I introduced the concept of a Cloud Management Platform (CMP) in my last article here on the IBA Group blog and closed by saying that it’s a complex process to choose a specific platform. However, that’s exactly the decision that many managers are exploring right now and it can be even more complex when you need to buy a cloud, but it is your service provider that will actually be using it.
This white paper from the IT research firm Neovise gives some excellent advice on this particular issue. The white paper introduces the need for CMPs, as I did in my last article, but then it lists some specific questions you need to ask when determining the best system to use:
1. Business Requirements:
• What customers do you plan to serve, and what are
their requirements? How well will the cloud platform serve them?
• How much additional work is required for installation/configuration? Integration? Adding missing features?
• How quickly will the cloud platform let you get to market and start generating revenue?
2. Product Requirements:
• Does the platform enable the right compute, network
and storage capabilities?
• Are there specific hardware requirements for the platform? Or can you choose hardware from any vendor? Can you leverage existing
• How extensible is the product? Does it support federation with other providers?
• Does the platform allow you to seamlessly integrate new cloud services with your existing hosting services?
3. Support Requirements:
• Will it require significant resources and expertise
to deploy, customize and operate the platform?
• What do you do if you need help deploying or troubleshooting the platform? Is there customer support? Or just community support? Both?
• Does the platform receive ongoing enhancements? Are new versions difficult or disruptive to install?
These are quite detailed questions and there are
different types of CMP as I outlined in my earlier article, but if you go into
these questions with a clear outline of your specific capabilities, resource,
timeline, and strategy then you can achieve a successful outcome. It’s
recommended to include this information on any RFI or RFP process when
selecting a supplier so you can work with a supplier that supports your
preferences on CMP in addition to just agreeing on a cloud strategy.
Where you have not already deployed a cloud or CMP
then it would be preferable to outline your preferences and needs right from
the RFI – this way a potential partner can advise on the best cloud to use and
the best tools to manage it.
In the early days of cloud adoption, this was all easier. A client would just make requests directly to their supplier if more capacity or storage is needed, but as IT infrastructure has become more complex, and usually involves a mix of cloud and on premises equipment, it is essential to make the right choices about the system you use to manage your cloud – and manage it in a way that works with the needs of your supplier.
21 to June 23 this year, the 16th IBA Group’s tourist rally took place 70 km
away from Minsk. Over 1,000 people got together to enjoy nature and sports. The
participants of the rally ranged in age from several months to their 70s. The
organizers of the event did their best to meet the needs of such a versatile
IBA Group’s tourist rally is an annual tradition for the IBA Group’s community. It is a time when IBA Group’s employees, their families, and friends gathered to celebrate team spirit, endurance, nature, and sports. It is more than just an annual celebration. It is a spotlight on what these values mean to each IBA Group’s employee.
expectations from the event were far from being optimistic as the weather forecast
promised heavy rains and windstorm. That was the first challenge to overcome
for most of the participants. They got through the heavy rain on the way to the
venue of the rally and were rewarded by fantastic weather on the days to
tourist rally has longstanding traditions that developed together with IBA
Group. What started as an 87-people event in 2005, grew into a massive 1,000+ participant
rally. This year, the organizers welcomed a new participating team Lemmingi that defied such veterans as Pertsy, Dynamit, Dobry Vecher, Belki, and
Smarch Cats. The bike biathlon was added to the list of competition
categories. Other team categories included obstacle racing, mud racing,
volleyball, badminton, rock climbing, draniki (potato pancakes) contest, and
some individual disciplines such as ropes course and darts.
evening, to warm up and to dry up the atmosphere, a culinary draniki
competition was held under the guidance of an experienced chef. All
participants and viewers\tasters enjoyed every minute and bite of the contest. The
Mammoth team won the first place.
ceremony of the tourist rally took place at 09.30 am on Saturday. At the
opening ceremony, Sergei Levteev, IBA Group Chairman, made a welcoming speech. According
to the tradition, Alexei Tereschuk, the captain of Smart Cats, the last year’s
winning team, opened the rally by raising the flag.
program was diverse and manifold. Each participant found an occupation to his
or her taste, be it an athlete, a fan, a guest or a child. The program of
workshops was varied. One could opt for an individual pottery class, take part
in a tea ceremony, master a new style of calligraphy, make a nesting house, or
compete in funny duo contests. The strongest could go up against Vyacheslav
Khoroneko, the six-time record holder of the English Guinness World Records,
and a repeated world champion and a record holder in free weight lifting.
Other activities enjoyed by the rally participants included a ride on a trolley, a walk on the rope course, a wall climbing, and a ride in a BRDM-2 military reconnaissance vehicle. Everyone received a charge of positive emotions during a Fun Starts relay race. Wellness lovers could indulge themselves in saunas, bathe in a nearby lake, and get a Hawaii-like suntan.
Saturday, all participants and guests enjoyed breakfast and lunch.
the day, the kids danced and played with animators, took rides on catamarans
and canoes, played in an inflatable castle, rode a merry-go-round, and watched
cartoons in the karaoke tent.
evening and throughout the night, the teams had wonderful bonfire parties
accompanied by shashlik and guitar songs.
Everyone could unwind at the disco and demonstrate their vocal abilities
in the karaoke tent. The Saturday night also hosted Bez Bileta, a well-known Belarusian group, and the DeTroit cover band. That was one of many
moments when members of competing teams celebrated the company’s spirit and
feeling of being a part of IBA Group’s global family was somehow complemented
by the atmosphere of solidarity inside each team. Most of the teams comprised
colleagues of the same department. The tour rally for them is another chance to
strengthen the team spirit and extend the relationships beyond the working
Each team had a motto, a flag, and a designated territory. The teams’ captains did their very best to win the contests and to feed the teams. Each member of the team was assigned a task, the teams‘ cooks used their creativity and experience to appeal to the taste of each team’s member.
As the tradition has it, there are no ex-employees at IBA. Many retired and ex-IBAers come to the rally to feel themselves a part of the IBA Group’s family. They are the tradition keepers of the rally. On the other hand, we saw many new faces this year who have brought enthusiasm and changes to the company’s life. Tradition and innovation, youth and experience is what makes us so similar and so unique.
teams competed in the multiple categories, including obstacle racing, mud
racing, water relay race, rowing slalom, volleyball, bike biathlon, rock
climbing, and badminton. Rope course, darts, and weights lifting were available
for individual competition.
The award ceremony
took place on Sunday morning. Winning teams, Lemmingi, Dynamite, and SmartCats
and prizewinners in individual categories received medals and prizes. Gennady
Makeev, HR Director, made a closing speech where he summed up the results of
the rally and thanked the organizers and the participants.
You can get a glimpse inside the 16th IBA tourist rally by visiting our Facebook and Instagram.
Most people working in IT today know about the cloud and how cloud-based systems can offer immediate access to storage or computing power easily. Many companies now use a cloud strategy to ensure they can ramp up and down on available systems or storage – it’s a common theme of discussion when planning an IT strategy.
But what is a Cloud Management Platform and in particular how can one be useful to service providers offering IT services to their clients?
Cloud Management Platform (CMP) is a term coined by the industry analyst Gartner. The analyst firm wanted a way to describe products or tools that help companies to optimize and manage their cloud infrastructure for cost, security, and operations. A good CMP strategy should allow users to maintain control over dynamic and scalable cloud environments.
So it is really just a control system that allows the user to maintain dynamic control over their cloud system. Instead of frantically calling a service provider and asking them to quickly scale up storage capacity in their contracted cloud, the customer should be able to use a CMP to just scale their cloud – it should be as easy as sliding a bar on a control panel.
The major CMPs on the market today will all offer these different aspects of cloud management:
These are the three main areas where the customer can manage their cloud and cover more specific areas such as budgeting, rightsizing the cloud, compliance and monitoring, and creating alerts and other analytics.
CMPs are still quite new tools and so there are still different types of tool available. Some are very focused on specific issues, such as controlling security risk or optimising costs. Some allow the option to manage multiple clouds, so if you are using both Microsoft Azure and Amazon AWS then you can manage both clouds from a single tool. Some CMPs even allow the tool to manage a cloud and systems you have on site simultaneously.
Clearly this is an emerging area. There are many new tools solving problems that have only recently become apparent. It was only a few years back that companies started taking cloud-based services seriously and it has become clear that it can be difficult to control the various aspects of a cloud-based system – such as cost control and security. In addition, if a service provider is delivering services on a cloud that is owned and managed by the client then the client needs an easy way to manage areas such as security in partnership with their service provider.
CMPs are still new and it is therefore difficult to advise on which one is perfect for each client, but there is a clear need to work on CMP selection with your service provider as any chosen solution must work for both client and service provider. I’ll explore this question next time here on the IBA Group blog.
I have written in the past about how impressed I was when I visited IBA Group in person. They don’t really shout about it, but their Robotic Process Automation (RPA) team has a level of expertise that I was not expecting to find when I visited Minsk last December. I keep recalling this when I see some of the analyst and media coverage of RPA online because there is still a strange mixture of anticipation and hype in most of the analysis.
HfS Research has been one of the main critics of the hype around RPA. They have consistently called on other analysts to provide realistic market projections and to stop using the ‘robots are taking over’ myths that have grown in frequency in the past two years. Their Horse For Sources blog in particular has been scathing when individual analysts have made RPA claims that just cannot be supported by evidence or case studies.
HfS has documented that they believe the ‘big 3’ RPA companies – Automation Anywhere, Blue Prism, and UiPath – are creating a baseline for the entire industry. It’s messy out there because there are loads of companies that are trying to get a piece of the RPA hype and yet not everyone can succeed – not least because each system needs experienced people who can implement and use it. I believe that WorkFusion should also be on this list as they are not only creating a baseline, but they are disrupting the marketing by even offering basic RPA services free.
On March 3rd the Horses For Sources blog said this: “However, beyond scripts and bots and dreams of digital workers scaling up rapidly to provide reams of value, most enterprises are fast coming to the realization that they need an actual process automation platform capability that ingests their data, visualizes it, machine learns it, contextualizes it and finally automates it. ”
The blog goes on to say: “The implication is that for many companies the dream is over. They thought that RPA would work easily and yet they have found that it’s actually quite complex to integrate into their main business processes. You cannot just point an RPA system at a business and say ‘automate that’ in the same way that computer software doesn’t write itself – someone needs to understand how to code so the computer understands what you need.”
Go and follow the link above if you want to read the conclusion to what they think will happen next, although the short story is that they believe that there may be a new phase of RPA led by AntWorks with a more integrated approach to automation. In a way, we are seeing the process of automation becoming more automated.
