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Smart Process Automation (SPA)
… Critical Component for a Successful Digital Transformation Program
June 2016
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• Share our points of view regarding the digital transformation imperatives for
enterprises and the role of Smart Process Automation tactics in enabling successful
digital transformation
• Our storyline includes the following points:
• Enterprises must either “Disrupt” or “Be Disrupted”
• Digital Transformation enhances “Disrupt” and mitigates “Be Disrupted”
• Smart Process Automation is a critical component of a Digital Transformation agenda
• An explanation of what we mean by Smart Process Automation and how it can be used to
drive value
• The business case for Smart Process Automation – cost, insights, quality, risk, skilled
resources, customer journey
• Getting started with Smart Process Automation
• How ICG can help
Our Objectives Today
Robotic Process
Automation
CognitionDigital Labor
Artificial Intelligence
Autonomics
(Deep) Machine Learning
Automated Process
Discovery
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40% of the Top Ten Incumbents in Each Industry Will Be Displaced
• Digital Transformation is the
main driver of business
disruption
• McKinsey recently published a
paper titled “An Incumbents
Guide to Digital Disruption”1
that explores this business
challenge. They say:o Companies often fail to recognize
disruptive threats until it’s too late
and, even if they do, fail to act
boldly enough
o The right actions to take depend on
whether disruption is detectable,
clear, inevitable, or the new normal1 McKinsey Quarterly article May 2016
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• Companies that are “Digital Masters” have 9% more revenue growth and 23% more
profit1
• Companies who invest heavily in advanced analytics outperform the S&P 500 by an
average of 64%2
• Firms who have effective end to end process management grow 42 % faster and are
28% more efficient.3
• Companies with stronger transformation management intensity are more profitable,
have higher market valuations than those that don’t (+26% and +12 % respectively)4
• The “Everyday Bank5” is highly industrialized with automated front and back offices
that are integrated and optimized for speed with:
o Back Office effort slashed by 80%
o Managed application portfolio reduced by 70%
o Time to market cut by 70%
o Operating Income increased up to 30%
2016-08-20Wanilah Advisors Draft for Discussion 4
1 “Leading Digital”; Harvard Business Review Press 2014
2 2011 Accenture Enterprise Analytics for Banks 2011
3 CEB Operations Council Process Ownership Survey 2013
4 The Digital Advantage: How digital leaders outperform their peers in every industry, Cap Gemini MIT Sloan 2011
5 Digital Banking: Stretch the boundaries to the Everyday Bank, Accenture (July 2015)
The Case for Digital Transformation is Compelling
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And The Paradigm is Shifting
Then We Must Rapidly
Reality Implications
Digital Disruption is Driving
Significant Change
40% of “traditional” businesses will be disrupted by the arrival of new competitors with lower cost
or revolutionary operating models - Uber, ABnB, Amazon, …
The Status Quo is Not Safe Changing / evolving your operating model to survive is an imperative
Customer Journey Design/
Execution is the New Battle
Ground
Customers are more demanding, better informed and expect a full Omni channel experience (and
they will leave if they do not get it); redesigning your processes to enable and enhance the client
experience is critical to surviving and out-competing
Operating Models are Being
Redesigned / Reimagined
Artifical intelligence, robots and cognitive computing and decision-making, and digital technology
are fundamentally changing the way work is done
Analytics Is Driving Operational
Effectiveness
Data analytics about operational effectiveness with timely insight is now used by many
organizations to improve their business
Skilled labor (experts) are
becoming increasingly scarce
Applying digital labor to operational functions mitigates this risk and frees the best and brightest to
bring more value to the enterprise
Process Automation Lowers
operating costs and improves
quality
Digital labor reduces the cost of a traditional employee by 40% to 60%, and can work longer with
fewer errors
Smart Process Automation is
maturing
Not just Hype - but a critical success factor to enhance and ensure Digital Transformation
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Look At All Three Dimensions to Successfully Transform
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PeoplePeople govern andexecute the process
People attrition and loss of institutional knowledge and skills are a risk
ProcessProcesses are not standard; they are typically in people’s heads or on sticky notes
The “rules” are often “judgemental”
TechnologyTechnology must aid and guide the process
People are the glue
Banks are vulnerable if someone changes the game
Adaptive, real-time business coaching• identification of
relevant and curated best practices and improvement levers
• Ask for help boards , codified business rules
Internet of things• real time
performance monitoring
• real time geo-location inventory/work in progress monitoring
• As digital as our clients and maybe more
Business Ecosystem• fail safe redundancy
of business suppliers
• digital Integration into customer business models
• part of the Banks/Clients infrastructure and operating model
Applied business acumen(IA)
• self-correcting and optimising operating processes
• physical and virtual resource optimisation
• heuristic guided semi-automated problem recovery
• digital process measurement and tracking of the inline operational experience
Business Analytics • real time big data
monitoring of actual business performance
• signalling and contingent decision making to relevant business partners (Suppliers, Banks, Clients )
• syncs with all operating systems
Leaders have historically made choices to
have either strong:
• People,
• Processes, or
• Technology
Typically organizations cannot afford to do it
all, But now with the advances in digital
capability and availability of big data, they
are seeking to compete on all three
dimensions.
