Modernizing Back-office Workflows for Superior Operational Efficiency
Automating manual back-office processes has now become a business imperative. Remote working with a distributed workforce is here to stay. The top priority for businesses is to have a digital-first strategy to streamline back-office workflows of any level of complexity.
Watch this on-demand panel discussion, featuring panelists from LTI, Forrester, and Newgen, to learn how enterprises are modernizing their back-office workflows to reduce costs and achieve higher operational efficiency.
- The growing need for modernizing back-office workflows
- The advent of virtual back-offices
- Real-world use cases
Gunjan Kalita: Good morning and good afternoon, everyone. Welcome to the panel discussion titled Modernizing Back-Office Workflows for Superior Operational Efficiency. I’m Gunjan Kalita, and I shall be your host and the moderator for this discussion. At the end of the discussion, we will be having a question and answer session. We request you to type your questions in the question window that you see on your go to webinar. I shall take them up at the end. Today, we have an esteemed panel of experts from LTI Canada, Forrester, and Newgen with us for the discussion. Let us have a quick round of introductions from them and we can start with Yasemin.
Yasemin Sezer: Hi, everyone. I’m Yasemin Sezer. I’m head of technology and operations at LTI Canada, and have been with the company for over 20 years now and in the industry over 30, working mostly in application infrastructure as a CIO. I’m part of the CIO association board in Canada.
Gunjan Kalita: Thank you. Steve?
Steve Kingston: Good morning folks. Steve Kingston. So I had a product in the customer experience at LTI Canada, and just a quick background on LTI Canada, so we are a back-office platform provider. Our platform is called Unitrax, and we support about 190 asset managers in Canada across funds and insurance wealth, and basically any unitized financial services product. Part of our ecosystem is also a workflow platform, and that is where we partnered with our friends at Newgen to build out that workflow platform integrated to Unitrax.
Gunjan Kalita: Okay. Leslie?
Leslie Joseph: Hi. Thanks, Gunjan and the team for inviting me to be a part of this panel. I’m Leslie Joseph. I am a principal analyst at Forrester Research. Some of you might know we are a research and advisory firm, and I’ve been with the company for about four years, and I really cover themes around AI, automation, and the future of work. That includes a variety of technologies, but also supporting clients in solving their business problems that focus around these themes is something that I do on a day to day basis.
Gunjan Kalita: Thanks. And finally, Sameer.
Sameer Kundu: Hi, this is Sameer Kundu here. I head the business and operations for Newgen Canada. I have been with Newgen for almost 18 years now and in the industry for about 30 years. Newgen, just to give you a brief, has been associated with back-offices, shared services, business process, outsourcing organizations for a very long time, and our technology has been servicing this part of the business very, very significantly. And therefore, this topic is actually a very interesting part of our technology that we provide to these places. So I’m hoping we’ll have a very good discussion and it’ll benefit all of you to have a hearing to what we are discussing today. Thanks so much.
Gunjan Kalita: Thank you all. Backend automation has become increasingly important to companies that realize the need to clean up these antiquated, paper driven, labor intensive processes. Industry has invested a lot in customer facing initiatives, but how do we modernize the back-offices to make it all fit together? And with that climatic question, let us get straight into that discussion. We can start with Steve. What factors do you think have brought in this need to modernize back-office workloads?
Steve Kingston: Yeah, thanks Gunjan. And it’s an interesting question, and I would say that “brought in” maybe isn’t the right way to approach it. I think the need to automate has always been there. I think the back-office has always known and always wanted to drive as much automation as possible, but there’s been certain limitations. And whether that’s the ability to get funding or the business case to drive that automation in the back-office, prioritization of initiatives in the front office is certainly another thing. But if we look at the last 20 months, what it certainly has highlighted is the need to modernize and automate the back-office, and in a lot of cases catch up to some other areas. So if I look at the main factors that I see on a day to day basis that are driving the need for modernization, catching up to the front middle office is a big one.
We’ve seen a ton of investment over the last three or four or five years around those customer experience digitization initiatives in the front office, but not always the same level of automation on the back end to allow for straight through processing. So we certainly see an uptake in that. It drives our roadmap around APIs and integration and the ability to truly support straight through processing. One of the standard ones that’s driving automation that we see and have seen for a long time is cost pressure. Cost pressure at all levels of the organization to drive further automation and bring down operational costs. We have a lot of conversations with clients around, how do we eliminate UCS or end user computing type things that are happening in the back-office?
One of the other ones that we see regularly is really adapting to the broader ecosystem. So all of us, regardless of industry, there’s new players, there’s new FinTechs, there’s new data providers coming into the industry, and how do we make sure that we, as the back-office, are enabling integration and enabling to get the true benefit of those new players? And certainly with our customers in financial services, and I’m sure this applies across the board, the expectations of the back-office and the service provider continues to change. The way that we look at that is it’s not point solutions, so I don’t want you to bring in RPA as a standalone solution. I don’t want you to bring in OCR. I want you to bundle and package those things and deliver a full end to end solution, post it in the cloud, provide it a SAS. I want to pick it up and use it and get to market quickly. So those are the key themes that I see from a product standpoint here in Canada.
