The relationship between RPA vendors and their clients isn’t so different from the relationship between Marvel Studios and its fans.
Since the movie Iron Man hit the big screen in 2008, fans’ expectations of superhero films have skyrocketed. Despite the rising and evolving expectations, Marvel has satisfied its audience and has made a little pocket change in the process.
In a similar way, RPA buyers are expecting increasingly more from their RPA vendors. So, have RPA technology vendors been MARVELous in their customers’ eyes?
Our recent research study among 50 enterprise RPA buyers makes it clear that vendors have excelled in addressing their primary drivers, which are cost reduction and process optimization.
Consequently, technology vendors should focus on continuously evolving their RPA solutions with a host of capabilities to help enterprise buyers achieve their strategic business outcomes.
As to be expected, the buyers in our research study found their RPA vendors excelled in certain areas and had work to do in others.
The key strengths for those vendors who were identified as the Leaders as per our PEAK Matrix™ assessment on RPA included:
- Customer support and service
- Ease of use and robot development
- Vision and strategy
Key improvement areas for Leaders included:
- Product vision and strategy
- Product training and support
The X Factors
As there are so many RPA tools available in the market, each with its own strengths and weaknesses, it can be daunting for enterprises to select the right vendor for their unique needs. One critical part of the decision-making process is to focus on the X factors that are most important to their strategic agendas.
Our study found that factors including “ease of use and robot maintenance” and “scalability” highly correlate to buyers’ overall satisfaction levels. This is not surprising, as these are factors that buyers typically face issues with during RPA adoption. “Product vision and strategy” – and in some cases vendor expertise in a specific vertical industry or function – are also important buyer X factors.
While it’s clear that RPA vendors can do more to satisfy the needs of their customers – and that they’ll need to continually evolve their solutions – they have indeed been relatively MARVELous in delivering value and overall satisfaction to their buyers.
To learn more, please read our report “Buyer Satisfaction with RPA – How Far or Close is Reality From Hype.”
Research EVP and distinguished analyst Sarah Burnett will be a key speaker at the IEEE WIE International Leadership Summit held on August 13-15 in Southhampton. During her August 14 session, Sarah will unpack findings from industry-leading research into the capabilities of RPA and AI for enterprises, as well as how they can be combined for advanced automation of business processes.
Sarah’s presentation will highlight:
- The capabilities of the two different types of technologies and how they differ in what they can offer
- Evolution of RPA technology and its development into enterprise-grade software
- How AI technologies are helping extend the scope of RPA, making it easier to apply, use and maintain
- How the two combine to help enterprises automate more business processes
- What the office of the future will look like with a mixed workforce of people, AI and robots
- What the future holds in terms of technology and market development for real life applications of business process automation
About the event
The 2018 IEEE WIE International Leadership Summit (ILS) mission is to empower women to choose their own career path and facilitate the recruitment and retention of women in technical disciplines. Our summit is dedicated to promote women in Engineering, Science and Technology and inspire girls around the world to achieve rewarding careers in engineering.
August 13-15, 2018
University of Southampton
Southampton SO17 1BJ
Sarah Burnett, Research EVP and Distinguished Analyst, Everest Group
How hot has Summer 2018 been around the globe? Red hot…but not as hot as the RPA marketplace. The speed of evolution in this industry segment is almost without precedent. Firms that had revenues worth tens of millions of U.S. dollars just a couple of years ago are talking about reaching a billion in revenue in just a couple of more years.
So why all the excitement? Some chalk it up to Robotic Process Automation being a clever product idea and others to the even cleverer marketing of sexy robots.
But the reality is that it’s the perfect storm – or heat wave – of innovation and capital intersecting at just the right time.
Of course, it doesn’t hurt that enterprises have already captured most of the potential value from offshore labor arbitrage. But when you combine the need for a new source of cost savings with the acute shortage of labor in the U.S. and Europe, you have a market condition in which enterprises are screaming for automation that allows continued productivity improvements for less money, with less human labor-based effort.
The RPA Virtuous Circle Story
These four keys make up the RPA virtuous circle: More sophisticated software platforms, real value propositions, significant capital infusion, and aggressive buy/build decisions. Let’s unpack each one to get the full story.
More sophisticated software platforms – the software platforms underlying RPA are not new; some of them have been around for many years. But as interest and revenues in the segment grow, the vendors are investing in better software and getting invaluable real-life implementation experience. And great use cases and robust feedback loops will drive enhanced software innovation.
