Leadership Insights podcast | episode 8
The evolution of what’s fueling process automation
Leadership Insights podcast
Forrester VP and Principal Analyst, Rob Koplowitz joins Nintex CEO Eric Johnson for the eighth episode of the Leadership Insights podcast. The two discuss why companies are embracing a comprehensive approach to intelligent automation.
VP and Principal Analyst
00:04 | Hi, everyone. Welcome to the leadership insights podcast by Nintex. I’m Eric Johnson, CEO of Nintex. We are a high-growth automation software company with more than 10,000 customers, and 850 team members around the globe. Leadership insights came about when we recognized the need for more thought leadership expertise around process improvements and automation investments. Before becoming the CEO, I was previously serving as a chief financial officer here at Nintex and witnessed the headache that many leaders suffered after investing in automation software–or any technology–that didn’t provide profitable returns for the business. I want to help change this pattern by offering more insight for leadership professionals or anyone who is making large technology investments. In each podcast, I will combine experiences from my leadership career, along with the knowledge of my peers who have been proven leaders in their space.
With me on the podcast today I have Rob Koplowitz, who is a VP and Principal Analyst at Forrester Research. Rob’s research focuses on digital process automation (DPA) as well as artificial intelligence and cognitive computing. Rob, thanks for joining the Leadership Insights podcast today.
01:15 | Thanks, Eric. And thanks for having me. And thanks, everybody, for joining us today.
01:19 | Well, great, let’s jump right in. I think everybody will really enjoy Rob. He’s got a ton of great perspectives. I know, he’s been really helpful to us over the years, we’ve learned a lot, I think you’re going to learn a lot, too. So let’s jump right in here. So Rob, first question on my mind today, late last year, Forrester released some research and predictions for the automation space in 2022.
Can you talk a little bit about that?
01:40 | Yeah. So I think maybe the first thing to note, Eric, is that this is actually the sixth iteration of this particular survey. So it served us well for a long time. But I think the other piece that’s that’s hidden in there is we now have sort of a longitudinal view of how this has been trending. And it’s been really interesting. So, you know, we asked a number of questions through here, we’ve augmented them through the years and brought in some new aspects. But one of the things that has been core to this that we’ve really kind of focused on is, what is the primary driver of process optimization in your organization? What is it that’s fueling you wanting to drive process optimization, and this has been a pattern that has been consistently growing over six years where we’ve moved from tactical reasons that people were optimizing, they were optimizing to reduce costs, maybe to comply with regulations. And increasingly, it’s now moving towards improving customer experience and driving an overall digital business strategy. So these are actually really strategic drivers, they’re they’re quite a bit different than kind of the tactical roots that one might associate with, with our father’s BPM of many years ago. If we look at that data, and when we asked folks to project a couple years out, it’s 69%, that are actually focusing on customer experience and digital transformation, which is really interesting. And what’s interesting about these topics is these are things that are coming from the C-level, these things are coming from the board level. So they’re strategic, they permeate the entirety of the organization, they put process automation, and process optimization into a really critical category within an overall software portfolio. And I want to just throw out maybe one more point on this, Eric, which I think is interesting, because what we’ve seen is a huge drop around cost reduction as the primary driver, but not as a driver. What’s interesting is we asked folks to identify the primary driver, and then we asked “what else is important to you and do you measure it?” and we asked specifically around cost reduction improvements and measuring that on the process of change, the 67% are still measuring it and finding it important today and another 31% are looking to measure it going forward in the future. So a little bit of having to figure this out. Like if cost reduction is not your primary driver. But it remains a very important driver. It is an assumption that process optimization and automation will reduce costs. But the implications are broader and more strategic in general.
04:10 | Well, that’s certainly what we’ve seen. I mean, I would say the number of cases now where in organizations, where it’s at the c-level, it’s at the boardroom level, it’s a strategic initiative for the company. And it’s to drive ultimately a better outcome with a customer, but I still think they want to drive that outcome with the customer efficiently. Right. And so the kind of Nirvana in there is, can the organization you know, leverage process optimization, process excellence, process automation, to actually improve customer experience and have it be super efficient? We see definitely a lot of interest in that. So I remember those diagrams to showing the percentages and how much they’ve changed. So it’s right in line with I could say with what my experience has been in the market. I guess one question, you know, whenever you do the research, there’s always the stuff that kind of comes back the way you thought maybe in the momentum, but then there’s sometimes there’s things that are a little surprising. So in your recent research you’ve been doing including the recent DPA software wave, and throughout the pandemic, what has surprised you? What’s been maybe something you didn’t expect?
