LSE on RPA: A Q&A with London School of Economics Professor Leslie Willcocks

For several months now London School of Economics (LSE) Professor of Technology Work and Globalization Leslie Willcocks and his colleague Mary Lacity, University of Missouri Curators’ professor and visiting professor at LSE, have been hard at work on a series of case studies that examine how Robotic Process Automation (RPA) has been deployed across industries  (find the first two published case studies here). We recently conducted a Q&A with Professor Willcocks to gain greater insight into their growing interest in the field and the findings of their research.

BP: There are a lot of varying definitions of robots and, as a result, some confusion in the market about Robotic Process Automation. How do you define it?

LW: For some, the term “Robotic Process Automation” may conjure up the image of shiny, human-like robots moving about the office. In reality, RPA really is just software that can be made to perform the kinds of administrative tasks that otherwise require stop-gap human handling. The quality that makes it robotic is the utility of a machine to stand in for a human worker and handle disparate, discrete chores. One “robot” equals one software license and typically that robot can perform structured tasks equivalent to two to five humans.

BP: Many may argue that this is just business process automation. Would you agree?

LW:  No, the application of RPA differs from classic business process automation in two important areas. First, the developer hoping to automate a task does not need to have programming skills. For example, business operations people who have process and subject matter expertise but no programming experience can, with only a few weeks of training, start automating processes with RPA-enabled software robots. Second, RPA does not disturb underlying computer systems. Robots access other computer systems the same way humans do—through the user interface with a logon ID and password—and there is no underlying systems programming logic. It truly is “lightweight IT.”

BP: Why is RPA emerging as a viable solution now?

LW: If you were to look inside the operations of any large organization today, you’d quickly see how little time their knowledge workers are actually spending on higher-order thinking tasks. Many companies have realized this and attempted to resolve it by doing one of two things: automate or informate, as pointed out by Shoshana Zuboff. Many have tended toward the former – transferring tasks from the hands of workers to machines, rather than endowing people with greater capacities and having them work symbiotically with technology. As a result, workers now spend substantial time dealing with what John Gall called systemantics — the quirks and shortcomings that are just as endemic to systems as their strengths. For example, it is a systemantic problem that the typical automated operations system (e.g., Enterprise Resourcing Planning, CRM, or e-commerce) is unable to complete a whole process end-to-end. For the technology to deliver value, knowledge workers must conduct menial tasks like extracting and moving massive amounts of data from one system to another, and they want to be liberated from such highly-structured, routine, and dreary tasks to focus on more interesting work. Robotic Process Automation (RPA) is giving them that opportunity.

BP: What do you view as the biggest business benefits of RPA?

LW: Thanks to its ease of use and lightweight operation, RPA adoption can originate inside business operations, rather than requiring heavy Information Technology (IT) department involvement and buy-in. And because RPA projects do not require expensive IT skills, the threshold of processes worth automating is considerably lowered. Even if a monotonous task is not being conducted by a large number of human staff, RPA can economically delegate it to robots.

Take, for example, one of the companies we studied as part of our RPA research: UK mobile communications provider Telefónica O2. The company deploys more than 160 robots to process between 400,000 and 500,000 transactions each month. This not only yielded a three-year return on investment of over 650 percent, but did so by training only four people. In general, early adopters of RPA find that automation radically transforms operations, delivering much lower costs while improving service quality, increasing compliance (because everything the software does is logged), and decreasing delivery times.

Wall Street Journal on How RPA is Disrupting the Workforce

Automation, which uses algorithms and artificial intelligence to do tasks currently done by humans, has the power to reshape the IT services and business process outsourcing (BPO) landscape as we know it. Increased efficiency and high quality of work are just some of the reasons why companies are putting work into the hands of smart machines. Take a look at this article from the Wall Street Journal for more information (also below).

Bringing Outsourcing Back—to Machines

By Thomas H. Davenport and Bala Iyer

Corporations in the U.S. began offshoring work in the 1990s to save costs. The whole logic was predicated on finding cheap labor that possessed adequate knowledge to execute a business process. This is all about to change with automation. Automation, which uses algorithms and artificial intelligence to do tasks now done by humans, could reshape the entire IT services and business process outsourcing (BPO) landscape. We could end up bringing offshored work back to the U.S.—only to put it on smart machines.

Many of the tasks that were outsourced and sent offshore were those that could be specified and monitored easily. When work was hard to specify it was also difficult to write contracts for its completion, so it didn’t get outsourced. Take, for example, administrative banking transactions. Banks could specify the workflow and processing logic clearly, and it could be orchestrated via technology. The location of the work no longer mattered, so it went to countries with low-cost labor and good English skills—most frequently India.