Gunjan Kalita: Perfect. Yasemin, I would love your reviews on this as well.
Yasemin Sezer: Yeah. Thank you. And I think from a technology perspective, at the onset of pandemic, and I was counting the months, it’s been 20 months now almost that we are locked down. Of course, the technology groups were pressured to get remote working in place. Their focus was whether it’s networks, applications, remote work, get that done well with security so they can focus on it, but it happened in such a speed that I think it actually brought in more trust and respect from other parts of the organization. The CIOs became more prominent on the strategic discussions and tables to figure out what to do with the transformation. A lot of organizations, as Steve said, had these needs in the past, but a lot of projects were on the fence sitting and not being started. It’s digital transformation that everybody has a different definition and scope of. But what I find is really there was a great push now to get into that transformation, change your business operating model, bring in the cost efficiencies and end to end automation and processes.
And technology became a great catalyst and driver in that strategic discussion with various solutions. Like I said, we have not seen this type of speed of implementing solutions in the past. Whatever was seen impossible became more possible these days. I can share a personal experience as well. The other day I got a letter from Service Canada, all of the renewals for driver’s license, health cards, et cetera, they’ve been deferring those because their offices were closed. Now they opened up the offices, but they’ve also put in place end to end of workflows, automated workflows through their website. They’re recommending you to use the website to do it online versus going into the offices, because there’s going to be a huge demand and they won’t be able to handle that. Even governments had to act very fast and in our industry, we’re seeing certain functions, especially very popular, client onboarding is one of them that everybody started to implement end to end straight through processing for that. So it became more possible and more relevant.
Gunjan Kalita: Perfect. And Leslie, what are some of the current trends you have been seeing in regard to this?
Leslie Joseph: Yeah, I think Yasemin and Steve have given a very comprehensive overview, so I think I’ll maybe characterize this a little bit or their responses a little bit. If you think about the trends, and I think the pandemic has obviously been a very important moment, but the trends that we are seeing now are not just pandemic created trends. They’ve been something that we’ve been seeing for a while, so if you go back to just around the time that the pandemic was starting, at first, we rolled out this survey that was called the Global Financial Services Architecture Survey, where we asked a bunch of decision makers in financial services questions about how they’re looking at their world at that point in time. A lot of the results showed as you would expect that most executives that we polled, they really put customer experience as a top priority for digital transformation.
But interestingly, what we also saw was that the need to improve efficiency and productivity was a close second to this first to the need to look at customer experience. The fact is that this has been a fairly consistent pattern over the last two years. And in fact, the need from a back-office perspective has actually possibly even gone beyond or come closer to the need to look at customer experience. And look, the reality is that the road to this improved efficiency and productivity invariably goes down specific paths. So when we asked a question which was, I think, formulated around, “What will your firm primarily focus upon when transforming the landscape of your business applications?” The answers were interesting. About 45% said that they were really focusing on automation of business applications, which is by far the most important for them.
But then about 43% said that they were also looking to increase the leverage of APIs. And then of course, there were 40 odd percent who counted better digital engagement platforms as really critical for them. But the first two are really important because they talk about the importance of the business applications and automation and the various models of automation that are prevalent. So the way that I look at it is that we’ve spent the last decade or so in digital, and this is taking off from what Steve said, is that we’ve really focused on the front office because that’s where the action has been. In a very real sense, that’s where the satisfaction comes from almost seeing an immediate outcome manifest itself. But the fact is that the front office has had a slew of digital technologies and shiny, exciting things happening there. Over time, especially more so over the last five, six years, it’s becoming really, really hard to differentiate just in the quality of digital experiences that you’re delivering to your customers.
We’ve seen this, we’ve called it digital sameness. At this point, there isn’t a lot of difference between the brand and their closest competitor, just in terms of the digital interfaces and the customer experiences that you can create. Now, the back-office is interesting and different, because it’s more boring to talk about the back-office until you realize that the efficiency gains in most companies in the back-offices tend to have a much bigger financial impact. So the back-office also by the way, has been traditionally over the last decade or so relatively under penetrated in terms of the digital technologies that are available to you to implement and so on. The truly breakaway technologies that have focused on the back-office and the reinvention of the back-office, like AI and automation and the ability to manipulate unstructured data at possibly an industrial scale.
These are capabilities that are only emerging now. So if you look at, for example, financial services. We are hearing many organizations who have chosen to focus on back-office modernization and workflow automation in the back-office, even in situations where there has not been an existing, broader digital transformation program within the firm that has touched on these areas. So I wouldn’t go as far as to say that this is the golden age for the back-office, but in some sense, maybe it is a golden age for the back-office.
