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Leverage the power of “and” to deliver your integrated digital business strategy

The “Triple-A Trifecta” in action

In 2017, HFS Research introduced our Triple-A Trifecta as a simple model to define the core elements of intelligent automation (IA)—automation, artificial intelligence, and smart analytics. It underscores that while each component is powerful in its own right, they are more powerful when used together. Enterprises are endeavoring to harness these change agents to help digitally transform how they run their businesses and interact with their customers, partners, and employees. The Triple-A Trifecta is critical to enabling the Digital OneOffice—HFS’ operating model framework for the digital enterprise and the outcome of digital transformation.

 

An emerging example of where HFS sees the integrated power of the Triple-A Trifecta coming to life is with Genpact and its digital business platform, Genpact Cora. Genpact, driven by both client needs and internal business requirements to connect and manage the components of digital change, developed Genpact Cora. This modular platform is designed to scale digital transformation through integration, orchestration, and governance. It is built around similar pillars as the Triple-A Trifecta thus its use by clients offers enterprises a real-time window into digital transformation in action (Exhibit 1).

 

Exhibit 1: The HFS Triple-A Trifecta in action in Genpact Cora

 

Source: HFS Research 2019, Genpact 2019

 

This voice of the customer (VOC) report showcases two enterprise examples of businesses that are embracing integrated automation using the Genpact Cora platform to digitally transform their businesses. Featured enterprises include:

  • A global food and beverage company—This firm’s global business services (GBS) operation targeted the nefariously issue-fraught area of trade promotions management as an initial problem area to address through an integrated approach to intelligent automation.
  • A global distributor of food products—This firm targeted finance transformation with a mission to drive enhanced customer and associate experience, enabled and ultimately funded by streamlined and automated processes.

 

Enterprises are struggling to deliver an integrated digital business strategy

Despite enterprise investment and adoption in various IA technologies across the Triple-A Trifecta elements, solution utilization remains heavily siloed in most businesses. HFS recently surveyed 590 business leaders including 100 C-level executives to better understand their IA adoption trends. When respondents were asked how well they were able to develop solutions that integrate multiple elements of IA technologies to solve business problems, just a scant 11% indicated that they’ve been successful with this integrated approach (Exhibit 2). The sub-text is that more than 60% are using multiple IA technologies, but they are using them in a piecemeal fashion.

 

This piecemeal approach to intelligent automation is contributing to scale challenges and results that are decidedly linear rather than the hoped-for and planned-for exponential benefits. Established enterprises, despite decades of experience harnessing people, process, and technology to fuel business and operations excellence, are challenged by intelligent automation. It’s almost as though the urgent need to digitally transform or risk becoming the latest cautionary tale of digital failure has spawned an inertia effect. Whether the cause is the sheer volume of new technology, lack of clarity on what to prioritize, or the likeliest candidate—a complex combination of factors–enterprises are missing the transformative power of “and.” There is a massive need for integrated digital business strategies—the effective melding of extensible digital technology, people, and processes focused on achieving clear business objectives.

 

One of the core principles of the Triple-A Trifecta model is that the components are stronger when used together, offering greater value and scalability across functions. Technologies such as RPA, the various types of AI, and smart analytics can be used together to complement existing IT investments, engage across systems and silos, and futureproof downstream investments. Bringing these elements together in the Triple-A Trifecta enables the power of “and.” But, as the results suggest, achieving this integration is harder than it looks.

 

Exhibit 2: Enterprise use of solutions leveraging multiple IA technologies

Note: 590 business leaders including 100 C-level executives

Source: HFS Research, State of Intelligent Automation 2019

 

Connecting and managing the components of digital change

One market response to enabling integrated automation is Genpact and its Cora platform. Genpact Cora is a digital business platform designed to help scale digital transformation through integration, orchestration, and governance. Through its clients and within its own operations, Genpact saw that it is massively challenging to connect and manage all the myriad elements of digital change.

 

Similar to the HFS Triple-A Trifecta, the genesis of Genpact Cora was initially as a curation exercise—pulling together an intelligent mesh of curated digital technologies. Once they were identified and understood, then the task became how to integrate them in logical ways to solve business problems and ultimately to incorporate other solutions via APIs to both link existing technology investments and enable future integrations. Genpact Cora enables this integration and supports the necessary governance and orchestration required to scale and operate digital businesses. The launch of Genpact Cora in 2017 heralded the formalization of years of development and integration work.

 

Part of Genpact Cora’s purpose is to leverage new, extensible digital technologies to complement existing systems, not replace them. Genpact Cora is designed to integrate with legacy systems and orchestrate their capabilities with new technologies and methods that enterprises need to build digital operations. This is accomplished with a combination of Genpact tools and products and an array of best-of-breed third-party solutions that can be leveraged in a modular manner with associated governance and controls. Genpact Cora can ultimately enable systemic and scalable integration across an existing IT stack by creating a “system of engagement” layer that overlays enterprises’ existing systems of record. Exhibit 3 illustrates the logical architecture of Genpact Cora.

