Month: March 2018

Enterprise RPA Adoption: Behind the Curtain | Sherpas in Blue Shirts

Now that we’ve put the finishing touches on our first-of-its kind assessment of enterprise RPA adoption around the globe, we’re seeing a full dismantling of several RPA assumptions and myths.

After surveying enterprises across a wide swath of industries, we have finalized the analysis and are releasing a goldmine of data and insights for enterprises looking to take a confident step forward in their journey toward Pinnacle RPA status. While the full results are laid out in our Enterprise RPA adoption | Pinnacle Model™ Analysis for 2018, I want to provide an overview of some of the findings here that I think you’ll find interesting.

RPA adoption is size- and industry-agnostic across enterprises

Enterprise RPA adoption is not a trend for big organizations in certain industries to pursue while smaller players maintain the status quo. Stagnation is a recipe for complete disaster in the industry’s rotation to digital. In our research, we’ve found that all types and sizes of enterprises are adopting RPA. This includes both top-down adoption across the org to improve overall speed to impact and bottom-up adoption where segments of orgs are adopting RPA to optimize specific processes. Regardless of size and type, enterprises are going all-in and getting results.

Related: How to transform with RPA implementation

So, what happens if you’re not a part of that? Well, you can imagine the way Toys ‘R Us execs felt when they realized they were about to watch the titan enterprise enter into complete oblivion. Part of that is due to a failure to transform the model in the age of digital transformation. Enterprises that are not thinking in the direction of some level of enterprise RPA adoption are in danger of charting a course to that same end. The takeaway here is clear: adopt or be disrupted.

RPA Pinnacle Enterprises™ significantly excel in three impact areas

RPA Pinnacle Enterprises exceed others in the three critical areas of cost impact, operational impact and business impact. Statistically, they have seen a 50% improvement in operational impact alone. Those enterprises not at the Pinnacle level, but who are still adopting RPA, have seen a 30% improvement.

Enterprise RPA adoption

So the news for all enterprises moving along the RPA adoption curve is either good or great – there is really no bad news here. This is a fascinating and important statistic for all enterprises, and warning of what’s to be missed out on for those on the sidelines of adoption.

RPA and massive job loss is a myth

Automation is soon to be a driving factor for sweeping job losses across all industries. While that’s great fodder for headlines, blog titles, and social media clicks, the actual enterprises we’re talking to aren’t singing that song at all. I talk about this more in a recent blog, The Robots are Coming – Should You Fear or Welcome Them, but in essence, enterprises are talking about reskilling, upskilling, and enhanced training; they’re not talking about eradication of the human element.

As you might have heard, in the midst of this rotation to digital across all industries, we’re actually experiencing a labor shortage in the United States and Europe. We’re just not seeing it in the headlines.

Instead of the comparison to Skynet or some other Terminator-related theme, a better comparison for RPA and jobs is one that involves our actual history. When you review what happened in the industrial revolution, you don’t find the entire workforce replaced by machines (Of course, individuals were impacted at various levels). Instead, you find massive reskilling and upskilling so that the new technology can complement and improve human effort – AND by improving productivity, allow our companies to continue to grow even in the face of a labor shortage. That’s much more along the lines of what enterprises are discussing, planning, and doing. Unfortunately, news like that doesn’t make the cut for trending stories.

RPA Pinnacle Enterprise webinar

Many more in-depth details about these enterprise RPA trends are laid out in our Pinnacle Model analyses. Moreover, this research is brimming with data-packed analysis on what is truly differentiating Pinnacle RPA enterprises from the rest of the pack. The kind of analysis that all enterprises are clamoring for as they determine where they are on their journey to Pinnacle, and decide what the next best steps should be. We also hosted a webinar on April 12 that dispels popular myths surrounding RPA using our fact-based analysis from the RPA Pinnacle Model study. Watch the webinar replay.

Please contact us with any questions you may have about our Pinnacle Model analyses, or reach me directly at [email protected].