I think there are two conclusions that can be drawn from what we are seeing in the RPA market at present. First is that most implementations are started to coalesce around the three top system suppliers and that’s a good thing because the market cannot tolerate the fragmentation that dozens of small systems creates. Second, the RPA story is not over yet. It remains quite difficult to implement and anyone making this process easier could well lead the next chapter in the RPA story.
I wrote recently on this blog about the use of SAP to create Digital Twins, a digital representation of a real system so it can be more easily monitored and controlled. As I mentioned earlier, this has been a common practice in aviation for several years. Engine manufacturers will always maintain a digital version of every engine they sell and ensure that the digital version is updated in real-time using sensors on the real engine.
In aviation the advantage of doing this is obvious – it allows for more efficient maintenance and safety procedures when the digital engine allows engineers to monitor real engines remotely. But I believe that the launch of SAP’s Leonardo system last year will really start accelerating the use of Digital Twins as a common business strategy.
It is a combination of technologies and strategies that are creating this possibility, but the three important ones are:
1. The Internet of Things (IoT); as the real world fills with sensors and connectivity as standard for almost every electronic device we will reach a point where systems such as a Digital Twin are essential just to stay on top of what is connected and what information it is reporting. In the home, this may only be devices such as a Kindle, iPad, Echo, phone, lightbulbs, or heating thermostat, but in the industrial environment it can easily be more complex and difficult to control.
2. Artificial Intelligence (AI); with so much data being created constantly by sensors we will need to apply AI principles to the data just to make sense of it all. For example, if your home thermostat detects patterns in the way that you prefer your home to be heated then it should be able to anticipate what you want before you change the settings.
3. Machine Learning (ML); the ability to look at every action and outcome by every sensor inside a network will allow the system to learn about the ideal outcomes and then to suggest recommendations in future based on earlier learning.
It is really the IoT that is at the heart of this development. Imagine the complexity of a modern industrial facility – a large brewery or car factory for example. Across the entire property will be doors, windows, pumps, and various robots that all need to be coordinated. Most companies with these facilities will already have some sort of control mechanism, but the Digital Twin makes an assumption that every component (pump, door, assembly-line robot) has in-built sensors. By taking a feed from all of these sensors we can build a complete virtual mirror of the plant.
The IoT facilitates this by ensuring that the real-time sensor data is available, then the AI system goes to work on spotting potential problems or just process flows that are unusual and alerting workers to places they need to check.
I have seen this type of system deployed for an office management system where every light, heater, door, and window is modelled in the system. I believe that we will see the Digital Twin concept growing much faster as companies find that they can create enormous efficiencies by improving what they do and spotting problems before they happen.
As Forbes magazine recently suggested, it will soon be impossible to plan any kind of digital transformation for your business without creating a digital twin first. The processes will be simply too complex for any one manager to understand from start to end. Not only do you need to map out all the existing components, you need to apply AI to oversee how the entire system is working.
Without these deep insights into the way your business functions at present any transformation plans will be impossible. Digital Twins are not just for those obsessed with being able to manage their existing IoT infrastructure, they are becoming an essential tool for managers who want to see how the future of their business might look.
Artificial Intelligence (AI) has moved from science fiction into the enterprise in recent years. Many companies are using AI systems today to intelligently analyse large volumes of changing data and to notice or predict patterns. Typical business uses today include examples such as:
Rail operators predicting train delays before they happen because the AI system can extrapolate from small delays to predict the impact on the entire network.
Customer service agents being advised on how to help customers by systems that know the answer to every question a customer has asked in the past.
Netflix knows which movie you might want to watch because they know your past behaviour and how similar customers have also behaved.
AI really is all around us today, in the enterprise and as consumers of services. In the present environment it would now be unusual for any company to not be exploring how AI can improve their business.
But AI does have one a fundamental flaw, it is always limited to working on a very specific problem. This means that you can have a very complex system that knows everything that your customer may ask when they call for help or the system may understand how to play chess or Go, but these individual tasks are all that it can do. There is no inherent awareness of the environment around the system – although we use the term intelligence, it’s not really aware or sentient. An AI system that can play Go cannot plan the best route on a map.
This means that the system can only solve the problems it was designed for. Some might argue that this is a benefit, because it means that however good our AI systems get, they never move into the realm of awareness and all the problems that a conscious system might create.
A recent experiment by IBM has demonstrated that AI is developing rapidly though. They demonstrated how an AI system could be asked a random question and it would then have the ability to debate that subject. For example, in the video clip that I watched the system was asked if pre-school facilities should be subsidised by the government. It gave a response, arguing why subsidies are useful for 4 minutes.
This system has been pre-loaded with information on millions of subjects and objects. It’s stuffed full of encyclopedia content and research. But even with all this data it is quite an achievement to turn that into information and then a coherent argument.
Essentially this system is starting to show that perhaps an Artificial General Intelligence might be possible. It would need to be pre-loaded with an enormous amount of general data, and then would need a Machine Learning system to continue learning, but it is looking more feasible than even a year or two ago when Elon Musk started warning that we are heading for an ‘AI apocalypse’ because the machines will eventually have more intelligence than the humans.
I don’t think we will be seeing many business case studies featuring general intelligence just yet, but AI in the form we already know it will certainly be more important. AI is offering companies a chance to identify patterns and trends they could never see manually and this will be a strong source of competitive advantage in the next few years.
The IBA team was there at the event because their expertise in areas such as Cloud Computing and Robotic Process Automation is highly in demand from the CX companies – hopefully they managed to strike a few new partnerships!
As mentioned in the IBA article, I was speaking at the event about the future of the customer experience – how can you profile and understand the customer of the future?
What I tried to do with this talk was to initially frame expectations. It is easy for people to make wild predictions about how customers will behave in future, but what they often forget is that social and technological progress is not always gradual. Sometimes an invention or innovation can completely change the way that people behave.
A good way to think of this is by considering how railways changed society. Before railways people were forced to live within walking distance of their workplace. Railways created the freedom for people to travel to work and this in turn created the concept of the suburb.
We have seen a similar change in the past decade. Since the launch of the Apple iPhone in 2007 and the subsequent explosion in the use of social networks, the way that people communicate with each other has dramatically changed. This has led to a radical change in the way that people communicate with brands and an evolution in the way that the customer journey works – this is the journey from first hearing of a product to learning more and then eventually buying it.
That customer journey used to be quite simple and was focused on advertising or marketing to create awareness and then a sales process followed by customer support. Now we can see brands that are not building customer service contact centres, they are building customer experience hubs. They are using a mix of human and digital technologies and building an ongoing relationship with customers that can last for half a century or more.
What is so interesting about the present day business environment is that there is so much potential for dramatic change in so many ways. A retailer planning strategy in the era of my parents would only ever be planning new store locations and sales promotions – nothing in the future was dramatically different to the past.
Look at the retail environment today. Not only is online retail creating a new era of competition, but the way that town centres are featuring retail is changing. Other huge factors may also change how society interacts with business, such as climate change, geopolitics and the dramatic rise of China, the creation of social inequalities, and the preference to rent experiences rather than owning products.
You can click the link to read through my slides for some more of the ideas I presented at CXOutsourcers, but I think that what we will see more often today is emerging business models and services driven by the online economy and the desire of the customer for greater convenience. Go-Jek in Indonesia started out as a ride-hailing service with motorbikes – like Uber with two wheels. They expanded into offering services such as medicine or food delivery by leveraging their network of riders and eventually they created such a wide array of services that they introduced their own in-app payment system. They now process more payments than any major credit card brand… they are now a financial service brand and they started out offering rides on scooters.
How might this happen in your industry? Think about it, your competition in 2020 may not even exist today or they may be working in a completely different industry. Now that’s scary because it means that we are moving faster than ever to stay ahead of business trends, but we are never going to be going this slow again in future.
I visited IBA Group just a few months ago and one of the most interesting interactions I had during my visit was with Dmitry Konevtsev, the SAP Department Director. In my own experience, attitudes to Enterprise Resource Planning (ERP) systems such as SAP have changed dramatically in the past few years. Systems that were once essential and heavily invested in have proven to be failures for the business. The reputation of ERP has been in decline, but what are real companies doing with ERP today?
I asked Dmitry for his views on how businesses are approaching ERP today. He said: “The implementation of ERP has been a matter of many discussions since the early days. People often feel uncomfortable about any changes to their business and ERP can often overhaul the operation of the entire enterprise. Therefore, employees are opposed to ERP, but the key is to approach it as a business task, not an IT implementation.”
Dmitry explained a recent project that IBA has been involved in implementing. He said: “We initiated the introduction of the newest SAP Profitability and Performance Management 3.0 technology at a major mobile operator. The customer aimed to develop a self-service analytics system that provides a comprehensive insight into the overall company performance. The project is one of the first SAP Performance Management for Financial Services (FS-PER) implementations in the world. The analytical solution is complicated, as it is designed to integrate and harmonize numerous heterogeneous data sources and involves millions of measurement units.”
Dmitry explained how IBA has experience across many different industries, including oil and gas, railways, and telecommunications. ERP is an important tool across all these industries and although the media image of ERP installations has been largely negative in recent years, the reality is that many companies still require ERP to manage complex logistics and supply chains.
The idea of a digital twin is a concept that many industries are growing, especially as Internet of Things (IoT) sensors become more common. The digital twin has been common in the aerospace industry for many years – an engine manufacturer such as Rolls Royce will maintain a digital version of every engine they deliver and it is updated in real-time from the real engine using a stream of data from sensors, capturing a complete digital twin of the real engine.
Tools such as SAP can deliver this concept for other solutions. Dmitry showed me an example of a building management system. Now I am not an expert on managing buildings, but I can imagine the complexity of managing every single power socket, lightbulb, fire extinguisher, window, and door in a large building. It used to require pages of maps and floor layouts in addition to constant inspections. Now the entire building can be coded into a graphical interface so the user can see everything in 3D on screen and sensors all over the building feed data into the SAP model. A fire extinguisher can send an alert if it has been used and is now empty. A power socket causing a circuit to short out can be identified the moment there is a problem. The model I saw looked stunning because the graphics resembled a video game – maintaining a building like this would clearly be far more efficient than the old system of only fixing problems after they happen. With real-time monitoring and sensors, some problems can be predicted before they happen – and then prevented.
Dmitry explained: “Digital twins are a development of the IoT concept. Earlier, IoT was viewed as a technology of passive sensors that receive and send data. Today, it is a concept of smart sensors that analyze data and make decisions locally based on the data they process. In 2018, Gartner suggested that this is a technology stuck in the hype cycle, but we can see real clients asking for projects like this using SAP Leonardo.”
It is clear that ERP has evolved. The integration of IoT is allowing ERP to not only represent process flows, but also to predict and make changes. We are now in an age of intelligent ERP and the failed installations of the past can now stay in the past. Solutions like digital twins using SAP are demonstrating that there is a bright new future for companies ready to explore how ERP can help them to redefine and manage their business processes.
