In this Digital CxO Leadership Insights Series video, Mike Vizard talks to Garth Hamilton, executive vice president for FPT Software, about why digital business transformation initiatives need to be approached from a truly global perspective.
Mike Vizard: Hello and welcome to the latest edition of The Digital CxO Leadership Insight Series video. I’m your host Mike Vizard. Today we’re with Garth Hamilton who’s head of solutions for FPT Software. They’re based in Vietnam, but they work globally. And we’re talking about trends in digital transformation and what is going on in the world? Garth, welcome to the show.
Garth Hamilton: Thank you very much, Mike, I appreciate that. And thank you for having me on the show. The one trend I was focusing on today really is around automation. As a topic and trend, certainly, as we are looking at challenges, looking at the potential for business slow down, a lot of our clients are looking at how they can improve their operations, improve how their business runs, and improve efficiency. Especially in light of a very low unemployment rate, having their people do less manual work and do more value add work is key in a lot of our client’s minds.
Mike Vizard: What is the challenge you see with trying to accomplish that goal? Because it seems like on paper at least everything can be automated to varying degrees. But then when you get into it, it seems like there’s always a hiccup and sometimes there’s more exceptions than there are rules in these processes. So from your experience so far, what it is that you see people struggling with?
Garth Hamilton: So the original way or the current concept as to how to do automation really focuses on RPA, robotic process automation. I would argue that that’s technology, while it’s an advanced technology, it’s sitting somewhat in its valley of despair. Big launch, big hype, and it’s been a struggle. There are clients that have gone after it in a fashion that really is a citizen developer, they’ve kind of put it out there to see what happens. And they’re seeing a proliferation of bots, they’re seeing their license costs going through the roof. And they’re not getting they’re not getting the ROI.
People are – some guys are adopting, some guys are grabbing it, some guys are putting it out there. And it’s causing some interesting challenges in how that piece of it works. The other challenge with an RPA really is that it needs to be highly structured, structured data, structured process, very much a rules-driven process, but there’s not much variability. The other thing we’re seeing is that people are rushing to automate, and they simply have a bad process running quickly. Or in some cases, we’re hearing and seeing, not from our work, but we’re hearing from our clients that they have used the RPA process and the RPA, the bot, runs slower than the person does.
They’re not achieving the efficiencies that they are looking for. So there are a number of those kind of challenges sitting out there at this point in time.
Mike Vizard: How much of this is, to me at least it feels like we’re trying to automate the exact same process that we use with paper and people. And yet we have a more of a digital construct, so maybe we need to rethink the whole process from end to end and kind of automate it at that end instead of just trying to replicate the existing process in some sort of digital format.
Garth Hamilton: Thank you, Michael, a great lead in, I greatly appreciate that. Yes, 100 percent, the approach that we are working with our clients on is, A, to make sure that you are being selective on your processes, as in finding where the best ROI is going to be. But then going ahead and doing the process optimization as part of the automation. So as you think through the Six Sigma approaches, the Gemba Walks, those kind of pieces, on how do I get to a much – to a more efficient and effective process. And then I apply the automation techniques to where that makes the most sense.
And kind of take that concept a step further, you start driving significant value from automation when you can do cross departmental. When you can start getting into end to end business processes across multiple different applications and able to really drive that visibility and that process across multiple departments, you’re starting to get to significant benefits in the automation space. But if you don’t do that end to end process review versus optimization, it’s very difficult to get to that.
Mike Vizard: What is the value of partnering with an organization like yours? A lot of folks out there will say we’ll do it ourselves, we’ll get together with the business guys and the IT guys. So for a company like yours who’s more or less a consultant, how is it that you bring value to that equation? And why should people lean more on you guys?
Garth Hamilton: Well, because we’ve been there, we’ve done that. So in terms of the process optimization, we have the Six Sigma specialists who have done this kind of work, who have been very successful in achieving the necessary outcomes. And we also have the technologists that understand how to build the bots efficiently and effectively, including how to do the integration beyond the screen scraper. Just getting into doing proper APIs in terms of how you’re going to extract and fix and load the data is also a key element. So it’s our experience in the space where we do have our own RPA toolset that we use, but we are, quite frankly, platform agnostic. We’ll do whatever the client needs in terms of RPA. But we have those skills in terms of how to implement the bot, but also how to improve and optimize the process.
