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© 2017 HfS Research, Ltd. The Services Research Company Unveiling the Early Leaders Providing AI Capabilities for the Digital OneOffice An HfS Webcast Production July 7 th 2017 Phil Fersht CEO and Chief Analyst [email protected] Tom Reuner SVP, Intelligent Automation & IT Services [email protected]

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Page 1: Unveiling the Early Leaders Providing AI Capabilities for ......Using predictive analytics and social media and connect with the public. These two approaches are building trust within

© 2017 HfS Research, Ltd. Proprietary │Page 1

The Services Research Company

Unveiling the Early Leaders

Providing AI Capabilities

for the Digital OneOffice

An HfS Webcast Production

July 7th 2017

Phil FershtCEO and Chief [email protected]

Tom ReunerSVP, Intelligent Automation & IT [email protected]

Page 2: Unveiling the Early Leaders Providing AI Capabilities for ......Using predictive analytics and social media and connect with the public. These two approaches are building trust within

© 2017 HfS Research, Ltd. Proprietary │Page 2

Overview:

• Industry analyst, author, speaker, strategist, entrepreneur and blogger

• 20 years’ in the global IT and business process outsourcing and shared services industry spanning analyst and consulting roles

• Coined the As-a-Service Economy in 2014

• Coined The Digital OneOfficeTM in 2017

• Advised and on 100’s of global IT services, BPO and shared services engagements

• Overseas the largest global network of enterprise services and operations professionals

Career Experience:

• Founded HfS Research in 2010, overseeing an unprecedented growth story in the analyst industry

• Practice Lead, Global IT Services & BPO Research, Gartner, Inc

• Global BPO Marketplace Leader, Deloitte Consulting

• Consulting Practice Head, IDC Asia/Pacific

• European IT Markets Practice Lead, IDC Europe

Education:

• BSc. Honors in Business & Technology, Coventry University, UK

• Diplôme Universitaire de Technologie in Business & Technology, University of Grenoble, France

[email protected]

@pfershtWeb: hfsresearch.comBlog: horsesforsources.com

Phil Fersht, CEO and Chief Analyst, HfS Research

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B2B Digital SpendCould reach $2

Trillion in North America in

2020, as high as $7

Trillion Globally

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Investment Banking

Retail Banking Insurance Technology

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Retail Banking Pharmaceutical Government

Digital Renovation: Digital Transformations Create Revenue Streams and Enhance Customer Engagement

Once a stodgy catalog company, Argos has undergone a digital transformation to the 3rd largest online retailer in the UK.

Argos now provides an omni channel experience through linking online, mobile and physical channels. Online and mobile spend now 50% of revenue stream

European Financial Group created online bank Widiba to move from a product centric view to a client centric one.

New front end system allows for multiple languages, high level of personalization and excellent user experience. Widibaattracted 20,000 new 1st customers within 3 months.

GSK’s new Digital Platform was built to deliver a better B2B experience.

GSK has upgraded its direct B2B purchasing system to add multi-device access and new elements that make purchasing vaccines similar to a consumer shopping experience. Results are an approx 3.2% increase in buyers

Using predictive analytics and social media and connect with the public. These two approaches are building trust within the community and preventing large scale crime.

Estimate is timeliness of information reporting by the public has increased 37% since 2015

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The Fundamentals

of a “OneOffice”

Organization

Standardized

Processes

Automated,

Real Time &

Converged

Data

Diverse Global

Workforce

Multiple Avenues

to Source Talent

on-demand

Flat

Structure

Dynamic Management

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The Future of Operations: The Digital OneOfficeTM Organization

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[email protected]@tom_reuner

Overview▪ Tom Reuner is Senior Vice President, Intelligent Automation and IT

Services at HfS. Tom is responsible for driving the HfS research agenda

for Intelligent Automation and IT Services. Automation cuts across the

whole gamut ranging from RPA to Autonomics to Cognitive Computing

and Artificial Intelligence. This includes increasingly the intersections of

unstructured data, Analytics, and Cognitive Automation while mobilizing

the HfS analysts to research Intelligent Automation dynamics across

specific industries and business functions. Furthermore, he is supporting

HfS’ push to disrupt IT Services research by focusing on application

services and testing. A central theme for all his research is the increasing

linkages between technological evolution and evolution in the delivery of

business processes.

