Monthly Archives: Nov 2018

The cocktail of SAP (ERP), Qualtrics (UX), and Contextor (RPA): Tastes like the OneOffice, but lacks one critical ingredient - RPA experience

November 21, 2018 | Phil FershtSaurabh GuptaElena Christopher

The software giant and world’s premier system of record, SAP, was on an acquisition spree over the last two weeks. First it spent $8billion on the acquisition of Qualtrics, a User Experience (UX) software that helps to collect and analyze data for market research, customer satisfaction and loyalty, product and concept testing, employee evaluations and website feedback. And then it acquired Contextor, a small little-known France-based Robotic Process Automation (RPA) product to augment SAP Leonardo’s intelligent technologies portfolio.

It appears that SAP is starting to mix a heady cocktail that enables its systems of record with the triple-A trifecta (AI, Analytics, and RPA) and embedded UX capabilities. Tastes like the OneOffice?  

Well, definitely for SAP mighty front office portfolio, but the huge disparity between the $8bn splurged on Qualtric and - whatever negligible sum was invested in Contextor - does not excite us that SAP is in anyway deadly serious about dominating the back-to-middle office automation space, which is critical to knit together disparate processes and systems. 

What is the Digital OneOffice and why it matters?

The Digital OneOffice is where teams function autonomously across front, middle and back office functions to promote broader processes with real-time data flows that support rapid decision making. It’s where front, middle and back offices will cease to exist, as they will be, simply, OneOffice:

 The HFS Digital OneOffice

Click to Enlarge

The OneOffice Framework is a guide to align the entire organization to driving a customer experience (CX) that gives them a competitive edge.  This means breaking down the siloes between front, middle and back office so that information and data flows freely and enterprises are able to predict and cater to customer needs.  OneOffice is realized when the needs and experiences of the customer are front and center to the entirety of business operations.  This means enabling automated data flows between the customer interface, your customer-facing staff and operations staff in order to create common goals and outcomes across the organization. Hence the addition of Qualtrics has terrific potential to bridge critical gaps between customers and employees, and effective RPA provides a real gateway to digitize processes and create a gateway to broader AI possibilities

Qualtrics and Contextor  are attempts to plug SAP’s solution gaps in the OneOffice vision

The reason behind the success of Qualtrics (and the driver for the 20X PSR!) is that Qualtrics-driven UX is not about just a fancy UI. Qualtrics enables SAP to offer solutions that combine front and back-office data. SAP is already a leader in managing organizational transactional data but lacked the capability to understand its implications on customer satisfaction, loyalty, and experience. With Qualtrics this is now a distinct possibility.

Contextor’s addition is focused on providing the missing ‘A’ in SAP’s Triple-A Trifecta capabilities. HFS believes the “Holy Trinity” of service delivery is at the intersection of the Automation, Analytics, and AI or the Triple-A Trifecta. SAP Leonardo already has a portfolio of technologies across Machine Learning, Analytics, IoT and blockchain but lacked the basic automation capabilities that Contextor now provides. Intelligent RPA capabilities are scheduled for inclusion into SAP S/4HANA in the first half of 2019, with other SAP applications to follow.

SAP will still need to justify why embedded capabilities will be better than standalone products

Automation and UX are hot areas with multiple robust Commercially-Off-The-Shelf (COTS) solutions that can integrate well with SAP environments. SAP itself is heavily invested (and rightly so) in building its own ecosystem with the SAP App Center where third-party solution providers can offer solutions that work seamlessly with SAP environments. In today’s world, it is unclear how much more an embedded functionality is worth compared to an ecosystem approach. SAP will need to justify why and how the acquired capabilities will offer a unique or better value proposition than standalone products. 

Qualtrics brings to the table a differentiated value proposition, especially when combined with SAP’s existing operational data and transaction processing market share. But only in theory. Integrated value proposition demonstrated through tangible use cases will be the real proof. The cultural mismatch between SAP and Qualtrics (as pointed out by Dennis Howlett here) will make it even tougher.  

When it comes to RPA, the software giants have been largely MIA. Before SAP’s Contextor acquisition, Pega is potentially the only other software player that recognized the power of RPA with its acquisition of Openspan RPA in 2016. It initially embedded bots into its BPM suite of applications and now gives away unlimited robots with its Pega Platform.

Contextor itself is a very small player in the fast-growing RPA product market dominated by Automation Anywhere, Blue Prism, and UiPath. Power users of Contextor shared with HFS that it is a complex-to-use tool, requires coding experience, and has limited AI hooks. SAP opted not to acquire any of the big three RPA players (perish the thought at their hefty price tags!) and will possibly get basic RPA capabilities with Contextor. However, it will still need to convince clients about the advantages of using embedded RPA capabilities because the stand-alone RPA products can offer the same (perhaps even better). What’s so compelling about Contextor-driven SAP that requires a course correction from clients who are already on their intelligent automation journey? As with Pega, perhaps the answer lies in bundles bots as give aways.