Offshore outsourcing became a thriving industry. Today, however, automated systems and “robotic process automation” (we don’t like the term, so let’s just call it “process automation,” shall we?) are performing structured administrative tasks. If smart machines can perform tasks that are outsourced already, work would now migrate to places where automation is prevalent. As it turns out, the US is the leader in automation, as well as the biggest consumer of offshore outsourcing. That suggests a tectonic shift in the economic landscape for outsourcing buyers and sellers.

Such a dramatic change has not been lost on large outsourcing firms. Several of them are preparing for this future by entering the automation fray themselves. Cognizant Technology Solutions Corp. recently acquired TriZetto, which has a platform for health-care automation. Wipro Ltd. is using machine learning algorithms to help with its internal help desk support. The firm has now created an artificial intelligence platform called HOLMES that uses computer algorithms to reduce human effort in many of its customers’ industries. Tata Consultancy Services is working on an AI platform called Ignio to help build applications quickly and get more out of its infrastructure management capability. Infosys Ltd. has announced a major investment in automation capabilities as well.

These firms see a more automated future, and want to make money when work is done by machines rather than people. We don’t think their work in this space is too far along, however. There are other startups that are already making this capability available in the marketplace. IPSoft Inc. and Rage Frameworks Inc. in the U.S., and Blue Prism in the UK, are companies that have already delivered process automation offerings to customers. Blue Prism customers Telefonica O2 Ltd. and Xchanging (an outsourcing company spun out of Lloyd’s) have already brought back home some of their offshored work to be done by “robots” (actually computers, so let’s just call them that, shall we?). Rage Frameworks has focused on automated processes for financial services firms. IPSoft has focused primarily on automating IT management processes thus far, but is broadening that focus with its “Amelia” intelligent interaction system.

We spoke with one company, KMG International (a substantial international oil company based in Romania) that has already used IPSoft’s product IPCenter to automate many of its IT management tasks. Marcel Chiriac, the company’s CIO, said that he led an effort in 2013 to restructure an out-of-control outsourcing agreement. One aspect of it involved working with IPSoft to automate many straightforward IT tasks, such as network and infrastructure management and gas station technology monitoring. There are automated scripts running on a couple hundred “automatas” (hey, it beats calling them robots) that do things like disk space monitoring and file deletion, automated rebooting of frozen PCs, and setting up new employee email accounts. He showed us a report that 73% of recent trouble tickets were resolved without human intervention. Mr. Chiriac says his company has saved some money by automating some previously outsourced services (even given the low labor costs in Romanian outsourcing firms), but his primary concern is the quality of the service. And that’s been high; not only do trouble tickets get resolved quickly and automatically, but his IT infrastructure has had no unplanned outages in the last 15 months.

Work has already moved around the globe to exploit labor arbitrage. In the future, owners of these automation platforms may dictate where work gets done. One driver will be where data scientists and automation programmers are most easily found. With many of these platforms originating in the U.S., outsourcing will come full circle. Labor costs forced the US to send work to distant shores, but it may be pulled back by automation.

Another driver of the location of automated work may be electricity costs and green energy availability. Once automated, the biggest line item in the cost of a process might be computing costs or electricity consumed to keep data centers and computers cool. Cold places with natural energy sources will have an advantage. Perhaps the new center of automated outsourcing will be Iceland!

Thomas H. Davenport is a Distinguished Professor at Babson College, a Research Fellow at the Center for Digital Business, Director of Research at the International Institute for Analytics, and a Senior Advisor to Deloitte Analytics.

Bala Iyer is a Professor and Chair of the Technology, Operations, and Information Management Division at Babson College.

What Knowledge Workers Stand to Gain from Automation

50 years after Peter Drucker coined the term “Knowledge worker,” it is disappointing to realize how little time knowledge workers actually spend on higher-order thinking tasks. Despite impressive technological advancements, the ability for human knowledge workers to work symbiotically with technology is still lacking. So, what can knowledge workers gain from automation? London School of Economics Professors Mary Lacity and Leslie Willcocks share insight into how RPA can benefit businesses in this bylined article featured in Harvard Business Review. Take a look at the full article here, or below.

It is by now an obvious statement that companies compete on the strengths of their knowledge workers – people who “think for a living” by applying convergent, divergent, and creative thinking skills. Yet, more than 50 years after Peter Drucker devised the term knowledge worker, it is quite disappointing to peer inside the operations of any large organization and see how little of their time knowledge workers actually spend on higher-order thinking tasks. Largely to blame is the approach their companies have taken in applying office technologies. Faced with the choice, as author Shoshana Zuboff put it, to either automate or informate, they have tended toward the former – transferring tasks from the hands of workers to machines, rather than endowing people with greater capacities and having them work symbiotically with technology.

