Celaton Puts the Artificial in Intelligent Business Process Automation | Sherpas in Blue Shirts

As a part of our efforts to profile the rapidly evolving service delivery automation landscape, I am speaking with the leaders of many of the technology players who are helping stimulate innovation in this space. It is an exciting time for automation and the following observations and learnings come from one of my recent conversations, a briefing with Andrew Anderson, founder and CEO of Celaton. Stay tuned to learn more as I speak with other leading players.

Celaton and its Proposition

UK-based Celaton was born out of the management buyout of Redrock software from Netstore plc and the acquisition of DG Tech in 2004. Today it has revenue of circa £2.5m and the same amount of investment by Business Growth Fund to enhance its sales and marketing capabilities.

Celaton’s artificial intelligence software, inSTREAM is designed to handle labor intensive administrative tasks. It takes unstructured content, such as correspondence, complaints, letters, faxes, e-mails, and attachments, learns to understand the content and context and then processes the information. inSTREAM is a self-learning system. When it is first deployed it will need human guidance on what to do. It learns from experience. The more it does the faster it becomes as it learns how to handle different requirements according to the rules and knowledge that it accumulates.

inSTREAM reads unstructured content and applies rules to it to identify and understand key information such as context, sentiment, importance and urgency. It then structures the content and feeds it into the appropriate line of business application (LOB) for processing. The objective is to get guaranteed perfect structured data that can be fed into a line of business system such as ERP, CRM, and workflow, so that the data can continue along its corporate journey. In many instances, the data that goes into the LOB system has to be connected to its source e.g. route to source in the insurance industry where there is the need to go back to the original document for audit purposes. InSTREAM retains the data that it has processed including the original source document. It delivers the data to the LOB system and the document to a document management system.

InSTREAM is a non-invasive system.  Integration is done via web services or the data can be delivered to a holding area for the target system to pick up.

inSTREAM runs on Microsoft platforms utilizing SQL Server, Internet Information Server and .NET technologies. It can process all types of incoming documents, and it is platform agnostic. It is provided on a hosted basis. Subscription rates are based on volumes, complexity of the processes in question, and the levels of benefits that it is expected to generate.  Pricing starts from £1500 per month and can go up to £60k or more per month.

Celaton’s typical customers are retail, travel and insurance companies. Benefits are realized through increased productivity and improved customer management. One client, a UK loss adjuster, has reportedly reduced its head count by 85% while managing a fivefold increase peak in demand in insurance claims.

Celaton has a reselling partnership with Agilisys, the UK technology and outsourcing services company, was the first to sign up. Agilisys Automate, based on inSTREAM, is targeted at UK local government sector and has its first customer, a London borough council, signed up already. There are more council deals in the pipeline.

Carving a Niche in AI-based Business Process Automation

Celaton is carving a niche for itself in textual and document processing automation. It is in the right place at the right time to grow with rising demand in the market.

My take on the company’s proposition, benefits and challenges:

Competition: There are not many competitors in this field with AI-based standalone tools, but some capabilities are on offer as part of other offerings. Examples include Oracle RightNow Email Management Cloud Service and its Email Management which is integrated with a self-learning knowledge base and across customer interaction channels. Optimized for smartphones and mobile web devices, this receives enquiries via email and web forms and automates responses. New entrants to the market are highly likely with at least one new product on its way – a new cognitive engine from a well-known IT services automation company.

Marketing: The cost advantage of automation can clearly be significant but there are challenges too. Celaton has to overcome buyer uncertainty about machines doing the job of an employee in a service-line, such as in-bound document management, which has to deal with highly unstructured content. A Good marketing of a few success stories could work wonders. Anderson is doing a good job of telling the Celaton story and the company also has a substantial investment by BGF to orchestrate a robust marketing campaign.

Go-to-market and Scaling Up: I believe one way for Celaton to find more willing clients is to target companies that have outsourced their in-bound document handling and who are looking beyond labor arbitrage and offshoring to build on efficiencies. Celaton also has to look for ways that it can scale up to respond to demand. At the moment it is the only company that can fully configure, deploy and host inSTREAM. Agilisys is coming up to speed but more deployment partners are needed to meet the two objectives of reaching the right client segment and gaining scale.

Outsourcing service providers are also looking for new ways to increase their cost competitiveness, but they need to think about alternative pricing to the FTE-based model.

Service Provider Investment Quandary

Service providers will be investigating partnership opportunities with Celaton and other automation technology providers, such as Blue Prism, and asking themselves the classic question about timing new investment. Do they invest in business process automation today or wait for the opportunities to come before spending on new capabilities? Agilisys has gone halfway – with Agilisys Automate, it is focusing on technology sales for now and gaining new skills.  Other service providers, such as Sutherland Global Services and Capita have already invested in automation (e.g. Blue Prism). For the undecided, there are lessons from the journey of analytics into the business process services market. What started as added value is now being built into specific offerings by some leading vendors. A similar approach to automation could lead to a significant competitive edge through automation.

Check back for more of our views on technology players in service delivery automation.

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