achieving intelligent automation in business operations

HfS Webinar

Achieving Intelligent Automation In Business Operations

July 2017

© 2017 HfS Research Proprietary │

Today’s Speakers

Phil FershtCEO and Chief AnalystHfS Research

Brian HalpinHead of Automation, HSBC

Tom ReunerSenior Vice President, Intelligent Automation and IT Services, HfS Research

Chinmoy BannerjeeEVP and Global Head of BPS, Hexaware

Reetika JoshiResearch Director, HfS Research


The Future of Operations: The Digital OneOfficeTM Organization


How would you describe your organizations current Automation strategy?

Only 2% Of Enterprises Admit To Not Having An Automation

Strategy

31%

20%18% 17%

13%

2%

We are integratingin our service

delivery

We are in theprocess of

formulating astrategy

We have built/arebuilding a Center of

Excellence

Project use/casefocused

We are mandatingthis as a

requirement for ourservice provider

We don’t have one

Source: “State of Automation 2017”

Sample: Enterprise Buyers = 400


Automation Opportunity Vast & Untapped


Worldwide Global Robotic Process Automation

(RPA) Market, 2016-2021

73 113 153 192 232 272198

330

476

630

790

952

63%

42%

31%

24%20%

0%

10%

20%

30%

40%

50%

60%

70%

0

200

400

600

800

1000

1200

1400

2016 2017 2018 2019 2020 2021

RPA Software RPA Services YoY Growth

USD Million

$271m

$1224m

$629m

$1022m

$822m

$443m

Source: HfS Research 2017


Worldwide Business Process Automation Market, 2016-2021

0,7 1,4 2,1 2,8 3,5 4,14,4

5,36,1

6,97,7

8,6

5,1

6,6

8,2

9,7

11,2

12,7

2016 2017 2018 2019 2020 2021

Automation - External Services & Software

Automation - internal operational spend

USD Billion

• External Professional Services: Relates to all external spending focused on developing business process automation strategies / roadmaps and the use/ implementation of automation with business functions.

• Internal Operational spend: Includes internal and external spending on automation – change management, IT and operational teams focused on process automation and automation use as part of existing business process management initiatives.


RPA is less that 10% of the Global Business Process

Automation Market

0,3 0,4 0,6 0,8 1 1,2

4,86,2

7,58,9

10,211,5

30%

23%

19%

16%

13%

0%

5%

10%

15%

20%

25%

30%

35%

0

2

4

6

8

10

12

14

2016 2017 2018 2019 2020 2021

RPA Other BPA Growth (YoY)

USD Billion

$5.1 Bn

$6.6 Bn

$8.2 Bn

$9.7 Bn

$11.2 Bn

$12.7 Bn

Source: HfS Research 2017

• Business Process Automation is the use of technology to allow a business function or part of the operation of a process workflow work automatically. It includes the use of RPA, BPM suites, custom scripting, AI and related technologies.


AI & RPA Process Automation Market, 2016-2021

0,71,1

1,62,0

2,42,7

0,3

0,4

0,6

0,8

1,0

1,2

1,0

1.4

2,2

2,8

3,4

3,9

2016 2017 2018 2019 2020 2021

AI Automation Spend RPA Spending

USD Billion

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


400 participants involvement in buying decisions related to technology and services that include automation tools and services used to improve their organizations internal operations and business processes. The interviewing was conducted in May and June 2017 with a combination of telephone and online surveys.

Methodology & Study Demographics




Satisfaction with RPA Installs: Still a Nascent Market

Source: HfS Research, “State of Automation 2017 ” Sample: n=136 Buyers of RPA


The 2017 HfS Automation Maturity Model for Enterprises

Automation maturity

Goal Impact on current process

Target areas Deployment model

Scalability focus

Data usage focus

“Bot” lifecycle Intelligent Automation alignment

Level 4: Integrate

+ Service delivery synchronization

Re-imagined processes

End-to-end enterprise processes

Integrated “bots” managed independently

End-to-end enterprise processes

Used for solving business problem

“bots” as shared capability across client available on demand

Integrated solutions across RPA and AI

Level 3: Institutionalize

+ Standardized process delivery

Re-engineered processes

Processes with judgment-based tasks

Shared pool of co-ordinated“bots”

Across standardized processes

Used to re-engineer process

“bots” as shared capability across client available on demand

Investigating alignment between RPA and Artificial Intelligence (AI)

