformationRobotic Process AutomationCognitive



AI is bollocks... or is it?

November 08, 2017 | Phil Fersht

Well someone actually said it - and it may not come as a complete shock that it's come from everyone's favorite RPA evangelist Guy Kirkwood, of UIPath fame. Even more impressive is guy's beautiful command of the English language to describe the latest hyped term "AI", now that most the hypesters have got bored touting the massively disruptive impacts of IoT and digital - and the automation conversations have just got a bit rinse and repeat.  Guy is saying that true AI is when we arrive at the "singularity" (which Ray Kurzweil predicts will happen in 2029), when machines will become smarter than humans, abruptly triggering runaway technological growth, resulting in unfathomable changes to human civilization.

Guy basically claims it's incorrect that we are dubbing the conglomeration of tools, such as NLP, Machine Learning etc as "AI".  While I agree with Guy that the inane use of the term AI is driving me (and many of my colleagues) to scream "Please just stop the bollocks!", my point to him is: what else do we call tools which are all about "the simulation of human thought processes across enterprise operations, where the system makes autonomous decisions, using high-level policies, constantly monitoring and optimizing its performance and automatically adapting itself to changing conditions and evolving business rules and dynamics."  So if this isn't Artificial Intelligence, what is it?

And my further point, here, is that these tools are already here and being heavily piloted and evaluated, according to 400 major enterprises in our recent State of Automation and AI Study:

Sorry, Guy, but while we all want to scream "bollocks!" at all the bollocks, I think we're stuck with AI until the next buzz term comes along =)

Posted in: Cognitive ComputingOutsourcing HerosRobotic Process Automation



The first industry mandates for the Future of Operations in the Robotic Age

November 07, 2017 | Phil Fersht

HfS recently hosted the debut session of the newly-formed Future of Operations in the Robotic Age Leadership Council (FORA) in Chicago. The purpose was to bring together stakeholders across all corners of enterprise operations, services and intelligent automation software arenas to lock heads and map the course of this emerging industry: business operations being fundamentally redesigned by the impact of intelligent automation and digital technologies.  We believe this is becoming known more broadly as the “digital operations industry”.  So let's hear the consolidated feedback from the industry's key stakeholders:

The FORA Mandates, Q4 2017

1) Automation technologies can collapse the barriers between front and back offices

While there’s a lot of noise and scaremongering in the public sphere around job losses, the real story is that automation technologies of various flavors and deployments — RPA, RDA, AI, etc. – are quietly creating a new execution layer on top of the IT “stack,” one that offers a flexible, reconfigurable operations platform for the business.  Freed from the costs and rigidity of legacy systems, savvy enterprise architects see automation technologies, together with the data they capture and generate, as a way to digitally connect their back-, middle-, and front-offices for greater throughput, quality, and responsiveness. 

2) Commercials of engagements must be reconstructed around the economic value of robots

Automation is destroying the traditional FTE-based cost/value equation for service delivery, and we need a new “post-FTE” commercial model, one based on partnership, business outcomes and joint value creation for buyers, advisors, and provides.  The economic value of a robot is vastly different in kind, cost and scale from that of a human being, and is forcing us to rethink the value of different kinds of work – separating rote transaction work from judgment-based work.  Ultimately, this will require all parties to re-think their offerings and value propositions and to demonstrate imagination, creativity and flexibility, while educating their respective stakeholder communities and managing the financial and human impacts.

3) From the C-Suite to the manager, enterprises need people who appreciate and understand the value of data

Success in achieving the OneOffice future requires a blend of strategy, business design, and technology skills to re-think and re-configure core processes with a singular focus on improving the customer experience v. just cutting costs.  Automation per se looks deceptively simple (and is often sold with that promise) but can fail to deliver true value if simply retrofitted on existing processes; coupled with artificial intelligence and cognitive, automation can support new services and capabilities at speed and scale.   But thoughtful tool selection and disciplined deployment is crucial.  And as data grows exponentially, it becomes the essential raw material for every enterprise in every industry.  At every level of the organization – from the C-Suite to manager – enterprises need people who appreciate and understand the value of data and who can identify/extract the most important customer-relevant insights.

