Will RPA Swing the Innovation Pendulum Back to Providers?

Perpetual Motion

Jeff Augustin, Managing Director –

My colleague Mike Slavin recently made some provocative statements to CIO magazine, saying, in effect, that outsourcers were, for a number of reasons, doing a poor job at delivering innovation to clients. Further, Mike opined that many client organizations are reacting to their disillusion by seizing the reins and taking functions related to innovation back in-house.

Pretty harsh words – but the fact is I agree that Mike’s comments accurately reflect today’s reality. That said, I believe a longer-term perspective puts things in a different light. While insourcing may indeed be a viable innovation strategy today, in my opinion that will change, and in the relatively near future. And the main driver for that change will be autonomics and Robotic Process Automation (RPA).

Specifically, every transaction engagement I’m involved in today has an element of RPA, cognitive computing or autonomics. I’m also seeing all the major providers developing impressive – and certainly innovative – proprietary RPA solutions to compete with off-the-shelf offerings from Arago, BluePrism and IPsoft. As RPA continues to gain traction and as these solutions are implemented, disruption of existing service delivery models will intensify, as processes are decomposed and reconstructed to incorporate new digital capabilities, as well as new roles and skill-sets for human workers. Putting that puzzle together is going to require innovation that few enterprises are going to have in-house.

Consider too the business plans of many of the providers, which call for significant sustained growth, but supported by very limited growth in staffing. Clearly RPA has to drive that model, and clearly the commitment to invest and build the knowledge is there.

In this context, while we may be seeing a pause in innovative energy from the service provider community, I suspect it’s the pause that happens before a pendulum swings back full-speed the other way.

For more information on this and related topics, you can download a recording of last week’s “Sourcing Savants” webinar. Sponsored by Horses for Sources and moderated by CEO Phil Fersht, the panel discussion included experts from leading advisory firms who discussed a wide range of issues facing the industry.

1 thought on “Will RPA Swing the Innovation Pendulum Back to Providers?

  1. Michael Donnellan

    Interesting commentary. At HP we are currently seeing a tsnunami of innovation in our services delivery model. For example, in the past week our Digital Process Engineers have developed a solution that delivers a 60% improvement in productivity across the Hire to Retire services model. In F&A we have a production prototype that replaces 50% of manual activity in the Source to Pay domain. We are using a combination of RPA, digital replacement of paper, analytics and cognitive orchestration of workflow to compress the cash conversion cycle. The result, onshore delivery that is cheaper than offshore and hundreds of millions of dollars of cash improvement. There is a great deal of hype being written in the media speculating opinions that are disconnected to the reality of breakthroughs in service solutions that exist inside organisations like HP.

    Reply

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