21 Months to Brexit and the Case for Digital | Sherpas in Blue Shirts

The United Kingdom (UK) and the European Union (EU) officials have finally agreed on a Brexit transition deal. While some aspects of the agreement still need further work, the principles for the period are clear:

  1. The transition period will run to the end of December 2020. This means that the UK will have to abide by EU rules until then, but it will be able to negotiate new trade deals during that period
  2. The UK must treat EU citizens coming to the country during the transition period the same as those who already are residing there
  3. There will be no border between Northern Ireland (NI) and the Republic of Ireland with the back stop of NI remaining in the EU customs union even after Brexit, if no other solution can be found to a borderless relationship between the two

The Road to Brexit is Digital

Following this announcement, organizations now have a clear timetable to prepare for Brexit, allowing them to plan and define an internal roadmap. One of the key factors when planning is to build with agility in mind. If you’re an executive creating the plan, you’ll want to make sure that the business remains flexible to allow for adjustments to the remaining unknowns.

Digital is a big enabler of agility, and in the run up to Brexit, it is more important than ever that organizations invest in it. Boosting spending on digital solutions and automation will help them adapt and adopt to new market pressures, changing regulatory frameworks, and an uncertain labour pool because of the likelihood of many EU workers deciding to return to their home countries after Brexit.

The ways that digital and automation technologies help organizations in times of uncertainty include:

  • Reduce costs and increase process efficiency while maintaining service quality
  • Decrease hiring and training needs while increasing flexibility to handle fluctuating demand
  • Increase speed to market while decreasing the cost of launching new products and services
  • Empower staff to do more and maintain productivity during a time of change
  • Eliminate capital investment in infrastructure by migrating to the cloud
  • Satisfy new trade requirements and custom checks at EU borders or with new trade partners

Digital Skills will be High in Demand

 

Digital Skills will be High in Demand

 

Digital Skills will be High in Demand

Brexit will increase the demand for digital skills as companies prepare for handling new trade and customs requirements. The same goes for the public sector in both the UK and EU member states. For example, they will need a fair bit of digitalization on their borders to deal with the new paradigm of tracking immigration and trade, and handling customs requirements electronically using technology, such as RFID, IoT, and automation, to achieve the goals set out by political agreements while at the same time not creating hard borders.

Meeting Demand for Digital Skills and Services

Investing and tapping into digital skills is a must. This can take the form of internal training and development, recruitment, and contracting outside the organization. In turn, this likely will drive demand for digital consulting and implementation services.

On the supply-side, there are opportunities for service providers and consultancies to provide Brexit-specific services, such as Brexit Competency Centres (BCC) and products. We may well see Brexit specific packaged offerings emerge as well as Brexit specific robots from RPA and AI automation vendors. I expect these will be provided in extended robot libraries or bot-stores.

Northern Ireland – the New UK Gateway to EU

While the approach is unclear, there is certainty that NI will continue to have borderless access to the EU. This would make NI the ideal location for UK-based companies to place new production sites or delivery centres while still maintaining the bulk of business operations in the UK.

The road to Brexit has become clearer this week – but this is only the beginning. Businesses and governments must start detailed planning and preparation for Brexit. In this regard, digital solutions are a key enabler of both business continuity and change and must be on every C-level executive’s agenda.

What’s Driving The Growth Of Third-Party Services In Eastern Europe & Local U.S. Delivery Centers? | Sherpas in Blue Shirts

As the third-party services industry pivots away from the factory model of labor arbitrage-based work toward digital work, having local delivery centers becomes increasingly important to service providers. Firms such as EPAM and Luxoft are investing in Eastern European operations (Bratislava, Krakow, Prague and Sofia, for instance). And Wipro has invested in a delivery center in Dallas.