It’s always great to see when the new issue of Intelligent Sourcing arrives. It’s updated all the time online, but there is still something nice about seeing a collection of news bound together in a real magazine. I know that’s old fashioned, but a quarterly business journal is like a collection of thoughts from that time.
The issue is focused on innovation and I contributed a column that you can read if you click the later link to the magazine. Although my article was a focus on Customer Experience (CX) innovation, as I read it again I noticed that so many of the specific innovations I was documenting require technology expertise.
This is quite a change from the days when customer experience was called customer service and involved nothing more than a contact centre full of phones. Handling interactions between customers and brands today is highly complex and operates across a number of channels. Here are some of the key areas shaping CX innovation today as outlined in the Intelligent Sourcing feature:
Customer expectations and journey; interacting with customers today takes place 24/7 across many different channels (including social) and involves thinking about a 50-year ongoing relationship with the customer, not just managing a single phone call.
Technology; almost every emerging technology you can think of is being applied to the customer relationship. To list just a few – Artificial Intelligence, Machine Learning, Augmented Reality, Virtual Reality, Robotics, location awareness, cloud computing, the app store. All these technologies are being shaped and influenced by the way that brands are using them to interact with real customers.
Automation; Robotic Process Automation (RPA) is being extensively deployed as a tool to make customer service agents more efficient. The blend between digital service and human service is now one of the most important areas of research in this field.
Customer-centricity; new companies can design their entire service around what customers want in an age of smartphones. There is no need to copy how a bank or insurance company operates – especially if they designed their processes many years ago. This is having an enormous impact on traditional brands that are being challenged by brand new companies that can deliver services better.
CX and Business Process Outsourcing is often presented as an entirely separate type of business that is unconnected to what IT service companies are doing, but I believe that most of the innovation taking place in CX is being driven by IT. In fact, many of the IT experts are now becoming experts in areas such as RPA and that means they are rapidly becoming CX experts. The market for technology services is changing and CX innovation is creating many of these new opportunities.
How does Robotic Process Automation (RPA) really change the enterprise? Naturally, there is a need to seek out the expertise of companies (like IBA Group!) that have expertise in all the main software systems – because it pays to bring in experts when delivering a completely new system, but what about the wider changes that continue after the implementation?
I think this is an interesting question. RPA has the potential to fundamentally change the way that workflows are organised inside many companies and yet I rarely see this discussed in most of the coverage. In fact, most RPA media coverage can be summarised as focused on the size of the market and how automation can replace employees.
Of course, the market size is important, and the potential for automation to replace people is also important – and scary. Many people are getting worried by media headlines suggesting that the robots are about to take their jobs.
Most of this reporting is irresponsible and doesn’t reflect how companies are really exploring the use of automated systems such as RPA. The current debate around RPA reminds me of the lump of labour fallacy. This was suggested by some economists who believed that the amount of work in the economy is fixed, so if you restrict the hours that employees can work then you will reduce unemployment. Work isn’t so simple and the amount of labour is certainly not fixed.
Why is RPA becoming so popular? There are demonstrable benefits that can be attributed to RPA projects. Some of the clear business benefits that can deliver a Return on Investment (ROI) include:
Faster time to market: products and services can be delivered faster when a part of the value chain has been automated, allowing quicker delivery and an improved time to market for new ideas.
Productivity boost: more can be achieved with fewer resources, so the same team can boost what they were delivering before automation.
FTE requirements: if a significant part of your business processes can be automated then logically the number of team members required to process this information can be reduced.
These are the initial short-term benefits. Naturally, the immediate benefits of an automation project will be that the processes work faster, allowing the same team to be more productive, but there are some additional longer-term benefits that should be considered beyond the initial boost.
First is the ability to transform your business. Many industries are experiencing a wave of rapid change at present. Change really is the only constant for almost every traditional business model. Look at banks becoming apps, or news publishers searching for a revenue stream. Many traditional industries are finding that they need to change in order to survive in a very different business environment. If a significant part of your business can be automated then this facilitates innovation in the rest of your processes. It could even be argued that a significant digital transformation project will never succeed if you cannot automate the repetitive processes in your value chain.
Streamlining the processes you have yet to automate is another significant advantage – expanding the scope of automation beyond what you can initially achieve. Once you can see just how much of your business can be automated, there is a strong temptation to increase the processes your business manages using RPA. It’s important to create a period of stability once RPA is initially rolled out, but after that expansion should be encouraged.
Automating many of your systems allows governance checks to be applied automatically by the system and all processes and actions to be recorded. This can help with compliance and governance by removing the opportunity for manual errors and ensuring that a comprehensive audit trail exists for all automated actions.
It won’t be easy to see all the potential benefits from RPA immediately because there are just so many software vendors and no single control mechanism. We are still watching the growth of a market that will transform how companies operate far more than ERP or CRM ever did. But questions remain about how to link RPA into other systems within the enterprise – the Internet of Things for example. Instead of building these links differently for every organisation why are we not building RPA systems like USB cables – able to just plug in anywhere?
RPA will fundamentally change how enterprises are designed in the next decade, but some important decisions will need to be taken along the way. Not every RPA vendor will survive, just as Betamax video was killed off by the market acceptance of VHS. It’s going to get interesting out there as more companies rely on automation to compete.
I wrote recently on this blog about my surprise at how sophisticated the RPA solutions offered by IBA Group already are. As I mentioned, they are offering solutions that are far from the typical vapourware offered by some IT specialists – they already have genuine case studies using all the major RPA platforms.
Forrester makes some bold claims. Principal Analyst JP Gownder said: “Automation will be central to the next phase of digital transformation, driving new levels of customer value such as faster delivery of products, higher quality and dependability, deeper personalization, and greater convenience.”
That’s strong support for RPA in 2019, but Forrester also notes that we are now reaching a tipping point for automation. The Forrester argument suggests that we will now start expecting professional employees to be augmented by automation. This alters the workforce and drives companies to focus on customer value.
In fact, this is a common theme in talks that I have given on automation. I believe we will see this being a much more pervasive change in the way that professionals work and are hired for their jobs. At present we still see RPA as a function of the technology department, but soon we will see job adverts on LinkedIn for HR professionals, credit analysts, and accountants all asking that the applicants have relevant RPA coding experience – that’s going to be quite a change.
· Government adoption will soar; governments always need to do more than less so they will be quick adopters of RPA.
· Less focus on headcount reduction; the focus for RPA will shift from saving cash to improving employee engagement and how employees work.
· Death of BPO; controversially they also predict the end of Business Process Outsourcing because RPA tools allow internal teams to create their own efficiencies.
· RPA blended with AI; put them together and you can create a wave of new intelligence – they each help each other.
· Growth will be bigger than you expect; despite many analysts predicting strong growth for RPA, the team at UiPath says it will be bigger than you expect in 2019.
I think that both UiPath and Forrester have some interesting insights here and I tend to agree with them both. I believe we really are at a tipping point and the effect will go far beyond the technology team. The adoption of RPA will affect just about every professional employee and will demand that they start adopting new skills and methods.
This is why UiPath can speak with such confidence. If the analysts are still focused on the ability of RPA to redefine processes that are defined by the CIO then of course there will be growth, but if we start to see every single business process being redefined and automated then the current growth projections will be nowhere near large enough. Let’s see what 2019 has in store for us all!
One of the biggest changes in recent years in the IT market has been the use of platforms to deliver solutions. Software development may have moved on from the old waterfall style developments to agile delivery models, but many projects still required analysts to design solutions, developers to build them, and engineers to then deliver the product.
Consider just these three types of platform and the change becomes obvious:
1. Cloud; the ability to use a system remotely without local hardware or storage requirements and usually charged on a pay-as-you-use basis.
2. App Store; developing systems for Android or iOS and releasing them to the App Store allows software to be globally distributed instantly.
3. Social and mobile; the success of games such as Farmville or Mafia Wars has largely been because they were designed to be social – play is integrated into social networks such as Facebook so friends can actively engage with your game or compete with you.
These are all major changes to the way that software is designed and released. Not least, one of the biggest changes because of these platform adjustments is that business line heads – rather than the CIO – will make decisions on new IT systems. If the IT tools can be delivered without affecting the infrastructure of the client company then this is much more likely.
In particular, the cloud is changing how enterprise systems are delivered. Business users can pay for systems on a subscription basis without the need to plan for infrastructure and this is radically transforming how many companies see their use of IT and supportive software systems, such as ERP or CRM.
But even the cloud is undergoing rapid change. Many developers are now suggesting that there are some key trends to look for in the cloud market in 2019, such as:
1. Multicloud; AWS, Google, and Microsoft are the cloud giants and all have their strengths, but many companies are now exploring how to reduce their reliance on a single cloud supplier – for security, resilience, and to gain advantages from the strengths of each one.
2. Migration; it will be more common to migrate across different clouds to take advantage of deals or strengths from specific suppliers. New tools will make this much easier.
3. Governance; many companies still have fairly weak rules governing their cloud use and this will get stronger in 2019.
These are interesting points and worth noting. It has never been a good strategy to get locked into a single IT supplier and now we are seeing the same caution with cloud suppliers. 2019 will not only be a year of opportunity for various platforms, it will be a year where we start auditing how these platforms are being used.
From January 24 to January 25, IBA Group hosted the Rocket.Build Local 2019 – Minsk, Belarus hackathon. For the first time, the annual event took place at the IBA Group’s High-Tech Park campus. Rocket.Build is a Rocket Software’s annual hackathon. This event brings together engineers and programmers from around the world to work in teams to develop new products that help Rocket customers solve their business and technology challenges.
IBA has been cooperating with Rocket Software since 2016, the primary area of cooperation being mainframe products. Rocket develops products in diverse fields, including analytics, networks, data, storage, and enterprise software. The firm’s products are designed to run on mainframes, Linux/Unix/Windows, IBM i, cloud, and hybrid/virtualized systems.
IBA Group specialists who are involved in Rocket Software projects took part in the hackathon. All 90 participants were divided into teams, each team consisting of two to four members. The teams came up with 26 various ideas to solve production issues.
Having finished working on projects, the participants presented their ideas to the customer. In a strictly limited three-minute presentation, the teams had to convey the value of the proposed solution to the audience and the customer, and to demonstrate its functionality.
Anjali Arora, Chief Product Officer at Rocket Software, chose the winner of the main prize, the CPO Award. The winning team is expected to travel to Boston to participate in Rocket Build Global to be held from June 9 to June 13 at Rocket Global Headquarters. In addition, a peer voting was held at Rocket.Build Local 2019 and three teams were selected as winners.
The hackathon was a delightful event for IBA Group employees, giving them an opportunity to demonstrate their skills in a friendly and innovative atmosphere.
