We're on a train to the Hyper-Connected Enterprise Don't ... · RPA drives enterprise automation...
Transcript of We're on a train to the Hyper-Connected Enterprise Don't ... · RPA drives enterprise automation...
We're on a train to the Hyper-Connected Enterprise...
Don't miss your stop!
KPMG Intelligent Automation Symposium, San Diego
Phil Fersht, CEO & Chief Analyst, HFS Research@pfersht
25 September 2018
© 2018, HFS Research Ltd
The Triple-A Trifecta defines future business operations…
“The unification of digital business models, intelligent automation, analytics and creative talent is
happening before our very eyes.”
Cost still dominates C-suite directives, but the way to get there is driven by the smart management of data How critical are the following C-suite directives/objectives to your operations strategy?
Predictive Data, Automation, AI
and OneOffice –gateway to new cost / operating
models
Source: HfS Research in Conjunction with KPMG"State of Operations Study”, 2018
Sample: Global 2000 Enterprise Leaders = 381
Q. Can you estimate the proportion of structured v unstructured data in your organization?
Unstructured data plagues enterprises
Only 22% of organizations have more
than half their data structured
Source: HfS Research, 2018“Intelligent Operations Study”Sample: Global 2000 Enterprise Leaders = 460
Digital disruption is rampant: 29% have already seen their top 2competitors change in just past 3 years
Source: HfS Research, “Journey to the OneOffice, 2018” Sample: n=395 Digital Decision Makers (Global 2000)
How far are you behind or ahead of most of you competitors now? How do you expect to compare over the next two years?
Majority of enterprises are deer in headlights, waiting to get flattened by digitally-savvy competitors
52%
43%
51%
20%
34%
37%
40%
60%
-10%
-10%
-6%
-15%
-4%
-9%
-2%
-5%
In the next 2-3 years
Now
In the next 2-3 years
Now
Hig
hes
tP
erf
orm
ers
Lo
west
Perf
orm
ers
Slightly ahead Well ahead Slightly behind Well behind
Source: HfS Research, “Journey to the OneOffice, 2018” Sample: n=395 Digital Decision Makers (Global 2000)
Q. What are your greatest challenges holding back your journey to achieve the Digital OneOffice Framework?
Making the Leap to Digital OneOffice: IT Lacks Talent, Business Lacks Mindset…
12%
10%
23%
29%
21%
0%
23%
25%
6%
35%
8%
8%
6%
13%
6%
6%
We’re held hostage by legacy technology
Lack of talent internally
Legacy thinking / lack of a “digital mindset” from IT
Legacy thinking / lack of a “digital mindset” from biz functions
We’re held hostage by legacy technology
Lack of talent internally
Legacy thinking / lack of a “digital mindset” from IT
Legacy thinking / lack of a “digital mindset” from biz functions
Rank 1 Rank 2
IT
C-Suite
Busines
s C-Suite
Source: HfS Research 2018Sample: C-Level Enterprise Executives = 100
How enterprises can achieve the Digital OneOffice…
• CX is not just fancy UI. Make CX the core of all your business operations from front to back.
• Cost reduction is not a strategy. Drive metrics that measure value creation, versus only cost reduction.
• Stop kicking the intelligent technology can down the road. It’s all here and now you need to make
decisions on where you go with it
• Weed out the people unprepared to change. Invest in an inclusive talent strategy, based on people who
want to learn and share.
• Build co-innovation relationships and shed legacy relationships. The partners who got you here may not
be the ones to take you where you want to go.
• Stop thinking about the Future of Work. It’s already here… act now!
How Intelligent Automation will Power the Hyper-Connected
Economy
• Flips the traditional model on its head
• Has social causes at the core of its mission
• Leverages AI to create competitive advantage
• Reduces fraud by social impact
• Massively disruptive
People left these insurance companies to join Lemonade:
31%Assurant, Farmers,
Homesite, Progressive,
Stillwater & more….