Read more in my blog on Forbes

How IT Service Providers Can Beat the Anti-incumbency Menace | Sherpas in Blue Shirts

The sobering writing is on the wall, and only getting bolder: nearly 50% of enterprises are dissatisfied with their incumbent IT service provider. With this all-time low enterprise satisfaction level, and outsourcing deals worth more than US$50 billion coming up for renewal over the next 18 to 20 months, service providers are rolling up their sleeves and fighting to protect their turf. Whether they succeed in notching their performance up to the enterprise expectation levels – or are led to digging their own graves – remains to be seen.

“Change the Business” is Becoming Table Stakes

Enterprises today are trying to ease into the digital age, and realigning their focus from the erstwhile cost-efficient, technology-focused solutions towards more business-focused, productivity-enhancing, and outcome-oriented service models. Next-generation themes such as automation, analytics, and DevOps have started to capture the imagination of IT leaders as they seek to improve overall service quality and agility.

In this regard, enterprises expect their service providers to start focusing beyond the traditional “run the business” mandate, and function as end-to-end transformation partners. This means bringing in strong point-of-view and context around how disruptive technologies can be leveraged by enterprises to drive competitiveness and business agility/resilience.

These evolving enterprise expectations, coupled with massive technology strides, have placed a huge responsibility on the service providers’ shoulders, especially in an environment wrought with strong anti-incumbency sentiments. To be able to increase deal renewal success, service providers need to work on building a broad set of organizational capabilities and solutioning best practices to supplement their investments in building differentiated service offerings and solutions.

Here are some of the key factors that, if managed the right way, can influence deal renewals in the service providers’ favor.

Contract Renewals Blog

Interesting times lie ahead, brimming with massive sets of opportunities and challenges for services providers as they continue to wage wars in the contract renewal battlefield. As service providers work their way around retaining existing relationships, meeting renewed enterprise expectations, and warding off strong competition, will there be clear winners and losers? Only time and numbers will tell.

May the force be with you, service providers!

For drill-down data and insights into outsourcing transaction trends by function, geography, industry, and service provider type, and implications for key stakeholders (both buyers and suppliers), please see Everest Group’s newly released reports, “Upcoming Contract Renewals: Application Services” and “Upcoming Contract Renewals: Cloud & Infrastructure Services.”

Infosys abandons annual strategy session STRAP | In the News

Infosys will not be holding its annual strategy brainstorming session Strap (strategy, action and planning) this year. Instead, new CEO Salil Parekh has chosen to make it an ongoing exercise with a smaller group of internal leaders.

Peter Bendor-Samuel, CEO of IT consulting firm Everest Group, believes Parekh is trying to set his stamp on the organization. “He is also committed to avoiding the division and acrimony which has been the recent hallmark of Infosys. Hence he is attempting a more low key approach to internal communications and the canceling of Strap is one such example,” he says.

Read more in The Times of India

Strategy For Building Digital Platforms | Sherpas in Blue Shirts

I recently visited with senior executives at Exela Technologies to discuss the interesting strategy their company undertook to succeed in the digital world. Exela’s success is like a caterpillar that goes into a cocoon and emerges as something completely different. The “caterpillar” was stodgy, low-margin, traditional BPO services – uninteresting work in a very mature market. They went into a digital cocoon, worked for several years reinventing the business and came out as a beautiful butterfly with fabulous – tested and working – digital platforms and turned the business from mildly profitable to very profitable. Many executives believe their companies can reengineer back-office processes onto a digital platform; however, they encounter problems in trying to do this. How did Exela’s strategy succeed where others fail?

Read more in my blog on Forbes

Will AI Take the “H” Out of HR? Not if Done Well | Sherpas in Blue Shirts

Most people talk about how AI will transform both the transactional and strategic HR functions across recruiting, performance management, career guidance, and operations. Technology vendors such as Belong.co, Glider.ai, Hirevue, MontageTalent, and Talla, are often quoted as transforming the HR functions across different facets.

So the burning question here is, will AI technologies eventually transform the HR function for good? Or will it dehumanize it? Let’s look at some fundamental issues.

