Tag: F&A

Quick Takes on Robotic Automation | Sherpas in Blue Shirts

Since the start of 2015, we have had the opportunity to speak with a wide range of old friends, new acquaintances, and industry contacts – and spanning across enterprises, services providers, technology providers, academics, and consultants. Almost without fail, the topic of robot process automation (RPA) comes up. Most of the discussion aligns with the thinking in our report from last October (Service Delivery Automation (SDA) Market in 2014 – Moving Business Process Services Beyond Labor Arbitrage), but some goes deeper and adds fresh new colors.

In this blog we offer a quick summary of recent observations from these dialogues. Although these points are an amalgamation of many conversations, a few bear mentioning specifically. Mihir Shukla (CEO of Automation Anywhere), Lee Coulter (CEO of Ascension Health Shared Services), and Gianni Giacomelli (SVP Product Innovation/CMO at Genpact) debated the trends in disruptive technologies, particularly automation, at a recent SSOW event in Orlando. Additionally, Matt Smith and Dan Hudson – formerly leading Virtual Operations North America, now in Cognizant’s RPA group – spent some time explaining how their views have evolved as they have gone from advising service providers to actually working for a provider. We also spent time speaking with a number of enterprises with process improvement programs that are utilizing robotic process automation, plus conducted a recent webinar with Telefónica about automation.

Viability of RPA

  • RPA is a “no regrets” move that essentially guarantees results. Beyond the somewhat obvious fact that it can generally deliver savings quickly, it is also flexible. Unlike many decisions in global services, the approach, priorities, and tactics can all evolve fairly rapidly without having to take major steps back because the automation routines are not fixed and are designed to be changed. In this way, it is closer to how small applications outsourcing projects are simple compared to large infrastructure agreements with multi-year terms, which are complex and hard to reverse transitions, etc.
  • For automation-friendly processes of 8 or more FTEs, 40% savings is a reasonable expectation. Sometimes it is less but can also often be more. As a result, ROIs of new initiatives are measured in quarters, not years.
  • Although the cost savings is nice, the predictability and rigor from automating complex, but rules-based processes can add tremendous value. It makes knowing that operations are under control much easier. Plus, the benefits of reduced errors and delays can be a huge positive–truly value beyond cost savings.

Rate of adoption of RPA

  • Although initial processes can be implemented in several months or quarters, it requires two to three years to implement and reach significant penetration of processes across an organization.
  • There is a surprising degree of organizational inertia to not look seriously at RPA or go slowly. As a result, our view is that it will take five years to penetrate most of the market – despite being a fairly simple, almost no-brainer approach.
  • As an illustration of the pace of adoption, consider the exhibit below from our recent webinar on service delivery automation. RPA is making inroads into FAO renewals and new deals. However, notice that only 12-28% of recent deals are including RPA. Given that most of those are 4-5 year terms plus others immediately preceding them had even lower rates of RPA inclusion, this means that 3-5 years from now deals signed without RPA will be coming up for renewal…and it will still be the majority of the deals hitting the market without RPA. Once we see the deals per year with RPA cross 50%, the rate of change in the market will be noticeably faster. The wildcard, of course, is how many of the deals being signed now without RPA will be restructured during the term of the deal to include it – this will happen, but the rate is not yet clear.

RPA adoption

Technology models for automation

  • No single tool can do everything and it is a matter of building the right portfolio of options. Further, even if a tool tried to do everything, the market would likely be reluctant to select it due to fear of lock-in.
  • Interestingly, we are seeing more proprietary tools by service providers coming into play. This is not to say that the commercially available tools aren’t effective – they are, but rather that providers are experimenting with making their own investments to avoid licenses fees and to create the operating model they desire. In fact, there is a general feeling that some of the proprietary tools have functionality not found in the commercials tools (and vice versa), such that we may be entering an arms-race for innovation in automation tools. Might this even lead to service providers being willing to license their proprietary tools without also providing accompanying services? Time will tell, but this would seem to be a compelling way to attract and retain clients with a differentiated offering while spreading investments across a larger base of users.
  • At this point, those organizations electing to utilize outsourcing appear largely comfortable allowing their service provider to select and provide the relevant tools (results-oriented mindset). Those enterprises wanting to select their own tools, tend to shy away from an outsourcing model anyway.

