The BPO market is being rocked by the onslaught of Robotic Process Automation and Cognitive Intelligence. The future of this $322 billion industry could become distinctly robotic, as software agents are able to replicate (and improve on) the labor arbitrage model, while also delivering higher accuracy and lower risk.  Will today’s current cast of BPO providers be able to survive the transition, and will their clients hang around long enough? Or will Robotic-BPO become the new normal for business services engagements?  In this webinar, we will explore how R-BPO, unburdened by legacy contracts and surplus FTEs, is set to become the new business model for outsourced business services.     HfS experts, along with executives from Symphony Ventures and ADP, will discuss the incredible opportunities and array of options open to enterprises today, as they navigate the multitude of options open to them.     Participants will be better positioned to understand:  - The rationale for bringing automation in house vs. implementing with BPO service providers  - The opportunity to leverage the emerging R-BPO suppliers, rather than renewing with legacy providers  - The potential of combining RPA, AI and human experts in delivering “As a Service” solutions  - What the future will look like as “Digitally Native” businesses emerge and many traditional legacy enterprises struggle to transform their legacy operating models and IT infrastructures

1. The Services Research Company
The Advent of R-BPO: Is the Future of BPO Robotic?
Webinar, July 15th 2016
Phil Fersht
Chief Analyst and CEO, HfS Research
phil.fersht@hfsresearch.com
@pfersht

2. © 2016 HfS Research
Overview:
• 20 years’ business experience in the global IT and business process
outsourcing and shared services industry
• Coined the “As-a-Service Economy” in 2014
• Industry analyst, author, speaker, strategist and blogger
• Advised and cogitated on 100’s of global IT services, BPO and
shared services engagements
• Meddles with the largest global network of enterprise services and
operations professionals
Career Experience:
• Practice Lead, IT Services & BPO Research, Gartner, Inc
• Global BPO Marketplace Leader, Deloitte Consulting
• Consulting Practice Lead, IDC Asia/Pacific
• IT Markets Practice Lead, IDC Europe
Education:
• BS with Honors in European Business & Technology, Coventry
University, United Kingdom
• Diplôme Universitaire de Technologie in Business & Technology from
the University of Grenoble, France
phil.fersht@hfsresearch.com
Phil Fersht, CEO and Chief Analyst, HfS Research

3. © 2016 HfS Research

4. © 2016 HfS Research
HfS Research Has Been Writing About Intelligent
Automation for 4+ Years

5. © 2016 HfS Research
The “Intelligent OneOffice” will emerge from
Digital + Automation
The Digitally-
Driven Front
Office
Mobile,
Social/Interactive, Real-
time actionable data,
Design Thinking
Digital
Underbelly
Intelligent
Automation of
manual processes
Digitization of
documents
IoT
Intelligent
Digital Support
Function
Front office-aligned
IT, Finance, HR,
Procurement,
Supply Chain
Intelligent
Digital
Processes
Predictive &
Operational
Analytics,
Cognitive.
The Customer-first Digital
Organization
The Enabling Intelligent
OneOffice
The Nervous System,
incepting & Processing
all Inputs
The
Neural System
The
Circular System

6. © 2016 HfS Research
The Service Providers will bifurcate
into two groupings
Back Office
Outsourcers
Efficiency, Automation, Labor
Arbitrage and Scalability
OneOffice Enablers
Data Orchestration and Human
Collaboration

7. © 2016 HfS Research
62%
49%
29%
29%
26%
24%
18%
13%
11%
33%
45%
40%
31%
48%
43%
30%
23%
25%
19%
22%
21%
24%
37%
29%
26%
12%
18%
5%
9%
16%
35%
38%
Drive down operating costs
Cost effective, flexible services
Better address risk and regulation
Accelerate speed to market with new
products/services
End-to-end process optimization
Real-time data-driven insights
Improve the quality of operations talent
Restrict the recruitment of labor where
possible
Invest in process automation and robotics to
reduce reliance on labor
Mission Critical Increasingly Important Emerging Not a Directive
How critical are the following C-Suite priorities/directives, in terms of shifting from a Cost Focus to a
Value Focus with your operating model?
C-Suite operations directives focused on “more from less”
Source: HfS Research and KPMG LLP, 2015
Sample: 168 Enterprise Buyer Executives from “Achieving Value Beyond Cost” Study, 2015