 

Exhibit 3: The logical architecture of Genpact Cora

Source: Genpact, 2019

 

The following case studies showcase two very different roles Genpact Cora is playing in helping enterprises connect and manage components of digital change to solve problems and achieve tangible business benefits:

  • A global food and beverage company—Intelligent automation of the trade promotion function with an eye to transferability to other business areas using Genpact Cora as a digital business platform that works across the enterprise.
  • A global food distributor—Broad functional finance process transformation leveraging Cora products as the system of engagement and bringing orchestration, RPA, and analytics to create an extensible digital layer over existing systems.

 

Global food and beverage company—automating trade promotions and creating a scalable backbone for digital initiatives

The company’s global business services (GBS) organization was run with a combination of an internal retained organization and a mix of external outsourcing partners, including Genpact. In an effort to drive greater efficiency, the company began exploring options for digital technologies within its GBS organization. It targeted trade promotions, a process whereby product marketing is executed by its retail partners, who are then paid once the promotion event has been executed. Its existing trade promotion process had been previously optimized, but it was still heavily manual.

 

The enterprise wanted to improve its trade promotions process by reducing manual work, augmenting the abilities of the existing human trade promotions workforce, and improving invoice validation to reduce potential overpayments. It ideally wanted an extensible solution that could grow with it and serve other needs rather than spending a lot of time optimizing and training point solutions that could only solve one problem.

 

Creating a Virtual Trade Assistant

Its trade promotions management process consists of four primary functions: (1) trade promotion contract creation, (2) invoice review and validation, (3) proof of performance validation, and (4) payment. The company knew from prior experience that there were no off-the-shelf technology solutions that could automate its complex and multi-faceted trade promotions process.

 

Genpact was already supporting the process via a managed services engagement and thus understood the process from the inside. The client partnered with Genpact to conduct a proof of concept (POC) for two of its existing retailers for trade promotions. Its existing knowledge of the process helped it develop a refined operating model before applying automation. From the onset, the solution was a combination of people, process, and technology, with Cora helping to integrate and manage the components.

 

In the POC, Genpact used multiple elements of the Cora platform to automate the various steps in trade promotions such as using natural language understanding and machine learning to read and interpret contracts and invoices, training machine learning algorithms to understand and reconcile items on invoices, applying data engineering to create connectors to SAP, and using RPA to key in values to retailer contracts and invoices.

 

After a robust “trust but verify” POC, the head of GBS allowed Genpact to build out what became the client’s Virtual Trade Assistant. The terminology was key as the client wanted to underscore that this was supporting—not replacing—existing staff. The client is currently working through various sprints, cycling through the company’s body of retailers.

 

Delivering an initial business case and creating a scalable capability

The trade promotions engagement is on track to generate savings and productivity gains:

  • Generate ongoing annual savings of $20 million through reducing overpayment of invoices.
  • Achieve productivity gains of 50%+ for its sales.

 

“Trade promotions is the tip of the iceberg. This is now a platform for us. We are

moving from trade pay to procurement and freight pay—other process areas that

 involve integration with invoices and contracts. We are delivering the initial business

 case but have also created an anchor capability.”
 Head of Global Business Services, Global Food and Beverage Company

 

While the trade promotions program is delivering solid results, the client’s head of GBS emphasizes that the company views this as the tip of the iceberg. It is now looking to expand this platform to other areas that involve integration with contracts and invoices such as procurement and freight logistics. This will allow the client to leverage the appropriate connectors and ingestors of data established for trade promotions and re-use them, thus enabling scale.

 

A global distributor of food products—driving finance transformation through a streamlined system of engagement and automated processes

A global distributor of food products with healthy revenue growth and solid profitability had grown through acquisition over the years. For certain core business processes such as finance, the result was a large number of divisions with different systems and processes. About a decade ago, the company went through a consolidation exercise—establishing a shared service organization (SSO) and implementing SAP to standardize, streamline, and centralize finance operations. For various reasons, the company was not successful with SAP, and after five years or so it opted to revert to certain legacy systems while developing its next wave plan. The SSO lived on with a strong baseline of best practices, but it had a hodgepodge of technologies across its various broadline divisions. While disappointed, the company was committed to getting it right the next time around and conducted loads of due diligence to create and articulate its vision for digital finance transformation. Essential to the resultant master plan was the creation of an extensible system of engagement layer that could use existing legacy systems now and then later seamlessly transition to its new core finance applications. The following outlines this company’s digital finance transformation journey.

