Monthly Archives: Apr 2019

Many “Glass Millennials” are polluting the workplace and the reputations of their hardworking millennial peers: we can't afford to ignore this

April 22, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

 

The emerging batch of “Glass Millennials” - a large portion of young professionals born in the early 90s - is proving to be a unique challenge in the workplace to the age-old work ethic of having a backbone, working hard and making a workplace work for you.  This new batch is taking all of the stereotypes of millennials to a whole new extreme.

Forget Glassdoor, we need to vet the Glass Millennial

Many of the “older millennials” (born before 1985-90) are clearly a great mix of creative thinking with a desire to learn. And when this group of young, passionate and hardworking professionals get started, there really is no stopping them. But they’re being let down by this new batch of self-entitled kids who demand bloated paychecks and would never dream of going beyond the 9.00-5.00pm. 

In fact, having discussed these issues at length with many other employers, we believe many companies could find themselves in real trouble if they do not vet their Millennial hires effectively. Forget “Glassdoor”, if we do not have a good “Glass Millennial” detection process, we could end up making hiring decisions that could hurt many decent businesses.

Why these Glass Millennials can be so damaging to workplace culture and harmony

Glass Millennials are too arrogant to accept they also need to start at the bottom and work their way up, feel they should start on $80K (or equivalent) salaries and want to complain about literally everything.  It’s as if they’re looking for reasons to find fault in their environment because they’ve been taught if a situation doesn’t constantly make them feel warm and fuzzy in their quest for the Utopian work environment, they should just walk away.

These Glass Millennials have never been taught to make suggestions to help improve their work environments – they’ve only been taught to complain and behave like spoiled children when something doesn’t suit them.  They’ve  grown up wrapped in cotton wool and given prizes just for turning up.  When they get to the workforce they are surprised they can’t just do whatever they want and their mindset does not have the flexibility to figure out what do to so be successful, such as asking advice from experienced colleagues, investing time in training courses and putting in effort, patience and some grit to better themselves.

Oh and there is no career plan – it’s simply do what you want and if it doesn’t quite work for you, just quit and go to the next desperate employer for your services – who mistakenly thinks hiring “someone young” implies passion and enthusiasm.

And forget about respecting your elders, who needs experience these days anyway? In many cases, respect has just disappeared – that’s respect for senior colleagues, managers, clients, and even themselves. To them,  today’s businesses and institutions are just so messed up they couldn’t possibly deserve a modicum of appreciation for the fact that some people worked really hard to create the workplaces we often take for granted today.

They’ve been promised inflated paychecks, immediate promotions, and Utopian office spaces by leadership consultants and overly-optimistic parents, so you can bet that’s what they expect when they walk into your office. 

Glass Millennials expect the Utopian work environment that suits them

Quite simply, this attitude of “this doesn’t quite suit me and make me all warm and fuzzy every day” is going to be a huge issue (if not already) to so many ambitious businesses. 

Newsflash: There is no perfect work environment and one needs to work at making where they are better. Unlike what this generation seems to have experienced at school and the coddling from their parents, real life doesn't give you a trophy for just showing up. 

Our society and education system is perpetuating these attitudes by telling an entire generation that everything in life should be perfectly fair, that they should be able to have everything they want, regardless of how hard they work or talented they are, and that no one needs to learn resilience or develop inner strength and confidence because why do so when one can have the right to be offended by everything instead?

Being "offended" is the new currency of the day

In candid conversations with business leaders, we’ve heard everything from the profound despair new starters have experienced when realizing they don’t get the corner office as soon as the walk in. To the inevitable tantrum that comes when after three months of doing nothing, they’re shown the door. “Nobody explained to me that I would be doing work!?!” they cry, citing fictitious unfair management practices, and libelous accusations at colleagues who weren’t even hired at the time. 

The reality is, an entire generation is being let down by a group of over-entitled sociopaths hell-bent on doing nothing productive, but instead eking out an existence where they turn everything into a badly funded soap opera. And I know you’ll all say ‘but every generation has its bag eggs’. Sure. But this generation has a larger volume of particularly rotten ones, ruining a batch that otherwise is keen and eager to learn. They may have a different set of values, but it doesn’t take much to align them with other generations and off they go.

Finding young millennials with potential and the right attitude is critical

 We need to focus on the portion that has real potential, that has the attitude, capability, and passion to really make a difference. By doing so we can reverse the narrative we’re seeing of all millennials being bad. Some are fantastic, others are dreadful – with very little in the middle. For previous generations, it was the wedge of decent enough people that kept the balance. They clocked in, did the job, and went home. Of course, there were high fliers and problem employees, but they were neutralized by the much larger portion of people who were getting by. But now we live in a world were capability and attitude are polarised – it’s now been more important than ever to hire the right people. Because hiring the wrong people could sink your business faster than a cheese grater in the bath. (never tried it? Trust me, they sink real quick.)

If we’re not careful, an entire generation is going to wake up one day and realize they could have worked to build what they were seeking in the companies they work in, or even in their own company, instead of wasting years jumping from job to job because something as basic as the office decor didn't suit them. We believe in work-life balance, having priorities, and deciding what factors to measure one's life on.

But the thought that work environments owe this to you is naive. One must create the balance they are looking for instead of accusing workplaces of not creating it for them. No one is going to tell you to take time off or spend time with your family. You must create the balance you seek. 

The Bottom-line:  If this is the new work attitude, then we are royally f***ed

We can only hope the proportion of Gen Zs (and whatever else is behind this batch) aren’t as lilly-livered and self-entitled as this lot.  However, considering the coddling culture just seems to have got more and more cotton-woolly over the last 20 years, our fear is it could get even worse. So here’s what we need to do going forward – we need to work together with the young professionals that are passionate, hardworking, and eager to learn. We need to ensure they get the opportunities they rightly deserve and give them the opportunity and flexibility to shape their work. To do this we need to evolve recruitment processes to more readily siphon off ‘glass millennials’ who in the space of just a few short years have shattered the reputation of an entire generation. Honestly, stop wasting your energy trying to coach and mentor them, save that for the ones that really want it. 

Already, employers are wising up to the threat posed by these glass millennials.  As an employer ourselves, nothing beats the fact that someone can come into an organization ready to make changes that benefit them and everyone around them. Rather than sit in the corner and do nothing but lament the lack of their ill-defined workplace utopia. The future workplace is made by the young professionals coming through the ranks now, ready for change and eager to drive it. Let’s help them leave the glass millennials behind.

Posted in: Sourcing Change Management

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

April 21, 2019 | Phil Fersht

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?

