HfS Webinar Slides: The 2017 RPA Blueprint Snapshot

1. The Services Research Company The 2017 RPA Blueprint Snapshot Webinar, February 22nd, 2016 Phil Fersht, CEO and Chief Analyst, HfS Research phil.fersht@hfsresearch.com @pfersht #hfsresearch Tom Reuner, SVP, HfS Research tom.reuner@hfsresearch.com @tom_reuner #hfsresearch

2. © 2017 HfS Research Proprietary │Page 1 Overview: • Industry analyst, author, speaker, strategist, entrepreneur and blogger • 20 years’ in the global IT and business process outsourcing and shared services industry spanning analyst and consulting roles • Coined the “As-a-Service Economy” in 2014 • Coined the “Digital OneOfficeTM” in 2017 • Advised and on 100’s of global IT services, BPO and shared services engagements • Overseas the largest global network of enterprise services and operations professionals Career Experience: • Founded HfS Research in 2010, overseeing an unprecedented growth story in the analyst industry • Practice Lead, Global IT Services & BPO Research, Gartner, Inc • Global BPO Marketplace Leader, Deloitte Consulting • Consulting Practice Head, IDC Asia/Pacific • European IT Markets Practice Lead, IDC Europe Education: • BSc. Honors in Business & Technology, Coventry University, UK • Diplôme Universitaire de Technologie in Business & Technology, University of Grenoble, France phil.fersht@hfsresearch.com @pfersht Web: hfsresearch.com Blog: horsesforsources.com Phil Fersht, Chief Analyst and CEO, HfS Research

5. © 2017 HfS Research Ltd. C-Suite wants OneOffice integration, predictive real-time data and speed to market – while aggressively driving down costs How critical are the following C-Suite directives to your operations strategy? (SVPs and above) ) 20% 22% 24% 26% 29% 30% 31% 31% 42% 48% 46% 38% 55% 50% 45% 48% 48% 43% 19% 19% 17% 13% 17% 20% 15% 15% 8% 12% 12% 21% 5% 4% 5% 6% 6% 7% Invest in cognitive technologies and machine learning to reduce reliance on mid/high skilled labor Invest in process automation and robotics to reduce reliance on low-skilled labor Policies that restrict the hiring of people Improve the quality of operations talent Scalable / Flexible services Accelerate speed to market with new products Create real-time data that supports predictive, not reactive decisions Align middle/back office operations to improve customer experiences Drive down operating costs Mission Critical Increasingly Important Emerging Not a Directive Source: HfS Research in Conjunction with KPMG, “State of Operations and Outsourcing 2017” Sample: n=454 Enterprise Buyers

6. © 2017 HfS Research Ltd. C-Suite Directives in 2017: Technology Drives Talent! How critical are the following C-Suite directives to your operations strategy? (“Mission Critical” responses – all buyers) 0% 20% 40% 60% 80% Drive down operating costs Accelerate speed to market with new products Create real-time data that supports predictive, not reactive decisions Align middle/back office operations to improve customer experiences Improve the quality of operations talent Policies that restrict the hiring of people Invest in process automation and robotics to reduce reliance on low-skilled labor Invest in cognitive technologies and machine learning to reduce reliance on mid/high skilled labor BFSI Manufacturing Healthcare & Life Sciences Retail Software & Hi Tech Energy & Utilities Source: HfS Research in Conjunction with KPMG, “State of Operations and Outsourcing 2017” Sample: n=454 Enterprise Buyers

8. © 2017 HfS Research Proprietary │Page 7 Intelligent Automation is underway for well over half of $Billion+ Enterprises What is the most impactful timing to begin these actions? 19% 18% 19% 20% 24% 21% 23% 31% 33% 33% 32% 30% 34% 34% 30% 32% 29% 26% 30% 28% 26% 15% 11% 13% 16% 12% 10% 12% 6% 6% 7% 5% 4% 7% 4% Accomplish creative problem solving / "Design Thinking" Retrain existing internal operations talent to redesign processes Invest in specialized change management support to reorient operations staff Invest in internal IT talent to help us migrate away from legacy systems Invest in effective analytics tools & skill Identify / hire a transformational leader / change agent Invest in intelligent automation Now Within the next year Within 3 years Within 5 years Never Source: “Intelligent Operations" Study, HfS Research 2016 Sample: Buyers = 371

9. © 2017 HfS Research Proprietary │Page 8 Source: Bureau of Labor Statistics, HfS Research Analysis (data to 2015) Recessions destroy jobs, not robots… -4.0% -3.0% -2.0% -1.0% 0.0% 1.0% 2.0% 3.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Annual Job Growth US

10. © 2017 HfS Research Proprietary │Page 9 tom.reuner@hfsresearch.com Overview § Tom Reuner is Senior Vice President, Intelligent Automation and IT Services at HfS. Tom is responsible for driving the HfS research agenda for Intelligent Automation and IT Services. Automation cuts across the whole gamut ranging from RPA to Autonomics to Cognitive Computing and Artificial Intelligence. This includes increasingly the intersections of unstructured data, Analytics, and Cognitive Automation while mobilizing the HfS analysts to research Intelligent Automation dynamics across specific industries and business functions. Furthermore, he is supporting HfS’ push to disrupt IT Services research by focusing on application services and testing. A central theme for all his research is the increasing linkages between technological evolution and evolution in the delivery of business processes. Previous Experience § Tom’s deep understanding of the dynamics of this market comes from having held senior positions with Gartner, Ovum and KPMG Consulting in the UK and with IDC in Germany where his responsibilities ranged from research and consulting to business development. He has always been involved in advising clients on the formulation of strategies, guiding them through methodologies and analytical data and working with clients to develop impactful and actionable insights. Tom is frequently quoted in the leading business and national press, appeared on TV and is a regular presenter at conferences. Education § Tom has a PhD in History from the University of Göttingen in Germany. Tom Reuner, SVP, HfS Research

