Future ready how to bring process automation to your enterprise

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Copyright © 2016 Neo Group, Inc. All Rights Reserved.

FUTURE READY - HOW TO BRING PROCESS AUTOMATION TO YOUR ENTERPRISE



Outsourcing in the form of labor arbitrage using low

cost centers has delivered well over the years and

enterprises are now looking for various solutions that

are more than just cost savings to be future ready.

Now the question is “What Next?” The issue has

moved beyond SLA compliance and quality of service.

Labor arbitrage and mere cost savings is becoming a

thing of the past.

Enterprises who buy outsourcing services and

henceforth are referred to as buyers are looking for

innovation and transformation and automation is one

of the key approaches to bring about this

transformation.

2

INTRODUCTION



Some of the questions that always make their entry into our discussions with buyers are:

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THE WHAT?

1. What is automation all about?

THE WHY?

1. Why should we think about automation?

2. Is there a need to bring in automation?

THE HOW?

1. Should we outsource first & then automate OR automate & then outsource?

2. What is the process to go ahead with automation?

3. How to identify & assess automation opportunities?

4. Should we use a 3rd party automation tool or should we build our own?

5. How do we ensure that our automation program is successful? What should we watch out for?

6. Everybody is talking about automation. Where is automation headed?

7. Where will automation not work?

INTRODUCTION


Copyright © 2016 Neo Group, Inc. All Rights Reserved. 4

THE ADVANTAGES

What are the advantages of automation?

a) For the buyer

b) For the service providers

This paper will provide insights into the above questions and the key focus will be on how to go

about automation.

We will also talk about the advantages of automation and the impact of automation on the

contracts between the buyer and service provider.

INTRODUCTION



What is

Automation?

Automation is about using technology to

transform processes and achieve greater

speed and accuracy. Robotic Process

Automation or RPA is the field of

automation that deals with mimicking the

actions of a human and is typically

technology agnostic. When we refer to

automation it includes RPA.

Why Automate?

Emerging and disruptive technologies are

changing the rules of the game, allowing the

businesses to automate many (if not all) of their

rules-based processes quickly and at a low

cost. The economies obtained by automation

are tremendous. They lead to cost reduction,

efficiency gains, increase in accuracy and high

level of compliance and security.

Outsource first or Automate first?

This is similar to the question that was being asked earlier- should we outsource first or

transform and then outsource? The answer really depends on what works best depending on the

circumstances and needs to be assessed on a case to case basis. Most buyers follow the path of

outsource first and include automation later, as part of the outsourcing roadmap. Buyers who

have already outsourced have started amending their contracts to include automation.



Automation Process

We recommend the following automation process and the stages therein to be followed in the

automation program.

IDENTIFY •Potential Processes

PLAN•Plan Automation Roll Out

DEVELOP•Design & Development

IMPLEMENT •Move to Production

MANAGE •Support & Governance



STAGES IN

AUTOMATION PROCESS

IDENTIFY

In the Identify stage, look at all the processes that

could potentially be automated. The section on

‘How to Identify & Assess Automation Opportunities’

will give you a good indication of where to look. As

the next step, prepare the business case and

identify the stakeholders and get their buy-in to

make this program successful, before proceeding to

the next stages.

Who are the stakeholders?

This would depend on the company but

typically it would include the CIO/CTO and

Business Owner. Similar to the success rate

of ERP implementation in the past, automation

success will also increase when the CEO is

one of the key stakeholders. More on this in

the section on ‘What makes an automation

program successful’.



PLAN

Once identified, plan the roll out of the automation. This would differ from company to

company and would depend on various factors including the corporate & business strategy, the

business cycle, culture etc. Typically, enterprises prefer to run a pilot and then decide based

on the success of that pilot.

The enterprise could decide on a custom built automation or buy an off the shelf automation

product and configure that. In some cases, it could even be a combination of both.

In this stage, create a detailed plan and work out the various phases of the automation

program. Planning on a pilot could also be part of the overall plan.

STAGES IN AUTOMATION PROCESS

DEVELOP

This will involve design, solution architecture & development and/or product configuration

depending on the strategy adopted in the earlier phase on the buy vs. build decision. This also

includes the UAT (User Acceptance Testing) before the automation can go live.

This could start off with a pilot as the first phase and then enterprise-wide development in the

subsequent phases.



STAGES IN AUTOMATION PROCESS

IMPLEMENT

Post development and completing of the

configuration, the next step is to implement the

solution which could be done in phases over either

shorter or longer periods of time, depending on the

enterprise’s culture and business cycle. This stage

ends when the software or tool is moved to

production.

MANAGE

Once implemented, there needs to be a well-

defined support & governance process to manage

not only business as usual but also any system,

technology and business upgrades. In addition,

continuous measurement of the value bought in by

the automation will be useful for future automation

projects.



How to Identify & Assess Automation

Opportunities

One of the key questions is how to go about identifying the processes that can be automated.

Outlined in this table are process characteristics that make them candidates to be considered for

automation. Also go through the section on “Where automation will not work well” to understand what

types of processes are not candidates for automation.

