UiPath spoke with Shantanu Ghosh, the Genpact Senior Vice President responsible for all horizontal service lines, in particular: Finance & Accounting; Sourcing & Procurement and Human Resources. A member of the Genpact Leadership Council, he also leads the company’s Consulting & Risk Advisory Services.
Prior to joining Genpact in 2005, Mr. Ghosh was GE India’s CFO with responsibility for all GE India operations. Over the past eleven years Mr. Ghosh has positioned Genpact as a recognized industry leader in F&A services.
In August, Mr. Ghosh published “Robotic Process Automation - Changing the Finance Landscape” at CFO.com. In that article he addressed several topics discussed in this interview, including: the evolution of the CFO role to include operational competitiveness; the value RPA brings to that objective; also, the why and how this automation technology will influence BPO solutions.
UiPath: In your CFO article, you wrote about the CFO role and its evolution to include operational competitiveness. In your opinion, how mainstream has this new CFO role become? For example, would you advise the RPA industry to consider CFOs as real forces for operational changes?
Shantanu Ghosh: Absolutely. I believe most CFOs have taken up significant roles in driving operational effectiveness and competitiveness.
If companies do not have a COO, it’s almost inevitable that the CFO will be in charge of those areas. Even in companies which have a COO, my observation is that it’s increasingly a joint collaboration - as opposed to the COO being responsible for driving operational competitiveness and the CFO taking a back seat.
Obviously there are differences across industries. In some financial services industries, you might find the COO still takes a much bigger role. But given the financial turmoil those industries are experiencing, it’s the CFO who sets the targets and is a very keen and interested partner. If you look at the rest of the industries, I think operational competitiveness is now squarely with the CFO.
UiPath: In the context of that answer, do you believe RPA providers should perceive and treat CFOs as likely candidates for RPA champions and implementation partners?
Shantanu Ghosh: Certainly.
UiPath: Some reading this interview may be surprised at your answer, thinking a champion of process change must come up through the ranks and have acquired knowledge of how processes generally work - or don’t work.
Do you find CFOs face any disadvantages as an RPA champion because they haven’t come up through the operational side of the business?
Shantanu Ghosh: No, because you’ll find the bulk of CFOs in large companies actually have come up through functional operational roles to their current position.
They would have been part of a management program and performed functional roles across business, production and sales units; profit centers and geographies before becoming CFO. That’s been the traditional route for a CFO, one that gives them a deep understanding of operational dynamics and requirements.
Today there’s a trend in some large corporations to have CFOs with a slightly different DNA. So they’ve brought in investment bankers and consultants; people with a different point of view for strategy and value creation - in order for CFOs to drive disruptive change in the business models.
Obviously the operational experience for these people, in the way we’re talking about it, is low. However, the very reason these people are CFOs is to drive significant, disruptive change. And therefore, they’re going to leverage digital in its entirety - so RPA should be a part of those changes.
UiPath: Two years ago RPA was widely considered a limited, swivel-chair automation solution. Now it’s regarded much more as a disruptive and transformational technology. From where you sit, how would you characterize the when & why of this shift in perception?
Shantanu Ghosh: First, I have to challenge the question to an extent, because I’m not sure there is one uniform and standard understanding of RPA within the industry and across different groups.
I think there is still a large group of people who consider RPA to be entry-level digitization - by which they mean swivel-chair automation.
There is another group of people who think that RPA by itself means nothing. For them it’s RPA plus machine learning and everything else that’s part of a large digital change.
Then there are people everywhere across the breadth of that continuum and in the middle of that continuum. In fact, one of the challenges we face when we communicate our solution to customers is to define and differentiate it in terms of that continuum. It’s always an involved discussion and there is an amount of time that has to be spent to get everyone on board with the same understanding.
Our perspective is that the world is not going to move cleanly from one end of the spectrum to the other. Many different points of the spectrum will continue to be relevant and necessary for optimal solutions. So it’s important for us, along with the customer, to recognize that fact and create a solution which is value-added and highest ROI for them.
UiPath: Mindful of your observation that some people primarily view RPA in association with other technologies, to what extent do you think innovations in the RPA product itself has influenced perceptions?