Gunjan Kalita: True. It does. Everything that has been brought forth in this discussion looks to point that way as well. Moving on to Steve. What is the significance of effective back end processing to truly go digital? Steve, I think you just got muted. Sorry.
Steve Kingston: Sorry. Thank you for letting me know. Yeah. I think it’s interesting. And at the end of the day, what does going digital in the back-office truly mean? I think a large part of that really boils down to the customer experience and whoever the customer of that back-office is. Can you do things faster? Can you do things more accurately? Can you scale up in certain peak times of the year and maintain the service levels and the expectations of the people that you’re servicing? A lot of that can be done through some of those front end things, but you need to bring technology in in the background, and especially have the proper technology and tools to scale. Every business is looking to grow. Do you want to hire 15 more people? Or do you want to leverage automation and technology to be able to scale up and address those needs? It’s really making sure that you’ve got the technology and the tools and focusing on removing the manual effort. One of the things when we were looking at workflow platforms, and one of the key selection criteria is for picking Newgen was the low code approach.
How do we maintain that level of flexibility and ability to adapt quickly as things change? And certainly that was a big part of it. Integration. As we look to go digital, as new players enter the market in Canada here within financial services, we’ve got an organization called Fundserv that acts as an industry hub, between us as the back-office and advisor platforms in the front middle office. They’ve got a number of initiatives on the go to go paperless and to drive more straight through processing, and we need to be able to react to those. As Yasemin and Leslie mentioned, APIs are a huge part of that strategy. Data is always a conversation that comes up with our customers. How do I get the right data to make the right decisions? Operationally, we see a lot of that coming out of workflow platforms. How do I make sure that people are efficient, they’re doing the right thing, where are the process bottlenecks and how do I address those whether through technology or through process change?
And at the end of the day as we look at digital, there are going to be things… We’ve been talking paperless for 20 years, and we’re still not there. We’re inching closer, but when we talk about BPM and workflow, that’s certainly an area that we don’t see going away. There are always exceptions coming out of even digital initiatives. Digital onboarding is an example. There’s always going to be exceptions that need to be handled, and those can be certainly handled through workflow platforms.
Gunjan Kalita: Perfect. Sameer, taking a cue from there, how do you connect the dots?
Sameer Kundu: Yeah, I think that’s a very important point brought out by Steve and Leslie in his previous answers also set the tone up. I just want to relate this to what we are seeing in the auto industry. Every year, a car comes up with the look at the outside that make the changes. They make some feeling changes from the inside, and after a period of time, in order to give the complete experience to the customers or the drivers, they have to bring in some changes in the engine as well. That relates to the kind of back-office and front office discussion that we keep having. While we are digitizing the front office to a big extent in many industries in many ways, the back-office has to be updated, upgraded, as Steve was saying, with the power of workflow, with the power of bringing that digital transformation in the back end as well so that the complete efficiencies of customer expectations or customer fulfillment can happen.
That digital transformation happening at the back-office is as much equally important so that the partners, the customers, the vendors, and the complete ecosystem and the users themselves also within the organizations have a similar experience, which is being done at the front end. So I would say this, that empowering the back-office with an equivalent kind of visual automation power through effective workflow through RPA, through extraction tools, and Newgen has been working towards that to bring it in a concise way to make sure that the back-offices are getting the equal attention as the front office activities. So that, as per Leslie’s points, that has to be pushed back to the end customers. That’s where I would like to connect the dots to the back-office.
Gunjan Kalita: Leslie, as an analyst firm as well, do you have any examples around this theme?
Leslie Joseph: Sure. Let me put some context around it before I jump into that. So one of the, I guess, ideas that has caught on over the last few years, and especially over the last few years of the pandemic is this idea of zero back-office. Now, this is an idea that is, I guess, transposable to many different types of organizations, but in particular financial services companies have really adopted it, because obviously automation comes across very strongly as one of the primary focus areas for transformation. If you think about what zero back-office is, think of it as a bit of a strategic plan to leverage different methods and technologies and architecture to essentially make back-office operations more efficient, more seamless, and more automated. So you’d never get to zero back-office in the structural sense of the term, but that’s where you’re headed in terms of everything goes straight through, and everything is automated.
Now with this end goal in mind, what we are actually seeing is that different kind of organizations, they are actually taking different tacts to work towards zero back-office in their transformation journey. There are about three odd examples. The first is to think about this as a tactical work around that precedes transformation. So in organizations where, for whatever reasons, there may be some conditionality around all in digital transformation where it might not be a priority yet, or maybe it’s needed because of cost or other considerations. We’ve seen companies use a zero back-office approach to deliver more tactical improvements. Some form of RPA or local automation to patch up specific processes like maybe customer onboarding or account opening. This allows them to reap a significant cost or time saving, at least in the short term, while at the same time, it does allow them the flexibility to defer a large scale investment into transformation somewhere downstream, whenever they’re ready.
