HCL is offering robotics both in the form of robotics software plus operations to its new & existing BPO contracts. HCL is typically deploying robotics in two forms:

• Virtualized workforce, directly replacing the agent with robotics (~70% of current activity by value). Here HCL estimates that 50%-70% efficiency gains are achievable

• Assisted decisioning, empowering the agent by providing them with additional information through non-invasive techniques (~30% of current activity by value) and achieving estimated efficiency gains of 20%-30%.

In general HCL is aiming to co-locate its robots with client systems to avoid the wait times inherent in robots accessing client systems using a surface integration techniques a through virtual desktop infrastructure (VDI).

The principal sectors currently being targeted by HCL for RPA are retail banking, investment banking, insurance, and telecoms, with the company also planning to apply robotics to the utilities sector, supply chain management, and finance & accounting. Overall, origination support is a major theme in the application of RPA by HCL. In addition, the company has applied robotics to track-and-trace in support of the logistics sector.

HCL currently has ~10 RPA implementations & pilots underway. Examples of where RPA has been applied by HCL include:

Account Opening for a European Bank

Prior to the application of robotics, the agent, having checked that the application data was complete and that the application was eligible, was required to enter duplicate application data separately into the bank’s money laundering and account opening systems,.

The implementation of robotics still requires agents to handle AML and checklist verification manually but applying automated data entry by ToscanaBot robots and presentation layer integration thereafter removed the subsequent data entry by agents leading to a refocusing of the agents on QC-related activities and an overall reduction of 42% in agent headcount.

Change of Address for a European Bank

This bank’s “change of address” process involved a number of mandatory checks including field checks and signature verification. However, it then potentially involved the agent in accessing a range of systems covering multiple banking products such as savings accounts, credit card, mortgage, and loan. This led to a lengthy agent training cycle since the agent needed to be familiar with each system supporting each of the full range of products offered by the bank.

While as in the first example, the agent is still required to perform the initial verification checks on the customer, robotics is then used to poll the various systems and present the relevant information to the agent. Once the agent authorizes, the robot now updates the systems. This has led to a 54% reduction in agent headcount.

Financial Reporting for a Large U.S. Bank

HCL has carried out a pilot with a large U.S. bank to address the challenges inherent to the financial reporting process. Through this pilot HCL proposes to replace manual activities covering data acquisition, data validation, and preparation of the financial reporting templates. In this pilot HCL estimates that it has achieved 54% reduction in the human effort and double digit reduction in the error rates. FTEs are now largely responsible for making the manual adjustments (subject to auditor, client and fund specs) and reviewing the Robot output instead of the usual maker/checker activities.

Fund Accounting for U.S. Bank

HCL has also carried out a pilot to address fund accounting processes with a U.S. bank. The principle was again to concentrate the agent activity on review and exception handling and to use robots for data input where possible. Here once RPA was implemented, following the introduction of workflow to facilitate hand-offs between agents and robots, the following steps were handled by agents:

• Upload investor transactions

• Review cash reconciliation

• Review monetary value reconciliation

• Review net asset value package

Robotics now handled the following steps:

• Book trade & non-trade

• Prepare cash reconciliation

• Price securities

• Prepare monetary value reconciliation

• Book accruals

• Prepare net asset value package.

This shows the potential to automate 60% of those activities formerly handled by agents.

In addition, HCL has implemented assisted decisioning for a telecoms operator, with robots accessing information from three systems: call manager, knowledge management, & billing, and in support of order management for a telecoms operator. In the latter case, order management data entry required knowledge of a different system for each region, again making agent training a significant issue for the company.

HCL’s robotic automation software is branded ToscanaBot, and as an integral part of the Toscana Suite which also includes HCL’s BPM/workflow software.

ToscanaBot is based on partner robotic software. The current partners used are Blue Prism and jacada, with in addition Automation Anywhere currently being onboarded. In the future, HCL plans to additionally partner with IPsoft and Celaton as the market becomes more sophisticated and increasingly embraces artificial cognition within RPA.

HCL aims to differentiate its robotics capability by:

• Combining robotics within a portfolio of transformational tools including for example ICR/OCR, BPM, text mining & analytics, and machine learning. In particular, HCL is looking to incorporate more intelligence into its robotics offerings, including enhancing its ability to convert non-digital documents to digital format and convert unstructured data to structured data

• Process and domain knowledge, HCL has so far largely targeted specialist industry-specific processes requiring significant domain knowledge rather than horizontal services and is working on creating add-ons for specific core software applications/ERPs, to facilitate integration between ToscanaBot and these core domain-specific applications

• Creation of IP on top of partner software products.