4) Businesses must be redesigned from a logical rather than physical perspective

Native digital businesses have demonstrated the value and power of a digital operations approach by thinking about their business from a logical rather than physical perspective – focusing on customer outcomes rather than internal inputs.  They begin with an intense focus on identifying their customers’ most important ‘priorities’ (as distinct from ‘needs’) to design a differentiated and dynamic customer experience.  They then build and optimize a collaborative partner ecosystem to deliver that experience, leveraging specialist capabilities and resources.  The result is a more disaggregated but fiercely cooperative business model.  The challenge for non-digital natives is to re-imagine their businesses from this logical perspective and to demonstrate what one executive called the “willingness to let go.”  That implies – and requires – a fundamental re-thinking around control and governance as well as motivation and reward, supported by deep and enduring commitment to change management.

Download your complimentary copy of the full debrief from the inaugural FORA summit here 

I hope to see many of you in London on 7th December for our next round of pivotal discussions. A big thanks to all of you for your terrific support with the FORA Leadership Council initiative,


Posted in: Buyers' Sourcing Best PracticesCognitive ComputingRobotic Process Automation



Enterprise Automation and AI will reach $10 billion in 2018 to engineer the OneOffice

November 04, 2017 | Phil Fersht

As we brace ourselves for yet another deluge of dodgy automation and AI predictions for 2018, where people just make stuff up and hope we don't remember them in a few months, we thought we'd break the mold and actually release some real numbers based on real adoption trends and real expenditure date on software and services.  We also had the audacity to define the market so this might actually make some sense:

Click to Enlarge

Robotic Process Automation

As we revealed earlier this year, despite all the ridiculous hype, the global market for RPA Software and Services will pass $400 million in 2017 and is expected to grow to $1.2 billion by 2021 at a compound annual growth rate of 36%. The direct services market includes implementation and consulting services focused on building RPA capabilities within an organization. It does not include wider operational services like BPO, which may include RPA becoming increasingly embedded in its delivery.

RPA Definition: RPA describes a software development toolkit that allows non-engineers to quickly create software robots (known commonly as "bots") to automate rules-driven business processes. At the core, an RPA system imitates human interventions that interact with internal IT systems. It is a non-invasive application that requires minimum integration with the existing IT setup; delivering productivity by replacing human effort to complete the task. Any company which has labor-intensive processes, where people are performing high-volume, highly transactional process functions, will boost their capabilities and save money and time with robotic process automation. Similarly, RPA offers enough advantage to companies which operate with very few people or shortage of labor. Both situations offer a welcome opportunity to save on cost as well as streamline the resource allocation by deploying automation.

Intelligent Process Automation

RPA is only 10% of the true picture when it comes to total spending by enterprises on automating their processes.  The internal training and development, pilot projects and trial implementations, is so much larger than simply software licences and third-party professional services to work the software effectively. We term this broader automation market, beyond RPA as "Intelligent Process Automation".  This market will surpass $6bn this year and more than double over the next four years.  

Intelligent Process Automation Definition: Intelligent Process Automation (IPA) is the use of technology to allow a business function or part of the operation of a process workflow work automatically. It includes the use of RPA, BPM suites, Remote Desktop Automation, screen scraping and custom scripting and related technologies.  IPA comprises of two core elements:

  • External professional services: Relates to all external spending focused on developing business process automation strategies / roadmaps and the use/ implementation of automation with business functions.
  • Internal operational spend:  Includes internal and external spending on automation – change management, IT and operational teams focused on process automation and automation use as part of existing business process management initiatives.

Artificial Intelligence

And the most talked about area is Artificial Intelligence (AI), which is already emerging as a billion dollar market for enterprise operations, and could almost treble in spend in four years.  

