Tag Archives: business process

RPA Doesn’t Begin with FTE-Based Assumptions (Part One of Two)

Bill Huber Blog

Bill Huber, Managing Director – 

Alsbridge Managing Director Bill Huber recently interviewed Sean Tinney, Global Head of Innovation and Transformation at Sutherland Global Services, to discuss the current state of the Robotic Process Automation (RPA) market and to examine where the technology is headed.

Bill Huber: Tell me about your background and current responsibilities.

Sean Tinney: I have been in the BPO space for 13 years. My career began with a focus on O2C, transitioned into management, then account responsibilities. My current role is running innovation and transformation from a delivery perspective at Sutherland Global Services. I work with the Platform Development team — beginning at the pilot phase, determining what works best as a point solution and what the appropriate scale should be. Our focus is bringing innovation and scalability to our customer solutions.

BH: What does RPA mean to you?

ST: That’s the million dollar question. There are multiple definitions out there. To me, RPA is another way to have a virtual workforce handling transaction-based or decision-based transactions. The software itself is not a substitute for front end automation but it is software that automates process exceptions. It thrives when subjectivity is driven out of a process and improves the use of rules-based decisions, keeping quality and efficiency up, and driving errors out of a process. It can be a substantial differentiator or value-added service if you are fundamentally committed to changing the process.

RPA is designed around automating process exceptions that are a result of not having automation up front. It quantifies all of the various secession points. We believe that it will move up the cognition scale. You are seeing a degree of it now, in terms of fuzzy logic and historical trends. True cognitive robotics is a ways away, as there are so many different variables, both in horizontal process and all of the vertical variants of the same.

The next level of integrating analytics into the process will enable the software to make better educated guesses. That will be a major step toward improved cognitive processes.

BH: What are the advantages of using a provider for RPA work?

ST: It goes back to the sensitivity of the process, and the software. It requires hands on maintenance. Anything occurring upstream affects the coding of the robots, requiring a dedicated team to stay on top of it. It requires a whole new level of change management and necessitates an ingrained transformation organization that can be cost prohibitive or impractical for a client organization. Working with a provider, an organization can leverage the economies of scale, the process expertise, as well as the collective learning of a BPO organization. They get faster deployments that are more cost effective, with more impactful implementation when using a provider. The provider knows the vertical, the horizontal and the technology.

BH: How is contracting different for an RPA solution vs. a normal BPO solution?

ST: There is significantly more flexibility with an RPA solution. An RPA solution does not even begin with an FTE based assumption, but rather goes immediately to a transaction-based model. It opens up outcome based pricing opportunities because there is a new level of detail in process documentation and transformation, it provides a comprehensive view and thorough understanding of upstream and downstream processes. For example, when you apply an RPA enabled solution to a traditional manual order processing process it provides a better understanding of how it impacts billing, cash applications, DSOs, etc. This enables gainshare, with a more lucrative revenue stream because of the benefit of reducing bad debt or improving working capital. As we see RPA mature and become more adapted, there will be changes to contracting, with the FTE model slowly dying out. There will be a natural shift toward analysts and advisors. RPA will erode the traditional size and scale of resources involved in BPO. This will be an evolutionary process as the market will have to shift.   Some analyst firms base rankings on the number of contracts and people. I believe that this will become less and less important. For a company like Sutherland, it plays into our sweet spot. We have flexible commercial terms and have always leveraged technology and platforms.   RPA will be an opportunity to further differentiate ourselves.

This is nothing different than what Sutherland has been doing for nearly 30 years, RPA just reflects a continuation.

BH: What Are the Barriers to Client Acceptance?

ST: Some clients are innovators and some are more cautious. Clients are reading about new and emerging technologies. There is a natural concern about anything that could impact our client’s customers. We have two different approaches that we take. The first is proof of concepts – a small selection of sub processes or an individual segment of accounts. We will demonstrate what is possible and develop a transformation roadmap to roll into larger scale. The other approach is a traditional lift and shift, with transformation after we have control. Sutherland builds a transformation roadmap after we have control of the process.