Level 2: Implement

+ Process efficiency and effectiveness

Looking for common process components

Processes with unstructured data

Co-ordinated “bots”

Common shared processes

Used for driving process efficiency

Dependent on each client and process

RPA dominates

Level 1: Investigate

Cost-reduction As-is / no-change

Simple rule-based

Individual “bots”

Specific tasks / processes

Used for performance management

Not specified No alignment


Today’s Speakers

Phil FershtCEO and Chief AnalystHfS Research

Brian HalpinHead of Automation, HSBC

Tom ReunerSenior Vice President, Intelligent Automation and IT Services, HfS Research

Chinmoy BannerjeeEVP and Global Head of BPS, Hexaware

Reetika JoshiResearch Director, HfS Research


Decision Making in Automation


Automation Really is in the Eye of the Beholder


HfS Sees Intelligent Automation as a Continuum Today

trigger based

Characteristic of process

rules baseddynamic language

rules basedstandardized language

Structured

Characteristic of data/information

Unstructured without patternsUnstructured patterned

Data CenterAutomation:

RunbookScriptingSchedulingJob controlWorkloadautomationProcessorchestration

SOAVirtualizationCloud services

RPACognitive

ComputingArtificial

Intelligence

BPMWorkflow

ERP


How is the decision-making process for automation capabilities organized within your enterprise?

Decision Making For Automation: Broad Set of

Stakeholders, Narrow Set of Decision Makers



18%

21%

22%

24%

24%

27%

28%

29%

35%

57%

54%

15%

48%

42%

51%

48%

44%

47%

49%

44%

51%

32%

31%

43%

13%

11%

18%

21%

11%

19%

20%

21%

11%

10%

15%

39%

21%

27%

10%

8%

21%

7%

4%

7%

4%

1%

1%

3%

External Consultants

Channel Partner

Data center Manager

Purchasing Manager

Internal Panel of experts/business leaders

Procurement department

Finance Department

Line of Business director

CFO/Finance Director

CIO / IT Director

CEO

Management Board

Decision Maker Influencer Stakeholder No role

The C-suite plays a critical role in setting the automation strategy


Please pick the most influential source of information.

Where are customers getting their information?

18%17%

16%

13% 14%

12%11%

Industryanalysts

Case studies Internalprocurement

expertise

Conferences In-house deskresearch

Sourcingadvisors

Externalconsultant




The Execution and Market Dynamics of

Automation with Business Operations


How would you describe your organizations current Automation strategy?

Only 2% Of Enterprises Admit To Not Having An Automation

Strategy

31%

20%18% 17%

13%

2%

We are integratingin our service

delivery

We are in theprocess of

formulating astrategy

We have built/arebuilding a Center of

Excellence

Project use/casefocused

We are mandatingthis as a

requirement for ourservice provider

We don’t have one




When, if ever, do you believe AI automation to be applicable for you within the following processes


Sample: n=219 Non Buyers of AI

24%

26%

29%

29%

30%

32%

32%

33%

38%

32%

34%

33%

37%

38%

33%

35%

34%

32%

HR

Procurement

Master Data Management

Finance & Accounting

Supply Chain

Customer Service

Industry specific processes

Marketing

IT including service desk

Within the next year In the next 1-2 years from now

AI Adoption Is On A 2-

Year Horizon For 60-70%

Of Clients SurveyedWhen, if ever, do you believe AI automation to be applicable for you within the following processes


Sample: n=400

All AI Techniques & Solutions

Are Getting Evaluated

37%

42%

37%

41%

45%

19%

18%

21%

23%

21%

23%

21%

24%

19%

22%

Neural Networks

Natural Language Processing (NLP)

Computer Vision

Virtual Agents

Machine Learning (ML)

Piloted / implemented Evaluating In next 2 years


Which of the following benefits do you think Automation could deliver to your operations?

Automation Benefits Seem To Reflect Long-Term Thinking…

%

12%

21%

25%

31%

37%

38%

45%

46%

48%

49%

52%

We don’t believe it will deliver any significant non-cost related benefits

FTE reduction

Guaranteed short term cost reduction

Overcoming process bottlenecks and enablingprocesses to flow end-to-end

Relieves management time to focus on customers

Improves employee motivation by relieving them ofrudimentary tasks

Better visibility, auditability and compliance

More actionable data for customer insights

More actionable data for operational insights

Superior data accuracy

More workforce agility – giving operations the ability to scale

Better quality of operations




What is preventing or slowing the adoption of Automation within your organization?