Previous Experience▪ Tom’s deep understanding of the dynamics of this market comes from

having held senior positions with Gartner, Ovum and KPMG Consulting

in the UK and with IDC in Germany where his responsibilities ranged

from research and consulting to business development. He has always

been involved in advising clients on the formulation of strategies,

guiding them through methodologies and analytical data and working

with clients to develop impactful and actionable insights. Tom is

frequently quoted in the leading business and national press, appeared

on TV and is a regular presenter at conferences.

Education▪ Tom has a PhD in History from the University of Göttingen in Germany.

Tom Reuner, SVP, HfS Research

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AI is Hyped, Inflationary, Undefined, yet Starting to Become

Pervasive

Page 10: Unveiling the Early Leaders Providing AI Capabilities for ......Using predictive analytics and social media and connect with the public. These two approaches are building trust within

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Just like Intelligent Automation, AI Should Be Seen as

Continuum

AI

NeuralNetworks

Autonomics

VirtualAgent

MachineLearning

ImageRecognition

MachineReasoning Natural

LanguageProcessing

Chatbot

DeepLearning

ComputerVision

SpeechRecognition

KnowledgeRepresen-

tation

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AI Building Blocks (Examples)

Technology: Nuance, Cortana, Alexa

Use cases: voice recognition, conversational services

Technology: Google DeepMind, Tensorflow, Loop AI, Microsoft Cognitive Services

Use cases: integration of data on an industrial scale, pattern recognition without

ontology or knowledge base, analysis of dark or IoT data

Technology: IPcenter, HIRO, ignio, HOLMES

Use cases: password reset in IT help desk, self-healing IT environment

Technology: IBM Watson, Amelia, LivingActor, Accenture myWizard

Use cases: substitute of IT and business agent, virtual data scientist, virtual scrum

master, mortgage broker advisor

Technology: HIRO, ignio, HOLMES

Use cases: discovery in accounting, KYC, batch management

Technology: AntWorks, AlchemyAPI, Clarifai

Use cases: pattern recognition in images, integration of handwriting

NLP

Machine/Deep

Learning

Neural Networks

Virtual Agents

Auto-nomics

Computer Vision

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User Journey from Unstructured Request to Execution

Customerrequests

Virtual AgentStandard

transactionsSelf-service

formsDynamic Case

Flow Mgt.

• Unstructured

forms of

requests

• Different media

• Conversation

• Knowledge

infusion

• Natural

language

processing

• Analytics

• Transactions

that comply

with standard

operating

procedure

• Knowledge

base

• Interactive

forms

• Service

catalogue

• Governance

• Orchestration

of interactions

and workflows

Bots

Chat

Knowledgedatabase

NLP

• Extraction of

data

• Execution of

requests

• Scheduling

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Scope

Definition of "The AI-Powered OneOffice“

The AI-Powered OneOffice is enabled by a broad set of automation and process

technologies and approaches with AI advancing the decoupling of service delivery and labor

arbitrage. Thus, AI is key enabler to move toward notions of unattended, increasingly

touchless automation. However, there is a blurred perception between AI and Cognitive

Computing, with the latter being a sub-set of AI. While we acknowledge that RPA tools are

evolving toward integrating AI capabilities, they are not in scope ion this study.

Against this background, for the purpose of this study, we understand AI as the simulation of

human thought processes across the front, middle and back office of the enterprise, where

the system makes autonomous decisions, using high-level policies, constantly monitoring

and optimizing its performance and automatically adapting itself to changing conditions and

evolving business rules and dynamics.

It involves self-learning systems that use data mining, pattern recognition and natural

language processing to mimic the way the human brain works, without continuous manual

intervention. In this context, AI is helping erode the silos across business functions to drive

real-time predictive capabilities and an engaging digital experience that unifies all the

stakeholders across the organization: the customers, partners and employees.

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Key Issues Advancing Service Delivery and Integrating AI

How do organizations integrate (increasingly unstructured) data on an industrial scale into delivery backbones?

How do you manage those data sets (clean, annotate, structure, pre-process etc.)?

How do you derive meaning and insights from those data sets?

How do you route customer specific data from interaction all the way to execution?

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The Long and Difficult Journey Toward Data-Centric Model

Supervised

Learning

Unsupervised

Learning

Deep

Learning

Insights, Meaning

Data,Input

AppliedLearning

Process,Production

Identify & Acquire Data

Store, Structure, Pre-process Data

Analyze Data via Machine Learning &Similar Approaches

Integrate into Production

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Endgame: Vertically infused data and insights?!

Insights, Data

Vertical Processes

Vertically infusedinsights and data

BPaaS, BPO as-a-stack,Industry platforms.