Shantanu Ghosh: Well, the first point is customers don’t wake up in the morning thinking about technology terms, just as we don’t wake up in the morning and think of technology. In our personal lives we simply start using our smartphones or tablets to do more and more interesting things.
The customer’s core thought process is engaged in thinking about various value chains and the potential to digitally transform the performance and outcomes of activities within them. So I think the job of people like you and me is to bring them a mixture of the many different technology possibilities which fit their purpose and are suited to solve their challenges.
In fact, we recently had a conversation with the CEO of a very large company. During our talk we showed him an on-demand, automated reporting pack which combined inside and outside data. We created that automatic pack by mashing up various analytical technologies, natural language generation, natural language processing - plus visualization.
The CEO wasn’t interested because we’d mashed together four different technologies. Instead, the CEO saw what he lacked; quick, daily access to aggregated data from different sources, plus qualitative insights capable of changing behavior and decision-making.
In my view, this is how technology expectation and demand is experienced; not by hearing, “I want to see cognitive, and also plan for machine learning.” For most customers that approach isn’t relevant.
UiPath: Using the Genpact Global Business Services framework as an example, how do you anticipate RPA will influence the way such services are delivered in the future?
Shantanu Ghosh: RPA will certainly influence how and where services will be delivered in the future. Think of the business evolution of our industry - it started with a 100% resource-centric thinking and business model. Right?
Where we’re trying to go now is from that 100% resource-centric thinking and model to a solution-centric model. This doesn’t mean there’s no need for resources, it doesn’t mean global leverage of delivery is going to become 100% redundant.
What it does mean is the unidimensional aspect of resource-centrism is no longer valid from our company’s strategic growth perspective; and as you move up the continuum towards the solution-centric model, many different elements come in play.
One element we see happening is the exploitation of digital advances. Another is the exploitation of our intellectual property and domain expertise in a way that takes it beyond just running a process. A third is a shift away from making a specific part of a customer’s operations more efficient to the concept of providing them with solutions for business transformation. All those elements are present and it’s a fundamental shift in the way we think about ourselves.
UiPath: There’s been quite a bit written on how robotic process automation is a challenge to the BPO industry. It certainly seems that Genpact views this technology as a business opportunity.
Shantanu Ghosh: That’s true. We believe it’s one of the many tools contributing to the continuum of change from a resource-centric model to a solution-centric model. On the other hand, it’s absolutely the case that companies whose philosophy and outlook gets stuck on the resource-centric end of the continuum will face real challenges.
UiPath: At Genpact you’ve built the horizontal service lines into industry leaders. From that perspective of achievement, what challenges do you believe are often underestimated - or perhaps not even accounted for - by RPA customers and their service providers?
Shantanu Ghosh: That’s an interesting question. The challenge we worked hard to overcome was not to think of value propositions in unidimensional terms - because the problem statement for most customers is not just becoming more transactionally productive.
The bigger problem statement is this: how do you change the way a value stream runs today, and change it in a manner so it’s more efficient; less costly; faster; more agile; more adaptable to change and creates platforms for the business dynamic happening today across almost every industry.
If you keep that problem statement in mind and think about solutions, it becomes apparent those solutions will have different dimensions which must be simultaneously engaged.
Whether it’s an operating model dimension; a process redefinition or process re-engineering dimension; a technology dimension or a chain management dimension- all of them must be simultaneously engaged and coordinated in the solution.
A key challenge occurs whenever a solution tries to engage just one dimension without acknowledging and having a plan for the other dimensions. This typically leads to underwhelming results and, in many cases, a great deal of frustration.
Addressing RPA specifically, our point of view and our experience - which we’ve shared with multiple customers - is that there are many types of jobs where an individual does three activities: some very basic transactional work; a little bit of coordination and exception management work; and there’s also some complex decision-making and collaboration work.
Depending on the job, a person’s ratio for these three types of job activities could be 80/10/10, 50-30-20 - or whatever the numbers happen to be.
If you say, “Okay, I’m going to independently address each job with RPA”, the solution typically ends up automating only a percentage of each job; creates more handoffs and doesn’t achieve the savings goal.
