Companies are achieving productivity gains by using software robots to perform routine, rules-based service processes. If implemented well, such automation can result in high-performing human-robot teams, in which software robots and human employees complement one another.
Although the term “robot” brings to mind visions of electromechanical machines that perform human tasks, the term as it relates to service automation refers to something less threatening: software that performs certain repetitive and dreary service tasks previously performed by humans, so that humans can focus on more unstructured and interesting tasks.
About The ResearchWe conducted empirical research on service automation to answer three questions: (1) Why are companies adopting service automation? (2) What outcomes are they achieving? and (3) What practices distinguish service automation outcomes? To answer these questions, we conducted two surveys of professionals attending the International Association of Outsourcing Professionals world summits in 2015 and 2016 and conducted interviews with 48 people, including service automation adopters, software providers, and management consultants across the major business sectors.
This article focuses on what we call robotic process automation — software tools and platforms that can automate rules-based processes that involve structured data and deterministic outcomes.
The Service Automation Landscape
The plethora of software tools and terms to describe software designed to automate services can be very confusing. To help make sense of the service automation landscape, we suggest avoiding the jargon and instead focusing on the service characteristics that the tools are designed to help automate. We consider two broad classes of service automation tools: robotic process automation and cognitive automation. Each class of tools is designed to deal with specific types of data and processes.
Previously, Xchanging’s human operators managed the transactions manually. They organized the data, checked it for completeness and accuracy, worked with the insurance brokers to correct errors, extracted other necessary data from online sources, and then created and posted the official sales records. Humans still handle the unstructured parts of the work, however, the structured parts of the process, including finding the errors, retrieving the online data, creating the official sales record, and notifying brokers when the process is complete, is managed by the robotic process automation software.
By studying organizations that were early adopters of software robots, we saw how companies could generate tangible benefits via service innovations. They achieved benefits in three ways: (1) by developing an approach to service automation supported by top management, (2) by initiating effective processes that deliver value to customers and employees, and (3) by building enterprise-wide skills and capabilities. Managers interested in capturing the benefits of service automation need to pursue all three avenues.
Companies that captured the full benefits of service automation took a long-term view.
- Service automation enables a broader business enterprise strategy. Our experience indicated that the businesses with the best outcomes didn’t have a service automation strategy per se; instead, they had strategies that defined the organization’s long-term goals, such as creating a more flexible workforce or expanding services without expanding head count. These strategies were driven by management and enabled, in part, by service automation; it was a key component of the business transformation.
- Strategic service automation requires support from senior management. Organizations where the C-suite supported and promoted service automation tended to achieve more strategic benefit from service automation than those where the support was at the divisional or IT level.
- Service automation can deliver multiple benefits. Organizations can use service automation to generate multiple business benefits, including cost savings, improved customer experience, and, as we saw in the case of Xchanging, higher employee satisfaction.
- Organizations seeking to automate services have multiple sourcing options. A peculiarity of our research sample was that all of the organizations we examined adopted service automation themselves and relied on the help of a service automation tool provider to get started.
- The options include:
- Insourcing: buying service automation software licenses directly from a service automation provider;
- Insourcing and consulting: buying licenses directly from a service automation provider and engaging a consulting firm for services and configuration;
- Outsourcing with a traditional business-process outsourcing (BPO) provider: buying service automation as part of a suite of integrated services delivered by a traditional BPO provider;
- Outsourcing with a new provider: buying service automation from a new outsourcing provider that specializes in service automation; and
- Cloud sourcing: buying service automation as a cloud service.
Initiating Effective Automation Processes
Once executives have developed their strategies, they must enable execution. They need to have committed middle managers who can help deliver the service automation vision. To ensure that the best processes to automate are identified, it’s also important that business operations, rather than the IT department, leads the service automation initiative.
- Identify sponsors, program champions, and program managers. A successful robotic process automation project requires multiple levels of management support.
- Allow business operations to take the lead. People preparing to embark on service automation projects often ask, “Where should service automation originate — in business operations, IT, or outsourcing provider companies?” The companies we studied initiated their service automation projects in business operations.
- Pinpoint what you’re trying to achieve and how it will be perceived by customers and/or employees. Many new technologies overpromise and underdeliver. Before you embark on a service automation project, make sure stakeholders such as customers and employees are attracted to the supposed benefits.
- Involve IT early. The IT department can be an important contributor to the success of an automation program.
- Recognize that many employees are wary about the impacts of automation.
Building Mature Service Automation Capabilities
For many companies in our study, the goal was to build an enterprise-wide automation capability. Accomplishing this requires having a centralized command center that serves as a shared organizational resource. It requires organizations to rethink talent development and develop mechanisms for constant learning.