8. © 2016 HfS Research
RPA use focused on IT currently, with F&A in a high
adoption swing
8%
8%
8%
9%
8%
8%
10%
6%
9%
10%
17%
17%
18%
17%
19%
21%
19%
23%
23%
23%
Human Resources
Procurement
Industry-specific Process (i.e. …
Sales
Supply Chain and Logistics
Customer Service / Sales Support
Marketing
Finance and Accounting
IT application maintenance & …
IT and Network infrastructure …
Full scale RPA Implementing / using RPA actively
Source: “Intelligent Operations" Study, HfS Research 2016
Sample: Buyers = 371
Thinking about the use of RPA within the following business functions,
what stage of maturity have you reached?

9. © 2016 HfS Research

10. How buyers would improve the quality and
outcomes from their current service
relationships…
28%
13%
9%
45%
4%
2%
Letting go and giving up more higher-value work to
our service provider(s)
Threatening to entertain competitive bid(s) to force
your current provider(s) to up their game
Bring back more work in-house and improve it
ourselves
Roll out an automation strategy in tandem with our
provider
Bring in a specialist advisor to recalibrate our
relationship(s) and get us on the right course for As-
a-Service
Not a lot – we paid for “cheap and cheerful” and
that’s what we’re stuck with
Source: The HfS Working Summit for Service Buyers, December 2015
(Sample 53 enterprise outsourcing leads)

11. © 2016 HfS Research
RPA 1.0

12. © 2016 HfS Research
How HfS Defines Intelligent Automation
Robotic Process Automation describes a software development toolkit that allows non-engineers quickly to
create software robots to automate rules-driven business processes.
E.g. digitizing the process of collecting of unpaid invoices, that involves mimicking manual activities in the RPA
software, the integration of electronic documents and generation of automated emails to ensure the whole
collections, process is run digitally and can be repeated in a high-throughput, high intensity model.
Cognitive computing is the simulation of human thought processes in an Intelligent Automation process or set
of processes. 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.
E.g. an insurance adjudication system that assesses claims, based on scanned documents and available data
from similar claims and evaluates payment awards.
Autonomics is referring to self-learning and self-remediating engines, 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. Increasingly minimal human
intervention.
E.g. a virtual support agent continuously learning to handle queries and creating new rules/exceptions as
products evolves and queries change.
Artificial Intelligence is where intelligent automation systems go beyond routine business and IT process
activity to make decisions and orchestrate processes.
E.g. an AI system managing a fleet of self-driving cars or drones to deliver goods to clients, manage aftermarket
warranties and continuously improve the supply chain.

13. © 2016 HfS Research
HfS Sees Intelligent Automation As-a-Continuum
trigger based
Characteristic of process
rules based
dynamic language
rules based
standardized language
Structured
Characteristic of data/information
Unstructured without patternsUnstructured patterned
Data Center
Automation:
Runbook
Scripting
Scheduling
Job control
Workload
automation
Process
orchestration
SOA
Virtualization
Cloud services
RPA
Cognitive
Computing
Artificial
Intelligence
BPM
Workflow
ERP
Autonomics
Self-learning & Self-remediation

14. © 2016 HfS Research
Intelligent Automation Continuum Expanding Fast
trigger based
Characteristic of process
rules based
dynamic language
rules based
standardized language
Structured
Characteristic of data/information
Unstructured without patternsUnstructured patterned
Data Center
Automation:
Runbook
Scripting
Scheduling
Job control
Workload
automation
Process
orchestration
SOA
Virtualization
Cloud services
RPA
Cognitive
Computing
Artificial
Intelligence
BPM
Workflow
ERP
Autonomics
Self-learning & Self-remediation

