HfS Webinar Slides - Achieving Intelligent Automation in Business Operations

HfS Webinar
Achieving Intelligent Automation In Business Operations
July 2017

© 2017 HfS Research Proprietary │Page 2
Today’s Speakers
Phil Fersht
CEO and Chief Analyst
HfS Research
Brian Halpin
Head of Automation,
HSBC
Tom Reuner
Senior Vice President,
Intelligent Automation and IT
Services, HfS Research
Chinmoy Bannerjee
EVP and Global Head of BPS,
Hexaware
Reetika Joshi
Research Director,
HfS Research

The Future of Operations: The Digital OneOfficeTM Organization

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 integrating
in our service
delivery
We are in the
process of
formulating a
strategy
We have built/are
building a Center of
Excellence
Project use/case
focused
We are mandating
this as a
requirement for our
service provider
We don’t have one
Source: “State of Automation 2017”
Sample: Enterprise Buyers = 400

Automation Opportunity Vast & Untapped

Worldwide Global Robotic Process Automation
(RPA) Market, 2016-2021
73 113 153 192 232 272
198
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

Worldwide Business Process Automation Market, 2016-2021
0,7 1,4 2,1 2,8 3,5 4,1
4,4
5,3
6,1
6,9
7,7
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.

RPA is less that 10% of the Global Business Process
Automation Market
0,3 0,4 0,6 0,8 1 1,2
4,8
6,2
7,5
8,9
10,2
11,5
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.

AI & RPA Process Automation Market, 2016-2021
0,7
1,1
1,6
2,0
2,4
2,7
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.

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

Satisfaction with RPA Installs: Still a Nascent Market
Source: HfS Research, “State of Automation 2017 ”
Sample: n=136 Buyers of RPA

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

Today’s Speakers
Phil Fersht
CEO and Chief Analyst
HfS Research
Brian Halpin
Head of Automation,
HSBC
Tom Reuner
Senior Vice President,
Intelligent Automation and IT
Services, HfS Research
Chinmoy Bannerjee
EVP and Global Head of BPS,
Hexaware
Reetika Joshi
Research Director,
HfS Research

Decision Making in Automation

Automation Really is in the Eye of the Beholder

HfS Sees Intelligent Automation as a Continuum Today
trigger based
Characteristic of process
rules based
dynamic language
rules based
standardized language
Structured
Characteristic of data/information
Unstructured without patternsUnstructured patterned
Data Center
Automation:
Runbook
Scripting
Scheduling
Job control
Workload
automation
Process
orchestration
SOA
Virtualization
Cloud services
RPA
Cognitive
Computing
Artificial
Intelligence
BPM
Workflow
ERP

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
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

Please pick the most influential source of information.
Where are customers getting their information?
18%
17%
16%
13% 14%
12%
11%
Industry
analysts
Case studies Internal
procurement
expertise
Conferences In-house desk
research
Sourcing
advisors
External
consultant

The Execution and Market Dynamics of
Automation with Business Operations

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 integrating
in our service
delivery
We are in the
process of
formulating a
strategy
We have built/are
building a Center of
Excellence
Project use/case
focused
We are mandating
this as a
requirement for our
service provider
We don’t have one

When, if ever, do you believe AI automation to be applicable
for you within the following processes
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 Surveyed
When, if ever, do you believe AI automation to be applicable for
you within the following processes
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

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 enabling
processes to flow end-to-end
Relieves management time to focus on customers
Improves employee motivation by relieving them of
rudimentary 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

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
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 process
change
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

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

Satisfaction with RPA Installs: Still a Nascent Market
Source: HfS Research, “State of Automation 2017 ”
Sample: n=136 Buyers of RPA

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.

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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.

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