by Stephanie Overby

Autonomic offerings set to transform IT, but outsourcing customers beware

Aug 26, 2016
InnovationIT LeadershipIT Strategy

IT leaders have more automation options that ever, but not all robotic systems are created equal.

automation ts
Credit: Thinkstock

Wipro has Holmes, Tata Consultancy Services introduced Ignio, Syntel is selling SyntBots. HCL Systems calls its Dry Ice. And Infosys is promoting Mana. With traditional IT outsourcing revenue streams at risk to automation, a number of IT service providers are responding by developing their own homegrown systems which are designed to perform routine tasks and operations otherwise performed by humans.

The good news is that CIOs now have a number of automation options to choose from. The bad news? The array of choices can be confusing and the unproven systems can be risky. It may not be immediately clear how these new automation options from traditional IT service providers differ from the solutions of the more well-established robotic systems companies like IPSoft or BluePrism.

Today’s automation market includes a wide variety of offerings comprising a broad spectrum of capabilities. The most mature market segment is Robotic Process Automation (RPA). RPA applications are designed to execute specifically defined tasks typically around business processes, such as processing an insurance claim. RPA tools can be easily deployed in a matter of weeks. While IT support is important, the impact of RPA on existing infrastructure and applications is relatively minimal. Autonomics, on the other hand, use learning algorithms to automate repetitive processes thereby reducing costs or increasing speed, accuracy, availability, or auditability.

Autonomics are being designed specifically for IT-related functions and processes in the areas of network, storage, server and application management, database administration, virtual machine provisioning and diagnostics. These systems have the ability to learn new capabilities and respond to new conditions, but can require four to six months to implement.

[ Related: Should CIOs be chief robot wranglers? ] talked to Jeff Augustin, managing director of IT outsourcing consultancy Alsbridge about this evolving market and what CIOs seeking to take advantage of automation to manage their enterprises should know about these new offerings. In what areas are CIOs most interested in autonomic solutions?

Jeff Augustin, Managing Director, Alsbridge: Broadly speaking, CIOs are looking to apply smart tools to improve IT management, including processes related to network, storage, server and application management, database administration, virtual machine provisioning, triaging and diagnostics. More specifically, CIOs are focused on solutions that have some machine learning and adaptive capabilities that allow them to respond to new information and new conditions. A good example is incident management within ITIL. CIOs are often looking to automate level one and level two incident management processes. But rather than just have a static solution, they want something that will adapt and get better over time through machine learning and cognitive platforms. What are the biggest benefits of automation for IT?

Augustin: One of the key benefits is cost savings through the replacement of human labor by software robots and autonomic platforms. Robots are faster, cheaper, and more productive than people at executing repetitive tasks. What we typically see is that robots will take on a portion of a person’s job and free up bandwidth. So we’re seeing a lot of re-skilling and redeployment of resources, rather than massive displacements.

Another critical benefit of autonomics is increased accuracy and auditability. Each action performed by the autonomics tool is consistently executed and documented, which helps enormously in meeting regulatory compliance requirements. Autonomics also helps with performance optimization, as data gathered by the systems can be cycled through a continuous feedback loop of data collection, analysis and change actions. Specific quantitative benefits we’ve observed include faster Mean Time to Repair (MTTR), improved provisioning time for cloud services, and overall improved service levels at lower costs. What are the biggest risks with these new tools?

Augustin: The biggest risk for a CIO is to not understand what they’re getting. This is not a one-size-fits-all solution. It’s critical to understand the problem you are trying to solve. Am I trying to increase productivity? Reduce cost? If the problem isn’t clearly defined, [the solution may not] match the need.

This sounds basic. But in today’s environment, where the solutions are relatively immature, it’s a challenge for CIOs to really understand the features and benefits of the various offerings.

Another risk is underestimating the need to redesign the organization, its processes and how people and technology interact. When that happens the benefits of the tools can be delayed or compromised.

[ Related: How to prepare IT workers for the impact of automation ] What has been the impact of autonomics on traditional IT service providers?

Augustin: The impact on traditional providers is enormous. The competitive advantage of outsourcing — particularly for the India heritage firms — has been people resources, specifically the availability of low-cost, skilled labor in offshore locations. Autonomics fundamentally undercuts that competitive advantage. When it comes to performing routine and rules-based tasks, people can’t compete against robots on a cost or productivity basis. So at a macro level, we’re seeing location and labor costs becoming less relevant. Service provider differentiation will become more and more about thought leadership in the specific industry vertical than the lowest cost solution.

For service providers, this shift represents both a threat and an opportunity. The threat is obviously losing existing business to autonomics. The providers recognize this, and several have said publicly that they will be reducing their headcounts and focusing on building their automation capabilities. Many of the tier-one service providers have rolled out an automation platform in the past 18 months.

The potential opportunity lies in delivering more value to customers and winning new business. But will a provider be willing to potentially cannibalize existing revenue by proactively proposing an autonomics initiative to a customer? Increasingly, the answer is “yes,” and the marketplace is driving that answer. Providers are recognizing that there’s no alternative; if they don’t aggressively offer an autonomics solution to their CIO customers, that customer will gladly find it elsewhere.

[ Related: IT automation in the wild ] How has automation impacted IT services pricing and contracting?

Augustin: The impact of autonomics has been significant. Over the past 18 months or so, we’ve seen downward [pricing] trends of 40 to 60 percent. While a number of factors are involved, automation is the primary driver, especially for areas such as problem ticket handling.

In terms of impact on contracts, we’re seeing more gain sharing agreements. If a provider implements automation, there may be provisions included to ensure that both the client and provider benefit from the improvement. It’s an incentive for the provider to reduce costs and cannibalize their revenue. How similar or different are the various autonomics solutions?

Augustin: it’s hard to know what the capabilities of the different tools are. They’re all trying to be similar in the sense of being advanced, adaptive platforms with machine learning capabilities. Some that we’ve seen do have cognitive aspects, while others are more static and to a large extent involve the repackaging of existing tools without adding new functionality. Does it make sense for CIOs to seek these solutions from traditional IT service providers?

Augustin: There are really two options. One is to work with a tier one outsourcing provider. The other is to work directly with a smart tool or automation platform provider. If you go that route, however, you would need to be very specific about requirements. Which types of autonomic solutions are most mature and beneficial?

Augustin: The two areas of focus are infrastructure and applications. In infrastructure, there’s a lot of focus on ITIL and incident/problem management. In the applications space, we also see a significant increase in automation in the area of testing. What advice would you offer IT leaders navigating this new market?

Augustin: There’s still a lot of confusion around automation technology, and terms like “artificial intelligence,” “cognitive” and “machine learning” get tossed around a bit too freely.

The key is to get an objective perspective and to thoroughly investigate and vet the offerings — and do so in the specific context of your business requirements. Providers face enormous competitive pressure to sell their solutions, and frankly will be biased and inclined to overstate the capabilities of their offerings.

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