15. © 2016 HfS Research
Endgame: Vertically infused insights and data??!!
Insights, Data
Vertical Processes
Vertically infused
insights and data
BPaaS, BPO as-a-stack,
Industry platforms.
Machine learning,
Neural networks,
Enterprise search,
Artificial intelligence
Analytics

16. © 2016 HfS Research
So We Need To Transform What Knowledge Work Means
New Jobs
Data Insight Manager
Augmentation Integrator
Visualization Interpretation
"Bot" Employee Oversight
Automation Overlord
Endangered Jobs
Data Entry
Invoicing / Collections
Abstracting & Indexing
Data Reconciliation
L1 Customer Support
Master Data Management

17. © 2016 HfS Research
Automation Impact Scenarios on Services Professionals by 2021
Scenario 1
Moderate
Low skilled jobs
falling by 22%
Medium skilled jobs
increasing by 13%
High skilled jobs
increasing by 57%
Total jobs falling by
2%
Scenario 2
Likely
Low skilled jobs
falling by 30%
Medium skilled jobs
increasing by 8%
High skilled jobs
increasing by 56%
Total jobs falling by
9%
Scenario 3
Aggressive
Low skilled jobs
falling by 36%
Medium skilled jobs
increasing by 1%
High skilled jobs
increasing by 55%
Total jobs falling by
14%
~300,000 jobs at risk ~1,400,000 jobs at risk ~2,200,000 jobs at risk

18. © 2016 HfS Research
1.7 2.7
4.8
5.2
8.8 6.1
0
4
8
12
16
2015 2021
IT Services and BPO Employees
(Millions)
Low Skilled Services Jobs
Medium Skilled Services Jobs
High Skilled Services Jobs
Impact of Automation on Services Jobs – Likely Scenario
Impact
• Low skilled jobs falling by 30%
• Medium skilled jobs increasing by
8%
• High skilled jobs increasing by 56%
• Total jobs falling by 9%
Outlook
• Low skilled jobs phasing out to
automation through
RPA/Autonomics
• Starting to affect medium skills as
cognitive computing augments
these skills
• Increasing demand for high skilled
positions involving creative problem
solving, analytics and critical
thinking

19. © 2016 HfS Research
Total Impact of Automation on IT/BPO Services Workers by
Major Country (likely scenario, low-skilled workers)
0.73 0.74
2.28
2.34
0.67
0.54
1.64
1.57
-35%
-30%
-25%
-20%
-15%
-10%
-5%
0%0.0
0.5
1.0
1.5
2.0
2.5
Philippines UK India US
% Decrease in Workforce
Services Workers (Millions)
2015 2021 % Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM,
US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment

20. © 2016 HfS Research
Total Impact of Automation on IT/BPO Services Workers by
Major Country (likely scenario, mid-high skilled workers)
0.28
0.80
1.11
2.56
0.41
0.94
1.27
2.73
0%
10%
20%
30%
40%
50%
0.0
0.5
1.0
1.5
2.0
2.5
3.0
Philippines UK India US
% Increase in Workforce
Services Workers (Millions)
2015 2021 % Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM,
US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment

21. © 2016 HfS Research
Total Impact of Automation on IT/BPO Services Workers by
Major Country (all skill-levels across all workers)
1.00
1.54
3.38
4.90
4.43
1.08
1.47
2.90
4.30 4.18
-20%
-15%
-10%
-5%
0%
5%
10%
0.0
1.0
2.0
3.0
4.0
5.0
6.0
Philippines UK India US Other
% Change in Workforce
Services Workers (Millions)
2015 2021 % Change
Research sources: 1477 industry stakeholder interviews 2015-16, NASSCOM,
US National Bureau of Labor Statistics, UK ONS, Selected others, HfS Analyst judgment

