In this blog Nick Andrews explores the inhibitors to the take up of robotic process automation and the choices faced by CIO’s, together with the potential for a new role in the boardroom – look out for the Chief Automation Office (CAO).
Eight years ago there were just a few pioneering companies adopting true process automation on an enterprise-wide scale. These organisations were not just early adopters, they helped shape the products that today are being investigated and implemented to deliver massive transformational benefits world-wide. The process automation market (often referred to as ‘robotics process automation’) is estimated to be >$25bn within the next 5 years.
There are many growth factors. The need is great, the automation process itself is rapid, inexpensive, very low-risk, low maintenance and truly transformational. In addition, adopters are finding that the indirect benefits typically exceed the direct cost benefits (examples include: improved audit trail, quality management information, releasing creative resources, reducing churn, increasing bandwidth, without headcount increase, and managing seasonal peaks).
Given all of the above, it is surprising that the number of case studies remains relatively low. From our work with the leading BPO companies, automation technology providers and end-users we can see the inhibitory factors which have slowed the growth, for the time being at least.
- The BPO community has been slow to adopt ‘robotics’. It doesn’t fit neatly with their commercial models, which are often FTE-based, and in many cases has been seen more as a threat than an opportunity.
- Incumbent suppliers are threatened by the simplicity, speed-to-value and demonstrable efficacy of process automation. They are adopting defensive tactics to prevent the introduction of RPA or claiming their products can achieve the same outcome.
- End-user adopters see RPA as providing a competitive advantage. Many are reluctant to publish outcomes or even to be cited as references.
- There are innumerable end-users who have progressed only as far as the proof of concept stage. These are invariably successful but this may be as far as the initiative goes without endorsement from the buyer’s IT department. Fears and perceptions prevail such as: ‘not invented here’, RPA is grey IT, presents an enterprise security risk or that similar capability already exists within the department.
- Lack of available skills – the technology providers themselves do not wish to become large-scale service suppliers. There are currently only a handful of specialist service providers in this area and only one of these is fully operational outside of the UK.
Our experience is that the inhibitors are now being outweighed by the growth factors. We expect a number of new case studies to be presented in Q2 2015 (we are confident of this just by looking at our own client portfolio). The BPO lag will change with organisations like HP and Cognizant having placed it high on their strategic agenda. Incumbent suppliers are failing to deliver and the smoke is clearing on their claims. Organisations are becoming more receptive to publishing the results of their process automation programmes.
The number of relevant technology practitioners has doubled in the past year. Virtual Operations runs a global Academy which enables students to get to practitioner level within two weeks. Demand for places has quadrupled in the past 3 months. Together with the short (albeit steep) learning curve this will facilitate growth massively as trainees become trainers in as little as nine months.
CIO’s have a choice. They can either be process automation ‘blockers’ or process automation ‘quarterbacks’. The move from blocker to quarterback has to accelerate as demand increases, perceptions are shown to be invalid and their peers increasingly adopt and endorse the technology. Our view is that CIO’s should be the initiators and orchestrators rather than the gate-keepers and a key part of their remit should be managing the enterprise-wide adoption of process automation within an optimal environment (Governance, Security and Framework).
It has been suggested by industry watchers that CIO’s will need to have large scale process automation experience on their CV’s and further that a new role of CAO (Chief Automation Officer) may emerge. Watch this space.