HfS Network

Monthly Archives: Jun 2017

Why have so many sourcing advisors failed with automation?

June 24, 2017 | Phil Fersht

Remember when sourcing advisors has become the "new analysts" and dominated so many outsourcing discussions?  Remember when it was the norm for clients to bring in the sourcing specialists whenever they needed a deal done, not only to get a good price, but also to make sure they selected the right partner and had a strategic view of the future?  Remember when most advisors were not only contract experts, they were also strategists, researchers, sounding boards and respected brands you could hang your hat on... Just look at our 2011 study when advisors lorded the influence over everyone bar direct peer feedback:

Fast forward to today, with all the sourcing advisors doubling-down in RPA to compensate for the drying up outsourcing deals and confidently hoping their outsourcing clients will immediately turn to them to help them grapple with the new outsourcing-cum-automation model.  Surely their ability to craft deals for clients will put them in pole position to take their clients down the RPA path...

Let's visit our brand new (still-in-the-field) study on the 2017 State of Automation, and it's telling us a very different story when we spoke with 56 enterprises actually deploying RPA:

Less than half the RPA buyers view either consultants of sourcing advisors as influential in their automation sourcing.  Even conferences are impacting automation buyers more.

So what's gone so wrong with advisors in automation?

Credibility. Suddenly many advisors who were previously hawking their deep understanding of HCL versus TCS's FTE rate cards are now suddenly adding their names to white papers on automation and trying to insert themselves into serious client conversations about said topic.  It's just not credible.

Smarter clients.  The swirl of information over social channels is so intense these days that most clients' knowledge isn't that far behind the experts.  In many cases, you'll learn more about RPA talking with a client in beta mode than an advisor or analyst trying to impress you at

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Posted in: Outsourcing AdvisorsRobotic Process Automation

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A third of enterprises are making significant investments in RPA

June 22, 2017 | Phil Fersht

Tired of the RPA hyperbole?  Well, you'd better get used to it continuing, as key industries have already made significant short-medium term commitments:

Our 2017 State of Operations and Outsourcing study with KPMG, covering 454 major enterprises, shows the hi-tech and financial services industries leading the way with, respectively, 53% and 44%  already making significant investments in RPA over the next couple

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Posted in: HfS Surveys: All our Survey PostsRobotic Process Automation2017 State of Industry Study

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We are in the People Elimination business. How did it get this bad, and can we change course? (Rant warning)

June 18, 2017 | Phil Fersht

Talent is still the most precious asset firms have and it needs to be nurtured as the real proponent of growth and success, not merely the fancy technologies that can automate workflows. Our technology and business services industry desperately needs a mindset shift - and one that requires a longer term view, than the next quarterly Wall St announcement. Whilst we are not the only guilty party here, our technology and business services industry is still rooted firmly in people capability, much more than technology and commodity products, hence the desperate need to correct course and avoid circling the drain...

I was interviewing with the Delhi branch of NPR the other day on the layoff paranoia engulfing the Indian IT industry, and it dawned on me just how inhuman our business has become. These are normal people who still view the world as one where employers have responsibilities to their employees, where people still care about the welfare of others, when you got up in the morning and went to a job that had a purpose and a future.

The poor interviewers simply couldn’t comprehend why major employers enjoying ~20% profit margins and continual 5-10% growth were so focused on making massive staff reductions.  “Don’t these firms have a responsibility to their employees, Phil?” was the question. “Of course they don’t, it’s all about their shareholders” was my immediate hair-trigger response.  Ugh – I suddenly felt ashamed of the business of which I was part. 

We’re in the business of increasing profits for investors, not creating new business value from people

Is our sole purpose now simply to eliminate people? We spend a couple of decades displacing "expensive" workers because we could find less expensive able ones to do the job. Now we’re getting rid of them altogether just to keep the Buffetts and Elliotts happy? And why are we literally obsessing with labels to describe what we do:  Digital, Machine Learning, Intelligent Operations, Robotic Process Automation… or my favorite “Digital Labor”. 

Let’s be honest, what all these things really signify is “how to get work down without the need for people”. And how can you call something “Digital Labor” when the labor is no more… unless we start redefining RPA recording loops based on optical recognition software as “labor”. Maybe we need to revisit what labor actually is, according to Merriam-Webster:

Definition of Labor (Merriam-Webster): 

"1) The human activity that provides the goods or services in an economy; 

2) The services performed by workers for wages as distinguished from those rendered by entrepreneurs for profits."

Correct me if I am completely losing my mind here, but we’re no longer in the business of promoting human activity to stimulate economies… we’re in the business of increasing profits for investors.  Is there any way to dig ourselves out of this hole, or are we on an inexorable nosedive to the lowest common denominator of creating and promoting business operations that no longer require people?