22. © 2016 HfS Research
David Poole
Co-founder and CEO
Symphony Ventures
Ian Barkin
Co-founder and Head of Strategy
Symphony Ventures
Johnny Ramondino
Senior Director Product Management
ADP
The Panel

23. 23 Orchestrating the world’s work© 2016 Symphony Ventures – Confidential and Proprietary
This Game is Changing

24. 24 Orchestrating the world’s work© 2016 Symphony Ventures – Confidential and Proprietary
Our Observations Regarding RPA Take-Up
Robotic BPO Pure Players
• Automation process specialists
• Implementation experience and capability extending into operate and run
• Extensive process model and object library
• Human augmentation in exception handling and expert knowledge provision
Shared Services and GBS
• Direct / implementation partners
• Centers of excellence
BPO
• Clients taking a multi-channel approach
- In-house / specialist firms vs BPO providers
• Slow provider take-up and limited partnering strategy
• Outcome-based providers win over FTE-based providers
• Opportunity for digital innovation

25. 25 Orchestrating the world’s work© 2016 Symphony Ventures – Confidential and Proprietary
World-Class
Process
Standardized
&
Controlled
Process
World-Class
Process
World-Class
Process
“Process as a service” – standardized world class processes utilizing leading SaaS tools, enablers and accelerators. RPA
provides the integrations between the tools and the interfaces to and from core legacy systems. Staff will handle the tasks requiring
human intervention.
World-Class
Process
Unstructured
Common
Process
”As-a-Service” Processes

26. The Changing Landscape Driving BPO
(Business Process Outsourcing)

27. 27
ADP is transforming HCM
Copyright © 2016 ADP, LLC. Proprietary and Confidential.
Interconnecting
Technology
with Expertise
27

28. 28
Supporting our clients throughout their lifecycle
Service delivery evolution
• ACA cost and compliance
analysis, scenario modeling
• HR, Pay and benefits
regulations and best practices
• Sustain and improve quality of
service & speed of execution
• Optimize scope of services
to improve value proposition
• Speed up transition to stable
state after major initiatives
• Business case support
• Compensation planning, job/
position codes, salary banding
• HCM integration and
process improvement
• Wellness strategies
• Workforce planning
• Data driven decision support
• Rapid standup model
• Combined technology stack and
service teams
• Proven track record mitigating
risks
• Controlled cost
• Supports all sizes of clients
• Manages differences in
complexity needs when
requirements change
• Large geographic footprint
• Strategy & personalized tools
to educate employees and
improve engagement
• Change Management for
organizational, process and
technology changes
Intelligent
Automation
Advisory
Services
Communication
& Change
Management
Acquisition
& Carve out
Support
Compliance
& Regulatory
Affairs
Scalable
Service
Model

29. The Services Research Company
The Advent of R-BPO: Is the Future of BPO Robotic?
APPENDICES
Phil Fersht
Chief Analyst and CEO, HfS Research
phil.fersht@hfsresearch.com
@pfersht

30. © 2016 HfS Research
How HfS Defines Intelligent Automation
Robotic Process Automation describes a software development toolkit that allows non-engineers quickly to
create software robots to automate rules-driven business processes.
E.g. digitizing the process of collecting of unpaid invoices, that involves mimicking manual activities in the RPA
software, the integration of electronic documents and generation of automated emails to ensure the whole
collections, process is run digitally and can be repeated in a high-throughput, high intensity model.
Cognitive computing is the simulation of human thought processes in an Intelligent Automation process or set
of processes. 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.
E.g. an insurance adjudication system that assesses claims, based on scanned documents and available data
from similar claims and evaluates payment awards.
Autonomics is referring to self-learning and self-remediating engines, 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. Increasingly minimal human
intervention.
E.g. a virtual support agent continuously learning to handle queries and creating new rules/exceptions as
products evolves and queries change.
Artificial Intelligence is where intelligent automation systems go beyond routine business and IT process
activity to make decisions and orchestrate processes.
E.g. an AI system managing a fleet of self-driving cars or drones to deliver goods to clients, manage aftermarket
warranties and continuously improve the supply chain.