05:07 | Well, what I think we have seen, I’d like to think we expected. But let’s say it’s gratifying to see, which is folks are embracing a more comprehensive approach towards the overall process of Intelligent Automation, right? So I think we’re coming out of that era of, you know, well, it’s an RPA versus DPA war, can we embrace low code? Is low code, kind of the way to go? Where does our decisioning and where does our document generation–all these other pieces that make up an automation strategy. They were tending towards becoming point solutions. They were trending towards being kind of contentious decisions within the IT organization. And I think we’ve now settled on this view that these things are complementary technologies and they need to be deeply integrated, and that you have to think about them holistically. That core process, your end to end process, is going to cross a heterogeneous technology landscape, and it’s going across human states, and that we have to manage that. And and so this is something we’ve been hoping for. And I think that survey is now kind of coming around and the data and the way we approach the wave is now coming around to that viewpoint in the market.
06:20 | Yeah well, we certainly see that. And so with that in mind, when you think about kind of maybe the way the world was a few years ago, people having a lot of best of breed lots of different solutions for different components of automation. And then you think about a world where customers would like it to be more integrated, work more tightly. That leads me down this path of then how do you suggest an organization to standardize on automation? And how do they get to potentially fewer technologies to do more? What do you guys see as best practices around that?
06:48 | It’s funny, but if we could pull out like a Nintex webinar from like four or five years ago, for the old roadshows, you would see that we used to end up with this slide that said, keep calm and standardize. At that point in time, you could see the audience kind of like, they get their body language, say, I don’t like standardization, I don’t like this conversation. But after COVID, this has become very much the driver, right?
So, you know, among the things that we saw coming out of COVID was, you have to be able to react extremely quickly. You have to be agile, you have to be adaptable to the unknown. I don’t know what the unknowns are going to be. I don’t know whether it’s hopefully it’s not another pandemic, or its geopolitical or its environmental, or it’s, you know, that there’s any one of a number of things that have disturbed businesses, and the ability to react extremely quickly has become paramount. This, again, is one that’s coming down from the board level. How do I do that? Well, I do have to start thinking about standardizing. I have to think about standardization from the perspective of IT diligence, right? How do I ensure that I’m governing the applications correctly? How do I ensure that I’m governing any kind of emerging citizen development programs appropriately? How do I drive, you know, hygienic data access to make sure that things are uncompromised? And how do I come up with this comprehensive view of a lot of different complementary technologies that need to be woven together effectively in order to drive an end to end process, and I don’t want to be in that integration business. So I have to be able to depend on vendors that are going to give me that comprehensive solution. So standardization has been the primary conversation that we’ve been having with clients–probably for the last year now. And I think that’s gratifying. I think that’s good. I understand people’s hesitance when confronted with this standardization word. But I think it’s critical. I think it’s really, really critical for these technologies to become a first-class citizen within organizations’ development portfolios.
08:41 | That’s great. So switching gears just slightly here and building on that. So we’re seeing a lot of traction around that whole notion of the citizen development or citizen developer here in our company. What’s your take on, you know, kind of the status and where the markets at in terms of citizen developers,
08:55 | Cautiously optimistic, I think would be the answer. And I think there’s, there’s a very logical stepping stone that many organizations have taken now, which is, you know, what I would describe as bringing the business closer to the development process. So maybe not handing over the keys to the citizen developer quite yet. But approaching requirements gathering, approaching prototyping, approaching the interaction between IT and the business in a fundamentally different way, all of which DPA and low-code allow you to do. So we can develop faster. We can develop closer to the business and the business has a significant role, maybe in prototyping, maybe in iterative prototyping to gather and refine requirements, and I think that’s a fantastic step forward. So that gets us part of the way there. But the really big one, what our clients really want to get to, they want to get to citizen development. They want to embrace citizen developer we want to do it right, right? We don’t want to go and reinvent some of the horror stories we had around Lotus Notes and, and other things that kind of ran free and didn’t have a lot of guardrails. So we want to make sure that the business people are ready to develop, they understand what their role is. And that they understand their role in process optimization, they understand what they can build what they can’t build, and that it can govern this at scale, and scale becomes a really, really big piece of it. So there are organizations that are moving in the direction of citizen development, I truly believe 6, 7, 8 years from now, we’re all gonna be software developers, as part of our business. It’s going to be as common ask for, you know, to do develop in Nintex will be as common as asking do you develop in Excel. But right now we’re moving towards it, we’re on a journey, and I think it’s the right direction.
10:33 | Yeah, I would totally agree with you that front part of having them involved there, the process optimization lens, and then this notion of the role of governance and IT so that we don’t end up with the Lotus Notes, little applications all over the place that are ungoverned. And then we end up with problems, and we want to migrate them or change things. That makes a ton of sense. And actually leads me to my next question, which kind of two parts to it? So overall, how does an organization approach process optimization? And then if you kind of break it down a little bit, for instance, how do you understand your processes before you automate them, so that you ensure you’re actually optimizing them. And that’s the other thing that’s always kind of on my mind is this some automation doesn’t necessarily equal optimization, right. And so there’s this whole notion of true process optimization. So any perspectives you have around that would be great.