What Keeps an Analytics Expert Up at Night (Part II of II)

Analytics2

In part one of this discussion, Alsbridge Managing Director Bill Huber spoke with Paul Burton, Senior VP and Head of Analytics and Research at Genpact, about how the growing use of analytics is redefining Business Process Management. Here’s a continuation of their conversation.

BH: What are examples of how analytics is changing BPM?

PB: BPO is outsourcing which grew up 15-20 years ago for arbitrage reasons.  The emphasis is shifting to process as a service, which has nothing to do with captives or rebadging.  It is more of a technology and analytics focus, to make it smarter to deliver the same service with less, but having the same group of people.  Customers are coming to ask for capabilities.  The cultural issue is that clients still expect to save money, even if the provider is delivering new capabilities.   In customers’ minds, taking people out of the process should mean freeing up resources to allow for the addition of capabilities.  They expect more for less, and not more for more.

The biggest thing is data. Clients have disparate data systems, CRM, back office banking, GL, finance, and sales.  None of them are ever fully integrated.  The notion of the 90s was building an enterprise data warehouse, but they never really worked.  The reason was that nothing was ever static, and changes to the system were difficult to implement.  The idea now is to leave the source systems alone, as they are what they are.  The new thing which is important is to simply virtualize the data from multiple systems and look at it in a single view, which enables the analyst to query the data for whatever purpose needed to run a report or produce a visualization.  The analyst will pull the query as often as needed.  These days, compute power is cheap, and network is cheap.  Data virtualization technologies are allowing you to pull together the data which used to be hard wired into the data warehouse.  Now analytics can be done near real time.

BH: Can you speak to specific impacts of analytics in vertical processes?

PB: In banking, risk is the big issue, with the need for stress testing, and so forth to satisfy the regulators.  Doing the model isn’t good enough.  Banks need to produce the model and let a third party look at it and then refine the model.  In low margin businesses such as CPG and retail, customer centricity is king.  Margins are low, so analytics enables you to build scale.  In businesses such as high tech and manufacturing, asset optimization is critical.  Analytical insights help to predict, mitigate and optimize repair and warranty costs.  For technology companies, manufacturers, airlines, and oil fields, asset optimization is huge.  It enables these companies to reduces reserves for product liability issues and frees up cash reserves from balance sheets.

BH: How should clients think about the business case for analytics?

PB: Clients need to focus on how analytics will enable a culture change. It’s not sufficient to do some neat math tricks, and it can’t be based on a one-time result. Analytics need to be embedded into business process so results are continuous.  This kind of culture change requires top down support, with C-level executives driving the use of analytics.  The evidence is out there to support the importance of analytics.  The problem is that companies have been spending money and not seeing the expected returns. The only way to spend money smartly is to change the culture so that you are realizing the benefits that you are investing in.

There are some similarities to when companies implemented ERPs.  When companies simply automated ineffective processes, they spent a lot of money with limited rewards. Once they began changing the process, the software became easier to implement and companies started getting returns.  The same thing applies to analytics.

BH: How can advisors such as Alsbridge help to enable more value to buyers of analytics?

PB: Advisors need to develop a view of the world that emphasizes the criticality of culture change. When that is integrated into the advisory services, advisors can play a huge role.

BH: What keeps you up at night?

PB: Not having the right skills early on.  The math and analytics are easy.  It’s the domain skills and business savvy to understand the industry and define the problems that are critical. The other thing that keeps me up is missing a big shift in the industry. Change is constant, and you need to always be aware of new innovations occurring.

BH: Thank you very much!

Three Perspectives on Analytics and BPM (Part I of II)

Analytics1

The increasing use of analytics is redefining Business Process Management. Alsbridge Managing Director Bill Huber recently interviewed Paul Burton, Senior VP and Head of Analytics and Research at Genpact. Here’s a transcript of their conversation.

BH: Tell me about your background and current role at Genpact.

PB: I’ve now been with Genpact for seven months and am responsible for the analytics business worldwide. We have a global footprint with the majority of our customers located in Western Europe and the US. Our delivery capabilities are also global, with the largest population in India. It’s important to understand that the analytics business is not a traditional BPO business, and has more of the flavor of a consultancy with an industrialization/execution capability. A big part of our delivery is the onshore/on premise team, and we continue to invest in our onshore capabilities to drive analytical skills into the market. We currently have about 6,000 resources in our analytics business.

