By Leslie Willcocks and John Hindle
Introduction: The Knowledge Switch
I have been researching intelligent automation with my colleague at Knowledge Capital Partners, John Hindle. One of the major sectors we have been exploring is telecommunications. By 2022, it is generally recognised that telecom operators must marry operational efficiency and reduced capital expenditure with improved customer experiences, higher revenues, and greater business and operational resilience. While intelligent automation can be operationalised to support these objectives, we found that it requires four knowledge-related changes to occur.
One imperative is improved data control, focusing on identity management and unifying customer profiles across service lines. The second imperative is connecting customer journeys by identifying gaps and end-states, enabling flexible journey orchestrations in real time. Thirdly, telcos (telecommunications companies) need new impetus in organising around the customer, with staff engaged with customers’ data and empowered to fulfil customers’ needs. Finally, the fourth imperative: to build on the integration and personalisation capacities of intelligent automation, as well as the predictive and interactive capabilities, to automate and orchestrate the actions needed.
For telcos, the pandemic and economic crisis of 2020–2022 have accelerated and amplified trends that were already redefining the basis for success in the industry. The telco challenge rests, firstly, with the massive amounts of data and information in their businesses, much of which is fragmented, isolated and, at best, semi-structured. Telcos are like utilities in this sense, but with more diverse product portfolios.
Second is the long-term reengineering challenge for telcos to organise around the customer rather than the service. Operations infrastructures and accompanying data repositories have grown up around specific technologies and service lines (e.g., POTS(i), wireless, Internet, cloud, streaming) as they were invented and deployed or acquired, then managed and regulated. Today, they urgently and fundamentally need a knowledge switch, and this poses a challenge.
The historic focus on operational knowledge needs other data, such as what customers are doing, what they want and need to know, and how self-service can be achieved. Connecting data islands, mining for insights, and getting the relevant information structured and accessible to frontline staff and customers is the key to competing, including against digital start-ups. Fortunately, intelligent automation can be a huge enabler if the strategic imperative is recognised, as the three cases below demonstrate.
A particular concern we investigate is the actual business value gained from deploying intelligent automation. If you have been reading earlier blogs, or our book Becoming Strategic with Robotic Process Automation (SB Publishing, UK), you will be familiar with our finding that a huge amount of value is being left on the table because of the limited objectives organisations pursue with intelligent automation.
We are finding that most organisations focus on Efficiency gains, and applying automation technologies to making things run better, that is improving productivity and lowering costs and time scales through efficiency measures. Examples include 24/7 operations (flexible work scheduling); fewer or redeployed FTEs (improved productivity), lower recruitment / training / benefit costs; and rework cost avoidance (keying errors, process missteps, etc.)
But there are much bigger gains to be had. Effectiveness covers doing things ‘differently’, for example Increased ‘enterprise ROI’—24/7 real-time operations; IT functional optimisation (less application development; workforce augmentation (intelligent digital workers); improved regulatory compliance (transaction traceability/auditability). But then there are Enablement gains from doing ‘different things’, for example: infrastructure platform for innovation; analytics for new products / services (new business modelling); increased disruptive potential (agility / responsiveness / speed / scale); differentiated ‘total’ customer experience(s); integrated across channels / partners.
We explore such types of gain in the three cases below.
A North American Telco
One North American telco began its intelligent automation journey in 2015 by establishing a Centre of Excellence (COE) to focus on technology selection, opportunity evaluation and prioritisation based on alignment to business strategy; along with building, testing and deploying automations. The COE leadership wisely adopted a strategy to ‘infect’ the organisation and create demand for automation by demonstrating and widely promoting results from early deployments.
The success of the initial focus on Efficiency with RPA in the back office improved speed, volume and accuracy of order transactions, payment processing and inventory management. This created ‘permission’ internally to expand automation into front-office deployments to improve enterprise Effectiveness.
In contact centres, the integration of RPA with cognitive tools such as Natural Language Processing (NLP), Optical Character Recognition (OCR) and sentiment analysis, enabled digital workers to engage directly as chatbots; they supported agents by gathering relevant data in real time from multiple service lines, accelerating case completions and greatly improving both customer and employee experience. Customer sentiment analysis, and the improved customer experience overall, also created opportunities to upsell at scale. Together, the increase in enterprise capacity translated into significant gains in enterprise Effectiveness. The company, by late 2021, had over 240 digital workers in contact centres and is planning to add 70 to 80 per year to meet customer demand.
Consistent with results in other sectors and companies, these gains from intelligent automation in overall Effectiveness greatly exceed its gains from Efficiency. While the company fully met its Efficiency targets through automation, it reports achieving 8 times those gains in greater enterprise Effectiveness—double its expectations.
