Robotic automation – from factory to back office

October 15th, 2012

My marketing director, a keen petrol head, sent me this YouTube link showing how robotic automation works in a BMW factory. It bought to mind the seminal Fiat Strada advertisement from 1979 – thirty three (yes, 33) years ago. As an aside, I always wondered what the association was between an Italian car and the Barber of Seville. Never mind. Equally, never mind that the cars fell apart frequently, or that the production team turned up to film, only to find striking workers blockading the factory. These were pioneering days of the robotic car plant.

Whilst the British automotive industry went bust, was nationalised, privatised, and sold to Japanese and Germans for 2’6″, other parts of the world took the concept of robotics and improved it so that cars were cheaper and faster to design and build, more reliable, more flexible (I’ll spare you a long spiel about mass customisation) and more appealing to consumers.

What is interesting from the BMW clip is that robots can’t do everything. Work is constantly handed off to real people before returning the automated line. Another thing that grabbed my attention was the detailed process design that maximises the robots’ effectiveness by preparing the work for them. For example, somebody had to design the car build process in such a way that all the painted bits hang together so the robots can spray without having to use masking tape etc.

I think this is something that the clerical back office is only just starting to learn about. But the economic case is bound to be just as compelling.

More bank processing woes

October 5th, 2012

Lloyds Group is the latest UK bank to have systems glitches leaving customers in the lurch.

I do have sympathy – the level of complexity in bank systems these days combined with the amount of security needed, makes occasional errors inevitable. Trouble is, a minor glitch can end up resulting in wholesale chaos. Who cleans up the mess?

In a similar incident, RBS had to put on extra staff not only in branches, but also the back office to complete the “mop-up” exercise.

When errors like this happen, clearly there has to be an inquest – what can be learnt to minimise the chances of a repeat? But there also need to be a remediation exercise to cope with the immediate aftermath, and the operational business front and back office usually bears the brunt.

Another great use case for Operational Agility software – let the (software) robots take the strain…

Stormy waters for UK banks – where’s the lifeboat?

July 3rd, 2012

Let’s be honest, banks, and especially British banks, are not having a great time right now. I doubt that Bob Diamond will be the last casualty of the LIBOR manipulation affair. Stephen Hester has his own problems, and I would imagine that whether he takes a bonus or not will be the last thing on his mind right now.

There is often little that can be done to correct problems of the past. No use crying over spilt milk, as the saying goes. But who clears up the mess when a BACS tape is wrongly processed? Who refunds bank charges when a software upgrade puts batch processing behind and wages don’t make it to customers’ accounts? When a regulator rules that a regulated product was mis-sold, who organises the refunds? Operations of course!

A great example of this is PPI. Banks were ruled to have sold inappropriate payment protection insurance policies alongside loans and other forms of credit. Now, certain UK banks have created and staffed specific divisions to handle the PPI complaints. A fundamentally simple process – read complaint, check PPI was sold, evaluate whether compensation due, calculate and issue refund, write to customer – is consuming hundreds of jobs. Whilst this is good for the Indian offshoring industry, enlightened banks are using technology, such as robotic software, to automate these rules based tasks so that refunds are evaluated more accurately and more quickly. This does more than reduce the number of onshore and offshore staff required. It enables regulator deadlines to be met, customers to be dealt with faster, balance sheet provisions to be more accurate.

Is new technology an opportunity or a threat for BPOs?

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

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?

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

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?

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

O2 automation “saves millions”

March 23rd, 2012

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.

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

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.