We have seen three primary views of the world in the analytics business, which shape the strategies that companies take to the market. The first is the pure technology view, taken by large legacy companies in the technology space. Their premise is that analytics is largely driven by better hardware and software. The problem with this view is that the track record of return on investment in terms of the business value of the analytics has been less than what C-level executives had expected. Looking across the market, we are seeing a lot of disappointment with this approach.

The second approach is one taken by pure analytics firms. For them, it’s all about putting more and brighter people in front of the customers, and solving math problems to deliver business insights. The challenge here is that the insights rarely become industrialized and part of the future state business processes utilized by the clients

The third view is where Genpact is. Technology is just an enabler. Clients don’t have math problems, they have business problems. The process component is critical.  Clients want to take insights and industrialize them, to make them repeatable at scale, so that the processes used to run the company become analytical processes. In this approach, self-learning and redesigned and reimagined processes provide a big bump in value realization

Genpact leads with process experts who focus the client on what they are trying to accomplish and how that delivers benefit to the company.  It’s about using the right lens and the right definition, which leads to specific solutions containing applied analytics and technology which are then embedded in business processes. These analytics enriched processes are not static, but rather are “self-aware”; learning evolving, growing, and never the same.

BH: How important is “analytics” to the future of BPM?

PB: Most clients are overtaxed and want a quick solution to whatever problem they are facing.  The perception of a quick fix seems satisfying, but does not yield long term results.  It’s critical to focus on cultural change to embed analytics into core processes that clients use to run the company.

Our objective is to start with domain and process and reimagine them to take a discontinuous jump forward.  The context is that 1) there will continue to be pressure in back office because cost cutting is not going away, 2) there is an increasing need for customer centricity – knowing your customer and market better and in real time.  The business objective through analytics is having a one-to-one relationship with each client even if you have thousands of clients.

In part two of this discussion Paul Burton will discuss what keeps him up at night.

Translating Policies into Processes – the Compliance Challenge

David England Blog

David England, Director –

Complying with OCC regulations on third-party oversight clearly represents a clear and pressing priority for banks and financial services firms. So how are they doing?

The good news is that vendor management and sourcing organizations have made significant progress in navigating the tortuous regulatory maze and developing internal policies that align with regulatory guidelines and requirements.

The real challenge, however, is to convert those policies into rigorous and sustainable processes that operate seamlessly and consistently across a number of business units. Specifically, the compliance oversight of any given third party provider must involve sourcing, procurement, legal, finance, contracting, IT, vendor and risk management and often multiple business units – groups that don’t necessarily make a habit of playing nicely together. The gray areas that mark the boundaries between these different units only complicate matters. How, for example, do you determine where sourcing’s responsibility ends and vendor management’s begins? Or, what does corporate vendor management own, compared to what IT or a business unit’s vendor management own? These specific questions only underscores the scope of the broader goal – which is to define all the activities that need to get done, get the right people in place within each department and business unit and then establish and maintain the necessary flows between those disparate organizations.

Achieving that broader goal of alignment, communication and process discipline requires a reconsideration of the traditional role of vendor management. Typically, the vendor management function enters the sourcing lifecycle post-contract, which means that the function most directly involved with ensuring oversight and compliance has had no involvement in determining or understanding what is to be overseen, or in creating a contractual construct to support vendor management oversight and compliance. Put differently, vendor management is playing catch up before the game even starts – and in today’ regulatory climate, that game is becoming increasingly tough with increasingly high stakes.

The solution, of course, is to involve vendor management earlier in the sourcing lifecycle so that the frameworks and communication guidelines essential to effective third-party oversight can be clearly defined and baked into the relationship, rather than tacked on as an afterthought.

For more on Alsbridge’s perspective on third-party governance, download this white paper.

Will RPA Turn Us Into Technology Babysitters?

young engeneer business man with thin modern aluminium laptop in

Michael Fullwood, Director

Boosters of Robotic Process Automation (RPA) assure us that increasingly intelligent software tools will free people from days of drudgery and repetitive tasks and allow us to focus on creative and value-added activities.