11:21 | We like to separate the term efficiency from effectiveness. So you can become very, very efficient at processing things that are generating high rates of fraud, right, that’s probably not a way to become efficient, you want to be effective, you want to be better at executing your processes, and you want to do them faster, and you want to take cost out. So you want all of these things. But if we sort of think about the most simplistic way of doing this, if we just automate what we’re doing today, it’ll be faster and cheaper, that’s probably not the answer. So we need to take a step back, we’re in the midst of a research stream that we call the citizen process expert, where we’re trying to explore the democratization of process optimization/process insight tool. So if we’re moving towards towards a world of citizen developers, we probably have to understand what constitutes a good process. We probably have to have tools. So congratulations on the Kryon acquisition, by the way, you know, really, really nice move. And really interesting in the sense that, you know, when I look at Kryon, and its process inside its process analytic capabilities, you give me an objective baseline of how the process is running today. And I could use that as a starting point for re engineering and you have Nintex Promapp®, as well. So I can think of process mapping as a collaborative reengineering palette, we think this pattern of moving from insight into re engineering, and then opportunistically into automation is the right way to approach this. But part of this, I think, is just in the same way that five to 10 years from now, we’re all gonna be very familiar with low-code development tools. I think our first thing we’re going to turn to would be how is the process running today? How do I go about coming to consensus on how this process should run with all the relevant stakeholders?
13:05 | You know, Rob, I love the perspective you bring there, because the word we’re talking about a lot today, as we keep saying both of us process. Yeah, and I think what it’s doing is it’s elevating people up to think about what’s the process first. And that whole notion you have right there, understanding the process, then doing re engineering, getting back to your example of the fraud situation where you just don’t want to redo your claims process or your loan origination process. You just don’t want to automate pieces of it, you actually want to think about the whole thing. Some of the things you may want to change about might not even have anything to do with automation. It could be the number of approvers. It could be why you’re doing something/certain things, and then then go ahead and automate a well designed process. That seems like a more common sense approach.
13:47 | I mean, Eric, I’ll go back to one of my favorite stories that I get to all the time, which was one of your customers that was using Nintex Promapp. And they were bringing contractors on board to a construction site. It was a very cumbersome process, and you want to do it well, right. They need the contractors want to get paid. I want to say there were nine sign offs to get a contractor on board. And so they they sat down and they looked at the process from end to end. And they went to the legal and the HR people, they went to everybody and said, why do we have nine process? Why do we have nine sign off? That seems excessive? And the team came back to them and said, We don’t need any sign-offs for this. I don’t know how this happened to where it came from. But none of these approvals are required. And so what a massive change in terms of efficiency as well as effectiveness in that instance. And it’s a dramatic example, but I love it because it’s very accessible.
14:34 | No, I yeah, that is a great example. So thank you for sharing that. You know, final question on my mind today. If you think about it, and I know you just did the DPA wave, so it’s probably really fresh. But when we talk about DPA platform, breadth and comprehensiveness and the ability to maintain state, let’s talk about those concepts.
14:53 | So there’s this really ugly thing that came out of the good old world of BPM. It’s really fun to bash BPM we all enjoy it. I can’t think of anyone that call themselves a BPM vendor anymore. But there are some amazing things that came out of that world, not the least of which is the ability to model and orchestrate a process. And to maintain state of that process over a long running period of time. It is difficult, it is a non-trivial thing to do. So that sort of thing number one, and I think the world is kind of finally figuring this out. Like there’s a lot of really different great complementary technologies, you know, RPA is great technology, conditional logic, decisioning rules, document generation, all of these things are content intelligence. All these things are fantastic pieces of the overall puzzle, among which is the ability to develop, you know, an application of workflows. But underlying all of this is the ability to model and orchestrate and manage these processes over time. And that requires a modeling environment, requires a state machine, it requires some rather difficult technology. And what that technology then enables you to do is to say, look, we have RPA solutions, or we have pre integration with RPA solutions. And these things are part of our modeling suite, we have the ability to drag in integrations through API’s through back-end integration. And all these things are part of our model.
So if you look at the way we set up that DPA wave, all of these things were evaluation criteria, all of these things were things that we wanted the vendor to either say, we provide it, or we have a strategy to provide it to you through partnerships or pre-integration, because we do think that all of these things are needed to drive us towards true process optimization.
16:32 | Well, great, that makes a ton of sense. And I would fundamentally agree. That is one of the hardest things to do. So you’re spot on. Hard, but necessary. So Rob, I just want to thank you for joining us today, as always really great to get your perspectives and I know our audience will really appreciate it. So thank you.
17:00 | Thank you