Released Today!

2

• https://www.hfsresearch.com/pointsofview/state-of-intelligent-automation-2019

• HFS, in collaboration with KPMG International, launches seminal new study on the state of intelligent automation

• 590 business leaders including 100 C-level executives across six industries and thirteen countries

• Qualitative interviews with IA leaders at global brands to contextualize the trends

© 2019, HFS Research Ltd

3

2

1

Housekeeping: Asking webinar host and panelists a question

© 2019, HFS Research Ltd 3

Clicking on the Q&A icon will open a pop-up window where you can type your question.

Type your question here…

• We want to hear from you! Please submit your questions. We’ll reserve time for Q&A at the end of the webinar.

• To submit questions, look at the bottom of your Zoom window. You will see three icons. Click on the Q&A to submit a question.

Icons at the bottom of your Zoom window:

What we’ll cover today

● The state of intelligent automation 2019 – results from our latest study conducted in collaboration with KPMG on intelligent automation adoption trends and challenges including:

The latest on enterprise objectives for IA investment and what’s commanding the lion’s share of the spend

Which IA technologies enterprises are prioritizing and how they are using them

What the leading inhibitors are to IA success

How enterprises are mitigating challenges and executing their IA programs

● Actionable recommendations – emerging best practices for achieving integrated automation

● Q&A

HYPERCONNECTED FUTURE STATE

Smart Analytics

Robotic Process

Automation

Artificial Intelligence

Digital Business Models

Blockchain

Global Sourcing

“The unification of digital business models, intelligent automation, analytics and creative talent is

happening before our very eyes”

Emerging Opportunity

Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

© 2019, HFS Research Ltd

Hurtling into the Hyper-Connected Economy

OffshoringGlobalization

Shared Services /Nearshoring

Centralization

The Internet

Client/ Server

ERP

Six Sigma

LEAN

Basel II

Private Cloud

Open Source

Digital Business Models

IOT

Public Cloud

eBusiness

Digital Marketplaces

ASPs

Sox

Y2K

Euro Currency Conversion

VOIP

3G

RPA

Enterprise IT dressed up as

Digital

Intelligent Automation

Machine Learning

AI

Blockchain

5G

The Guerrilla Sharing

Economy

Digital Workers

OutsourcingAnalog

Basic DigitalResponsive

Digital OneOfficeAnticipatory

2020+

Autonomous Supply Chains

Super-Intelligent

Digital Workers

Quantum Computing

Hyper-Connected Enterprises

Interactive

2019 Investment intentions: “Humans-plus-Bots” now the norm

63%

58%54% 53% 53% 52%

50%

39%

33%

40%

10%

20%

32%

24%

20%

10%

29%

19%

Telecom Insurance Retail/CPG Energy Travel (H&L) Manufacturing BFS Utilities Healthcare

Significant Investment in RPA Significant Investment in Outsourcing

Source: HfS Research in Conjunction with KPMG, "State of Operations and Outsourcing 2018"Sample: Global 2000 Enterprise Leaders = 381

Big $ for the big bets. Significant IA investments are on the table

0%

5%

10%

15%

20%

25%

Less than $1M $1-5M $5-10M $10-50M $50-100M $100-250M $250-500M More than $500M

Perc

enta

ge r

esp

on

den

ts

What level of Intelligent Automation-related investment is your enterprise making today?

Source: HFS Research in Conjunction with KPMG, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Over 30% enterprises are already investing over $50M in IA technologies

Why IA should not be under the CIO’s agenda…

• Prioritize use cases from AI

availability

• Develop AI Business case

• IA feasibility analysis and

specification development

• Technology cost estimation

• IA Data preparation and

identification

• Coordinate with partners

• Manage IA Testing

• Manage effective IA feedback

loops

• IA Training Responsibility

• IA Deployment

It’s no longer how capabilities are “sold”It’s how enterprises “buy”…

Hyper-Connected Enterprise

IT Services

Software Providers

Middle / Back Office

Business ServicesFront

Office / Call Center

Services

Data Science & Analytics

Transform

Consulting

© 2019, HFS Research Ltd

Source: HfS Research in Conjunction with KPMG, 2018Sample: Global 2000 Enterprise Leaders = 381

Source: Brigette Hyacinth, 12th November 2018"10 Things That Require ZERO Talent But Can Still Lead To SUCCESS”

A compass for using intelligent automation to transform the enterprise

Intelligent automation is where knowledge work within the

enterprise is either automated and/or augmented.