The second approach is to take zero back-office and bake it into an ongoing transformation. We’ve seen Canadian Bank, for example, they’ve adopted a zero back-office approach as critical and central to their transformation strategy, which is, as you can imagine, a multi-year program. What they’ve done is they’ve prioritized a list of business processes to create a roadmap around their future digital architecture state. And they’ve used automation technologies in and out and woven it around, but not in a way where these are exactly the center of the bank’s transformation efforts, but really these are tools that support this transformation by say bridging the gaps between all of these heterogeneous systems of varying ages and all of that. Because of that, what has happened is that the automation component has become that glue between these elements across this application landscape.
And that’s what’s helping them progress down their multi-year transformation roadmap. The third approach is to use zero back-office principles to really close the digital gaps that get left behind after you’ve completed a transformation program. If you look at Dodge bank, for example they’ve obviously gone through a whole process over the last few years, and now they’re still using RPA on top of their SAP core banking solution, which itself is just a few years old. There are examples. All of it depends on how the organization really thinks about automation and all of these capabilities in the context of what they’re trying to achieve in the short term, as well as where they see themselves as progressing in terms of their transformation objectives long term.
Gunjan Kalita: Perfect. I think that is really insightful for all our attendees who have come in and how to approach the modernization. Also with that, we come to a favorite of mine in terms of the question. With so many channels through which a customer is interacting in the present age, what is the strategy for enterprises to offer a seamless customer journey? Probably, we can start with Leslie on this.
Leslie Joseph: Okay. There are so many ways to answer this question. I guess, let me try and offer a specific perspective. Over this conversation, I think between myself and my co-panelists, I think we really all agree that the front office, the customer experience component, and the back-office processes, these feed off of each other and have very distinct interdependencies. We’ve talked about it over the last few minutes already, but if you think about any complex customer journey. Let’s talk about something really simple, so think about the storyboard that an airline paints before you as a customer, as a traveler, through the notifications that it pipes through you through your app, or through text messages or whatever at various stages of your journey. Now it’s a simple flow and we’ve all gone through it at some stage in our lives.
Probably not as recent as the last two years, but maybe before, it’s happened to us all the time. So to even actualize what seems like such a straightforward narrative, think about the immense amounts of process complexity that it really takes to manifest the storyboard before a customer. The airline has to typically stitch together data and events and all of these things from so many different processes, applications, and a lot of times these cut across the front, middle, and the back-office. You see CX and you see process, you see back-office and you see front office, but there are, in these kind of situations, very distinct interdependencies when it comes to actually putting together a consistent experience, a consistent narrative before the customer. But when you look at the disciplines and the toolkits that have emerged, on one end, we’ve got this entire discipline of CX with their toolkits and their understanding of customer journey mapping and all of those things that they do.
On the other hand, you’ve got process and automation professionals who have a distinctly different set of tools and ways of looking at the world. Which in many ways, if you forget the differences between these notional titles and organizational constructs, they’re actually quite complimentary to each other, the CX professionals and the process professional tool kit. Now, the problem is that CX process folks almost never sit across the same table and work together. You almost never hear about a CX leader sitting on an automation COE. You never hear about somebody from a process modeling perspective or a process improvement point of view sitting in on and helping participate in a customer journey map or something like that. It never happens. They rarely work together to define common problems and pool their knowhow and their toolkits together to solve these problems.
I’ve had the belief for some time now that as automation becomes more and more central to the organizations’ business model and its transformation ambitions, we need to invest more and more time in connecting these diverse viewpoints. And that’s the only way to consistently create truly seamless customer journeys that actually lead to digital differentiation. I’m very keen to hear what my co-panelists have to say, but I think this is such a vital idea that we are already at a point where digital differentiation is dwindling just from the construct that we’ve come at it from, but there’s this other universe that is available to plug in and unleash another source of value when we don’t do it. It’s something that I think we should talk about a lot more and organizations should introspect a lot more about how they can bring these two disciplines together and work together better.
Gunjan Kalita: Perfect. And Sameer, is this a view that you share as well?
Sameer Kundu: I certainly share your view that this is a very interesting part of the question like yours and my thought here and why is it interesting for me is that today, if we see and if we compare back-offices of yesteryears where data entry used to be a very important part of back-office. But today, that work is being done by the customer or on the digital platform. They’re entering their own data and that is being taken in. So a lot of that earlier yesteryear’s back-office work has actually been brought into the front office and they are doing that part of the job and giving it to the organizations to process them and whatever. So the commitments or the capabilities of back-office is increases that much more to give that customer or the journey of that customer to resolve the situation.
If I take a customer service as a process in this whole thing, a customer may be contacting an organization and in the same call, the person may be making a complaint and also may be making a request. In addition to that, the person may be suggesting some suggestions also to improve certain things. Now, look at it from an organization point of view and the back-office capabilities point of view, the three things are very different. A complaint has to be handled in a particular way, and maybe there’s a group that handles it. A suggestion has to be handled in a slightly different way. And also a request has to be handled in a very different way. Those three back-office setups has to handle them and then come back to the customer with a single response covering all those three.
