HfS Webinar
Achieving Intelligent Automation In Business Operations
July 2017
© 2017 HfS Research Proprietary │Page 2
Today’s Speakers
Phil FershtCEO and Chief AnalystHfS Research
Brian HalpinHead of Automation, HSBC
Tom ReunerSenior Vice President, Intelligent Automation and IT Services, HfS Research
Chinmoy BannerjeeEVP and Global Head of BPS, Hexaware
Reetika JoshiResearch Director, HfS Research
© 2017 HfS Research Proprietary │Page 3
The Future of Operations: The Digital OneOfficeTM Organization
© 2017 HfS Research Proprietary │Page 4
© 2017 HfS Research Proprietary │Page 5
How would you describe your organizations current Automation strategy?
Only 2% Of Enterprises Admit To Not Having An Automation
Strategy
31%
20%18% 17%
13%
2%
We are integratingin our service
delivery
We are in theprocess of
formulating astrategy
We have built/arebuilding a Center of
Excellence
Project use/casefocused
We are mandatingthis as a
requirement for ourservice provider
We don’t have one
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
© 2017 HfS Research Proprietary │Page 6
Automation Opportunity Vast & Untapped
© 2017 HfS Research Proprietary │Page 7
Worldwide Global Robotic Process Automation
(RPA) Market, 2016-2021
73 113 153 192 232 272198
330
476
630
790
952
63%
42%
31%
24%20%
0%
10%
20%
30%
40%
50%
60%
70%
0
200
400
600
800
1000
1200
1400
2016 2017 2018 2019 2020 2021
RPA Software RPA Services YoY Growth
USD Million
$271m
$1224m
$629m
$1022m
$822m
$443m
Source: HfS Research 2017
© 2017 HfS Research Proprietary │Page 8
Worldwide Business Process Automation Market, 2016-2021
0,7 1,4 2,1 2,8 3,5 4,14,4
5,36,1
6,97,7
8,6
5,1
6,6
8,2
9,7
11,2
12,7
2016 2017 2018 2019 2020 2021
Automation - External Services & Software
Automation - internal operational spend
USD Billion
• External Professional Services: Relates to all external spending focused on developing business process automation strategies / roadmaps and the use/ implementation of automation with business functions.
• Internal Operational spend: Includes internal and external spending on automation – change management, IT and operational teams focused on process automation and automation use as part of existing business process management initiatives.
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RPA is less that 10% of the Global Business Process
Automation Market
0,3 0,4 0,6 0,8 1 1,2
4,86,2
7,58,9
10,211,5
30%
23%
19%
16%
13%
0%
5%
10%
15%
20%
25%
30%
35%
0
2
4
6
8
10
12
14
2016 2017 2018 2019 2020 2021
RPA Other BPA Growth (YoY)
USD Billion
$5.1 Bn
$6.6 Bn
$8.2 Bn
$9.7 Bn
$11.2 Bn
$12.7 Bn
Source: HfS Research 2017
• Business Process Automation is the use of technology to allow a business function or part of the operation of a process workflow work automatically. It includes the use of RPA, BPM suites, custom scripting, AI and related technologies.
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AI & RPA Process Automation Market, 2016-2021
0,71,1
1,62,0
2,42,7
0,3
0,4
0,6
0,8
1,0
1,2
1,0
1.4
2,2
2,8
3,4
3,9
2016 2017 2018 2019 2020 2021
AI Automation Spend RPA Spending
USD Billion
Artificial Intelligence, in this context, refers to the simulation of human thought processes across enterprise operations, where the system makes autonomous decisions, using high-level policies, constantly monitoring and optimizing its performance and automatically adapting itself to changing conditions and evolving business rules and dynamics. It involves self-learning systems that use data mining, pattern recognition and natural language processing to mimic the way the human brain works, without continuous manual intervention.
© 2017 HfS Research Proprietary │Page 11
400 participants involvement in buying decisions related to technology and services that include automation tools and services used to improve their organizations internal operations and business processes. The interviewing was conducted in May and June 2017 with a combination of telephone and online surveys.
