AiiA Benefactor Series
Mihir Shukla, CEO, Automation Anywhere
You might have noticed that the AI & Intelligent Automation Network has a set of benefactors. These benefactors were kind enough to invest in the network when we launched. You’ve probably seen a fair amount of content from them so far in 2018 and that will continue.
We’ve got a number of articles, whitepapers, webinars and survey’s coming out throughout the year so that you can benefit from the work that they’ve done in the space.
As I host the AI & Intelligent Automation podcast, I’m taking the opportunity to sit down with a thought leader from each organization to get a sense of each company’s thinking.
Next up is the CEO of Automation Anywhere, Mihir Shukla...
Seth: Mihir, what was the first pet that you owned?
Mihir Shukla: Never owned a pet.
Seth: Never owned a pet? Not once?
Mihir Shukla: Not once!
Seth: All right. So we're here in the 2020 room at Automation Anywhere headquarters. Thanks for having me. You said this is the Future Room, which is why there's a time travel machine on the wall,..kind of.
Mihir Shukla: Yeah.
Seth: You said it doesn't work yet.
Mihir Shukla: Not yet! We have four rooms. Our passion is that we see this in the larger scheme of human evolution. The first room is 1760, that's first Industrial Revolution. And the second room, there was a second Industrial Revolution. Third is the IT revolution. And fourth, we believe, is the bot revolution. That's the fourth industrial revolution and so that's why we're in the future room.
Seth: Now, you're giving it a little bit of time, right? For everybody to kind of catch up because you're calling it 2020? It's not 2018, 2019. How come? Why that nuance, I wonder.
Mihir Shukla: I think our journey towards the future is already underway, but by 2020 we expect that we will have three-million digital workers in production to our customers and partners. And at that point, this is a vision that we set up many years ago and we are about, in the last scheme of things it looks very near now.
Mihir Shukla: And at that point, to have that level of impact, at that point, we can say it's the industrial revolution.
Seth: It is, okay. So we are well on the way to that number, which means that there are millions, right? That's the number that we're talking about, which means that this is a mainstream thing. I know that from the corporate enterprise practitioners that I speak to. You can't get through, you know, the Global 5,000, the Fortune 500, whatever you want to call it, without tripping over a corporate enterprise that is absolutely on the intelligent automation journey. So we're here right now, as far as everybody, right?
"If you want to be a digital enterprise, you must have a digital workforce platform, and you invest proportionate to the size of the problem."
Mihir Shukla: That is correct. I think in the last couple of years, this has become a mainstream. Today, automation anywhere alone has over a thousand customers. And out of 75% of world's largest companies are engaged with us. So at this point, if you haven't started the journey, you should be asking yourself, when would be a good time to start it?
Seth: And it would be now, right?
Mihir Shukla: When 75% of the largest are on the journey, for me, it's the writing is on the wall.
Seth: You say three-million bots.
Mihir Shukla: Yeah.
Seth: That's an intelligent workforce. What are we talking about with that much intelligent power.
Mihir Shukla: So let me define the term intelligent digital workforce.
Mihir Shukla: It's a term that we pioneered. And the idea is we realized that about three years ago, we looked at this space and said where does RPA grow next? And then we begin to look at the definition of work itself. We think about things, then we do them on often on a computer. Then we analyze what we have done, and we drink coffee. It's kind of the work definition today, right?
Mihir Shukla: So a hundred years ago, it was about dig a hole and plant something.
Mihir Shukla: So the definition of work itself changes. So three years ago we got ambitious and we said, hey, we have an opportunity to redefine, augment, the definition of work itself. So the idea behind this is RPA can do many things that we do on a computer. We've added the power of cognitive and artificial intelligence product line to our portfolio. And then we added an added capability called bot in site. So now three together allows you to do, think, and analyze. No coffee. But that three together creates a digital workforce, digital worker, a digital colleague that works with you on the work. And we think that has a power of augmenting the definition of work itself.
Seth: So augmenting the definition of work itself through our three-million bots here at Automation Anywhere, I wonder what that means to you as far as what that reality is. So if I am the vice president of IT, if I am the vice president of innovation, if I'm the vice president of shared services, if I'm the president of operational [inaudible 00:05:23], whatever, you know, when I've got my intelligent workforce up and now really running in 2020, what does that mean for my job? Do I have one, Mihir?
Mihir Shukla: Of course. I think this has happened many times in the history, as we know, that most of the routine work gets automated and that's how standard of living is improved, and everybody shifts to doing higher things, right? And this has happened so many times that, so this is happening again. Let's say you are a leader of a back office at a bank, right? And you produce X amount of work. To produce the same amount of work, now you will need 5,000 less people, and you will produce three times more.