Real value propositions – while a great idea is always fun to talk about, the story quickly fades if the economics are insufficient. In RPA’s case, enterprises are finding real savings and, probably most important, operational improvement. What makes this such an exciting story is that RPA doesn’t apply to just one aspect of the enterprise – it applies anywhere human resources are being deployed for labor-intensive services. So not just G&A functions, but also core business operations.
Significant capital being infused – where there is monetary value creation, Wall Street and Silicon Valley will certainly be found nearby. In the RPA segment, multiple investments in excess of US$100 million have been made. In total, we have seen more than a half billion dollars in investments in just the past six months. These are huge flows of capital, especially considering that in many cases they far exceed current revenues.
Aggressive buy/build decisions – of course, when that much capital is deployed, there’s tremendous pressure to take action to generate real, quantifiable results. The most obvious is to deploy larger sales/account teams to support the growth. But, there will be also significant development needs as use cases expand. We also anticipate that RPA firms will go on a buying spree of niche competitors or companies that increase automation functionality for items like OCR, machine learning, artificial intelligence, and natural language processing.
Right now, the velocity of the Virtuous Circle is increasing…better software, increased enterprise value propositions, and another round of investments.
To learn more about Everest Group’s take on RPA, view the replay of our popular August 8 webinar on the latest developments and implications for enterprises. By registering, you will also receive a a copy of the presentation and deck for download after the webinar.
Sarah’s presentation, Are “Colleagues” Electric?, will distill volumes of unique and detailed, industry-leading research on the rise of robots in enterprises. She will discuss the state of the automation market and its phenomenal growth, technology trends, how leading enterprises are taking advantage of the technology to get ahead of competition, and what the future holds for the industry.
Join Everest Group at this event for a round of discussions and presentations on the state of the automation market.
June 27-28, 2018
Sarah Burnett, Research VP, Everest Group
“Max, please send our new terms and conditions’ letter to all our Prime current account holders,” said Louise, a customer contact manager in a retail bank.
“I will ask Alf to do it. Is there anything else I can do for you today Louise?” Asked Max, the personal virtual helper on Louise’s desktop computer.
“Yes, please tell Alf to update Elsa.”
You may have guessed that Alf and Elsa are robots too – one processes letters for mailshots, the other makes records for regulatory compliance.
Is this scenario hype or reality?
Are colleagues going to be electric? Everest Group data indicates that by 2021 there will be as many Robotic Desktop Automation (RDA), attended robots running on users’ desktops, assisting agents, and employees, as there are people currently delivering contact center outsourcing services globally; that means about three million attended robots by 2021.
There will also be a huge rise in the number of virtual workers or unattended Robotic Process Automation (RPA) robots, running on servers in data centers and delivering end-to-end process automation without the need for employees to activate them. Exhibits 1 and 2 highlight the projected rise of both attended and unattended robots through to 2021. These estimates are for robots purchased on license from independent third-party RPA software vendors. They exclude robots provided by vendors at no charge for proof of concepts, and training, etc.
Exhibit 1 – Attended robots
Exhibit 2 – Unattended robots
Our calculations are based on data from multiple Everest Group databases including but not limited to:
- Revenue, average license costs, and growth of 18 RPA vendors projected out to the larger market
- Numbers of people currently working in contact center outsourcing services, in Global in-house Centers (GICs), also known as shared services centers, in both front- and back-office functions globally
Everest Group analysis indicates that many colleagues will indeed be electric by 2021, a shift that will impact enterprises, not only in operations but also in terms of HR policies, recruitment, succession planning, process knowledge and other skills development, process and program document management, IT investment, management and maintenance, and business and IT continuity.
Sarah Burnett will be discussing this topic and other RPA trends during her talk at Symphony Venture’s Robotic Operations Centre Launch in Krakow, Poland on June 27.
Everest Group conducted a comprehensive study on enterprise Robotic Process Automation (RPA) adoption. The study provided us with important insights into what allows companies to realize value from investing in RPA. For instance, at the outset, executives believe RPA is an easy way to automate tasks and thus increase productivity. But the study participants’ experiences reveal that, in theory, RPA is simple but, in practice, it’s difficult. Why? Because RPA is a digital transformation journey, and there are complications when trying to unleash digital transformation.
A company that wants to realize much value from implementing RPA must invest in the capability to drive automation. This involves more than configuring the robots. It requires process redesign, navigating the different stakeholders that have purview (security, IT, audit compliance, etc.) and navigating the business unit with the problem. Often the opportunities and problems span multiple business units, which requires coordinating and focus on multiple units and departments.