Process Characteristics Elucidation

Manual Processes that are time-consuming and are currently done manually. Pay close attention to

processes that are repeatable.

Regulated Processes that have high compliance and statutory requirement.

High Quality Requirement Business needs for these processes dictate high level of quality requirement.

Issues Processes that have issues in terms of quality of deliverables, customer issues, employee issues

etc.

Rudimentary Optimized Process Processes where some kind of rudimentary and sub-optimal automation has been done like Excel

uploads, Excel macros etc.

Highly Rules Based Processes that are rules based and maybe have some level of decision making.

Highly Data Driven Processes that involves a lot of data including data gathering, data entry in multiple ERPs or other

systems, data sanitizing & analyzing.

High Employee attrition Processes that have high employee attrition, especially where the job becomes monotonous and

repetitive and employee motivation and engagement level drops.

Volume Fluctuation Process that have volume fluctuation and optimal staffing becomes difficult.

Seasonal Process that are seasonal in nature which makes it difficult to staff the process optimally.



Build Vs. Buy

Which automation tool should I use or should I custom build it or do I need a combination

of both? This is perhaps one of the most important questions. While the answer to this

depends on several factors such as your goals (staff reduction, analytics, standardization),

the nature of your business (size, industry-type, regulation level, location) and the

important technology factors such as:

• Do you have a strong in-house technology team?

• Is technology core to your business?

• Does being a technology leader in disruption technology make you a leader

in your business?

There are several tools available in the market and this paper does not analyze those

tools. Choose a tool that fits your requirements after analyzing the various tools.

It’s always a better option to use a tool instead of building one, as this will ensure that you

are upgraded as technology gets upgraded.



What makes an Automation Program

successful?

The following are the key parameters that makes an automation program successful.

I. Clarity of Objective

While cost saving is the obvious objective, it is important to keep the other objectives such

as seamless access to multiple systems (including ERPs), increasing regulatory

compliance, reducing offshore etc. in mind when defining your automation program.

II. Right Strategic Plan

Automation program should be aligned to the overall company’s objective at best; at the

very least it should look at a department or function level objective. The more aligned it is

to the strategy at the highest level, the more successful the program will be. If we end up

looking only at process level objective, the success will be limited.

III. Stakeholder buy-in

It is very critical that all the stakeholders including the CXO level, business owners,

technology departments and suppliers are not only involved but have also given their buy-

in. Otherwise there could be disruptions during the execution stage and that might lead to

the program not getting implemented well or not at all.



IV. CXO Level Automation Leader

Create a Chief Automation Officer role - a person who has the vision and leadership skills. This

will give a clear message to the enterprise about the importance of this initiative.

The CAO, or equivalent, will look at the overall objective and also align automation activities to

the various business units of the corporation. This person will bring in the best practices and

ensure that the strategic objectives of the program as well as the corporate objectives are met.

V. Approved Budget

This is an obvious yet an important aspect to ensure success of the program. Ensure that a

proper ‘Cost Benefit Analysis’ is done and the budget is approved so that the program does not

get abandoned in between.

VI. Tactical Automation

While short and tactical automation projects may not be strategic in nature, their wins will

boost the entire automation program.

VII. Right Owner

We need a Global Process Owner and not a technical owner. In other words, the program must

be driven by business and not by the IT. It should not be a “cool” technical thing to have but

something that the business needs.

What makes an Automation Program successful?



Future of Automation

While everybody is talking about Automation and is being future ready, it will be good to explore

where automation is headed. We believe that there will be an exponential adaptation of

technology in the next couple of years and there will be focus on best practices to be followed in

the area of automation. We envisage the following trends:

1. Move towards a Utility Model

The move towards a utility model is about using automation on an ‘As-Need’ basis.

Enterprises that use automation will not be making capital investment in the software tools

nor will they have dedicated tools and infrastructure to service their needs. They will

instead go more towards a pay as you use (which is ‘As-Need’) model and focus will be on

Capex reduction.

2. Increased focus on Cognitive and Artificial Intelligence

Automation has become common and there are already tools talking about Cognitive and

Artificial Intelligence. There will be increased focus on Cognitive and Artificial Intelligence.

Currently we do see cognitive tools being used for service desks etc. In the future more

and more business process outsourcing processes will leverage Cognitive and Artificial

Intelligence.



3. Further institutionalization of Automation

Automation will move from a project level / contract level investment to a more centralized

business and technology investment.

4. Emergence of Knowledge plugins

Best practices will be incorporated into the automation tools. These tools will have

knowledge plugins, which are objects with process knowledge. This will enable people to

incorporate best practices within the tool at a much faster rate.

5. Focus on End to End Automation

The move will be from automation in silos to end to end automation and automation will be

able to get significant benefits because of the it’s holistic view of the business.

6. Emergence of an Engagement layer

We will see emergence of an engagement layer, which will integrate the different

components of disruptive technology, including RPA, mobility & cloud.

Future of Automation



Where automation will not work well

It’s important to note that automation is the means and the end is effectiveness. To appreciate

the potential of automation it is best to align it with the enterprise’s strategic objective and not

make it an ad hoc process improvement project.

