The Emergence of the Digital Workforce: Humans & AI Working Side-by-Side
KeyBanc Capital Markets® (KBCM) Technology Group gathered some of the most intriguing tech minds in downtown San Francisco for their 2019 Emerging Technology Summit. As part of this 14th annual event, one keynote focused on making tangible a concept that’s abstract to many: AI.
- Moderating was Arvind Ramnani, Director, Equity Research Analyst with KeyBanc Capital Markets Inc. Mr. Ramnani heads the tech-enabled business services and IT services practice.
- The featured speaker was Mihir Shukla, the CEO & Co-Founder of Automation Anywhere. Mr. Shukla is an early visionary of Robotic Process Automation (RPA) who started his company over 15 years ago, in 2003.
The $100 Billion Question
With an addressable market of over $100 billion, robotic process automation (RPA) is going to drive significant changes around how humans work alongside digital workers.
For Mr. Shukla, his vision started about fifteen years ago with a single question: After 20 years of automation software, why was the business world still so manual?
- The entire software industry focused only on 20% of the problem, i.e., only 20% of systems were designed to work within an application programming interface (API).
- For 80% of what businesses do, companies never involved IT. Instead, they bought large buildings, hired thousands of people, and put them in cubicles. That was the “solution.”
To address that 80%, an idea was born to simulate human behavior with a bot that could operate any application, just like people could. It could type, read a screen, apply a set of rules—and with AI, make some intelligent decisions. In theory, except where human judgment is required, all the world's applications could be operated by a bot.
By freeing people of tedious work, the goal is to enable human intellect to achieve greater things; to make work more human. That was the birth of RPA.
All About Automation Anywhere
If a technology doesn't impact the life of an average person, what good is it? Automation Anywhere’s RPA represents the most tangible example of a scalable, predictable revenue model within AI. While the average person might not comprehend AI, most anyone can understand hiring an accounts payable clerk. That is how AI will reach millions of people and makes a difference in everyone's life.
This is part of the reason Automation Anywhere is seeing consumer-like virality within Enterprise Service Providers (ESPs), with renewal rates greater than 98%.
Experiencing triple-digit revenue growth, and with a total of 1,400 employees in twenty-five countries, Automation Anywhere is the market leader in a new category with an enormous total addressable market (TAM). Its 1,600 large-market customers have about 1 million digital workers/bots in production. By 2020 that number will be 3 million.
Mr. Shukla has a rule that his organization will always have 1,500 people and 100 digital workers—a blueprint he recommends for other companies. There is a commitment to help 10% of its workforce with digital at all times and the 100 digital workers primarily are in HR, Finance, Support, Operations.
Changing the Definition of Work Itself
Every technology company changes how people work. But very rarely is one able to change the definition of work itself. A hundred years ago, that was: you dig a hole and you plant something. Today, that is people think about things, then do them―often on a computer―then analyze them.
For the first time, in a single unit there is a true, augmented digital worker that can do, think, and analyze. The following three elements combine to create a Digital Worker/the Digital Workforce:
- Enterprise RPA: Can perform 99% of the tasks people do on a computer.
- IQ Bot: If a judgment call is not involved, AI is incorporated.
- Bot Insight: Analytics are added to predictive capability.
The Bot Store
It's like an app store, except where people download pre-made bots. Using the example of an Accounts Payable clerk, that includes a set of RPA bots with a pre-trained cognitive brain—with equivalent language competency—that is capable of processing all kinds of unstructured data and full analytical proficiencies.
Eventually, all employees, in every part of the world, will have a digital companion working with them, side-by-side.
How did We Get Here?
The past year has seen a more than 300% increase in the number of companies looking for RPA workers. What caused this inflection? Around 2015, three major events came together:
- Two macro events are that the world ran out of its two leading productivity drivers. First, advances in the internet and mobile plateaued. Second, for the world’s 19 leading economies, there will be no more growth from population increases—that rate is almost zero, at 0.1%.
- This coincided with an alignment of new productivity advancements and work preferences. One, bots run 24/7 and are super-fast, representing new productivity drivers. Two, a seismic demographic shift in the workforce occurred: Millennials desire and are able to demand quality of life improvements.
RPA: Unlocking Total Digital Transformation
On an enterprise scale, making one slice of a company digital—whether with big data, IoT, or something else—doesn’t make an entire business digital. However, to transform 200,000 people and bring digital everywhere, Automation Anywhere’s digital workers can be employed across an entire organization.
Who’s Buying Bots?
An interesting learning is how Uber runs many of their automatable functions the same as Honeywell does, etc. While one might think technology companies would be “better” candidates, it turns out RPA is relatively industry-agnostic.
- KeyBank, among others, uses RPA for anti-money laundering. There are lower costs, higher compliance rates, and lower risks. Automation Anywhere’s bots can perform the same as a 100-person audit.
- Mortgage companies are using Automation Anywhere bots to reduce 30-day mortgage processing to 15 days…then ideally 5 days and even next-day. It’s not just about cost savings and error reductions. Imagine what that does for customer experience.
- Fully automated manufacturing plants have RPA bots that tell hardware robots—the ones that move physically—what to do.
- Plus, it’s not just low-wage, manual labor use cases. Hedge funds, which involve “highly paid” work, are using bots for tedious research on where and when to invest. Once an opportunity is identified, a person comes in and uses judgment to finalize the decision.
RPA as a Board-Level Topic
Mr. Ramnani indicated that his KeyBanc colleague Don Hooker covers RCM Technologies, Inc., a premier provider of business and technology solutions, as well as specialty health care services. On a recent earnings call, RCM devoted more than 5 minutes to its use of RPA to drive efficiency, improve margins, and increase earnings per share.
Mr. Shukla noted that Automation Anywhere has revenue cycle management and data solutions built around its RPA platform. While he thinks there may be more announcements similar to RCM’s—perhaps even where entire business models will be built around digital labor—the political climate will dictate how much of that is reported.
What’s the Best Way to Bring in Bots?
Mr. Shukla believes two elements are key:
- If RPA software requires a developer or technical expertise, it will not scale. That's the problem with all other prior automation technologies with software. There are simply not that many developers on the planet. Unless the business user, IT, and the developer―all three―can use a platform, it will fail to change the world. In this respect, Mr. Shukla emphasized that all three top vendors are not the same.
- The second part is, for things to change, a program has to be supported from both the top-down and bottom-up. If RPA is brought in as a cost cutting idea, that spreads fear. Then, it becomes almost impossible to manage. Instead, how do you lead and bring people along with you?
Both are essential. All people must be able to easily use the technology and also feel included in the process. That’s the only way to see the whole world change.
Secrets to Success
- Mr. Shukla’s mindset was always to build a $20-$50 billion company.
- There’s only one way to get to that number: customer success.
- This involves tremendous investments in worldwide support and customer success teams.
- Automation Anywhere’s Net Promoter Score (NPS) is 67, making it one of the highest-rated customer success companies in the world.
- This year, the goal is to reach an NPS of 73.
- Why 73? Because Apple is at 72.
To learn more, connect with Arvind Ramnani, Senior Analyst: Workforce Software & Services email@example.com.