AI Definition: AI refers to the simulation of human thought processes across enterprise operations, where the system makes autonomous decisions, using high-level policies, constantly monitoring and optimizing its performance and automatically adapting itself to changing conditions and evolving business rules and dynamics. It involves self-learning systems that use data mining, pattern recognition, machine learning. virtual agents, computer vision and natural language processing to mimic the way the human brain works, without continuous manual intervention.

The Bottom-Line: Automation and AI have a significant part to play in engineering a touchless and intelligent OneOffice

However which way we spin "digital", the name of the game is about enterprises responding to customer needs as and when they occur, and these customers are increasingly wanting to interact with companies without physical interaction. This means manual interventions must be eliminated, data sets converged and process chains broadened and digitized to cater for the customer.  This means entire supply chains need to be designed to meet these outcomes and engage with all the stakeholders to service customers seamlessly and effectively.  There is no silver bullet to achieve this, but there is emerging technology available to design processes faster, cheaper and smarter with desired outcomes in mind.  The concept was pretty much the same with business process reengineering two+ decades ago, but the difference today is we have the tech available to do the real data engineering that is necessary:

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In short, every siloed dataset restricts the analytical insight that makes process owners strategic contributors to the business. You can’t create value - or transform a business operation - without converged, real-time data. Digitally-driven organizations must create a Digital Underbelly  to support the front office by automating manual processes, digitizing manual documents to create converged datasets, and embracing the cloud in a way that enables genuine scalability and security for a digital organization. Organizations simply cannot be effective with a digital strategy without automating processes intelligently - forget all the hype around robotics and jobs going away, this is about making processes run digitally so smart organizations can grow their digital businesses and create new work and opportunities. This is where RPA adds most value today... however, as more processes become digitized, the more value we can glean from cognitive applications that feed off data patterns to help orchestrate more intelligent, broader process chains that link the front to the back office.  In our view, as these solutions mature, we'll see a real convergence of analytics, RPA and cognitive solutions as intelligent data orchestration becomes the true lifeblood - and currency - for organizations. 

Do take some time to read the HfS Trifecta to understand the real enmeshing of automation, analytics and AI.

Posted in: Cognitive ComputingDigital TransformationDigital OneOffice



Are we poised to see a new era of digital operations advisors?

October 29, 2017 | Phil Fersht

Over the last 15 years, we've witnessed the rise and fall of the sourcing consultancy.  Clients needed help finding the right services partners - at the right price points - and the likes of EquaTerra, TPI (now ISG), Everest, Alsbridge were there happily to oblige.  Today, only ISG survives as a credible boutique sourcing advisor, while the Big 4 have moved into developing sourcing practices of their own.  However, new data from our soon-to-be-unveiled, Journey to the Digital OneOffice study, conducted with the support of Cognizant, shows that decision makers for business operations are looking largely to other places to stay ahead of all this change:

However which way we look at this, not even a third of decision-makers are relying on consultants in this ever-confusing market, when you would have thought consultants would be licking their lips at the opportunity.  Don't these guys feed off confusion, hype and nervousness from the well-resourced enterprise leaders, only too keen to pay their rates to get a steer on what to do next?  What's going wrong here?

Consultants just don't do research.  For example, I have yet to see a single set of publications from any of the sourcing advisors examining the performance of the RPA solution vendors.  There are a million best practice pieces, but nothing of actionable substance.  Clients want substance, not just the fluff.  Clients are shifting to soliciting help from firms which can do the work and have the proven knowledge to support it, which is why so many are resorting to analyst reports to figure stuff out.

The MBA bus can't find its usual parking spot in the visitor's parking lot.  As the demand for expertise in areas such as complex operating models, understanding murky automation challenges and being able to design outcomes-focused models is reaching unprecedented

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Posted in: Digital TransformationOutsourcing AdvisorsRobotic Process Automation



The State of Automation and AI Study 2017: 400 operations leaders air the real deal

October 28, 2017 | Phil Fersht

Finally, we can stop freaking out at all these lovely projections, such as "AI will eliminate 1.8M jobs but create 2.3M" in the next couple of years, and "47 percent of total US employment" being at risk and "AI being possibly the last event in human history".  Oh, and who can forget that recent whopper, "96% of clients are getting real value from RPA".