That’s the expectation of a customer. That’s the journey the customer wants to travel, so the capability of that back-office processing or the mid-office processing increases to that extent, and that can be done through the technology through ad hoc routing, through case management capabilities, through rule based workflows through local workflow platforms. And most of it is a strong integration capability. Some data Leslie was giving about the API based integrations, so that experience of customer journey has to be given in from the back-office, because a lot of their work is being done by the customer in the first place. So I think that’s the way I look at it that how the modernization of back-office will also have an impact to provide these things through the technologies that are available today in order to have a favorable customer journey for any industry for that matter. Call it the airlines industry or the financial services industry or any other industry. That’s my take on it.
Gunjan Kalita: Steve, would love to hear your views as well on this.
Steve Kingston: Yeah. Taking it from the angle of being an actual back-office platform provider, Yasemin and I have this conversation all the time around, “Hey, a transaction is a transaction.” Yes, there’s a lot of channels that transaction can come in from. But at the end of the day, it’s effectively doing the same thing in the back-office. Really, we’re here to support our customers and make sure that things happen properly, they happen quickly, they happen without errors, there’s ease of maintenance from our standpoint and from the customer standpoint. To do that, we look at the back-office and how do we streamline those four channels or five channels? Whether it’s coming in from funds serve or through the screens, or through digital onboarding or through our bulk data load. How do we standardize all of that coming into the back-office to make it faster, cheaper, better? And I think Yasemin will talk a little bit about what our strategy looks like to do that.
Yasemin Sezer: Yes, and I wanted to add onto that when the rubber hits the road, how do you make it happen? How do you implement it? What’s the right approach, right strategy, and architecture for it? Certainly, APIs is a big portion because everything needs to be integrated. Whatever channel the request comes in, you need a standard business logic layer that handles that request and responds in the same manner, same logic flow, wherever it’s coming from. So the customer at the end gets the same result regardless of the channel they’re coming through, and it happens in real time and fast. Having the API architecture is really a critical component of it and having the business rules embedded in there so it becomes a reusable service goal that can be utilized from any channel is very important.
When you built your API framework, it is very easy to go down the path of every click becomes API. We saw that very clearly with our developers, but you have to sit back and think, “What is a service? What’s a common logic business process that you can build?” And when you design your APIs, if you keep that principle reusable services, reusable APIs, then you build them in such a manner you have that common business logic layer, you have that common service that can be called from any channel, so you give the same result in any channel the customer is experiencing with you.
Gunjan Kalita: Perfect. With the multitude of systems that are existing in these companies, I think that API plays a major role in it. That also brings us to our next question, which talks about how important is it? API enablement/integration for this entire back-office automation that we are talking about. Sameer, would love your views on this as well.
Sameer Kundu: Yeah. As Yasemin said just now, the API capabilities of any workflow that is available for back-office automation is so, so, so very important, because the back-office is all about connecting with several other systems that is operating in the whole organization and getting the inputs from there. And Newgen as an organization that been pretty focused in this space, and we’ve been created by some of the analyst firms as a strong API based workflow platform. Because, as I said in the beginning, we have been working with back-office organizations for a very long time. So we definitely feel the importance of APIs based integration capabilities in the workflow platforms that we offer. We also go to the extent like Yasemin was giving some a hint about ready made connectors.
We are also talking about these ready made connectors, which of course, they are done through the APIs itself, which can be a plug and play and going forward from an implementation standpoint, from a capability of reusability, those are the areas that helps us. Ultimately, the end result is that the back-office is able to keep the SLAs, is able to give the response to the front end so that the end customer is benefited. So as a matter of fact, API plays a big role in our opinion, and we are driving our technology and the product area on that front in a big way.
Gunjan Kalita: And from an LTI perspective as well, Yasemin, could you shine some light, how have you been going on about it?
Yasemin Sezer: Yeah, to me, API is the key part of the foundation, and when we started our transformation journey three years ago, we started with APIs. API led transformation, connectivity, and when I started explaining APIs to the organization and we work closely with Steve, I was explaining, “How do we use APIs in a business form?” It’s very hard to explain. It’s a very technical concept, and initially it was taking a bit of time to get to understand it, get some real cases to play, but today Steve says APIs became one of his most used words. So I think I’ve been successful working together with him getting APIs moving forward, and once we started putting that foundation layer strongly, reusable APIs, we found a lot of our new clients coming on board jumped on board right away. The demand on APIs is certainly increasing, because you have to integrate that customer journey we talked about, requires our client’s website to connect to our system. And guess what? API is the glue in there.
