I recommend business decision-makers use this logic as a lodestone to guide themselves past any confusion; the point of innovative technology must be better automation, because only better automation can produce better business outcomes.

1. EYES ON
AUTOMATION
WHERE TO START WHO’S BUYING THE MARKET SPEAKS
REPORT
01 Cover final.indd 13 07/07/2016 15:21:27

2. The smart money says people are
talking about robotics but not buying,
by Guy Kirkwood of UiPath
18 Professional Outsourcing Special Report
F
or all the media attention being paid
to the robotic process automation
(RPA) market, it seems that clarity
into where the industry is going is hard
to find. There’s been a proliferation
of acronyms – SDA, RBPO, RPA and
AI (just to name a few) – to the point
where a prospective customer has to be
tempted to just sit back and wait for the
dust to settle. That would be a mistake.
RPA technology is far too legitimately
disruptive and transformational for any
business person to ignore.
How can I make that statement on the
heels of describing the industry as un-
intelligible? Fair question; I can because
my company is a leading RPA provider.
We’re talking to companies well before
there’s any external knowledge of their
automation interest; we’re implementing
solutions months away from publicity
and seeing the scaling of this technology
right in front of our eyes.
The starting point for understanding
RPA is to recognise it’s not another
coming of ERP or BPM (I know, more
acronyms... ) sold to IT decision-makers
as much, if not more, than to the busi-
ness side of the house. While it began
with techies in IT departments using
scripts, macros and screen-scraping to
solve specific problems, this automation
has grown into a powerful technology
Robotic process
automation: who is
buying, and why?
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3. “Some RPA providers
muddy the waters
by presenting
compliance and
governance as
the holy grail.”
ROBOTICS
that is now purchased overwhelmingly
by business stakeholders. Why? Because
it’s the best response to their perennial
marching orders – do more with less.
It’s a starting point for clarity because
it’s all about the impact on business
processes: lowering (compellingly) costs
and increasing (dramatically) efficiencies.
Some RPA providers muddy the waters
of features and capabilities by present-
ing compliance and governance as the
holy grail: essential to be sure, but table
stakes rather than a differentiator for the
customer. Further, that same competitor
is on an amusing crusade against the
record function, which is one of the
best features to deliver productivity. Our
recording is actually recording intelligent
actions on objects, not dumb, screen-
based actions. They cannot implement
it because of their convoluted (and old)
object-oriented design. Other providers
and third parties create shiny objects, by
forecasting the remarkable impact AI will
have on RPA – and they will, someday.
Lodestone logic
I recommend business decision-makers
use this logic as a lodestone to guide
themselves past any confusion; the
point of innovative technology must be
better automation, because only better
automation can produce better business
outcomes.
In my experience, the most successful
robotic automation companies share
a common characteristic. They don’t
view themselves as software companies;
rather, their business model resembles
that of a service business and the value
proposition is a compellingly better
business outcome.
This business model is now potentially
on a collision course with other, bet-
ter-known providers of service: business
process outsourcers (BPO) and shared
services centres (SSC). From what I can
see, the growth of robotic automation is
not just mimicking the historical growth
of those business models, but accelerat-
ing at a far faster rate. The venture
Professional Outsourcing Special Report 19
t
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4. 20 Professional Outsourcing Special Report
only result from many high-volume,
automated processes, and high-volume
benefits soar with efficiency or sink in its
absence.
What do I mean by efficient auto-
mation? Let me illustrate it with two
different automation circumstances.
One is a customer who discovered that
similar processes they’d automated over
a nine-day period with a competitor’s
product took less than two days with
ours.
Another is recurring waves of high
error rates caused by minor shifts of field
locations. Very few robots besides ours
can “see” the screen like a person and
respond to a shift in field locations with-
out revised automation scripts. Instead,
instructed to navigate to a fixed point on
the screen, those robots continue to do
so, producing errors such as filling phone
fields with street addresses and bringing
the automated process to a screeching
halt.
Despite all the horror stories in the
press about how “the future of work”
actually means mass unemployment,
we’re not seeing significant redundancies
as a result of our automation projects.
Clients are simply moving those people
affected on to higher-value tasks – doing
stuff that they just couldn’t do before.
Irrelevant, or not?
However, we are seeing real disruption
across service industries. Let me give
an example. Last month I was briefing
Cathy Tornbohm of Gartner on what I
saw happening in the market when she
delivered a true bombshell; Gartner
is cancelling its annual financial and ac-
counting (F&A) outsourcing BPO, Magic
Quadrant, because she has concluded
that unless that type of BPO involves
automation, it’s become irrelevant.
Think for a moment of what that
means to those global service providers
– unless BPO involves automation, it’s
irrelevant. In fact, the smartest business
buyers are now producing requests for
proposals that ask for pricing on the
assumption that automation is going to
be the delivery model, so any bidder
that does not have automation as a key
plank of their proposition is – to be blunt
– screwed.
In addition, I’m witnessing tier one,
global consultancies making noises about
taking minority stakes in RPA providers.