The technology itself is simple, but the problem of driving change is difficult. To overcome this, companies are establishing RPA Centers of Excellence (CoEs) – one of the best practices evident among 52 participants in our Enterprise RPA Pinnacle Model study. Getting IT involved early in the adoption effort is another best practice.
It’s very clear that companies that make the commitment and invest in resources to enable change to achieve a higher return on their investment. Pinnacle Enterprises™ – those that achieved superior outcomes as a result of their advanced capabilities – achieved 4X greater ROI than enterprises that didn’t take the RPA opportunity seriously by investing in such success factors as a COE, partners to do the configuration and coordinating the numerous stakeholders that need to be aligned to drive change. 4X is a huge difference in benefits!
A Surprising Outcome of the Study
In our detailed interview discussions with the companies participating in the study, we found significant frustration among the executives sponsoring RPA adoption. They discussed their struggles in trying to communicate with boards of directors and with the business units the need for adequate investment, support resources and the amount of change necessary to capture the value of RPA. The depth of the change and the extent of the investment is difficult for executives to convey to their organizations and their boards.
Interestingly, companies get a robust return from these investments in driving change. But because of the perception that the technology is simple, executives expect that value can be extracted without investment, without resources and without stakeholder alignment. This study clearly proves that is not the case.
One of our goals in the Pinnacle study was to investigate the participating companies across six dimensions of change required for RPA success so that they and other companies can learn from their experiences. A second goal was to develop an assessment tool. Any company can take the 30-minute questionnaire, followed by a four-hour workshop, and compare its RPA journey results against others’ experiences and against the Pinnacle companies, which are the most mature and achieving the most value from their investments.
We anticipated that people would compare their experiences against others, which would then give a practical road map where people can understand the investments and activities they needed to do to get a greater return from their RPA investment. In fact, this happened. Clearly, the people who take the assessment quickly identify the gaps they have against the best practices and build a road map to close the gaps.
The surprising outcome is that we didn’t anticipate how effective the assessment tool is for the executive sponsors of RPA to help communicate the level of effort and resources required. It’s a helpful communication vehicle for justifying the kind of investment and budget necessary to be a high-performing organization in extracting value from RPA and for getting the support for change and aligning stakeholder interests.
Assess Your Company’s Gaps
If your company is undertaking an RPA adoption journey, we believe you’ll get great value from going through this assessment process. Comparing your company’s results to other industries and leading companies will help you understand what you’re doing differently and help you build a road map to close the gaps. It will also provide a tool to help you discuss the business case for the appropriate amount of investment and the appropriate amount of resources necessary for top performance.
Each company progresses down the RPA adoption curve at its own pace. But there’s always something a company can learn from others. Even the best-performing companies – the Pinnacle Enterprises – benefited seeing what others had done and knowing where they should double down on investments and activities that capture value from RPA.
Transform with an RPA Implementation
Are you positioning your company for real success in RPA (Robotic Process Automation)?
Increasingly, a number of companies are doing just that. They are moving out of the RPA “pilot” stage and beginning to reap real, lasting value from RPA implementations.
Everest Group surveyed 52 enterprises in 10 industries in various stages of RPA adoption, all with more than US$1 billion in revenue, 10 with revenue between $5 and $10 billion, and 23 with revenue greater than $10 billion.
As the chart below shows, nine of those companies are substantially farther along the path to achieving the fullest value from robotic process automation. These are the nine in the upper right that we have designated as Pinnacle Enterprises™.
Where would your company’s “dot” land? Everest Group can help you find it in 30 days
True, RPA adoption is still in early stages at most companies, and much value remains unrealized even in the most mature RPA implementations. But even small advantages seized early can make a big difference today and create the foundation for even greater value in the future.
We found three significant differentiators in the RPA activities of the Pinnacle Enterprises™ versus the strivers. Interestingly, these differentiators repudiate three persistent RPA myths.
Before we address those myths versus the reality, let us specify how Everest Group measures RPA adoption.
RPA Adoption Measurements
To qualify as Pinnacle Enterprises™, the nine companies outperformed the strivers on three measures: business performance, operational impact, and costs.
In terms of business performance, the Pinnacle Enterprises™ share a broader set of significant business impacts:
The Pinnacle Enterprises™ also demand more operational benefits of their RPA implementations:
As for cost impact, RPA implementations enables the Pinnacle Enterprises to:
RPA Differentiators: The Myths and the Realities
As three myths have gained currency around RPA, they have promoted false expectations and complicated execution – ultimately circumscribing its potential. By repudiating these myths, our research sheds light on how enterprises can reposition their RPA adoption to reap its greater rewards.
