Transforming Government Back Office Operations With Platform-Based ERP and AI

TRANSFORMING TO
IMPROVE CITIZEN SERVICES
THE FUTURE OF
GOVERNMENT
BACK OFFICE
OPERATIONS

2Copyright 2019 Accenture. All rights reserved.
73%
85%
???
GOOD ENOUGH FOR GOVERNMENT
% of citizens that
expect the same or
higher quality from
government digital
services as they do
from commercial
organizations
Accenture Public Services Pulse Survey, Digital Expectations 4/2016—Survey of 3,311 of voting citizens
2014 2016 2018
IS NOT GOOD ENOUGH

SEVEN IN TEN CITIZENS FEEL THAT PUBLIC
AGENCIES COULD PROVIDE A BETTER CUSTOMER
EXPERIENCE BY USING THE LATEST TECHNOLOGIES
Source: Accenture

4
ARE GOVERNMENT BACK OFFICES READY?
CAN THEY SUPPORT DIGITAL CITIZEN SERVICES?
By 2020, enterprises that continue to
invest in heavily customized,
traditional, monolithic ERP solutions
will be 75% less effective in supporting
digital business strategies.
—Gartner
Are you investing in large, traditional ERP solutions?
OR
Are you getting ready for the future so you can support better digital citizen services?
Source: Gartner, Government CIOs Should Consider Postmodern ERP to Modernize Legacy Business Applications (pub. May 18, 2019)

ERP IS TRANSFORMING
FROM FOCUS ON ‘CONTROL’ TO ‘VALUE’
1st Generation
Custom ERP
Delivered & customized
to 1,000s of client
requirements
Standardized to
leading processes
Customized only
where required
Focused on
commoditized
cloud-based systems
Combines digital and
human workforce via RPA
and AI
2nd Generation
Process Led ERP
3rd Generation
Platformed Back
Office
4th Generation
Augmented Back
Office
The market is here

6
“It is expected that the
service-based approach for
IT will become the preferred
option over the software-based
approach over time, as end-
user organizations look to
downsize the operation side
of their IT portfolios.”
—Gartner
Source: Gartner, Magic Quadrant for Enterprise Integration Platform as a Service (IPaaS), 30 March 2019

ERP IN TRANSFORMATION
1Source: Center for Digital Government, Future of ERP Report, 2015
2Source: Gartner, Forecast Overview: ERP Software, Worldwide, 2016 (pub. Oct. 11, 2016)
States are investing in Cloud-based systems:
83% implemented or deployed cloud in multiple agencies
─Center for Digital Govt1
Primary examples are content and document management, business
intelligence, health applications, and GIS systems
By 2020, 50% of ERP spending will be SaaS-based and
underpinned by hybrid modernization strategies
─Gartner2
PLATFORMED BACK OFFICE IS GROWING

WHY MOVE TO PLATFORMED BACK OFFICE?
Current
• Fixed Costs
• Cumbersome
• Capital Intensive
• High Maintenance and Run Costs
• Security Issues
• Business Lagging
• Out-dated
COMPELLING VALUE PROPOSITION
Future
• Pay by the Drink’
• Agile
• Capital Light
• 20%+ Lower Maintenance
and Run Costs
• Managed Security
• Business Leading
• New Technologies

PLATFORMED BACK OFFICE
Business services, delivered through 3 possible models:
WHAT IS IT?
Typically
chosen
when:
ON-PREMISE ERP HYBRID MODEL
Some, but not all, Cloud Components
UNIFIED CLOUD PLATFORM
• Current version of ERP software /
straightforward upgrades
• No business case for ERP transformation
• Customizations are necessary or regulated
• Adopt best-in-class cloud modules
• Core ERP processes with little change
• Maintain control over critical data/ functions
• Capital investment in On-Premise ERP
• Cloud ERP not ready (~12-18 months ago)
• Replace multiple legacy systems or new
solution
• Cloud is “Case for Change”
• Employee engagement: mobile, social,
collaboration, seamless UX
• Recent implementation (<12 months)
As-a-Service