Cloud computing has transformed how the enterprise uses both storage and applications. Local storage is no longer a requirement with remote server farms immediately managing any requirements and applications using cloud resources to cope with heavy loads – such as online retailers on particularly busy shopping days. All these benefits of the cloud have become normalised, but could we be achieving more with cloud-based services?
A recent feature in ZDNet suggests that we can – digital transformation. Most enterprises view digital transformation through the lens of a change in business model, for example a retailer with a focus on in-store sales shifting their attention to apps. However, the ZDNet research shows that enterprises with a requirement to quickly change business model or offer an improved digital service could be more effectively exploring cloud-based services.
The research group IDC claims that spending on digital transformation in 2017 topped $1.3 trillion, so this is a market where a lot of enterprises are spending, but are they getting the best value and results from that investment?
The problem in many cases is that the technology makes the problem look simple. The cloud, Big Data, the Internet of Things (IoT) – on the surface all these technologies are easy to understand. Executives can sit in the boardroom and proclaim that we need a business strategy that builds on the IoT, yet it is one thing to declare that you want to use a certain type of technology and another to figure out how to make that an integral part of your business in a way that delights your customers.
This is where ZDNet believes that a focus on the cloud can pay dividends. Too many enterprises do not have an efficient or well-structured IT department. There are disparate apps spread across different storage facilities and no easy way to share and analyse data across all the business applications being used. Rather than focusing on technology-led solutions, such as what can we do with AI or the IoT, it makes more sense to fix this central core of the organisation by using cloud-based services. Fix the platform and your applications and data use will naturally transform.
Secure cloud access is a proven technology and it is simple to deploy if you hire a good partner with cloud expertise. The initial focus can be on storage, but you can build out from there to centrally manage business applications and data.
This approach can drive digital transformation in your business, not because it is a radical change to manage storage or apps in this way, but because once you organise your systems around this central core, with strong business application support and the ability to share data across systems, you will be able to quickly design new solutions that could only ever work in this environment.
Sometimes it is better to build the platform and let the solutions arrive through innovation, rather than trying to build the solution on day one. Once you have a platform in place that allows data sharing, then the ideas will flow and your teams will automatically start exploring digital transformation options that are driven by business needs – not just technology.
I recently visited IBA Group in Minsk and I had the pleasure to speak with Andrei Lepeyev, the director of software development at IBA Group. As someone who studied software engineering at university myself, I’m always fascinated by the way that platforms such as cloud computing and the app store have changed what it means to deliver software, so it was really great to catch up with Andrei.
You can hear our conversation on the CX Files podcast by clicking here or search your favourite audio podcast provider, such as iTunes, Spotify, SoundCloud, or Stitcher. Because we were focused on CX we talked about some of the technologies and systems that Andrei is working on that have a direct impact on the quality of CX for the clients of IBA Group.
I had initially asked Andrei about how Artificial Intelligence (AI) is being used to predict customer behaviour, but he explained to me that IBA has gone further and created a product called APPULSE that offers a complete Level 1 and 2 support service for mainframe computer systems.
Andrei said: “APPULSE not only detects the system and finds problems, it uses Machine Learning to learn about the solutions so in many cases it can create a self-healing mainframe system. Mainframes are still really important and unbeaten in the range of directions they are deployed. They are the most stable and virus-free systems, but their user-interface is not usually so good.”
Andrei was talking about the importance of keeping mainframes running because they are often overlooked by most customers, yet your bank will be relying on those systems to be running if they want to offer a 24/7 online banking platform. Ensuring that the system can heal itself before problems even happen is an enormous improvement in the way that a traditional IT support operation would run – fixing problems only after they have caused a problem. That’s always a disaster for customers who need service now.
He said: “First we think about the support level of each supplier. Can they provide education or trial systems? Can they add specific requests to the software? Can they give extra information to a company like ours that may be implementing the solution?” However Andrei also added an interesting point which is not often discussed in the industry – sometimes it is just which software system is seen first by the customer. He said: “It is also important to see how each of the companies is marketing their product to the client. Often we will be approached by a potential client who already has a pilot system – developed free by the software vendor – and it can be very hard to move them to another system even if we think it could be better.”
Andrei mentioned Machine Learning when describing the mainframe support system and I asked him about the popularity of this in 2019. Are more and more customers asking how to make their systems learn about customers and systems automatically?
Andrei said: “Yes, many more clients are asking about it. The main reason is that there has been an evolution of hardware. A simple mobile phone allows almost every standard machine learning platform to work. Ten years ago this was impossible. We are not talking about huge brands like Google and Amazon – even smaller companies can deploy a machine learning system today – there is a very low barrier to entry now.”
When I asked Andrei about his priorities for 2019 he said that he wanted everyone in the industry to remember that none of these technologies exist in a vacuum – they all need to interact with other technologies and business processes. He said: “When we are talking about AI we cannot talk about it alone, it should be the business application of AI. We can’t talk about RPA without Machine Learning. We can’t talk about Cloud Computing without talking about the solutions that are built and deployed on the cloud. I’m looking forward to some projects in 2019 that involve AI using RPA and are delivered on the cloud.”
My conversation with Andrei provided a great insight into how some of these technologies are really affecting the customer experience. A large amount of media coverage is just hype, but as Andrei demonstrated, there is a great deal of substance here. These technologies can deliver game-changing systems, but the companies using them to interact with their customers need to have great products and services – it is not the use of an RPA or AI platform alone that will help them to be more successful.
When I recently visited IBA Group in Minsk I was expecting to hear about their Cloud Computing solutions and some of their more recent developments in Machine Learning, but I was surprised to hear exactly how developed their Robotic Process Automation (RPA) expertise is today. I was surprised because their approach to RPA is not typical. They have experience of delivering real projects to real clients in multiple countries using the top 4 RPA software platforms.
Now contrast this to the typical RPA story in the media. Robo-bosses, robots taking over, and other mentions of robots replacing humans. When reading about RPA we usually read hype and grand claims of digital transformation, often from experts or IT companies with very little track record in this area. Yet IBA has been quietly developing expertise in all the major RPA platforms all over the world and there is no hype at all. They have just been getting on with the job.
When I arrived at IBA, I never expected to hear such a solid RPA success story – case study after case study of real RPA deliveries. I did a detailed interview with Vjacheslav Mikitjuk, director of Internet Technologies, that I intend to publish in the new year.
The RPA world is full of hype. HFS Research has been a vocal critic of the RPA hot air and fake news for the past few years, but even they now acknowledge that there are real solutions being delivered that are adding value all over the world. I witnessed this up close when I went to visit IBA Group and it was not even something that I had expected. They have kept their RPA expertise fairly quiet, but I’m hoping to change that in 2019 by telling the world what they have been doing.
The life of the CIO has been like a roller coaster in recent years. The strategic importance of information was probably only really appreciated in the 90s, when the CIO became a more common term than IT Director. It was then that the value of the information, and what a company did with it, became more important than the technology itself.
But in recent years, the CIO has seen cloud-based systems take over. So long as business teams had access to the Internet they could subscribe to pay as you go business services offering everything from CRM to ERP to data storage – software as a service. It seemed like the IT department was offering little of strategic significance for many companies, other than ensuring the business teams can access their Internet-based services.
Now catch up into the present and it seems that some organisations are thinking again about their IT infrastructure because the strong core approach is becoming a popular way to approach the way that technology is organised inside the enterprise. But what is the core, beyond just offering a secure network?
The core approach offers security, but also APIs into all business applications that the company uses, a single way to share data across applications, and a stable environment where automation/bots and tools such as Robotic Process Automation (RPA) can be applied. In short, the enterprise creates a core for data and applications and benefits from being able to share data across teams. This also offers the opportunity to automate processes and create efficiencies that are impossible if each individual department is just deploying cloud-based business solutions.
The digital core should in fact be a core for driving improved customer engagement with the business. By creating opportunities to manage enterprise data more effectively, insights can be created and customers can experience a far more personal service – the enterprise finds efficiency, but the customer experience is also improved.
Building a core requires a consistent approach to building a central platform, sharing APIs, applications that can work together, and data that can be shared and analysed. It requires an enterprise-wide approach to managing data and applications, which sounds a bit like the old days of central control from the CIO office, but the insights and efficiencies that can be achieved from this approach should outweigh any loss of autonomy for individual business units. In fact, individual business managers can continue to select and deploy their own software solutions so long as they can be plugged into the core system. Flexibility should still be promoted.
We are moving back to an environment where the CIO matters once again. Have you explored the core in your own enterprise yet?
I mentioned in my last blog that the very nature of jobs and employment is changing today because of emerging technologies such as Artificial Intelligence (AI). Tools such as AI in business application support, are fundamentally changing how corporate processes function – and this changes the skills that people in professional jobs need. This change is prevalent throughout many parts of the modern organisational structure, but the most important area of change is probably enterprise decision support.
The problem is, how do we get from here to there? Many organisations are overrun with data. They have so much that they just don’t know what to do with it all. Some have tried to focus on data analysis, creating a data-driven approach to their business, but even those who have moved in this direction need to rely on the skills of their data scientists to try turning data into information.
As data analytics evolved, it was clear that enterprises were changing from a backwards-facing approach where they analysed past events and described what happened, to an ability to be predictive – trends and patterns that help to predict future behaviour could be found. A similar change needs to take place in enterprises using AI today.
Today, the possibilities for AI-enabled decision-making are more prescriptive, with AI providing enterprises not just a look into the future, but also key diagnostics and suggestions on potential decision options and their payoffs. Such highly evolved applications of AI can help businesses make decisions that can potentially exploit more business opportunities, while averting potential threats much earlier.
This is the real opportunity for AI in the enterprise. To create the opportunity for automated decision-making, but where the system is designed to learn, unlearn, and relearn as often as required. Insights from automated AI business application support should be powerful because the system is trained to learn where insights may be found.
I believe we will be seeing many more AI business application support systems in future – its no longer a technology of the future. These are systems that are already installed and in use in enterprises globally – have you explored what AI can do for you and your decision-making processes?
There are many emerging technologies that are not only changing the workplace, but changing the way that jobs are structured and the skills that modern (or future) employees need. I believe that three of the most important changes taking place at present include:
1. Artificial Intelligence (AI) in the workplace
2. Remote working
3. Creating tribes
There are technologies and systems emerging, such as AI in business application support, that are fundamentally changing how corporate processes function – and this changes the skills that people in professional jobs need. Employees need to become comfortable with the idea of AI delivering performance feedback, personal development, coaching and evaluation. This offers many advantages to both employee and employer, but it can still face resistance by some employees, especially when they feel it will change their job.
