19/5: From Efficiency to Enablement: The Power of Connecting Technologies

Dr. Leslie Willcocks & Dr. John Hindle

Effective RPA Centers of Excellence invariably do project governance well. But to achieve corporate coherence on multiple related technologies, RPA CoE activities need to be linked to wider IT, cognitive automation and digital transformation developments arising elsewhere in the organization, requiring decisions in five major areas:

• Automation Principles – Clarifying the business role of automation technologies

• Automation and IT/digital Architecture – Defining integration and standardization requirements

• Automation and IT/digital Infrastructure – Determining shared and enabling services

• Business Application Needs – Specifying the business need for purchased or internally developed automation applications

• Automation Investment and Prioritization – Choosing which initiatives to fund and how much to spend.

To achieve these ends, the RPA CoE mission and scope must be expanded and redefined to become a comprehensive Automation Center of Excellence, with authority to manage and coordinate all automation projects and the overall program. Business and service unit managers become primarily responsible for decisions on business and process applications, with expert support and some mandates from the CoE. Technology decisions are primarily made by a combination of CoE and IT, with the CoE responsible for design, development, delivery, operations and maintenance, and IT for integration challenges, and IT architecture/infrastructure and IT trajectory issues.

Ultimately, however, mature RPA users are looking to move beyond operational excellence to continuous innovation, and to accelerate their digital transformation programs. As organizations realize that both RPA and CA realms enable new business strategies, and that together they can complement and magnify value, we are seeing the rise of service automation Centers of Enablement to bring the full force of the service automation landscape under one centralized center. We think this center will report to a Chief Digital Strategy Officer or other C-suite executive. By early 2019 we saw several financial service companies moving in this direction.

One approach is to expand and uplift the existing Automation CoE mission, supported by additional skills and resources. Another practice would be to bring several different centers together – e.g R&D, innovation, digital, RPA, cognitive – and co-locate, integrate and scale their efforts. In practice the specific structure adopted is less important initially than introducing the extra capabilities needed for continuous innovation, expressed as future-focused roles:

  • Innovation leader. Business-focused, executive-level. Devising and engaging in organizational relationships and arrangements supporting innovation. Listening to emerging technologies and identifying where the business value might be, and aligning strategy, structure, process, technology and people required to migrate the organization to new sources of business value.

  • Technical architect. Technology-focused. Future proofing the 3-5 year technology trajectory through architecture planning and design for an efficient, effective, enabling technology platform.

  • Relationship builder. Business- and technology-focused. An integrating, operational role building understanding, trust and cooperation with business users, and identifying and helping delivery of valuable business innovations.

  • Supplier/partner developer. Service-focused. Understanding and benchmarking the external market for automation technologies and services. Engaging with external parties and in-house service staff to release combined innovation potential in order to gain mutual business value.

  • Innovation monitor. Value-focused. Developing and auditing metrics on efficiency, effectiveness, and enablement. Looking for continuous improvement and innovation. Reviewing progress, anticipating problems, driving out business value. In our previous blog we discussed our Total Value of Ownership (TVO) framework, specifically designed to help value and innovation monitoring.

This will be an accelerating trend, in our view, because increasingly, organizations will create competitive advantage by connecting a portfolio of technology innovations that we call SMAC/BRAID, including Social media, Mobile technologies, Analytics and Big Data, Cloud services, Blockchains, Robotics, Automation of knowledge work (RPA and CA), the Internet-of-Things, and Digital Fabrication (i.e., 3-D printing), to transform service delivery. Organizations usually experiment with new technologies in innovation labs, but getting vetted technologies out of digital labs and into production environments, via Centers of Enablement focused on rapid delivery, will become a competitive differentiator.

19/4: Beyond ROI: Towards Total Value of Ownership

Dr. Leslie Willcocks & Dr. John Hindle, Knowledge Capital Partners

Initial adoption of Robotic Process Automation (RPA) typically starts with efficiency – using new technology to improve accuracy, quality, and speed while reducing costs. And the most common business case metric is some variant of Return on Investment (ROI), with the reference benchmark being the cost of a Full-Time Employee (FTE). But we know from decades of research that traditional ROI measures and cost/benefit analyses typically understate ‘soft’ and strategic benefits when applied to IT investments, and don’t account for many operational, maintenance as well as human and organizational costs, which can exceed technical costs by 300-400%.