In such cases, automation will be less effective. However, there are instances where automation

does not make sense at all.

Some areas where automation will not work well are:

1. Processes that have small volumes

2. Processes that are constantly changing

3. Processes that have high level of exception and have judgment calls

4. Processes that have too many different forms of data and unstructured text

5. Processes that have high number of handwritten notes



Advantages of Automation

Automation is not just a FTE reduction tool but a more strategic path followed. It capitalizes on the

knowledge gained through BI & Analysis and social media. We will touch upon the advantages to buyers

and service providers.

Advantages to the buyer

The advantages of Automation to the buyer in the various areas are:

.

1. Sourcing

Automation helps to avoid sourcing problems such

as cultural issues, political issues etc. and also

helps increase on-shoring.

2. Process

Automation helps in having better control of the

process and improves the efficiency, security,

compliance, speed and the quality of the process. It

makes the process more flexible and scalable, while

keeping costs low and provides for real time data

and business continuity

3. People

Automation makes the process less

dependent on people and reduces

supervision time and reduces

attrition.

4. Technology

Automation as part of technology

road map makes the buyer a leading player in his field



Advantages for service providers

1. Non-Linear growth

With increasing cost pressures, the service

providers can leverage technology and

automation for non-linear growth.

2. Long Term Clients

Automation will tend to make a service

provider’s client contracts stickier.

3. Reskill employees

Service Providers can leverage

automation to reskill their workforce on

the disruptive technologies.

4. Leverage Automation Partnership

to add value

Service provides can use a particular

solution as-is or with slight modification

across verticals and across clients, thus

giving them better value for their

investment.

Service providers can bring better value

to their buyers through strategic

partnership with technology product

vendors.

Advantages of Automation



How automation impacts the way we will see

contracts and working style

Contract Focus This will move from pure ”What needs to be done” to “What needs to be

achieved”

Performance Measurement This will move more towards “Outcome based” rather than “Activities

based”

Resources This will move from tradition process skill to resources with process skills,

automation skills, cloud skills etc.

Flexibility Buyer will want more flexible contract and would like to keep it open to

leverage more benefits of future technologies

Financial Move from cost reduction to value enhancement

Location Low cost location may be only a part of the consideration. Low cost location

because of lower labor costs will become irrelevant.

Innovation focus The contract will focus more on innovation rather than on pure costs.

Strategic procurement Buyers will look at procurement more strategically. Buyers will look at

vendors who can not only execute automation but also innovate and

vendors who are leaders in following latest value add trends in outsourcing

so that the buyer can become future ready.

Relationship Relationship will become more important as both the buyer and the supplier

will need to work in tandem to add high level of value to the engagements.

Collaboration The approach will be more collaborative as collaboration between the

parties will enhance value further



Next Steps

Now the question is “Now that I know this, what

should the next step be?”.

Engaging an advisory company like Neo will help

you assess the health of the current engagement

and the right time to go with automation strategy and

Neo can add great value by

1. Providing critical insights to you and your

service providers

2. Helping determine automaton readiness through

assessments

3. Helping in the process of automation strategy

and help implement the automation roadmap

effectively

4. Helping weigh all the aspects before you make a

strategic procurement decision

5. Helping choose the right vendor based on their

automation capability by leveraging our

knowledge base of the key vendors and the

market trends



Neo Group Can Help

The global sourcing landscape is constantly evolving. For a deeper discussion on planning and executing a successful

globalization strategy, contact one of our lead advisors.

Atul Vashistha Brad Pickar Hemant Puthli

CEO & Founder Partner & SVP Partner & SVP

[email protected] [email protected] [email protected]

Kevin English Pankaj Sharma Vikram Naaidu

Partner & SVP Partner & SVP Partner & SVP

[email protected] [email protected] [email protected]

About the Author

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Sudhakar Kuckian is a Sr. Director with Neo Group’s Advisory Services and has 22+ years of experience in all aspects of

sourcing advisory services in the IT and ITeS areas. He has worked extensively with customers across North America and

Europe. Sudhakar is on the Harvard Business Review Advisory council and is a McKinsey Quarterly Executive Panelist.

Sudhakar is an ardent enthusiast of disruptive technologies and strongly strongly believes that disruptive technologies can play

a much larger role in transforming businesses. He is a SMAC (Social, Mobile, Analytics & Cloud) certified professional, and has

led major technology implementations at Fortune 100 organizations. He has an engineering degree in Computer Science from

NIT, Allahabad and an MBA from Krannert School of Business and has completed his executive education on Strategy and

Leadership from Wharton School of Business..

mailto:[email protected]








About Neo Group

Founded in 1999, Neo Group helps organizations meet business objectives and address business

challenges by leveraging global services and sourcing. To learn more about Neo Group, please visit

www.NeoGroup.com.

About Supply WisdomSM

Supply WisdomSM is a unique cloud-based service that provides data and intelligence for sourcing risk

and opportunity monitoring of global countries, cities and suppliers. To learn more about Supply

WisdomSM, please visit www.SupplyWisdom.com.

No part of this report may be reprinted/reproduced without prior permission from Neo Group.

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