Methodology & Study Demographics
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
© 2017 HfS Research Proprietary │Page 12
Satisfaction with RPA Installs: Still a Nascent Market
Source: HfS Research, “State of Automation 2017 ” Sample: n=136 Buyers of RPA
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The 2017 HfS Automation Maturity Model for Enterprises
Automation maturity
Goal Impact on current process
Target areas Deployment model
Scalability focus
Data usage focus
“Bot” lifecycle Intelligent Automation alignment
Level 4: Integrate
+ Service delivery synchronization
Re-imagined processes
End-to-end enterprise processes
Integrated “bots” managed independently
End-to-end enterprise processes
Used for solving business problem
“bots” as shared capability across client available on demand
Integrated solutions across RPA and AI
Level 3: Institutionalize
+ Standardized process delivery
Re-engineered processes
Processes with judgment-based tasks
Shared pool of co-ordinated“bots”
Across standardized processes
Used to re-engineer process
“bots” as shared capability across client available on demand
Investigating alignment between RPA and Artificial Intelligence (AI)
Level 2: Implement
+ Process efficiency and effectiveness
Looking for common process components
Processes with unstructured data
Co-ordinated “bots”
Common shared processes
Used for driving process efficiency
Dependent on each client and process
RPA dominates
Level 1: Investigate
Cost-reduction As-is / no-change
Simple rule-based
Individual “bots”
Specific tasks / processes
Used for performance management
Not specified No alignment
© 2017 HfS Research Proprietary │Page 15
Today’s Speakers
Phil FershtCEO and Chief AnalystHfS Research
Brian HalpinHead of Automation, HSBC
Tom ReunerSenior Vice President, Intelligent Automation and IT Services, HfS Research
Chinmoy BannerjeeEVP and Global Head of BPS, Hexaware
Reetika JoshiResearch Director, HfS Research
© 2017 HfS Research Proprietary │Page 16
Decision Making in Automation
© 2017 HfS Research Proprietary │Page 17
Automation Really is in the Eye of the Beholder
© 2017 HfS Research Proprietary │Page 18
HfS Sees Intelligent Automation as a Continuum Today
trigger based
Characteristic of process
rules baseddynamic language
rules basedstandardized language
Structured
Characteristic of data/information
Unstructured without patternsUnstructured patterned
Data CenterAutomation:
RunbookScriptingSchedulingJob controlWorkloadautomationProcessorchestration
SOAVirtualizationCloud services
RPACognitive
ComputingArtificial
Intelligence
BPMWorkflow
ERP
© 2017 HfS Research Proprietary │Page 19
How is the decision-making process for automation capabilities organized within your enterprise?
Decision Making For Automation: Broad Set of
Stakeholders, Narrow Set of Decision Makers
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
18%
21%
22%
24%
24%
27%
28%
29%
35%
57%
54%
15%
48%
42%
51%
48%
44%
47%
49%
44%
51%
32%
31%
43%
13%
11%
18%
21%
11%
19%
20%
21%
11%
10%
15%
39%
21%
27%
10%
8%
21%
7%
4%
7%
4%
1%
1%
3%
External Consultants
Channel Partner
Data center Manager
Purchasing Manager
Internal Panel of experts/business leaders
Procurement department
Finance Department
Line of Business director
CFO/Finance Director
CIO / IT Director
CEO
Management Board
Decision Maker Influencer Stakeholder No role
The C-suite plays a critical role in setting the automation strategy
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Please pick the most influential source of information.
Where are customers getting their information?
18%17%
16%
13% 14%
12%11%
Industryanalysts
Case studies Internalprocurement
expertise
Conferences In-house deskresearch
Sourcingadvisors
Externalconsultant
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
© 2017 HfS Research Proprietary │Page 21
The Execution and Market Dynamics of
Automation with Business Operations
© 2017 HfS Research Proprietary │Page 22
How would you describe your organizations current Automation strategy?
Only 2% Of Enterprises Admit To Not Having An Automation
Strategy
31%
20%18% 17%
13%
2%
We are integratingin our service
delivery
We are in theprocess of
formulating astrategy
We have built/arebuilding a Center of
Excellence
Project use/casefocused
We are mandatingthis as a
requirement for ourservice provider
We don’t have one
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
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When, if ever, do you believe AI automation to be applicable for you within the following processes
Source: “State of Automation 2017”
Sample: n=219 Non Buyers of AI
24%
26%
29%
29%
30%
32%
32%
33%
38%
32%
34%
33%
37%
38%
33%
35%
34%
32%
HR
Procurement
Master Data Management
Finance & Accounting
Supply Chain
Customer Service
Industry specific processes
Marketing
IT including service desk
Within the next year In the next 1-2 years from now
AI Adoption Is On A 2-
Year Horizon For 60-70%
Of Clients SurveyedWhen, if ever, do you believe AI automation to be applicable for you within the following processes
Source: “State of Automation 2017”
Sample: n=400
All AI Techniques & Solutions
Are Getting Evaluated
37%
42%
37%
41%
45%
19%
18%
21%
23%
21%
23%
21%
24%
19%
22%
Neural Networks
Natural Language Processing (NLP)
Computer Vision
Virtual Agents
Machine Learning (ML)
Piloted / implemented Evaluating In next 2 years
© 2017 HfS Research Proprietary │Page 24
Which of the following benefits do you think Automation could deliver to your operations?
Automation Benefits Seem To Reflect Long-Term Thinking…
%
12%
21%
25%
31%
37%
38%
45%
46%
48%
49%
52%
We don’t believe it will deliver any significant non-cost related benefits
FTE reduction
Guaranteed short term cost reduction
Overcoming process bottlenecks and enablingprocesses to flow end-to-end
Relieves management time to focus on customers
Improves employee motivation by relieving them ofrudimentary tasks
Better visibility, auditability and compliance
More actionable data for customer insights
More actionable data for operational insights
Superior data accuracy
More workforce agility – giving operations the ability to scale
Better quality of operations
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
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What is preventing or slowing the adoption of Automation within your organization?
