Impact of RPA on outsourcing – Interview with WGroup Founder Harry Wallaesa

Frank Casale, IRPA Founder, recently met with Harry Wallaesa, President & CEO of the advisory group WGroup over lunch in NYC. The setting was upscale downtown. The commentary was candid and for many, a wakeup call as to who in the ecosystem is about to get disrupted.  Maybe you.

Frank’s questions for Harry were as follows:

FC: How real is the impact of RPA and autonomics on traditional outsourcing?

HW: It’s an evolution of the traditional outsourcing model. At WGroup, we don’t believe that all outsourcing will be completely replaced by RPA. In the same way that ERP didn’t eliminate the accounting profession, there will always be a need to leverage resources external to the enterprise. RPA and autonomics will, however, replace much of the commodity, repetitive, and highly transactional work that gets outsourced today with software. It won’t replace complex skills like engineering, but it can make engineers more effective. We see RPA as a new option for service delivery. Today, you can do things with your own people, you can do them with an outsourcer’s people, or you can do them with software. Quickly, we will see that every outsourcing deal has some component of labor and some component of RPA, and that journey will be focused on getting the service delivery model right, and aligning the best-fit delivery approach to the appropriate type of work.

FC: What benefits do find most appealing?

HW: Much of the discussion around RPA’s benefits centers on the cost savings that RPA can deliver. And make no mistake about it – RPA can deliver significant cost savings through replacing highly repetitive tasks and commodity labor with software. To WGroup, the most exciting benefit that we see is on the revenue and differentiation side. We were at an event recently where we discussed that the value from RPA isn’t in automating the response to thousands of help desk tickets – it’s in preventing thousands of poor customer experiences.  RPA has the possibility to change the way a company interacts with its customers as it can make those interactions exponentially faster, more efficient, more accurate, more personalized, and more scalable. When deployed in strategic ways, RPA enables a company to interact with its customers in ways that weren’t feasible in the past. For example, it enables the business to more proactively communicate with customers and to engage with every customer in a highly unique way that leverages all of the data that your business knows about the customer. RPA can enable the packaging of your best sales rep, your best customer care rep, and your best promotion into every customer interaction. That’s a benefit that will move the needle for a company’s top line.

FC: How are the service providers doing in their attempts to keep up?

HW: Actually, better than many people think considering how disruptive RPA has been to their business models. Twelve months ago, RPA was not embraced by the service provider community and seen as a threat to their core labor arbitrage business. Today, nearly every service provider either has their own RPA solution or has partnerships with one of the leading autonomics companies such as Arago. WGroup believes that service providers who take the agnostic and integrator approach to automation will deliver the most value to clients and will be seen as more strategic partners. RPA technology is moving very fast. The amount of Private Equity investment in automation firms is at an all-time high, and growing. A service provider cannot be married to their own RPA solution if something else would be a better fit for the client. Newer and standalone solutions in the market will continue to emerge, and many may be able to deliver value to customers in unique ways that hasn’t been done before. Clients want to avoid lock-in and instead desire to maintain a flexible and open relationship with their service provider with respect to automation.

FC: How has this impacted the role of the advisor?

HW: Significantly, and in three different ways. First, it has made the role of an advisor such as WGroup, who understands service delivery transformation, more important than ever. We have seen advisory work move away from just outsourcing advisory to a broader role in advising on service delivery transformation. Today, clients need help evaluating what work really needs to get done, who is best to do it, and where it should get done. Clients need an advisor that can help sort through a multitude of service delivery models – insourced, outsourced managed services, contract staff augmentation, in the cloud, or automated. And most often, the best approach is a combination of those options. Secondly, the opportunity for value from RPA varies by company. A cookie cutter approach for a business case doesn’t always work. An advisor specialized in RPA will guide a client through a review of the appropriate business process candidates for RPA, and will help define a business case that sets realistic savings and improvement targets through automation. And thirdly, as with any emerging technology, RPA is in the height of “hype” and some service and technology vendors have become quite good at marketing aspirational capabilities as actual capabilities. An experienced advisor will provide a factual and practical perspective on what can be done, and what is just vapor. For WGroup, the automation wave is exciting – we’re up to speed on the capabilities of all RPA vendors, and we’re advising clients daily about what’s on the leading edge of what the industry can offer. On a personal level, I’m enjoying being in the technology industry now more than ever before.

FC: In this year’s Automation Innovation conference a key theme is speed. We refer to the “..race to cognitive..” Why is speed becoming so critical when it comes to implementing intelligent automation and digital transformation in general?

HW: Start with the reason why you would implement intelligent automation or digital technologies. It would be to either increase revenue or reduce cost – or said another way, to drive competitive advantage. The reason that speed is so important is that the technology is becoming so standardized, so commoditized, and so widely available that the technology itself doesn’t provide competitive advantage to any individual company for very long. And even though we’re talking about emerging technologies this is still true.  It’s simply not good enough to just put these advanced technologies into operation. If the goal is to make a measurable impact on business performance, you either need to either be first to implement it, the quickest to adapt it, or the fastest at scaling it – or you’re just treading water as you keep pace with your competition. Peter Drucker once argued that speed should be a component of cost accounting, as it directly impacts the business outcomes and should weigh heavily into management’s decision making. The same is true here – speed must be a critical component of an intelligent automation strategy.  Competitive advantage from these technologies alone is perishable, but an ability to deploy new technology at speed and scale is a sustainable advantage.