Forbes magazine recently published data from a study by the Center for Effective Organizations at USC Marshall School of Business. The study suggested that only 37% of employees would share innovation or automation ideas if they believed they would have to do different work as a result of such technology being implemented. However, when employees believed the technology would help make their job better, 87% of them said they would share innovation ideas with their employer.
Both AI and employees will help companies to reengineer their processes, but with AI exploring how to optimise systems there is an opportunity to change processes without the natural reluctance of the employees.
Remote working is increasingly a reality in many industries. Customer service companies are now actively promoting the Work-At-Home-Agent model instead of increasingly large contact centres. Companies with a large number of home-based employees can dramatically reduce costs for office estate and more easily scale up and down as the business requires.
The need to create tribes is partly related to the trend for home-working, but it is also linked to our increasing use of social networks. As we see people less in real life and more in virtual spaces, such as social networks, it becomes more important to be more methodical about socialising – both in person and virtually.
All these changes in the way we work are related back to the increasing intelligence of systems that can help us to perform more effectively at work. We are now reaching a point where coding skills are becoming useful for employees in almost any professional job – accounting, HR, and law companies will all be using AI business application support and this means that professionals need to learn how to manage their virtual tools.
A great change is coming soon. It’s not that every job will vanish as many are automated, but those that remain will become more interesting and more technical – the HR team needs to start coding soon!
Will citizen developers really take over software development from the big IT companies in future? The market for citizen development is growing fast and what are often called ‘low-code platforms’ allow people to develop software without much knowledge of software development. The market for these systems is currently worth over $4bn, but is predicted to grow to over $27bn by 2022 – that’s extremely rapid growth for any market.
But let’s take a step back to understand what is going on. In the early days of software development programmers would need to use machine language (or code) to get computers to do anything. This machine language is exactly as it sounds, essentially instructions that are directly manipulating chip functions and data. It was extremely difficult to learn how to do this and because the code was hard to read it was not only hard to create, it was hard to fix problems and maintain too.
These days, machine coding is still possible, but it is only really used where speed is essential or there is some other very specific requirement – such as being able to directly address the functions of a video chip. Most software developers now use a programming language, such as C, Java, or Basic – many are available and they are constantly evolving. These languages are much easier to read and use and the developer can either use a system called a compiler to translate the code into the required machine code, or they can use an interpreter that converts the software in real-time as it is running.
These languages have dramatically increased the productivity of software developers, but to use one of these languages is still a specialised skill. The software developer not only needs to understand the language they are using, but also has to be comfortable with many other basic programming principles, such as how to use variables to store and manipulate data. This is not something that an untrained individual can do easily. So what is low-coding?
Essentially it is software development, but at a high level so the focus is just on business processes or queries. The developer doesn’t need to think about underlying issues such as graphics or data storage, they just need to describe what they want the system to do. A good example might be a Human Resource platform that offers the user the ability to create a filtered interface – only show me candidates over 21 years old with a degree for example.
These queries are essentially basic coding and this will become an increasingly important skill in the modern workplace. It’s easy to argue that this is not really software development and therefore the companies offering software services can feel safe that their business is not about to collapse, but it does represent an important change in skills that will be required for jobs that are not traditionally connected to IT.
Automation is increasing across many industries, particularly Robotic Process Automation (RPA). This means that some basic coding skills will be required of accountants, credit analysts, lawyers, and HR professionals (to just name a few) if they want to be able to manage and control the software systems they are using.
So low-coding does not mean that citizen developers will be building the software that IT companies are now delivering. However, it does mean that almost all office-based professionals need to consider how they can learn about basic coding skills – their future employability depends on it!
Artificial Intelligence (AI) is quite a pervasive technology in the present-day environment. Even regular consumers with no technical knowledge are becoming aware of AI and are comfortable interacting with these systems. Examples are all around, from Siri on the Apple iPhone to the movie recommendations made by Netflix and song playlists on Spotify.
AI can also help to predict what people will do in the future. Facebook can tell if you are likely to take your own life based on recent posts. Stanford University trained a system to detect if you are gay or straight based just facial photographs. The HR system designed by IBM can predict who is likely to quit their job. The implications for these insights are fairly clear – imagine what an insurance company or government could do with this data.
Perhaps more positively, there are now investment algorithms that outperform regular investment managers and AI-powered disease diagnosis means that your virtual doctor will be aware of any relevant research and drug trials – even if it was just published yesterday.
Most consumers will be largely unaware of these developments, but there is one area where people are creating a huge demand for greater investment and research into AI systems and that is personalisation – the interaction between consumers and brands.
Years ago it was Amazon that really started this wave of personalisation by offering deals or recommendations based on the specific shopping behaviour of the individual customer. This was extremely innovative at the time because most brands could only ever offer the same deal to all customers at the same time. Now this is commonplace and expected. A clothes retailer needs to know what the customer likes, dislikes, their shopping history, and what they have browsed and lingered over in the past. All these insights would be impossible for a person, but an AI system can figure out what to offer the customer – either as a recommendation or as a special offer – and ensure that the offer is made at exactly the time that the customer is most likely to respond positively.
Now these personalised insights are not only becoming more common, but customers know that brands have the data so they are expecting greater personalisation. Customer demand is creating a wave of IT research and development. AI is moving quickly from being interesting and innovative to becoming essential for brands across many industries and it is customer expectation that is driving this change.
On September 2, IBA Group organized a family festival for its employees and their children to celebrate the beginning of the new school year. The celebration took place at Minsk Zoo, much to the delight of young visitors and their parents.
This year, IBA invited children, their parents, and their grandparents to spend a sunny Sunday at the zoo, where they could get acquainted with various animals in enclosures, as well as at the terrarium, aquarium, and exotarium. The icing on the cake was a show at the dolphinarium.
IBA Group’s management congratulated children on the beginning of a new school year. First graders received makeshift medals and gifts with the IBA logo. All attendees got lunch bags and could satisfy their sweet tooth with ice cream.
As a part of the entertainment program, children could see exciting chemical experiments and use a trampoline, an inflatable slide or a swan ride.
Digital Transformation today can mean a lot more than just changing the way your brand delivers a service online. In many cases, companies many need to entirely redefine their business model to keep up with a changing industry that is being shaken by new market arrivals and constant innovation.
In some cases this means old brands die and new ones takeover the market. Instagram is a good example. The entire business of taking and sharing photographs is completely different today and the entire infrastructure that involved cameras, films, and development facilities has almost entirely disappeared in the last 5-10 years. However, in some cases a digital transformation can mean a completely new way of working inside a business that, on the surface, appears to be doing what they have always done.
This Forbes case study of Lufthansa Technik Logistik Services (LTLS) is a good example. LTLS provides logistics, transport, and warehousing services inside the airline industry. LTLS is itself owned by Lufthansa Technik, which provides maintenance, repair, and overhaul services for airline engines. On the surface these businesses sound like traditional engineering and logistics companies that exist to help keep airlines flying safely.
This remains true and nothing has changed in that regard since LTLS started a major digital transformation project a year ago, but there are some areas of process that have changed dramatically, especially around warehousing. Around half their revenue comes from their warehousing service so any way that innovative digital technologies can help to improve these processes will directly impact on the success of the business.
LTLS has implemented nine different projects all focused on assessing digital technologies. These include: using optical character recognition in combination with AI software to automatically fill in input screens and eliminate paper in the receiving department by scanning 10,000 documents each day; smart, light weight, gloves with 2D scanners that allow for hands free picking; integrating their warehouse management system to smart watches; and the use of mobile logistics robots to reduce worker travel.
One of the critical aspects the LTLS highlight about their own digital transformation is the cultural adoption of new processes. They tested the robot technologies in warehouses by buying a single robot and testing it alongside the existing processes, building cultural support for a complete rollout and replacement of the old practices.
This is where your approach to culture can be critical. Not every digital transformation springs from nowhere and transforms the industry overnight. This can happen, as we have seen, but most plans resemble the LTLS approach. There is a clear need to improve the way the business functions and digital technologies can help to transform the business processes – there is a clear sense of where we are now and a future state for the business.
In all these transformations you will require the team to support the changes being proposed, or the implementation is likely to fail. LTLS were smart by slowly introducing changes that could work alongside existing processes and the workers could quickly see how their life would be improved if robots did most of the heavy work inside the warehouse. It’s an agile approach that not only allows for support to develop, it allows for process errors for be fixed during the implementation and avoids the potential disaster of switching from one system to a new one and finding that it is full of errors.
Clearly this approach is worth some extra consideration by any executive team currently studying the opportunities for digital transformation in their business.
Take a look at what the industry analysts are all saying about customer experience (CX). It doesn’t matter which industry you are focused on, it is typical to see that improving CX is now considered to be one of the most important strategic priorities – often it is more important than the more traditional revenue maximisation and cost reduction strategies that most CEOs focus on.
But when you explore what CX transformation really means, it is clear that modern CX is largely supported by IT systems. To create a modern CX environment requires not only a major investment in IT and communication systems, it requires an understanding of these technologies and how they can blend with your people and processes so CX is improved.
This requires multiple skills. Executives investing in the technology systems that are now being used to improve CX may know the technologies, but have no personal knowledge of CX or customer service principles in general. So it’s worth taking a moment to appreciate just how much the various technologies have changed in the past few years. Supporting CX today is no longer focused just on Customer Relationship Management (CRM) systems alone. This CMSWire article details five key areas where you might want to think again about the kind of technologies being used today – and where we were in the recent past:
Moving from websites to apps – it’s no longer enough to have corporate information on a website. If you really want to interact and build a relationship with customers then you need the interactivity of an app.
Moving from Web Content Marketing to Artificial Intelligence (AI) – online content is great for brands, but AI will allow brands to automatically share relevant content and to build their content library automatically.
Digital Asset Management (DAM) moving from a static repository to the centre of your digital assets – instead of just tracking all your digital assets using a spreadsheet, create a culture of sharing every digital asset, even photos and videos, and utilising the DAM database as a key asset throughout the business.
Moving from data use to help the marketing team to predicting what the customer will do next – don’t just use data on customers for marketing mailshots, study their behaviour and figure out what they will do next by using predictive data analytics.
Personalisation based on strict rules moving to AI – Machine Learning and AI allow you to get much closer to customers by creating a completely personal experience, not just the same experience every customer has. More and more customers are already insisting on this as an expectation.
Robotic Process Automation, Virtual Reality, Augmented Reality, Machine Learning, Artificial Intelligence, Cloud delivery and Data Analytics. The list could go on. All these emerging and complex technologies are being deployed in solutions that are specifically designed to improve CX, but as this list suggests there is also a need for executives to think beyond what they knew as cutting edge two years ago.
When selecting a technology partner for a CX initiative you should keep in mind that they need to have expertise in the specific technologies you want to deploy, but also talk to their team about how they see these technologies evolving. CX is driving so much investment into these technologies that none of them are static. You need to consider how best to plan for a solution that delivers today and can flexibly grow with the business in future.