The prerequisite for reaching real RPA savings is an operating model that creates pools of people and allows the different work activities to be decoupled: for example, transactions from exception-handling; analytics from complex problem-solving and both from decision-making.
However, the operating model can’t just be about pure centralization, performance and efficiency also requires job redefinitions and centers of excellence. When this is in place, and you add RPA to the model, you start seeing dramatic benefits - not just in cost but also in value chain transformation.
Remember - the key challenge is understanding that effective solutions have multiple dimensions - all of which must be thought through and engaged in such a way that your solution achieves the savings you seek. Otherwise you’ll struggle to reconcile expectations of robotizing 60-70% of all jobs with a much lower outcome.
UiPath: In my experience it’s rare to find customers who have accurate process documentation along with role descriptions. It makes me wonder - how do you get a customer to view what you just described as achievable? How do you put together a roadmap that shows how this change is going to take place in their companies?
Shantanu Ghosh: This question hits the core of what we believe our business is and why a solution-centric model brings value - as opposed to the view that says, “What’s your relevance when we can just use robots to solve problems.”
Our belief is there’s a need for a service that helps customers develop this model - perhaps more accurately described as a journey. And it has a value built upon multiple core skills, extremely strong domain expertise and the ability to experiment, integrate multiple solutions and drive change with confidence and experience derived from many such successful journeys. Otherwise, customers will be in purely “trust me” situations. We believe this role is required and it’s a role we believe to be ours.
UiPath: I’ve heard speculation that your industry may move in the direction of wrapping domain expertise and experience into prepackaged automation solutions for universal processes; accounts payable, for example. What are your thoughts?
Shantanu Ghosh: Our belief is that there’s going to be increasing amounts of very focused “fit for purpose” solutions across the whole range of our services, whether it’s claims processing for insurance, mortgage operations for a bank, accounts payable, order management or the whole nine yards of any value chain. Today there’s already - and will be increasing amounts of - these “fit for purpose” solutions; solutions that focus on one part of the value chain and do it better than anyone else.
I’ll give you a simple example of this from order management: it’s a solution designed to go beyond just automating the input of orders; or the receipt of orders; or the validation of orders; to also making sure that the entire process is touchless - along with management analytics for the rest of the downstream supply chain.
Now you need a mashup of several technologies for this solution, and that’s a trend we absolutely see occurring. We believe combining technologies, rather than using a single platform and single technology approach, allows acceleration of business transformation and enables faster ROI.
UiPath: You say in your article that five years from now we’ll look at some of today’s processes and shake our heads - wondering how we managed to run businesses this way.
My question is this: if a group of CFOs came to your office and looked into your RPA crystal ball, which of today’s F&A processes would they see as having changed the most?
Shantanu Ghosh: Well, if you look at the finance area - it’s a back office function. And a lot of today’s back office work is really error and exception handling as opposed to analysis and forward looking. Depending on the kind of process or area, it can be 90% just error and exception handling. In other cases, it might be 60%, but I would argue that there’s almost nothing in back office work which is less than 30% error and exception handling.
The initial phase of process automation technology was focused on taking out the manual transactional effort. Now the technology focus is on dramatically reducing manual intervention, errors and exception handling. Whatever reduces the total amount of work and cost will create capacity, but the ability to use information better must also be increased, because at the end of the day, back office work must enable better business decision-making.
I think five years from now CFO’s will look at where their finance organizations spend time. And they’ll realize today’s biggest gripe - that they never have enough time to focus on business impact and implications - will have, to a large extent, been resolved. I’ll illustrate this point with a very specific, if somewhat prosaic example.
Within today’s global, multi-country companies a major finance and accounting pain point is intercompany reconciliations settlements. These transactions are necessary because intercompany parties are on two different platforms, or segregated by time zones, timing or events.
However, Blockchain technology enables shared ledgers and automatic settlements, making this pain point archaic. So five years from now CFOs will say, “Why did we ever have intercompany reconciliations when two parts of the same company were trading with each other?”
UiPath: Shantanu, thank you very much for taking the time for this interview. You’ve provided me and the audience with more than just insights into RPA. You’ve also given us a thought provoking perspective on how its automation solution fits into a larger landscape of business, industry and technology transformation.