19%Allstate
10%Liberty Mutual
16%State Farm
14%Travelers
10%Gelco
• Started in the U.K., now expanding into the U.S. and Australia
• Leverages AI to identify & target specific customers via social media and direct ads
• Success hinges upon how quickly AI algorithms can target customers and sell properties
• Fixed fee model only viable if customer acquisitions continue to increase
But few have created true shifts in their business model – Yet……
“Traditional” companies are taking on the challenge of integrating AI to improve their Digital Customer Experience
Deployed artificial intelligence in deciding personal injury claims after trials showed processing time was significantly reduced. Cut the processing time from an hour to just seconds, its chairman said. Claim they have “saved 40,000 work hours, while speeding up the claim processing time to five seconds”
Siemens Healthineers has developed a portfolio of AI solutions that help automate and standardize complex diagnostics.
Using Watson’s API, the company transformed its Easy Button into a cognitive ordering ecosystem that customers can use to order supplies from a variety of devices using voice, text or email.
© 2018, HFS Research Ltd
Hurtling into the Hyper-Connected Economy
OffshoringGlobalization
Shared Services /Nearshoring
Centralization
The Internet
Client/ Server
ERP
Six Sigma
LEAN
Basel II
Private Cloud
Open Source
Digital Business Models
IOT
Public Cloud
eBusiness
Digital Marketplaces
ASPs
Sox
Y2K
Euro Currency Conversion
VOIP
3G
RPA
Enterprise IT dressed up as
Digital
Intelligent Automation
Machine Learning
AI
Blockchain
5G
The Guerrilla Sharing
Economy
Brexit?
OutsourcingAnalog
Basic DigitalResponsive
Digital OneOfficeAnticipatory
2020+
Autonomous Supply Chains
Super-Intelligent Cognitive Assistants
Quantum Computing
Hyper-Connected Enterprises
Interactive
Value levers, such as offshoring, rapidly embedding into the fabric of Hyper-Connectedness
Q. To what extent is your use of offshoring is likely to change in the next 2 years across the following functions?
22%
13%
18%
20%
23%
12%
15%
19%
15%
-1% -2%
5%
12%11%
6%
1%2%
8%
1%3%
4% 5% 5% 5% 4%5%
4%
Finance andAccounting
HumanResources
Procurement IT applicationmaintenance &development
IT and Networkinfrastructure
support
CustomerService / Sales
Support
Supply Chainand Logistics
Industry-specific Marketing
2014 2016 2018
Increase
Decrease
Source: HfS Research in Conjunction with KPMG, "State of Operations and Outsourcing” Surveys 2014, 2016 and 2018 Sample: Global 2000 Enterprise Leaders = ~400
2018 Investment intentions: “Humans-plus-Bots” now the norm
63%
58%54% 53% 53% 52%
50%
39%
33%
40%
10%
20%
32%
24%
20%
10%
29%
19%
Telecom Insurance Retail/CPG Energy Travel (H&L) Manufacturing BFS Utilities Healthcare
Significant Investment in RPA Significant Investment in Outsourcing
Source: HfS Research in Conjunction with KPMG, "State of Operations and Outsourcing 2018"Sample: Global 2000 Enterprise Leaders = 381
Big $ for the big bets. Significant IA investments are on the table
0%
5%
10%
15%
20%
25%
Less than $1M $1-5M $5-10M $10-50M $50-100M $100-250M $250-500M More than $500M
Pe
rce
nta
ge
re
sp
on
den
ts
What level of Intelligent Automation-related investment is your enterprise making today?
Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2018 Sample = 590 Business Leaders including 100 C-level executives
Over 30% enterprises are
already investing over
$50M in IA technologies
20 © 2018, HFS Research Ltd
Time to dispel some myths…
RPA Replaces People: Incorrect.
