Companies are achieving productivity gains by using software robots to perform routine, rules-based service processes. If implemented well, such automation can result in high-performing human-robot teams, in which software robots and human employees complement one another.

For more than 130 years, managers have, in effect, been trying to get humans to act like robots by structuring, routinizing, and measuring work — all under the guise of organizational efficiency.1 The automation software that is being developed today2 enables a reversal of this process. We are now able to use software robots to amplify and augment distinctive human strengths, enabling large economic gains and more satisfying work. However, given the widespread skepticism and fears about how many types of employment will fare in the future, managers are in a difficult spot. Media headlines such as the “Rise of the Robots: Technology and the Threat of a Jobless Future”3 and “A World Without Work”4 only serve to fuel the anxiety.

Although the term “robot” brings to mind visions of electromechanical machines that perform human tasks, the term as it relates to service automation refers to something less threatening: software that performs certain repetitive and dreary service tasks previously performed by humans, so that humans can focus on more unstructured and interesting tasks. Service automation includes a variety of tools and platforms that have various capabilities. While conducting research for this article, we interviewed people who used a variety of terms to discuss service automation. (See “About the Research.”) To help make sense of the landscape, we classified the tools along a service automation continuum based on the specific types of data and processes. (See “The Service Automation Landscape.”)

References

1. For a brief history of the evolution of work from craft to mechanization, see J. Trevor, “Work and the Robot Revolution,” March 1, 2016, www.sbs.ox.ac.uk.

2. Among the developers of automation software are companies such as Blue Prism, Celaton, UiPath, Redwood Software, and Automation Anywhere.

3. M. Ford, “Rise of the Robots: Technology and the Threat of a Jobless Future” (New York: Basic Books, 2015).

4. D. Thompson, “A World Without Work,” Atlantic, July/August 2015, 50-61.

5. A detailed analysis of types of work that can be automated and where this is leading is provided in T.H. Davenport and J. Kirby, “Just How Smart Are Smart Machines?” MIT Sloan Management Review 57, no. 3 (spring 2016): 21-25.

6. Our interviews at Xchanging were done in 2015. Computer Sciences Corp. of Tyson, Virginia, bought Xchanging on May 5, 2016. See “CSC Completes Xchanging Acquisition,” press release, May 5, 2016, www.csc.com.

7. We asked all the early adopters to indicate the one-year return on investment (ROI) for each automation project. The lowest ROI reported was 30%; the most common responses were in the range of 40% to 60%. Respondents from one health insurance company reported a triple-digit ROI. We do not know the detailed parameters that companies used to calculate ROIs, but costs typically considered employee training, employee time required to build and operate the software robots, and software licensing fees. Benefits included savings on personnel costs, but none of the companies seemed to calculate a dollar value for improvements in service quality, service speed, or compliance.

8. These figures refer only to the company’s United Kingdom retail division, where automation was first implemented.

9. We studied early adopters, and no other service automation sourcing options existed. Since early 2015, several advisory companies have developed robotic process automation practices that offer companies more options.

10. M.C. Lacity and L.P. Willcocks, “Advanced Outsourcing Practice: Rethinking ITO, BPO, and Cloud Services” (London: Palgrave, 2012).

11. Although the benefits of cloud services are obvious (particularly for small and medium-sized companies), robotic process automation companies we contacted said that no companies were using cloud services as of fall 2015.

12. For studies that look at standardization, see R. McIvor, M. McCracken, and M. McHugh, “Creating Outsourced Shared Services Arrangements: Lessons From the Public Sector,” European Management Journal 29, no. 6 (December 2011): 448-461; M. Sako, “Technology Strategy and Management: Outsourcing Versus Shared Services,” Communications of the ACM 53, no. 7 (July 2010): 27-29; M.J. Bidwell, “Politics and Firm Boundaries: How Organizational Structure, Group Interests, and Resources Affect Outsourcing,” Organization Science 23, no. 6 (November-December 2012): 1622-1642; and M.C. Lacity and J. Fox, “Creating Global Shared Services: Lessons From Reuters,” MIS Quarterly Executive 7, no. 1 (March 2008): 17-32. For a study that summarizes processes suitable for outsourcing, see Lacity and Willcocks, “Advanced Outsourcing Practice”; and for a study that looks at processes suitable for shared services, see J.D. McKeen and H.A. Smith, “Creating IT Shared Services,” Communications of the Association for Information Systems 29 (2011): 645-656.

13. “The Impact of Robotic Process Automation on BPO” (panel discussion at the Automation Innovation Conference, New York, Dec. 10, 2014).

14. Some analysis suggests that tasks within jobs, rather than whole jobs, will be automated. Thus the focus should be not on whole jobs but on activities and processes and how they can be reconstructed as a result of automation. See M. Chui, J. Manyika, and M. Miremadi, “Four Fundamentals of Workplace Automation,” McKinsey Quarterly (November 2015): 1-9.

15. In the case of Telefónica O2, for example, head count at the service provider in India was reduced but full-time jobs in the United Kingdom were maintained.

16. See M.C. Lacity and J.W. Rottman, “Offshore Outsourcing of IT Work” (Basingstoke, U.K.: Palgrave 2008), 20-22.

17. An alternative view on the abiding value of multiple human capabilities is provided by T.H. Davenport and J. Kirby, “Only Humans Need Apply: Winners and Losers in the Age of Smart Machines” (New York: Harper Business, 2016); see also G. Colvin, “Humans Are Underrated: What High Achievers Know That Brilliant Machines Never Will” (New York: Portfolio/Penguin, 2015).

18. A comprehensive review of automation and the future of work studies, together with detailed projections about impacts on work design, outsourcing, and future processes, appears in L.P. Willcocks and M.C. Lacity, “Lessons and the Future of Automation and Work,” chap. 10 in “Service Automation: Robots and the Future of Work” (Stratford-upon-Avon, U.K.: Steve Brookes Publishing, 2016).

2 Comments On: A New Approach to Automating Services

  • Adolfo Nori | September 14, 2016

    Service automation improves quality and bandwidth of services but no doubt that service automation reduces significantly the number of workers needed to deliver the services. I think that all relevant stakeholders and Government and should work to support the change and to drive the transition towards the future managing the unavoidable impact on the workforce.

  • Philip Barbonis | October 4, 2016

    The boring, dreary work can be passed on to software automation. But what about handling customer’s problems that require human face-to-face interaction, which invariably involves emotions?

    I used to visit a branch of my bank now and then, but on a day in May this year there was a sign posted outside the branch, that the branch has been closed and that customers should henceforth use the Internet. An old gentleman obviously advanced in age, and perhaps in his eighties, and on crutches who had come to the bank for a transaction, was bitterly complaining to passers-by — and I happened to be one–, and swearing at the bank, using an amusing array of choice words. He had never used a computer! Had the branch been opened, a bank person could have helped. I wonder how he could ever have come to using the software. How could the software robot, which he obviously could not have accessed been of any help to him? How could the bank’ software robot — I am unsure if the bank is already using such softare robots — have helped that gentleman? I think businesses should think carefully about software automation, which has its place in the scheme of things. But not everything should have been automated.

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