Archive for the ‘Business Process’ Category

Is new technology an opportunity or a threat for BPOs?

Monday, June 18th, 2012

An interesting post from Karl Flinders today: How is technology changing BPO?

Karl outlines a range of technologies that are revolutionising the BPO sector and enabling BPOs to deliver new services to their clients more economically. So, the CIO of a BPO is in a powerful position, and the client is happy to benefit from reduced costs?

I am tempted to take the argument a stage further.

The “perfect storm” that Karl describes “as customers want to cut additional back office costs due to continued budget pressure, and at the same time suppliers are trying to create additional services and the revenues that go with them” could drive a new type of behaviour. New technologies “such as cloud computing, business analytics software, social media platforms and process automation software” are so easy to adopt, perhaps the corporate customer’s CIO will work out how to insource the work at the expense of the BPO contract.

Add to the mix political pressure (especially in the US) to repatriate offshored jobs, and the perfect storm could be very windy indeed.

Shop Direct “self-serve” process automation

Thursday, June 14th, 2012

More Blue Prism customer press coverage in British IT journal, Computer Weekly today. This time Shop Direct.

Two things leapt out at me from this article:

1. Shop Direct initially evaluated Blue Prism as an alternative to human beings and, specifically, to avoid offshoring.

2. An internal capability has been set up where business operations teams automate processes with minimal IT support bringing a new agility to managing the back office operation.

In short, Blue Prism will not appear on your integration or middleware architecture chart because it is a business application that is used by operational teams to automate their own processes: The “long tail” of process automation that is never going to make it onto the core IT program because of resourcing, economic or temporal reasons.

If I told you that Blue Prism was a software company with an “integrate anything” platform linked to a scalable and secure orchestration and execution engine, I’m sure you would glaze over. By listening to customers we are understanding how to express more simply what we do. Our website has changed quite a lot recently to help reflect this.

Robotic automation: driving next generation BPO?

Monday, June 11th, 2012

Just reading through a “Outsourcing Business” pullout in The Times today. Lots of interesting stuff about Business Process Outsourcing and offshoring trends.

A common theme is how BPOs have used offshoring for labour arbitrage, or as one article puts it “Race for the bottom as companies cut costs”.

One new angle being explored, supported by a Blue Prism sponsored piece, is whether robotic software is going to start taking the place of offshore staff as a way of bringing new economics to delivering business processes, whilst increasing quality and speed.

The full pullout is available online. It’s worth more than a quick scan.

NHS innovates to save public funds

Tuesday, May 22nd, 2012

In these days of austerity, and if you read the Daily Mail, it is all too easy to believe that the public sector is over-populated with plodders who lack the initiative to find ways to save costs whilst maintaining, or even improving, services.

My experience, based on working with many NHS trusts, is that this sector is rife with innovation. In the post-NPfIT era, IT directors are grasping the nettle and really making a difference. A good recent example is University Hospitals Birmingham (UHB) in their use of Blue Prism to attack new process areas that using traditional IT tools, could not be economically automated.

Steve Chilton, IT Director at UHB, explains his motives in this ComputerWorldUK article.

Will virtual FTEs deliver the next wave of back office cost savings?

Friday, March 30th, 2012

Virtualisation. It’s a term that is rattling around the IT industry like a pinball. Yet, unlike many IT terms (SOA anyone?) it seems to me, fairly easy to define.

Virtualisation has so far focussed on hardware, and software. Shared central resources providing computing power as needed, are sure to be more economical than local machines which carry wasteful overheads. This utility model can also apply to software. MSP, SaaS, Cloud – take your pick. All are aimed at making software available at the point of need, in immediately scalable quantity. All are managed automatically, with resources being selected to suit the requested task at any given point in time.

Let’s think about your back office for a moment, though. How many people work there – hundreds? Thousands? What do they all do? I would place at least a $1 bet that more than half are doing simple rules based processes. Couldn’t we apply the same principles of virtualisation to people? It’s like the opposite of the Mechanical Turk principle.

So far, efforts to reduce back office costs fall into three categories:

  • Large scale IT automation programs
  • Process Improvement – Lean/Six Sigma etc
  • Reducing input costs – work people harder, or offshore to cheaper labour rates.

But despite all these efforts, back offices are still hideously inefficient. Just ask any process expert who has worked in manufacturing and moved into the clerical world.

What if we could create a centralised pool of virtual FTEs*, using robotic automation techniques. Then delegate business processes to that pool to be executed at the most appropriate time to suit the business. These virtual FTEs can perform rules based processes interacting with other applications to achieve the process outcome.

It’s not just about cost savings, accuracy and the other benefits that go with any type of automation. It also provides process visibility and perhaps most importantly, scalability. Under-estimated your business volumes for that new product by a factor of 10? No problem in the virtualised world. In the “real people” world, how would you multiply the size of your workforce overnight?

Blue Prism’s experience is that the economics are very interesting indeed. The cost of setting up and managing a virtual back office is about 1/3rd of an offshore centre. So you can imagine the savings if you haven’t offshored yet.