While automating routine functions certainly has economic benefits, and while people undoubtedly prefer to do engaging rather than mind-numbing work, the growth of smart machines may also have some unintended consequences.

We are conditioned to think of “technology as an enabler” – people use technology tools to solve problems and do their jobs. But as RPA, cognitive computing and artificial intelligence capabilities continue to evolve, at some point the tools will be doing the bulk of (some) jobs, and it will be people who assume the role of “enabler.”

Consider: today smart tools in a service desk environment can take care of simple and straightforward incidents like password resets. But when a user sends an email or calls with a specific problem, the smart tool very quickly runs out of if/then scenarios or logical sequences. So, unable to solve the problem, the machine kicks it over to the human agent. Enhanced reasoning and problem-solving capabilities of technology will rapidly change that dynamic in the near future; human agents will shrink in number, and their role will be largely limited to handling increasingly rare exceptions, checking code and monitoring systems.

In other words, at least some of us will become baby-sitters for well-behaved machines.

Leaving aside the macro-implications of this trend in terms of employability, job satisfaction and economic impact, this trend presents an immediate and practical challenge to enterprises and service providers; namely, how to structure the service delivery chain to optimize the role of both the human agent and the smart machines that require increasingly minimal supervision.

Addressing that challenge will require process expertise and new ways of structuring human/technology interaction, as well as effective training and staffing to ensure the right skill sets are in place. (For example, you don’t want a software engineer with 15 years of experience watching a machine all day.)

RPA and intelligent machines are clearly reshaping the outsourcing world and changing the nature of the discussion around not just service delivery and business processes, but around the nature of work itself. Some of the changes underway may not be to our liking, but the reality is they are happening and we have to deal with them.

Will HP Share the Toys Now?

Child holding set of colorful jacks

By Chip Wagner, CEO

A few months ago, I had the opportunity to witness a number of emerging technology breakthroughs from HP and its labs (and I bet they didn’t even show the uber secret stuff). What I saw was Star Wars-like in its advancement and eye-wateringly impressive.  At a dinner following the demonstration, I asked Meg Whitman why, as the makers of the light sabers, hyperspace drives and cloaking devices (or “toys” if you prefer), HP seemed unable to use their innovations smarter and earlier than their competitors – who buy the same technology from HP and then use it to serve their own customers. In other words, why should a pure play services competitor overseas be able to outflank the maker of the technology?

If the split into two businesses allows HP to answer that question and be more nimble and imaginative in using their own capabilities, then it can’t help but be a good thing. From the outside looking in, it seems that HP never fully capitalized on the potential synergies from integrating EDS’ services business.  The organizational structure, perhaps its revenue accounting approach, and the historical product culture/mindset may have contributed to this. HP’s own data centers were not run by the services business, rather they stayed in the internal IT organization. It appeared that there was a lack of coordination between the products and services businesses, leading to sub-optimal outcomes.

In order to leverage that tradition of innovation, the new HP must be faster to market, aggressively exploit its breakthrough technology and proactively use that technology to re-engineer and re-craft their managed service contracts well ahead of renewal time. If they can do that, the seeming cannibalization of their book of business will in fact be a fortification.

And consider this: the most common frustration voiced by enterprise managed services customers these days is lack of innovation. That demand for new thinking and creativity can potentially be the very thing that energizes HP’s services business portfolio. Meanwhile, the printer and PC folks can do what is best for them. Maybe the services guys will figure out how to use one or two of their sister company’s products too, although cross-selling products into the services side of the business has long been an HP challenge.

The jury is out, but what an opportunity if it can be harnessed.

SG&A E2E Transformation – 2015 and beyond

business and technology concept - businessman hand with chart on

By Michael Fullwood

The pressure continues to mount on corporate C-suites as Wall Street demands ever increasing shareholder value, while Main Street demands higher quality of goods, services, and consumer value. Neither is particularly interested in segmented cost cutting measures of certain back office functions, or isolated initiatives related to quality or lean processes. Indeed, both Wall Street and Main Street expect true enterprise value, a tangible barometer of a firm’s strength and sustainability.