…But The Biggest Adoption Barrier Still Seems To Be Short-

Term Cost Benefits



20%

23%

25%

27%

28%

28%

28%

35%

Not sure where to start

IT does not have the time to implement

Lack of understanding of technology building blocks

Bad experience with technology-driven processchange

Lack of internal talent to evaluate and implement

Underlying platform is sufficient, don’t think automation lower cost

IT budgets exhausted from technology deployments

Immediate cost savings not attractive enough


7%

8%

13%

13%

14%

14%

15%

17%

Ability to deliver as part of an end to end managed service

Specific Process knowledge

Industry specific capabilities

Track record in delivering cost savings

Partnerships with Automation technology firms

Track record in delivering business outcomes

Reference clients

Internal Automation IP

How important are the following selection criteria when choosing an external service provider to help with you Automation strategy and implementation. Which is the most important?

Service Providers Will Need Internal IP And Clients Willing To

Endorse Them In These Early Days




Satisfaction with RPA Installs: Still a Nascent Market

Source: HfS Research, “State of Automation 2017 ” Sample: n=136 Buyers of RPA


Key Study Takeaways

The study findings outline three immediate calls-to-action for clients:

• Enterprises are past the point of pondering about the possibilities of automation. Challenges exist when it comes to execution, but as a whole the shift to intelligent operations through automation is real and already starting to deliver value.

• Artificial Intelligence will become mainstream in 2 years. Enterprise leaders are either already piloting or implementing AI technology in some form, or plan to do so in the next few years. Customer service leads the use cases for AI today.

• Integrate automation in the overall service delivery strategy. We need to look past the labor displacement arguments that are the here-and-now symptoms and benefits of using AI, and think more holistically about large-scale service orchestration of processes centered around automation and AI technologies.


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HfS Research: The Services Research Company

HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations and IT services. The firm helps enterprises validate and improve their global operations with world-class research, benchmarking and peer networking. HfS Research was named "Independent Analyst Firm of the Year for 2017" by the Institute of Industry Analyst Relations which voted on 170 other leading analysts. HfS Chief Analyst, Phil Fersht, was named Analyst of the Year in 2017 for the third time.

HfS coined the terms "The As-a-Service Economy" and "OneOffice™", which describe HfS Research's vision for the future of global operations and the impact of cognitive automation and digital technologies. HfS' vision is centered on creating the digital customer experience and an intelligent, single office to enable and support it. HfS’ core mission is about helping clients achieve an integrated support operation that has the digital prowess to enable its enterprise to meet customer demand - as and when that demand happens. With specific practice areas focused on the Digitization of business processes and Design Thinking, Intelligent Automation and Outsourcing, HfS analysts apply industry knowledge in healthcare, life sciences, retail, manufacturing, energy, utilities, telecommunications and financial services to form a real viewpoint of the future of business operations.

HfS facilitates a thriving and dynamic global community which contributes to its research and stages several OneOffice™ Summits each year, bringing together senior service buyers, advisors, providers and technology suppliers in an intimate forum to develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings.

Now in its tenth year of publication, HfS Research’s acclaimed blog Horses for Sources is the most widely read and trusted destination for unfettered collective insight, research and open debate about sourcing industry issues and developments.

HfS was named Analyst Firm of the Year for 2017, alongside Gartner and Forrester, by leading analyst observer InfluencerRelations.

http://analystrelations.org/2016/12/06/winners-announced-iiar-analyst-of-the-year-2016/

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Fastestgrowing IT Services

company over past 10 quarters

(CQGR of 3.1%)

Revenue: USD 526 Million

We cannibalized revenues at

clients20through proactive

proposals

50%

We want to be the First IT services

company to have

Digital Workforce

Automation is about

changing culture

We are far ahead in that journey

Transitioned work from Top 5 Indian

Origin Providers in 7 clients

in the past

6 months

AUTOMATIONFIRSTCultureofautomationfirst,nofearofcannibalization;operationsleadershipgoaledonautomationvalue

ANTIPYRAMIDLowskillL1won’twork,slowrotation

GRASSROOTINNOVATIONClientcentricinnovation,18Mtangiblevalueaddedtoclientsin2016– 3%ofrevenue

CROSSSKILLINGFocusoncross-skilling,e.g.hyper-convergedengineers,operatorsasautomators

13000+ Employees

25 Languages

12 GDCs

achieving intelligent automation in business operations

Documents