13. © 2017 HfS Research Proprietary │Page 12 Understanding the Methodology behind the Blueprint Market-led with sourcing focus, not functions and features Input from partners, sourcing advisors, fellow HfS analysts and other stakeholders key Evaluation across set of weighted criteria in execution and innovation; focus on enabling transformation and un-attended automation RFI send to RPA providers Expanding the research of HfS Intelligent Automation, building on Intelligent Automation Blueprint and RPA Premier League Table Focus on “core RPA” not RDA or other adjacent capabilities; proprietary tools (EdgeVerve, SyntBots etc.) not in scope

14. © 2017 HfS Research Proprietary │Page 13 Lessons and Insights from the Blueprint Research Duopoly of AutomationAnywhere and Blue Prism: Behind the two market leaders, UiPath is growing strongly and Pega gets increasingly added to the mix. Congratulation to all the providers in the Winners’ Circle!! It is about transformation stupid! Market is shifting toward transformational projects with end-to-end perspective. Consultancies and pure-plays coming to the fore. However, M&A likely to absorb pure-plays Move toward Cognitive Automation and Automation Ecosystems: Shift from early notions of turn-key solutions toward broad cognitive capabilities and the ability to demonstrate open standards and ecosystems mindset Data curation is critical: Applying Cognitive and machine learning solutions to IA and RPA requires access to large amounts of relevant data to build reliable models War for talent: Acute lack of talent understanding the implications of RPA technologies on process chains and workflows. Certifications double-edge sword as they might accelerate attrition Smoke and mirrors add to confusion: The confusion around RPA vs. RDAs as well as the lack of clarity as to how coding and scripting is needed for deployments. Many projects are sold as ”Managed Service„ confounding automation proposition

16. © 2017 HfS Research Proprietary │Page 15 WorkFusion (and Commoditization) are Challenging the Fundamentals of RPA Intelligent Automation: Virtual Agents, Deep Learning, Self-remediation RPA extension: Operational analytics, Machine Learning

17. © 2017 HfS Research Proprietary │Page 16 The Future of RPA in 2017 and beyond RPA will remain undefined. Over the next 12 months, the perception of RPA will remain blurred. RPA capabilities will fold into broad propositions such as Digital Workforces or Cognitive Automation. M&A through ISVs. Buyers will have to do scenario planning for acquisitions. While this might bring broader capabilities, licensing costs are likely to increase as well. Pega’s acquisition of OpenSpan is the template for such developments. The emergence of Automation Ecosystems: We already have seen the impact of Watson, as it is starting to evolve into an ecosystem. But it could equally be one of the tool providers significantly expanding its reach At the same time, we are seeing providers like Blue Prism and UiPath being deployed in IT-centric scenarios such as IT Help Desk and Application Management, pointing to a convergence of scenarios and tool sets.

18. © 2017 HfS Research Proprietary │Page 17 Endgame: Vertically infused data and insights?! Insights, Data Vertical Processes Vertically infused insights and data BPaaS, BPO as-a-stack, Industry platforms. Machine learning, Neural networks, Enterprise search, Artificial intelligence Analytics

19. © 2017 HfS Research Proprietary │Page 18 The Key Take-aways § While not clearly defined, the market for RPA is set to enter phase of exponential growth § It is a question of where, how, at what scale and under which name § RDA and proprietary tools not focus of this study § AutomationAnywhere, Blue Prism, UiPath and Pega are the early leaders and educators § Service delivery is being decoupled from labour arbitrage § RPA is morphing into Cognitive Automation § WorkFusions’ free RPA move won’t disrupt the market, but example for marketing savvy § The future of RPA lies in service orchestration and evolving automation ecosystems

21. © 2017 HfS Research Proprietary │Page 20 About HfS Research HfS Research is The Services Research Company™—the leading analyst authority and global community for business operations and IT services. The firm helps organizations validate and improve their global operations with world-class research, benchmarking and peer networking. HfS Research was named "Independent Analyst Firm of the Year for 2016" by the Institute of Industry Analyst Relations which voted on 170 other leading analysts. HfS Chief Analyst, Phil Fersht, was named Analyst of the Year in 2016 for the third time. HfS coined the terms "The As-a-Service Economy" and "OneOffice™", which describe HfS Research's vision for the future of global operations and the impact of cognitive automation and digital technologies. HfS' vision is centered on creating the digital customer experience and an intelligent, single office to enable and support it. HfS’ core mission is about helping clients achieve an integrated support operation that has the digital prowess to enable its organization to meet customer demand - as and when that demand happens. With specific practice areas focused on the Digitization of business processes and Design Thinking, Intelligent Automation and Outsourcing, HfS analysts apply industry knowledge in healthcare, life sciences, retail, manufacturing, energy, utilities, telecommunications and financial services to form a real viewpoint of the future of business operations. HfS facilitates a thriving and dynamic global community which contributes to its research and stages several OneOffice™ Summits each year, bringing together senior service buyers, advisors, providers and technology suppliers in an intimate forum to develop collective recommendations for the industry and add depth to the firm’s research publications and analyst offerings. Now in its tenth year of publication, HfS Research’s acclaimed blog Horses for Sources is the most widely read and trusted destination for unfettered collective insight, research and open debate about sourcing industry issues and developments. HfS was named Analyst Firm of the Year for 2016, alongside Gartner and Forrester, by leading analyst observer InfluencerRelations.