Making this transformation without looking
at the blend of people, process and
technology is like trying to solve a quadratic
equation when you only know one variable
LOOK AT PEOPLE, PROCESS AND
TECHNOLOGY TOGETHER
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What is Smart Process Automation?
7Source: Sylvan Digital 2016
Replacing human labor in operations centers and
centers of excellence with digital labor performed
by software robots following rules and learning
from human experts, through pattern recognition
and machine learning, to improve efficiency and
reduce reliance on human experts over time.
Smart Process Automation disrupts the
operating paradigm by positioning human
experts as the overseers and exception
handlers and the technology tools as the
primary for executing operational functions
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“Digital Labor” Matures and Gains Experience
8Source: Sylvan Digital 2016
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Understanding How SPA Gains Maturity and Efficiency as Insights Develop
9Source: Sylvan Digital 2016
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Workforce Orchestration
Robotic Automation
Cognitive Automation
The Three Major Components of SPA
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Orchestration, Robotic and Cognitive Automation
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OCR and Convert Documents
Transfer Linked Content to Content Field
TaxKeywords- Keyword Check
Clear Content Field
Extract Company Name and Jurisdiction
Normalize Data
W-8ECI –Updated XPath
W-8ECI Extraction
W-9 Extraction (Name Only, Always US Jurisdiction)
Name Jurisdiction
Detection
doc type
Robotic Tasks
Robotic Task
SME Task
Cognitive TasksProcess
Transparency is
critical to the initial
SPA Implementation
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Using SPA to Build a Successful Digital Transformation
OCR Web Scraping Text Analytics Info Extraction
Internal Data Feeds
(Inbound / Outbound)External Data Feeds
(Inbound / Outbound)
Robotic Process
Automation
Business Process
Management
Orchestration of Human Labor
Cognitive Automation
Insights
100s of structured
data sources must be
integrated
… and many of the data sources required are unstructured
Employing tools that can learn embeds continual process improvement and
transparency into the operational ecosystem
Use of integrated technology tools to accelerate and improve business
processes
Allows for the efficient application of skilled
experts to support and oversee the processes
instead of performing all but the exceptions
The information generated in such an ecosystem
supports analytics that inform and enable digital
transformations
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Using SPA to Enable Digital Transformation Makes Good Business Sense
25% - 30% Plain old
outsourcing and offshoring
10%- 15% robotic
automation on offshore,
40% on onshore
resources
10%- 20% cognitive
automation on top of robotics
5%- 10% human worker
analytics / UX improvements
30%
+50%
Initial State Sourcing Robotics Cognitive Future State
Intelligent Automation
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Examples of Outcomes
ANZ Bank with Automation Anywhere Global Bank Invoice Process with WorkFusion
Global Retail Bank Technology Services with Arago
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Telefonica with BluePrism
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The Market Players in Automation Eco-Systems
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Artificial Intelligence
Cognitive Computing
Autonomics
Robotic Process Automation
Limited Automation
Jacada Cicero
… and a multitude for purpose automation tools that focus on automating specific Use Cases
Accenture’s “MyWizard IPSoft’s “Amelia”
Celeton’s “Infostream” Arago’s “Hiro” WorkFusion
BluePrism UIPath KryonIPSoft OpenSpan KofaxAyehu Nice Automation Anywhere
IBM’s “Watson” Google’s “Brains”
Wipro’s “Holmes”
TCS’s “Ignio” Infosys’s “Mana”
Increased Application of
Pattern Recognition and
Machine Learning
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The Case for Digital Transformation and How SPA Helps
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Robots and Digital Transformation Change the Game …
By Facilitating the Application of Highly Skilled Experts Where They Are Needed Most,
And Providing Consistent Availability of Metrics and Process Transparency
to Drive the Digital Transformation AgendaSource: World Economic Forum 2015
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Recent Analyst Predictions
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The opportunities extend far beyond labor savings.
