UiPath recently sat down with David Poole, CEO and Co-Founder of Symphony Ventures; a company focused on bringing positive change to enterprises by leveraging emerging process automation toolsets.
Our discussion reveals what the man who’s built global teams and run multi-billion-dollar outsourcing & services firms thinks about: the RPA opportunity size; when and how the technology evolved from swivel-chair to enterprise; what BPO models will survive; realistic expectations for AI and more.
UiPath: Could you speak about your background, how it led to you founding Symphony Ventures and how it influenced the services Symphony Ventures offers its robotic process automation (RPA) customers?
David Poole: My background and the background of the other founders at Symphony Ventures is from the BPO world. I spent twenty years working in the BPO business; starting at PwC where I was the partner running their European BPO operations; I then moved to Capgemini where we set up their BPO business, first in Europe and then the U.S. That's when I met the other founders because they were all from Capgemini.
We were involved in a lot of the innovation activities, setting up innovation labs and innovation teams, always searching for different technologies and different approaches to make BPO more technology enabled. As I moved on from Capgemini, we went into Serco and then Sutherland – and it was at that point in time when robotic automation was starting to be known and starting to make an impact.
Four years ago, prior to founding Symphony, we had a fantastic opportunity with a client who was looking at RPA as a solution for a business problem.
The client needed to reduce their costs further, but all the work had already been off-shored to very low cost locations. So they didn’t have anywhere else to go.
So we thought, this is a market opportunity to really put RPA to the test. And, the business cases we came back with were phenomenal.
It was at that point we decided RPA was an opportunity that was going to change the market, disrupt BPO significantly, and be a great opportunity for shared services in large corporations.
So we set up Symphony Ventures as a consulting and managed services business to service that market, knowing full well that there would be a number of emerging software providers which would be extremely capable in this space, including UiPath.
We took the decision to launch a services business supporting those vendors, but also helping large enterprises understand how they can apply the technology and get the best value out of RPA. That was the mission of Symphony Ventures from the beginning.
UiPath: How would you characterize why and how the RPA industry has changed from a swivel-chair niche to a labor arbitrage disruptor?
David Poole: Well, the swivel chair analogy still stands - there are a lot of clients who have work done by humans which is essentially typing information into multiple systems – but, the ability to really manage complex rule based processes goes way beyond the swivel chair.
I think that an understanding of RPA’s potential is only just emerging. Month by month, we're seeing clients who are much better educated. It’s partly the work that we've been doing at Symphony Ventures, together with our partners, to help organizations understand the extent of this technology.
The truth of the matter is that firms are realizing RPA is not meant to replace their ERP systems, and it's not trying to transform their overall technology strategy. Instead, RPA is squarely focused on enabling the people in an organization, and making them more efficient at what they do.
It's now considered a real transformational tool, and a very rapid way to make significant process improvements. As such, market awareness has evolved well beyond the initial way of thinking of RPA as a simple swivel chair replacement.
UiPath: As a follow up, do you feel there was any tipping point at the C-level - where suddenly people you had spoken to about the potential of RPA suddenly had a light bulb click on - or was it more of an incremental change of awareness, a seamless flow into, “Yes, this makes sense”?
David Poole: Good question. We’ve seen that early business cases and early implementations were significantly transformational to organizations, and news of this quickly got to the boardroom.
The middle of last year was a turning point, where very senior Chief Operating Officers or very senior shared services or GBS leaders were going to their boards, saying, look there's something really interesting going on here and we want your support to push this throughout the organization.
In addition, the types of projects that we're helping clients with have changed. At the beginning of last year we were educating - talking about what RPA is and how it can be used. By the end of last year, it was about doing proofs of concepts and pilots. Now, those pilots are getting bigger and more significant, to the point where clients are now planning live implementations, setting up centers of excellence and making real technology decisions.
So the maturity of the client base has really advanced, and the projects we're managing for clients are becoming bigger and more significant as a result. There’s been a shift, it's been very rapid, and it's fair to say that this is something that gets discussed at the board level pretty frequently now.
UiPath: To what extent have technology innovations triggered or accompanied this change? Have they influenced your advice to customers on RPA product evaluation and selection?
David Poole: I think the products are clearly developing and evolving in the market as a whole, and UiPath is no exception. In addition, the maturity in the market and the better coverage from commentators on the market has raised awareness quite a lot.
One trend we’re watching is the discussion around AI – ‘cognitive automation’ and ‘intelligent automation’ are the terms most commonly used.
My sense is that these newer capabilities are not stand-alone. These technologies will instead be used as part of a tool kit. For example, the use of a UiPath along with a cognitive tool would be a very powerful combination. There's no one tool that does everything, and that concept is quite fundamental to future-proof solution design.
In fact, a lot of the time we’re advising clients on the ecosystem of technology that they should be using, with RPA being a very significant part of it, but not the only part. RPA is the arms and legs of a process, if you will. Ultimately, we see this market as evolving because the cognitive piece has not caught up with the hype around it at the moment. There are products emerging and it is the combination of these that will be powerful.
UiPath: Shared Service Centers have customarily used BPO service providers as part of their business model. Do you see RPA changing the relationship between them?
David Poole: Yes, I do. The BPO players are the ones, frankly, that face the most disruption to their business model at the hands of RPA, and I think that has driven them to at least appear to be early and active adopters of the technology.