…But The Biggest Adoption Barrier Still Seems To Be Short-
Term Cost Benefits
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
20%
23%
25%
27%
28%
28%
28%
35%
Not sure where to start
IT does not have the time to implement
Lack of understanding of technology building blocks
Bad experience with technology-driven processchange
Lack of internal talent to evaluate and implement
Underlying platform is sufficient, don’t think automation lower cost
IT budgets exhausted from technology deployments
Immediate cost savings not attractive enough
© 2017 HfS Research Proprietary │Page 26
7%
8%
13%
13%
14%
14%
15%
17%
Ability to deliver as part of an end to end managed service
Specific Process knowledge
Industry specific capabilities
Track record in delivering cost savings
Partnerships with Automation technology firms
Track record in delivering business outcomes
Reference clients
Internal Automation IP
How important are the following selection criteria when choosing an external service provider to help with you Automation strategy and implementation. Which is the most important?
Service Providers Will Need Internal IP And Clients Willing To
Endorse Them In These Early Days
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400
© 2017 HfS Research Proprietary │Page 27
Satisfaction with RPA Installs: Still a Nascent Market
Source: HfS Research, “State of Automation 2017 ” Sample: n=136 Buyers of RPA
© 2017 HfS Research Proprietary │Page 28
© 2017 HfS Research Proprietary │Page 29
Key Study Takeaways
The study findings outline three immediate calls-to-action for clients:
• Enterprises are past the point of pondering about the possibilities of automation. Challenges exist when it comes to execution, but as a whole the shift to intelligent operations through automation is real and already starting to deliver value.
• Artificial Intelligence will become mainstream in 2 years. Enterprise leaders are either already piloting or implementing AI technology in some form, or plan to do so in the next few years. Customer service leads the use cases for AI today.
• Integrate automation in the overall service delivery strategy. We need to look past the labor displacement arguments that are the here-and-now symptoms and benefits of using AI, and think more holistically about large-scale service orchestration of processes centered around automation and AI technologies.
© 2017 HfS Research Proprietary │Page 30
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© 2017 HfS Research Proprietary │Page 31
HfS Research: The Services Research Company
HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations and IT services. The firm helps enterprises validate and improve their global operations with world-class research, benchmarking and peer networking. HfS Research was named "Independent Analyst Firm of the Year for 2017" by the Institute of Industry Analyst Relations which voted on 170 other leading analysts. HfS Chief Analyst, Phil Fersht, was named Analyst of the Year in 2017 for the third time.
HfS coined the terms "The As-a-Service Economy" and "OneOffice™", which describe HfS Research's vision for the future of global operations and the impact of cognitive automation and digital technologies. HfS' vision is centered on creating the digital customer experience and an intelligent, single office to enable and support it. HfS’ core mission is about helping clients achieve an integrated support operation that has the digital prowess to enable its enterprise to meet customer demand - as and when that demand happens. With specific practice areas focused on the Digitization of business processes and Design Thinking, Intelligent Automation and Outsourcing, HfS analysts apply industry knowledge in healthcare, life sciences, retail, manufacturing, energy, utilities, telecommunications and financial services to form a real viewpoint of the future of business operations.
HfS facilitates a thriving and dynamic global community which contributes to its research and stages several OneOffice™ Summits each year, bringing together senior service buyers, advisors, providers and technology suppliers in an intimate forum to develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings.
Now in its tenth year of publication, HfS Research’s acclaimed blog Horses for Sources is the most widely read and trusted destination for unfettered collective insight, research and open debate about sourcing industry issues and developments.
HfS was named Analyst Firm of the Year for 2017, alongside Gartner and Forrester, by leading analyst observer InfluencerRelations.
1www.hexaware.com | © Hexaware Technologies. All rights reserved.
Fastestgrowing IT Services
company over past 10 quarters
(CQGR of 3.1%)
Revenue: USD 526 Million
We cannibalized revenues at
clients20through proactive
proposals
50%
We want to be the First IT services
company to have
Digital Workforce
Automation is about
changing culture
We are far ahead in that journey
Transitioned work from Top 5 Indian
Origin Providers in 7 clients
in the past
6 months
AUTOMATIONFIRSTCultureofautomationfirst,nofearofcannibalization;operationsleadershipgoaledonautomationvalue
ANTIPYRAMIDLowskillL1won’twork,slowrotation
GRASSROOTINNOVATIONClientcentricinnovation,18Mtangiblevalueaddedtoclientsin2016– 3%ofrevenue
CROSSSKILLINGFocusoncross-skilling,e.g.hyper-convergedengineers,operatorsasautomators
13000+ Employees
25 Languages
12 GDCs