RPA Myth #1 – RPA adoption is about cost reduction, especially through layoffs.
Reality: Pinnacle Enterprises see RPA as transformational, leading to resource reskilling/upskilling.
It is true that if RPA is undertaken with nothing but raw cost reduction in mind, most of RPA’s potential will be squandered. But Pinnacle Enterprises™ expect more and get more. They achieve:
- 50% improvement in operations metrics
- 39% improvement in SLA compliance
- 100% find their employees to be happier
- l8% report significant improvements in customer performance
This RPA myth has also stoked a pervasive fear that “robots will replace people” – that effective RPA adoption can be achieved only in concert with massive layoffs. Even among leaders who know better, the public relations impact of this myth leads them to proceed with excessive caution and conflicted motivation.
In fact, the nine RPA Pinnacle Enterprises, and strivers to a slightly lower yet still predominant extent, showed a significant focus on talent management:
- Pinnacle Enterprises reskilled, upskilled, or redeployed 98% of employees affected by RPA (versus 83% of the strivers)
By envisioning RPA as transformational, Pinnacle Enterprises position themselves to achieve RPA’s greatest benefits. For the Pinnacle Enterprises versus the RPA strivers:
RPA Myth #2: Federating RPA implementations drives RPA innovation and ROI.
Reality: Pinnacle Enterprises centralize RPA adoption to achieve scale and (ROI?).
Expectations feed outcomes. If RPA is viewed as a series of disconnected technical projects, the separate implementers sacrifice opportunities. They overlook potential to redesign processes to optimize RPA and to design how its human workforce can best engage with its digital workforce. Carrying out their work in siloed groups, they cannot foresee or manage RPA’s organizational implications.
In keeping with their broader view of RPA’s impact, Pinnacle Enterprises establish centralized implementation approaches to help in scaling RPA more quickly.
In centralizing their RPA initiatives, the Pinnacle Enterprises™ position themselves for RPA success in the following ways:
RPA Myth #3: RPA Can Be Deployed by Business Units, without IT Collaboration.
Reality: Pinnacle Enterprises collaborate closely with their IT organizations and service providers.
RPA vendors sometimes position their wares as easy for business units to implement, thus skirting the scrutiny of IT. Years of decentralizing technology implementations have emboldened business units to take that independent path.
But our research shows that RPA implementations uncoupled from IT shortchange the enterprise on scale, efficiency, compliance, security, standards, and pure IT know-how.
Instead, Pinnacle Enterprises™, recognizing they need broader RPA skills and resource levels, augment their IT organizations with third-party IT service providers to support or jointly lead RPA implementations. They see IT as the logical place for the full scope of desired expertise to help them: select and own RPA technology, manage and integrate it, provide supporting infrastructure, mitigate risk and security implications, standardize tools, ensure conformance with enterprise performance standards, and sync bots with application and infrastructure changes.
In the Pinnacle Enterprises™:
It is not too late – far from it. With RPA adoption still in the early stages, these gaps need not be predictive for the long term, and even the Pinnacle Enterprises™ still have a long journey to achieve full RPA benefits.
If the enterprises now trailing in RPA outcomes can quickly recognize the power of these differentiators and work to alter their course, they can likewise reap the anticipated benefits of their RPA efforts in the coming months and years.
If you would like to learn how your RPA adoption compares to the Pinnacle Enterprises™ –and how you can improve it – Everest Group can show you.
Pinnacle Assessment™ Process
By engaging in an assessment of your readiness for digital transformation, you will gain an understanding of:
- Your level of readiness to either drive or be a major player in the digital transformation of your enterprise as compared to others who are achieving superior outcomes
- Your highest potential areas for improvement
- Pinnacle Practices™ used by high performers that could accelerate your readiness for the digital transformation
- Complete the same survey completed by participants in the original Pinnacle Model™ study – completed online in less than 20 minutes
- Everest Group prepares an assessment of both the outcomes you have been able to achieve and your maturity level
- Senior leaders participate in a 2-3 hour workshop with Everest Group to review the assessment and identify high priority next steps
Ready or not – it’s here!
Is Your Digital Transformation Strategy Successful?
As you are keenly aware, today’s business climate requires enterprises to embrace successful digital transformation strategies.