Mike Vizard: There’s no shortage of well-known companies in this space with very big names, but why would anybody kind of want to lean more on a smaller company or somebody who maybe does not have as big a profile versus some of these companies that sponsor Super Bowl ads?
Garth Hamilton: No, great question. I would say from our brand, we really are nimble and innovative. We are not a major hierarchical organization with bureaucracy, et cetera. We are very flexible, we work to our clients, we work for our clients. And that really does give us a different perspective and a viewpoint. This is very much about the client and the client outcome. It’s not about us, and that our entrepreneurial spirit runs through our organization and makes us very effective on how we deal and work with clients. And so we are a pleasure to work with and we have the tools, and we have the skills.
Mike Vizard: You guys, of course, are based in Vietnam but you operate around the world. How much is globalization driving a lot of these digital business trends? And how much of that is an advantage to work with somebody who maybe is not so centered in one country.
Garth Hamilton: At this point in time, I wouldn’t say this particular trend is driving or being driven by globalization. I would say it’s an enabler of globalization as you think through that end to end process as I do. Different parts of the business and different parts of the globe, having that end to end view is very helpful. And it does help accelerate the efficiency and the effectiveness across the organization. In terms of us, yes, we are headquartered in Vietnam. But to your point, we operate globally. And that does give certain advantages on to the geo-diversification.
Yes, we are based in Vietnam, yes we have a big presence in North America and the US. We have good presence in South America as well as in Europe and Eastern Europe and, obviously, significant presence in Asia Pacific. So we can cover the globe in terms of an operation, in terms of a project we do the follow sun concepts and we can make sure we continue to deliver work 24 hours a day as necessary.
Mike Vizard: What’s that one thing you see companies doing over and over again that just makes you shake your head and go, folks, why are we going down this path one more time? Is there something that you kind of wished that most executives knew before they launched these projects?
Garth Hamilton: In the automation space, the thing that causes me to shake my head is people see it as being an IT initiative. They see it as it should be coming from outside of IT. And often, it’s the CIO and his own organization that is pushing on getting this out there. But if you are changing and optimizing a business process, it’s a business project. And a lot of this is done and being pushed by an IT organization against a business that’s not necessarily willing or wanting to do it. Certainly, I talk about back in the day, a year or two ago, when this became popular a lot of the business case was driven by a head count reduction.
And so here am I the IT person, and I’m saying let’s do the RPA thing on these processes and I can take out four of your headcount. And I got the VP or the controller saying I don’t want to lose my head count. They know what they’re doing, they’re highly effective. And it’s a lot of that resistance occurred. Where you have it as a process optimization and automation driven by your controller, you’re going to have a much better outcome. But the real value in my mind is not that I can cut head count, it’s that I can have my people engage and do higher value add work because the administrative kind of work is being done by a bot.
Mike Vizard: Every organization has it’s speedbumps; how hard is it to get a project going that spans multiple departments and organizations which sometimes, let’s be honest, business executives sometimes compete with each other for internal resources, and they can be a little more fierce with each other than they are their official competitors.
Garth Hamilton: In certain cases, tough. But if you think of the journey to automation, you don’t start with the end to end global process, it’s too difficult. People can’t get their heads around it. You really need to start with, and we see quite a lot of this, kind of it’s one of our kind of maturity model structures, start with some simple RPA. Do some pieces where you know you’re going to bring value, prove that it works well. Then once you’ve proved that the automation piece works, then you do the process optimization inside of that department, out of that process itself, and you prove that value.
If you think of that journey, you then talk about how do I do intelligent automation which starts narrowing in things like machine learning, artificial intelligence, to go after getting an improved success rate. Classic RPA, you’re getting – if you’re getting to your 70, 80 percent, that’s really, really, really good. Often it’s about a 60 percent and you have to have human intervention to solve the remainder. As you start layering in the more advanced technologies, you’re able to improve that success rate because it’s much better able to handle unstructured data, handwriting, et cetera.