Why? Certainly there’s a pure invest-
ment rationale, but just as important is
the motivation for a pull-through of con-
sulting revenue. Unusually, these small
RPA vendors (and we are all still small,
comparatively) are being approached
directly by clients wanting to find out
t
capital interest RPA is attracting – not
from the tier two or three firms I’d have
expected for such a nascent market, but
heavy hitters such as KKR and General
Atlantic Partners – leads me to believe
that what I’m seeing is true.
There’s one robotic automation soft-
ware capability that I strongly encourage
business leaders to value as highly as the
venture capitalists do: efficient automa-
tion. A common fallacy is all automation
is efficient and the technology is by and
large the same. Efficiency is a relative
term; certainly, all types of automation
will be more efficient than the manual
alternative, but efficiency gaps between
robotic software products can make the
difference between process automa-
tion success or failure. Why is efficient
automation so critical? Because of this
basic truth; large cost reductions can
“A common
fallacy is that
all automation
is efficient.”
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5. “Very few robots
can ‘see’ the
screen like a
person and
respond to a shift
in field locations
without revised
automation
scripts.”
ROBOTICS
Professional Outsourcing Special Report 21
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6. more about and then try automation.
We’re getting 15-20 leads a week, for
instance, which means that they can
“feed” the implementation firms, rather
than the other way round. That situation
will, of course, change over time, but
for now the consulting and implementa-
tion companies see the RPA vendors as
golden geese.
Having spent 20 years in BPO and
shared services, when I arrived in this
automation market, I assumed the
technology would be sold to clients who
had previously purchased BPO service
lines and now planned to replace those
services with in-house automation. But
what we’re seeing is clients who want
to scale the industry-specific processes
quickly: claims processing, securities
processing and fund administration,
order processing, fare distribution, etc.
Processes typically provided by BPO or
SSCs – F&A, procurement and HR – are
a secondary priority.
These industry-specific processes
are more attractive in the short term
because they generally run on old
technology; the processes have not
been “optimised” or “commoditised”,
precisely because the processes are not
generic, so companies have just thrown
bodies at the problem and there’s been
no real technological solution.
Three drivers of growth
When I first started feeling the tremors
of explosive growth, I began to look for
signs of the growth engine beyond the
phenomena. What I discovered is that
there are three such growth engines.
The first growth engine consists of the
most mature shared services: captives
and global business service operations.
They have been purchasing RPA soft-
ware licences, implementing pilots and
22 Professional Outsourcing Special Report
t
creating their own centres of excellence.
These mature organisations don’t need
any third-party help because they have
the process improvement, process map-
ping and lean six sigma skills necessary
to build their RPA competencies. They
accurately perceive robotics as the next
logical step for their business organisa-
tions. The numbers behind this engine
are quite small, limited to large, global
enterprises.
The second growth engine is the
biggest one, and where my company
is seeing the most activity. It consists of
organisations seeking to automate, but
lacking the in-house capability. These
organisations typically don’t have all their
processes mapped, nor do they have
the black belts to plan and implement
process improvements. Often they
have outsourced as many processes as
possible, then gutted their retained or-
ganisations, leaving themselves barren of
skill sets, documentation and methodol-
ogies. We recommend these companies
leverage third parties to help them
implement automation. Our ecosystem
of partners is diverse, covering geogra-
phies, industries and services lines, and
we can therefore recommend partners
that match their needs.
The third growth engine consists of
BPO providers who began using RPA
over the past two years and are now
coming to market with automation
as-a-service offerings, particularly if their
technology can operate extremely effi-
ciently over Citrix. We find that capability
is important to our BPO customers,
because many of their clients operate
dozens of ERP systems and/or instances
in Citrix environments. The importance
can be seen in this Citrix efficiency
example; a new customer discovered
the process that had taken nine hours to
automate with a prior vendor now took
16 minutes with our technology. With-
out seamless efficiency, automation as a
service is a flawed business model.
How do AI and digitalisation fit into this
automation picture? Certainly digitialsa-
tion fits into the picture right now and in
different ways. Capgemini is combin-
ing two providers: for example, using
my company for RPA technology and
Celaton for digitisation – dealing with un-
structured data. Other customers prefer
the “one throat to choke” approach and
we’re providing digitisation by combining
OCR with Google algorithms to struc-
ture their data, then applying our RPA
technology to the digitised information.
AI is farther off. Like our competitors,
we’re moving in that direction using
open source software and tools, but it’s
unlikely the industry will see any major
announcements in this field for another
two or three years. However, based on
the activity and noise that came out of
Google’s recent I/O 2016 event, it may
come sooner.
To some this surge of automation may
seem to be a curse, but with a 300%
growth rate in 2015 and a projected
400% growth in 2016, I’m in the group
of those pleased to be living in truly
exciting times.
“A new customer
discovered that
a process that had
taken nine hours
with a prior
vendor now took
16 minutes.”
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7. “It’s unlikely
that we’ll see
any major
announcements
in AI for two
or three years.”
ROBOTICS
Professional Outsourcing Special Report 23
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8. Chris