Firstly, 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. 

Secondly, our automation industry cares about making these solutions work, and this ridiculous noise about inflated fundingisn'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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RPA is still dead. We talked, you all listened... now smell the integrated automation roses

April 18, 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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RPA is dead. Long live Integrated Automation Platforms

April 15, 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, talent, organizational change, and leadership to get to the promise land. It requires the integration of the Triple-A Trifecta change agents in your toolbox and their application across the original trifecta of people, process, and technology. If you keep throwing technology at a business problem, you will have more technology rather than a solution.

Technology has overpowered the discussion today without adequate focus on people and process:

 

Source: HFS Research 2019

Integrated Automation is not a Product or a Service. It is a Product and a Service.

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. Strategic and collaborative relationships of the future will be formed by providers that can consult as a trustworthy advisor and execute as an “extension” of clients’ operations. Enterprises need partners to drive innovation, contribute investment, apply automation and new ideas, and focus on delivering business outcomes – and that requires a combination of services and software. An ecosystem approach with symbiotic relationships between service and product companies is a must-have ingredient for automation to succeed and truly be transformative. It is imminently clear that no one can be everything to everyone.

Adoption is not the measure of success for Integrated Automation. It is about Change Management.

Fifty-one percent of the highest performing enterprises see their cultures as holding them back in the digital transformation journey, while only 36% of the lowest performing enterprises identify culture as a problem to progress. Providers need to offer change management approaches that are agile, measurable, and iterative to be impactful. Scaling up digital initiatives and enabling the right governance models are also critical points. The ability to codify “business outcomes” in contractual agreements, pricing structures, and performance measures is also a vital element to drive change. While there is no nirvana around pricing, it needs to be implemented based on every client’s unique requirements and context. The flexibility to put skin in the game with innovative and non-linear commercial models is essential to drive real change.

Integrated Automation will not be effective with a functional approach. It requires an end-to-end “OneOffice” strategy.

Less than 12% of the enterprises we surveyed have an enterprise-wide approach to automation. This strong focus on task-level and process-level automation remind us that automation often takes place in functional silos, with parallel but unconnected initiatives. The ability to balance task-specific and process-specific pilots and production instances with broader enterprise mission and vision is certainly daunting, but it is precisely what needs to occur to enable scaled and successful automation programs.

The collaboration between business and IT is another crucial issue. While automation initiatives require IT involvement, the programs are generally impacting and enhancing business processes—which requires participation from business constituents who understand the functions in question. The ideal leadership mix, then, is a combination of IT and business. However, our data shows that just one-fifth of respondents have created integrated IT and business leadership teams to grapple with automation strategy and deployment.

Bottom Line: Integrated Automation utilizes the power of AND, not OR! 

We are lucky to live at a time where we have a multitude of established and emerging change agents at our disposal: global sourcing, design thinking, Robotic Transformation Software, AI, Analytics, IoT, blockchain among others. But, unfortunately, most of the discussions in the market end up becoming a comparative discussion versus integrative discussion – man versus machine, offshore versus automation, RPA versus AI, consulting versus execution, and so on. These change agents must work together rather than operate in silos to solve real business problems. The power of AND is much greater than OR and Integrated Automation is all about the power of AND. Thus, RPA is dead. Long live integrated automation!

Posted in: Cognitive ComputingRobotic Process AutomationIntelligent Automation

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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:

Click to Enlarge

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.

Click for detailed view

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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Is the Big 3 RPA stranglehold about to be challenged? AntWorks patiently times its move

March 03, 2019 | Phil FershtElena Christopher

RPA has passed its peaky hype and we're now staring into reality for the first time in 6 years. And it's a messy picture.... the market has largely bought into three software tools and tens of thousands of people have invested a significant amount of their time training themselves on them. 

However, beyond scripts and bots and dreams of digital workers scaling up rapidly to provide reams of value, most enterprises are fast coming to the realization that they need an actual process automation platform capability that ingests their data, visualizes it, machine learns it, contextualizes it and finally automates it.  Essentially, the whole lifecycle of data components needs to be integrated into a single platform in order to take maximum advantage out of automating processes through scripts, bots and APIs.

AntWorks comes out of the closet to make its integrated automation play, taking the fight to the Big 3

Fresh off a series A round of funding with SBI Investment Co in July 2018, AntWorks has come out of the 2019 gate ready to up their profile and expand their enterprise footprint for their brand of intelligent automation. And why not choose the lovely island of the Maldives to press home its vision for its Process Automation Platform that integrates data ingestion, visualization, machine vision and RPA...

Having tracked the product for several years, and also researching the lions share of early adopters of automation products, AntWorks' machine vision is an outstanding product, and Fractal math has significant advantages over Bayesian. Visiting with the core team just last week, having them show how it can extract text from images within images is something that can provide a huge edge in the market as users wise up to what they really need to integrate data. One of their use cases involves taking a picture of a coupon flyer to find out intel on what products are being promoted, special packaging, size, flavors, dates of promo etc.. They can tell you, for example, how many ounces are on a Pringles can in an image on an image on an image (label on a can in coupon on a page of coupons).

Yes, this really is slick stuff, and last year 350 users of automation products show how AntWorks is stacking up when it comes to embedded intelligence:

Click to Enlarge

Five things enterprises evaluating intelligent integrated automation platforms should know about AntWorks

While HFS has been tracking AntWorks since early 2017, this was its first "official" analyst briefing. We took away a variety of facts as well as future direction and strategy points. Here are the five things we learned that we consider relevant to enterprises evaluating intelligent automation tech and partners:

1) Its platform offers up integrated intelligent automation – AntWork’s ANTstein platform consists of modular components including “cognitive machine reading (CMR)” sort of a computer vision meets machine learning-based smart OCR, RPA , and a smart analytics components. While these are available piecemeal, they are designed to work together. The primary client entry point today is with its CMR module. So rather than adding AI to RPA, AntWorks adds RPA to AI. HFS created our Triple-A Trifecta framework (eg: RPA, AI, and smart analytics) to make the point that you can start anywhere with intelligent automation, but our research shows most firms start with RPA and then can struggle with scale. Clients that start with CMR are tackling unstructured data which can then help unlock greater functionality with RPA downstream. ANTstein offers a path to integration which can enable end-to-end work flows and the potential for the coveted scaling of IA. AntWorks is launching its new version of ANTstein, Square, imminently.

2) Its machine learning engine leverages fractal data science rather than neural – While the sciences are different, why it matters to enterprises is that you can train some business process algorithms faster as there are finite sets of patterns and outcomes in many business processes. Fractal science tends to work best with a finite set of outcomes, rather than infinite, where neural would be more appropriate.

