For the last two years, I have been speaking at conferences about Robotic Process Automation (RPA) and the interest levels continue to grow – the RPA market is gaining attention from professionals and investors alike.
What do we know about the evolution of RPA? Despite humble beginnings, how did RPA become such a spectacular global success? Let’s take a quick look.
2011: Switching their branding from Thethys Solutions to Automation Anywhere, a US-based IT product company shifted focus from software testing automation (legacy products: Testing Anywhere, Workspace Macro, Launch-n-Go etc.) to Business Process Automation
2012: A UK-based IT product firm, Blue Prism (revenue at £2.5 mn) coined the term “Robotic Automation”. It denoted a new capability to their workflow product which could automate rules-based processes in the back-office. This was positioned as a threat to traditional low-cost outsourcing.
2013: IBM Watson ventured into cancer treatment with its first commercial implementation at Memorial Sloan Kettering Cancer Center, New York City. This was a major step in augmenting human efforts with Artificial Intelligence (AI). The year also saw Gartner featuring Blue Prism as a key automation vendor of business process services.
2014: Research firms predicted massive job losses in the coming years due to advances in Artificial Intelligence. Back-office jobs were estimated to have 80% automation vulnerability, as most of their work content was related to collecting/processing data.
2015: With ‘Digital Transformation’ offered as a service, consulting firms advised CXOs to invest in Artificial Intelligence (AI) to counter the threat from digital companies. ‘Chief Digital Officer (CDO)’ was added as a new CXO designation.
2016: Blue Prism filed for IPO (valued at £48.5 mn). In the next 9 months, the stock surged to 4X. OpenSpan (a RPA product company) was acquired by Pegasystems for $52 mn, gaining massive attention from research firms and media houses.
RPA was added to ‘Digital Transformation’ as an AI product. Consulting firms earned both advising revenue and sales commission from RPA vendors. In just a few months, companies could start their digital journey through an RPA product by forming a digital center of excellence and evaluating proof of concepts.
2017: Most IT/TES services companies became deeply involved and RPA become a hygiene factor. Some companies even developed their in-house RPA products. A company’s digital capabilities began being measured by the number of RPA bots (running licenses) it deploys.
Struggling to manage sales demand, main RPA vendors increased the threshold to include a customer with a minimum annual spend of above $100K, thus creating space for smaller, newer players.
By August 2017, the market cap of Blue Prism crossed $1 bn and the first RPA unicorn was born.
Blue Prism expanded further in USA and Asia, with its market cap peaking at $2.4 bn in September.
What’s in the bot store?
There are few negative reviews on RPA capabilities, ROI and valuation. Still product companies, servicing companies and consulting firms continue to demonstrate YOY increase (some by 8X) in revenue on RPA services.
RPA skills are still very much in great demand as the industry continues to grow beyond anyone expectation. The research firms are being compelled to frequently revise RPA industry revenue forecast upwards e.g. 2019 revenue was estimated at $0.8bn on June 2017, revised to $1.3bn after 6 months and further revised to $2.3bn after 11 months.
Author: Rohit Garg
Disclaimer: These opinions are the author’s own and do not necessarily reflect the views of his current and/or previous organizations.
Pursuing change through disruptive ideas and setting a new normal for the industry.
Automation summit lead speaker (RPA, Artificial Intelligence and Machine Learning).
Served the global financial industry for about 20+ years in domestic, US, European and Asian Markets as a banker, software service provider and operations service provider.
Created and managed service centers from ground zero both for captives and third party players.