Getting Corporates to work Smarter
The world of the big corporates is about the change. There's a new technology on the march and those that don't get on-board are going to struggle to keep up. In the world of the corporates, this is going to be the big story of the 2020's.
It uses generic process management software to deliver something that blends “Business Process Automation” and “Business Process Management”.
At the core, you take a common business process and codify it (usually using some kind of work-flow diagram paradigm), then use the workflow to control the business operation.
Let take an example of a mortgage application. Here's some steps that might be required
1. Applicant fills out the application form 2. The form is checked and either proceeds or additional information is requested 3. The applicant is credit checked. 4. Legal checks are run on the property to be purchased 5. A request is raised to acquire the funds 6. The Exchange takes place 7. Documents sent to the applicant
This is not meant to represent any kind of real process, but is just an example of the sort of things you see in a typical business process. Next, using standard workflow / flowchart modelling, we implement the process in the computer. So that might look something like this …
This is a huge over simplification, but useful for illustrative purposes. In a real system, each action is usually sub-divided into sub-actions, then each action & sub-action can be assigned to specific teams. Each action will have a corresponding SLA, which (if not met) causes the action to be escalated.
Other actions, like the credit check, may be ones that can be automated. So the action to be taken isn't to assign it to a team, but to run some code to talk to another computer system (say over a Rest/API) to trigger the credit check process. When the process is done, the checking system can then call back to the workflow system to give it the results, trigger the application to continue its journey. Although automated, this could still have an SLA and escalation process, to ensure there isn't a break in the flow.
As the task is stepped through its workflow, it automatically appears in the outstanding jobs for each team, so can be assigned to team members in their regular sprint planning.
Of course, there is a lot more complexity to the workflow options. For example, under specific conditions, items can be sent to more senior members of staff for specific approval.
The amazing thing about this is how simple it is. Its doesn't actually require a whole lot of processing power, so could have been implemented any time. Of course, being able to draw the workflow out visually is a lot better than writing it in text, so the mainstream adoption of the graphical user interface (some 30 yrs ago), would help, but its wasn't the lack of computer power that held back this idea, maybe just the lack of imagination.
Of course, when you start adding automated steps that call out to other computer systems, that could be anywhere in the world, or even other on-line services run by third party organisations, the power of the automated workflow really comes to life.
What are the benefitsTo many large corporations, who is doing what, what jobs people are spending their time on, where the bottlenecks in their processes are and where's the money being spent are question that are often only answered by running massively expensive audits, or hiring outside consultants to tell you how your business is run.
Workflow automation solves that problem. You can not only instantly see where there are bottlenecks in your processes, you can even run automated alerts on queue lengths so managers are aware of it, before customers start complaining.
The other big headache of the large corporate is when jobs fall between two stools, or just get lost in the process. With an automated workflow, you know exactly who is responsible for the job at any one time and the pre-determined workflow will automatically walk the job to the next team, when its ready.
You can then use this information to have more multi-skilled staff of the appropriate types, that can be quickly moved from one role to another, as the work starts to back up.
The US State Department has gone heavily into automated workflow. Everything from ordering a new light-bulb for the wash-rooms to ordering travel for the ambassador is done with a workflow. Now there is a record of where all the money is being spent and why.
Its now going one step further where the workflow can all be trigger and controlled by a dedicated app. So you go into the wash-rooms and find a light is out, so you pull out the app and scan a QR code on the wall. The app now knows where you are and gives you a list of possible events to report, like “Light is out”. You click the option and there's now automatically a job in the building maintenance staff's queue to replace it.
There's also now a record of the annual cost of replacing light-bulbs.
Because the workflows will include SLAs and escalations, this way of working is particularly popular with highly regulated markets, like banking or health. It's not uncommon for providers in these markets to have to be able to prove to a regulator or client that they are meeting the targets they have promised, often with severe penalties if they do not. Was the cancer scan looked at, and reported to the GP, within the time promised? What's the status of my mortgage application and how long before I can plan to move in?
In summary, the benefit is visibility – both financially and operationally.
