Three major trends are reshaping the industry: a major rethinking of outsourcing vs. moving in-house, advanced handwriting recognition becoming mainstream and the increased need and reliance upon data science. This article explores these trends, as well as what they mean to enterprises and their service providers.
Rethinking the Benefits of Outsourcing
Just recently, HFS research published an article on the acceleration of insourcing operations that service providers currently provide. Why is this? One of the primary reasons is the renewed interest in automation. Also, it is the perspective that with automation, reliance upon manual labor is reduced, the outsourced version of which is still the primary business model of many service providers both large and small.
Historically, if an organization wanted to rid itself of low-value, but necessary tasks or processes, the best option was always to outsource these functions to a service provider that could provide the same capability at less cost through economies of scale. With automation, there is the promise of handing over the work to “bots” that can be deployed anywhere and whose costs are not sensitive to typical wage arbitration. A bot costs the same whether it is deployed onshore or in low-cost regions. HFS calls this “going straight to digital.”
Greg Council, Vice President of Marketing and Product Management
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This Month at SIG
If your April was full of showers (real or figurative), we hope you can seize the opportunity this month to make things bloom and reap the benefits of your hard work. Read about the important things happening at SIG in May to give you a boost.
Artificial Intelligence is the topic of many business conversations where often the fantasy is of intelligent robots doing more work with less time and resources. Not all of the promises related to AI are unfounded. Read this eBook to learn how AI’s potential can transform procurement.
When it comes to Robotic Process Automation (RPA) within a digital transformation project, the clear objective is to move all processes into a controllable, fully-automated workflow. This is achievable when processes need to use structured data. However, the most expensive and business-critical processes involve human workflows using complex, document-based information. Achieving the same levels of automation realized from structured RPA-enabled processes becomes much more challenging because the needed information isn’t always easy for a system to locate—much less successfully extract—from a document. Without a precise solution for getting access to document-based data, automation is adversely affected.
Finding the Right Solution
The answer is to approach cognitive RPA projects by understanding the level of “maturity” required with respect to the level of document automation your project requires and compare that with your peer’s experience within your industry.
This includes getting a solid foundation in what are current best practices regarding automation and understanding the various options for injecting document automation into RPA projects. Not all vendors approach a solution in the same way and not all capabilities are equal.
Greg Council, Vice President of Marketing and Product Management
Early days were characterized by excitement over the dramatic productivity and cost-saving benefits enabled by RPA. Over time, however, the limitations of rules-based bots have emerged. For one thing, basic RPA tools can’t adjust to new conditions or changes in their environment. Even the slightest deviation from the process they’re trained to follow triggers an exception that requires a human to step in, thereby sapping the solution’s productivity.
Another issue is the complexity surrounding deployment of RPA bots. While instructing a bot to perform a task is relatively easy, it does involve a level of programming expertise. Most end users of RPA are on the business side and lack the requisite technical knowledge. That means that setting up a bot requires an RPA programmer. Demand for RPA skills, meanwhile, is through the roof. (Witness the volume of urgent “we’re hiring” notices on LinkedIn pleading for people with Automation Anywhere, Blue Prism and UiPath certifications.) As a result, because the intervention of scarce technical resources is required, bottlenecks often occur when deploying a bot for a business user.
Alex Kozlov, Director of Content for Softtek US & Canada
Our world is shaped by technology. From the second we wake up until the moment our heads hit the pillow at night, we are constantly interacting with technology to manage our lives, to get us from point A to point B or to check in on our loved ones through social media. We interact with Artificial Intelligence (AI) so often that most of us don’t even realize that we’re doing it. And if you’re anything like me, it’s easy to get distracted or overwhelmed by the new, flashy inventions that seem to be released daily. AI makes our lives easier, can even make a person’s life safer and in some cases, it can extend it.
I’m currently seeking my nursing degree and in my Essentials of Nursing class, it was discussed that in the US alone, 50% of all adults are living with at least one chronic disease. These illnesses not only have an impact on a person’s overall health and their independence, but it can also pose an enormous financial burden. In 2015, the total national health expenditures were $3.2 trillion and those costs are continuing to increase, especially as our population ages. Within 10 years, the population of people above 65 years of age will exceed the number of children under five for the first time in human history.
The Hackett Group, in conjunction with Symphony Ventures, recently published a whitepaper regarding Robotics Process Automation (RPA). (You may recall that Symphony Ventures conducted an excellent RPA proof of concept at the SIG 2017 Spring Summit with American Honda.) In this whitepaper, the authors provide a blueprint for selecting sourcing opportunities appropriate for RPA. Any sourcing professional worth their salt, should be considering RPA as a viable strategy after reading this statement, "Individual tasks of such processes may be fully automated with RPA, eliminating 100% of labor and up to 90% of cost. The total efficiency improvement achievable through holistic transformation using RPA across end-to-end transactional process can add up to 50% to 75% of baseline cost."