But when you build APIs you have to build it in such a way that it is sustainable. It’s strong. You need to have the right tools, the right operating environment. You have to be able to support it well. You need the right operational management tools, scalability, monitoring, throttling, those are all very important aspects of APIs. Also, if you look at the industry, whether it’s in Canada, payments industry is implementing API based solutions right now. Open banking APIs are in Europe already in place coming to US and Canada, and even Fundserv, the body we work with, is moving to APIs now. And we were the first one to accomplish and enter on transaction with APIs with them. So it is becoming a key driver in the industries, all industries, as well as a core component of our architecture and solutions.
Gunjan Kalita: Perfect. Steve, Yasemin did mention the entire journey. Would love your views on it as well.
Steve Kingston: Yeah. My view is pretty simple. I’m the business guy, so I’m the one sitting in front of our customers trying to figure out the, “So what?” APIs are fantastic, but they’re a means to an end. There’s got to be a business problem that you’re trying to solve or integration that’s going to drive material efficiency that’s really the driver of that API. As Yasemin said, I think probably 80% of the conversations that I’m having these days with our customers have some level of API component to it, but that’s all in the interest of automation and increasing efficiency in the back-office and getting rid of that report that somebody manually picks up and punches in some numbers into another platform.
I think very simply from my standpoint, that’s always the way that I look at APIs is, “So what? What’s the business outcome that’s going to come out of it?” Yasemin has done a wonderful job of building the infrastructure to support those business needs with our APIs. And as I mentioned, I think, at the beginning, Sameer, when we were out looking for a workflow partner a few years ago, having that API integration capabilities and the ability to quickly integrate was probably number one or two on our list of criteria. So that’s how I look at it.
Gunjan Kalita: Leslie, is this something that is echoed by Forrester as well?
Leslie Joseph: Yes. Let me let try and throw a few more perspectives into this, because I think Steve and Yasemin really covered the idea of APIs at a technology and business level fairly well. If you think about where we see this headed, a lot of the foundational mechanisms that relate to how we approach enterprise software development creation essentially are undergoing a certain level of flux. If you think about the last few decades where the key question for many CIOs and CTOs was build versus buy. Today that question has changed and it’s no longer build or buy. It’s really actually a plethora of options, but primary among them are this approach of whether to customize or to compose, which is inherently a really big change in the way software is developed and the relationship between creation and service from an enterprise point of view. The second consideration, which is also very interesting emerging thing as we go through whatever we’re going through right now is who’s developing the software.
And increasingly, what we are seeing is the need and the ask, in fact, for business users. People who are not computer scientists, who are not coders, but the business folks who are closest to the actual work. There’s a need and an ask for these folks to really start participating in building functionality, building workflows, creating capacity and so on. We are seeing a great democratization starting out in that space. The third idea is the emergence of this automation fabric, which is something that we are talking about increasingly these days. Think about it as this heterogenous yet pervasive layer of automation that we are starting to see emerge and come and sit between the application layer at the bottom and the users on the top. And what the automation fabric is really doing is it’s not just one thing that you can go and snap in. It’s a combination of different technologies, digital workers, and APIs, and a little bit of process mining and AI machine learning.
Everything else coming together in a very loose cross weave. What this is essentially doing is that it’s coming in and abstracting application functionality, so that on the top end, this wider variety of developer personas and user personas and hybrid workforces, as I said, can really participate more and more in creating enterprise value through software, but they can also in a very real sense, shrink the distance between workers and work. Coming back to the question of how important is API enablement? I think it’s absolutely paramount that organizations stop thinking about their technology landscape as being like we used to back in the day, built out of static application blocks, but instead, really start thinking about it as a collection of dynamic business events and interactions and data flows and human machine interactions. And having a robust API ecology is really fundamental to this shift because it changes the whole paradigm with which you can both interface with as well as create technology capabilities across the organization.
More so in the back-office where a lot of the heavy lifting around data and so on generally tends to take place. But I think I also do agree with what Yasemin said, is that it’s very important while developing a robust API ecology to really have the right guard rails and governance and considerations of security and all of those things, which unfortunately are often thought about as after the fact, but these need to be considered right from the start.
Gunjan Kalita: Perfect. And now finally, the key question that comes in. How does any enterprise get started with modernizing their processes, including the back-office. Steve, would love to know your take on it.
Steve Kingston: Yeah. Most of the firms or all of the firms that we deal with have started. It’s really, how do you keep up the momentum and how do you keep going and how do you continually get incremental benefits? We’ve talked a lot about front office getting a lot of the investment. I think that is certainly one area where we see a lot of focus now, and to get that true modernization and the true benefit, you need that straight through processing. We’ve seen a number of clients build beautiful front end customer experience platforms, but if there isn’t that straight through process to the back, you don’t truly get the benefits in the back-office. Understanding your back-office, it sounds very basic, but it’s a big one. I just heard Leslie mention process mining tools.