Source: HfS Research in Conjunction with KPMG, "State of Operations and Outsourcing 2018Sample: Global 2000 Enterprise Leaders = 381
7%
22%
24%
27%
33%
35%
36%
41%
FTE reduction
Enabling processes to flow end-to-end
Improves employee motivation byrelieving them of rudimentary tasks
Relieves management time to focus oncustomers
More actionable data for operationalinsights
More actionable data for customerinsights
More workforce agility – giving operations the ability to scale
Better quality of operations
33%
28%
40%
27%
33%
30%
Adopt/invest in cognitivetechnologies and machine
learning to drive morevalue from labor
Drive down operatingcosts
Adopt/invest in processautomation and robotics
to reduce reliance onlabor
5 - Very satisfied 4 - Satisfied
70%
61%
60%
Satisfaction of C-suite to deliver Expected Benefits from Automation
RPA can scale rapidly to have a dramatic impact on enterprises in months. Incorrect.
Enterprises want to scale up adoption 2 years …but don’t know how
3%
5%
26%
29%
22%
No plans or unsure
Within the next 5years
Within the next 2years
Within the nextyear
We are alreadythere
When will your adoption of Intelligent Automation (IA) be scaled-up and industrialized?
Need more scale with IA to achieve objectives
Uncertainty about the financial investment needed in IA
Lack of organizational clarity and accountability for driving IA
Change management concerns over the effect on employees
Concerns about changes in governance and risk management
Lack of quantifiable benefits/inability to build strong business case
Understanding the need and resources to train cognitive systems
Non-standard or incomplete end to end processes
Lack of in-house talent to support IA
Deficiency in overall data quality
Lack of current of as-a-service options for RPA and Cognitive/AI
Lack of senior management mandate and vision to deploy IA
Lack of end-end processes
10%
10%
11%
11%
10%
14%
13%
12%
12%
10%
16%
14%
13%
10%
14%
12%
4%
6%
7%
8%
8%
6%
5%
5%
2%
7%
6%
7%
3%
3%
7%
3%
3%
5%
7%2%
34%
31%
30%
28%
26%
24%
24%
23%
22%
22%
17%
11%
6%
What are the top three inhibitors that are holding you back from achieving strategic AND operational goals?
Rank 3Rank 2Rank 1
Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2018 Sample = 590 Business Leaders including 100 C-level executives
RPA drives enterprise automation solutions that remains siloed and piecemeal
38%35%
16%
11%
We are primarily focusing on oneIntelligent Automation technology
right now
We are using multiple IntelligentAutomation technologies, but most of
the implementations are piecemeal
There is emerging alignment betweendifferent Intelligent Automation
solution elements
We are leveraging integratedsolutions that combine the power of
automation, analytics, and AI
How well are you able to develop integrated solutions leveraging multiple Intelligent Automation technologies to solve business problems?
While 60%+ enterprises are leveraging multiple IA technologies, only 11% are leveraging an integrated solution approach
Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2018 Sample = 590 Business Leaders including 100 C-level executives
AI is not one market, but AI should be seen as a set of technologies and building blocks
AI
NeuralNetworks
Autonomics
VirtualAgent
MachineLearning
ImageRecognition
MachineReasoning Natural
LanguageProcessing
Chatbot
DeepLearning
ComputerVision
SpeechRecognition
KnowledgeRepresen-
tation
The center of gravity for AI is around the mega-ISVs – Microsoft, Google, AWS, and IBM
AI
Data
Algorithms
Platform
Compute
Google TensorProcessing Unit
NVIDIA Volta
SAP Leonardo
SalesforceEinstein
Google NeuralMachine Translations
Google WaveNet
Google TensorFlow
Amazon Machine Learning
Google CloudMachine Learning
MicrosoftCognitive Services
OracleData Cloud
Oracle Adaptive Apps
IBM WatsonData Insights
IBM WatsonAPI Explorer
HIROKnowledge Core
HIRO Engine
WiproHolmes
TCS ignioIBM Watson
Knowledge Studio
Google DeepMind
Celaton Instream
Loop AI
CortanaIntelligent Services
Azure Machine Learning
SAPData Hub
AWS PublicDatasets
InforColeman
AmazonRekognition
AmazonLex
IBM WatsonVirtual Agents
IntelMovidius
AmazonConnect
Fujitsu DLU
AMD/GloFlo
OracleIntelligent Bots
IntelLoihi
AdobeSensei
HFS’ Intelligent Automation Maturity Model
Objective Singularly cost / efficiency focused