Leading corporate executives recognize this and are rethinking their Sales, General and Administrative (AG&A) models. Rather than examining specific back office functions (traditionally customer service and accounts payables), these business leaders instead comprehend the magnitude of these mandates. As such, they’re aggressively assessing end-to-End SG&A P&L components, with the prospect of embarking upon an SG&A Transformation.

What does end-to-end SG&A transformation actually look like? The process will vary for every firm, but these three keys are generally shared by all:

  • Sales – Optimize the revenue cycle
  • General – Source and procure more prudently
  • Administrative – Become more productive in the back office finance organization.

The precursor to implementing this type of transformation is a carefully crafted roadmap, the principal deliverable of an assessment of these areas. Furthermore, the assessment is founded upon each of the three aspects having a unique primary objective, but common secondary objectives.

Sales (Order-to-Cash) – In today’s globally competitive marketplace, organizations continually seek to optimize revenue opportunities through the maximization of recurring revenue channels and creation of other non-recurring cycles. The efficiency of the order-to-cash organization enables stronger revenue. Whether it’s shared services, internal transformation or outsourcing, world-class sales operations are being evaluated in direct connection with an assessment of procurement and finance operations.

General (Requisition-to-Procure) – For decades, direct procurement has garnered a great deal of corporate executive attention; and as long as gross margins remain a crucial financial metric, this will be the case. However, the best of best global companies have seen substantive bottom line positive impacts to their P&L by managing and influencing a higher percentage of their indirect spend. Assessing the requisition-to-procure functions with the objective of putting more IP spend under the influence of the sourcing/supply chain organization has consistently proven to be a catalyst to secondary, but sizeable benefits. This is directly related to and complementary to a finance assessment.

Administrative (Procure-to-Pay & Record-to-Report) – As exhibited during the 80’s and 90’s with the transformation of manufacturing in the automotive industry, managing internal cost centers like back office finance has a direct correlation to EBITDA and an organization’s ability to increase quality of goods and services. Operating cost metric outliers in the procure-to-pay and record-to-report functions will weigh down a company and impede agility. Yet, evaluating finance productivity in a vacuum and untethered, particularly to req-to-procure functions will only produce a partial answer.

In the final analysis, an assessment and subsequent enterprise transformation of SG&A increases shareholder value and consumer value through:

  • Optimization of the revenue cycle
  • Maximization of the spend under influence and ultimately
  • Reduction of Cost

Higher Revenue + Lower Cost + Operational Efficiency = Market recognized Enterprise Value (Shareholder & Consumer).

About Alsbridge

Alsbridge is a global management consulting firm that helps companies enable their businesses and reduce costs by optimizing their service provider relationships.  As a trusted advisor to over 40% of the Fortune 500 and FTSE 250, we work with over 200 clients a year on over $11b in spend.  Our experienced consultants leverage market insight and deep benchmarking databases to help clients align their requirements to the optimal vendor solution, apply best practices, negotiate terms at fair market prices and improve relationship governance. We help clients utilize the most cost-effective and value-added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

Alsbridge Managing Director Bill Huber to Moderate, Speak and Teach at NASSCOM BPM Strategy Summit Sept. 16-17

Managing Director Bill Huber of Alsbridge, Inc., an award-winning benchmarking, sourcing and transformation advisory firm, will serve as a moderator, panelist and instructor on topics about next generation Business Process Management (BPM) at the NASSCOM BPM Strategy Summit, Sept. 16-17, in Bangalore, India. Themed “Making hyper-growth a sustainable business reality,” this year marks NASSCOM’s 16th edition of the conference.

“The global BPM industry is quickly shifting from a cost-based to a value-based proposition, and next generation models such as Business Process as a Service (BPaaS), cloud, analytics, and robotics are challenging the established paradigms of sourcing,” said Huber. “This summit, focused on next generation BPM models and strategies, is very timely, and I look forward to contributing to these conversations.”