3) Innate process and verticalization depth – AntWorks’ leadership team came from the BPO industry (eg: Infosys BPO, WNS, Capita, Mphasis BPO), where deep understanding of business processes is essential. This deep process knowledge in the areas being automated by enterprises today is largely lacking from most AI and RPA software companies. AntWorks is applying this process focus to develop domain-specific use cases for horizontals like finance and accounting and HR and more notably industry-specific use cases like title search in mortgage or claims processing in insurance. The service provider community has really been bridging the gap between intelligent automation software and domain knowledge to create end-to-end workflows. AntWorks’ domain use cases bridge its full stack and demonstrate the potential of integrated IA.  

4) RPA innovation – While AntWorks missed the first wave of RPA, it is working to offer RPA product improvements in areas clients are grappling with such as bot productivity to ensure its relevancy. Its forthcoming Square release of ANTstein is purported to enable dynamic reallocation of idle bots and multi-tenancy of multiple bots on one machine. One of their clients in attendance at the event indicated this would be a major resource saver.

5) Bot cloning – As many enterprises have already invested in one or more of the leading RPA software players, AntWorks needs a value proposition beyond follow the leader RPA. An interesting concept they are working on is “bot cloning” – essentially replicating existing bots and porting them over to their platform. Given its current focus on unlocking unstructured data for enterprises as their lead selling point, this may create a logical bridge to RPA as long as it works. As enterprises increasingly focus on outcomes rather than the enabling technology, this may create some conversion opportunities as enterprises look for ease of integration to enable end-to-end workflows.

Bottom line: AntWorks offers a path to integrated intelligent automation, provided enterprises embrace its full stack. One more large round of funding and it will be a real force 

Go global with its platform play. AntWorks, fuelled by funding and early client success, is making a major push to take its product to market globally. While its full stack platform offers enterprises a tangible path to integrated intelligent automation, the reality is that today they are best known for their cognitive machine reading capabilities. AntWorks needs to continue to focus on its domain expertise which has the greatest potential to showcase end-to-end workflows that work across its stack – essentially showing intelligent automation in action (the Triple-A Trifecta). Currently, there are a lot of piecemeal IA tools in the market that requires custom integration to tie them together to enable straight-through processing of automated workflows. As enterprises grow weary of having to continually piece together the components that enable intelligent automation, the focus on tools will become more about what delivers the best results and can scale. AntWorks’ investment in people and expanded geographic footprint will help take the message to a broader range of prospects outside its core client case in Asia Pacific. Additionally, the firm needs work on its global channel strategy. A solid network of partners, particularly strong service partners who understand the tech and value proposition, can help AntWorks reach a broader range of prospects. 

Secure more investment funds to fight for a limited supply of talent. What's needed next is a significant second round of funding, not dissimilar to those being ingested by UiPath, Automation Anywhere and more recently Blue Prism.  The sales team, under the experienced leadership of Bill Schrank, need added firepower, and AntWorks needs to prove its RPA story aggressively... how can they truly bring it all together and negate the need for enterprises to purchase expensive RPA licenses when ANTstein provides it all for them in a one-stop solution?  And finding the talent is tough as the Big 3 currently soak up any semi-decent professional with a pulse capable of understanding and communicating the value of integrated automation.

Combat "RPA fatigue" to re-energize a weary and frustrated market.  Too many enterprises have been oversold the same old story of no-code and the fact this is supposed to be "easy".  So Ash and his crew need to make the case that clients of AA, BP and Ui can jump ship without losing face.  In addition, weary service providers and advisors need to be convinced to put similar resources into AntWorks that they already have into the others.

Posted in: Analytics and Big DataRobotic Process AutomationIntelligent Automation

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We really do not have to be this boring!

February 27, 2019 | Phil Fersht

The future is so exciting, we need to focus on our disruptive talent to make it all happen... just like the Blue-footed Booby!

Posted in: Confusing Outsourcing Information

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NASSCOM 2019: Has the Indian IT industry become… boring?

February 23, 2019 | Phil Fersht

I just couldn’t resist the annual pilgrimage to Mumbai to experience the Indian IT elite’s gathering, in the case my concerns that the offshore-centric IT service delivery industry was getting complacent were misplaced.  Sadly, they were not.

It has been two years since the NASSCOM leadership forum of sell-side IT execs was held in Mumbai (after a pretty disastrous diversion in Hyderabad last year), so it was pretty obvious that attendance was clearly down, compared to two years’ ago.  Am sure numbers will be reported otherwise, but it was pretty easy to navigate the entire venue without having to resort to the traditional scrimmage position to hack through the usual sea of people.

My takeaways:

The atmosphere was “relaxed”.  Seriously.  The traditional urgency has somehow dissipated to this bizarre - almost chilled-out - mindset from most of the people there.  “Aren’t you guys worried about Brexit or this Chinese/US trade war escalating.  Surely that could really hurt Indian service delivery?”.  Most people just shrugged.  No-one seems to care that much anymore… everything is just fine, and, I hate to say it…. BORING.

Digital as a term is done.  Yes, even in India.  After the last few years of digital overdosing, the only time the word is now uttered is when an Indian provider exec explains that “half their revenues are now digital”. 

“AI” is the new Digital.  And absolutely no one can define it.  Great.  Hurry up Quantum…

Service providers fell into two camps:  inspiring and downright awful.  Yes, we literally hammered our way through 30 meetings and I can honestly report that about a third were truly inspired conversations… the other two-thirds were dull as dishwater.  Some came to us with a precise vision and focus, others literally had nothing to say beyond “we’re doing OK”. There was nothing in between.

There is a depressing lack of service delivery disruption.  All the execs wanted to pitch was their amazing new pricing models that incorporated some RPA and some type of “outcome” pricing.  Few were pushing their ability to disrupt actual service delivery with a next-generation talent development strategy. Few were talking about how they were helping clients with innovative role development, with change management programs, with co-investment plans, with the re-platforming of IT for their clients.  And no-one was talking about investments in cognitive assistants and blockchain… it was all about dumb RPA bots and new-fangled pricing models that helped them win deals. Who is advising these people?  Don’t they – at least - talk to decent analysts anymore to tune up their messages?

Where were the CEOs?  We got visits from Salil Parekh (Infosys), C.P. Gurnani (Tech Mahindra) and mid-cap CEOs Keshav Murugesh (WNS) and Nitin Rakesh (Mphasis).  In addition, we were treated to Accenture’s CTO Paul Daugherty, which was welcome… and Capgemini’s Thierry Delaporte, co-COO (and potentially the next CEO) did manage to make the trip. However… Cognizant, HCL, Genpact and TCS all failed to serve up any C-Suite royalty. 