HR Works within the Enterprise’s Constraints

Focuses on creating individual-centric training, incentives, performance management, and career development plans are noble. However, HR may well not have the budget, and the organization’s processes may well not allow these in reality. Most organizations have a fixed number of roles (bands) and employees are fit into them. And there is a fixed L&D budget, which is treated as a cost that prevents meaningful investment in programs for individual employees.

HR Hardly Understands Technology

Most of today’s enterprises are looking to hire “digital HR” specialists who understand the confluence of technologies and HR. Because very few exist, the businesses themselves need to teach and handhold non-digital HR people about the value of AI principles in their mundane tasks, such as CV/resume shortlisting, as well as in their creative work, such as performance management and employee engagement.

Senior Leadership’s Flawed Perception of HR

While every enterprise claims that their employees are their greatest asset, they don’t always perceive HR to be a strategic function. Many senior executives view HR as a department they need to deal with when team members are joining or leaving the organization, and that everything in between is transactional. This perception does not allow meaningful investments in HR technologies, much less AI-based services. As AI systems are comparatively expensive, they require senior leadership’s full support for business case and execution, and HR will likely not be on the radar screen.

HR’s Flawed Perception of Itself

Most HR departments consider themselves to be recruitment, training, and performance management engines. They fail to strategically think about their role as a crucial enabler of a digital business. Because most HR executives don’t perceive themselves to be C-level material, their view becomes self-fulfilling. Many HR executives also silently fear, that their relevance in the organization will be eliminated if seemingly rote activities are automated by AI.

I believe that AI systems provide tremendous opportunities for HR transformation – if the HR function is willing to transform. It needs to make a strong business case for adopting AI based on hard facts, such as delay in employee hiring, number of potential candidates missed due to timelines constraints, poor retention because of gaps in performance management, inferior employee engagement due to limited visibility into what they really want, and compliance issues.

However, there is a tightrope to be walked here. As HR is fundamentally about humans, AI should be assisting the function, not driving it. A chatbot, which may become the face of HR operations, is just a chatbot. AI should be leveraged to automate rote transactional activities and mundane HR operations, and help enhance the HR organization.

Unfortunately, many enterprises myopically and dangerously believe that AI should lead HR. Because HR is not about AI, those that do are bound to dehumanize HR and drive their own demise.

HR’s broader organizational mandate will have to change for AI adoption to truly succeed without dehumanizing the function and its purposes. Doing so will not be easy. Various enterprises may take a shortcut, such as deploying chatbots for simple HR operations, to appease their desire for a transformational moniker. But in today’s digital age, these organizations will be short lived. Enterprises that weave AI into their HR functions – akin to ambient technology – to fundamentally enhance employee experience, engagement, and creativity, will succeed.

9 IT outsourcing mistakes to avoid | In the News

As IT outsourcing moves well into its third decade, IT decision makers have made great strides in maturity, managing to avoid some common and costly pitfalls of the practice.

However, there are a number of common — and costly — pitfalls that persist, as well as some emerging errors IT leaders are making with their latest outsourcing deals. Taking care to avoid these outsourcing missteps will go a long way toward fostering IT services engagements that achieve their intended results.

Focusing on procuring the lowest price for pre-defined solutions is less common than in the past, says Abhishek Sharma, vice president of pricing assurance with outsourcing consultancy Everest Group. “Manifestations of this could be frequent change requests and demand for ad-hoc specialist resources that come at a premium fee, both of which dilute the business case and impact the confidence in outsourcing,” Sharma says.

Companies are struggling to compete in the dynamic digital era, so it’s only natural that they look to their IT service providers for help. The only problem is that it’s nearly impossible to write an RFP for disruption.

“Clients complain that they don’t get creativity and innovation from their service provider. However, they also want to run this procurement process in a traditional RFP manner with tight rules with no flexibility,” says Jimit Arora, a partner with IT services at Everest Group. “Our experience suggests that in a majority of situations it is not the service providers but the enterprises that are the true limitation for achieving innovation.”