Mary Zampino, Senior Director of Global Sourcing Intelligence, SIG
Let’s discuss accretive manufacturing. What? Haven’t heard that term yet? That’s because accretive manufacturing is just a fancier name for 3D printing. You may never hear it referred to as accretive manufacturing, but mark my words…the supply chain industry is about to be disrupted to an unrecognizable extent by it. In 2016, Honda released a single-seat “micro-commuter” vehicle with the body and majority of the panels having been 3D printed. In the meantime, Boeing expects to shave $2 to $3 million off each 787 Dreamliner's manufacturing costs by 2018, thanks in part to 3D-printed titanium. So if Boeing can now 3D print parts to an airplane and auto manufacturers are now 3D printing dashboards—and even entire vehicles—how long do you think it will be until we require almost no inventory because we can 3D print on demand any item we desire?
At home if I break a spatula, I can now 3D print a replacement. Granted, I am only printing with plastic and lack the tools to print an exact replica, but when it only takes an hour to print with specifications that are available for free online at a cost of only 15 cents (plus a little electricity)…isn’t it worth considering? Even Amazon Prime same day delivery (not available where I live) can’t beat that timeline and price.
As I sit here at my desk listening to the glorious whirl of robotic process automation taking place at my feet (my Roomba is vacuuming diligently), I think back to SIG's last Global Summit in Amelia Island and how RPA was at the forefront of our discussions.
Now, of course not everyone is as fond of certain types of automation. My dogs for instance, who are getting old, a little deaf, a little blind and a little senile, get spooked occasionally by this little disruptive digitalization in their lives. And my 4 year-old daughter thinks it's cool, (calls it her puppy) but if it gets too loud or in her way, its process quickly becomes terminated prematurely.
As I write this my Roomba signals with its happy little tune that it has completed cleaning the room and silence almost ensues, except for the faint hum of my newly installed ceiling fan (it’s a truly glorious sleek modern contraption) and it occurs to me that this too, a more common example of process automation, also brings me great joy, convenience and comfort. At one point both these items were the newest technology and people doubted their need and also questioned how many jobs would be lost at their hands. Not unfortunately, these days you do not find too many personal fanners (picture Cleopatra being fed grapes and giant palm fronds), but in its stead fan designers, engineers, installers, repair servicemen and salesmen. And whereas only a small minority of the population could afford a professional fanner back in those days, ceiling fans are common place and found in abundance due to technology and manufacturing improvements, making them less expensive and more easily accessible.
It was recently announced that full tests of driverless cars will take place on UK roads (including motorways) within the next two years. The UK is lagging in this area behind some other countries, especially the USA, where the likes of Google have been taking automated cars out on public highways for several years. However, it's another landmark for technology which looks set to utterly transform human transportation over the next couple of decades.
At the same time, as I walk along my local High Street the windows of employment agencies are plastered with signs calling for drivers - of vans, minibuses, HGVs; indeed, one agency has only these jobs on display.
Obviously, any transition to automated vehicles (especially the large ones on which the logistics industry relies) will take time (how much time has yet to be seen, and many issues remain to be decided before the shift can fully take place); however, it seems both interesting and unsettling that anyone approaching an employment office wondering which roles might be most in demand would come away with his or her thoughts pointed towards an industry on the verge of radical transformation involving the eventual removal of exactly those roles currently being yelled for.
A couple of weeks ago, I published a blog entitled ‘Automation and the Human Touch’, looking at some of the challenges the automation revolution is set to throw our way regarding future employment opportunities and the education and training of our next generation(s). That blog provoked some very interesting thoughts from readers:
The mini-supermarket at the bottom of my road is closed for a couple of weeks for refurbishments (this may seem like an incredibly mundane topic with which to start a blog, but bear with me). The signs announcing this closure were only put up a couple of days beforehand, and somewhat surprised I asked the cashier - with whom, like many in my neighborhood, I have a friendly relationship – what was behind the chain. The shop is part of a very large national chain, but has a "local" atmosphere unlike, in my experience, most such establishments. She replied that the shop is being redesigned to include several self-serve tills - and was, of course, unwilling or unable to answer when I inquired if that means job losses amongst the current staff.
An elderly man being served next to me then said something which got me thinking: "It's computers, isn't it? Everything will be run by computers soon, and there'll be nobody left to talk to." In this particular instance, at least in the short term, that gentleman was of course being premature - that shop will still have a complement of human staff, and won't be entirely based around self-serve points of sale (POS) - but there as everywhere else in the country, technology is driving vast change in the retail sector, with ramifications that go far beyond that industry and which have the potential to affect the whole fabric of society.