The other open question around Contextor is how SAP decides to position it internally and with clients. Consider the system integration space. APIs are real-time and resilient but RPA-driven integrations are brittle. IT purists love APIs but businesses don’t really care as long as it works. In reality, enterprises need both options as an “API-everything” world is impractical or at least not terribly timely. But will SAP look at RPA as a viable long-term option for automation or just as a temporary “duct-tape” till it gets the more robust (and expensive) functionality developed within the core application?

Bottom-line: SAP’s acquisitions of Qualtrics and Contextor demonstrate that UX is not limited to the front office, but we question the ability to drive OneOffice integration with a paltry investment in automation 

Qualtrics enables the integration of back-office and front-office data while Contextor will enable automation from front to back within the SAP environment and outside. This is the HFS OneOffice vision where organizational silos start to converge to focus on real-time customer and employee engagement.   

However, the deep process requirements on the client side that are critical to find success with RPA, coupled with strong services partnerships needed to provide the technical expertise, reskilling and change management do not bode well for SAP to find much (if any) success with RPA.  SAP has not proven particularly successful supporting complex process transformation needs of clients outside of the traditional SAP product templates (its BPO alignment division was quietly wound down several years ago) and the services partnerships that have been developed by Automation Anywhere, Blue Prism and UIPath are lightyears ahead of anything Contextor has forged (and some leading consultancies in the space had never even heard of the French firm).  While it is understandable that SAP did not want to invest multiple-billions in a leading RPA solution, we believe it could have targeted a more established middle tier solution, such as Redwood (which is specialized with the SAP template), Softomotive, Kofax or Kryon.  

While it is easy to criticize the Contextor investment as lacking real teeth, at least is it a much larger step forward to bring "big iron" ERP into the robotic process automation age, when you compare it with the complete void of RPA investments yet to be seen from the likes of the SaaS giants Oracle, Salesforce, Workday and the AI platform movers Microsoft, Amazon, IBM and Alibaba.  Now what to expect to see next as this industry stumbles into consolidation....

Posted in: Digital OneOfficeRobotic Process AutomationIntelligent Automation

1

1 Comments

It's never too late for Tech Humanist Kate

November 17, 2018 | Phil Fersht

The final countdown is on for the end-of-year reality check leadership extravaganza, with HFS' New York FORA Summit where we measure the genuine pace at which we're Hurtling into the Hyper-Connected Economy. 

We've been living through a journey of change agents promising to shake the very foundations of how we do business, how we engage with our customers, our partners and our employees; how we structure our business operations; how we build and source our IT backbones; how we balance our portfolios of legacy systems with super-connected platforms; how we explore the potpourri of analytics, automation and AI solutions to make us smart enough to keep our businesses ahead of the competition, where the front office can anticipate the needs of our customers, with operations geared and finely-tuned to deliver on those needs.

So time to meet one of our keynote speakers, Kate O'Neill, who will be unveiling her new book, "Tech Humanist" during her speech "How to Be Successful with Human-Centric Data and Technology"...

Phil Fersht, CEO and Chief Analyst, HFS Research: Kate, really happy to have you speak at FORA New York this December. So, can you tell us about what you will cover in your keynote, and maybe a little bit about the new book? What is really driving your thinking these days, in terms of where we’re going, and what’s changed in the last couple of years?

Kate O'Neill: Phil, thanks for having me, I am really excited about speaking at the Summit so I can share some insights from my new book, Tech Humanist, and when I last spoke last time I had just published my earlier work, Pixels in Place.  Then it was all about integrated, connected, smart experiences, and the data that’s shared between the physical layer and the digital layer.  I talked about how humans are the connective tissue between those layers of the world, and how that implies that we need to be respectful of that data, and protective of it, and mindful about the kinds of experiences that we’re creating when we use human data to make our businesses more successful, which we certainly can do, and there’s a lot of opportunity for

Read More »

Posted in: Digital OneOfficeIntelligent Automation

0

0 Comments

Happy 100 years of Independence for the Third Polish Republic... Trzecia Rzeczpospolita

November 11, 2018 | Phil Fersht

Posted in: Sourcing Locations

0

0 Comments

Brexit will rip out the underbelly from the British economy - and we'll likely never recover

November 07, 2018 | Phil FershtJamie SnowdonOllie O’Donoghue

Click to Enlarge

However which way you analyze all the economic indicators, and whatever your opinion may be regarding Britain's relationship with the European Union (EU), removing the movement of EU labour into the UK will create a perilous shortage of labour, particularly for low-to-mid skilled professions.  If anything, removing worker base at the lower end of the skills spectrum is worse than at the high-end, for the simple reason it's much harder to entice people into jobs that may be low-paid, unattractive and - in many cases - require hard graft for low wages.  How are our hotels and restaurants going to find 120,000 staff willing to work for the minimum wage; our food factories to renew a third of their workforces to prepare our food; our cleaning firms going to backfill 132,000 people willing to mop and scrub for a living? The answer is sadly obvious - many of our industries will be under real threat of implosion because they simply cannot access the people they need to keep them functioning.