We got so sick of this nonsense, we just went out and surveyed 400 enterprise automation and AI decision makers across the Global 2000, split across IT and business operations functions, and hit them with some very straight poignant questions about their attitudes, satisfaction levels and genuine plans for both AI and Automation across their business operations.

But let's start with the hype: AI and Machine Learning is now one of the most critical strategic directives being dictated from the C-Suite onto the operations function

81% of operations leaders are feeling the pressure from their bosses to reduce the reliance on mid/higher skilled labor, viewing AI and Machine Learning as increasingly important or even mission-critical directives to drive this. Only cost reduction beats this out as a priority, but as we all know, we can't reduce costs much further without investing in our digital underbellies:

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What's clear is that enterprises are frantically evaluating their talent (81%) and looking to collapse these silos in the middle/back offices to improve their customer experiences.  And they see AI, Machine Learning, and process automation as the levers to achieve this. 

So let's summarize the key findings from the study, and you can download your copy here :

  • Automation is the number one strategic priority four-fifths of enterprise C-Suites are placing on their operations. Enterprises see AI and machine learning (81%) and process automation and robotics (82%) as important C-suite directives toward operations strategy – higher than any priority other than cost reduction.
  • 98% of enterprises have an automation agenda, but a third already have embedded it into their service delivery. Every organization today needs to have an automation strategy and that is reflected in the responses in our survey; only 2% suggest not having a strategy as of now, while 20% are in the process of formulating their strategy. Already, 31% of enterprises are integrating automation into the fabric of their service operations. Others are setting up dedicated CoEs (18%) and working with service providers (13%).
  • Corporate leadership and IT are most active driving the automation agenda. Decision making is increasingly being led by the CEO (54%), CIO/IT Director (57%), and CFO/Finance Director (35%). Additionally, a diverse group of automation influencers and stakeholders emerge, notably the finance department (49% consider as influencers), procurement (47%), data center managers (51%) and purchasing managers (48%).
  • Deployments of RPA as well as AI starting to scale out with varying degrees of maturity. RPA is seeing rapid adoption and AI will become mainstream in two years. More than 70% of customers are planning to deploy RPA over the next two years and more than 50%

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Posted in: Buyers' Sourcing Best PracticesCognitive ComputingHfS Surveys: All our Survey Posts



Meet Rajan Kohli... adding the fizz at Wipro Digital

October 25, 2017 | Phil Fersht

If there one service provider who's really got focused over the last couple of years, it's Wipro - not only expanding all its main business lines and making some exciting acquisitions, but also revamping its brand and showing a very focused approach to its marketing and positioning. While several of its Indian-heritage competitors have struggled to differentiate themselves, or just failed to develop a coherent strategy, Wipro has stayed focused on pushing its automation platform, Holmes, and making determined efforts with its digital proposition.  One man who is tirelessly pushing its digitization efforts to a new level is Rajan Kohli - a really nice guy who doesn't mince his words....

Phil Fersht, CEO and Chief Analyst, HfS Research: Good afternoon Rajan - thank you for your time today. We would love to hear more about Wipro's digital strategy. We have been hearing a lot about the opening of your new centers and the recent acquisitions of Designit and Appirio. There really seems to be a lot of energy around the strategy here.  Maybe we could start with a bit about you, Rajan... could you tell us a bit about yourself, your background and how you came to be leading Wipro Digital?

Rajan Kohli, Senior Vice President and Global Head, Wipro Digital: It's a great honour to be speaking to you, Phil. I have spoken to you many times before, but this is the first interview with you specific to Wipro Digital. So thank you.

A brief history about me. I have been with Wipro for 22 years now. I have been through various roles within Wipro in both Sales and Leadership. I was also the Chief Marketing Officer and

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Posted in: Digital Transformation