Mihir Shukla: Now there are two sides of it. One is that in the long run, this 5,000 people, you end up doing other things, like we've always done, right? But look at it from other perspective. If I'm operating at a 5,000 less people to produce the same work and producing three times more work, how does any other bank compete with me?
So if I'm another bank, I have to adopt digital workforce. Same goes for retail. Same goes for healthcare. Same goes for oil and gas and telcos and many others.
Seth: As your conference rooms are named for the Industrial Revolutions, we've always figured it out then and we will always figure it out again.
Mihir Shukla: That's right.
Seth: And specifically this time. What does the global kind of landscape look like, in your opinion? I'd love to kind of take pieces of the globe and talk to you about them. As far as Asia Pacific is concerned, how does that compare to the rest of the world, and what do you see there specifically, if anything?
Mihir Shukla: I think where we are, we have global presence, about 15 offices worldwide and five are coming up later this quarter.
Seth: Mm-hmm (affirmative). This quarter, it's not this year, it's this quarter.
Mihir Shukla: No, this quarter, yeah.
Seth: It gives you a sense of growth.
Mihir Shukla: Things are moving at a bot speed.
Seth: There you go.
Mihir Shukla: The eruption is global across the world. I think what truly across every industry, this has been erupted already. In many cases, many of these companies are global as well, so many customers where it has gone to hundred different offices in 70 different countries, so that kind of global deployments now exist in RP.
Seth: How does the U.S compare to the EU, you know, and Europe and maybe EMEA versus APAC? What do you see as far as trends and who's in front, or you know, what's interesting about either?
Mihir Shukla: As you know, each of have their unique characteristics. I think U.S, in terms of the volume and size, leads today. APAC, because a lot of process work happens today, it has an unusually significant role to play compared to any other industry. And Europe is a close second, but it is moving fast. So one of the faster-growing region for us.
Places like Japan and certain other regions in APAC are also kind of a rocket ship for us.
Seth: You say, and I don't mean to press, but unusually significant. I just want to unpack that, if you would. Just take us one level deeper there.
"There are reasons why certain projects don't succeed. One of the most common reasons we hear is that you took a process that turned out to be a wrong process, wrong team or wrong application."
Mihir Shukla: So particularly if you are a software company, you have five to 10 percent of your revenue coming out of certain APAC regions, typically because just the natural distribution of GDP. But because so much of process work happens in APAC, the unusual part is that that number could be as high as 20 to 30 percent.
Seth: All right. So we are all across the globe. We've mentioned the number of customers, we've mentioned a number of bots. You know, we've mentioned the fact that work as we know it is changing. What are the benefits beyond that? Beyond maybe I won't have to do some of the boring stuff I'm doing now? Truly, at a high level, what are the benefits?
Mihir Shukla: I work them into two categories, short term and long term. I think in a short term, the cost benefit is enormous. And the quality improvement, you have so much, the current data rates are caused by our current processes. When they're transformed to digital processes with the bots, you have near-zero error rates, right? So those two alone create a tremendous benefit.
Now if you take any industry, let's see you look at a medical world, healthcare world. And you have denied billing because somebody put the wrong code and you have 10-million dollars of denied billing stuck in your system. There are billions of dollars stuck in system because of regular errors, that's to be expected in the human world.
Seth: Free the money.
Mihir Shukla: Free the money, right? So if you just look at that alone or you improve your day sale's outstanding process and if you improve it by five days for a large company, that's 200-million dollars in free cash flow. Those are the most immediate benefit, you just take it, right?
Seth: Put it in the bank, quite literally.
Mihir Shukla: 200-million dollars in free cash flow, why wouldn't you take it? The long term benefit is, I think, liberating the human workforce to do higher value added things is amazing. In manufacturing we think about how to not waste material. You know, the biggest waste of all is waste of human intellect. That's the biggest waste, right?
So what this does is it allows people to focus on higher value added stuff. Automation Anywhere uses it internally, and I can see how that transforms our finance, accounting departments and HRs and operation departments. And so as a leader, that's the most gratifying things to see, when people do that.
And at one point, I think it will be about competitive advantage. If you are not doing it, you simply can't survive.
Seth: Let's say I'm in the unfortunate position. I have gone through, you know, maybe an RPA implementation that did not go perfectly. My board and C-level folks are saying, listen, just focus on something else. It didn't work. We spent money. We lost time. We're not getting the benefits.
What would you say to executives that are certainly sharing with me that they are, you know, there are some that are in that boat, so to speak?