One result is that workers must now spend substantial time dealing with systemantics – the quirks and shortcomings that are just as endemic to systems as their strengths. For example, it is a systemantic problem that the typical automated operations system (including Enterprise Resourcing Planning, Customer Relationship Management, e-commerce, and e-business solution systems) is unable to complete a whole process, end-to-end. For the technology to deliver value, knowledge workers must do pesky things like extract and move massive amounts of data from one system to another. Knowledge workers consistently tell us they want to be liberated from such highly-structured, routine, and dreary tasks to focus on more interesting work. Some are actually getting that wish, thanks to a new approach known as Robotic Process Automation (RPA).

When people first hear the term “Robotic Process Automation,” they might imagine shiny robots gliding around office buildings. In reality, this is just software that can be made to perform the kinds of administrative tasks that otherwise require stop-gap human handling – for example, transferring data from multiple input sources like email and spreadsheets to systems of record like ERP and CRM systems. Calling it robotic, however, emphasizes the utility of a machine that can stand in for a worker and handle disparate, discrete chores. (One “robot” equals one software license and, in general, one robot can perform structured tasks equivalent to two to five humans.). The workplace adoption of RPA differs from classic business process automation in two important respects:

The developer hoping to automate a task does not need to have programming skills. Business operations people who have process and subject matter expertise but no programming experience can, with only a few weeks of training, start automating processes with RPA tools. If you are familiar with Microsoft’s Visio product, you can envision RPA tools functioning in the same way, with users dragging, dropping, and linking icons that represent steps in a process. (One of us took the software training for Blue Prism, one of the leading RPA providers, and was able to automate a process in less than two hours.)

RPA does not disturb underlying computer systems. This is “lightweight IT,” in that the robots access other computer systems the way humans do—through the user interface with a logon ID and password. No underlying systems programming logic is touched. (For IT readers: RPA accesses systems of record through the presentation layer.)

Given this ease of use and lightweight operation, adoption of RPA can originate inside business operations, and typically does, rather than being brought to the business by the IT department. And thus (because RPA projects do not require expensive IT skills), the threshold of processes worth automating is substantially lowered. Even where a particular tedious task is not being performed by a very large number of people, RPA can economically delegate the task to robots.

In one case study we saw UK mobile communications providerTelefónica O2 deploy more than 160 robots to process between 400,000 and 500,000 transactions each month, yielding a three-year return on investment of over 650%. More astounding, Telefónica O2 reached this scale by training only four people. Another case study subject, a large UK-based utility, deployed more than 300 robots that process three million transactions per quarter, yielding an annual return on investment of 200 percent. Here, two humans orchestrate 300 robots that perform the work of 600 people. In general, early adopters of RPA find that automation radically transforms operations, delivering much lower costs while improving service quality, increasing compliance (because everything the software does is logged), and decreasing delivery times.

This might sound like a recipe for headcount reduction, but in the cases we have studied, it hasn’t been. People who worry about job losses to automation tend to overlook the unprecedented data explosion businesses are experiencing, now accelerating out of knowledge workers’ control and demanding automation to deal with it. Indeed, most of the RPA adopters we have studied have gone so far as to promise their employees that automation would not result in layoffs. (To be sure, many have been able to avoid hiring new workers – and some companies have reduced their reliance on outsourcing to complete administrative tasks.)

Where such job assurances have been given, workers have not felt threatened by automation. They embrace the opportunity to take on more interesting work, and view the robots as teammates. For example, in our case study of Xchanging, a provider of IT, business, and procurement services, the knowledge workers named the robots and even invited them to office parties.

Our favorite example is the robot (technically, the set of robots) they named “Poppy” — because the system went live on Remembrance Day in the UK, when it is traditional to wear poppies. For the knowledge workers at Xchanging, Poppy took over the laborious task of processing the structured premiums that come in from London’s insurance brokers. She adds supporting documentation, checks for errors, kicks out exceptions, and adds validated information to the official market repository. Poppy hands over the exceptions to her human teammates for processing. They think of her as a “fresher”— the kind of newly-hired employee that has traditionally done the support work for the team — but an especially industrious one.

In another workgroup at Xchanging, a knowledge worker named her robot teammate “Henry”— but despite the male persona, she sees him as a kind of extension of herself. “He is programmed with 400 decisions, all from my brain,” she explained to us, “so he is part of my brain, and I’ve given him a bit of human character which works for me.”