* FTE – Full Time Equivalent Staff

Up to 60% of your back office processes will NEVER be automated

Wednesday, August 24th, 2011

I know what you are thinking. Despite relentless terawatts of brainpower expended by the aggregated minds of the biggest and brightest enterprise software companies on the planet, who have been working on automating processes since before I was born, I have the temerity to suggest that we are not even half way there in terms of addressing the process automation opportunity. Am I mad?

Core processes automated long ago like billing, statements, payment decisions, customer letters etc have pretty much given the enterprise IT industry its meat and gravy for the last 50 years. More recently, because many of the solutions implemented were centred on accounts, or customers, or staff, or products, there was a realisation that the one dimension that had been forgotten was process. And so was born workflow and subsequently BPMS. Process-centric platforms that finally acknowledged that the efficiency of your back office could be used to differentiate yourself from your competitors, despite the common use of industry standard back end systems such as ERP (and the ubiquity of SAP for example).

But even BPMS has limits. The speed of business these days is driven by the Twitter generation. Customers demand instantaneous responses; competitors launch new products on a sixpence; even regulators expect customer refunds to be done urgently. Consider three common scenarios where processes typically do NOT get automated:

1. Temporary or one-off processes. Correcting processing errors, billing recalcs, customer compensation etc. These are often processes where an automated solution is needed in days, not months.
2. Business as usual (BAU) processes where there is no economic case to automate because there is only a small handful of people doing the process now.
3. Processes where there is a core IT solution coming but it is, say, 18 months away. Business Ops may need a “pontoon bridge” to get some portion of the benefits right now to manage the business until the core solution is delivered.

The truth is that in every large organisation there is a “long tail” of automation represented by a 500 item (or more) change list. BPMS and traditional core IT automation never has the resources, the priority, or the budget to address all these requirements so they simply remain unfulfilled. This results in Business Ops having to resort to inefficient ways of getting stuff done – outsourcing, off-shoring and “Rogue IT” to name but three.

Forrester has recently started talking about Empowered Business Technology as a “mega-trend”.  Other commentators are observing that IT needs to become a trusted advisor rather than a provider of hardware and software which is ever more available to buy (and be managed from) outside the organisation.  Google around by all means but for a concise and insightful piece read Todd Biske in a post I have referenced previously (thereby warranting its quality). This trend is happening and it is not just Cloud, SaaS and Social Media that is driving it. There are tools around that can deliver real business value to your Operations teams, without being held within the usual cost and time constraints of a core IT program.

So how do we adapt to the faster business environment, and address the long tail? In short, the answer is self-service. From petrol pumps, through supermarkets and ATMs, to online shopping and banking, today’s consumer expects to be able to do it for themselves. And they can….except, to their frustration, when they come to work.

The rise of Business Ops is unstoppable. Smart IT functions are already empowering their business users with innovative ideas and products. It is the only economic way of addressing the long tail of automation.

Integration is so easy, IT can’t do it!

Thursday, August 5th, 2010

I stumbled across Mike Vizard’s post, Managing Borderless Applications.  Mike’s contention is that IT is facing a support headache caused by integration that they don’t know about.  Integration carried out by business users using web based tools integrating web based applications.  Integrations and automations that will ultimately become mission critical, and then break, at which point the business will stare over at IT and ask for help.  And, as web apps race for ubiquity, this problem will inevitably increase.

It is an interesting conundrum that we spent a lot of time thinking about at Blue Prism.  The reason business users run off and do their own integration, is because IT takes too long to deliver in the context of the speed of business today. So the business gets its solution quickly, but this type of end user computing carries a high risk of failure in the medium term due to lack of documentation, security, maintenance and support.

We realised that end-user integration and process automation, whilst technically possible, needs controlling.  The trick is to find the balance between IT discipline and user freedom and flexibility.

We found that this works best if IT sets out a corridor of governance within which the business users can operate.  Some of the components of this approach need to be built into the integration/automation technology.  Some need to come from a new “light touch” governance methodology that both IT and the business subscribe to.

The business gets an agile response to rapidly changing business requirements, but IT knows about the computing initiatives and helps the business to deliver them within a supported environment.

Not easy to resolve, but worth the effort for the competitive advantage that comes from agile operations.

Business Ops should have more control

Wednesday, May 19th, 2010

Do you remember the days of early websites?  Come on you don’t have to be that old.  I wrote a paper for my Masters in 1997 that recommended that banks, for example, ought to have more transactional websites even though, at the time, there was not a huge business case for the investment.  Hard to believe that was only 13 years ago.

In those days, if your organisation was lucky enough to have a website, you were starting to gain competitive advantage.  Especially if you could keep it up to date more quickly than your competitors.

However, that depended on your IT dept and an army of HTML programmers, who wanted a specification, a design document, a test environment, methodology, design authority, sign off procedures etc etc.

