Month: September 2015

Pervasive Artificial Intelligence in Software: Trends & Impact on Outsourcing | Sherpas in Blue Shirts

One prediction I have made about the future of service delivery automation (SDA) is that increasingly enterprise software will have the technology embedded. This is particularly true of intelligent and cognitive type of tools. I expect these to become a common feature of enterprise software in the next 5-7 years.

We saw this kind of trend in the earlier days of business intelligence and reporting. The popularity of third-party tools saw the functionality built into enterprise software. As well as reports on activities, dashboards started to feature in applications giving instant views of what was going on in the enterprise. We do not have to look far to find such software today, for example, Blue Prism, includes analytics that report on operations and performance of its robots.

A current example of a more intelligent enterprise software is Oracle Policy Automation Cloud Service. This reads policies written in natural language. Then based on business rules and the policy, it decides what questions to ask the customer, performs eligibility checks, and produces a decision report.

Another example is HighSpot, an enterprise search tool that uses natural language processing for searches and machine learning for finding the most relevant information and ranking the results.

The availability of open source machine learning software libraries, such as Apache Mahout, and software tools from industry giants, such as Microsoft (Machine Learning Service on Azure), will accelerate the next generation of smarter enterprise software.

Some would say that intelligent enterprise software would be function-specific, but I believe some varieties will be able to do more than one thing within large software applications. The need for standardization of interfaces to these tools and the ability to interact with other intelligent applications will grow over time too. We could even see more automations crossing paths across workflows leading to more complex machine-based decision making.

The question is what impact will pervasive intelligence have on the outsourcing industry:

  • On the one hand, intelligent software will shrink the size of the workforce that is needed to fulfill many services and thus reducing the need for outsourcing
  • On the other, intelligent software will open up opportunities for outsourcing processes that have not been outsourced before:
    • These could be heavily document-centric processes, such as anything involving the administration and management of searching large volumes of content, for example, for legal discovery
    • The processes could also be the evolution of other processes. For example, in hospitals we might see the patient “meet-and-greet” services outsourced to service providers who can also run basic health checks supported by AI engines to produce first-pass health assessments, before the patient is ushered to see a doctor
  • Another outcome will be higher expectations of artificially intelligent outsourcing services; upping the ante for smarter outsourced processes – this is inevitable as those on the buy-side of the market become more and more accustomed to intelligent software.

Intelligent enterprise software is here. And we are on the brink of it becoming pervasive and commonplace. As it does, I’ll continue to share my insights on its evolution.


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North American Enterprises Spend 2x as Much on Efficiency-Focused Tech Than on Marketing-Focused Digital Solutions | Press Release

NA enterprises embrace digital adoption far beyond enabling customer-facing functions.

DALLAS, September 30, 2015 — Although “digital customer interaction” is all the rage in business IT conversations today, new research from Everest Group—a consulting and research firm focused on strategic IT, business services, and sourcing—indicates that North American enterprises are applying digital technologies to solve business problems across all enterprise functions, not just sales, marketing and customer support.

“Most of the hype around digital services and solutions appears to be pivoted around the CMO suite and marketing-oriented applications; however, in reality, digital adoption is much more inclusive and pervasive in nature,” said Chirajeet Sengupta, vice president at Everest Group. “Enterprises look at an array of technologies to support and augment digital functionality across the entire scope of business processes.”

In fact, North American enterprises spend twice as much on digital technology to improve the efficiency of back-office and mid-office processes than they spend on technology that supports market-facing, front-office processes. Everest Group identifies the former as “Digital for Efficiency” or “DfE” and the latter as “Digital for Growth” or “DfG.” On average, North American enterprises spend 47 percent on DfE as opposed to 24 percent on DfG.

“So, digital transformation is not only about digital marketing or changing the business model from brick and mortar to online,” continued Sengupta. “Digital transformation also applies to global procurement and supply chains across retail, manufacturing, and oil and gas companies around the world; to professional service companies that are transforming the way they engage, hire, reward, and retain talent; and to call centers using analytics to predict staff attrition, to name just a few examples.”

