Adding Autonomics to Outsourcing

autonomics, outsourcing.The concept of robots running the data center may sound like the plot to a blockbuster Hollywood movie, but CIOs should give serious consideration to adding autonomics to their outsourcing contracts.  Today, top notch providers are augmenting their arsenal with operational and business process automation to deliver even greater client benefits.

Since 2012, industry observers have been watching this automation trend and its impact.  Although not as visible as cloud computing or big data, software based process automation is a trend that deserves the attention of innovative IT executives looking to increase their contribution to the business.  So what is autonomics?  It’s software that applies high-level policies to automate and adapt to changing conditions, reducing and eliminating the need for human intervention.

During the International Outsourcing Summit (IOS) 2013 held in Manila, Philippines, conversations heated up on this trend and the implications for the outsourcing industry. The outsourcing industry maintains that the demand will continue to be robust as players pursue bigger market shares.  Yet, there are skeptics.  Some analysts suggest that CIOs need to first address bigger issues such as standardization of IT infrastructure as a prerequisite to automation. And this task of deciding what components of the infrastructure have to be standardized—and how to standardize them—can be a time-consuming and costly process, slowing the adoption of automation. [1]

Innovative Outsourcers

This has not slowed innovative outsourcers who recognize the need to bring new value to their customers and move beyond lower level-IT processes and labor arbitrage centered deals.  Indian outsourcers like Wipro, recently partnered with US supplier IPsoft, and mid-sized outsourcer iGATE, with its iTOPS model, are just two examples of providers who are changing the outsourcing market through application of autonomics.

IPsoft itself recently established an Australian office to sell automation software that allows robots to replace humans in Level 0 and Level 1 technical support roles such as helpdesk.  With clients such as Pfizer and Autodesk, it claims to have addressed more than 17 billion customer “incidents” without human intervention through virtual workers. [1]

iGATE signed two Australian customers, Victoria’s Residential Tenancies Bond Authority and Regional Development Australia – Tasmania, and has stated expectations to have 3000 consultants in the next four years serving customers through automation.[2]

Other players are active on the software development side such as IBM, Cisco, Google and Hewlett Packard.  Large, well-known outsourcers such as Infosys, Accenture, TCS and Dell are also adopting autonomics into their solutions, either through internal development or partnerships with software automation experts.  Lastly, it’s worth mentioning that academic institutions such as MIT are also at the forefront of autonomics and exploring how it can be applied to IT and other enterprise and government functions.

Benefits You Can Expect

Before you run off to discuss adding autonomics with your outsourcer, what benefits should you expect to achieve?

There are two clear benefits you should expect to hear during your discussion with providers:

  1. Better Service/Shorter Mean-Time-To-Repair Service Level Agreements (MTTR SLAs).   The basic benefit of applying robotics or automation is clearly the ability to solve routine problems faster and without human intervention, so this benefit is cornerstone to adoption.  Studies have already shown that 30% of routine issues can be easily handled by autonomics.
  2. Cost reduction.  Another benefit already being cited is cost reductions to the outsourcing organization through staff reductions, as high as 45% for customer call centers, and improved efficiencies in IT service delivery.  It has been reported that Infosys has been able to cut the number of people supporting some infrastructure management projects in half, from 100 to 50 people.[3]  Passing on cost savings, estimated to be as high as 60%, to CIOs is expected to drive down the cost of managed services and allow more focus by outsourcers and IT organizations on higher valued services that are core to creating new business value.

Getting Started

If you’re provider hasn’t proactively discussed where and how they can deliver some of the benefits listed above, it’s time to start the conversation—with or without your current provider.

Here’s a sampling of areas to consider implementing autonomics:

  1. New Product/Service Launch.  By applying autonomics to IT services supporting a new product or service launch, CIOs can more clearly measure the ROI.  Autonomics can help to streamline labor costs associated with the launch.
  2. Scripted Call Centers.  Sophisticated voice recognition software and cognitive tools that are part of autonomics solutions offer the ability to further automate call center operations.  Automating repetitive, commonly encountered tasks can help improve productivity rates for new or existing outsourced call center operations.
  3. Legacy IT Infrastructure Services.  By applying autonomics to IT services such as network management, server management, provisioning, process orchestration and teleconferencing, studies have shown as many as 70% more events can be resolved in the same amount of time.  This level of efficiency creates the opportunity to get more from your provider or add new service coverage.

Negotiating New Business Models

One of the most exciting aspects of adding autonomics to your outsourcing plan is the opportunity to change existing pricing models.  Business-based outcome models are now possible.

Automation measurement tools are making business outcome models a reality.  By applying these tools, providers are able to measure the impact of automation and in return, create contracts that are outcome-based rather than fee-based.  One example of an outcome-based model is an outsourcer working for a hospitality firm where the provider is paid on the number of reservations or hotel bookings.

Don’t miss the opportunity to add autonomics to your future plans.  The pace of change is fast and the potential benefits are significant.  Robots aren’t something you should fear; when applied properly, autonomics can have tremendous operational and business value.

 

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