For us, there is a big takeaway from the case research we have done. It indicates that, as cost barriers fall, workplaces will naturally gravitate toward teams of humans and robots working together to accomplish goals, each assigned the tasks for which they are ideally suited. RPA is one automation tool, but not the only one, that will help to bring about this future of operations. As cognitive intelligence tools like IBM’s Watson are adopted, those will be game changers, too. Combining these technologies, human knowledge workers might soon, in the midst of creative tasks, call on multi-tasking robotic coworkers to perform supporting work as needed — boosting their output even in novel processes with “robots-on-request.” In this way, contrary to today’s worst fears, robotics could facilitate the rise, not the demise, of the knowledge worker. Let’s hope the imaginations of their managers expand as rapidly as their automation toolkits.

Mary Lacity is a Curators’ Professor of Information Systems at the University of Missouri-St. Louis and a Visiting Professor at the London School of Economics.  She is co-author of Nine Keys to World-Class Business Process Outsourcing, published by Bloomsbury in 2015.

Dr. Leslie Willcocks is a Professor at the London School of Economics and Director of the Outsourcing Unit there. He holds visiting chairs at Erasmus, Melbourne, and Sydney universities and is an Associate Fellow at Green-Templeton, University of Oxford. He has been editor in chief of the Journal of Information Technology for over 20 years, and is joint series editor, with Mary C. Lacity, of the Palgrave book seriesTechnology, Work, and Globalization.

London School of Economics Releases Second in Series of RPA Case Studies

Today, we are excited to share the second in a series of case studies from of the London School of Economics Outsourcing Unit. The results  showcase business technology and services provider Xchanging’s current and long-term use of the company’s industry-defining Robotic Process Automation (RPA) technology. At present Xchanging’s Insurance business has 14 core processes automated, using 27 robots (as of June 2015) and processes 120,000 cases a month. The results are exciting, detailing the multiple benefits Xchanging has gained from implementing the technology. The study highlights multiple benefits to Xchanging, including: improved service quality, high accuracy, low error rates, faster turnaround times, increased compliance and strategic positioning. It also addresses four big myths of RPA, including:

• RPA is only used to replace humans with technology
• The perception that operations staff feel threatened by RPA
• RPA has not brought back many jobs from offshore
• Cost savings are insignificant

For more on the misconceptions of RPA and the results it offered Xchanging, take a look at the full press release here, or download the full study, here.

London School of Economics Releases First in a Series of RPA Case Studies

Today, we are excited to announce the release of the first of a five-part case study series examining the value of implementing RPA across business processes. The research, led by Leslie Willcocks, Mary Lacity and Andrew Craig of the London School of Economics, explores how the deployment of RPA in a major telecom provider has yielded a three-year return on investment of between 650 and 800 percent. Not only that, but the report reveals that the business has reported significant financial and customer service benefits in just three years.

For more on this exciting study (and follow-on studies), find the full press release here.

How RPA is taking service providers to the next level

Today, we are excited to share the success story of our customer, Xchanging, which has implemented our robotic process automation technology into its core business processes. Adrian Guttridge, executive director of insurance services at Xchanging, describes how the deployment of Blue Prism robots has greatly increased process efficiency and accuracy, while freeing up of human resources. Read the full article in Outsource Magazine here, or see below.

How RPA is taking service providers to the next level

As a provider of business processing services we see first-hand the challenges companies face as they look to increase the accuracy and processing times of ever-expanding volumes of digital data.

Robotics has changed the way companies are now processing this information. From manual keying to industrial scale virtual input, the era of wholesale automated data input is here to stay.

The mainstream business media has already commented widely in early 2015 about the likely impact Robotic Process Automation (RPA) will have on the global workforce and on everyday processes like data entry. Opinion has been cautiously optimistic, and with good reason, the wholesale changes likely to be implemented by this technology are far-reaching.

For those unfamiliar, RPA is the application of technology that allows employees in a company to configure computer software or a “robot” to capture data from existing applications to process a transaction, manipulate data, trigger a response and communicate with other digital systems.
Through this technology traditional everyday office roles are transforming. As innovators we should embrace the fact that most aspects of office life will change as a result of RPA technology over the coming decade.

For my colleagues and me at Xchanging, we view robotics as an enabler of best practice within business processing. Technology is the key to innovation. The software and platforms we have developed for clients have to constantly evolve to keep efficiency high and new opportunities flowing.

Xchanging’s traditional business started as a processor of claims and underwriting documents in London’s specialty insurance market. Today we implement business solutions to every type of private and public sector organisation imaginable.

Through innovation in the last 15 years we have moved into the space of being a technology company providing software platforms. Within the insurance sector we exclusively provide a data repository called the Insurers’ Market Repository (IMR) to our clients in London’s specialty insurance market. That IMR holds more than 40 million claims records and with thousands of claims processed every year by our staff, the importance of processing documents accurately and quickly is not lost.

The use of robotics allows our staff to do this. As executive sponsor I agreed to introduce robotics through our chosen partner, Blue Prism, in 2013. By the end of 2014 we had ten automated processes within the insurance business and to-date 13 processes are now live in the insurance business, with more to follow in 2015.