Finally, as seen in other industries, the COVID-19 pandemic created immediate resilience challenges in operational performance and customer experience. Dramatic spikes in service utilisation and traffic patterns as a result of lockdown restrictions and home working—for customers and staff alike—created critical, unanticipated service challenges. By expanding the digital workforce supporting its contact centres and technical support staff, it was able to accommodate these shifts in customer demand and resource availability. This generated additional Enablement gains equal to its Effectiveness gains, with even greater value expected in the future.
A European Telco
This telco operates on a federated model, with four customer-facing lines of business and a fifth focused on IT. While the company predominately uses ROI for evaluating automation business cases, the extensive use of lower-cost offshore service providers often puts stress on building the strongest cases. One solution has been to allocate ‘common costs’ of automation onto the COE, making automation cases more attractive.
As seen in other cases, the strong focus on Efficiency includes over 450 automated processes, which have enabled the company to significantly reduce overhead costs. In its most recent financial year, reduction of future hiring needs, plus greater cost avoidance, represent 60 percent of the financial benefit from automation. One innovative automation alone generates millions in annual procurement savings by checking excess inventory stocks across all lines of business before confirming new equipment orders. In total, the company has tripled its planned Efficiency gains through automation.
Those achievements are multiplied by additional gains in enterprise Effectiveness from intelligent automation, with an astonishing 8-fold increase over original estimates. In one example, with over 200 applications requiring various levels of security access, the company developed a ‘validation digital worker’ to confirm access for new joiners, terminate leavers and re-validate contractors supporting over 2000 systems.
In its contact centres, the company has realised significant Effectiveness gains by creating a digital workforce to communicate with customers via text; the range of requests includes automated fault identification and reporting, setting service appointments and reminders, booking engineers when required, and closing open tickets. Overall, customers get a better experience through streamlined, more focused communications. On path to achieve or exceed its target traffic reduction in contact centres of 80 percent, a more meaningful benefit is the improved customer experience it creates. A 30- to 45-minute call centre interaction now takes less than 10 minutes, and two-thirds of customers rated the service 8 or above on a 10-point scale, with nearly half scoring the service 10.
Finally, the COVID-19 pandemic proved a massive stress-test in Enablement. Lockdowns led to a 50 percent drop in on-shore and off-shore labour capacity. Simultaneously, demand for broadband exploded as customers began working from home. Within two weeks, the existing text-based digital workforce was expanded to meet this demand spike, and has now become a sustaining source of long-term value. The company reports that its gains in Enablement to date have reached 20 times its expectations, demonstrating that the full benefits of intelligent automation are both cumulative and exponential.
An EMEA Multinational
This telecoms provider sought value in the form of cultural change as well as enterprise performance from its automation program. A ‘big bang’ digital automation program across business and consumer contact centres built on an RPA platform has transformed both customer and employee experience with impressive results.
In its domestic market, the company began by transforming its business-facing contact centres, which handled 160,000 calls and 360,000 emails annually to carry out 500,000 requests across 3 business segments (small, medium and large enterprises). B2B call centre employees had to interact with more than 70 different screens and more than 30 different systems in many requests, due to disconnected service contracts, products and relationships. The company set an Efficiency goal to reduce average processing time by 50 percent and the number of screens by 85 percent with a more agile and simple operation. By applying RPA and machine learning, the company has achieved a 35 percent gain in Efficiency from its B2B contact centre automations.
While the main strategy goal of the project was to improve Efficiency, the deployment also generates Effectiveness gains; with more than 50 percent reduction in average handling times, quality and customer satisfaction have greatly improved. Digital workers freed human workers to focus on higher impact activities, so employee satisfaction also rose significantly by eliminating frustration and allowing employees to focus on customer engagement.
The Efficiency and Effectiveness gains realised in the B2B contact centre automation program are being replicated at scale through the consumer-facing contact centre transformation program. The B2C contact centres get more than two million calls per year, receive 60,000 emails and carry out four million operations, and automations are expected to reduce agent time more than 30 percent, again improving both employee and customer experience.
Combined, the B2B and B2C contact centres are expected to deploy a total of over 1,000 digital workers. They will pave the way for even greater Enablement gains as the company experiments with more sophisticated automations, such as cognitive-skilled digital workers capable of interacting autonomously with customers to solve support requests.
The three telecom leaders interviewed responded to the telecom imperatives of 2021–2022, which included master data management, connecting customer journeys, reshaping customer focus, reengineering knowledge, and automating and orchestrating through intelligent automation.
Telecom leaders leverage intelligent automation to pursue multiple objectives in addition to Efficiency. Enablement gains are exponential, even potentially infinite. Effectiveness and Enablement gains are closely related to executive leadership recognising intelligent automation as a strategic business lever requiring investment, not just a piece of technology.
Telecom leaders demonstrate how intelligent automation can progress the knowledge switch from service operations to customer needs. In particular, intelligent automation is being used as the central engine to overhaul, refashion and enhance the business value of contact centres.