ONE EXAMPLE OF HOW IT MIGHT WORK
POTENTIAL BUSINESS SERVICES:
On-Premise
CORE HR BENEFITS
PAYROLL
Performance
Management
Compensation
Management
Recruiting
Learning
Management
Workforce
Analytics
ESS
MSS
Mobility and
Collaboration

Identify business process / determine value
Keep it internal? Or external service provider?
Business process purchased ‘a la carte’
Create an integration platform
Business service roll out based on need and value delivered
HOW WOULD I DECIDE?
1
2
3
4
5

NETFLIX FOR ERP, CHOOSE WHAT YOU NEED
Australian Financial Institution:
• Moved 30 legacy systems to cloud
• Virtual P2V migration with minimal service
disruption
• Pay-as-you-go services
AND SEE RESULTS
U.S. Department of State: uses flexible and
modular system to save time and money
• Deployed 4 mobile apps onto PeopleSoft solution
to support Mobile Diplomat initiative
• Apps scope: motor pool services to order
fulfillment— 3 more mobile apps planned for 2016
RESULTS OVER THREE YEARS:
$1.5M savings
Speed of application server delivery from 13
weeks to 3 days
700 transactions per second for 16m
customer accounts at peak times
RESULTS:
Save 16,000+ data entry hours
1 million sheets of paper annually

“Unsexy specialties such as
contract management, tax
compliance and regulatory
tools are getting a fresh glitter
of promise for what’s possible.
That is because the future
of machine learning for
extracting new data insights
and heading off corporate
risks could save corporations
enormous costs.”
—The Wall Street Journal

14
ERP IN TRANSFORMATION
AI FOR BACK OFFICE IS JUST GETTING STARTED
More of the IT workforce will
focus on AI related functions:
By 2019, more than 10% of IT hires in
customer service will mostly write scripts
for bot interactions.
By 2020, 20% of companies will dedicate
workers to monitor and guide neural
networks.2
Organizations are investing in AI
and are seeing positive results:
55% of private sector enterprises plan to
invest in AI in the next 12 months
45% of organizations are seeing positive
results from their AI projects
50% of organizations who had invested in AI
said that the results from their AI investments
met or exceeded their expectations.1
1Source: Forrester, Artificial Intelligence: A CIOs Guide to AI’s Promises and Perils, January 9,
2019
2Source: Gartner, Predicts 2019: Artificial Intelligence, 23 November 2016

AI IS HAVING AN IMPACT, INSIDE AND
OUTSIDE OF YOUR ORGANIZATION
AI’s impact will be felt
throughout the
economy.
AI has the potential to
double the annual
economic growth rates
by 2035 for developed
economies.
In the same time frame
AI can boost labor
productivity by 40
percent.
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
The Economic Impact of AI
Baseline AI Steady State Source: Accenture and Frontier EconomicsReal gross value added(GVA) (% Growth)

AND CONSUMERS ARE GROWING
MORE COMFORTABLE WITH USING AI
Source: Accenture Digital Consumer Survey 2019
are interested in using
a voice-enabled
digital assistant in
smartphones
1/3
interact through AI-
powered live chats
or mobile apps on
a monthly basis
52%
are comfortable with
an AI responding to
their query.
62%
reported that the top
benefit of AI advisors
over human is they
are available
anytime.
82%

AI IS A BROAD CONCEPT AND CAN PERFORM MANY
FUNCTIONS IN THE BACK OFFICE
Artificial Intelligence
is a:
Disclaimer: Technologies vs. Applications/ Capabilities are broadly classified here, subjective to individual interpretation
Sense Act
Applications
Technologies
Gesture
Recognition
Biometrics Identity
Facial Recognition
Computer Vision
Audio Processing
Sensor
Processing
Context-Aware
Computing
Expert Systems
Video Analytics
Inference Engines
Artificial Intelligence
Comprehend
Natural Language
Processing
Speech to Text
Machine Learning
Text Analytics
Knowledge
Representation
Deep Learning
Mini Bots
Robotic Process
Automation
Virtual AssistantsSemantics/
Ontology
Augmented
Reality
Reinforcement
Learning
Recommendation
systems
System
Optimization
Source: Accenture Research
System that
possesses human-like
intelligence and
learning capabilities
Collection of
technologies that,
together, enable
human-like intelligence

