A CIO’s first rule for automation: Have a clear business case

By virtue of their position between IT and effecting business strategy, CIOs can identify what processes their organizations need in order to modernize and automate. When it comes to updating core systems to drive operational efficiencies, they also have to ensure that a sound business case exists to automate them, says Laurie Shotton, VP and analyst at Gartner. That’s not surprising since CIOs typically own IT automation, as well as help drive business automation. But it’s not always a given the two aren’t working at cross purposes.

“For the last 15 to 20 years, organizations have been trying to modernize core systems in order to drive operational efficiencies,” he says. “And quite often, the business case for replacing them doesn’t stack up.”

Automation, the business, and the CIO

Since automation can help improve KPIs and create new channels to help improve end-user experience, it’s one of the primary tools in a CIO’s toolkit to drive the business forward, says Brian Woodring, CIO at Rocket Mortgage. “The biggest challenge is making sure that by automating the business, you’re not just taking a legacy, highly bureaucratic manual process and putting RPA in front of it,” he says. “You may get some short-term wins, but you’re unlikely to deliver durable value. One of the biggest things I’ve learned is you can’t do automation to the business; you have to do it with the business.”

As an example, the technology organization of the pharmaceutical segment at Cardinal Health collaborates closely with business leaders so they can identify current pain points and determine the right processes to automate, focusing on how these tools will improve the customer or employee experiences, says CIO Greg Boggs.

“Our technology organization collaborates closely with business leaders so we can identify current pain points and determine the right processes to automate, focusing on how these tools will improve our customer or employee experiences,” he says. “In general, it’s been straight forward to quantify the business impact of automation initiatives, given they typically have clear before and after business metrics. We’ve matured our practice around automation and built architecture that’s enabled us to be nimble, innovative, and able to pivot quickly in a dynamic, global healthcare environment.”

The challenge of the CIO’s job at a financial institution, however, is to eliminate waste by redefining the entire business process while delighting the client and simultaneously maintaining compliance, says Woodring.

Additionally, businesses that combine automation with AI will be able to make faster decisions, optimize business processes, and drive higher rates of efficiencies, says Subramani Elumalai, VP of application management services delivery at Capgemini.

Other CIOs concur that the business is the central consideration for automation efforts.

At Northwestern Mutual, for instance, the company’s mission — to free Americans from financial anxiety — drives everything it does to inform its business priorities, says Jeff Sippel, CIO and EVP.

From a practical level, the organization is consistently looking to apply automation solutions where they can have meaningful impact. The company measures the success of these efforts by business outcomes, not the success of the automation itself, he adds.

Automation as enabler

Automation and business goals also go hand in hand for Vaibhav Tandon, head of commercial management, Adani Electricity Mumbai Ltd.

Automation acts as an enabler to identify specific processes and achieve business requirements, he says. Customer centricity is also crucial to the power company’s business goals, and automation initiatives ensure it enhances the system’s productivity effectiveness. “It’s become one of the key levers in the client experience, and it plays different roles throughout the lifecycle of that change,” says Sippel.

For the CIO, this requires a broader and longer-term perspective while simultaneously keeping the lights on and innovating to create the best client experience.

“We’re essentially rebuilding the city while we’re living in it, so the CIO is constantly weighing both the strategic and tactical considerations: what are the right tools, and how do we bring them together at the right time and place,” he says.

Jamie Smith says his job as CIO at the University of Phoenix is to evangelize the opportunities for applying automation across all the university’s activities. His perspective is that automation augments human tasks so the university can do more for its students.

The university currently employs a variety of automations including RPA to automate recurring human tasks for efficiency, ML-based automated nudges to facilitate student progression and attendance, and an automated virtual assistant (Phoebe) to broaden the support window for working adult students when they need assistance.

Priorities for CIOs

Automating complex workflows will remain a CIO priority, says Petr Baudis, CTO and chief AI architect at London-based Rossum. The key will be getting such projects to scale beyond departmental silos. A catalyst to make this happen will be the ongoing improvements in AI-enabled data capture.

Fast and accurate data extraction will speed up transactions and automation capabilities, and be the foundational technology within any business intelligence or data analytics platform, enabling better collaboration and B2B communications, he says.

“The types of automation technology we see being vital include RPA along with process and task mining,” says Baudis. “We’re seeing a convergence taking place between all these technologies as enterprises try and scale their automation projects.”

Plus, Adani Electricity this year is continuing with advancements in the areas of distribution management, customer experience, the metering ecosystem, and consumer data analytics, says Tandon.

“We’ve implemented SAS’ AI/ML-based energy forecasting solution to improve our forecasting performance,” he says. “This has helped us achieve a forecast accuracy of around 97%, thereby allowing us to optimize power procurement costs while providing reliable electricity supply to our 2.5 million consumers. We’ll also continue with advancements in distribution management, the metering ecosystem, and consumer data analytics.”

The power company’s flagship automation projects include implementing an advanced distribution management system to create a self-healing grid infrastructure with enhanced visibility and scalability to improve the customer experience. They’re also implementing a cloud-based data lake and analytics solution that will provide what Tandon calls a single source of truth, and drive self-service analytics and data-backed decision-making to help them operate more efficiently.

“Estimated readings for our customers stood at 2.2% three years back, but now we’ve brought them down to 0.3%,” he says. “The whole mechanism was automated so all readings were optically downloaded without any manual intervention. This initiative not only ensured our system accuracy and return of equity (RoE) incentive, but also improved transparency and reduced consumer complaints.”

And at the pharmaceutical segment at Cardinal Health, a main goal is to also boost its efforts in warehouse automation to better serve its customers, Boggs says.

“In IT, we’ll continue to prioritize infrastructure as code, continuous integration and deployment, and AI operations,” he says.

The University of Phoenix has some new automation projects on tap as well. Currently, the institution is developing an enterprise platform that will enable the increased use of ML and automation across a wide range of student and staff journeys, Smith says.

“This engine will be deeply integrated into our data lake to enable truly individualized student support at the right time, through the best channel,” he adds.

The university also plans to continue improving student support by continuing to automate increasingly complex tasks in matriculation, transcript processing, and student financial aid.

“Recent advances in the ability to consume unstructured documents and natural language processing are enabling a whole new crop of complex tasks to become candidates for automation,” says Smith.

His team is creating platforms and systems by which they can effectively scale and govern automation safely and reliably. After all, he says, there’s nothing less effective than automating a process that shouldn’t exist. Automation combined with AI should significantly help businesses make faster decisions, optimize business processes, and drive higher rates of efficiencies, says Elumalai. “It has the potential to improve business KPIs through auto-detect, auto-heal solutions, and create new channels to improve end-user experience,” he says.

Artificial Intelligence, Business IT Alignment, CIO, Data Management, IT Leadership, IT Operations, IT Strategy, Machine Learning