One remedy, at least on the cost side, has been to focus on Total Cost of Ownership (TCO), defined as the total technical, project, human and organizational acquisition and operating costs as well costs related to replacement or upgrades at the end of the life cycle. TCO adds up all resource costs across all the activities comprising the automation life-cycle, flushing out hidden costs so often missed when using ROI. By mid-2018 some 67% of Blue Prism clients had a TCO model. Of these, 40% started with a TCO model while 60% developed it over time.

The real limitation so far in RPA assessment, however, has been in establishing benefits. Inherited from IT evaluation practice, one tendency has been to understate total costs in order to be able to allocate only hard, financial benefits allowable under traditional ROI or TCO measurement regimes. But this does not lead to gaining strategic value from RPA, nor treat RPA as strategic. The truth is that a new measure of net benefits is needed in order to drive strategic behavior and gains

Based on extensive research at Knowledge Capital Partners, we have developed a new measurement framework for service automation investments we call Total Value of Ownership (TVO). With this concept, the objective is to ensure that business cases for service automation are driven by:

  • total costs (both explicit and hidden costs)

  • multiple expected business benefits, and the strategic returns from future business and technical options made possible by RPA (hidden value).

Our TVO Framework is shown below, with Total Costs on the left had side of the equation, matched against Total Benefits on the right.

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(Total Value of Ownership (Source: Knowledge Capital Partners. © All Rights Reserved)

On the cost side we include all relevant activities and resources, not just traditional ROI inputs. On the benefits side, we have already found very strong empirical evidence amongst Blue Prism and other clients using RPA to achieve a ‘triple win’ for shareholders, customers and employees. Our “Three E’s” framework is designed to capture all these, but also locates further hidden value frequently omitted from clients’ business cases.

Much hidden value resides in the potential from applying process analytics for further Efficiency gains. Additional hidden value is located in the Effectiveness area (‘doing things right/differently’) by using automation and analytics to change how business is done, or to extend its capabilities. Meanwhile when we come to Enablement, we have already found multiple examples of enhanced customer journeys, new services, and increased profit/revenue.

Furthermore, we need to capture the hidden strategic value of the future options enabled where RPA creates a powerful digital business platform, operating something like a ‘bus’ on a computer motherboard but here connecting and integrating a growing range of innovative cognitive and AI solutions, supporting a blended human and digital workforce. Discounting the source of such major hidden, future value is a serious mistake.

Identifying and capturing these business-driven Effectiveness and Enablement value opportunities requires evolving the initial RPA Center of Excellence – first to become an Automation Center of Excellence, and ultimately to become what we call a Center of Enablement. We discuss how to do this in the next blog.

19/3: The critical role of communications in RPA change management

Words by John Smith

All our evidence gathering at KCP has made absolutely clear to us that the quality of change management is critical to successful outcomes in RPA. Quality is the operative word here. Because of course everyone will tick the box “ change management”. The issue is, how good is it? And too often there is not enough focus on getting the answer to that question. Plenty of energy is spent investigating whether the technology will live up to what is claimed for it . There is also increasing understanding and focus in the user community on finding the skills needed to redesign processes to optimise the benefit of RPA – rather than plugging it into established process design. But then regrettably the people part of the equation can get a bit fuzzy. Good change management practice puts people at the heart of success, mobilises colleagues to get the most from the technology, presents a credible narrative that everyone engaged in the enterprise can buy into. It doesn’t obscure the uncomfortable truths about the need for change and it explains all outcomes for stakeholders - challenging and positive outcomes - equally. Change management isn’t simply about the mechanics of implementation, it has strong, motivating, credible, intelligent and farsighted communications built into it as a vital means of propulsion.

In our case study work at KCP we have seen less communications of this calibre than might be expected in companies that are starting out on a path offering strategic gain. And it leads us to wonder whether tentativeness in communications in change management is caused in user organisations by the climate of debate about intelligent automation in society. Alarm dominates so much of the analysis and conversation in the public sphere about how this new age of technology will shape our lives. Maybe that is inevitable. And perhaps one of the biggest challenges any single organisation now faces when it decides on RPA investment is to chart its own course for change management communications in a turbulent sea of loud opinion that affects every individual away from their work. The real life context in which we individually translate change into impact on our own existence, and make a judgement about whether we want it to happen or not, has many inputs. What a partially informed politician might say, a journalist online or on air might comment with little time to prepare, will be weighed against what our CEO might tell us.