AI FOR GOVERNMENT BACK OFFICE
A SIMPLER WAY TO THINK ABOUT APPLYING THE TECH
• Standardized rigid
processes
• Manual entry and monitoring
of repetitive tasks
Standardized
Processes
• RPA perform repetitive
actions efficiently
• Minimal oversight
• Requires no decision
making.
Robotic Process
Automation
• AI for decision making,
orchestration, or communication
• Works through learned behaviour.
• Capable to “run-the-show”
• Calls RPA to perform tactical
actions.
AI-powered
Automation
• Expanded capabilities
• AI + RPA + Data leads to
the Digital Workforce
• capable of augmenting
human counterparts.
Digital
Worker
CURRENT STATE SIMPLE MEDIUM COMPLEX
Remove redundant low level
tasks from your workforce
Enable resources to be used much
more effectively and valuably
Increase engagement with
your citizens and employees
LOWER WORK TEDIUM LABOR REALIGNMENT INNOVATION
BENEFITS

ONE GOVERNMENT IS USING AI TO TRANSFORM
THEIR MODEL OF CUSTOMER SERVICE
HELP DESK EMPLOYEES
WERE SPENDING THE
MAJORITY OF TIME ON
ROUTINE CUSTOMER
QUERIES
ACCENTURE PROPOSED
AUTOMATING THE
PROCESS WITH AI
VA IS ALSO ABLE
TO UNDERSTAND
THE CONTEXT IN
CUSTOMER REQUESTS
Client wanted to reduce the time, cost and
effort of repetitive tasks so employees focused
on complex tasks
Virtual Agent (VA):
• Understands / process natural language
• Autonomously handles calls / webchat
using cognitive-semantic analysis and
machine-learning algorithms.
VA can:
• Extract what customers are looking for
• Support decision making process with
variables
• Customers receive answers by querying
data / documents in natural language or a
form through voice, assisted by agent

Ticket resolved by agent
75%
Increased users satisfaction
65%
Decreased operator tasks
55%
95%
85%
85%
52%
55%
20%
35%
45%
15%
M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
PROJECT IMPLEMENTATION
3 Months - 2 FTE to Analyze and Build the Virtual Assistant 1 Months - 1,5 FTE to train the Virtual Assistant
AI HELPED DECREASE TASKS FOR THE FIRST LEVEL
OPERATOR BY ~85% WHILE INCREASING CUSTOMER
SATISFACTION

AN OPPORTUNITY FOR TRANSFORMATION
AI CAN BE USED AT ANY ERP MATURITY LEVEL
AI can by used independently, extending the life and functionality of legacy systems and
enhancing the capabilities of major and platformed ERPs
All types of systems can bring greater value when augmented with AI
Custom ERP
Process Led ERP
Platformed ERP
AI Driven ERP
AI

AN OPPORTUNITY FOR TRANSFORMATION
‘LEAPFROGGING’ IS POSSIBLE
ERPs can continue moving up the maturity scale
On legacy
system, no plans
to move
On legacy system,
considering move
to major ERP
3: Platformed
Back Office
4: Augmented
Back OfficeOn premise ERP
with major vendor
Current State Future State

A HIGH LEVEL OF SECURITY WILL BE KEY
TO NEW TECHNOLOGIES’ SUCCESS
Eight in ten citizens
expressed concern about
the privacy and security of
their personal data
Three-quarters lack
confidence in the
government’s ability to
safeguard their information.
Unknown malware is
downloaded in enterprises
every 34 seconds.
Source: Accenture Research
Checkpoint

SECURITY MUST BE “DESIGNED IN”
FOR EVERYTHING-AS-A-SERVICE
THE NEW NORM
Increase proper IT & security
governance to maintain control
Leverage Security as a Service for
coverage and business benefits
Establish a shared responsibility
security model and strategy
Design, implement, extend existing
security capabilities to cloud
Develop consistent security ops
across cloud and enterprise
environments
Security Considerations
Cloud adoption challenges:
Security
• Lack of Expertise
• Governance and Control
• Compliance
• Integration with Legacy Systems
• Multiple Cloud Services
Management
• SLAs
Broad
Network
Access Rapid
Scalability
and Elasticity
Measured
service
On-demand
self-service
Resource
Pooling

