Tag Archives: RPA

Taking RPA Mainstream (Part Two 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, on the current state of the Robotic Process Automation (RPA) market and on where the technology is headed. Part One of their discussion examined how RPA redefines the concept of “full-time equivalent.” In Part Two, they look at practical considerations involved in implementation.

BH: How long do you think it will be before RPA becomes the prevalent form of delivery?

ST: For Sutherland it is how we go to market, and how we deliver. Every new agreement has an element of RPA embedded in our delivery.   There still seems to be a good deal of marketing rather than deployment.  Actual delivery is still limited.  I believe that we are 12-18 months away from wide scale deployment in the market, and about six months until most of Sutherland’s clients have RPA deployed.

BH: What are the change management challenges on the client side?

ST: Change management is huge.  Clients look at it contractually, how do we go from a sourced to a retained environment?  How do we manage the process changes: What are the new quality metrics?  The challenge becomes one of [bringing] together all of the constituents and process implications.  Any change to any of the systems on the client side will impact the robotic programs.  You need to have good visibility to manage the risks at a much more granular level.  This needs to be managed as a separate stream with strong project management.  It requires careful synchronization to avoid problems.  We need to solve for both the project and for changes to the client’s organization.  The client may not always be able to communicate their internal changes because they can be siloed internally.  Robotics truly is transformative, but like anything that you are changing on a mass scale, you need to over invest in change management.

BH: What are going to be the biggest areas for RPA in the next year?

ST: Next year, we expect a nice push into human resources processes.  The push will be to get all inquiries to a help desk or employee self-service.  There are so many repeatable tasks — like onboarding — where we will see adoption.  Also — within health care — credentialing, claims processing and revenue processes will provide a large opportunity.

This will be followed closely by insurance and then the banking and mortgage industries.  How can you use robotics as an audit and quality tool?  Subjectivity and exceptions are kicked out of the process.  When you look at comparing information to a system of record against a source file and an application, you can use robotics to automate those checks and reporting.  Audit, compliance and quality as a service in multiple industries.

There are three things that make a successful RPA deployment:

  • Quality
  • Productivity
  • Visibility

The base of all of this is quality.  Inherently all [RPA] allows [us] to offer a quality as-a-service offering.  All of the data points that [are] created by going through greater detail on process documentation allows a whole new level of analytics.  The reality is that robotics is one small component.  The secret is how exceptions [are managed] and how analytics [are implemented], which will drive toward outcome-based and gainshare-based pricing models.

BH: What do advisors like Alsbridge need to do differently to address the age of RPA?

ST: Create a separate group to understand Robotics, and how to work with clients to identify opportunities for robotics.  Help clients to understand what a programs is; to define a program; and to assist a client in selecting the right service provider.  Educate the clients and help them to understand where there may be an opportunity.  Not only bring the right provider to the table, but help the clients prepare for RPA.

BH: What keeps you up at night?

ST: Change management keeps me up at night!  As good as the best change management programs can be, there is always something that happens or someone who doesn’t communicate accurately.  If virtually any change falls through the cracks, bells and whistles will go off.  The best RPA implementations are still mini solutions.  If the change management is nailed down, there is little cause to worry about the system slowing down or breaking.

The RPA Manifesto and the Onshoring Revolution

Derek Toone Blog

Derek Toone, Managing Director –

A specter is haunting offshore outsourcing — the specter of Robotic Process Automation…

The cost and availability for a given skillset is a key driver in determining the location of a service delivery center. Due in large part to its thousands of highly skilled and competitively salaried labor resources, India is today the recognized global center of outsourcing operations. And in general, the value proposition of any sourcing location – be it China, Eastern Europe or Latin America – is based to a significant degree on skillsets and labor costs.

Other considerations contributing to service delivery location decisions include language capability and cultural affinity, as well as existing infrastructure, government stability, physical and IP security and time zone. Ultimately, though, if the same skillsets are available in two locations but cost less in one versus the other, the location decision will most often go in favor of the one with the lower cost of labor.

This is changing in a fundamental way, as the emergence and rapid adoption of RPA transforms how businesses approach service delivery location. By enabling more work to be performed with fewer people, RPA undermines the basic premise of labor arbitrage. Put simply, cheap workers – however skilled or capable – now present a significantly diminished competitive advantage compared to software that doesn’t require a weekly wage and never takes a holiday.  Moreover, the processes most suitable for RPA – digital inputs and outputs, with rules-based decision making and no requirement for voice or in-person interaction – are the also the ones most likely to be offshored.

As the cost and availability of labor becomes a smaller component of overall service delivery, the weight of other factors such as language, culture, time zone and IP security will no longer be additional considerations; rather, they will be primary drivers of service delivery location decisions. This change in priorities will force global enterprises to re-think their service delivery models, which today combine a complex mix of onshore and offshore locations designed to maximize the advantages of each location while making the hand-offs and touch points between locations as seamless as possible.

We are seeing these shifts occurring already with some of the smaller, up-and-coming ITO and BPO providers who are using early adoption of RPA to compete against the larger established players. These upstarts are using an optimal mix of skillsets from onshore and offshore labor, with a focus on maximizing quality of service rather than minimizing cost of labor.