Isn’t this supposed to be India’s premier IT event?  And what about IBM and DXC, two of the largest IT employers in the country?  I don’t think a single leadership soul from those giants made the effort.  Not to mention Deloitte, EY, PwC… all huge beneficiaries of Indian IT talent.  Where were they?

Where were the RPA dignitaries?  Considering RPA was pretty much the most discussed topic this week, apart from AntWorks co-founder Govind Sandhu and a rumored sighting of Automation Anywhere’s Mihir Shukla, they all gave this conference a wide berth.  Considering the Indian IT service provider channel probably represents the largest growth opportunity for the RPAs, this was a huge miss from them.  And from NASSCOM for not inviting them along.

What happened to the analysts?  Aside from single individuals from Gartner and Forrester, only a handful of lower tiers analysts were seen parked in the meeting lounge desperately trying to pitch their wares to Indian marketing folks (pretending to be excited by them). Even the HFS trends session was thrust into an obscure breakout room that ended up with wall-to-wall standing and disappointed people being turned away.  When I mentioned to some NASSCOM folks that it “may have been wiser to stick us on the main stage”, the response was “We’re truly sorry, but we have to be careful not to upset the other analysts”.  As if anyone would have cared… there were hardly any there in any case… and when did the feisty Indian IT monster of yesterday worry about upsetting a few people?

Thank god for Rishad!  The one truly bright shining light was the effervescent Rishad Premji gracing the halls, bouncing around on stage, talking to everyone he could, even having beers with his buddies in the hotel bar.  Someone with a vision, oodles of passion… saving the day for a tired old show that badly needs a facelift.  I must apologize to my friends at Wipro, but can you just let this guy run for PM?

The Bottom-line: It’s time to change the Indian IT record… or this industry will be disrupted by… something else

I can recall all the way back to my first NASSCOM invitation in 2002… this was THE event of the year, back then.  Anyone in IT services who meant anything just had to be there. This thing literally used to be Davos for global IT.  Now it appears to be descending into a microcosm of an Indian IT industry bordered on complacency… content to make quarterly numbers and little else. 

Having spent time, in recent months, at industry events in the US and emerging European locations, something is going wrong in India. Is Indian IT losing its luster?  Has it settled for what is has… losing its ambition to keep disrupting the world of technology, like it did so magnificently between 1995 and 2015?  Will we see IT services firms headquartered outside of India creating the next big shift, leveraging more talent from emerging locations such as Ukraine, Poland, Russia, South America and China… and lessening their reliance on India? 

Posted in: IT Outsourcing / IT ServicesOutsourcing Events

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Everything you ever needed to know about Brexit but never dared to ask...

February 22, 2019 | Phil Fersht

Posted in: Policy and Regulations

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Bathgate's Blue Prism: Delivering RPA in a very British way

February 16, 2019 | Phil Fersht

Bathgate.  Alastair Bathgate... Unshaken and stirring the pot, but doing it his way

Anyone who's known Blue Prism CEO and Co-Founder Alastair Bathgate over the years has seen a marked change in his executive presence, especially since the IPO two years ago.  While he still insists on driving his Volvo SUV, while his buddies are prancing around in fancy Aston Martins and Bentleys, he is a more assured and confident individual than the chap I first met seven years ago, when we first alerted the world to RPA.  Yes, he still has the same honest style and just tells you what he thinks, but there’s a certaswagger about him now – he sees the future of his firm and is hell-bent on taking it there.  And yes, if only he could use his wine pricing app for RPA, all his problems would be solved =)

In short, it's been a mildly frustrating couple of years for RPA’s early mover and market maker, Blue Prism… the firm was the first (and still only the first) pureplay RPA firm to go public, with every dollar spent being visible,  all staff moves closely scrutinized, and a CEO who’s had to divide his time between board meetings and investor days instead of harassing the conference circuit as aggressively as his rivals.

Meanwhile, while some of his competitors have been in stealth mode, raising all sorts of private investment and offering licensing models that appear (on the surface) a lot cheaper, while selling the “This is easy, this is no/low code, we can train you in weeks and get you a nice certificate to share with your friends on LinkedIn”.  This is what I personally detest about the software business… anyone can sell dreams, confuse executives too scared to ask critical questions like “how exactly does this work again?” especially when you have the lovely term “robotics” to excite greedy CFOs and CEOs eager to find new ways to increase margins.

'Refusing to get carried away' may have hurt Blue Prism in the short-term

Cutting to the chase, the Blue Prism team has stuck together for almost a couple of decades and has stayed true to its very British style of keeping the discussion realistic, refusing to get too carried away with the hype and the fantastical stories gripping many starry-eyed executives eager to slap RPA success on their CVs... not unlike the SAP and Oracle roll-outs of the 90s and Workday and Salesforce escapades of the last decade. 

Now it’s all about stitching the wonderful skills of building scripts, macros, document processing and screen scrapes with the emerging excitement of Machine Learning, Natural Language Processing, Augmented Reality and Computer Vision.  Yes, folks, you thought the hype-train of the past 30 years was bad, the one we’re venturing into is going to drive many of us completely nuts. 

It’s been pretty hard for Alastair Bathgate not to get irritated by the challenge of his highly-visible firm taking pot-shots from other firms, playing on the excitement this market is generating, promising enterprise clients dreams that will likely turn into nightmares when they set their expectations to achieve outcomes their staff simply do not have the skills to achieve – with a hodge-podge of processes far too messed up to fix, simply by slapping new software components over the top. 

However, Blue Prism’s low-hype, pragmatic approach could pay attractive dividends as the hype-phase dissipates and fresh investments are made in re-thinking the whole RPA/AI model

While his firm may not have been quite as successful as UiPath in forging lucrative partnerships with professional services firms and lacks some of the terrific messaging and vision of Automation Anywhere… while having to tackle a publicly-listed firm persona and widespread (unjustified) confusion over its pricing model, you have to credit Alastair, Dave Moss, Pat Geary and Martin Flood for sticking to their knitting and focusing on what they know best – keeping the conversational balanced and realistic and investing in the sales and technical talent they believe they need to keep developing their product.

It went unnoticed to many that Blue Prism recently landed a $130m investment round.  What excites me about this investment is the firm will actually get the money over the next two years and we can see exactly where it is going… on its product-specific developers in Manchester and an exciting new group of research in London, where 25 crack AI thinkers will be working hard to take Blue Prism’s solution into the place it needs to go. The firm already has a diverse group of 250 salespeople... now it can focus on the development areas that hold the key to who will ultimately will this automation arms race.