For our partners at KCP evidence is always king. What the evidence from the now hundreds of RPA deployments we have researched shows is that the companies succeeding with RPA, and on track for achieving the value they envisioned, have communicated effectively both the big picture – the why, the goal, the how - and the realities of the impact on their people. They have communicated early in their adoption of the technology, and continued with clear, consistent and regular messages and engagement with colleagues. They have focused on the value to employees, including less repetitive, boring work; co-working for higher productivity; learning new skills and roles; being recognized as innovators; and being able to focus more on customer service. They have faced up to the fact that we all hate uncertainty and have confronted the inevitable potential for downsizing intelligent automation offers. They examine the implications with the individuals and groups involved with joined up human resources strategies in place and have had the courage to set out and adopt all the options available – natural attrition, redeployment, reduced dependency on outsourcing, – and with redundancy or early retirement as a last option. It’s worth emphasising that in nearly half the user companies we interviewed in a recent survey, communications highlighted the opportunities presented by automation to take on more work and grow the organisation.

In the Insight section of this site you will find a briefing paper that examines the whole role of change management in RPA. (Keys To RPA Success - Part Four: Change Management & Capability Development). It has a vital role, and communications is one of its most critical components. Especially as the debate about the impact of intelligent automation captures the imagination of so many people - for better or worse.

19/1: Is RPA ‘The Real Deal?’

Dr. John Hindle, Dr. Leslie Willcocks, Dr. Mary Lacity

Robotic Process Automation increasingly looks like a game-changer. Why? And why now? We discover that you need to look at the past, as much as the present, for the real answers.

As professional researchers, we’ve been studying IT-enabled business transformations for over 25 years, taking a long view of the sector through multiple generations of technology. We’ve been especially fascinated with the recent performance of Robotic Process Automation (RPA) and the impressive results customers have achieved over the 5 years we’ve been researching it. Our service automation research base includes dozens of case studies and multiple quantitative surveys, analyzed in several books, articles and conference presentations.

Is RPA simply the newest “new thing” in enterprise technology? Or is something deeper going on? We’ve been asking the same questions of ourselves that others have been asking: “What’s different about RPA? Why is everybody so excited? Why is the value realized so high?” The answer, our research suggests, has a lot to do with context.

For the past 30 years, companies in all industries have undertaken a succession of large-scale initiatives to improve operational effectiveness and competitiveness, applying the 3 classic enterprise transformation levers: People, Process, and Technology.

As our summary table below suggests, all these initiatives, from ITO and BPO to BPR, ERP, TQM, BPM and all the other acronyms, share some common features: they’re expensive, they involve long-term consultancy services, standalone “strategic” budgets and dedicated deployment teams, and they take a long time to implement. And oh, they’re all disruptive to the business.

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Looking at this picture, one might well pity the Operations and IT executives charged with leading and managing these interventions – it’s hard, painful work, with expensive, inflexible, long-cycle tools, for uncertain and often hard-to-quantify gains, with limited recognition and reward.

Enter RPA, which emerges in this context as a surprisingly winning solution. RPA technologies are available in three main models: autonomous, enterprise-grade RPA, delivered on a server or cloud infrastructure; local, “assistive” desktop versions, known as Robotic Desktop Automation (RDA); and a third, more IT-intensive model resembling a software development kit (SDK). While all 3 models have their value, enterprise-grade RPA offers the business a code-free, flexible, general purpose toolset. While not problem-free or without challenges, RPA is relatively easy to configure, offers rapid implementation, high ROI, and early benefit realization, with minimal pain and mostly happy users.

For business leaders, it eliminates multi-year waits on the IT work queue, enables control over configuration to meet changing process demands, and allows the workforce to pursue more rewarding, revenue-generating activities while increasing productivity. Conversely, RPA also enables the IT function to focus on core enterprise infrastructure and relieves pressure on shrinking IT resources (people and budgets), while maintaining security and governance. Because RPA software operates at the presentation layer, moreover, it doesn’t disturb or compromise underlying systems of record.

Is RPA a magic elixir? Given the challenges noted earlier, and the need for specialist implementation expertise, RPA isn’t a panacea for all enterprise ills. But it clearly changes earlier paradigms of enterprise transformation and greatly boosts productivity. In autonomous server- and cloud-based models, enterprise RPA creates an agile, flexible technology platform on which to build a truly digital business – a new, business-driven and business-managed layer on the IT “stack,” if you will. For all those unsung operations leaders, our research to date offers abundant evidence why they’re so excited about the opportunity and the benefits.

Over the coming weeks and months, we’ll be publishing a series of reports, sponsored by Blue Prism, on “The Keys to RPA Success” – check back here regularly for updates, or download our findings from our Reports page here.