Machine learning,Neural networks,Enterprise search,Artificial intelligenceAnalytics

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Key Developments Shaping the Build-out of AI

▪ Broadly speaking, AI has a different starting point than RPA; crucially AI has much more depth and scale

▪ Focal point is the integration of data into service delivery on an industrial scale

▪ Early development phase sees organizations pursuing AI solutions with a “bolt-on” approach, applying AI at the edge of the enterprise

▪ As the market matures, AI will disrupt enterprise architectures and enterprise software

▪ Mega-ISV ecosystems evolving strongly: Microsoft, Google, AWS

▪ Even though IBM is struggling to convey strategic parameters, Watson partner ecosystem is starting to take shape

▪ Chatbots are low level and commodity. Virtual Agents routing customer requests all the way to execution

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AI-Powered: Methodology & Scoring (1)

Building on HfS OneOffice Premier League Table and 2016

Intelligent Automation Blueprint

Questions in RFI:

• What is your vision as well as your investments in AI that can enable the Digital

OneOffice and innovate service delivery?

• How are you organized to deliver AI and how are you integrating AI into your

service delivery organization?

• What methods are you deploying to train staff in AI related disciplines (Both IT and

non IT)?

• How do you manage to scale AI deployments?

• What are the main use cases for integrating AI?

• What are your main partnerships in AI (both technology and services firms)?

• What is your strategy in terms of developing proprietary AI solutions versus

partnering with third party apps?

• What are examples of successful deploying AI for clients? Where are you having

most success / challenges – both by industries and processes?

• What do you think will be the impact of AI on governance, testing and talent in the

next couple of years?

• What is your outlook and roadmap on AI for the next two years?

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AI-Powered: Methodology & Scoring (2)

Scoring:

• AI-specific:

• Vision as well as Investments in AI that can Enable the Digital OneOffice and

Innovate Service Delivery (25%)

• OneOffice Fundamentals:

• Fostering genuine Digital Customer, Partner and Employee Engagement (10%)

• Embedding Design Thinking Techniques to achieve Continuous Digital Outcomes

(5%)

• Building a Scalable Digital Underbelly that Automates and Digitizes (25%)

• Achieving an Intelligent Digital Support Function without Hierarchies and Silos

(10%)

• Establishing Intelligent, Cognitive Processes that Promote Predictive Decision

Making (25%)

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© 2017 HfS Research, Ltd. Proprietary │Page 20

Call to Action for All AI Technology Providers

▪ HfS will follow up on this research with a heatmap on innovative technology approaches in AI

▪ Do get in touch in you are interested to work with us on that

▪ We are keen to learn more about innovative approaches and compelling use cases

▪ As with this research the context is service delivery

▪ If interested, drop me a line at: [email protected]

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© 2017 HfS Research, Ltd. Proprietary │Page 21

The Artificial Intelligence OneOffice Premier League

Coming soon – www.hfsresearch.com/research

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© 2017 HfS Research, Ltd. Proprietary │Page 23

HfS Research: The Services Research Company

HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations and IT services. The firm helps enterprises validate and improve their global operations with world-class research, benchmarking and peer networking. HfS Research was named "Independent Analyst Firm of the Year for 2017" by the Institute of Industry Analyst Relations which voted on 170 other leading analysts. HfS Chief Analyst, Phil Fersht, was named Analyst of the Year in 2017 for the third time.

HfS coined the terms "The As-a-Service Economy" and "OneOffice™", which describe HfS Research's vision for the future of global operations and the impact of cognitive automation and digital technologies. HfS' vision is centered on creating the digital customer experience and an intelligent, single office to enable and support it. HfS’ core mission is about helping clients achieve an integrated support operation that has the digital prowess to enable its enterprise to meet customer demand - as and when that demand happens. With specific practice areas focused on the Digitization of business processes and Design Thinking, Intelligent Automation and Outsourcing, HfS analysts apply industry knowledge in healthcare, life sciences, retail, manufacturing, energy, utilities, telecommunications and financial services to form a real viewpoint of the future of business operations.

HfS facilitates a thriving and dynamic global community which contributes to its research and stages several OneOffice™ Summits each year, bringing together senior service buyers, advisors, providers and technology suppliers in an intimate forum to develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings.

Now in its tenth year of publication, HfS Research’s acclaimed blog Horses for Sources is the most widely read and trusted destination for unfettered collective insight, research and open debate about sourcing industry issues and developments.

HfS was named Analyst Firm of the Year for 2017, alongside Gartner and Forrester, by leading analyst observer InfluencerRelations.