MYTHS SURROUND SECURITY OF THE CLOUD
KNOW THE REALITIES
1Source: 20 of the Greatest Myths of Cloud Security, CIO.com May 13 2015.
There are More
Breaches in the
Cloud
Physical Control of
Data on Premises
Implies Security
Cloud Security
Tools & Capabilities
Are Not Ready
Cloud Security is
Far Too Difficult to
Maintain
REALITY:
“When the correct security
policies for preventing
attacks and detecting
them are implemented,
attacks are no more
threatening to the cloud
than any other piece of
infrastructure.”
REALITY:
“The various high profile
security breaches over
the past few months
have served to highlight
that the physical location
of the data matters less
than the access and
associated controls.”
REALITY:
“There are now tools and
capabilities that allow IT
to enable cloud securely
in any number of
environments specific to
unique requirements’
needs thanks to the
ubiquitous nature of
APIs.”
REALITY:
“The same
standardization applied
to on premise security
management can be
applied to cloud security
management.”
Cloud is Inherently
Insecure
REALITY:
“A multi-tenant cloud
may actually be
more secure
because it makes it
difficult to target a
particular company
or data set.'”
Significant improvements have been made to overcome security concerns associated with cloud adoption1
MYTH 1: MYTH 2: MYTH 3: MYTH 4: MYTH 5:

GOVERNMENTS HAVE AN OPPORTUNITY TO ELEVATE
THE SKILLS OF THEIR CURRENT WORKFORCE
Less time on routine tasks, more time
making a difference
• 63% said developing talent within
the organization would increase
satisfaction
• 60% said it would increase
attractiveness of public sector.2
AI will require new jobs, roles, and
skills.
• 17% of government leaders said
they had a hard time filling IT roles
• 1/3 said wages were not
competitive with the labor market.1
1Source: Center for State and Local Government Excellence: Survey findings state and local government workforce, 2019
2Source: Accenture Research Survey, Accenture Pulse Survey—Public Service Talent Jan 2016—Sample of 3046 US Voting age citizens
AI CREATES AN
OPPORTUNITY TO RESKILL
THE CURRENT WORKFORCE
AI WILL CHANGE THE
GOVERNMENT WORKFORCE

…AND THE IMPACT OUTSIDE OF GOVERNMENT
MUST ALSO BE CONSIDERED
The increase in AI will not only raise ethical questions and challenges within government agencies,
but government will also be asked to provide regulation and policy guidance for the use of AI
throughout the private sector. The World Economic Forum and others identify key areas of concern:
Source: World Economic Forum: https://www.weforum.org/agenda/2016/10/top-10-ethical-issues-in-artificial-intelligence/
Unemployment and Job Displacement: Components of many jobs will be automated and workers will be displaced.
Governments will need to consider how to reskill their workforce and the broader workforce.
Inequality: As companies become more automated they will require fewer people to produce the same amount,
wealth will be increasingly concentrated with fewer people.
AI can learn bias: AI systems are created by humans and learn from human habits. Thus they are subject to the
same biases that humans have. Any citizen facing system will have to protect against these biases.
Security: AI systems are faster and more capable than humans and could cause damage if hacked and maliciously
used. This makes cybersecurity incredible important.
Unintended Consequences: AI can be used and hacked for nefarious purposes. Furthermore the machines
themselves could ‘turn against us.’ By not understanding the full human context the results that AI machines arrive at
may be the most efficient but could create harm.

QUESTIONS
CLICK HERE
TO LEARN
MORE ABOUT
BACK OFFICE
TRANSFORMATION
BILL KILMARTIN
Finance & Administration Lead, North
America
william.kilmartin@accenture.com
@BillKilmartin1
Bill Kilmartin

Copyright © 2019 Accenture. All rights reserved. 29
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