In case you missed it, we recently released some additional information on automation and technology in business process services:


Photo credit: Flickr

HP – In the MooD for F&A Visibility | Sherpas in Blue Shirts

I recently had a briefing with HP Enterprise Services about HP BPO Flight Deck, a visual F&A performance monitoring and reporting tool focused on processes such as order to cash, source to pay and record to report. The flight deck is based on MooD software, which produces visual performance reports based on an enterprise business model that is built to reflect the client’s organization. This typically includes interrelationships between components and processes. HP is offering the tool as part of its BPO proposition in every deal, to engage with clients on transforming processes from the earliest stages of a procurement cycle.

The intention is to help clients increase visibility of F&A performance across the organization to manage operations better and to help with achieving business outcomes. Views can include specific initiatives such as electronic invoicing or dynamic settlements. HP also highlights the application in multi-sourced outsourcing deals, with HP BPO Flight Deck used to measure and monitor service provider performance as well as outcomes and issues. Other features include trending information and scenario-based planning capabilities, e.g., what would be the knock-on effect on processes if certain factors were altered.

This tool could potentially addresses the kind of F&A issues that Everest Group’s buy-side clients often highlight to us, including:

  • The need to get a broader and yet in-depth view of what is going on in the organization, what is broken and what needs changing
  • To get clarity and identify choices that support the organizational vision, strategy, framework, scope and approach
  • How plans are progressing and if an implementation or new F&A initiative is meeting its objectives

Getting that end-to-end view of processes is not easy though. One of the biggest challenges that organizations face is getting their data in order. Data challenges typically include:

  • Data from disparate systems having different definitions and formats making it difficult to compare and contrast information
  • Poor data quality – data that is simply not maintained, out of date and/or erroneous

HP and MooD have worked together to address some of the typical data integration issues that organization face when seeking this kind of end-to-end view of operations. The offering includes pre-built data dictionaries, templates and ready-built connectors for major enterprise systems and their reports.

Deployment can be done by degrees starting from a consulting engagement to map out the enterprise business model, and data taken for a sub-set of processes. A hosted proof of concept can be built, if required, before the full deployment is taken live in the client’s production environment. The software can also deal with data quality issues as part of its extract, transform and load (ETL) processes which include automated checks and fixes for standard types of issues, such as different date formats or typing errors in standard terms.

With HP BPO Flight Deck, HP aims to address many of the data challenges that organizations face when going for global process views but at the end of the day, organizations still have to get their data practices in order to be able to make the most of such tools. That said, in these days of intense global competition in business, there are strong drivers, such as year-on-year efficiency and profitability improvement targets, for coordinated group-wide action for every organization to improve its data. Many organizations are also proactively looking to gain end-to-end views of their F&A operations.

HP’s product addresses growing demand and adds an edge to its F&A offerings with the flight deck and its price built into every deal. It also supports HP’s strategy to provide a new style of BPO, based on data and performance analytics.

HP’s challenge is to help potential clients build the business case for the technology. As part of this, it highlights the case of an oil company that saved circa $23m in the first six months of deploying a similar MooD-based tool for its IT. HP believes the savings were possible because the client’s management team got visibility of problems and was able to take immediate action to fix them.

HP BPO Flight Deck has been deployed at one major client in the U.S. and is currently being implemented for another client in the UK.

How can we engage?

Please let us know how we can help you on your journey.

Contact Us

"*" indicates required fields

Please review our Privacy Notice and check the box below to consent to the use of Personal Data that you provide.