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Automation Shapes Digital Transformation

Automation Shapes Digital Transformation

A Forrester Consulting Thought Leadership Paper Commissioned By EdgeVerve August 2018 Automation Shapes Digital Transformation Table Of Contents Executive Summary RPA Continues To Propel Digital Transformation Forward Controlling And Operating RPA Is Difficult RPA Success Requires A WellThought-Out Implementation Process Key Recommendations Appendix 1 2 6 7 10 11 ABOUT FORRESTER CONSULTING Forrester Consulting provides independent and objective research-based consulting to help leaders succeed in their organizations. Ranging in scope from a short strategy session to custom projects, Forrester’s Consulting services connect you directly with research analysts who apply expert insight to your specific business challenges. For more information, visit forrester.com/consulting. © 2018, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. For additional information, go to forrester.com. ORDER ID: [0000034151] Project Director: Tarun Avasthy, Market Impact Consultant Contributing Research: Forrester’s Infrastructure & Operations research group 1 | Automation Shapes Digital Transformation Executive Summary Digital transformation has become a driving force of change that it is fundamentally altering how businesses operate. Why? Because digital transformation requires sweeping modernization of old systems to keep up with the demands of the customer. But digitally reimagining the business is no easy task. Digital transformation efforts span multiple channels, websites, and mobile apps. In turn, automation technologies, specifically robotic process automation (RPA), have emerged as the best solution as they imitate actions and key strokes of workers executing on rule-based tasks. The digitized worker is quicker, cheaper, and more reliable. RPA significantly increases worker productivity, helping employees focus on more strategically relevant tasks. This study also found additional incentives for automation across various departments and discovered how automation impacts employees. In March 2018, EdgeVerve commissioned Forrester Consulting to evaluate automation strategies, specifically RPA, which are relatively cost-effective and -efficient. This study explored the best operating model practices for RPA to deliver long-term value to stakeholders. Forrester conducted an online survey with 306 business and IT leaders at the director level or above to explore this topic. Forrester’s in-depth survey yielded several important recommendations: KEY FINDINGS › Firms must build an assessment model to guide the process of RPA platform selection. Proofs of concept enable both business and IT to work toward a common goal and, finally, the implementation of technology. › Automation influences employees’ roles for the better. Automation technologies clearly impact people across the organization. Human/machine interactions are invisible and buried; others are front and center. › Firms must look beyond RPA. RPA is not the be all, end all of enterprise digital transformation efforts. It should be part of a wider range of solutions. 75% of firms said RPA software boosts employee morale by reducing the amount of process-driven work. RPA Continues To Propel Digital Transformation Forward Digital transformation is a top corporate strategy, yet business and IT leaders struggle to show progress. Complex business processes and legacy systems are too difficult to change and lack a solid business case to do so. Enter RPA, a digital antidote or elixir that has allowed enterprises to progress rapidly toward a fully digital business. According to Forrester’s research, in many enterprises — from corporate offices to back-office administration to the contact center — humans toil with low-value, repetitive tasks and rote work. RPA automates many of these activities, improving productivity and freeing up worker time for higher-value work. In 2018, RPA-based digital workers (i.e., bots) will replace and/or augment 311,000 office and administrative positions and 260,000 sales and related positions. As a result, the RPA software market will remain heated and exceed to $1.06 billion by the end of 2018, and climb to $2.9 billion in 2021.1 The common notion is that RPA solutions automate highly repetitive and rule-based tasks, which, in turn, creates a digital workforce that executes on repeatable processes faster, more accurately, and more cost-effectively. Our study confirmed this but also revealed a few surprises along the way for both the business and employees (see Figure 1): › On-demand communications will (and are) replacing human-driven fulfillment. Reinforcing the common notion that RPA will lead to cost reduction, 72% of respondents revealed that they invest in RPA to lower costs by replacing humans performing low-value tasks. However, RPA also enables the remaining employees to focus on more value-adding initiatives, which is imperative to the bottom line of the business (66%). Seventy-five percent said they can boost the morale of their employees by reducing the amount of process-driven work, which allows for human workflow restructuring to take place and focus on higher-level customer communication (65%). › Firms should link RPA to self-service tools to improve experiences. RPA technology does more than improve internal communication: It can also enhance customers’ experiences by providing them with the tools and technology required to find answers without relying on human workers. Seventy-one percent of survey respondents said they invest in RPA to raise customer self-service experiences, enabling customers to find what they need, whenever they want. Forrester’s research forecasts spending on RPA solutions based on the projected reduction in cubicle jobs. It found that the RPA market, while only $500 million in 2017, will grow to $2.9 billion in 2021. RPA defined: RPA is an automated process powered by machine learning capabilities to handle a high volume of ruled-based and repeatable tasks. 