Evolving automation to spur business services for enterprise growth and innovation

Enterprise expectations from business services across third-party business process outsourcing (BPO) and managed services, internal shared services, and global business services (GBS) are evolving rapidly. Cost savings and efficiency are important but no longer sufficient. But there is also a great hurry to find new sources of value and drive enterprise growth.

As we enter 2023, enterprises face multiple macroeconomic headwinds: bank failures, inflation, layoffs, supply chain disruptions, the war in Europe, and the fear of recession. We expect strong demand for business services, given its inherent value proposition around cost savings and efficiency.

Business services of the future should align with the enterprise growth agenda; not just better, faster and cheaper operations

Our latest research of 500 Global 2000 enterprises also reveals that more than 80% of enterprises are looking at replacing or renegotiating their existing third-party BPM services. They are searching for fresh ideas and solutions to drive business growth and support enterprise innovation beyond cost reduction and productivity improvements.

Supporting innovation, driving business outcomes, and generating quality data are high on the minds of enterprise clients. Future business services should align with enterprise growth and innovation agendas, not just better, faster, and cheaper operations. While about 80% of business services initiatives in Exhibit 1 are at Stage 1 or 2 today, nearly a third of the enterprises expect their BPM model to shift toward Stage 3, business services for growth and innovation, in the next two years.

Exhibit 1: The evolution of business services: Cost, outcomes, and growth

Sample: 602 executives across Global 2000 enterprises
Source: HFS Research, 2023

We’ve said this before: the role of automation in business services must evolve beyond RPA

Ten years ago, we introduced robotic process automation (RPA) to the industry in our blog post, Greetings from Robotistan. Enterprises were beginning to incorporate RPA-led automation into business services solutions (Stage 1) for task-level automation to drive further productivity improvements and cost reduction. RPA is a great tool. It will continue to create some value by itself, but its value potential increases exponentially when combined with other tools.

Today, nearly 65% of automation initiatives incorporated in business services (Stage 2) incorporate multiple automation technologies (RPA, APIs, ML, process mining, cognitive assistants) to drive more end-to-end business process automation, business outcomes, and better stakeholder experiences (See Exhibit 2).

However, our research reveals that nearly 90% of these enterprises are still trying to extract better value from their existing investments in automation, and only 6 in 10 automation initiatives are meeting client expectations. The primary reason is that these automation technologies continue to be piecemeal. In addition, lack of organizational clarity, poor data quality, risk and compliance issues, uncertain business cases, and scaling up inhibit clients from realizing their automation dreams.

Automation will need to become an enterprise-wide discipline with more integrated solutions combining automation, analytics, and AI. To drive enterprise growth and innovation, business Services (Stage 3) will need to ensure it has the talent, technology infrastructure, automation, data, and AI to drive enterprise success with minimal manual interventions that impede progress and speed.

Exhibit 2: The role of automation in the evolution of business services

Sample: 602 executives across Global 2000 enterprises
Source: HFS Research, 2023

Workato emerges as an exciting automation stack to enable Stage 3 business services for enterprise growth and innovation

What excites us about Workato is that it is inherently designed to connect technologies, processes, and data through a simple drag-and-drop user interface (See Exhibit 3). It promises “One Automation Platform” for different technologies and applications to improve time-to-market. The cloud-native play without any hefty maintenance or upfront infrastructure cost reduces the cost of operations, and the OPEX-based pricing aligns well with emerging BPM pricing models. The focus on built-in APIs creates reliable automation without bot fragility, and it offers powerful dashboards to correlate with business outcomes directly.

Exhibit 3: Workato—the new enterprise automation stack connecting technologies, processes, and data

Source: Workato, 2023

Case in point: Xerox’s journey with Workato

In a recent conversation, Xerox’s Shivani Agarwal, Vice President—AI and Intelligent Automation, outlined the company’s automation journey and its partnership with Workato.

Xerox uses Workato in its commercial offering to automate customer processes. Xerox’s customers leverage several different ERPs, for which Workato has ready-to-use connectors that enable Xerox to avoid building custom APIs or connections.

Workato offers a library of prebuilt connectors and an easy way to build recipes. Xerox can use these to transform the data extracted from a document or received from an external source, like a customer portal or an incident ticket, to meet the requirements of another business application and automate the transaction using the back-end connectors.

Workato allows Xerox to speed up the automation by not working at a transactional level on the UI interface; rather, an API call instantly pulls the data into the business application, allowing Xerox to do business at the speed of software.

API-based automation also improves overall governance and bot maintenance. Whether it is Oracle or SAP, everybody does quarterly upgrades to their platforms, and those quarterly upgrades have some impact on the user interface. It may impact one out of a hundred bots that Xerox has running on that application, but they must test all hundred every quarter.

Shivani realizes that if Xerox must reach a state of “autonomous processes,” it’s not going to be one technology versus the other. Stitching these different technologies together is where Workato comes into the picture for Xerox to perform the last-mile activity pushing the extracted, validated data into the business applications or ERPs.

Making our automations more robust and taking away the brittle nature of the UI-based automations wherever we can is what led us to working with Workato.

– Shivani Agarwal, Vice President—AI and Intelligent Automation, Xerox

The Bottom Line: Business services need to evolve from outsourcing mundane transactional processes to orchestrating people, processes, technology, data, and change management capabilities.

Tools like Workato can enable this evolution, but technology alone will not be the answer. The broader narrative for business process management also needs to change to focus on enterprise growth and innovation in addition to cost reduction and efficiency.