Then someone invented Content Management Systems.  The purpose of a CMS was to enable the business to make their own website changes in real time but, and this is a crucial but, within a corridor of governance enabled by the IT dept.  So it was possible to change the text, but not corrupt customer data.  It was possible to change pictures, but not corporate design rules.  It was possible to change the database contents, but not the database itself.  So business users can do a whole load of useful stuff without the risk of bringing down the site.

Of course, other governance is required.  Someone still needs to take responsibility for the content that, in an instant, is representing your organisation around the globe.  But without this level of flexibility how can your company compete with the speed of business today?

This type of flexibility (I prefer to think of it as agility) is now finding its way into the operational world.  Giving business ops a way of doing their own process integration, orchestration and execution for example is freeing the business to react to the daily challenges of the changing world.  At Blue Prism we call it Business Led Computing.  It is a growing movement.  People are used to being able to do their own computing at home.  The next big thing in corporate computing might just be self serve.

Why IT and the business don’t trust each other

Wednesday, March 24th, 2010

Ask any business operations head what they think of their IT department and they will moan about IT being too slow, not connected enough to business strategy, too focussed on its own goals, too expensive, not addressing everyday business needs etc.

In truth, most experienced business heads are a bit more pragmatic than that.  They understand the IT side of the argument.  The importance of data integrity and security, system stability, centralised procurement of technology, coherent architectural strategy.

Whilst these are all very plausible and necessary requirements, the fact is that the speed of modern business requires operational responses measured in hours and days, rather than the months and years associated with traditional IT projects.

IT people are not dumb.  They recognised this ages ago.  Initiatives like SOA and BPMS are designed to provide business flexibility, speed of response, agility.  But these are major IT programmes in themselves and in business eyes can take too long to deliver even small benefits.  They can also be disproportionately costly, so the economic case only makes sense for major business requirements.  What about the 750 item (and growing) change list?

The business is coming under ever greater pressure to reduce headcount so the old option of simply recruiting a few more operational staff is no longer available.

The result is that well intentioned business ops people create their own solutions under the guise of “end user computing” but more likely referred to by EAs as “Rogue IT”.  Spreadsheets, local databases, emulator macros, even amateur VB programming.  All delivered without any control, governance or thought for future maintenance.  So, guess who gets called in to fix a “mission critical” system when the creators have moved on?

No wonder IT doesn’t trust the business to do IT.

The last thing IT needs is maverick business users creating their own solutions, so maybe they clamp down on end user computing, causing further frustration in the business.  A spiralling circle of distrust is normally masked by a resigned acceptance of “that’s just the way things are”.

Random quote I’ve heard from an operational head “IT have slowed the organisation down to a pace where we can’t react to business opportunities and it takes an age to get anything done”.

Random quote I’ve heard from an EA “Business Ops are continually doing their own skunkworks initiatives with no regard to data protection laws, system resilience, disaster recovery or central IT strategy and yet when they fall flat on their face, it becomes our problem to fix”.

As an external vendor interacting with business and IT, I can genuinely see both sides of this argument.  I also think there are ways of reconciling the two views.  More in a later post.

Operational Agility

Wednesday, July 9th, 2008

My previous post mentioned that Blue Prism’s new message is based on operational agility, so I thought I better explain what that means.

In today’s complex business world, front and back office customer service operations have to contend with a non-stop barrage of change.  Whereas traditional IT projects deliver systems against timescales measured in years, human beings on the front line have to react to events happening right now, today.

The long term IT strategy is generally based on what is known today with some future forecast factored in.  The business users, though, have little more idea of what is coming tomorrow than the poor EA faced with a blank sheet of paper.  Of course, the major systems still need to exist, CRM, core operational software, billing and collections etc.  It’s just that when these systems are conceived they have to be designed with a “best guess” of future requirements and this results in range of functions available to the front line that is then frozen in time.

The problem with this approach is that operational staff might need to do something new.  A merger or acquisition creates process duplication; a new product launch requires operational support with sketchy forecasts of process volumes; management want to push a certain product whilst sunsetting another; a processing error needs quickly reversing.

One of our customers had a processing problem caused by a mail strike.  Several thousand accounts were debited with a late payment penalty whilst the cheques really were “in the post”.  A decision was taken to refund these payments (very noble – glad I am a customer of this organisation!).  When the customer accounting system was designed, nobody thought that there might be a bulk requirement to selectively cancel debits applied to a range of accounts.  The traditional way of solving this problem is to take a few call centre agents off the phones for a few weeks to process these refunds manually.  With Blue Prism software the team was able to quickly piece together a new automated process flow that required no human involvement and the process was completed in one day.

Here’s the science bit.  Blue Prism retrospectively componentises the existing and legacy apps and allows you to re-purpose them into new operational scenarios and business processes.  Using point and click integration techniques (no code required), new methods can be clicked together into a process flow using a simple flowchart interface.  This gives operational staff the means to manage and react to short term change and therefore operational agility is enhanced.

Sounds like similar objectives to BPM/SOA?  Possibly some.  Except we are talking about delivery in days and weeks, not months and years.  I’ll go into more detail on this in a later post.