2 | Automation Shapes Digital Transformation 3 | Automation Shapes Digital Transformation 1/2 page Minimum Height Maximum Height Full page “What are the primary drivers for your investment in RPA?” (Select all that apply) Figure 1 Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 3 out of 4 rms said RPA software boosts employee morale by reducing the amount of process-driven work. 72% Lower costs by replacing humans performing low-value tasks 71% Link RPA with chatbots and self-service support to raise customer self-service experiences, to emerging channels such as mobile apps, social media, and mobile messaging 71% Reduce time-to-market with products 66% Allow workers to focus on more strategic tasks 60% Use RPA chatbots to gather diverse information from legacy systems to create an efcient 360-degree customer view “What are the effects of software robotics on the employees?” (Rank your top ve) 81% Takes over routine tasks, enabling human workers to focus on more strategic work 75% Boosts employee morale by reducing the amount of process-driven work 65% Restructures human work to allow higher-level customer communication 61% Reduces errors 60% Enables them to complete complex requests and tasks more efciently › Though predominantly back-office driven, RPA also affects other areas of the business. Simply redirecting repetitive tasks from human workers to bots enables employees and the business to focus on dramatically reducing the time to go from idea to working product (71%). This is fertile ground for RPA to excel and grow, but as firms redesign processes to improve customer experiences and extract cost using new self-service interfaces, faster iterations and frequent customer feedback cycles speed up time-to-market dramatically. THE WIDER BENEFITS OF RPA AFFECT THE ENTIRE BUSINESS RPA tools have matured so much over the past few years that largescale end-to-end proccesses can be performed by software robots with little human interaction. This means firms can experience the success associated with RPA when it’s used across the business for standardized, repetitive tasks and/or rule-based processes (see Figure 2): › Automation ensures better experiences — wherever it is used. Through the lapse of concentration, a human worker is prone to making mistakes by either miskeying data or missing a step in a process. This is normal and expected of human workers — and the key reason enterprises are using RPA in business functions such as complaints handling (54%) and business account onboarding (50%). RPA reduces errors and shifts many of the mundane tasks from humans to robots, which means fewer mistakes, increased productivity, and a better overall experience. › Finance and accounting are the perfect fit for RPA. According to survey respondents, RPA is exalted in finance and accounting (66%) as many of its processes are rule-based and can be easily optimized. Today’s hypercompetitive environment means financial markets require unprecedented levels of speed, accuracy, and cost effectiveness that a human workforce can’t provide. › Firms see a robotic opportunity in HR. Forty-five percent of survey respondents are using RPA in HR. Traditionally, HR employees conduct menial tasks such as calculating retention rates, performance reports, or extensive multistep onboarding. With the right programming rules in place, bots can take over these labor-intensive tasks. 4 5 “In what areas of the business functions are you having success?” (Please rank top three) Figure 2 Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 54% Complaints handling 50% Business account onboarding 48% Reporting “In what areas of shared services are you having success? (Please rank top three) 66% Finance and accounting 61% Contact center 45% HR 41% Sourcing 36% Marketing 34% Supply chain 17% General customer support functions Controlling And Operating RPA Is Difficult RPA software has followed the pattern of many software markets; needed features rise to the top, providers review competitor platforms, and enterprises push vendors toward a set of must-have capabilities. However, firms must consider various options for automating operational processes based on the assessment of the business and the operating environment. RPA provides a wide spectrum of broad business applications and use cases and should be considered as part of a broader digitalization strategy. However, firms revealed technical and operational barriers preventing them from leveraging RPA’s full capabilities (see Figure 3): › There is a need for multitenancy for shared services. Multitenancy enables separation of cloud or on-premises platforms — dramatically reducing RPA operating costs and infrastructure investments. However, nine out of 10 firms struggle to create these environments. Without multitenancy, RPA solutions can easily require dozens of servers handling hundreds of robots. When identifying the top risks or challenges perceived by digital workers (bots), 74% listed identifying appropriate change management to deal with attitudinal issues. 