Upping its RDA game and expanding its presence in Japan are immediate needs that it needs to deliver

In addition, the firm is working hard to fill the gaps in its current solutions… while it prides itself of the back office unattended automation, if has suffered at the hands of AA and UiPath when it comes to very RDA-centric (Robotic Desktop Automation) engagements (what we call “unattended watched RPA”). 

Plans to release (in version 6.5) document processing capabilities to support end-to-end processing of document workflows which also acts as an OCR system to classify documents, extract key-value pairs and encode verification steps into the digitization process, could well propel the firms back to the front of the market as the reality of delivery exceed these dreams of great visions. In addition, Blue Prism plans to deliver full Japanese and simplified Chinese language capabilities with this new version release… essential add-ons as it plays catch-up to UiPath in this region.

The Bottom-Line:  The real work starts now as RPA evolves to become a key component of the AI tool kit

The stark reality we’re currently facing is getting ahead of market confusion to forge genuine learning journeys for ourselves, our careers and our companies.  At our AI-enabling Operations roundtable last week in New York, we all agreed that AI is Nascent, New, Hard … but it is, most certainly, Inevitable.

The most important clarity that most organizations have gained over the last several months is that AI is not some monolithic thing or a singular technology.  Instead, we’ve come to understand AI as a toolkit, or “a bucket of stuff” that enterprises can use to make their operations more intelligent; building blocks that include various elements of foundational AI moving across a spectrum toward more packaged solutions. 

The one common denominator among the executives was that they were all determinedly seeking to evolve their experiences from RPA to join the dots to the next steps of achieving enterprise-wide automation and AI capability… essentially integrating the tools and hatching a real plan to get it done.  This is where the likes of Blue Prism, Automation Anywhere, UiPath, Pega, Kofax, and AntWorks need to head next; building on the RPA digitization to create real solutions that go far beyond scripts and bots… solutions that can help re-invent the underlying institutional processes that have held back firms for years.

Posted in: Cognitive ComputingRobotic Process AutomationIntelligent Automation

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Accenture, IBM, EY, KPMG and Cognizant lead the digital change imperative

February 11, 2019 | Phil FershtSaurabh GuptaMadhuparna Banerjee

Let's get to the point: most of the past five years have borne witness to our industry postulate on the why and what of digital (and many still do).  It's time to focus on the how.

Unlike the wild grandiose claims from most services and tech providers that everything they do, these days, is "Digital"... it is far, far more than simply investing in new technologies.  Digital is about embracing interactive technologies, mobile, social and analytics to drive new revenue and customer experiences, as well as harmonizing business silos to support these digital outcomes.

However, success in digital initiatives is much less about technology adoption... and much more about people and culture, and the ability to manage that change. Code errors can always be fixed, workflows stitched together, apps integrated... but taking enterprise teams through the whole volatile experience, helping their staff learn new techniques, creating an environment where an enterprise can keep evolving on its own accord, and not rely on armies of consultants until perpetuity, is how we evaluate the performance of today's ambitious service providers. 

With this evaluation objective in mind, HFS shortlisted and assessed 10 leading providers: Accenture, Capgemini, Cognizant, EY, Genpact, IBM, Infosys, KPMG, TCS, and Wipro across the following five dimensions of digital-change prowess:

1. Embracing emerging change agents;

2. Creating true partnerships;

3. Promoting the principles of OneOffice;

4. Enabling change management for digital labor;

5. Driving real business outcomes.

Click the table to view more detail

For a limited time, we are making our new report: "The Top 10 Digital Change Management Service Providers" completely free to HFS subscribers. (Click to download)

Posted in: Digital TransformationDigital OneOfficeSourcing Change Management

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Holding the automation cards... Meet Francis

February 04, 2019 | Phil Fersht

There aren't too many people who can boast to be one of the true pioneers of the emerging robotic process industry, or whatever we end up calling it, but one man who didn't need to recreate his resume in 2017 is Francis Carden, one of the original brains behind recreating desktop automation to become Robotic Desktop Automation (RDA) which is such a key component of the broader RPA offerings attracting so much noise and attention today.  And he now leads the whole robotics strategy for customer engagement and data orchestration giant Pega. 

Francis - a British Floridian these days - is never one to hold back, and when one cynic mercilessly described some of today's RPA rollouts as "lipstick on a pig" at our recent New York FORA event, he just had to take it one stage further to declare them as "lipstick on a pig's arse".  So without further ado, let's hear from the granddaddy of RDA himself...

Phil Fersht (CEO, HFS Research):  Francis - firstly, tell us about the OpenSpan business you co-founded and how this evolved to the acquisition by Pega?

Francis Carden (VP, Digital Automation and Robotics at Pegasystems): In 2004, a group of “tech head” advanced windows operating system engineers approached me about forming a company using an automation technology vastly different from anything proceeding it. It let companies rapidly automate, through the Graphical User Interfaces (GUI) of windows applications, any task or process that a normally would be done by a human on their desktop.

On first hearing of it, I had to laugh and said to myself, “It sounds like screen scraping.” I didn’t believe what they were proposing was even possible.  But I did a deeper investigation into the background of these engineers and the technology and found it both unique and incredible. So I bought in – and even invested a significant amount myself. Today, we label our RPA technology “Deep Robotics” given it is so different. 

In 2005 we started OpenSpan and over the next three years, as CEO, we convinced a consortium of Atlanta technology angels and then attracted four Tier 1 VC firms that what we had was something different. The customer base grew rapidly. Our patented technology started life as being called “Surface Integration” because it was so different from screen scrapers of the past (and current RPA). But we quickly settled on “Desktop Automation” (known today as RDA), and “Automation Broker” (known singularly today as RPA). We ended up implementing most of the world’s largest RPA projects over the next 10 years.

Then Pega acquired OpenSpan in 2016. Pega recognized our RPA approach was markedly different from any other RPA vendor. After we got talking, I realized our unique technology would be even stronger if it were part of something “bigger.”

What I mean by that is organizations on the digital transformation journey shouldn’t aspire to RPA as the end game. You really need to look at RPA as a short-term plug to fill the gaps on the road to get there. When you deploy RPA, you’re just masking the poor processes behind it. And when application UI changes, the bots are prone to break. It might be weird to hear me – an RPA vendor - say that. But it’s the truth.

