HFS’ “RPA is dead” prophecy comes true as UiPath ends its “bot for every user” narrative

In 2019, HFS Research presented a compelling and infamous argument about why robotic process automation (RPA) would eventually become obsolete and be replaced by more comprehensive automation platforms (RPA is dead. Long live Integrated Automation Platforms). UiPath and others hyped the RPA value proposition far beyond its capabilities. With its eye on multi-billion IPOs, HFS’ stark realism was not a popular revelation. In fact, UiPath’s market cap was once as high as $37 billion post its 2021 IPO before settling in at about $10 billion in today’s market.

The rationale was that as automation became a core discipline of business operations, piecemeal automation through RPA was bound to lose significance, primarily as it was often employed as a Band-Aid solution, holding together processes and tasks where there was no integration or API option. Moreover, many process chains incorporating elements of RPA become brittle and cannot be scaled effectively.

Fast forward to 2023, and we are witnessing the leading RPA players, such as UiPath and Automation Anywhere, following suit and attempting to shed the RPA label. UiPath underwent a brand repositioning exercise in March, transitioning from an RPA tool provider to a “business automation platform” firm. UiPath promotes a more comprehensive vision statement, an advanced automation platform, fresh product and partner initiatives, and a revamped go-to-market strategy under the new rebranding effort.

UiPath’s new vision promotes automation across all knowledge work for accelerated enterprise growth

Today’s enterprise customers seek a more comprehensive solution that can deliver measurable business outcomes. New operational requirements include establishing a digital workforce, utilizing digitization to achieve exponential operational efficiency, and embracing an enterprise-wide automation mindset. Furthermore, automation has emerged as a crucial tool for innovating and reimagining processes.

In response to this paradigm shift, UiPath has abandoned its previous “robot for every employee” vision statement and replaced it with a more comprehensive one, “To enable automation across all knowledge work to accelerate human achievement.” While we agree with this new vision, the critical question is whether UiPath’s automation platform is sophisticated enough to support this vision. The answer is partially affirmative.

The UiPath platform is still a work-in-progress

As Exhibit 1 showcases, UiPath’s automation platform integrates many mining methodologies, automation proficiencies, and operational components. This integration enables the platform’s implementation across enterprise resource planning (ERP) and customer relationship management (CRM) systems, with the promise of achieving heightened levels of enterprise automation.

Exhibit 1: UiPath’s platform professes an integrated approach to enterprise automation

Source: UiPath, 2023

UiPath recently announced developments, including a ChatGPT functionality for intelligent document processing (IDP), a partnership with Amelia to incorporate conversational AI capabilities, a communication mining service similar to Google analytics for clients, and prebuilt connectors in collaboration with Open AI and Microsoft Azure OpenAI service, enabling the infusion of GPT into automation workflows.

Additionally, UiPath established prebuilt connectors with AWS Sagemaker, Microsoft, and Google AI services to integrate AI capabilities into automation workflows. UiPath also offered a preview launch of Clipboard AI, a no-code AI computer vision capability, and it is developing a native AI co-pilot capability built on its existing foundation model for large language models (LLMs).

UiPath’s developments and plans demonstrate alignment with the imperatives of the Generative Enterprise™, a term recently coined by Phil Fersht, CEO and Chief Analyst at HFS Research. The Generative Enterprise articulates the pursuit of AI technologies based on LLMs and ChatGPT to deliver huge business benefits to organizations by continuously generating new ideas, redefining how work gets done, and disrupting business models steeped in decades of antiquated processes and technology.

These advantages encompass the perpetual generation of innovative ideas, fundamental reconfiguration of work processes, and revolutionary overhaul of business models steeped in archaic methodologies and outdated technologies.

UiPath’s go-to-market strategy aligns with market dynamics

UiPath has undertaken a slew of marketing measures to support the rebranding:

• The NorthStar program: UiPath devised a proprietary NorthStar framework focusing on value-based sales. This approach involves committing to providing quantified value to clients by aligning with their financial metrics, employee experience, and customer experience markers.
• Success stories highlighting and replicating groundbreaking work with top-tier clients: UiPath wants to showcase client success stories that have fully utilized the UiPath automation platform. These success stories go beyond mere RPA implementations and use the full array of capabilities of the automation platform. UiPath aims to present these triumphs to its extensive clientele of 11,000, many of whom have been limited to traditional RPA work.
• Targeted direct sales model: UiPath reduced the average number of clients assigned to each sales or account manager and discontinued direct sales efforts in the small and medium business (SMB) market.
• Tailored sales pitches for C-level executives and specific industries: UiPath crafted sales pitches to communicate the value proposition to various C-level executives more effectively. It has also developed distinct value propositions and selling points tailored to industry segments such as banking, financial services, insurance (BFSI); supply chain; and the public sector.
• Flexible pricing options aligned with market demands: UiPath introduced a flexible pricing structure that includes consumption-based and as-a-service offerings. Furthermore, UiPath drives greater adoption of its automation platform by providing free citizen developer licenses.

The Bottom Line: UiPath reached the $1 billion revenue mark riding the RPA wave, but that is now passé. To propel its next growth phase, UiPath must center its narrative around the demands of the Generative Enterprise.

UiPath must promptly undertake two crucial measures to advance. First, it must persist in constructing an ecosystem of strategic partners capable of unlocking fresh reservoirs of value for its enterprise clientele. Encouragingly, UiPath has undertaken some recent initiatives aligning with this objective, such as its partnership with Amelia. Second, UiPath must diligently devise use cases tailored to specific industries and domains underpinned by the concept of the Generative Enterprise. While it is likely UiPath already engages in these endeavors, it should accelerate them to meet urgent and rising demand.