31. © 2016 HfS Research
HfS Automation Labor Impact Model –
Key Assumptions & Methodology
This model predicts likely impact of the most recent wave of automation on the IT Services and BPO
industry. We estimate the current total IT Service and BPO employs c15 Million in 2015. With c3.5
Million in India, c1 Million in Philippines, c5 Million in North America and c4 Million in Europe.
The workers within the industry have been divided into 3 categories: low skilled, medium skilled and
high skilled. With low skilled workers conducting simple entry level, process driven tasks that require
little abstract thinking or autonomy. High level workers undertaking complicated tasks that require
experience, expertise, abstract thinking and autonomy.
The model then applies underlying growth rates for each category linked to market growth. Each
scenario has a different set of parameters that will impact each level of worker setting out likely degree
of automation for each group and the probability that the job will be automated and in what time
frame this is likely to happen. There parameters are set out in full on the “Scenario Parameters” slide.
The model then predicts the reduction in each level of the workforce based on the probability of
automation within the scenario. This is taken from the underlying growth figure to produce a number
for the work force at each level.
The underlying growth rates assume current market growth will continue and is varied between the
levels based on demand – so given the increasing demand for higher level workers the underlying
growth in this category is larger irrespective of increases in automation.

32. Automation is in the eye of the beholder

33. © 2016 HfS Research
What is IASK?
The Intelligent Automation Starter Kit is a specific workshop series for end-user
organizations.
It provides a one-stop orientation for enterprise teams looking to understand
Intelligent Automation technologies including the potential applications to their
business
To get involved, email iask@hfsresearch.com

34. © 2016 HfS Research
About HfS Research
HfS Research is the leading analyst authority and global network for IT and business services, with a specific focus on
global business services, digital transformation, and outsourcing. HfS serves the research, governance, and services
strategy needs of business operations and IT leaders across finance, supply chain, human resources, marketing, and core
industry functions. The firm provides insightful and meaningful analyst coverage of best business practices and
innovations that impact successful business outcomes, such as the digital transformation of operations, cloud-based
business platforms, services talent development strategies, process automation and outsourcing, mobility, analytics, and
social collaboration. HfS applies its acclaimed Blueprint Methodology to evaluate the performance of service and
technology in terms of innovating and executing against those business outcomes.
HfS educates and facilitates discussions among the world's largest knowledge community of enterprise services
professionals, currently comprising 150,000 subscribers and members. HfS Research facilitates the HfS Sourcing Executive
Council, the acclaimed elite group of sourcing practitioners from leading organizations that meets bi-annually to share the
future direction of the global services industry and to discuss the future enterprise operations framework. HfS provides
sourcing executive council members with the HfS Governance Academy and Certification Program to help its clients
improve the governance of their global business services and vendor relationships.
In 2010 and 2011, HfS Research's Founder and CEO, Phil Fersht, was named “Analyst of the Year” by the International
Institute of Analyst Relations (IIAR), the premier body of analyst-facing professionals, and achieved the distinctive award of
being voted the research analyst industry's Most Innovative Analyst Firm in 2012.
In 2013, HfS was named first in rising influence among leading analyst firms, according to the 2013 Analyst Value Survey,
and second out of the 44 leading industry analyst firms in the 2013 Analyst Value Index.
Now in its seventh year of publication, HfS Research’s acclaimed blog “Horses for Sources” is widely recognized as the
most widely read and revered destination for unfettered collective insight, research, and open debate about sourcing
industry issues and developments. Horses for Sources today receives over a million web visits a year.
To learn more about HfS Research, please email research@HfSResearch.com.