And that’s where Pega’s digital process automation (DPA) software comes into play. Pega enables you to digitally architect those processes the right way, from the ground up. No more organizational silos, no more inefficiencies, no more needlessly manual processes … and really, no need for RPA to always be the first option. RPA gives you a digital automation jump start, and when it’s time to deploy DPA, those bots can be put out to pasture.

And the good news, at least for us, is that everyone is on a digital transformation (One office as HFS call it Phil) journey, and it really never ends. RPA and DPA are the perfect one-two punch. So the tie up and combined value prop with Pega was, and has been, an ideal match.

You've been the undeclared granddaddy of RDA, so what is the key "difference" between RDA and RPA... unattended and attended... etc?

Imagine if every compiled windows application ever built allowed itself to be automated from within its own code, robustly and in real-time. You wouldn’t need any RPA, right? However, very few apps running on windows are easily automatable at the UI layer – at least, without resorting to screen scraping techniques like MSAA, UI automation and OCR. 

In 2005, we patented a more sophisticated approach to UI automations – a “plug-in” like architecture that enabled any compiled windows application and all its objects to be non-invasively automatable in a single architecture. This “deep robotics” automation occurs inside the windows layer, inside the memory of the machine, and runs as if the original developer of that application had natively built it.  This plug-in like approach automates at the application’s original speed (10x to 100x faster than scraping), highly robustly, and far less susceptible to application UI changes. More importantly, and hence the dual name “attended RPA,” it even allows the desktop worker to use their machine, keyboard, and mouse while the automations are running. This is something unheard for old school scrapers and other RPA products. It is this pure form of RPA that also enables it to be used as RDA, giving every worker their own personal robot or “co-bot” to automate from one percent to 90 percent of their work. Agile RPA. And only then, after you’ve rolled out RDA, should you look at those same processes ready for full automation with RPA (unattended as opposed to attended) operations.

Before the Pega acquisition and continuing since, we have 100s of 1000s of bots deployed across some of the world’s largest enterprises in all industries. By the way Phil, being a Grand-daddy makes me feel old, but I did calculate that I’ve been doing automation of the UI for 20 million minutes of my life!

So what happens next as RPA (assume RPA includes RDA here) moves from "tinkering" to broader enterprise adoption - where do you see clients finding the most value, and how can they scale their people and tech platforms to accommodate?

Good question, Phil, and the key word to the question is “tinkering’ – which is how most RPA vendors excuse themselves, after 10 years of trying, for not getting many customers to really scale or still stuck in pilot stages.  

It is hard to believe, looking at the crazy RPA vendor valuations today, but yes, most RPA projects are tiny compared to scope of the company’s using them. RPA is not new, so the real question enterprises need to ask is, “What’s stopping this large-scale adoption across the globe, and why do RPA vendors keep insisting it’s because it’s new” 

Attended RPA (RDA) scales -- that’s a fact. It automates all the easy stuff in an agile way. But RPA unattended constantly struggles with trying to automate everything, both the easy and the hard stuff. Putting RPA band-aids on top of old and tired processes is just wrong for the long term. As Gartner says, “RPA is a tax on legacy,” but businesses are often so enamored by the hype.

But the thing is, RPA will indeed scale if it’s part of something bigger. RPA is tactical to the extreme. Digital transformation is strategic. What happens though if you combine the two? This is where software robotics shines. Using RPA and RDA to plug gaps that currently prevent digital transformation allows business and IT to align to solve the real problems. This gets you real and rapid ROI from RPA out of the gate, but equally, it encourages planning to then “fire” the robots as fast as you deploy them. Not something you’ll hear other RPA vendors promote Phil. With robotic automation capabilities embedded and fully integrated into the heart of Pega’s DPA, we are seeing enterprises really changing the way they compete in a race to become them most digital company in their market(s). Analog companies, using tactical RPA only as the glue, or those not buying into your one-office analogy, will simply not survive.

Francis, we're seeing some tentative moves from "big iron" ERP vendors such as SAP into the process automation space, but do they really want to delve into this world, or are they merely ticking the "we have an RPA module" box?

Like I said, if all new applications were built to be truly digital and open, then there is no need for RPA at all. But we’re living in the real world here. While we wait for that to happen, the real “transformation” vendors selling the digital dream need to be able to use tactical technologies like RPA to help their customers plug the (hopefully) short term gaps. This gives customers quick relief where they are strangled by their legacy systems with no other integration capability. If a vendor doesn’t have this kind of automation, this sets the customers up for failure – they need to automate now to compete, not six or 12 months from now when your big overhaul project is finally done.

There are now 30+ RPA vendors, but I think the bubble will burst on these companies riding the hype wave. Most of them use many of the same old scraping technologies, and none of them have a unified DPA play to help companies for the long term. I’m not sure how long these RPA companies will be able stand on their own. Consider that Pega now includes bots as a standard capability of our DPA platform. We’ll give you all the bundled bots you need as part of your DPA strategy. So yes, we’ll likely see more consolidation in this market.

And how do you see the "blending" if classical RPA with some of these newer AI products on the market?  It feels to me that RPA has really evolved from the process/operations side of the business, while AI is some magical vision being pushed hard by IT, but lacks in real business applications?  What is real versus fantasy in your view?

This is the biggest myth of RPA. The idea that AI will help accelerate getting RPA to scale. It’s a red-herring perpetuated only by those in the RPA industry. No bias there then!! I concur with you Phil that AI is central to becoming a truly digital company. However, the idea of using AI with RPAdoesn’t fly – at least not right now. AI must live central to anything an enterprise does, everywhere. AI needs data, and LOTS of it. But very little of that will come because of RPA.

In order for AI to be really valuable, it needs data from as many systems as possible as well as data feeds from interactions with as many customers as possible, in real-time or extremely fast. Only then can you use AI start to predict what customers are going to do and/or create models that make the best decision for each individual customer. RPA would likely touch less than 1 percent of 1 percent of that data, so if anything, the RPA world is embarrassing themselves by trying to join these two tactical vs. highly strategic dots.

Don’t get me wrong, AI can create work for RPA bots, and maybe some RPA feeds some data into AI, but that doesn’t make RPA Intelligent. At the heart of AI is a digital company with data feeds from every source feeding into it. The DPA (one-office) movement is joining real transformation technologies together, acting as one, with AI at the center. The vendors that have DPA are the ones delivering IT and business on the promises of the past – a real digital company – and envy of their peers!

Thanks for the insights, Francis... we'll be watching Pega closely in this space this year as the market finds its sea-legs... and some more attractive lipstick!