Many of the established global providers recognize what the future holds as well – consider recent reports of Wipro’s plans to reduce headcount by 47,000 in the next three years by leveraging automation, artificial intelligence and digital services.

Bottom line: RPA, artificial intelligence and cognitive computing will over time make geography increasingly irrelevant to more and more job functions. While this Brave New World may be closer than we think, the immediate reality is that RPA is already having a significant impact on sourcing location decisions, by redefining the criteria and priorities used to determine where work gets done.

The impact of RPA on onshoring was the topic of a panel discussion at the recent RevAmerica Conference in New Orleans.

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.

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.

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.

The Year Ahead – Two Imperatives

2015 New Year Concept

Chip Wagner, CEO

As we indulge in the seasonal habit of taking stock of the past 12 months and looking ahead to the next 12, I think it’s safe to say that 2014 can be characterized as a “year of disruption.” We’ve talked a lot about game-changing technologies, new service delivery models and the end of business-as-usual. In terms of preparing for 2015, I propose that we think of a “year of the new normal.” In other words, if we’ve agreed that our world is changing, it’s now incumbent upon us – particularly “us” as sourcing advisors – to know what the new rules are and to get on with it.

In that spirit, here are some thoughts on two central challenges facing enterprise buyers, service providers and third-party advisors in 2015.

Leveraging autonomics/RPA: Client interest in intelligent machines is growing rapidly, and service providers are scrambling to get on the autonomics bandwagon, either as aggressive leaders eager to seize the opportunity, or reluctant followers who see the writing on the wall. Preliminary data shows that Robotics Process Automation (RPA) solutions are already having an impact on IT services pricing. The challenge now becomes smart implementations that achieve optimal benefits. As we learn more about intelligent systems, it’s becoming increasingly clear that the value proposition is by no means straightforward – we’re not talking about a clear-cut x percentage reduction in labor requirements. Rather than eliminating discrete and clearly defined “jobs,” RPA solutions will eliminate specific functions and time-consuming tasks, so enterprises will have to figure out how to reallocate portions of existing resources and utilize additional bandwidth. RPA results, moreover, will vary, based on enterprise maturity level and service tower. Business cases and forecast models must take these variances into account, as well as factor in implementation and long-term support costs.

Finding the right partners (and customers): Clients increasingly require service providers who have broad and deep knowledge of their industry, and who can apply technology and operational expertise to address industry-specific regulatory issues, competitive pressures and customer requirements. In this environment, enterprises must identify providers who have the right mix of capabilities and proven expertise. Providers, meanwhile, need to articulate their value propositions and hone their go-to-market strategies to identify the best opportunities. Put bluntly, clients can’t afford to pick a provider who doesn’t have the right stuff, and providers can’t afford to chase deals they won’t win. To remain relevant, advisors need to focus on and invest in industry knowledge.

Disruption on Steroids: Notes from the Robosphere

Chip Wagner,  CEO, Alsbridge

The prevailing notion that Robotic Process Automation (RPA) is an “industry game-changer” was reinforced for me in a big way recently, when I had the distinct privilege of co-chairing Automation Innovation 2014. Sponsored by the Institute for Robotic Process Automation (IRPA), the conference gathered buyers, providers, practitioners and thought leaders to discuss topics ranging from long-term societal implications of intelligent computers to near-term impacts on labor arbitrage-based service delivery models.*

Perhaps the most valuable lesson from this day-long learning experience was the humbling realization of how much more homework we all need to do. In addition, I was struck by a number of specific observations various speakers offered regarding new ways of looking at smart machines and how they are changing our world. These nuggets of insight helped to crystallize my thinking around what these changes look like and to articulate some of the questions we need to ask in order to more effectively help our clients and partners navigate the challenges and seize the opportunities that await.

For example, we’ve tended to look at autonomics as driving a certain percentage reduction in personnel requirements, and you tend to visualize that as a straightforward decrease in staffing numbers. In his presentation, Phil Fersht of HfS Research argued that the point is not that RPA will reduce a staff of 100 to a staff of, say, 60. Rather, it’s that a staff of 100 will have their individual workloads reduced by 40 percent each, as certain mundane and repeatable functions are off-loaded to smart machines. It’s a subtle distinction, perhaps, but an important one, as it allows you to envision change from a new perspective. Specifically, you can now ask, what new and different things can my staff do with 40 percent more capacity? How can I reconfigure my processes and delivery model to best leverage that increased capacity?

Entrepreneur Hans-Christian Boos, Founder and CEO of arago, offered a similarly fresh take. Rather than thinking in terms of RPA delivering cost reduction, he suggested we think of it as creating time. Here again, you have a different lens through which to view the potential for redefining service models and delivering value in a way that’s truly transformational.

So maybe that idea of a “different lens” is the real point here – with RPA, autonomics and intelligent computers (or whatever else you want to call them), you’re not talking about applying technology to do what you’re doing better. You’re talking about doing things in a completely new and different way. And we’ve reached a point where the next step is to show (rather than tell) what that “completely new and different way” looks like.

In any event, those of us who are serious about making a mark in this space have our work cut out for us. Let’s get to it.

*Hats off to IRPA Founder and CEO Frank Casale for having the vision and chutzpah to launch the IRPA enterprise, and to his team for putting on a first-rate event in NYC from beginning to end.