October 28, 2020

Market Analysis

Why Intelligent Process Automation May Be the Key to Balancing Efficiency and Organizational Agility

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Originally published on Intellyx.com

When I was in middle school, I was on a fantastic soccer team. We were undefeated and went on to win our youth soccer region.

I led our defensive squad, which powered (if I do say so myself) our team to its dominance. It was one of the greatest experiences of my young life — and taught me a life lesson that may now be essential for enterprise leaders to learn as well.

While I would love to take credit for our prowess, the real credit belonged to the team’s assistant coach, responsible for coaching our defense.

“You need to conserve your energy and play smart, Charlie,” he used to tell me. “But always be ready to strike when you see an opening.”

While it was common in professional, college, and even high school teams, it was very unusual for defensive players to ever do anything but hang back and defend in middle school. But our coach taught us that we were the ones who could see the whole field — and the opportunities when they developed.

So, he’d tell us, we had to be defenders, but be agile enough to go on offense when the time was right.

Little did I know that he was teaching much more than how to be a good soccer defenseman. He was teaching me a life skill — and something that is now an essential lesson for enterprise leaders everywhere: if you want to win, you need to strike a balance between playing defense and going on offense when an opportunity presents itself.

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In the context of the modern enterprise, the way to do that may be to embrace a new approach called Intelligent Process Automation.

The Enterprise Balancing Act

All the chatter around digital transformation belies the real challenge you face.

To thrive in this rapidly shifting market, you need to strike an almost impossible balance: continually improve efficiency and optimization, whilecreating organizational agility.

These two critical objectives intersect at the automation of enterprise processes — and can almost seem to be at counterpoints. Many of the business process technologies and approaches, such as business process management (BPM), enterprise content management (ECM), robotic process automation (RPA), digital process automation (DPA), and low-code platforms tend to excel at one or the other, but not both.

By themselves, they rarely enable organizations to find this elusive balance between efficiency and agility. More to the point, they introduce their own levels of rigidity. Every step that increases efficiency often decreases agility, and vice versa.

“The ability to adapt and respond according to both new events and consistent with existing rules and policies is critical to organizational agility,” explained Nathaniel Palmer writing in Forbes. “Yet this goal is often at odds with automation focused on scalability and repeatability.”

The advancement of artificial intelligence (AI)-based technologies promised to help bridge this gap — and it has, to some degree — but the underlying problem remains. As long as organizations remain focused on the technology, rather than the business problems they must solve, they will come up short for the simple reason that no one technology is sufficient to deliver what they really need.

A new method, which has been bubbling just below the surface for a few years, may offer a way to strike this tricky balance by integrating a combination of approaches and technologies and mixing in AI.

McKinsey calls this approach Intelligent Process Automation (IPA) and believes that it can help enterprises shift their focus to the customer. “While IPA takes over rote tasks, human workers can focus on delighting customers and thinking about how new troves of data outside the organization…can help achieve business goals.”

Doing so may be the key to enterprises striking the balance between defense and offense, and between efficiency and agility.

What is Intelligent Process Automation?

Like every buzzword before it, IPA is an imperfect term — and one that technology providers are already abusing.

Its similarity to RPA is not a coincidence, and, as a result, many observers have reduced IPA to merely mean RPA + Intelligence. In fairness, the idea originated in a desire to overcome some of RPA’s deficiencies.

“In essence, IPA ‘takes the robot out of the human,’” explained McKinsey in its report. “At its core, IPA is an emerging set of new technologies that combines fundamental process redesign with robotic process automation and machine learning. IPA mimics activities carried out by humans and, over time, learns to do them even better.”

But even in this definition, it acknowledges that the foundation of IPA is “fundamental process redesign” — something that is often missing from straight-forward RPA implementations. Moreover, the report goes on to define IPA as a combination of five different technologies and approaches:

  • RPA
  • Smart Workflow
  • Machine Learning/Advanced Analytics
  • Natural Language Generation (Note: I would include Natural Language Processing here as well)
  • Cognitive Agents (Note: McKinsey seems primarily focused on RPA-type agents, but I would add the new generation of Intelligent Virtual Agents here as well)

There are two crucial understandings when it comes to IPA.