And also you start layering in things like your voice recognition chat bot pieces to optimize that piece. And the advancement in voice recognition in the last couple of years, the conversational bot, has come a very long way. So you layer into that, kind of hyper automation is the very end of that journey where you are getting into the business process management along with automation and optimization, et cetera. But people, there are very few people at the end of that spectrum. A lot of them are still at the very beginning, so trying to think, well, what if I do this RPA thing?
So start somewhere, start small, prove value, prove success, and use that momentum to grow. If your operations guy is seeing your finance guy driving significant improvement, they’re much more likely to engage and be part of that process than if you start going after the elephant at the beginning.
Mike Vizard: We hear a lot about all things AI these days, what’s your sense of the actual impact that AI is going to have? People are talking about ChatGPT and all kinds of things that we never thought possible. So are we on the cusp of something completely new and different.
Garth Hamilton: Yes and no, the ChatGPT is certainly very, very interesting and it’s fun to play with. How and when does that become mainstream? How do we understand what is being produced by the machine, what’s being produced by the human is a very interesting kind of ethical question, right. As we, if you think of AI and kind of the machine learning and the voice recognition maybe the first steps on how that works. There is a lot of talk about how do I get to actionable insight? When I say that, that’s don’t give me grandad’s spreadsheet, don’t give me my father’s bar chart.
Give me the actions, tell me this has happened somewhere, these are your two choices. I’m overselling in Atlanta, I’m underselling in Seattle. I should take the container that’s arriving in Los Angeles and ship it to Atlanta, not to Seattle. Give me – don’t let me pour through spreadsheets and figure it out. When I wake up in the morning, tell me I highly recommend you take this action, and this is the outcome. That’s actionable insight.
There’s a lot of talk on how to get to that, but there are also a lot of companies that are looking at their data and trying to understand what to do with it. IoT is creating a huge proliferation of data, just ingesting that, harmonizing, and ingesting that is in itself a headache, let alone getting to insights on the data itself. Now, as you think about that, as you start doing those pieces, you then start getting into how do I use kind of the machine learning concepts to understand patterns, understand what the patterns mean. And that allows me to start moving to an actionable insight outcome. So I guess I do think that that is changing.
People talk about being in a data lake, data driven, does that mean I’m going to give you a spreadsheet? To some clients, some companies, and they’ve got reporting systems that spew out or have six to ten thousand reports in them. Don’t give me a report, give me actionable insight. So when you say where I think that’s going to, I think we’re going to more of that., where the AI is able to make an informed recommendation. What gets really exciting on top of that is I start getting away from, if I went beyond data lakes into the thread counts aps. You can start incorporating external data, I can start bringing in the weather, I can start bringing in events, I can start bringing in the calendar to inform those kind of decisions.
People talk about supply chain agility, right now that’s kind of people. People are getting the information and making the decisions, yes, ship that container to Atlanta. You want AI to make the recommendation or just do it once you trust it. I think as you layer in all this great, interesting, cool concept, on top of that how do I trust the data? Because there is if the machine gives you an answer that doesn’t make sense, you won’t trust it and you won’t do it. Because back in the day, one plus one equals two. In the AI world, one plus one equals something like two.
And so it’s trusting the answer, it’s having faith in the answer. And, of course, there’s a whole cyber security piece behind making sure that answer’s not being messed with is also very interesting trends that people are working on trying to figure out.
Mike Vizard: Do you think business executives actually get that this is some sort of journey that they’re about to go on? Because I think in their heads, a lot of them are like, well, it’s a project and it’s going to have a beginning and an end. But it seems to me it’s a never ending adventure.
Garth Hamilton: It’s a never ending adventure. I do agree that there certainly are a large number of executives that don’t really understand or comprehend or want to comprehend the impacts or the implications of what this can bring and what this will bring. But to my point, I talk about automation as being a business project, actionable insights should be a business project as well. If I’m not enabling the business, improving the business, driving efficiencies, serving, solving pain points, then technology for its own sake is not of much value.
Mike Vizard: All right, you heard it here, folks, digital transformation is as much a state of mind as anything else. Garth, thanks for being on the show.
Garth Hamilton: I appreciate it, thank you very much, Michael.
Mike Vizard: And thank you all for watching the latest episode of The Digital CxO Leadership Insights Series. You can find this and other episodes on the digitalcxo.com website. We invite you to check them all out. And, once again, thanks for watching.