Already we are seeing significant benefits from the robotics implemented. We have seen processing time reduced, including one process by over 90%. Uninterrupted labour is an important factor too, as we now have various multiskilled robots working on each process, non-stop 24 hours a day, seven days a week. We now reject items on day one of processing rather than days later. Automation has led to the freeing up of resource to work on more customer focused roles. The likelihood of human error has also been eradicated through robotics, as all the previous intricacies of an individual entering data have been replaced with automated technology.

What robotics is bringing to the table for us as a technology driven organisation are savings in time and resources. These efficiencies can be passed on further up the service chain, so our customers are ultimately the ones who benefit from innovation.

About the Author

Adrian Guttridge is Executive Director, Insurance Services at Xchanging. Before joining Xchanging, Adrian was Vice President of Business Processing Outsourcing, EMEA at Hewlett-Packard. In this role he was directly responsible for a business with 7,000 employees based on, near and offshore. In recent years Adrian has been running businesses wholly or substantially in financial services. He has a technology background and his 30 year career includes extensive experience specifically in the insurance sector, for example running the insurance practice for EDS (prior to its acquisition by HP), and in senior roles at Accenture and Marlborough Stirling.

Inside the virtual workforce: an army of software robots revolutionising enterprise innovation

Despite decades of investments in IT, knowledge work has been largely unaffected by productivity technologies up to this point. However, the landscape is quickly changing, due largely to the rise of the virtual workforce, and specifically, robots, who are able to efficiently and seamlessly complete mundane, process oriented tasks.

Such software robots are revolutionizing enterprise innovation and hold the potential to completely transform the back office workplace. For more insights on this topic, take a look at Blue Prism Chairman Jason Kingdon’s latest article addressing roles well suited for robots, the advantages of a virtual workforce, and the impact software robots will have on people, as featured on Information Age. You can find the full article here, or see below.

Despite decades of investments in IT, knowledge work has been largely unaffected by productivity technologies up to this point. Even with the introduction of dedicated process management systems it still requires human operators to carry out manual, often highly tedious and repetitive tasks to synchronise back-office systems.

Tasks such as data entry, account maintenance, creation of user IDs, passwords and even raising invoices are manual tasks. This situation could be about to change. Why? In a word: robots.

Robots are coming off factory floors and entering the white-collar workforce, taking up entry-level posts in service corporations and disrupting the enterprise. These enterprise robots are not clanking around the office, taking up space and typing on keyboards.

Rather, they can be thought of as a virtual employee, or virtual workforce, rendered in software with comparable skills to a human worker. The robots read screens, write administrative programs and communicate with both humans and other robots.

In essence, these software robots are capable of carrying out work with the same capacities as their human counterparts. They are even trained.

Unlike humans, however, robots are tireless, able to work around the clock. As you can imagine, this 24-7 virtual workforce offers tremendous efficiency gains. Recent research from London School of Economics (LSE) suggests return on investment of between 600% and 800% for specific tasks.

In one case study, telecom provider O2 has tapped software robots to drastically reduce SIM card data transfer processes. Now, customers can have their new phones working in a matter of seconds, as opposed to up to 24 hours.

In many ways, the software robot represents a serious upgrade to the entry-level human back office worker. Take scalability, for example. The LSE research team says scalability was unbeatable for O2. ‘Its robotic workforce could be doubled almost instantly when new products were about to be launched,’ it says, ‘and then scaled back down after the surge.’

Dealing with demand fluctuations has been a bane of most operations – not least are the security questions around taking on temporary staff. Robots – no such issue.

Process accuracy is another advantage of robotic automation. As soon as a manager trains a software robot, it instantly becomes an expert on the given process – able to complete the necessary steps with 100% precision.

LSE estimates that O2 reduced customer chase-up calls by a staggering 80% because fewer customers needed to chase requests. The robot also remembers how to perform a process. It builds a repertoire of capabilities overtime that, whenever needed, can automatically be retrieved so as to execute the procedure. Learning becomes an asset of the business.

Added to improved process quality, efficiency and customer experience delivery, businesses that implement virtual workforces have found that there are far greater opportunities for innovation.

Software robots cover simple, mundane tasks – the trench work for service teams. An obvious concern is how hungry these new job seekers will be in displacing their human counterparts. This anxiety is somewhat of a recurring theme within technology with mixed predictions.

Flashback to the 1970s when there was widespread concern about the potential lack of work in the imminent future. Many wondered whether people could survive a life of leisure. Two centuries before that, even in the midst of serfdom, Voltaire raised the point that ‘work saves us from three giant evils: boredom, vice and need’.