Posted in: Digital OneOfficeRobotic Process Automation

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(Weekend rant) Levin: a fading symbol of the legacy analyst industry? Or a hero helping edge those dots up the MQ for misunderstood vendors?

February 02, 2019 | Phil FershtOllie O’Donoghue

There’s nothing more jarring than an ex-Gartner analyst desperate to continue dining off a legacy analyst industry that is actually trying to change. And lo and behold, Just before the Christmas break, a blog emerged on LinkedIn with an enviably click-baity title ‘Is Gartner research quality under threat?’.  

Simon Levin, a Gartner Alum and owner of a boutique business “The Skills Connection” that helps tech vendors lobby their way through the Gartner and Forrester MQ and Wave processes, plies his trade on the fact he “knows” how to work his friends at Gartner, to help his vendor clients get their dots edged in a more positive direction for the firm.  And why not?  If I was a CMO, and lobbing Simon some moolah can help get some sort of leg-up in the process, I’d probably give him a shot.  And however you performed, there is no doubt Simon will claim it would have been worse without him.  It’s like that hair product “Rogain” that claims to slow down hair-loss… you’d never really know if it actually helped unless you went completely bald…

 Simon makes the case that now most his former Gartner buddies he worked with in the 90’s are being quietly “retired” and replaced with a new breed of youthful analysts, and their

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Time to tune in to Tapati!

January 25, 2019 | Phil Fersht

It's not everyday you can find a prolific industry expert, living and breathing AI and IT services, who wants to return to the analyst industry to make her mark.  So when a former Gartner legend - and one of the brains behind the market development of Wipro Holmes - was eyeing a return to the analyst fold, we didn't need too much encouragement when Tapati Bandopadhyay came calling...

Phil Fersht (CEO, HFS Research): Welcome Tapati! Can you share a little about your background and why you have chosen research and strategy as your career path?

Tapati Bandopadhyay (VP Research, HFS Research): First of all, thanks for giving me this opportunity Phil, to get back to my favorite world of analysts and research, in a firm that can make any enthusiastic 40+ feel like a 20 something again!

I have been a nerd all my life, and very proudly so. I wrote my first year PhD exams when my girls were 2 and 1-year old and I used to study for the exams from 12 to 4 at night and loved every moment of it. Even now, I cannot get sleep if I don’t read at least 20 pages of something completely new, something to anticipate and to be excited about when I wake up the next morning!

In last ten years I have probably taken the Strength-Finder 2.0 test at least three times, and each time my top two strengths remained exactly the same: Futuristic and Analytical. I think I am destined to be a research analyst and strategist! The upside of it has two key aspects: 1- analysts are future-makers, if we don’t push the real to the imaginary and back, the art of the possible is not likely to transform into the science of the real anytime soon; and 2- in addition to being future-proof and creatively bot-proof, analysts’ jobs are also recession-proof, as we can apply our analytical skills to find cheaper ways to do things with same or even better quality.

What are the areas and topics that you’re focusing on in your analyst role with us?

AI is my area of strength and there’s so much going on currently that I think we in the research and analyst world have a great responsibility right now, to clear up the clutter and let people focus on what’s real vs. what’s plain hype. Never losing sight of the Big Picture is becoming increasingly difficult in this technology-blurred world of “AI-defined everything”. While I love all the math models and algorithms and routinely devour new research papers in areas like deep belief nets, XAI, NLG, or imagination augmented AI, ultimately we have to keep it simple and human-centric. Only then all this technology hullabaloo will start making real business sense.

AI and IoT are highly connected, especially with 5G becoming mainstream in 2020 and even 6G at the works to come in by 2025-2028. Therefore I will be quite actively tracking the IoT space, chasing Nicola Tesla’s 1926 dream of creating a world-wide human-machine combined brain, which will become real when we achieve the next level of HFS OneOffice- the hyperconnected intelligent enterprise.

Talking about Things, I will cover the manufacturing and industry 4.0 research agenda too. I have always loved machines- be it those mammoth hydraulic presses at the Tata Motors truck factory, or the precision drilling machines at GEC Marine Glasgow. Manufacturing is truly the parent industry where tangible economic value gets generated with the land-labour-capital inputs. Only, the labour is now the ‘phygital’ workforce- with smart machines augmenting our quality of work and productivity, while freeing us up from loads of hazardous or boring tasks. That’s where AI, IoT and industry 4.0 connect beautifully in my mind-map, creating a simulated digital twin of the physical machine-world.

What trends and developments are capturing your attention today in technology and business operations?

I take what Andrew Ng said about data being the new oil, to data becoming the new glue, the invisible ‘ether’, the collective grey matter of the world. In sync with what you envision about the next OneOffice becoming ubiquitous in a hyperconnected world, the data oligopolies that we all know to exist today will come crashing down. We have already seen this happening just as the entry barriers to AI algorithms went down with the cloud-based pay-as-you-go models, and the entry barriers to top talent got broken in an open world of millennials comfortable in crowdsourcing. Now, with machine learning itself becoming partially autonomous, with unsupervised learning in a limited way and then with AutoML, human learning will also have to undergo transformation, where enterprises will learn from each other’s data, intelligence, experiments, experience, and thrive in a fairly co-opetitive world of frenemies where ultimately mankind and the unsuspecting individual, wins.

Is the analyst industry much different now than when you were at Gartner a few years ago? What is changing in your opinion, Tapati?

I think the analysts in this agile, new-age, ‘open research’ side of the world, are far more than mere subject matter experts. We are bolder, actionable and direct, hands-on folks, been-there-done-that type, and I love it. We are also listening better, to build our perspectives from a 360 standpoint. Not just technology, not just business, but the ability to cover all aspects, keeping the end-customers at the centre. Because, whatever be the industry or technology, if the end-customer is not impacted, nothing else matters.

So I see three key changes: 1- the idea of open research and collective intelligence, given that even IBM and Microsoft have now become proponents of open models; 2- the cognitive agility- to think fast and slow as the situation demands, and 3- to be direct, actionable and relevant with a holistic perspective – keeping the end-customers at the centre of any value universe.

So, Tapati, what are you working on first for our clients?

I am planning to cover the practical aspects of applied enterprise AI, as I have experienced this freshly and first-hand and have learned a lot. I have some very strong views and counter-views, on how these AI algorithms and their applications will pan out in the immediate and intermediate future, and the subsequent to-do’s. We will have to stay ahead of the curve. Hence I plan to share these as predictions and actions kind of PoV’s. I will also be covering the IoT and industry 4.0 with our India team along with the global team.

