Last week’s Economist ran an Outsourcing and Offshoring Special Report which contained an article titled Rise of the Software Machines. Mentioned alongside Blue Prism was IPSoft which caught my eye because complementary to Blue Prism’s back office focus, they are creating front office robots, that actually speak to customers. And more than that, they use autonomics to learn how to communicate in context. The website is worth a read, especially if you are a mathematics geek.
Archive for the ‘Self-service’ Category
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
Good piece in Computer Weekly this week explaining how O2 used Blue Prism software to create a virtualised back office, replacing more expensive off-shored resources. This was done by operational staff who built their own automated processes based on an IT-supported Blue Prism platform.
The economics of operational self-service are too compelling to ignore, according to Forrester Research.
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.