However, the business case for them, frankly, is not that strong, although they like to tell everyone that they will be the leaders in automation, and therefore they will actually grow their revenues and margin. In actual fact, I believe RPA will reduce their revenue and reduce their margins over time unless they do things dramatically differently.
My sense is that shared services organizations, and particularly centralized GBS-type functions, now have another tool in their toolkit allowing them to make decisions as to whether they automate something in-house or push their BPO provider to do it. Then they can make a decision as to whether or not their BPO provider is capable and willing, and whether they get the right sort of business case back from the work that could be automated by the BPO provider. Obviously it’s much harder for a BPO provider if they have to invest and make a margin before returning benefits to their clients.
So I think it's a challenge for the BPOs to adopt RPA technology in a way that makes it attractive to their customers. On the other hand, I think the customers are finding it quite easy, with the right advice, to manage automation projects themselves and to set up those centers of excellence - as a form of in-house competition to the BPO provider.
In fact, we're seeing projects where clients are asking us to evaluate BPO providers' capabilities in this space, so they can make decisions as to whether they should bring something back in-house and run it themselves with automation, or whether they should continue to work with their BPO provider.
The general feedback so far has been that the BPO providers are actually somewhat reluctant and slow to make big advances. That seems to be a bit of a common thread.
UiPath: It would seem remarkable if there wasn’t institutional resistance within BPOs against a technology that changes their business model in such an unfavorable way.
David Poole: I think it depends on the BPO provider. We have several clients that are BPOs. The ones that stand to benefit the most are those that are already very outcome focused.
For example, think about a payroll provider who’s literally charging per pay slip or charging for providing a global payroll service - they're very outcome focused. And actually their clients don't care how they deliver the service. Nobody says: well, you're using a robot to do this pay slip and therefore we think we should pay you less for it. Why? Because the foundation of those sort of deals is not FTE based.
Most of the F&A BPO deals, on the other hand, are actually based on, if not charged directly on, the number of FTEs; so when you start using robots to do bank reconciliations - which is something we've found they're quite capable of - I think BPO clients will start saying: if you're using robots to do bank recs, we want to pay less for that.
This is going to be a real dilemma and challenge for any BPO providers who are not outcome focused.
UiPath: That's a very good point about the future of outcome based pricing. It makes me wonder – will there also be a challenge to the current RPA provider practice of using a licensing revenue model? Could the industry see a move towards a software-as-a-service, or outcome based model instead?
David Poole: Yes, I think we will see changes in this area. We at Symphony Ventures are developing what we call "process-apps", which are essentially an as-a-service model where we’re using RPA around specific business processes combined with AI, analytics and human experts. I think as we start to evolve those models, the cost of the robotic component or the AI components within it will be paid for either on a usage or an outcome basis.
I think one of the biggest challenges for any software company is to work out its charging model, but I honestly believe they will be moving increasingly towards that kind of service usage or outcome basis with service providers like Symphony Ventures providing the added-value process knowledge and capabilities.
It just makes an awful lot of sense: once you’re able to understand the relation between the software required to deliver a service and the outcome of the service, it will make sense to eventually align the charging model with the outcome.
So I'm quite sure we'll see more and more of that over the next year or so.
UiPath: What challenges - and opportunities - for the RPA industry do you believe are currently either underestimated or not perceived by users and providers?
David Poole: The RPA opportunity is immense and we're only scratching the surface at the moment.
But several things I would also say; one is that it's easy to underestimate the complexity of implementing an RPA solution within a large enterprise. And I think we need to be careful that we stop saying that it's easy. It isn't easy. It still needs a systems mindset, it does need professionals who know how to design processes and also how to design solutions using RPA tools.
It's far too easy to underestimate the actual amount of effort. Quite often as a consultancy we get called in to fix the things which have been done wrong previously. So I would say that that's the biggest challenge: it's not easy to implement this stuff but it's very effective when you do it right.
The second challenge is this whole cognitive area. People are desperate for solutions that incorporate learning capabilities or pattern recognition capabilities and so on. Unfortunately, there's a dearth of supply in the market. There aren’t many AI providers that actually have commercial offers in the marketplace and that's going to be very frustrating. So the RPA players that can align with these technologies and help to pull them along will benefit from doing so.
It's a very frustrating time; the RPA tools are there; they're very effective; they're working really well; you've got great capabilities within a UiPath and the new tools around that. The cognitive tools are not at the same level and it will take some time to get there. I think that's just going to be frustrating for the market.
UiPath: My final question is this. When clients look into your RPA crystal ball, what does it show them for 2020?
David Poole: Interesting. As we touched on before, I think that we'll see a lot of, shall we say, as-a-service type solutions built around RPA engines - and we may be talking less about the RPA and more about the services built upon it.
So I do see specific processes being offered, like F&A processes or HR processes or banking processes or health care processes which are powered by RPA engines. But rather than having to necessarily apply a prescribed solution, I think we'll see more and more standardized process offers which will be driven both by the RPA vendor community but also the service providers in that market.
I believe we'll see a very nice menu of capabilities, options, processes, best in class practices, that will all be wrapped up and integrated using RPA as the engine. That would be my prediction within that time frame.
UiPath: This has been a very thought-provoking discussion. Thank you for being so generous with your time.
David Poole: My pleasure. Thank you to UiPath for being a partner on this exciting journey.
David Eddy has fifteen years of global application services experience.