These technologies are capable of learning, reasoning, improving,

and reaching conclusions…

…much like how humans use logic and rationale

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

A compass for using intelligent automation to transform the enterprise

To successfully compete in a digital world,some business processes and functions need to be reimagined.

Intelligent automation can enable new, radically different operating models; the value will come from reengineering business processes and knowledge work.

Cognitive Automation Patterns are simple, repeatable knowledge activity and technology design patterns.

Business executives and technologists can use these patterns to identify advanced intelligent automation opportunities

© 2019 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

The State of IA 2019:Exponential expectations but linear execution

16 © 2018, HFS Research Ltd

Drive revenue growth

Accelerate ability to leverage data analysis

Improve business and operational insights

Create a new business / operating model

Respond to what the competition is doing

Improve product and service innovation

Attract/retain talent

Improve product/service speed to market

Improve customer experience

Develop new market opportunities

(segmentation/growth)

24%

18%

18%

12%

7%

7%

5%

5%

3%

1%

What are the key strategic objectives/goals for your company's Intelligent

Automation (IA) strategy?

17

Enterprises are looking at IA to drive top line growth and delight customers

Improve customer service quality and quality of interactions

Streamline customer service delivery model front office effectiveness

Improve back-office and middle office efficiencies

Improve employee morale and efficiency

Improve data security

Cope with the regulatory/risk environment

Eliminate headcount

30%

23%

17%

12%

10%

8%

<1%

What are the key operational objectives for your company's Intelligent

Automation (IA) strategy?

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Yet back office processes dominate IA investment

18

What level of Intelligent Automation-related investment does your function have today?

77%

87%

87%

86%

89%

89%

100%

10%

12%

13%

13%

23%

14%

$52.5M

$30.7M

$30.2M

$29.9M

$27.2M

$6.7M

Finance & Accounting

GBS, Compliance & Other

Core business / industry-specific

IT / Digital

Supply chain / sourcing / procurement

Human Resources

Customer service / sales / marketing

$34.8M

Average Functional Spend

Less than $50M

$50M+

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Question one

What do you make of this seeming mismatch between IA objectives and what investment is actually focused on?

19 © 2018, HFS Research Ltd

IA technology adoption – parallel investments and limited scale so far

20 Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Only 20-30% enterprises are not considering or are unsure about IA

Smart Analytics

Computer Vision

Machine Learning (ML)

Natural Language Processing (NLP)

Artificial Intelligence (AI)

Cognitive/Smart Virtual Assistants (Chatbots++)

Robotic Process Automation (RPA)

Unsure

5%

5%

5%

6%

4%

6%

5%

Adoption patterns across the IA technology spectrum is similar. 17% average for scaled and industrialized

No plans Piloting right now Moving to productionScaled-up andindustrialized

14%

23%

17%

23%

16%

20%

20%

28%

25%

31%

31%

36%

30%

34%

30%

28%

30%

24%

28%

29%

27%

23%

19%

17%

15%

15%

15%

13%

What is the current state of adoption of the following Intelligent Automation (IA) technologies in your organization?

Despite parallel investment, IA solutions remain siloed

21

38%

35%

16%

11%

We are primarily focusing on oneIntelligent Automation technology

right now

We are using multiple IntelligentAutomation technologies, but most of

the implementations are piecemeal

There is emerging alignment betweendifferent Intelligent Automation

solution elements

We are leveraging integratedsolutions that combine the power of

automation, analytics, and AI

How well are you able to develop integrated solutions leveraging multiple Intelligent Automation technologies to solve business problems?