Mainly cost / efficiency focused
Cost + value Radical transformation
Scope Task(s) Multiple tasks End-to-end process Enterprise-wide
Solution Piecemeal solution Dominant IA solution element (limited alignment)
Emerging alignment between IA technologies
Integrated solution at the intersection of the Triple-A Trifecta
Management Not applicable Business unit driven Functional / regional COEs Global COEs for emerging technologies
Talent No skills Limited skills, engaging third-parties
Investing in building skills Programmatic approach to reskilling, hiring externally, engaging third-parties, and crowdsourcing
Adoption Proof of Concept (POC) POCs, pilots POCs, pilots, in-production POCs, Pilots, in- production, industrialized scale
Level 1. ExperimenterTrying out new ideas, methods, or activities
Level 2. TinkererTrying to improve something in a casual or desultory way,
often to no useful effect
Level 3. ExplorerCharting out new territories
Level 4. DisruptorRadically changing the status
quo
Defining ourselves in the Automation Revolution…
A retraining tsunami is coming: Nearly half of enterprise leaders believe that more
than 20% of their current workforce will be significantly impacted by IA
12%
36%
38%
14%
More than 50%
21-50%
11-20%
Less than 10%
What proportion of your current workforce do you expect to be significantly impacted (i.e., partial or complete job automation resulting in loss of job or change in job profile) by Intelligent Automation in the next 2 years?
Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2018 Sample = 590 Business Leaders including 100 C-level executives
How will your enterprise deal with displaced people as a result of Intelligent Automation implementation?
12%
36%
21%
22%
14%
Retain to specialize in an industryor process domain
Retrain them to work on new bizneeds (exception handling,customer facing roles, etc.)
Retrain them on ML or other AI
Retrain them to deal with data
Let them go
A “Digital Labor Strategy”: More Emphasis on the LABOR Please!
Focus is on the Right-brain, not the Left!Q. What are your top workforce requirements required today?
Less Critical Skills: Operational experts
to enable smart execution
Critical Skills:
Creative thinkers who reach across
the business ecosystem to
define and design businesses solutions.
Change is the norm
3%
2%
4%
10%
14%
18%
32%
3%
7%
8%
13%
9%
22%
9%
Understanding business processes and usingautomation and AI to improve business…
Improving end-to-end processes
Analytical prowess to improve operations /productivity
Vision and ability to drive change
Defining business outcomes
Creative, entrepreneurial spirit & curiosity forinnovation
Exploring new ways of partnering across theservices ecosystem
Ranked First Ranked Second
Source: HfS Research, 2018“Intelligent Operations Study” (Conducted with Accenture)Sample: Global 2000 Enterprise Leaders = 460
State of Intelligent Automation (IA) 2018 – The story of ambitious goals,
impatient timelines, cocktail solutions, scaling pains, and retraining storms
• Ambitious objectives. Enterprises are looking at IA to drive top line growth (#1 strategic objective), not reduce FTEs
• Big $s for the big bets. Significant IA investments are on the table. Over 30% enterprises are already investing over $50M in IA technologies
• Cocktail (blended) solutions. There is no silver bullet. There is a growing realization that adoption across all emerging IA technologies is required to achieve the ambitious goals. Only 20-30% enterprises are not considering or are unsure about IA and adoption pattern across the IA technology spectrum is similar
• Siloed approach. Despite the frenetic experimentation across triple-A trifecta (automation, analytics, and AI), solution approach continues to be piecemeal. Enterprises are managing IA initiatives with a process and/or functional lens, but an enterprise-wide approach to IA is rare
• The unanswered industrialization question. Enterprises want to scale up adoption in the next 2 years but don’t know how. Scaling up is the biggest challenge to realize the promise of IA
• The retraining tsunami. Nearly half of the enterprise believe that more than 20% of their current workforce will be significantly impacted by IA. The displaced workforce will need to be re-trained with data, domain, technical, and creative skills