When we modeled the potential of automation to
transform business processes across several industries,
we found that the benefits (ranging from increased
output to higher quality and improved reliability, as well
as the potential to perform some tasks at superhuman
levels) typically are between three and ten times the
cost.
McKinsey Quarterly Q1 2016
Boston Consulting Group predicts that by 2025, up
to a quarter of jobs will be replaced by either
smart software or robots, while a study from
Oxford University has suggested that 35% of
existing UK jobs are at risk of automation in the
next 20 years.
Forrester predicts that 25% of tasks across every
job category will be automated by 2019. The
magnitude of change caused by digital disruption
is even greater – it is expected to affect 44% of
tasks.
Forrester, February 2016
Our research suggests that as many as 45 percent
of the activities individuals are paid to perform
can be automated by adapting currently
demonstrated technologies.
McKinsey Quarterly Q1 2016
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The Business Case Benefits of SPA
Digital Labor typically reduces the cost of the cost of human labor 40% to 60%
No cost associated with attrition, benefits, paid leave, facilities, technology systems and support
Minimal training expense
Cost
Insights
Skilled Resources
Quality
Customer Journey
Richer, consistent metrics and visibility to operational processes facilitate insights leading to continuous improvement and process redesign
Consistent quality and accuracy lead to faster cycle times with less re-work, and better, more timely compliance performance
Risk Reduction of human involvement in process execution removes some risk mitigation
costs and makes risk associated with process execution more predictable
Change Management is more reliable without human bias and cultural considerations
Using Digital Labor for 60% to 80% of process execution frees the most skilled operations experts for other functions
Consistently performing, highly scalable operations can be designed to drive improvements in customer experience
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A Case for Action Requires Understanding Where to Start
Back Office
eInvoice (P2P)
Data Entry / Compliance
Marketing Research
Travel & Expense Management (T&E)
Data Entry / Compliance
Lock Box Processing
Commerce
Category Management
Search relevancy Optimization
Collections
Master Data Management
Corporate Actions
M&A Transactions Announcements
Corporate News Extraction
Real Time Dividend / ETF / Bond / Shares Outstanding
Announcements, etc.
Client Driven Events
KYC – Legal Entity, People Search, Monitoring
Standard Settlement Instructions (SSI)
Tax – K1 Forms / foot notes processing
Consumer Personal Assistant
Bookings
Travel Research
Reservations
Purchases
Customer Support
Entities and Instruments
Company Legal & Financial Information
Business Classification
ETF / Bonds / Term Sheets / Prospectus Attributes
Filings Extractions
Hierarchies / Taxonomies
Legal Entity Monitoring
Company Products and Services
Loan Data Extraction
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Automation Friendly /
High Functional Impact
• Assess your
process portfolios
• Learn by picking
the right pilot
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Getting Started … Disrupt or Be Disrupted
• These transformative initiatives are happening in most
global enterprises today - at an ever increasing pace and
with significant results for success
• Active executive sponsorship for programs of this nature
is critical
• The steps forward typically include:
o High level case for action
o Process Portfolio assessment & ranking
o Pilot deployments
o Business Case and Roadmap
o Governance Plan
o Execution Plan
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Next Steps
• Develop a “Case for Action”
• Assess and Rank the “Process
Portfolio”
• Conduct Internal Education to
drive senior leader consensus
and buy-in
• Select a “Pilot” to drive
learning
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