And given I have the locational advantage of being based out of India- the services factory of the world, and especially in Bangalore- world’s no. 2 silicon valley, I will work with a lot of tech start-up’s and service providers on their AI and automation initiatives, and IoT and manufacturing vertical practices.

And, what do you do with your spare time (if you have any...)?

Oh, I have to try very hard to play the cognitive catch-up game with my three children - my teenage girls and our 3-year old German Shepherd – named after our most fav physicist Dr. Feynman, we most humbly accept the fact that he is the smartest in the family.

I love to read physics books and fictions by the likes of Archer and Grisham, but I get constantly rebuked by my girls on not reading enough. Therefore I always try the easier way of asking them questions and then listening to every word of wisdom that they have internalized, post reading the tough non-fictions.

I also love to paint and play Indian music on the piano. And I love to cook for our friends and family. So next time any of you are in Bangalore, you have to come prepared. It’s a statutory warning- there’s no getting away from my unique cuisine while you’re here!

Welcome to HfS, Tapati. Delighted you have chosen us as your analytical home and can't wait to see those first pieces of insight to hit the press =)

Tapati Bandopadhyay (pictured above) joins HFS research to lead our India research operations and expand coverage of AI and IT services.  You can read her bio here.

Posted in: None

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No-Deal Brexit isn't just a British problem: This could wipe $15 trillion off global markets

January 19, 2019 | Phil FershtJamie SnowdonOllie O’Donoghue

In 2008 Lehman Brothers nearly took down the global banking system... in 2017 Greece's debts were poised to destroy the European economy... today, we are staring at a stock market that gyrates up and down double-digit percentages in a single day, based on one awkward tariff tweet-up between Xi and Donald...

We're talking about the world's 5th largest economy going into immediate meltdown.  This is more than a UK-only debacle

So... who cares about the world's 5th largest economy potentially plummeting into a complete meltdown? Let's just have a good giggle at those idiotic British politicians hell-bent on destroying the country over a referendum staged 2.5 years ago on a topic no-one actually understands.  Yeah, let's not worry as they'll be screwed, and we can all make Brit-jokes at parties as those idiots run out of medical supplies and are forced to import frozen butterball turkeys pumped full of Ractopramine and several other GMOs... yum.

Here's the bad news - Lehman and Greece are small-time when you consider the potential damage a complete Brexit failure will cause, if - as it possible - the UK government paralyzes itself and lets its economy degenerate into a warzone of regulation chaos, complete data disaster, supply chain meltdown and political purgatory.  While we have boldly - and positively - predicted (see earlier post) that Brexit won't actually happen, there is also the distinct possibility that Brexit and no-Brexit blindly meander into the nothingness of a "No-Deal" scenario.

We have predicted that - at the end of the day - politicians are surely not that selfish, and voters really aren't that stupid to allow their country to descend into complete economic and social chaos... and madness.  But that's because we, at HFS, have assumed a modicum of intelligence does exist in the world. But, we could be sadly naïve.  However, there is some hope - and that hope is the simple fact that if we Brits commit the ultimate harakiri of a No-Deal Brexit, we take the rest of the global economy down with us.  You thought Lehman Bros was bad?  You've seen nothing yet folks.

Why this could be a $15 trillion global decimation

If we look at similar shocks to the stock market over the last century, it takes relatively little to create a major downturn in global asset values. We don’t need to look too far back this decade to see how even a moderate dip on global stock markets cans seriously impact the health of the economy.

If we look at the Asian financial crisis in 1997, for example, we can see just how quickly the collapse of even a relatively small economy can wipe off a huge percentage of global stock values. If we look at the potential consequences of not only one of the world’s largest economies, but one tightly integrated with the global economy, it’s not hard to see how much of an impact this could have on the major stock exchanges. That’s not to mention the major role the UK currently plays in global finance – with some estimates advising that the City of London manages over $9 trillion in assets, three times the size of UK GDP.

In a no-deal scenario, almost overnight the UK will no longer be compliant with EU rules and regulations – of which the previously discussed GDPR is just one of. There are countless other regulations that have formed part of the business environment of the United Kingdom, Europe, and by extension, the rest of the global economy, that are likely to emerge during the real-time stress testing that a no-deal crash out will lead to.

We can simulate (with the same degree of absolutely no certainty characteristic of the Brexit process) a major tumble in global stock prices by examining how previous shocks to the market have impacted in the past. And it’s worth noting, that our estimates are generally very conservative compared to other financial crises over the past century.

In the following illustration, we can see how some significant impacts to the value of stock markets can play out – particularly in areas most likely to be impacted by Brexit. In this simulation, we can expect the value of the twenty largest stock markets to drop by $14.9 trillion as a result of the major market shock of no-deal Brexit.

 

Click to Enlarge 

Bottom Line: A no-deal Brexit has far-reaching consequences, and could knock chunks of value from global stock markets to send us crashing into a serious economic depression

The warnings about the implications of no longer being compliant with GDPR are chicken-feed compared to the true global impact of allowing Britain to hive itself off from the EU with no insulation from the multiple disastrous consequences. In the past, major financial crises have been caused simply from a much smaller and less integrated economy defaulting on debts, now we’re facing the very real prospect that one of the world’s largest economies will wake up one morning with a completely different rule book, and much more red-tape and bureaucracy between it and the rest of the world. It’s not hyperbolic to say, the consequences to the global economy could be huge.

In a sick way, maybe this No-Deal scenario is what we all deserve to open the eyes of the politicians and gullible voters of the world for losing their grip on reality.  Maybe a period of poverty and hardship will knock us into shape to prepare for the next chapter of economic and political life.  

Ugh - we seriously hope it doesn't take a crisis of these immense proportions for everyone to wake up to the world we are shaping, where facts are merely tools to shape opinions and this sense of entitlement that so many people possess is threatening to destroy everything we've worked so hard to create.

There never was a "Brexit deal".  Brexit was all about pissed off working class people (mainly older folks) sticking it to the rich and to "foreign" people they saw 'stealing' jobs (they were never going to do themselves in any case).  So the only "Brexit" these people wanted was to ruin the economy for the wealthy British middle class and to stop immigrants coming into the country (and kicking out the existing ones too).  This is why the situation is such as mess.  The real motives behind Brexit are not the ones being discussed in Parliament or in Brussels.  It's a mess and needs to be somehow reset so the real debate can take place.  Otherwise this never ends.  

We all agree at HFS that change can be good, and we must embrace change... but changing to what?  That is the issue right now - what is wrong with the current system and what is the ideal system we need to move to...  and its not only the UK grappling with this problem...

Posted in: Policy and Regulations

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