The transformation of the technology, media and entertainment, and telecommunications enterprise continues at breakneck speed. Whether as a consequence of strategic thinking or operational expediency, the trajectory is toward a new type of enterprise. It is one that is designed to create new experiences for customers: workforces will engage differently, assets will be managed in new ways, business processes will be rewritten and products will be reimagined continuously.
This is the first in a series of EY articles looking at how technology, media and entertainment, and telecommunications (TMT) enterprises are taking advantage of disruptive trends to become leaner, more efficient and more flexible. In particular, we take a look at how the new breed of transformative technologies is optimizing the enterprise. The focus is on intelligent automation (IA).
In as little as 18 months, IA has rocketed up the executive agenda, but the conversation remains too narrow. So far, attention has focused on processing, in areas such as payments automation, contract review and compliance, where the impact is evident, undeniable and yet only a small part of its overall potential. EY’s research shows that IA is relevant across the technology, media and entertainment, and telecommunications value chain. It impacts not only the back office but extends all the way to the very heart of the customer experience.
The imperative – why now?
IA is a suite of technologies that encompasses artificial intelligence (in all its forms), natural language processing, computer vision, robotic process automation (RPA) and others. What they all have in common is that they are both products of disruption and tools for thriving in it. Over time, the reasons for deploying IA are only likely to become more compelling. Here are just three reasons why it matters:
There is relentless pressure to optimize the enterprise
New entrants, such as over-the-top (OTT) companies, have dynamic business models. They are able to scale quickly and to do so without the traditional levels of investment or operating expenses. Against these competitive pressures, incumbents also need to pivot to a digital world. The cost of optimization is not cheap and requires the kind of capital structure that frees up the enterprise. Every slice of margin helps. For media and entertainment companies, operating expenses account for around 26% of revenue and for telcos, it is as much as 60% to 65%.
Increasing complexity places further pressure on the operating model
Complexity comes in many forms, not least competition, product diversity, emerging business models and the need for new customer experiences.
There is an exponential rise in the number of internal and external interactions among all stakeholders: employees, customers, vendors, suppliers and partners. The accompanying amount and diversity of data that this generates creates a foundation for new behaviors. Crucially, digitization also allows for automation of many of the processes that require human input and frees up human capabilities, empowering employees to change their behaviors and deliver greater value.
Intelligent automation rises to the challenge
IA is not a panacea, at least not yet! Its greatest opportunity and consequently greatest impact are to be found with processes that are data-intensive, repetitive and rule-driven and have electronic start and end points. Today’s enterprises have such processes in abundance and will likely have many more in the future. Estimates vary widely but suggest that anywhere from 30% to 85% of today’s processes could be benefit from automation.
IA’s strengths in optimizing operational excellence begin with bolting it to existing, legacy IT without the need for costly investment programs and consequently with much shorter payback. Yet where it really earns its stripes is from the ability to work 24/7, to scale quickly (exponentially bigger than many existing processes) and to free up existing manpower for more value-added roles. Across various functions, our research shows that the implementation of IA can deliver savings of 20% to 35%. Its potential to open up and deliver new sources of revenue is potentially limitless.
The most effective way to implement an IA solution is to make it part of the DNA of the organization, alongside all those other elements that make the enterprise thrive. For example, take one of the criticisms of IA technologies about the displacement of humans. Instead, we see the collaboration of IA and humans as integral in the prioritization, implementation, execution and ultimately success of these technologies. Combining IA capabilities with human creativity, decision-making and oversight must inevitably elevate the human role beyond the mundane into the value-add. It moves both technologies and humans in tandem to the next level.
Opportunities in TMT enterprises
The impact of IA on the TMT industries is not restricted to specific silos, but according to EY analysis, is capable of augmenting along end-to-end processes, encompassing the back, middle and — most importantly — front office.
Utilizing EY’s proprietary framework, we looked in turn at each area of the TMT business. These included areas that are both industry specific, such as content ideation, advertising sales or management of networks, to more generic functions albeit with a TMT flavor — for example, customer, sales and marketing, and finance. In each of these, we broke the function into its constituent processes and ranked it against a set of criteria to determine not only the likely benefit and impact of IA deployment but the relative ease of doing so: effectively, rewards vs. risks.
Our findings revealed that most areas of the TMT enterprise are ripe for IA and the majority are areas to act on today. Even those that do not fall into the buckets of “proceed now” or “quick wins” should at least be on the radar, most likely because the rapid evolution of intelligent technologies will very quickly shift those areas from a secondary focus to be higher on the list of priorities. While immediate decisions will be made around cost efficiencies and encompass better quality and consistency of work, we continue to believe it is the upside of new revenue opportunities that will become one of the key drivers of adoption.
TMT is an industry where IA deployment has realizable upsides
By way of illustrating the potential of IA, let us take one area in particular: advertising sales and specifically the role of IA in the media agency. Nowhere is the optimization of the end-to-end process better illustrated. IA can play a role in determining campaign options, prepopulating campaign plans, executing on specific transactions, and ultimately tracking, reporting and reconciling the effectiveness of those campaigns — not to mention, at the same time, managing many of the functional areas that sit alongside the process, such as client onboarding, contract review and invoicing. In essence, IA works across the life cycle of a campaign to optimize the efficiency and subsequently the effectiveness of each ad buy.
Take another example, this time illustrating the power in content classification. Using combinations of IA technologies such as computer visualization and artificial intelligence, not only can we tag content, we can assess it. Traditional models of metadata content tagging are elevated to a new level. Standard elements such as subject matter, actors and script are supplemented by sentiment, mood and even perceived audience reaction. The potential is so broad, from opening up content archives to providing recommendations that transform the customer experience.
What next? The intelligent automation checklist
EY’s experience of IA deployment has taught us that it must be founded on providing value to the business and that value should be quantifiable. We also believe that as IA permeates through enterprises and moves from the automation of today’s enterprise to the reinvention of tomorrows, it needs to be an adaptive solution, ingrained in an understanding of how the enterprise works and its strategy.
As such, the starting point is not about the technology, how it works or how to implement it. Instead, it is about the business value that can be delivered. A simple three-stage approach on where to go next follows.
Identify areas where IA is applicable
- Agree on the checklist for IA assessment
- Determine the answers to the following questions
- Is the process performed regularly rather than as a one-off?
- Does it rely mostly on business rules and their application and interpretation?
- Is it electronic/digital from start to end?
- Is it a manually-intensive process, involving multiple systems with typically high error rates?
Quantify the likely impact
- Define and map an opportunity so that it can be easier and faster to implement
- Use rapid trail and test cases to test opportunities against hypotheses
- Determine what the impact is: score against benchmarks the likely impact of intelligent automation
Target areas with the biggest business value
- Based on impact and ease of implementation, rank pilot opportunities and prioritize
- Test assumptions about impact and costs with stakeholders
- Business model: for high-priority opportunities, estimate the effort and project overhead as well as ongoing operational costs
As the capabilities for IA evolve and as the constituent technologies mature, the nature of the digital workforce and the enterprise at large will evolve. The powerful interplay of these technologies will lead to exponential gains in operational excellence that extend to every facet of the TMT enterprise.
EY Global Advisory Leader for Telecommunications and TMT Africa, India & Middle East (AIM) Advisory
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