How far the rise of automation goes in bringing a ‘life of leisure’ will be seen. One counter point is that real-world use cases of software robot adopters suggest human teams are freed to do more creative tasks and that the instincts of the business is to improve capacity and service quality – tasks that can now be addressed without the constant demands of busy fulfillment.

Humans orchestrate and robots do. Rather than eliminating workers, organisations improve capacity. Software robots perform time-consuming administrative tasks, while people dedicate their efforts to strategic and creative areas that add long-term value to their organisations and customers. Human thinking becomes another asset.
Sourced from Jason Kingdon, chairman, Blue Prism

The Goal Revisited – How the Theory of Constraints Applies to Robotic Process Automation

Or how automation without a plan and approach is a quick trip to chaos

Ian Barkin and David Brain, Symphony Ventures

In search of something new to say about the oncoming freight train that is Digital Labor, the team at Symphony, a professional services firm, has gone back to the fundamentals. And, in doing so, we’ve rediscovered the underpinnings of this new labor revolution that have always existed as part of the way we study complex systems in order to improve upon them. These underpinnings are constraints. In other words, automation is a new (and better) way to address enterprise constraints.

Our inspiration was a book we read nearly 15 years ago – The Goal by Eli Goldratt. For those not familiar with the premise, the book is about new principles of manufacturing in which Goldratt introduces the “Theory of Constraints” as a way to manage complex systems. Written in 1984, The Goal became a widely read business tome. So, why is it relevant for Shared Services Centers (SSC) and customers of Business Process Outsourcing (BPO)? A few reasons. First, its subtitle, – A Process of Ongoing Improvement – succinctly sums up what the entire SSC industry has branded itself around for the last decade. Second, the book and the approach was a mission for Goldratt to “change manufacturing from an art to a science.” This, we believe, is the role that Robotic Process Automation (RPA) will play in shared services and outsourcing. Finally, the ultimate lesson is about avoiding future constraints caused by inertia. This one will most certainly rear its head as a concept in the next 18-24 months and is worth exploring now.

A Process of Ongoing Improvement

As we’ve articulated in a Symphony blog titled “BPO = Business People Outsourcing,” the BPO (and SSC) industry has had a great run at improvements and evolutions from simple arbitrage to continuous improvement to analytics and insight, and so on.  At every stage, BPO and SSC providers have evolved to address the next pressing challenge. At first, it was high labor costs (arbitrage). Next it was inefficient processes (continuous improvement). Then it was a lack of a holistic understanding of a system and the resulting strategic blinders in place (analytics and insight).

In his novel, Goldratt uses his Theory of Constraints to highlight that the success of an entire factory (or any process at all) is determined by the choke point that constrains the overall output. In other words, the whole factory can only move as fast as its slowest resource. This bottleneck can occur at the beginning, middle, or end of a process. It could be an outdated machine, an inefficient worker, or a poorly designed company-wide policy. Goldratt suggests that, whatever the bottleneck is, every action should be taken with it in mind, and every resource should be directed at eliminating it. And this process should never stop. Once the worst bottleneck is identified and eliminated, the next culprit of inefficiency must be identified.

The general fervor around RPA in SSC would suggest that the next bottleneck in everyone’s crosshairs is ‘people.’ However, we believe that the approach of Digital Labor as human replacement is too simple, and frankly not very creative. We are more inspired by the role RPA can play in alleviating bottlenecks of Process and Technology. Process bottlenecks exist in the form of poorly built workflow, undefined business logic or simply heterogeneity of process resulting from acquisition, rapid growth and lack of process design mindset. Technology bottlenecks exist in the form of a spaghetti of legacy and homegrown systems struggling to work together to achieve business needs. In the process and technology bottleneck scenarios, an enterprise that thoughtfully deploys RPA is given a chance to not only emulate human tasks, but alleviate historical complexity inherited over time.

Art to Science

Here we share a particular kindred spirit with Goldratt. For too long, the design of workforce solutions has been a creative and flexible art – productivity levels, output volumes, retention rates, over-hire percentage, stabilization runways, knowledge capture methodologies, and more. The list of solution design components is long, and the rigor and precedent by which they are sculpted is loose. The last decade will be seen as the ‘art of (services) work’ decade. We dare say that Digital Labor has the ability and the momentum to change SSC and the outsourcing industry from one of art to one of science.

As we’ve seen, when we design a solution for a digital workforce (robots), we can no longer afford to be vague. It is incumbent on the solution design team to model, map and capture each end-to-end process to the most minute detail. This perhaps is where we are most fanatical. In working with our clients we must see, touch, record, and model every ounce of a process in order to clearly articulate judgment versus rote tasks, understanding the interplay between each branch of business logic in a process. It’s not good enough to do this for a discrete ‘automatable’ task. If an enterprise is not looking end-to-end, it’s laying the groundwork for convolutions and complexities in the near future.

