Think big and gain massive results. Play it safe and get middling success. Here are eight research insights to mull over…
For over a year now, the COVID-19 pandemic has presented a big question for businesses that were automating work and augmenting knowledge tasks: since we are at it, do we go the ‘whole hog’ or do we just ‘hunker down’ (playing safe)?
A global software provider of intelligent automation (IA) products, Blue Prism, has offered guidance and strategies to such business via a series of analyses from independent research firm Knowledge Capital Partners.
The research papers examine five major sectors—including banking and finance, insurance, telecommunications, healthcare, and energy and utilities—that have made the shift from ‘hunkering down’ to ‘going big’ with their intelligent automation efforts.
With 85% of companies playing it safe (i.e. hunkering down) and the others going the ‘whole hog’, what were the differences in outcomes between the two extremes? Here are the eight findings that pitch for intelligent automation:
- RPA is still largely unexploited: The potential of robotic process automation, even as a stand-alone technology, is vast but not being leveraged in spite of returns on investments ranging from 30% to 200%.
- Challenges in RPA scaling, investment and outlook in the pandemic: Across some 54 RPA supplier portfolios, most clients had between one and 50 ‘robots’, with few (13%) scaling to 51-100.
- Hunkering down is the default strategy: The typical organization that adopts intelligent automation got caught in a cycle of small initial outlays, with good returns in efficiency, but further investment looked expensive, and the benefits were less clear, resulting in no further intelligent automation. With some vendor products, enterprise RPA is harder to scale architecturally, and maintenance and support is costly. Relying on traditional ROI-based business cases, senior management typically under-invests, seeing RPA as a tactical back-office tool. Digital transformation efforts may be ongoing but, being driven from different places with different budgets, they are not well integrated, and are usually underwritten tactically.
- RPA leaders experienced ‘triple-win” benefits: The outliers scaled their RPA deployments to the enterprise level and across back-office, mid-office and customer facing activities. They grasped the potential of extending RPA to create ‘intelligent automations’, and integrated RPA with advanced cognitive technologies that can manage unstructured data, analytics, and probabilistic decision-making. For these leaders, RPA became the critical execution platform for creating more value than organizations that hunkered down on their digitalization strategy.
- 75% of the benefits of RPA, cognitive, and AI automation is a mindset and culture issue:
Only 25% of the challenges of optimizing these automation technologies are technological, while the remaining limitations are due to managerial and organizational issues. Previous studies showed 41 material risks arising when trying to introduce automation, but also identified 39 management actions that mitigated those risks and led to effective business deployment.
- True success in going big with intelligent automation is difficult: Depending on sector and definition, 75% to 85% of ‘go big’ digital transformation projects in the research failed. The challenges were mainly managerial or organizational, though integrating, deploying and institutionalizing a variety of emerging digital technologies is by its nature a long haul. It could take most organizations more than five years to become digital businesses, so they are advised to start early.
- There is much untapped potential in IA among all adopters: Reviewing case studies, surveys, interviews and advisory work, the research firm came to a stark conclusion: an enormous amount of business value is being left on the table. At least 200% more ROI can be extracted simply by hunkering down and applying these technologies more widely for efficiency purposes. Still more value (about 500% or more) could be gained by looking for applications that increase business effectiveness. The latest research suggests that the real value bonanza comes with building a ‘digital options platform’ that gives the business flexibility, adaptability, strategic options and resilience at a relatively low cost. The value of IA gained by some companies has been exponential, exceeding efficiency gains alone by 10 times or more. While ‘hunkering down’ is certainly a profitable fork to take, ‘going big’ can get an organization much further, more quickly.
- Secrets of the IA success leaders: What is noticeable and distinctive about those IA leaders that went big and reaped strong ROI is that they have senior executives that:
- see digital technologies as strategic and transformative and provide sustained support and resources for long-term organizational change
- see technologies, including automation, not as discrete tools, but instead comprising a digital platform enabling new business relationships with customers, ahead of their competitors
- appoint credible, influential champions that are held accountable to make it happen.
These organizational leaders are visionaries who rely on ‘big-bets thinking’ fueled by a big-picture view of what the business needs and what the technology can enable, and they have less time for traditional ROI and TCO analyses. By contrast, executives with a ‘hunkering down’ outlook tend to be much more driven by narrow, carefully calculated business cases, and have a much more bottom-up approach to using automation technologies for business value
The researchers have also created a new value framework called Total Value of Ownership (TVO) that embraces traditional ROI and Total Cost of Ownership approaches but extends them greatly. Why? Because used conventionally, the two concepts fail on two counts.
Firstly (and dangerously) they fail to account for all the costs. Secondly, they fail to include the more intangible transformational benefits, even though these can be significant and strategic. Such measurement systems inhibit aspiration and can lead to efficiency and—at best—effectiveness agendas. This is great to have, but not where the real action is.
Business leaders can hopefully glean some insights from these IA findings for their own organizational circumstances.