The technology industry is in an interesting place right now. Industries across the world are facing a wave of digital transformation that is often redefining their entire business model and value proposition. In addition, the increased strategic focus on customer experience (CX) as a boardroom priority is creating a wave of investment in emerging technologies. There has never been a better time to be closely connected to the IT industry because IT is redefining so many industries at a scale that nobody has ever seen before.
Customer expectations have changed dramatically in recent years meaning that companies need to deploy every tool possible to increase both sales and loyalty. The Business to Business (B2B) environment research by Salesforce shows that 80% of customers are influenced by the way that a company is able to understand their individual needs. There is a clear need for organisations to explore how digital transformation and the use of more innovative technologies can create a better experience for their customers.
There are many examples of the changing digital environment and how emerging technologies are changing the interface between companies and their customers, for example:
1. Bots; intelligent chat bots are able to handle simple customer questions automatically deflecting calls that would need to be answered in a contact centre.
2. Automation; the use of Robotic Process Automation (RPA) to automate manual processes makes life easier for employees and increases productivity.
3. Data Analytics; the ability to personalise service for customers because the system knows exactly what they like, when they like to buy, and which channels they prefer. Companies can use data insights to show their customers that they understand exactly what the customer wants.
4. Immersion; Both augmented and virtual reality systems are being used for solutions such as allowing customers to experience a luxury hotel before booking and how to find products inside a store.
5. Self Service; customers are increasingly searching for help online before ever asking a company for help with their products so there is an increasing need to create intelligent content that answers customer questions in locations such as Google.
It’s clear that the combination of increasing customer expectations and the emergence of these new technologies is driving a wave of digital transformation. More than ever, companies are turning to their technology partners for answers. Technology is no longer just a service that supports the business, technology is rapidly transforming how organisations function and redefining business models. Technology is rapidly becoming the most important driver shaping how organisations function and define a business model today.
Digital transformation is a business strategy that has been increasing in importance in the past few years. The ubiquitous use of smartphones, access to fast mobile Internet, and the app store concept have all combined to create a platform where established companies can offer online services and new companies can go to market with innovative ideas extremely quickly.
In some industries, such as financial services, there is an arms race taking place. New companies are launching services that are free of the technical legacy a large company, such as an international bank, needs to manage. Freed from many of the traditional requirements – such as a chain of retail branches – these new services can offer better prices to customers and be entirely designed around the needs of the customer, not the legacy systems of an established company.
It’s clear that companies across all industries need to be exploring how digital tools can improve their service to customers, but digital transformation projects can be risky. If a company bets on the wrong type of service then they can quickly become irrelevant in their own marketplace. Alternatively, if a company fears the complexity of a major digital transformation and delays investment then they may find that entirely new market entrants steal their customers by offering a more customer-centric product.
There are some key areas of focus that should be analysed before commencing on a digital transformation project, both to mitigate against failure and also to increase the chance of success. New research published in Information Age highlights six key factors for success in digital transformation projects:
1. Leadership; is the company leadership really supporting change?
2. People; does your team have the skills you need?
3. Agility; are you able to change plan during the transformation?
4. Business Integration; how will the transformed business connect to the existing processes?
5. Ecosystem; what support do you have from suppliers and others in the value chain?
6. Value From Data; are you capturing the right data and analysing it at the right time?
These may appear to be obvious points that any executive team would consider before a major change, but it’s worth studying each factor in more detail because digital transformation projects do fail. Often the reasons for failure are clear – a lack of agility is a classic example. If your project is so large that it may take several years to implement then it is almost certain that the requirements in a couple of years will be different to now. Therefore agility is essential.
The increasing use of Artificial Intelligence is a good example why these six key factors are important. In the Information Age research 68% of respondents said that they had already had a positive experience of AI systems and 61% expected AI to be creating new jobs in the near future.
That 68% figure is quite high for a technology that is often talked about as a trend for the future. Technologies such as AI are becoming very important in the present-day business environment and many of these emerging technologies will lead to a fundamental change in business models and the competitive landscape. But digital transformation is not just about the integration of emerging technologies into your existing business processes, it is the enabling of new business models or services through the use of technology.
These six factors identified by Information Age really do speak to the way that a digital transformation project should be approached. Kodak was researching digital photography and yet they never saw Instagram on the horizon – digital transformation can completely change entire industries in a short period of time so this is an area of strategy that is essential to get right.
The growth in corporate robotics feels rather like an overnight trend, but automation using robots has been changing the manufacturing industry for at least three decades. The difference today is that robotics is no longer restricted to factory production lines. Automation today is far more advanced than a machine capable of spray-painting car parts.
The reality in today’s environment is that several technologies are blending together to create new possibilities and solutions. Robotics, machine learning, and Artificial Intelligence are naturally connected because automation no longer has to just be the simple repetition of programmed bots – we can now ask the system to learn how to get better.
The IBM Watson system is a great example of this. Watson is capable of reading 800 million pages of data a second. This capacity to absorb new information constantly makes it incredibly useful for complex environments that are constantly changing. Cancer diagnosis is a good example because a traditional doctor will train for many years and then will work with patients in a hospital so their capability to absorb new research is limited. By training real doctors to work with AI systems such as Watson we can support and enhance them – allowing doctors to access a second opinion that includes knowledge of all published research.
Softbank in Japan has connected their Pepper ‘general purpose’ robot to a Watson ‘brain’ creating the possibility for intelligent assistants that actually have a physical form. It’s easy to imagine nurses treating patients with Pepper offering additional advice, or a bank advisor explaining a mortgage to a potential customer and Pepper offering further information and automatically checking compliance to legal regulations.
But this convergence of technologies is not taking place at the same speed in every company, or even in every industry. EWeek magazine recently summarised five important trends that give a good oversight on the growing importance of robotics in industry today:
Most companies are not yet using Robotic Process Automation (RPA), but are noticing those that are using it; Capgemini research suggests that 39% of companies are already using RPA and many are talking of extremely positive results – such as a reduction in repetitive work and an improvement in quality. The companies that have not yet tried RPA are noticing these reports and will move quickly.
RPA works best when used to create a Centre Of Excellence (COE); RPA requires a cultural change so it helps to create a mindset that you are not just automating existing tasks, rather the plan is to improve how the company works.
Once companies explore RPA they deploy it everywhere; companies that have piloted RPA initiatives find that it is not just useful in the back office – automation can be deployed everywhere.
Human jobs are changed, not eliminated; as with the Pepper examples, in most cases RPA enhances and improves what humans can do rather than just eliminating their roles. In research published by McKinsey, they estimated that around 90% of work functions cannot be automated 100% – the role of automation is to increase quality and productivity, not eliminate humans from the workplace.
RPA plus AI will lead to new cognitive opportunities; by created automated systems that can learn we are entering a new cognitive era of business. Research by OpusCapita suggests that 81% of executives believe that this combination of RPA with AI will significantly change their business inside the next 5 years.
This highlights two extremely important – and opposing – points. Executives mostly (81%) believe that automation and AI is about to dramatically change their business, perhaps even their entire business model. However, only a minority (39%) of companies have already launched an RPA project.
It’s clear that this is where the future lies for companies across all industries so the future seems bright for service companies with expertise in both these areas. I even think that the 5-year time horizon is rather long – in my opinion this will all change before 2020. RPA and cognitive systems are about to change your business forever – are you exploring the possibilities today?
Why do companies really implement Robotic Process Automation (RPA)? The technology journals endlessly talk about robotics, framed by ‘Terminator’ images, but what are the benefits reported by those companies that have already explored RPA? According to the robotics consulting firm Symphony, these are the main benefits found after RPA has been deployed:
86 per cent say RPA significantly reduces costs
86 per cent feel RPA reduces risk and improves compliance
86 per cent believe RPA improves process effectiveness and efficiency
89 per cent believe RPA improves the quality of work
91 per cent say RPA saves companies time on repetitive tasks
As you might expect from a system that is focused on automation, the focus is on saving time, improving quality, and reducing risk. RPA is often talked about as a technology that can replace people, but it is smarter to think in terms of how it can help people to do their job better – to always remain inside compliance regulations or to consistently deliver processes without errors.
This feature in IT Pro explores several RPA deployments and asks why the projects were successful and whether the companies involved achieved what they expected. Examples include:
A car manufacturer offering a bot that could answer questions about their vehicle, such as what a light on the dashboard means. Additionally the messenger bot maintains a relationship with the customer and sends reminders such as when it is time for maintenance or tasks such as an oil change.
A recruitment company used a bot to analyse CVs automatically and submit only those meeting all the required criteria. This allowed the recruitment consultant to scan far more CVs than would be possible manually.
A bot that could add information on music concerts to a website focused on music events. Instead of manually Googling for information on events and then copying information to the database, the bot could just search and populate the database automatically.
What’s interesting here is that these are all very different projects, but they previously required a large amount of repetitive manual work – especially the recruitment and music examples. In these examples, people would be performing repetitive manual searches many times. The bot allows them to focus more on the search results, rather than wasting time performing the searches. The car example shows that with a little thought, an existing process such as sending reminders to a customer can be performed in a more interactive way that actually should help to build a closer brand to customer relationship.
HfS Research believes that the RPA market will be big – around $1.2bn by 2021 – but they also exercise some restraint. HfS believes that many of the predictions linked to RPA are ‘ridiculous’ and typical of the hype we see whenever a new technology becomes trendy. This is always a danger when new technologies become popular. They are often seen as a solution looking for a problem. Executives start asking why we don’t have an RPA strategy without identifying where RPA can actually help to improve their business processes. However, as the IT Pro case studies demonstrate, it is possible to take specific processes and to automate them so quality and efficiency is improved.
RPA is not about a robotic takeover and a complete end to all manual work, but it is an opportunity to dramatically increase efficiency in any part of your business that suffers from a need to perform repetitive manual tasks. It will be an important business strategy, but let’s stop framing discussions about robotics with ‘Terminator’ images.
IBA Group Mark Hillary
Customer Experience (CX) has become an important topic for IT companies in recent years. Technology that helped customers used to be restricted to little more than Point-Of-Sale (POS) systems in retail stores, but now there is an enormous industry focused on CX and technology underpins most of these services. For example:
CRM; Customer Relationship Management systems are increasing automated and help brands build a better relationship with their customers by having a better understanding of customer needs.
ERP; Enterprise Resource Planning has become increasingly important as complex supply chains need products to be delivered just-in-time to the right place.
RPA; Robotic Process Automation is allowing companies to automate large groups of processes – especially in the back office.
Contact centres; the traditional link between brands and customers is increasingly complex now that omnichannel service is becoming a customer expectation.