Beware the next system constraint

The final warning in Goldratt’s Theory of Constraints is to not allow inertia to cause a system constraint. In other words, don’t let the work done previously coast on unchallenged so that it becomes a future choke point. This is particularly interesting, and why we believe orchestration in this new Digital Labor environment is as (or more) crucial than the careful design of the first robots in a system. The RPA-based ‘work’ industry (in both BPO and Shared Services) is unquestionably in its infancy. There are pilots, proofs of concept and in-house developments creating a maelstrom of press, promotion and promise. Without much doubt we can assume that the big BPO and Shared Services operations are test-driving numerous vendors. And, just as predictably, some of the big BPO houses are pretending to be software development shops, crafting their own robot code. While this exploration is healthy, the result of all this will be a robot Babel scenario. Choose any taxonomy – processs silos, business units, service contracts, delivery centers – the  story will be the same. There will be a lot of robots. Robots that will not be able to talk with one another. And unless good orchestration is in place from the beginning, the inertia of ‘automate everything’ will become our next bottleneck. And, perhaps fodder for our next hype cycle.

Eli Goldratt passionately pursued the conversion of ‘art to science’ by addressing constraints in order to unleash business potential. We believe, and have seen, how RPA can be a catalyst for this same ‘art to science’ shift across the enterprise work environment. However, in our work advising clients on their Digital Labor strategies, we have found that far too often, the rigor needed to succeed is not put in place at the very beginning of the journey. By following a modern approach, working with expert advisors and by requiring solution design to be specific and accurate, automation is enabling the adoption of the ‘Future of Work’ and driving a new level of process focus that will color a generation of task design and execution.

By: David Brain and Ian Barkin, Symphony Ventures

David Brain and Ian Barkin are COO and Head of Strategy, respectively, for Symphony Ventures, a new RPA Pure Play services firm.  They have extensive backgrounds in BPO and consulting, and have founded Symphony specifically because they believe RPA is a game-changer and industry-changer, and they want to be involved in the changing.  David and Ian have most recently been described as “exceptionally talented guys” by Horses for Sources, in a recent interview with the Symphony CEO, David Poole; an accolade they neither confirm, nor deny. 

Robo Madness West: The Photos and Takeaways

Last week Blue Prism CEO Alastair Bathgate presented during a fireside chat at Xconomy’s Robo Madness event in Menlo Park, California. There he discussed the opportunities for robots in the white collar workplace, explaining how RPA technology can be effectively deployed to free people from time-consuming, simple tasks, and open new doors for more fulfilling careers and innovative businesses and markets. Check out the picture below where Alastair can be seen discussing the benefits of RPA with session moderator and Xconomy editor Bruce Bigelow.

For more information on the event, take a look at this recap by Bernadette Tansey on Xconomy here.

Robot Revolution: Disrupting the Workplace as We Know It

No matter your stance on  the widely growing debate surrounding the economic effects of robots in the workplace, what is increasingly clear is that we are on the brink of the Third Industrial Revolution, with software robots moving off the factory floor and emerging in the white-collar office. Although these robots may look different than the stereotypical ‘robot,’ they pack a serious efficiency punch.

So how can businesses effectively use these auditable, reliable and efficient software robots? Any rules-based procedure—think administrative, repetitive processes—is appropriate for completion by a virtual workforce. Companies in industries spanning financial services, healthcare, retail, telecom, and energy have used software robots to take on core customer services, HR, payroll, finance, and admin processing jobs (amongst others).

For more on this topic, take a look at the latest from Blue Prism CEO, Alastair Bathgate, on how software robotics will disrupt the workplace as we know it. You can find the full article, featured on Xconomy, here, or below.

We’re on the brink of the Third Industrial Revolution, with robots moving off the factory floor and emerging in the white-collar office.

These “software robots” are being leveraged by businesses across industries to tackle rules-based processes and improve overall operational agility. Operational roles are well-suited for automatons since they, by definition, automatically follow and execute predetermined job sequences. As such, they offer enterprises a scalable, efficient, and precise option for digital back-office labor: a virtual workforce.

These advantages, plus cost and security benefits, are capturing the attention of technologists and business executives across the globe—putting software robots on the front lines of what could become the “Office 2.0.”

Prepare for a Virtual Workforce

As robots become more commonplace in offices, we’re seeing new varieties that best fit the needs of particular roles. While hardware robots have been able to successfully carry out responsibilities required by factories, software robots are proving valuable in office environments.