While 60%+ enterprises are leveraging multiple IA technologies, only 11% are leveraging an integrated solution approach

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Question two

Can these myriad IA technologies be effective on a piecemeal basis? What needs to happen to enable integrated solutions?

22 © 2018, HFS Research Ltd

Enterprises are moving at warp speed to scale IA programs

23

39%

32%

18%

7%

2% 3%

22%

29%

26%

15%

5%3%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

We are already there Within next year Within next 2 years Within next 5 years More than 5 years Never/Unsure

Function level Enterprise level

When will your adoption of Intelligent Automation (IA) be scaled-up and industrialized?

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Scale: The achievement of a stable and growing production environment used by a hybrid workforce with enterprise-wide best practices. IA programs can scale vertically within a function such as finance and accounting or horizontally across multiple functions such as finance and accounting, human resources, and customer service.

The impact of speed: the best performers are scaling IA faster

24

Best Performing Financial Quartile Poorest Performing Financial Quartile

We arealready there

Within nextyear

Within next 2years

Within next 5years

More than 5years

Unsure We arealready there

Within nextyear

Within next 2years

Within next 5years

More than 5years

Unsure

22%

42%

14% 16%

6%1%

10%

21%

37%

22%

6% 3%

Q14. When will your adoption of Intelligent Automation (IA) be scaled-up and industrialized?

64% of the best

performing companies

will be scaled by 2019

59% of poorly performing

companies need 2 – 5

years to achieve IA scale

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Question three

Is there a risk to being a follower when it comes to IA? Can enterprises that are scaling slower ever catch up?

25 © 2018, HFS Research Ltd

Scale is cited as the biggest inhibitor to achieving IA goals

1%

2%

2%

12%

14%

3%

3%

7%

10%

3%

13%

14%

16%

1%

2%

5%

5%

6%

8%

8%

10%

10%

14%

10%

10%

12%

4%

7%

11%

5%

3%

12%

13%

7%

6%

11%

7%

7%

6%

Lack of end-to-end processes

Lack of senior management mandate and vision to deploy IA

Lack of current of as-a-service options for RPA and Cognitive/AI

Deficiency in overall data quality

Lack of in-house talent to support IA

Non-standard or incomplete end-to-end processes

Understanding the need and resources to train cognitive systems

Lack of quantifiable benefits/inability to build strong business case

Concerns about changes in governance and risk management

Change management concerns over the effect on employees

Lack of organizational clarity and accountability for driving IA agenda

Uncertainty about the financial investment needed in IA

Need more scale with IA to achieve objectives

Rank 1

Rank 2

Rank 3

What are the top three inhibitors that are holding you back from achieving strategic AND operational goals?

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

11%

14%

11%

9%

8%

5%

6%

11%

8%

8%

5%

4%

39%

28%

28%

32%

32%

29%

31%

24%

27%

24%

24%

24%

24%

31%

34%

35%

35%

37%

38%

41%

40%

38%

43%

47%

24%

24%

23%

22%

23%

24%

24%

22%

24%

28%

24%

24%

Lack of senior management mandate and vision to deploy IA

Lack of in-house talent to support IA

Uncertainty about the financial investment needed in IA

Deficiency in overall data quality

Lack of organizational clarity and accountability for driving the IA agenda

Concerns about changes in governance and risk management

Lack of quantifiable benefits/inability to build strong business case

Non-standard or incomplete end to end processes

Understanding the need and resources to train cognitive systems

Lack of current of as-a-service options for RPA and Cognitive/AI

Need more scale with IA to achieve objectives

Change management concerns over the effect on employees

1 Not at all confident

2

3

4

5 Very confident

Scale is an effect. Causes for lack of scale are the areas of low confidence

27

On a scale of 1-5, how confident are you in managing the challenges that are holding you back over the next 12-18 months?

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Question four

How do enterprises need to structure themselves to succeed with IA? Who should be leading the agenda? Business operators; data scientists; IT leaders?