Data analytics; Big Data and expertise in studying customer behaviour is becoming an important way for brands to personalise the service they deliver.
AI; Artificial Intelligence is helping many brands to predict what customers will want, either to help improve the supply chain or to create a more personal service.
VR and AR; Many brands are exploring how Virtual and Augmented Reality can help customers locate more detailed information on their products.
This is just a short an immediate list, but the implication is clear. The customer to brand relationship is far more complex than ever before and it is increasingly these technology systems that are providing the ammunition for brands to improve their customer experience. IT service companies and advisors need to be increasingly aware of how important their role now is in creating a great experience for customers.
Many of these technological changes are helping smaller specialist companies to compete with the major players. Look at the Facebook Messenger and it’s automated bot system for one good example. Even a very small brand can configure the system to offer 24/7 customer support using automated bots – something that would have been unthinkable for a small company to offer just a couple of years ago.
Several major technology systems, such as CRM and ERP, have driven large parts of the technology industry in the past, but I believe that now the main driver is CX. Customer expectations on brands are increasing constantly, leading major companies to explore how they can deliver a better service than their competition. Likewise, many of these technologies are moving from just being used by early adopters to being more universally accepted – look at how Ikea now allows customers to view furniture using an AR system before purchasing.
The message is clear for IT experts – CX is going to drive your business for the next decade. Make sure you are tuned into what the CX experts are saying and what the upcoming CX trends are going to be, because many of them need IT expertise and that will not come directly from companies with experience of customer service.
How is automation such as Robotic Process Automation (RPA) changing your business? I’ve written here in the past about some of the automated solutions IBA Group has delivered to clients and how the use of automation can streamline various business processes, but what is the wider effect on a business when some processes can be automated?
In the short term some clear effects can be immediately observed:
1. Faster time to market; products and services can be delivered faster when a part of the value chain has been automated, allowing quicker delivery and an improved time to market for new ideas.
2. Productivity boost; more can be achieved with fewer resources, so the same team can boost what they were delivering before automation.
3. FTE requirements; if a significant part of your business processes can be automated then logically the number of team members required to process this information can be reduced.
But these are just the immediate effects, based on improving processes so everything works faster and more reliably. There are some additional changes that may not be immediately obvious, or even planned during the RPA transition, but will soon become important to any organisation that uses RPA.
Business re-engineering and transformation
Improved governance framework and process controls – such as change management
First is the ability to transform the business. Many industries are experiencing a wave of rapid change at present. Change really is the only constant for almost every traditional business model. Look at banks becoming apps, or news publishers searching for a revenue stream. Many traditional industries are finding that they need to change in order to survive in a very different business environment. If a significant part of your business can be automated then this facilitates innovation in the rest of your processes.
Automating many of your systems allows governance checks to be applied automatically by the system and all processes and actions to be recorded. This can help with compliance and governance by removing the opportunity for manual errors and ensuring that a comprehensive audit trail exists for all automated actions.
Tools like RPA are often talked about as a way to streamline a business, or reduce cost. It’s rare to hear the opportunities for a complete transformation mentioned, but this is where automation is heading – one day it’s going to redefine what your business does and how all your services are delivered.
On May 17, IBA Group celebrated its 25th anniversary with a big celebratory event in Minsk, Belarus.
Located at a picturesque lake, the venue included indoor and outdoor entertainment zones. Guests had a chance to interact with robots, try a variety of fast food from food trucks outside the restaurant, or indulge in molecular cuisine. They could relax and sit on bean bags, have a walk on the riverbank, and chill out inside the restaurant.
The newly gathered band Soft Skills, which consisted of IBA Group’s employees, performed for the first time to the public. Covering a kaleidoscope of hits, the band acquired a number of fans among their colleagues and was greeted with enthusiasm.
However, the real highlight of the celebration was a live set of the Belarusian State Academic Symphony Orchestra. Performing on the riverbank, the orchestra played a number of classical pieces, as well as soundtracks of modern movies and TV shows, such as Skyfall, Pirates of the Caribbean, and Game of Thrones. When the music started, the night sky of the lake lit up with fireworks, making the orchestra’s performance truly magical and unforgettable.
In his speech, Sergei Levteev, IBA Group CEO, thanked the company’s customers and employees, saying that 25 years many people doubted the company’s success, but IBA Group overcame all obstacles to be where it is now.
The party concluded with a discotheque, where employees of IBA Group could dance the night away to the sound of electronic music.
Technology is inherently democratic in nature. There are very few countries in which a person cannot take an interest in IT from a hobby all the way to a prosperous career. However, the global technology services market has never been more competitive, and standing out in a crowded field is challenging at best. This is where forward-looking stakeholders in Belarus are coming to the forefront, in the provision of various technology offerings that are definitively oriented to export markets across the globe. The Belarusian economy is steadily being moved toward technology, and there is a quiet confidence among its players that it will be successful in this modernizing agenda.
What immediately strikes any business visitor coming to Belarus is that the country is truly connected. It should be remembered that Minsk was designated as the USSR’s technology hub in the 1970s by the then-Soviet government, and this culture continues to permeate. With an estimated 100,000 IT experts living in Belarus, there is a vibrancy in the country’s atmosphere. Conference rooms and cafes bristle with lively discussions that take on both tech and entrepreneurial flavors. And, forward-looking leaders in this space have laid the groundwork for both ongoing development and profit.
Consider the recently completed Hi-Tech Park Belarus, a modern facility that acts as a strategic incubator for entrepreneurs across the IT value chain. Current tenants include application developers, hardware manufacturers, and prospective disruptors, many of the latter focusing on crypto-currencies, an area in which Belarus’ IT sector is targeting for future growth. Each takes advantage of recently-passed tax abatements designed to help boost Belarus’ IT space. Housed on the outskirts of Minsk, such a development would easily fit into Silicon Valley or Austin’s technology hub. But despite being uniquely East European in its flavor, the aim of the majority of this initiative’s members is to firmly implant their products and services in western markets. And, based on historic precedent, there is reason to believe that they will achieve this end.
The ongoing success of Belarus-based IBA Group is testament to the opportunity that technology players from this country can find overseas. With a list of services ranging from transportation management solutions through to RPA for leading financial services providers in South Africa, this company (which incidentally recently celebrated its twenty-fifth anniversary) has become an example of how IT services can be successfully exported from an emerging European location. That IBA Group has recently opened a brand new campus in Minsk’s technology hub speaks to its success.
I recently bought a Furbo. It’s a device that started life on the crowdfunding platform Indiegogo. You fill the Furbo with small dog treats and when away from home it’s possible to watch your dog using the camera and toss those treats remotely. It’s also possible to speak and listen to what your dog is ‘saying’.
It’s just a fun device, but it is also one more connection to the Internet. Our homes are becoming filled with connected devices and slowly our home environment is becoming far more technology-enabled than any office, where the focus is still on connecting little more than computers and printers.
Think about your own home environment. Do you have an Amazon Echo or Google Home system? That means you will have connected microphones dotted around the house. What about your phone, laptop, and Kindle? If you have a games console that that will also be connected and how else can your TV access Netflix if that’s not online?
Much of the traditional media we used to consume in the home such as records, movies, and books is now consumed electronically. We stream Netflix to a Smart TV. We stream Spotify music to a home theatre or speaker system. We download books and magazines to e-readers like the Amazon Kindle. The connected home has slowly become a reality and is no longer unusual or cutting edge. Data published last year by Cisco estimates that by 2021 each person in North America will be using 13 connected devices. Thirteen for each person! That’s a lot of Kindles and Furbos.
Naturally much of this growth is because everyday objects are gradually becoming connected. It would be unusual to buy a new car today and to find that it does not ask to connect to your wifi. Tesla cars regularly upgrade themselves when parked overnight. A new channel between products and their manufacturer has been created allowing automated updates and maintenance to take place without user involvement.
Smart leaders need to look beyond the devices and think about the data. When people are streaming constant information on their location and behaviour how can your business tap into that information to create genuine value? Insurance companies are one great example of a sector that is benefitting from this move to an Internet of Things (IoT) environment. If a car driver only pays insurance for their car when it is used and they are rewarded for safe driving behaviour then that helps the customer and the insurance company. Insurance is being redefined by this real-time data on the customer.
How is your business reacting to this connected environment? Can you see the opportunities or does it just seem like a threat to the established way of doing business?
This should be qualified by the more nuanced comments published by HfS. They stated that the RPA boom has been hyped, but not the more general focus on business automation. So the blogs and business journals that keep on breathlessly saying that bots will transform companies need to examine just exactly what they are saying. RPA cannot exist without a wider transformation of how a company functions.
Companies today need real-time data that converges across business functions. You cannot have a marketing database that is not connected to data your customer service team is using. You cannot drive business value today without your business data being real-time and accessible from across the entire business.
The hype around bots is that all this is automatic; but if your company still relies on paper documents then how are the bots going to process that data? To create a truly automated organisation requires more thought and planning than just the deployment of a bot in the back-office.
As more processes are digitised, more value can be created. More insights can be found. More opportunities to set bots searching for trends are created. HfS has actually been saying this for a long time and they have a digital office solution called OneOffice that broadly defines how organisations need to plan operations – if they want to use the data flowing through the company.
The real message is that RPA itself is not hype. There are many excellent examples of RPA deployments that have achieved genuine efficiencies for the companies using it – including customers of IBA. However, the idea that RPA is a silver bullet that can automate your business processes, making your team super-efficient overnight, is certainly hype. RPA is just one part of a transformation to a digital business environment. It is one tool in a complete arsenal of change related to the way that data is used.
We need to see a convergence of data analytics, cognitive solutions, and RPA. Big Data is another term that is often tossed around with very little understanding, but it needs to be understood by leaders. Big Data and data convergence are not just referring to smarter ways of using data. We are talking about the complete digital transformation of organisations so that data becomes the most valuable asset.
Many people have been shocked to recently discover just how much data Facebook has on their personal likes, dislikes, and preferences. It shouldn’t be a surprise. Facebook has offered a free service for years in return for data. That data allows them to know their customers inside-out, creating advertising opportunities that the traditional advertising industry cannot match. Facebook has redefined how advertising works and major advertising companies are struggling to keep up.
Whatever your business, you need to think about how data flows from customers to you and how it moves inside the organisation. How can you leverage this knowledge to create new opportunities – even a new business? RPA is just one ingredient and can help to automate some processes, but thinking about RPA should really just be your first step towards a complete transformation of how you are using data in your company today.
The Horses For Sources blog has been a great place to read comment on outsourcing for many years now. It became so popular and authoritative that the founder, Phil Fersht, managed to launch the innovative analyst company HfS Research. The contrarian approach of the blog has allowed the entire company to continue focusing on innovative research that sometimes exposes false trends and hype.