6 | Automation Shapes Digital Transformation 1/2 page Minimum Height Maximum Height Full page “Which technical and deployment issues with the RPA platform is your organization struggling with?” Figure 3 92% Inability to create multitenants for shared services 83% Compliance and regulatory issues, e.g., GDPR 78% The control and operations of RPA bots is not mature 77% Integration with desktop management tools 63% Infrastructure cost is too high 59% Security issues, e.g., credential management 47% Maintenance of bots is too high Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 › Compliance and regulatory adherence can slow RPA adoption. Over the past couple of years, a high number of regulatory changes have resulted in significant costs for businesses. It’s no surprise then that 83% of firms identified compliance and regulatory issues as a top technical issue. Ninety-four percent of firms also said they struggle with digital workers due to governance issues and an inability to accurately assess the total cost of ownership (TCO) for bot licensing software. › Central control of bots has become a focus area. The boundaries have not been drawn between business and IT, which means control processes are not clear. Seventy-eight percent of firms identified the control and operation of bots as a technical and a deployment issue, which are also additional control points needed for bot maintenance and design (Figure 4). Plus, the difficulty of designing the bots also limits the bots’ capabilities. RPA Success Requires A Well-ThoughtOut Implementation Process RPA is undoubtedly a powerful tool that wins in complex situations resistant to fundamental change. However, RPA should not be seen as a silver bullet or business strategy, but instead as one tool over a number of different automation tools. RPA technology covers a lot of ground: It is wide-reaching and isn’t limited to a certain function or team. In fact, a single automated process will have major effects across the organization. RPA implementation is an initiative, not a series of stand-alone projects, which is why an internal delivery and implementation team is a critical component in leading the automation initiative and establishing a center of excellence. Only then will firms be able to better control operations and ensure business continuity. RPA bots doing the same process with less labor is a good thing. But it’s essential to formalize the operating model early in the RPA journey and to guide the process of RPA selection: › Show an interest in RPA technology and assess the feasibility. › Ensure the proof of concept includes both business and IT working toward a common goal. › Implement the technology and ensure ongoing support is always provided. Traditional RPA frequently relies on desktop-based tools that replicate the work of a person to complete a task. With this, licensing costs can quickly spiral out of control as automation is scaled across the company. However, the vast majority of respondents reported the TCO of a bot to be anywhere between $15,000 to $25,000 (81%). Only 18% reported the TCO to be more than $25,000 per bot (see Figure 5). RPA is the natural evolution of labor as it takes the mechanical robot out of the employee. In fact, 70% said for every bot invested, they are saving or removing two to three FTEs for back-office operations, and 54% said the same for the front office (see Figure 6). “What are the additional control points you would need for bot design and maintenance?” (Select all that apply) Figure 4 55% Controlling operations (e.g., operational intelligence such as uptime, metrics, etc.) 53% Ensuring business continuity 50% Creating governance standards (e.g., audit and versioning capabilities) Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 “What is your overall TCO (in USD) per bot?” (Select one) Figure 5 Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 38% $15,000 to $20,000 1% $10,000 to $15,000 43% $20,000 to $25,000 18% More than $25,000 7 | Automation Shapes Digital Transformation 1/2 page Minimum Height Maximum Height Full page “For every bot you invest in, what are the number of hours of work that you remove on a per-full-time-employee basis?” Figure 6 Back-ofce operations Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Note: Percentages may not total 100 because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 0 to 1 FTE offset 2% 11% 1 to 2 FTE offset 12% 35% 2 to 3 FTE offset 70% 54% Greater than 3 15% 0% Front-ofce operations PARTNER WITH TECHNOLOGY VENDORS FOR RIGOROUS PLANNING Vendors sometimes allow organizations to trial the technology to understand how it will extend into their wider operations and to demonstrate the potential for RPA and its tangible value. But firms will really find it useful to work with technology vendors that have a track record in the RPA landscape. Our survey revealed that enterprises are seeking technology vendors that (see