And without a thriving working class, the economy will suffer due to less money being spent, our businesses will suffer because of rising hotel costs, our entire society will suffer because of rising food costs, our commercial and domestic real estate markets will struggle to complete projects.  While professions like education and hi-tech can source talent from elsewhere (and are less reliant on EU people imports) it's those industries that form the underbelly of the economy which will really suffer.  Forget "trickle down economics" Brexit will cause a "trickle up" effect that will be hazardous for the British economy and its mid-long term sustainability.  In the short-term, many EU workers in the UK should be able to stay on, but the reliable conveyor belt of workers prepared to roll their sleeves up and support our entire economic underbelly will be permanently halted, and the availability of workers will get progressively worse - and much more expensive with this shrinking supply of people.

So, without further ado, let's dive into the fuller implications of this seemingly masochistic self-flagellation known as "Brexit"... 

Nice try Theresa, but even your dancing can’t make us forget about the increasingly no-win Brexit scenario 

For our fellow Britons, these past few weeks have been a refreshing break from the normal Brexit debates as we became distracted instead by our premier literally dancing for trade agreements. Trade agreements that, even for the most dismally poor mathematicians, don’t stack up when compared to the one we’ll soon be leaving.

 

Brexit has been a topic of heated debate for years now - and I'm sure we all have that friend or relative you daren't mention Brexit in front of or risk a lecture based on unfounded inferences and sketchy sources. In many ways, it's these long-winded and often inebriated debates that are the problem - we're close to the day we sever ties with Europe and reclaim some sort of democratic freedom that only a nation with several unelected heads of state can find any ironic sense in. And yet we're no closer to understanding what Brexit means - even if we had a clear picture of how awful it will be at least that's something we can prepare for. Instead of this mind-numbingly irritating narrative from British politicians of 'Don't worry, it'll all work out in the end.' Well, unfortunately, we're not an eight-year-old child looking for reassurance from our

Read More »

Posted in: Policy and Regulations

5

1 Comments

Intelligent Automation is not about technology, it's about business

November 03, 2018 | Phil Fersht

Am excited to have HFS' Saurabh Gupta lead our session on de-mystifying Blockchain at our December NY Summit... but let's put this all into context and learn about the Hyper-Connected economy and the need to manage these merging technologies in a business context, where integrating them at scale is really the same of the game.

Posted in: Digital OneOfficeIntelligent Automation

0

0 Comments

A last word on #fakenews and the need to create our own original concepts...

November 03, 2018 | Phil Fersht

At HFS, we have been increasingly concerned about the plethora of business models and articles bombarding us on social media, media websites, research and consulting firms' websites, many of which are seemingly replicating similar terminologies and concepts.  And this trend seems to be worsening. For example, we highlighted the recent direct usage of an HFS headline to drive traffic to a well-known media website. Just blatant! 

We also have been observing the dizzying array of 'intelligent automation maturity models', especially being the first analyst to develop them, starting in 2014, refining in 2016, 2017 and this year.  We recently had our attention drawn  to the "Four Stages of Intelligent Automation Maturity" by Avasant, that initially gave us cause for concern, but when we communicated with them this week, they shared a presentation recording from earlier this year describing their model in much more detail, assuring us their "phases to maturity" are actually quite different from the HFS viewpoint. While there are always many shared common best practices when investing in a solution such as RPA, Avasant convinced us they had developed their own methodology and approach to automation maturity. We apologize to Avasant for making this assertion that it closely resembles the 2018 HFS Intelligent Automation Maturity Model. You can read a really decent interview with CEO Kevin Parikh here, espousing his views on the future of the consulting business.

The Bottom-line: We have to focus on our own concepts and ideas and avoid the regurgitation game

In general it is getting harder and harder to differentiate experts across the industry as many are very adept at hiring marketing resources to create whatever spin they feel they need to win business, while others simply extract another firm's creations as their own.  With the daily deluge of terminology being thrown at us, we just need to try harder than ever to provide our own original thought leadership and insight, as any smart enterprise today sees straight through the glossy veneer.

Posted in: Confusing Outsourcing InformationIntelligent Automation

0

0 Comments