Software robots mimic humans but live in the cloud or in the data center. They can be thought of as a virtual workforce, the ethereal cousins to their mechanical counterparts—driving applications through the user interface to enter and retrieve information, and following business rules to execute processes. Managers can configure software robots to drive any application (in house or Web)—without code. And unlike traditional computer software, they teach the machines how to complete core operations.

The Robo-Worker

Because software robots are taught, rather than programmed, they operate similarly to how a new human employee might. In fact, some companies have even assigned their robots names and identities based on their training and key functions.

The virtual workforce of software robots is an on-demand digital staff that can be called into action to complete a process at any hour of any day. The robot is triggered through monitoring a workflow queue or when a customer enters a request in a portal.  Any electronic trigger can start a software robot, which instantly becomes an expert in the particular process that has been previously configured. The software robot is then stored and managed in a central repository.

For example, consider a request that comes through a bank’s website to set up a second credit card. The software robot scheduler listens for the trigger and then identifies which process is needed from the central library to complete that task. The correct process to issue the card is then loaded into a software robot (the run-time component of the virtual workforce), as is the knowledge of the various applications the robot needs to complete the task. As a result, the software robot knows how to drive the various applications to complete the process. It executes the task and reports back to the scheduler to confirm that it has finished its task. It can then be put back into the robot pool to complete another procedure. The robot is designed to “intelligently execute” the transaction—thereby automatically dealing with underlying system changes and application performance.

In addition to delegating key admin processes to software robots, the ability to monitor and review robotic processes is part of what makes this technology so unique and appealing. For businesses, especially for those in scalable, regulated environments, predictability is paramount. Software robots—which operate deterministically—are ideal since their work is supervised and audited. As such, management teams never have to worry about the robots making whimsical (and potentially catastrophic) decisions, like impulsively increasing or decreasing employee salaries.

The Perks of a Virtual Workforce

In addition to security, another primary benefit of auditable software robots is unparalleled efficiency. Fans of software robots have found that the machines can complete tasks in a fraction of the time that humans do. For instance, telecom provider Telefonica has been able to minimize SIM card data transfer processes from 24 hours to a matter of seconds, enabling their customers to be able to use their phones almost immediately. This type of efficiency gain is one of the biggest draws of a virtual workforce: according to a study from MIT, respondents preferred working with (and even being managed by) robots over humans due to their ability to spur overall productivity. By enabling increased efficiency, as well as improved accuracy, organizations are able to offer enhanced user experiences, crucial for business success.

Making Robots Work for Your Business

So how can businesses effectively use these auditable, reliable and efficient software robots? Any rules-based procedure—think administrative, repetitive processes—is appropriate for completion by a virtual workforce. Companies in industries spanning financial services, healthcare, retail, telecom, and energy have used software robots to take on core customer services, HR, payroll, finance, and admin processing jobs (amongst others).

Perhaps the greatest benefit of software robots, however, is their ability to drive any system—regardless of the technology it is written in—on premise or in the cloud. This universal access means that software robots can execute any application that a person can so long as they have the necessary access rights. This removes one of the biggest barriers to automation in the software world: universal access to systems and the data those systems securely control.

Software robots’ ability to automate rules-based work and drive multiple, incompatible systems is a game-changing quality and one that offers boundless opportunities for innovation. People no longer have to worry about time-consuming, repetitive jobs—jobs that are ripe for automation. In fact, according to a recent report from Oxford University, 47 percent of jobs in the U.S. are likely to become automated. By delegating these jobs, which involve repetitive, manual labor, to a virtual workforce, businesses can allocate strategic, creative, and interpersonal work to people.

Yes, robots will replace some jobs. However, as history has proven time and time again—and as we have already seen through early adopters of software robots—for roles replaced or augmented by automation, there are opportunities for new job roles and re-allocation of human resources to roles that best suit their human skills. In fact, according to Erik Brynjolfsson, co-author of The Second Machine Age, the rise of robots will incite millions of new jobs by 2025.  What’s more, displaced human workers are shifting, and will continue to shift, to jobs that are more satisfactory than the repetitive, monotonous tasks people have had to do until this point. These jobs—harnessing people’s natural empathetic, interpersonal, and strategic skills—are more rewarding to employees and bring greater value to business customers.

As more and more organizations realize the value of—and deploy—a virtual workforce, robots are poised to shake up the way we work over the next ten years. In fact, case studies already exist where organizations have been able to allocate 25 to 50 percent of labor to software robots. While it may take time to work out the kinks of a collaborative robot/human workforce, it will pay off as people find themselves in more valuable, satisfactory roles better suited for their skill sets. By delivering never- before-reached levels of productivity, accuracy, and customer service, virtual workforces will help enterprises achieve new heights of business performance and vast opportunities for innovation. It’s time to get on board with software robots and launch a new era of work.