A recent report from Gartner identifies the impact of automation in IT services. Essentially, automation serves to reduce the unit cost of operating an in-house or outsourced process and fuels margin expansion opportunities, especially among processes delivered on a massive scale. Automation also enables quicker identification of exceptions for earlier decision making and can drive increased quality and predictability of process outcomes.
Gartner predicts that a combination of automation and virtualization will revolutionize IT service delivery. As organizations mature, their adoption of automation will increase productivity and require workers to change their execution strategies as well as the skills they will need to develop sharper decision making. It is also apparent that the impact of automation will stretch beyond the IT organization. According to Gartner, automation is expected to proliferate within IT and organically, with IT consumerization empowering business users to automate processes with productivity tools. Thus, pools of automation outside IT will become critical sources of analytics and process performance data, which will aid in simulation, optimization and decision making.
In the current market, buyers of IT services require new solutions with high levels of subject matter expertise. External service providers that intimately understand how their clients do business, in addition to having IT expertise, will be able to advise clients, discover requirements and design solutions which they will also implement, manage and optimize. In other words, these optimum providers will be able to ensure full life cycle support.
With regard to processes that are repeatable or more commodity-like, Gartner analysts predict that on-demand, cloud-sourced models will flourish. Organizations will look to providers to compose and build these cloud services into an overarching business process service that meets their needs and agility requirements. The result may be hybrid cloud services — a combination of traditional outsourcing and cloud-enabling technologies.
Gartner analysts point out, however, that automation and commoditization are not necessarily synonymous. Automated services using a common platform will yield massive amounts of standardized data, giving service providers an even greater opportunity to deliver value-added services in the form of analytics. Thus, sellers of IT services will need to regularly change their investment models and how they deliver services. As automated services start to move to the cloud, the emerging role of CSB providers will enable service providers to combine, package and assemble automated services that keep value propositions ahead of the commoditization curve. Providers that can couple automated services with insightful analytics services, as well as process agility capabilities, will redefine the optimum and stay ahead of the aggregator curve.
Gartner claims that the most profound impact of automation will be on offshore delivery of what are typically inexpensive, repetitive, non-differentiated, or rote tasks. Automation of IT service provider offerings will shift leverage away from labor arbitrage to asset arbitrage. Providers that are able to innovate their processes faster will benefit in this price-competitive market. Offshore service providers will be challenged to devise value-added components that leverage automation, and should avoid competing with automation on the basis of price.
Gartner recommends that IT service providers gain a clear understanding of the future trends shaping the business process services (BPS) market so that BPS strategies can be revised and retooled beyond merely cost reduction. BPS should be used for differentiation and to fuel growth. Tactical management of process change in operations, including automation and cloud-enabled services, will allow providers to effectively capitalize on new opportunities in the internet revolution, which is affecting how consultants and service providers deliver business process consulting services. Digitized content, business process management approaches and knowledge platforms will help to speed the delivery of advisory services and make them more predictable, as well as cost effective.
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