 

Digital finance transformation objectives and requirements

The global food distributor had several key objectives for its digital finance transformation program:

  • Drive consistency in systems, people, and processes across global finance functions.
  • Start the journey quickly with a scalable system of engagement.
  • Standardize finance work and incorporate intelligent automation to enhance or improve processes.
  • Enhance customer experience by improving interaction points.
  • Improve employee satisfaction by reducing mundane and manual work.

 

The firm wanted to find a partner to meet critical needs:

  1. Implement a core finance application.
  2. Implement system of engagement (SoE) tools to sit on top of core finance systems and be the interface for elements such as supplier invoices, customer payments, and portals to customers. The system of engagement layer needed to work seamlessly from legacy to the new core finance system of record. The successful provider needed to bring deep process excellence and process optimization capabilities inclusive of automation skills and tools inclusive of smart OCR, RPA, and AI.
  3. Manage and support of a broad set of finance business processes across procure to pay, order to cash, and record to report.

 

Solution – coupling managed services and system of engagement tools to drive process efficiencies

The food distributor conducted its evaluation and selection process with the same rigor it applied to the creation of its digital transformation plan. After a series of due diligence evaluations, the firm selected Workday as its new core finance application and Genpact as its partner for managed services and system of engagement tools. Genpact proposed a solution that combined business process services anchored by its deep F&A experience, a cohesive set of engagement layer products through Cora, and various automation tools and skills to help drive process efficiencies.

 

“Genpact showcased a cohesive set of engagement layer tools combined with impressive onshore and offshore business process design capabilities, lean process improvement, and associates empowered to fix inefficiencies. We also did some extra due diligence to ensure they brought strong digital innovation capabilities around automation.”
Senior Director of Business Technology—Finance, Finance Transformation Lead at a global food distributor

 

According to the firm’s Senior Director of Business Technology–Finance who was running the transformation program, Genpact showcased a cohesive set of engagement layer products combined with impressive business process design capabilities, lean process improvement, and associates empowered to fix inefficiencies. As the firm had not previously worked with Genpact, it conducted an extra level of assessment to confirm Genpact brought viable intelligent automation experience.

 

Referring back to Exhibit 3, Genpact Cora’s logical architecture combines various F&A-specific Genpact products such as Cora APFlow, Cora ARFlow, Cora FinancialControllership, and Cora PerformanceOptimizer in an engagement layer that sits on top of its core finance applications connected via a middleware layer. The product elements integrate with the Genpact Cora digital business platform for workflow, governance, and management.

 

Outcomes – enabling seamless change and delivering quantifiable benefits

The engagement began in early 2018, with initial process transformation and then the deployment of Genpact Cora product elements on top of legacy financial systems. It has been working in sprints starting first with its SSO, then across various functions and broadlines, and now with customers and suppliers. Thus far, more than 4,000 users have transitioned to Genpact Cora’s F&A solution. The firm now has a functional system of engagement that is used broadly across its internal and external users. As the company works through its Workday migration in parallel, the Cora-led system of engagement has enabled a seamless transition as intended.

 

The global food distributor indicates that it is well on its way to realizing the benefits of its digital finance transformation program. In addition to achieving the earlier stated objectives, it has generated substantial cost savings through streamlined systems and intelligent automation. It has succeeded in moving gigantic internal and external populations to its standardized best of breed system of engagement, Genpact Cora. Other quantifiable benefits include:

  • Approximately 15 million annual transactions, 30,000 suppliers, and 300,000 customers working through Cora SoE;
  • 80% standardization of processes across all F&A functions;
  • 50% productivity gains over the life cycle of the service agreement;
  • Approximately $20 million of P&L impact in the first 18 months.

 

With this stability, the firm is exploring enhanced enterprise performance analytics and dashboard visualization. At the process-level, Cora automation tools such as RPA and machine learning are driving additional efficiencies in areas such as supplier invoicing and collections.

 

The Bottom Line: Every enterprise needs a game plan for delivering an integrated digital business strategy

Digital transformation and creating the road to the OneOffice is pioneer work. All established enterprises of scale implicitly understand the need for striking a balance between people, process, and technology to successfully solve problems and drive effective change. However, the sheer abundance and confluence of new tech, new skills, new expectations, new competitors, and new business models have created a vortex of options that are wildly hard to navigate.

 

Enterprises are duly investing time and resources to determine their best way forward, but a piecemeal approach is not yielding scale or rave-worthy exponential results. Enterprises need to focus on big problems that matter and then determine the best people, processes, and technology resources to enable it. Resources such as the Triple-A Trifecta framework and emerging digital business platforms like Genpact’s Cora can help connect and manage the myriad components of digital change. Every enterprise needs an effective approach to enable integrated automation to achieve the Digital OneOffice.

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HfS Research, 14-05-2019 15:10:14

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