The Keys to Maximizing Value from Robotics Process Automation

Transcription

1 The Keys to Maximizing Value from Robotics Process Automation NelsonHall John Willmott CEO

2 Maximizing Value from Robotic Process Automation John Willmott, NelsonHall SIG, Huntington Beach October 28, 2015

3 NelsonHall The Leading Source of BPO Information NelsonHall is the leading BPO and IT outsourcing research firm with analysts in the U.S., U.K., and Continental Europe. The company takes a global approach to analysis of vendors and outsourcing markets and is widely respected for the quality and depth of its research. In addition, with its Speed-to-Source initiatives, NelsonHall is taking the lead in making access to BPO and ITO research much easier than ever before. Independent & objective information All analysis by onshore analysts (U.S. & Europe) All research interviews carried out by analysts no online surveys, no vendor form-filling Process domain experts with global remit 16-years experience in BPO market and vendor analysis Independence & objectivity not amplifying the hype With analyst access to ask the difficult questions

4 Topics 1. Application of RPA 2. Benefits and RoI Achieved Via RPA 3. Commercial Implications of RPA for Outsourcing Contracts 4. What s Next for RPA? 5. Conclusions NelsonHall-Proprietary Not for distribution without permission 4

5 Application of RPA Filling the Gap between Macros and Platforms

6 BPO Market Developments in Q1 2014: Global and Landscape Seven Disruptive Forces Impacting BPO 1. Robotics 5. BPO software components 2. Analytics 3. Digital 6. Internet of Things 4. Labor arbitrage on Labor arbitrage 7. Global Business Services NelsonHall-Proprietary Not for distribution without permission 6

7 The Robots are Coming: Is this the End of BPO? General lack of knowledge (organizations; advisors) as to how RPA/AI might apply to particular business processes.. Presentation-layer automation software that sits on top of the client s existing Systems of Record to access and enter data and make simple calculations RPA can be used to mimic the steps of a specified business rules-based process to automate specified standardized tasks where human judgement is not required, e.g. data entry 1 robot can process, on average, the number of transactions as 1.5 to 2 FTEs (though some service providers say more) Useful for business processes that require swivel-chair access to access data from several existing systems Robots can easily scale up or down to meet demand RPA can be used for specific tasks in activities in BPO areas such as F&A, procurement, SCM, accounting, customer service In BPO, RPA generally is often initially introduced by clients to handle backlogs or spikes in demand (e.g. seasonal peaks in utilities billing exceptions, big spike in volumes in cash applications in F&A). Hurdles to BPO client adoption of RPA include: Giving BPO vendors access to their IT systems (going behind the client firewall) Concerns re security (data collected by the robot) NelsonHall-Proprietary Not for distribution without permission 7

8 The Robots are Coming: Is this the End of BPO? Where is RPA Currently Being Deployed BPO Activity Data extraction & enrichment/ validation Proportion of RPA Activity (%) Performance analysis & reporting 25 Self-help query resolution 15 Multi-screen integration for users <10 Compliance <10 50 Implications for vendors: Getting to client first competitive weapon for cost take out Rapidity of change - short cycletime for implementation Maintaining revenues and margin Maintaining deep understanding of standard operating procedures Make or buy? NelsonHall-Proprietary Not for distribution without permission 8

9 Benefits and RoI Achieved via RPA A quick hit to reduce levels of rule-based processing..

10 RPA Benefits RPA capable of delivering 20%-50% cost take-out on applicable sub-processes Cost take-out in RPA largely a function of proportion of process addressable Within finance & accounting, RPA most applicable to procure-to-pay P2P: supplier management & catalog management, 3-way matching, reconciliations O2C: customer data management, cash application, reconciliation R2R: reporting, inter-company accounting, reconciliations Examples Vendor master creation: 35% FTE saving Invoice processing (3-way matching & posting): 35% Invoice data capture & data entry: 20%-25% productivity Vendor queries: 20%-25% FTE savings Remediating errors in billing data: 25% cost reduction NelsonHall-Proprietary Not for distribution without permission 10

11 Requirements for successful application of RPA Process improvement expertise Strong standard operating procedures Standardized processes Agent change management RPA governance Involve in-house IT Principal focus on data extraction, data enrichment, data validation, & data entry Don t run before you can walk NelsonHall-Proprietary Not for distribution without permission 11

12 Commercial Implications of RPA for Outsourcing Contracts..provided the commercials can be agreed

13 How are vendors approaching RPA? Typically partnering with third-party RPA software companies such as automation anywhere, Blue Prism, UiPath Others developing own RPA and AI software to protect process IP in short-term and develop competitive advantage in emerging forms of AI Developing libraries of RPA applications as their valueadd RPA libraries are typically cross-functional e.g. ROBOextractor ROBOformater ROBOuniter ROBOimpresario Though often packaged by function e.g. AccountSetupBOT CashAppsBOT NelsonHall-Proprietary Not for distribution without permission 13

14 What about the commercials? RPA pricing currently a challenge Returns largely unknown before project undertaken Vendor has no desire to remain on FTE-based pricing Possibilities include: Move to fixed price or transactional pricing plus ongoing productivity target and allow vendor to use robotics to hit productivity goal If still FTE-based, then run each RPA project as a separate gainshare Arguably rule-based RPA lends itself to transaction-based pricing or fixed price and judgment-based RPA lends itself to outcome-based Who pays for RPA licenses? Price per robot typically quoted as 1/3 of the price of an FTE NelsonHall-Proprietary Not for distribution without permission 14

15 What s Next for RPA RPA is dead.long live AI

16 Where Next? RPA Execution of repeatable, rule based tasks which require little or no cognition or human expertise or human intervention by machine or computer by mimicking human action. Machine operates enterprise software and applications through existing user interfaces based on pre-defined rules and inputs Start with high volume data entry and move to simple rulebased then complex rule-based AI Judgment-based tasks starting to be supported with cognitive platforms Execution of those tasks by machine which require human expertise or human judgment Cognitive : Adaptive Learning, Speech Recognition, Natural Language Processing, Pattern identification algorithms NelsonHall-Proprietary Not for distribution without permission 16

17 Conclusions A key tool for making continuous improvement realizable

18 Conclusions Current forms of RPA short-lived in the way that labor arbitrage is short-lived, with 20% one-off benefit for rule-based processes achieved over 3-year period Requires same process-centricity & strong standard operating procedures as other forms of BPO Currently around data extraction, enrichment, & posting and rulebased processes Much quicker and lower transition cost than new platform implementation Cognitive/self-learning platforms beginning to emerge, with high initial focus on customer service Requires change in commercials to reset productivity or gainshare targets Makes continuous improvement realizable rather than a major hurdle NelsonHall-Proprietary Not for distribution without permission 18

19 Q&A John Willmott, NelsonHall SIG, Huntington Beach October 28, 2015 Sign up for blogs & alerts NelsonHall Vendor Evaluation & Assessment Tool NelsonHall-Proprietary Not for distribution without permission 19

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