Huber will moderate the panel discussion, ‘Who Moved My Cheese – Capturing Value in Next Generation BPM Relationship’ session on Sept. 17. The discussion will address next generation models that are challenging the established paradigms of sourcing. The discussion focuses on understanding this dynamic environment, changing customer expectations, and how to capture value in the next generation relationships.

Huber also will lead a master class session, ‘A business case development beyond cost savings’ on Sept. 16. The class will explore approaches to capture the value add of BPO including: improved insights from analytics, operational improvements to upstream and downstream functions, improved revenue through improved market agility, market insights and customer care, and the cost and benefits of risk management.

Additionally, Huber will serve as a panelist for a discussion on ‘De-Risking Business: Protection of Confidential Data is a Key Corporate Priority’ on Sept. 17. The session will focus on highlighting specific issues around confidentiality in the industry, discuss ways to address them in a systemic way, and unveil an Industry Code of Conduct to institutionalize it going forward.

For more information about the summit, please visit www.nasscom.in.

About Alsbridge Inc.

Alsbridge is a global management consulting firm that helps companies enable their businesses and reduce costs by optimizing their service provider relationships.  As a trusted advisor to over 40% of the Fortune 500 and FTSE 250, we work with over 200 clients a year on over $11b in spend.  Our experienced consultants leverage market insight and deep benchmarking databases to help clients align their requirements to the optimal vendor solution, apply best practices, negotiate terms at fair market prices and improve relationship governance. We help clients utilize the most cost-effective and value-added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

Alsbridge to Share Insights on Shared Services & Outsourcing Week Industry Six Panel

Alsbridge is happy to announce that our Managing Director, Bill Huber, has been selected to be on the Industry Six: The Vertical Wizards panel at the 18th Annual North American Shared Services & Outsourcing Week in Orlando, Florida, March 11-14, 2014.

Alsbridge was appointed to the 2014 Industry Six panel based upon its reputation and experience in the Banking, Financial Services and Insurance industry verticals. Bill Huber will be interviewing John Standring from American Express on how to capitalize on sector knowledge, tips and secrets to accelerate the delivery of business outcomes through shared services and BPO

The Annual North American Shared Services & Outsourcing Week Summit covers three full days of information sharing, learning and networking with 800 senior practitioners, research analysts and sell-side professionals involved in shared services, outsourcing and transformation.

For further details about the event please, visit the Shared Services & Outsourcing Network website at http://www.ssonetwork.com

About Alsbridge Inc.

Alsbridge is a global consulting firm that helps companies transform and optimize the way they purchase, manage and leverage technology and business processes.   We have over 175 team members on 4 continents serving over 200 clients a year including more than 40% of the Fortune 500.  Alsbridge has helped hundreds of companies reduce costs and get more value from their vendors.  Our experienced consultants leverage proprietary tools and information databases to identify and engage the optimal vendors for your situation, negotiate best practice terms at fair market prices, and improve the way you work with your service providers.  Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

EDITORS/WRITERS: Journalists interested in covering the above topic or interviewing one of our SMEs please contact:

Eric Gilmour
Office: (214) 696-6410

eric.gilmour@alsbridge.com
www.alsbridge.com

BPO Vs ITO: Who Will Be the Outsourcing Heavyweight Champion in 2014? – Alsbridge Shares Insights

The gloves come off when it comes to BPO and ITO impacting the world of outsourcing. Experts from Alsbridge will be delivering an eSeminar –BPO vs. ITO: Who has the Upper Hand in 2014?- on January 16, 2014, 1:00 PM to 2:00 PM ET. This eSeminar will highlight how current trends in both business process and information technology outsourcing are impacting the outsourcing landscape in 2014.

Join Alsbridge for ringside insights from Directors, Dennis Winkler and Pete Roman as they discuss how the outsourcing arena is changing and what you need to understand to better leverage opportunities.

Attendees will learn:

  • ITO and BPO trends: past, present and future
  • Underlying drivers affecting new deals and pricing
  • The Big Data difference in BPO vs. ITO
  • ITO & BPO benchmarking: which is an art and which is a science

Discover what it takes to the outsourcing heavyweight champ and deliver a knock-out in 2014.

To register, visit the eSeminar registration page. Seats are limited and early registration is recommended.