These findings and more are discussed in Everest Group’s recently released report, North American Digital Adoption Survey—How Pervasive is Your Digital Strategy?

This report analyzes digital adoption among 120 North American enterprises and provides insight on their adoption maturity and allocation of digital spend. The research identifies four distinct market segments and maps their adoption behavior. It also highlights key implications for North American enterprises and service providers serving this market. 

***Download Complimentary 12-page Preview Report Here*** 

Key findings from the report include the following:

  • North American enterprises display a high degree of adoption maturity for digital services. Enabling technologies such as cyber security and infrastructure as a service (IaaS) have witnessed the most adoption. Nearly three-fourths of the enterprises have adopted core digital themes such as analytics and mobility related initiatives.
  • Enterprises focus their digital investments on Digital Enablement (i.e., optimizing existing IT environments), Digital for Efficiency (DfE) and Digital for Growth (DfG).
  • Based on their DfE and DfG orientations, North American enterprises are divided into four distinct segments, which differ significantly in maturity and allocation of digital spend across business imperatives.
  • After an initial “honeymoon period” when enterprises start their digital journey, many experience a “digital trough” when optimism, management buy-in and budget availability dips. Among North American enterprises seeking to adopt digital meaningfully, 43 percent are currently facing these challenges.

***Download Publication-Quality Graphics***

High-resolution graphics illustrating key takeaways from this report can be included in news coverage, with attribution to Everest Group. Graphics include:

  • Digital investment strategies in North American enterprises
  • Digital adoption: a definitional framework
  • Digital investment imperatives: efficiency or growth?
  • The digital adoption journey
  • Dispelling digital myths
  • Digital investments: perception versus reality
  • Digital investment priorities in North American enterprises

Nasscom and Everest Announce Findings of BPM Report – Computerworld | In The News

“This study clearly shows that RPA is fast moving from a pioneering stage to a rapid growth phase of adoption. If leveraged strategically along with other value creation levers, it has the potential to unlock significant value for the BPM industry”, said Rajesh Ranjan, Partner, Everest Group and one of the authors of the report.” Read more.

Virtusa Eyes Polaris In $350m Deal – Times Of India | In The News

“Peter Bendor Samuel, CEO of US-based Everest Group said, Virtusa wants scale and access to a new client base. They have a demonstrated ability to grow services, have a young aggressive talent base and should be able to revitalize a somewhat tired and dispirited business. It’s also good timing for Polaris as valua tions for this are high.” Read More.

Automation Introduces New Business Risks | Sherpas in Blue Shirts

Automation has the essentials for introducing different kinds of business risks and risk at a different order of magnitude. The new risks manifest differently and have greater consequences than in a normal business process. The issue is the difference between type 1 and type 2 errors.

  • Type 1 error. This is a normal error such as making a mathematical error on an invoice. The consequences are that you would under-bill or over-bill a client. Once you reconcile the error, you may have lost a revenue opportunity or may have to rebate the client for the difference in overcharging.
  • Type 2 error. An example of this situation is that you under bill all your clients. The consequence is often 10X or more the impact of a type 1 error.

We at Everest Group have discussed with clients this impending shift of business processes to a far more automated landscape where type 2 errors are inadvertently introduced.

In a previous blog, I talked about automation bias and how people tend to blindly come to accept or believe whatever comes out of an automated tool. This makes the likelihood stronger that type 2 errors would occur.

On an industrialized services basis with broad-scale business processes, we must be aware of type 2 errors and guard against them. This is why many of the leading firms that are looking at adopting automation, cognitive computing, and robotics are considering implementing a Center of Excellence (CoE) to help the business understand the changes that accompany automation. A CoE can help educate employees to guard against automation bias and type 2 errors that could inadvertently be institutionalized in automated approaches to business processes.


Photo credit: Flickr

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