Figure 7): › Provide control and operations management. Distributed responsibility emphasizes maintaining a checklist before a robot moves into production. Sixty-five percent of firms ranked this as the number one criterion when selecting an RPA solutions provider. › Offer proof of scalability. Improved technology reduces the cost of a product or service and improves the overall quality. Sixty-three percent ranked this as another important criterion. Vendor partners that cannot scale should be avoided. › Provide a cognitive road map. Fifty-five percent of survey respondents highlighted this as an important criterion when seeking to partner with a technology vendor. Plus, having a cognitive road map doesn’t mean jobs will be replaced; quite the opposite, employees can focus on strategic work like analyzing reports or develop new skills to take on new innovative work. RPA won’t replace jobs, but it will definitely redefine them. Today’s RPA capabilities have barely scratched the surface of RPA capabilities today. Reporting and analytics are not being used for RPA right now — but the combination is exciting. Machine learning capabilities and natural language processing (NLP) integrations are also important and should not be overlooked. 8 | Automation Shapes Digital Transformation 51% ranked the ability to support multichannel communication and interactions as a top selection criterion. 9 1/2 page Minimum Height Maximum Height Full page “When selecting an RPA solutions provider, what are the primary criteria your organization looks for?” Figure 7 Rank 1 Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Note: Percentages may not total perfectly because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 Rank 2 Rank 3 Control and operations management 23% 29% 13% 65% Proof of scalability and within larger automation deployments 19% 24% 20% 63% Cognitive AI road map 19% 18% 18% 55% Effort of implementation and integration with existing technologies 18% 12% 12% 43% The ease of the bot design 15% 8% 12% 34% Existing relationship with the solution provider 6% 9% 25% 39% Key Recommendations RPA is one of many tools being used to power forward a digital transformation across industries. Change is coming, and it’s going to become inevitable for organizations to adapt, especially if they want to empower employees by allowing them to focus on more strategic tasks. Build an assessment model to guide the process of RPA platform selection. Showing interest in RPA technology and assessing the feasibility will turn heads because of how much time it saves and how much it boosts productivity. Proofs of concept enable both business and IT to work toward a common goal and, finally, the implementation of technology. Use automation to influence employees’ roles for the better. Automation technologies clearly impact people across the organization. Human/machine interactions are invisible and buried; others are front and center. Some will have a huge impact on social experiences and the employee’s journey — employees can focus on more meaningful tasks that allow them to be creative, think on the spot, and develop better client relationships. Look beyond RPA. RPA is not the be all, end all of enterprise digital transformation efforts. It should be considered as only a part of a wider range of automation solutions. 10 | Automation Shapes Digital Transformation Appendix A: Methodology In this study, Forrester conducted an online survey of 306 organizations in Australia, France, Germany, Switzerland, the UK, and the US to evaluate their experiences of using RPA technology, as well as the impact it has had on the wider business and on an individual employee level. Survey participants included decision makers in automation strategy roles across various departments: IT, strategy/corporate development, executive management, and product management. Questions provided to the participants asked about the drivers for implementing RPA, where they’re seeing the most success, the technical issues, and the benefits they’ve experienced. The study began in March 2018 and was completed in August 2018. Appendix B: Demographics/Data 1/2 page Minimum Height Maximum Height Full page COUNTRY DEPARTMENT US 16% AU 17% UK 17% FR 17% DE 16% CH 17% IT/technology 34% 26% Strategy/corporate development 23% Executive management, board, or executive ofce Product management 17% ANNUAL REVENUE $500M to $1B 16% $1B to $2B 34% $2B to $5B 30% 84% > $5B 20% POSITION OF RESPONDENT Base: 450 global managers and above of workers who use technology to serve customers and communicate internally and externally Note: Percentages may not total 100 because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of Appirio, April 2017 17% C-level executive (e.g., CEO, COO, CFO) 28% Vice president (in charge of one/ several large departments) 55% Director (manage a team of managers and high-level contributors) Base: 306 respondents at the director level or above with inuence over organizational processes such as automation Note: Percentages may not total perfectly because of rounding. Source: A commissioned study conducted by Forrester Consulting on behalf of EdgeVerve, August 2018 Appendix C: Endnotes 1 Source: “Predictions 2018: Automation Alters The Global Workforce,” Forrester Research, Inc., November 9, 2017. 11 | Automation Shapes Digital Transformation