I think we’ve seen an increase in the number of those, and we’ve talked to a number of providers and it’s actually pretty impressive what they’re capable of these days. I think a lot of back-offices struggle with nonstandard processes or different processes across teams, and it’s very difficult to automate even with the best technology if you’ve got fragmented and nonstandard processes in the back-office. So that’s a big one. Again, a simple concept, but you need focus. I’m guilty of it. I’m sure all of us on this panel are guilty of it, but if automation and accelerating automation is really something your organization wants to do, you need people that are focused on it. Very simple, but it’s the truth. One of the things that I have been very consciously working on myself within my product organization is my ability to business case quickly.
And some people call it fail fast, whatever you want to call it. But look at areas for automation, look at areas where the biggest bang for the buck is, and start your business case and do it fast. I used to spend three months doing a business case. Now, I build the framework of a business case within a couple of weeks, and you can generally tell pretty quickly whether there’s an opportunity there. Don’t get caught in that analysis paralysis type of situation. Integration, we’ve talked a lot about, but you can have the best platforms in the world.
Whether it’s CRM, BPM, back-office, whatever it is. If they don’t talk to each other, you’re not going to get the true benefit. It’s, again, a simple concept, but it’s the truth. I think the other thing is, I mentioned it earlier. We all want to be 99% straight through processing, but even in those situations, you need platforms in the backend to handle the fallout from SCP. There are going to be exceptions. There’s going to be not in good order trades or applications or whatever it is, and that’s where we see the value of a workflow platform is not going away and is [inaudible 00:47:57] expand in future.
Gunjan Kalita: Perfect. Yasemin, anything to add to that?
Yasemin Sezer: Yeah, well, very quickly I’ll add that to be able to deliver fast business cases, solutions, you need to also have a good architecture and background. We talked about APIs, we talked about system components, but the environment gets very complex as you keep adding these different technologies. So you need to actually focus on how to stitch them together in a way that you can support them all. Because now, every one of our applications are calling APIs in one way or another. If there’s a problem, how do you determine the source of the problem very quickly and deal with it? Or better than that, the capacity demand is increasing so fast. You need to figure out your capacity management, the demands, and prepare for them and quickly adjust to them.
So a lot of focus on the technology side has to be also on these areas where you have a good support mechanism in place, as well as a methodology that helps you deliver fast. The agile DevOps, DevSecOps becomes a critical component as well in your delivery. But also the framework you build around alerts, monitoring the tools to check security and design privacy as part of design, those become critical components of your whole ecosystem and your fabric that you need to build in place.
Gunjan Kalita: Perfect. Sameer, what has been your approach with the customers around it?
Sameer Kundu: Yeah. With the customers that we have been talking to and we have been implementing, a lot of customers have changed their mindset of a back-office. In earlier days, digitization or data entry or scanning was a part of back-office, and it was a cost saving center primarily. Cost cutting, cost saving department as such. Now, my experience with talking to a lot of organizations is they’re looking at more from the point view of creating more efficiencies to service their customer. So it is an extension of a front end and keeping in mind, of course, the cost saving, that is an important parameter. Like Steve was saying about building a business case, of course the cost saving part will come in, but that is not the only priority that I’m looking at from the customer’s point of view. They’re also looking to use the back-office to service the front office and the end client together.
So that brings me to a situation where they are looking at it to modernize and how they get started is how are they thinking? So one, they’re not thinking anymore as a cost saving department, they’re thinking more as an end customer approach, so the front office processes are moving fair amount to the back-office. I’ll give you an example. One of the insurance companies, they are generating quotations for their customers. And the generation of the quotation itself has become a back-office operation. Ideally, that’s a sales process, it’s a sales activity, which typically remains in the front office, but they have structured that in a way that the quotation generation has become a part of the back-office. And they have gained immense efficiency out of that, and they have actually expanded their operations beyond Europe, into US, and probably in Australia as well.
That’s the way things are changing. So the way I would suggest how does any enterprise get started with modernizing is the thinking that they’re doing and bringing in lot of many other areas of processes or activities into the back-office and treated as more of an extension of the front office to bring in more efficiency. In Newgen to support that model, what we have done is we have structured an approach of what we call it Newgen One. In which typically we are bringing in many, many components, all stitched in together. We are bringing in the strong workflow, we are bringing in the document management, we are bringing in the case management, we are bringing in the RPs of the world, the AI and MLs activities, wherever they have to be used in a Newgen One kind of an approach system. So that the back-offices can utilize any part of these in a way that it needs to be used. That’s the way we are looking at it from the customers, and customers are also looking at us to improve our technology base to service those areas of their need.
Gunjan Kalita: Thank you, Sameer. When we started this discussion, we asked the question. Industry has an invested a lot in customer facing initiatives, but how do we modernize the back-offices to make it all click together? And I’m sure this enthralling discussion has answered that question clearly. Gone are the days when the customer, his face inside was flashy, but the back-office remained antiquated. Only the perfect mix of automation investments on both forays can bring about success to any organization. Thank you all. With that, we have some questions from the audience. Here is actually a straightforward one that we probably would’ve answered throughout the discussion, but here it is. Is anyone seeing the lines between the back-office and the front office blurring/disappearing, given the current business and technology conditions? It’s up in the air. Anyone who wishes to answer that?