 

Investor Elliott Management buys tiny stake in Wipro | In the News

Elliott Management, the activist hedge fund that changed Cognizant’s business strategy, has taken a tiny stake in WiproBSE 1.95 %, highlighting its interest in Indian IT companies. Of about 40 US-listed stocks that the $34-billion hedge fund owns, two are now from the Indian IT sector.

IT experts said the unprecedented disruption that the industry is going through makes it an attractive target and that there are three ways in which an activist could ask companies to improve shareholder value — by increasing margins as a result of cutting investment, overheads and sales costs; consolidation or accelerating the move to the digital model. “Option 1is by far the less risky and that is why it is favoured by the activist investors. Interestingly, the private equity community is increasingly interested in the industry and has already started to take positions in firms as well as taking them private. At this time the PE industry seems to be favouring options 2 and 3 and in some cases looking to combine them,” said Peter Bendor-Samuel, founder of Everest Research, an IT consultancy.

Read more in The Economic Times

Five Ways to Reduce Contact Center Costs with Automation and Chatbots | Sherpas in Blue Shirts

Everest Group’s recent research revealed that successful adoption of RPA and chatbots in contact centers can reduce the total cost of contact center operations by 11-16 percent. Yet, very few enterprises have achieved these levels of automation-driven cost reduction in their contact center operations. Why? Technology is just one piece of the puzzle. In order to unlock the true benefits of automation solutions in your contact center, you also need to focus on organizational readiness, effective change management, and better governance mechanisms.

Five ways to reduce contact center costs with RPA & chatbots


Analyze and select the right processes for automation

Enterprises should start by identifying the contact center processes that are most suitable for automation. To achieve breakeven in quick time, it’s best to start by automating highly repetitive and less complex business processes with RPA. For example, a process wherein agents spend exorbitant amounts of time navigating through multiple systems and applications to fetch the required information is ideal to automate with RPA.

Re-engineer business processes before automation

Automating business processes that aren’t standardized or simplified can result in more exceptions. But optimizing them before automating them, with IT and operations jointly looking at them through the RPA lens, can greatly reduce exceptions. Learnings from best-in-class RPA implementers also suggest that business process re-engineering is a significant step to realizing the strategic objectives of RPA adoption.

Build winning partnerships

Building a partner ecosystem with leading RPA technology vendors and/or system integrators that offer best-in-breed automation platforms and specialized domain expertise is crucial to achieving successful RPA adoption. Doing so can help enterprises save time and effort at every stage of RPA adoption, which eventually manifests in effective cost savings.

Make a quick transition from pilots to large-scale deployments

Enterprises that achieve significant financial impact and rapid return on their RPA investments quickly scale-up from the pilot stage to large-scale deployments. To move fast successfully, it’s important to foresee challenges ahead while in the pilot stage, and begin mitigation efforts earlier. Enterprises can also follow an agile implementation approach, which could enable their RPA deployments to quickly and flexibly adapt to changes in business requirements or underlying applications.

Integrate RPA with chatbots to achieve incremental cost reduction

Once RPA has delivered some quick wins, enterprises can deploy chatbots alongside RPA to realize incremental cost savings. For example, chatbots can resolve less complex customer queries more quickly when RPA bots fetch the necessary information and relevant insights from multiple systems and applications. Enterprises should envision building a digital workforce with both RPA and chatbots in their contact centers to achieve long-term benefits that can extend well beyond the incremental cost savings.

Adoption of best practices for contact center automation can help enterprises achieve tangible business outcomes. And the returns can be quick: our latest research shows 9-15 months with RPA, and 18-24 months with chatbots adoption.

To learn more about how you can build a successful business case for automation adoption in your contact center, check out Everest Group’s recently released report: The Business Case for RPA and Chatbots in Contact Centers.” And, please feel free to share your automation adoption experiences in contact centers with us: Katrina Menzigian ([email protected]) and Jayapriya K ([email protected])

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