Who are the players
The dominant players in the market right now have come into the field from slightly different angles and are both better know as niche players in their respective fields, but both are trying to turn their solutions into more generic business solutions as quick as they can. They also both sell the service as a SaaS/PaaS. The two big players are Salesforce and ServiceNow.
Most people in business will have heard of Salesforce by now. They've been a big player in the CRM market for some time and are widely used in this space. From their CRM background, they knew that a lot of the sales process can be automated. Once a customer has agreed to buy a product, this triggers a long list of things that need to be executed. Typically something like 1. Internally order the product(s) 2. Ge the product shipped to the customer 3. Raise an invoice 4. Chase the payment 5. Follow up to check the customer is happy.
Again, this is a gross overs simplification, but its not hard to see how this can be codified into a workflow, with all the appropriate SLAs.
When a new product comes out, you can create a workflow in all the appropriate staff to talk to their customers about it.
Once you have such a system for automating workflows, making it more generic isn't a big step.
ServiceNow's background it IT management – specifically “ITIL” compliant IT management. This requires tight management of the life-cycle of IT equipment. Large corporate struggle to control their IT without some kind of centralised management system.
“ITIL” also requires tight control over changes to IT systems. Changes must be stepped through specific processes with their risk factor assessed and appropriate approvals put in place.
Needless to say, the ability to call out to other computer systems is a real benefit, when managing a large IT infrastructure. So things like provisioning of a new virtual server can be done automatically by a workflow.
However, ServiceNow is not slow to realise the massive benefit workflow management can have to an entire corporate organisation. As one Senior Director told me - “In 10 years time, all corporates will be run this way, because the ones that weren't won't exist”.
How are they doing (as of Jan-2020)?
Despite changing both their CTO & CFO in very recent months, ServiceNow stock price seems unbothered. Yes, there were jitters at first, but its seems to be settling into an upwards trajectory. Which should be unsurprising as their ability to continue to grow their accounts and revenue, particularly their multimillion dollar subscriber accounts, should be the envie of any tech company.
Coming from SAP, their new CEO seems a good choice, as he will know how to talk to corporates and what they are looking for.
However, explosive growth comes with its own problems. Ensuring their internal processes, technology and engineering can continue to scale with their customers, without costs spiralling out of control, or quality suffering, is a challenge that should never be under-estimated.
When you're a small start-up, adding a few more staff to handle the fact your software or engineering isn't quite as polished as it should be, isn't a problem, but that's a solution what does not scale. Too many staff creates its own problems. Can you train them up quicker than they are leaving? Are there enough suitable staff in your region? These limits get reached quicker than some might think.
As SaaS/PaaS becomes a bigger and bigger market, the number of companies trying to draw from the same labour pool will make it more difficult to keep the vacancies filled.
Saleforce stock doesn't seem quite as happy. Although it started to climb at the beginning of the new year, most of last year is was really quite flat, hovering at about the same level it had been since Q3/2018. Where as, ServiceNow stock has been on a non-stop gradual upwards trajectory since the start of 2017.
One big difference is that Salesforce has bet heavily on moving to the public, cloud, where as, for now, ServiceNow hosts almost all its customers on infrastructure it owns. While moving to the cloud can reduce you staff requirement, it can also mean you are very susceptible to changes in cloud pricing. The problem being, once you have integrated into one cloud provider, it can be extremely difficult to change, so you are tied into whatever price structure they choose. Rebuilding a team to take the services back in-house, or recoding for a different cloud provider, can be quite a considerable cost.
Once in the public cloud, controlling costs can also be a challenge. Often referred to as “Cloud Sprawl”, it can be easy to over provision services and lose control over what is mission critical and what is not. Meaning you end up spending on services nobody wants or uses, and nobody knows which matter and which don't.
While this is also a risk with private clouds, because they have a fixed cost, there is far less budgetary implication. Where as, with public cloud, ever CPU cycle has a cost attached.
But it doesn't seem probable, or necessary, that one player should win out other the other. The market for this service should be so huge that there should be plenty of room for both.
This is because, large corporates are only the tip of the iceberg. Where this technology will really come into play is in Government departments, for whom lack of spending control and lack of visibility of service are practically legendary.