Sameer Kundu: I can take that up. It’s actually true that to an extent, yes, as I said, the customers are also thinking about using the back-office, not only from a cost saving point of view, but also from a customer service point of view. So yeah, there is a line which used to be there. A typical back-office activity used to be some certain set of activities. For example, accounts payable was always been a back-office activity for many, many years, but today there are many, many more processes that has come into the back-office. Like Yasemin was saying, Steve was also saying about customer onboarding processes. So there is a line which in yesteryears, they were pretty strong is blurring around, so that the combination of back-office and front office and mid office is kind of becoming the same process.
Yeah, I would say that the technology has enabled that to happen, and last 20 months of experience has also shown that there is a long way for the back-offices also to go, because it has come a long way, but a lot more can be done to the back-office structurally as well, and modeling it into a slightly different way beyond technology. I’m sure blurring will keep happening and the organization will function as a single organization. We are trying to bring in a Newgen One concept as well.
Steve Kingston: Yeah. And very simply from my standpoint, I think the closer you get to straight through processing, the more the lines get blurred. Because straight through processing, at that point, you’re dealing purely with exceptions. Those exceptions generally mean calling, in our situation, the advisor, which would be maybe a quasi front office activity. Yeah, the closer you get to straight through processing, the closer you get to zero back-office and the front office becomes more of a priority.
Gunjan Kalita: While we are also at the topic of straight through processing, there’s a question around it. Over the last few years, even OCRs have been moving to straight through processing. So is an investment in OCR world file today? Steve, if you could answer that.
Steve Kingston: It’s a good question. I think everybody looked at OCR 10 years ago, and I think the biggest challenge at the time was accuracy rates and things like that. We’ve actually looked at OCR fairly recently. There was always a bunch of legacy providers around OCR and your data cap, your AVI, your COFAX, and some of those. There’s been a number of FinTech providers that have come out in the last couple of years that do an excellent job leveraging cognitive and machine learning and some of these things. And we’ve seen some really cool demonstrations with accuracy rates on handwritten things, documents in the 90% range or 95. So I think OCR has changed. The other big challenge we always saw years ago was, I can build OCR in a form, but the next form, it’s going to take me another 20 development days to map that new document.
I think current providers have addressed that as well, putting that in the hands of more business type users, and you can map those documents out in a couple hours and really get the benefit. The question really becomes what are you OCRing? Is there still paper? Are you OCRing? There’s a lot of email activity where OCR is still relevant. So yeah, I don’t think it’s gone away by any stretch. I think, again, it’s what’s the quick business case for what are you trying to OCR? And how do you pull that data out, create APIs, and push it directly through to the back end?
Gunjan Kalita: I think we have just about enough time for one question, and this is right around Leslie’s domain. What do you think is the role of available RPA in back-office automation?
Leslie Joseph: That’s a great question. I’ve characterized this before, so if you think about the way that companies have approached AI and machine learning over the years, it’s been quite an interesting ride. There’ve been some notable successes in standalone creation of machine learning models for specific problems. There have been lots and lots of well-documented failures. I think what has changed with the advent of RPA, and now as we move more towards the automation fabric is that clearly, process automation has taken on a certain role where it is able to provide the scaffolding in a sense within which you can actually embed AI and machine learning into specific business processes, as opposed to, “Hey, let’s get a bunch of data scientists, put together a model, and then what?” How do you plug that into a real world business process?
How do you scale it? How do you industrialize it? That has always been the Achilles heel for machine learning. Now, with process automation providing that scaffolding, and as we move deeper and deeper into process automation, into the automation fabric, where you have more connections between capability, technology, and process and people, I think the opportunities will actually increase by significantly. To take a cue from, I think, what Steve was talking about in terms of obviously OCR is one technology, but if you think about just over the last year and a half, the technology level improvements that have happened in spaces like natural language, for example.
Chat bots, the technology has gotten frighteningly good and frighteningly useful. The questions that you should ask is A, as Steve mentioned, what’s the business problem that you’re trying to solve? And therefore what’s the business case? And B how do you bring it to life and scale it? So those are the questions that should keep you up at night. Not whether is the technology itself something that we should invest in, because there’s no harm in really experimenting with stuff at this point. The opportunity cost of trying something out is, at this point, almost asymptoting to zero. So try it out. Technology’s good, but build the case around it.
Gunjan Kalita: Perfect. Perfect. Thank you, Yasemin, Steve, Leslie, Sameer, we are on top of the hour. We really appreciate your time and valuable insights. An agent will send across a copy of the recording to all the registrants and attendees. Those who were not able to share the questions today, please feel free to send them over via email. Thank you again, and have a great rest of the day.
Yasemin Sezer: Thanks, everyone.
Leslie Joseph: Thanks everyone,
Gunjan Kalita: Take care. Bye bye.