28 © 2018, HFS Research Ltd

Actionable recommendations

29 © 2018, HFS Research Ltd

What’s missing is integrated automation

Integrated automation is when the HFS Triple-A Trifecta (automation, analytics, and AI) is balanced across the original trifecta (people, process, and technology). But technology has overpowered the discussion today without adequate focus on people and process resulting in the significant challenges of scaling up

30

People

ProcessTechnology

HFS Triple-A-Trifecta of Intelligent Automation The original optimized enterprise trifecta

Question five

What are the emerging best practices for achieving integrated automation?

31 © 2018, HFS Research Ltd

Define the why, what and how to scale IA and achieve integrated automation

Why?

What?

How?

• The “Why” – needs to support exponential growth not incremental improvement• Recognize and embrace exponential change. • Create a clear leadership mandate and objectives that

perpetually answer the question “why IA?”

• The “What” – requires an integrated, enterprise-wide strategy not silos fending for themselves• Embrace the Triple-A-Trifecta and integrated automation• Cultivate an enterprise-wide approach to IA

• The “How” – prioritizes talent, speed and execution • Take a multi-faceted approach to IA talent• Be aggressive and fast

33

Q&A and related HFS research

• Integrated Automation: Why You’ve Been Doing It All Wrong

• RPA is the gateway drug. AI is the drug...

• Tinker, experiment, explore, then disrupt: The Hyper-Connected Enterprise will be driven by Intelligent Automation

• Don’t assume your analytics partners will still be effective as you embrace smart analytics

• AI is Nascent, New, Hard… and Inevitable

• Smart Analytics Impacts Your Competitive Edge with Predictive OneOffice Capability

• Untangling the Gordian Knot: The HFS Dummies’ Guide to Enterprise AI

• The RPA Bible: Your Practical & Technical Guide to RPA

• How to Avoid Your Looming Machine Learning Crisis

© 2018, HFS Research Ltd

• RPA’s ticking time bomb: enterprises and service providers must make RPA talent their top priority to avoid disaster

• AIB Embraced RPA to Drive Its Digital Transformation Agenda

• Making Sense of Nonsensical RPA Software Pricing

• The HfS Triple A Trifecta: Automation, Analytics, and Artificial Intelligence

• Case Study: Harnessing the Triple-A Trifecta to Hit Digital OneOffice™ Gold

• Making AI the Killer App for Your Data

• HFS Top 10 RPA Service Providers 2018

• HFS Top 10 RPA Products 2018

• HfS Blueprint Report: Smart Analytics

• HfS Blueprint Report: Enterprise Artificial Intelligence (AI) Services 2018

34

State of IA 2019 study demographics

0 10 20 30 40 50 60 70 80 90 100 110 120 130

Number of Respondents

US

France

UK

Canada

South Africa

Germany

Japan

Spain

China

Australia

Brazil

Netherlands

India

106 20

35

36

34

34

32

33

33

33

31

30

27

25

7

6

7

7

8

7

7

6

7

7

6

6

Geography

0 10 20 30 40 50 60 70 80 90 100

Number of Respondents

Retail

Automotive

Energy

Government

Utilities

Banking and financial services

Healthcare

Insurance

Life Science

14

11

16

14

18

81

69

64

66

72

41

39

28

29

8

6

8

6

Industry

0 50 100 150 200 250 300

Number of Respondents

Between $3B and $5B

Between $1B and $3B

Between $5B & $10B

$10B +

270

127

55

18

2769

23

Company size (Revenue)

0 20 40 60 80 100 120 140 160 180 200 220

Number of Respondents

Director - IT/DigitalDirector - Business

Global Business Services or Shared Ser..SVP/VP - IT/Digital

Chief Information OfficerSVP/VP - Business

Chief Finance Officer (CFO)Chief Operations Officer

Chief Digital OfficerOther C-level executive

Chief Data OfficerCEO

208122

28

21

11

7854

8

Job Title

Source: HFS Research in conjunction with KPMG International, State of Intelligent Automation, 2019 Sample = 590 Business Leaders including 100 C-level executives

Thank you

35 © 2018, HFS Research Ltd