The stage is set. New entrants into the market that were born digital are disrupting once stable industries. Customers demand updated digital experiences. Fast moving traditional businesses are transforming at a rate that enables them to compete with the disruptors and requires their competitors to respond. Digital transformation is no longer a luxury or differentiator – but a requirement to compete
Digital transformation is a journey
Given that the language of digital transformation sounds technical – robotics processing automation (RPA), artificial intelligence (AI), cloud adoption, social media, analytics, Internet of Things (IoT), cyber security, mobility, etc. – it is tempting to engage as though the digital strategy merely requires a series of technology implementations. In reality, digital transformations are journeys. More accurately, they are a series of journeys.
Success on a digital transformation journey
The elements of success for a digital transformation journey are broader than the successful implementation of technology. A good digital transformation strategy will enable your organization to address all the parts of the business and delivery model that require change. Those elements include:
- Business processes: the way you develop your strategy, fund and govern your initiatives can either impede or enable success
- Sales & delivery: having an impact on how an enterprise sells and delivers to the end customer is at the heart of digital transformation
- Culture: outdated mindsets and historical modes of operation are frequently in conflict with what is required to perform at the speed of digital
- IT delivery model: while digital transformation strategies are not all about technology, having an IT delivery model that is aligned with the demands of an agile, as-a-Service business environment in critical
- Innovation: the ability to both innovate and adopt innovation is more challenging than one would image in businesses that previously succeeded on quality and efficiency dimensions
- Talent model: a digital world not only requires a different set of skills, but different ways in which people work together to accomplish tasks
Digital Transformation versus Digital Projects
What is the Difference between Digital Transformation and a Digital Project?
When businesses use digital technologies, it does not mean that they are in the process of a digital transformation. Digital transformation is the use of digital technologies to drive a change in the business model.
A Series of Journeys
Digital transformation strategies require the successful traversing of multiple journeys:
- Digital Transformation Readiness: Your IT organization must be ready to reinvent the enterprise through digital technology that dramatically alters their customers’ experience and their business processes. This requires first a reinvention of the IT organization itself
- Next Generation Infrastructure: All enterprises hoping to compete in the digital transformation era have a common imperative: each must find and deploy the right infrastructure strategy even as they simultaneously leverage numerous transformational technologies
- RPA Adoption: Breaking out of the pilot phase is a critical milestone along the RPA journey. There are other advantages, some small, that when seized early can make a big difference today and create the foundation for even greater value in the future
- Customer Experience (CX) Outsourcing: The ways in which companies engage with their customers, including contact centers, are changing dramatically to keep pace with the expectation of consumers
- Security: As enterprises rotate more of their business to digital models, leverage data more aggressively than before, and create more intimate engagements with customers, the security threat has moved from an IT issue to a board-level imperative to protect the firm
Insights to Maximize the Impact of your Digital Transformation Strategy
Insights to maximize the impact of your digital transformation strategy
Since most organizations are engaged in digital transformation at some level, you can gain a great deal of insight by understanding what successful organizations – those who are excelling in the achievement of cost, operational, and strategic outcomes – are doing. The Everest Group Pinnacle Model™ analyses and assessments help enterprises understand how much opportunity they may be leaving on the table with their current strategies and what capabilities should be enhanced or adjusted to order to improve.
Trends in Digital
Artificial Intelligence (AI)
Artificial Intelligence (AI) is gaining significant importance in driving end-to-end process automation in various industries. While RPA helped firms drive automation of transactional and repetitive tasks, AI focuses on driving automation of tasks that require human intelligence, driven by different technologies and capabilities, such as Machine Learning (ML), Natural Language Processing (NLP), computer vision, or cognitive computing.
Everest Group publishes reports on AI trends, adoption,
and benefits across processes and in several verticals.
Blockchain technology holds potential to bring enhanced trust and security, new business models, and infrastructure cost savings for various areas, such as supply chain, trade finance, provenance, cross-border payments, securities trading, and regulatory compliance.
Find out more about blockchain and how different organizations are leveraging this technology in Everest Group’s published reports.
Robotic Process Automation (RPA)
A majority of enterprises are still in the early stages of RPA adoption, but some enterprises have performed better than others in their RPA journey by developing a combination of differentiated capabilities that have produced superior outcomes. Beyond cost savings, RPA can bring numerous benefits.
Everest Group publishes reports on RPA adoption, effectiveness, and benefits across processes and in several verticals.
Digital Transformation Readiness
Only 10% of organizations say they're ready for digital transformation. Are you?
After surveying IT Leaders at more than 200 companies, we have insights to help you succeed at transformation. Pulling from this analysis, Partner Cecilia Edwards describes the three core distinctions between Pinnacle Enterprises and the rest of the pack. These include:
- Overall alignment with their business
- Ability to support and drive innovation
- Focus on enterprise outcomes instead of just IT outcomes