- Establish a command center. A centralized command center helps business units across the organization identify automation opportunities, prioritize projects, build the solutions, and monitor the software robots once they take over tasks. A command center also establishes standards and best practices and tracks the business performance of service automation.
- Rethink the talent development and skills needed for an enterprise automation capability. As organizations build automation capabilities, they need to rethink the skill sets needed to perform business services; different service automation roles require different skill sets. In the robotic process automation implementations we studied, companies added new roles, such as developers to build automation solutions and robotic process automation controllers to schedule, run, and monitor the software robots.
Beyond considering the skills of the command center staff, it’s also important to understand the capabilities of the retained human workforce. If robots are performing all of the repetitive and structured tasks, the humans will need to have more creativity, problem-solving skills, judgment, and emotional intelligence to tackle the unpredictable requirements of unstructured tasks.
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Company leaders, consider the following questions: How many surprises have you dealt with this week? How many customer relationships have had to be rescued or late orders escalated? How many apologies delivered, numbers explained, or presentations redone?
On closer inspection, the vast majority of fires are preventable. They are essentially “rework” — the added effort and cost required because something was not done right the first time. Unfortunately, firms can get stuck in a vicious cycle of rework, shortcuts, and more rework. The Juran Institute estimated in 2010 that 15 to 20 percent of revenues for manufacturing companies went to rework; for service businesses, it estimated 30 to 35 percent.
How did we get to this point, where firefighting is standard operating procedure? And how do we get out? Thirty years ago, the godfather of quality, W. Edwards Deming, addressed a similar situation with his book, Out of the Crisis (MIT, 1982). Although his work is generally applied to manufacturing or routine services, many of Deming’s “14 points for management” can be adapted to help managers in knowledge-driven, professional businesses to dig their teams out of constant crisis. Here are just a few:
- “Create constancy of purpose.” Without a sense of the bigger picture — what you are trying to accomplish and why it matters — people naturally default to fixing problems.
- “Cease dependence on inspection to achieve quality.” Deming’s approach to processes focused on building quality in from the start — reducing reliance on inspection and even individual performance reviews. Even for highly professional work, developing a few simple, repeatable processes for doing things right the first time can drastically increase your quality output.
- “Institute leadership.” Once your team knows the goal and invests in repeatable processes, the next challenge is to avoid management “tampering.”
- “Drive out fear.” Deming highlighted the reactive behavior caused by a culture of fear. People generate fewer creative solutions and are more likely to gravitate to the familiar, cut corners, or hide data. To help your organization sustain focus and build for the long term, Deming advised, “The leader, instead of being a judge, will be a colleague, counseling and leading his people on a day-to-day basis, learning from them and with them.”
Yes, some fires are urgent. But if you can take the time to provide clear direction; design simple, empowering processes; pause to get data before initiating change; and learn from teams who deliver without heroics, you will find your employees feel even more motivated and engaged.
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Miroslav Azis hosts his weekly show, Public Services, on intranet-based IBM Radio. Broadcasting from IBM's offices in Austin, Azis discusses a range of "complex, heady topics" that often revolve around the deeper questions many technologists and designers think about. What the show creates, he asserts, is a way to feel more a part of the more than 370,000 -person global IBM juggernaut. "This has really flattened the organizational structure," Azis says. IBM Radio creates a space for many people—from designers to executives—to take part, all on their own time. "You meet people in other organization silos," he says.
IBM Radio is a live-streamed intranet community station cofounded by Azis and a few other company designers in Austin. Over the last year, the station has blossomed, and now anyone else in the company can either listen in or record their own show. Those who take part consider it a community hub for the company, and IBMers around the world tune in every day.
IBM Radio runs nonstop from 9 a.m. Central until usually around 6 p.m. And it’s no longer merely design-centric. Employees from around the world contribute their own shows that include call-ins about career advice, a show that features weekly guests who talk about what’s going on at the company, and even shows where upper-level executives just tell interesting stories. The tie that binds is the internal workings of IBM. Azis says proudly that the radio station is meant for "open discussions about what we want to talk about."
The station tracks unique listeners—the number of individuals listening in—and found that it reaches between 5,000 and 6,000 people daily, according to Azis. The studio space in Austin is "a safe space for people to hang out, have fun, and talk with each other," Azis says. "This whole thing is about the community of people," he adds.
"We want to be able to talk product strategy, talk road maps," Azis maintains. The shows need to reflect the concert of people and roles at the company, he says, but as long as it stays behind the IBM firewalls and allows anyone to take part, the project persists. In the end, Azis says, "this is for IBMers by IBMers."
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