First, it is more than a single technology — it requires a combination of technologies and approaches to balance efficiency and agility. “When we combine case management and data-driven intelligence with process automation, we can expand the range of what can be automated or otherwise managed,” states Palmer. “This is the basis of Intelligent Automation, enabling data-driven processes adapting dynamically to the context of the work, delivering the efficiency of automation while leveraging rules and policies to steer the pathway towards the optimal outcome.”

Second, it’s about much more than integrating disparate technologies. Adopting IPA demands both the fundamental re-engineering that McKinsey described, but also the integration between these intelligent technologies and the humans that are intertwined within these critical end-to-end processes. Or, as Palmer states it: “Intelligent Automation bridges the ‘islands of automation’ where humans are the integration points between systems that otherwise cannot communicate.”

Converging Around Business Value

IPA’s power — and its potential undoing — is that it represents much more than just another technology-focused buzzword.

While the I of IPA stands for intelligent, it could just as easily represent “integrated,” as in the need for holistically-integrated process automation. To strike the balance between efficiency and agility, organizations need the ability to create true end-to-end automation and coordination of their critical and customer-facing business processes as they pass through various technologies and human actors — in service of a value-creating customer experience.

The bevy of BPM, RPA, DPA, ECM, and low-code technology solutions in the market each help organizations address part of this challenge. The introduction of AI has helped improve these solutions’ resiliency and adaptability, but they inevitably — and necessarily — remain focused in their specific technology silo, solving the parts of the problem for which they are best suited.

IPA’s promise is in its ability to move beyond a technology-project paradigm and, instead, focus on the convergence of these technologies and approaches around a set of specific, definable, measurable, and balanced business outcomes.

Despite what some technology vendors may lead you to believe, that viewpoint means that IPA is not a technology. Instead, when used properly, it becomes a transformational methodology.

“In many cases IPA has an important—even dominant—role in driving…change,” extolled McKinsey. “But its greatest value comes when companies understand how it can work with the other capabilities and approaches in the operating model.”

Enterprise leaders will uncover the real power and promise of IPA when they recognize that its primary use should be in reimagining their business and operating models and leveraging it as a transformational tool for that purpose.

The Intellyx Take: Will the Real Industry Leader Please Stand Up

Throughout this article, I’ve talked to enterprise leaders about the importance of seeing and leveraging IPA in its proper context. But if you’ll indulge me for a moment, I’d like to wrap this up by talking to the folks on the other side of the table: tech company execs.

If you’ve ever enjoyed an advisory session or briefing with me, you probably heard me say that one of the keys to effectively communicating with enterprise leaders is acknowledging their reality. No matter how much we (I’ll always consider myself an enterprise guy!) may want to hear it, deep in our hearts, we know that there is no such thing as the magical technology solution that will solve all of our problems.

In the end, while your technology may be an indispensable part of it, the only true solution to the existential business problems facing enterprise leaders will be one that demands that they make the tough choices and do the hard work. They need to find a way to bridge everything together to transform their business and operating models — and their culture.  There is no “out of the box” solution for that.

So stop trying to sell them one.

Still, that doesn’t mean you don’t have a critical role to play. In fact, I think there is a massive opportunity to step up and establish yourself as an industry leader. The key to doing so, however, is in helping your customers see all the pieces, how they fit together, the role your technology plays in this bigger picture, and how it will all come together to solve their real, overarching business challenges.

It will mean that you need to move beyond a focus on just your solution or your claim to be the one IPA platform that will solve all their problems. It will demand that you demonstrate empathy, authentic leadership, and a genuine desire to help them strike the critical balance between agility and efficiency — even when it requires far more than just your solution to do so.

Anyone game?

© 2020, Intellyx, LLC. Intellyx publishes the weekly Cortex and Brain Candy newsletters, and advises business leaders and technology vendors on their digital transformation strategies. Intellyx retains editorial control over the content of this document. At the time of writing, no parties mentioned in this story are Intellyx customers.


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