Mihir Shukla: I think my take is digital workforce is a platform that every company needs to have. You can't say I won't have database because my database implementation didn't go well. What are you going to do? Write it on a paper? There's no choice, in my view. This is the platform. We have to figure out how to succeed.
There are reasons why certain projects don't succeed. One of the most common reason we hear is that you took a process that turned out to be a wrong process, wrong team, wrong application. There could be five other reasons why that was the wrong thing to start with. That doesn't make the entire platform wrong, when there could be a few other reasons.
Mihir Shukla: So I think you need to, there is enough experience out there that can guide you on how to start it on the right footing, or right way. And thousands of customers are succeeding their own ways.
Seth: So just because the SAP implementation didn't go so well for Hershey's in the 90s, didn't mean that they didn't use an ERP system. Of course they did, right?
You're saying, okay, this obviously, this has to happen. And me, the practitioner, I know that it has to happen. You know, I've got to sell it up and just get it done if that's the direction of the communication. I've also got to sell it down if I'm thinking from the top. What would you say, you're the CEO, so you're not going to have real detailed information here, what would you say about budgeting in terms of intelligent automation?
Mihir Shukla: So let me step back because budget is an outcome of the thinking process. So the first thing you assume is that you have to become a digital enterprise. If you're not a digital enterprise, in five to 10 years, you may not exist, no matter how large you are. And there is enough data to show that in last 17 years, 200 of the Fortune 500 companies have disappeared. Many of them due to digital disruption. So if you need a reason to believe that, that would be one way.
Now if you agree that you have to become a digital enterprise, then what does a digital enterprise look like? One of the key capabilities of a digital enterprise is that you must have digital operations, digital processes. So that when volume goes up, you don't have to buy buildings and put people in it, you can scale digitally. That's what Ubers and Amazons of the world do, right? You're able to scale with digital power.
If you have to do that, digital workforce is your only choice. Now, you have other tools, blockchain and others, but what digital workforce does nobody else does at that scale because you can integrate all legacy applications, automate in a way that's not possible, it's not rip and replace. Rip and replace is five, 10 years projects. This is now, today, three to six months, nine months, you're done.
"A bot removes 80 per cent of the friction in all world processes, and it produces 80 per centof the value at 20 per cent of the cost. In a few years, that's the new norm."
So if you want to be a digital enterprise, you must have a digital workforce platform, and that's your ticket to becoming it. So you invest proportionate to the size of the problem. If I had 30,000 people, I must figure out how do I automate that level of work and you decide, you have the next three years, five years. You know, different industries have different time zone.
But the way I think of it is you define what a success looks like in five years and then you work backward.
Seth: If it's the end of 2018 and 2018 was the year of mainstream intelligent automation, what's 2019, before we get to 2020?
Mihir Shukla: I think 2019 is when conversation changes to not if we should do it or how we should it, it is how big and how fast that's going to change. The second part that will change is that, and we already see that but it will become more mainstream, is people will begin to see that cost is a great advantage but all other advantages is, oh, my God, that's amazing, right? So I saved 10-million dollars but I had 200-million in free cash flow and stock went up four bucks.
Mihir Shukla: Let's talk about that, right? I have this much error reduction in health care and it saved this many lives, right? That is a value. I have this kind of a compliance, and I am no longer in violation of those compliance rules. Or I'm able to produce this much. And the best of all is because I have digital operations I am able to respond to customers at a different pace. And my customer experience in MPS went up and revenue got a 10% lift. I think you will begin to hear the beginning of those conversations.
Seth: Just quickly, on the 90s, which was the last industrial revolution, you had your fingerprints on Netscape, if I remember correctly. What is your key lesson learned if you can crystallize that, from that last industrial revolution, that you are bringing forward to this one?
Mihir Shukla: I learned that in those days we were struggling to convince people that one browser, or one internet application could change the world. People's question was that our mainframes and databases and ERP systems, and there are so much large things, how could one thing change the world? And eventually we knew that our internet could do that, right? And how smart phone could do it.
The lesson I learned was that disruption requires three things. One is that anything that reduces friction by 80% is disruptive. Anything that gives you 80% value of 20% of the cost disrupts it. And anything that makes world a real time disrupts it. So internet made world real time, right? Smart phone made world real time. I didn't have to wait for things. Because life is real time and I think real time fits in well with life.
So when you have these three characteristics, any one of them could disrupt it. But when something has all three, which is what a bot world has, that is what internet had, that is what smart phone had, it had all the three characteristics. It is the new norm. It's not only disruptive, it is the new norm, how world operates. Because bot offers you all three, it makes it real time, it removes 80% of the friction in all world processes, and it produces 80% of the value at 20% of the cost. In a few years, that's the new norm.