And so it was recently when an article on the blog commented on growth expectations in the Indian ITO and BPO sector. The Indian technology association NASSCOM is predicting strong growth in the sector of 7-9% and yet all the industry analysts, including HfS, are saying that they believe it will be more like 4-5%. Who is right?
As the blog points out, some of the more level-headed executives have accepted that the days of rapid growth in this type of outsourcing are over. For example, the contact centres that were once endlessly growing now need to accept that customers would actually prefer self-service systems. The way that brands and customers interact is changing fast and this will impact on the service companies that are serving them.
But the blog also notes that many company executives will not accept that their growth is slowing and they will reach out for the latest fad to help give the impression that innovation is about to save them. Some of the ideas mentioned are Artificial Intelligence, Blockchain, and Robotic Process Automation (RPA). This is typical executive behaviour. When a proven business model starts slowing down, reach out to “innovation” for a boost.
The problem is that the executives who talk about these innovations as game-changing are not really accepting that the game has changed. They continue to talk about growth using old metrics, such as how many people work in their contact centre, and fail to see that in many cases, services are being delivered in a completely different way. New business models may be required and new charging structures are certainly required.
Strategies such as RPA are not just new services that can drum up additional revenue, they can entirely redefine how a business model works. As the HfS blog suggests, it’s time for executives to stop talking about AI, blockchain, and RPA as new sources of income and to start defining how these technologies might change, improve, or destroy their entire industry.
Chatbots have faced quite a challenge. Initially they were embraced, especially when Facebook championed how they could allow small companies to be available to customers 24/7 without the need for a contact centre. However, many customers and companies have also complained that they often fail to live up to the promise. The Artificial Intelligence (AI) systems are just not good enough to replicate interactions with a real person.
But a recent feature in Financial Review magazine explores how chatbots are really just the beginning of a long journey into AI. Perhaps we should review our expectations and remember that we are only just starting to use these technologies for real business solutions. Mistakes will be made, but when the technology is effectively deployed it really does work.
Take a look at the National Australia Bank deployment of a chatbot to answer customer questions. The bank focused on the most common 200 questions that customers ask and the bot can recognise all these and another 13,000 variations of the same questions. Commonwealth Bank launched a chatbot in January of this year and by the end of the year they predict that it will understand 500,000 different ways to ask about 500 different banking processes.
The bots are learning. They are applying Machine Learning principles so that every interaction with a customer becomes an opportunity to learn and improve. This is very important, because many of the executives who have been critical of AI systems have not allowed the system long enough to learn how it needs to behave.
Organisations that need to interact with their customers often, like banks, will find that an enormous amount of basic enquiries can be handled by bots and customers will prefer interacting with bots because they get immediate – and accurate – service. AI has proven beyond doubt that it is more than just a fad. The smart use of a chatbot system is the first step on a path to creating a much more automated customer experience – an experience that most customers will prefer because of the immediacy of service.
Robotic Process Automation (RPA) is the automation of business processes using software ‘bots’ and allows simple, repetitive tasks to be performed by computers rather than people. RPA covers a wide range of tasks, such as sorting incoming email, responding automatically to chat messages, or extracting useful information from documents using Optical Character Recognition.
RPA offers a great opportunity to streamline your business processes. The wave of Business Process Outsourcing (BPO) that has taken place over the last two decades means that executives are much more familiar with the concepts of workflow – determining how different parts of your business exchange information and interact. This awareness was built up as companies realised that some processes could be performed by a partner through outsourcing. To make these outsourced processes work it was important to define the information interface between the client company and the supplier managing the processes.
This knowledge can be translated well into RPA planning. Where do you have repetitive or rules-based processing in your organisation? Can you create an environment where you feed information to an RPA system and allow it to perform this work automatically?
The benefits of improving workflow in this way are multiple:
1. Optimise the time and potential of your employees by allowing them to focus on exceptions, not routine work.
2. Improve the customer experience by processing this information more reliably and quickly.
3. Achieve stronger control over your processes by ensuring that the system itself processes most work without failure – only a few complex situations need more analysis.
A new report from Forrester Research suggests that RPA will add 500,000 digital workers to the US economy – that’s the equivalent of half a million real workers, but in this case it’s software bots performing the work. In 2018, RPA-based digital workers will replace and/or augment 311,000 office and administrative positions in the US, and 260,000 sales and related positions. As a result, the RPA software market exceeded $500 million by the end of 2017 and will double to $1.06 billion by the end of 2018.
This kind of market growth is hard to ignore. Not only can RPA fundamentally transform your business, creating more engaged employees and more satisfied customers, it can reduce your ongoing cost of business too.
The business journals used to say that outsourcing and offshoring was replacing the need for companies to hire people. Now it’s the robots that are supposed to be taking our jobs. Business journals and commentators across the world are suggesting that a wave of automation driven by smart Artificial Intelligence (AI) systems will largely replace the need for workers.
But what is the reality? Forrester Research does believe that a big change is coming, especially to highly developed markets like the US. Their latest study on the global workforce suggested that in 2018, 9% of US jobs will be lost to automation, partly offset by a 2% growth in jobs supporting this automation – the systems need to be managed. The most impacted areas will be back-office and administrative, sales, and call centre employees. A wide range of technologies, from Robotic Process Automation (RPA) and AI to customer self-service and physical robots will change how people are hired and will create a need for different skills.
Analysis by McKinsey is cautious. They warn that just because it is technically feasible for tasks to be automated does not mean that every company will do so. This is similar to the earlier concerns about outsourcing. It is technically feasible to outsource almost every function of a company, yet few companies outsource everything.
McKinsey says that when planning what is possible to automate, first you need to rate jobs and tasks by their technical feasibility – is this a repetitive process that a robot or software bot could perform? For example, when thinking about manual work tasks such as a factory assembly line or food packaging are predictable and it is possible to consider how these tasks could be automated. Construction, forestry, or working with animals is highly unstructured and not predictable and therefore almost impossible to automate.
Let’s consider a simple example. IBA Group created an email bot that sorts incoming emails at the customer support centres. The EmailBot processes typical customer requests, grouping these by content, sending automatic responses, creating tickets, and gathering statistics. However, even a constantly-learning robot cannot process all customer requests. Roughly 50-70 percent of incoming emails are processed automatically and the rest are forwarded to the appropriate employees. Nevertheless, in this case the employees are relieved from repetitive operations and are able to focus on more complicated tasks so value is created.
But factories and manufacturing are just one part of the economy. In most developed economies services are a greater part of the economy. Here there are clear examples of how some automation can be introduced. Look at how customers in McDonald’s are now comfortable using a screen to order their own meal. Amazon has proven that an entire supermarket can be automated, so not even checkouts are required.
This rings true. Think about the skills needed by a finance assistant or Human Resources professional in an environment where many business processes will be automated. These office professionals need to be able to control the automation systems and improve them – the back office professionals you are now hiring probably need to be able to code software. That never used to be a requirement in HR, but it will be soon.
The McKinsey research analyses over 800 different types of job and explores the possibility of robots replacing these tasks. You can read the research here, but to my mind it is the transformation of skills that is the real story – not robots replacing workers. Workers need to understand how to work with the robots and control them so they can be more productive.
The difference between enterprise IT and consumer IT has been blurred in recent years. It used to be that managers used Blackberries as their mobile device of choice because it worked better with email than any other handset – now Android and IOS are dominant for both enterprise and consumer use.
Enterprise technology used to be completely unrelated to any of the systems we might use on a computer at home – think of ERP or CRM systems. Who would be building a CRM system at home, yet it’s a common tool in the office. However, now that many enterprise tools are delivered via the cloud using a web browser it feels remarkably similar to be using tools and systems at home or in the office.
So is the Internet of Things (IoT) any different? The IoT has largely been talked of as an automation tool to assist in the home – the smart home where every device is connected and controllable. But how does the IoT work in the enterprise environment and should it be approached differently to the home?
1. Security; you might be comfortable capturing personal data, such as your heart rate, on devices at home and sharing that information with your own personal cloud, but in the enterprise environment systems handling highly personal information need strong protection – just assuming a password is enough is negligent.
2. Reliability; enterprise and industrial IoT systems may be deployed far from your headquarters in remote and hostile environments. You need to know that a sensor will have a lifespan that can be measured in years, not weeks.
3. Programmability; IoT systems produced for personal use at home are largely out-of-the-box solutions. Even systems that can be configured in many ways, such as the Amazon Echo used for controlling home devices, are generally used in default mode most of the time. In the enterprise environment it is critical that your IoT devices and general environment can be changed to suit your needs – the default setting is unlikely to meet your needs.
This is an interesting paradox. As we have observed consumer and enterprise applications becoming more and more similar, the world of IoT remains distinct. The CIO, or general IT management, need to create an enterprise IoT strategy that moves beyond just installing systems that would be more useful in a smart home environment.
There has long been a battle over the best international locations for IT and Business Process Outsourcing (BPO) locations. Analysts in this area long ago stopped arguing about the merits of specific countries and started looking at cities and regions instead, with one of the constant comparisons being India compared to Central and Eastern Europe (CEE) for clients based in Western Europe.
At times the debate has been rather tired. It’s obvious that Europe and India both have their advantages and disadvantages for outsourcing service delivery, however a recent editorial feature in IT Pro really backs the case for working with companies in the CEE. In fact, IT Pro goes so far as to suggest that for IT and BPO services, the CEE region “is a nearshoring Mecca.”
According to research by Deloitte, working with partners in the CEE region, rather than China or India, helps to avoid problems such as:
– poor supplier performance; it’s hard to effectively control your supplier when they are so far away. Each problem may require a very expensive and long journey to visit in person – or you need to expatriate teams to oversee the supplier.
– inability to realise cost advantage; cost advantages in low-cost locations are often overstated because they don’t account for errors, mistakes, and the cost of increased oversight.
– time zone considerations; it can be difficult to manage a team when you only get a small window of time together each day. Emails may take a day or more to be answered and calls are very difficult.
– social beliefs; especially true if your remote team is customer-facing. It’s far easier to work with Europeans if you are a European company buying services – even if they come from a different country the team will broadly have the same European cultural values.
– government incentives; China and India are mature markets and the real incentives were on offer around 15 years ago – now there are more interesting government incentives in other markets.
Not much of this is new information. European companies have long weighed up the value of paying more to work with European partners they can be close to, both physically and culturally, but there is a strong emphasis on the gap getting wider. The BPO and IT companies are innovating at present and developing new delivery and payment platforms and this is where many Indian companies are getting left behind – relying on the same methods of IT sourcing that were in vogue a decade ago.
How do you think the India v Eastern Europe argument has developed recently? Will this change in 2018 and does the IT Pro analysis reflect what you see in the market at present? Please leave a comment here with your thoughts.