As technology and operations professionals, we must rediscover our purpose or we’re just promoting the end of labor

I wish I had a silver bullet solution to help us take this dramatic U-turn, but sadly, all I can offer are some ideas on how we can re-humanize what we do:

Find meaningful work for our people to do - not just fire them. In the past, when most businesses had some excess staff capacity, there were always useful things for them to do – such as consulting and outsourcing firms deploying their benched consultants to work gratis with existing clients on special projects that could eventually lead to future business – or just

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Posted in: Business Process Outsourcing (BPO)Cognitive ComputingDigital Transformation

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Time to hangout with the real robo-bosses at the FORA Council this September

June 17, 2017 | Phil Fersht

When an industry is enduring a secular shift that is literally redefining how we do work, it's pretty important to get some real, unfettered dialog going among all the key stakeholders this impacts. We need to break free from the glitzy paid-for sales presentations, robot keyrings, stress balls, nasty logo-ed leather notepads and greedy events firms vying for a quick buck from vendors eager to part with cash to promote themselves to all their competitors.

That's why we're assembling 100 of the industry's finest leaders in a single room for a whole afternoon to thrash out the mandate for the future of operations in the robotic age for our inaugural FORA council session in Chicago, 19th September. And we promise no sponsors, stress balls or bad white papers to take away...

Here's just a sample of the industry robo dignitaries who've already committed:

  • Alastair Bathgate, CEO, Blue Prism
  • Chetan Dube, CEO, IPsoft
  • Chip Wagner, President, Emerging Business Services, ISG
  • Cliff Justice, Partner, US Leader, Cognitive Automation and Digital Labor, KPMG
  • David Poole, CEO, Symphony Ventures
  • Daniel Dines, CEO and Founder at UiPath
  • Jesus Mantas, Managing Partner and General Manager, IBM Business Consulting, IBM US
  • Lee Coulter, Chair for the IEEE Working Group on Standards in Intelligent Process Automation
  • Dr. Mary C. Lacity, Curators' Distinguished Professor of Information Systems, UMSL, and Visiting Scholar MIT
  • Max Yankelevich, CEO, WorkFusion
  • Mihir Shukla, CEO, Automation Anywhere
  • Peter Lowes, Partner, and Head of Robotics & Cognitive Automation, Deloitte US
  • Shantanu Ghosh, SVP, CFO Services and Consulting, Genpact
  • Thomas Torlone, U.S. Leader of Enterprise Business Services, PwC
  • Tijl Vuyk, CEO and Founder, Redwood Software
  • Weston Jones, Global RPA Leader, EY

We also have leaders of cognitive and automation initiatives from the following buyside firms already signed up to get stuck into the debate:

So let's cut to the chase - it's time to have the real, hard conversation about where we really are as an industry. Why aren't those 40% cost savings happening, each time someone slams in some software and hopes it somehow eliminates manual labor because they can access a bot library? In fact, why are a third of RPA pilots just left hanging with no result? Yes, people, it's

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Posted in: Robotic Process Automation

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It'll be a very windy city this September... so don't miss the flagship HfS Digital OneOffice Summit

June 14, 2017 | Phil Fersht

The windy city will get extremely blustery this September 19-21, when HfS stages the inaugural FORA Council session, immediately followed by our annual HfS Summit "The Digital OneOffice: Redefining How We Get Work Done"

Friends,

Someone just described going to an HfS event as the whole industry being bludgeoned with a blunt instrument... how dare they? Yes, friends, it's nearing the time for the next, immense iteration of that HfS summit, where we're cementing together the biggest, boldest and

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Posted in: Digital OneOffice

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The Robotic Process Automation market will reach $443 million this year

June 10, 2017 | Phil FershtJamie Snowdon

Have we ever got so excited about a market that isn't even yet past the half-billion dollar spend level? Are we getting over excited about solutions because of their potential before they are fully tried and tested in reality?  Let's get to the realities of RPA by examining the size and five-year forecast for software and related services expenditure:

The global market for RPA Software and Services reached $271 million in 2016 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 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

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Posted in: Cognitive ComputingRobotic Process Automation

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Welcome back to the analyst community, Saurabh Gupta

June 01, 2017 | Phil Fersht

I am proud to announce we've unveiled a very exciting analyst talent to lead our global research team, based in Chicago US, as our Chief Strategy Officer (see bio).

Saurabh Gupta worked with me at Everest over ten years ago where I helped train him up to help lead the firm’s BPO research team. After a distinguished career at Everest, where he earned a very strong reputation as a highly focused and respected analyst in the areas of BPO, banking, F&A, procurement, analytics and the underlying technology platforms, he went onto the buyside with AbbVie (the spin off shared services for Abbott Labs), where he helped craft the firm’s BPO and shared services strategy, working across various service lines and service provider relationships. He then had a spell with Genpact, where he has been instrumental helping them devise and shape the firm’s CFO service offerings and digital strategy. 

Saurabh has long eyed a return to the analyst fold and coming onboard HfS is the ultimate challenge for him, where he'll be leading our global research team and working with all of us to write about real buyer experiences and mapping where enterprises are on their Digital OneOffice journeys, how fast they need to move and what is preventing them getting to their ideal states.  I caught up with Saurabh this week to share more with you all what you can expect...

Phil Fersht, CEO and Chief Analyst, HfS Research: Saurabh - it's just terrific to be working with you again after a decade since we were at Everest together!  What took you back to the research industry after your recent years on the buyer and supplier side of services life?

Saurabh Gupta, Chief Strategy Officer, HfS Research: Thanks Phil. I am thrilled to be here. I am passionate about business research and being an analyst was the best thing that happened to

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Posted in: Outsourcing Heros

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