Within BPO contracts, HCL is aiming to offer outcome-based pricing in conjunction with robotics, but in some instances the company has just sold the tools to the client organization or provided robotics as part of a wider ADM service.

Overall, HCL may be lagging behind some of its competitors in the application of RPA to horizontal processes such as F&A, though HCL is applying RPA to its own in-house finance & accounting process, but is at the forefront in the application of RPA to industry-specific processes where the company has strong domain knowledge in areas such as banking and supply chain management.

The EFaaS service has arisen from HCL’s Next Gen BPO tenets, namely domain orientation, innovation and improvement focused, based on output/outcome/flexible constructs, utilizing HCL’s Integrated Global Delivery Model (IGDM), and addressing risk and compliance. In particular, the EFaaS service aims to deliver business function services as utilities by undertaking elements of business operations transformation, IT standardization (e.g. SAP/Oracle transformation, unified chart of accounts, reduced reporting platforms, data warehouses etc.), platform transformation, and infrastructure consolidation and to achieve 25%-35% cost reduction within each utility. Accordingly, HCL is:

• Looking to create domain-specific global shared centers
• Use business outcome based constructs to put “skin in the game” in transforming the organization’s enterprise function
• Focusing on enhancing risk and compliance and HCL will engage with global accounting firms for SAS compliance
• In addition to cost reduction benefits, the carve-out of a business function utility aims to deliver increased business agility, enhanced controls, and faster scalability.

HCL has a five-step approach, typically spread over 24-30 months, to implementing EFaaS, namely:

• Due diligence and risk assessment, in conjunction with a Big 4 consulting partner, including developing process maps, integrated IT-BPO roadmap, co-governance model
• Process consolidation, including functional alignment, adjusting grade mix and location mix, and shared services utility creation
• Commercialization, including market assessment, asset monetization, and revenue sharing arrangement
• Carve out and transition, including carve out, transition, rebadging, and organization change management
• Platform transformation, including creating common data model, data & platform consolidation, new platform implementation and analytics.

HCL is working with global strategic partners in the development of these utilities, with partners assisting in:

• Benchmarking with world class enterprise functions
• Cost/benefits evaluation
• Performance and change management frameworks
• Stakeholder assessments and leadership alignment
• Communications strategy.

HCL initially targeted a number of major banks, all of which are looking to achieve multi-billion dollars of cost take-out from their operations. In particular, these banks typically face the following issues:

• How to carve-out non-core business functions
• How to boost their controls and put in strong compliance & control environment.
• How to manage complex IT environments typically involving use of the major ERPs plus a number of regulatory point solutions.

HCL has so far signed two contracts for EFaaS, both in the banking sector. In HCL’s initial contract for EFaaS, the contract scope covered four principal business processes within the client organization:

• External reporting, for example to the FCA and Bank of England
• Management reporting
• Cost utility, covering allocations/adjustments/accruals
• Regional and Group reporting & consolidation under U.S. GAAP, IFRS, U.K., GAAP and multiple local GAAPs.

Across these four process areas, HCL undertook a multi-year contract, undertaking to take out 35% of cost, while simplifying the IT environment with no up-front IT investment required by the client organization. In addition, the client organization was looking to establish a private utility or utilities across these functions that could then be taken to wider banking organizations.

In response, HCL established a private utility for the client organization across all four of these process areas and identified external reporting as the area which could be most readily replicated and taken to market. In addition, the process knowledge but not the technology aspects of the “cost utility” processes could be replicated, whereas management reporting is typically very specific to each bank and can’t be readily replicated. Accordingly, while private utilities have been established for the initial banking client organization across all four target process areas, only external reporting is being commercialized to other organizations at this stage.

Process improvement and service delivery location shifts have been made across all four process areas. For example, prior to the contract with HCL, 60% of the reporting was done by the bank in Excel. HCL has standardized much of this reporting using various report writing tools. In addition, HCL has implemented workflow in support of the close process, enabling the life-cycle of the close process to be established as an online tool and increasing transparency on a global basis.

Within the external reporting function, the approach taken by HCL has been to use Axiom software to establish and pre-populate templates for daily, monthly, and quarterly external reporting, extracting the appropriate data from SAP and Oracle ERPs.

In terms of delivery, HCL is creating global hubs in India (~80% of activity) with regional centers in the U.S. in Cary and in Europe in Krakow.  HCL has also put in place training in support of local country regulations, for example the differences between U.S. GAAP and U.K. GAAP.

HCL is continuing to take EFaaS to market by targeting major banking and insurance firms, initially approaching existing accounts. In terms of geographies, HCL is selectively targeting major banks and insurers in U.S., U.K., and Continental Europe.

The banks and insurers are expected to retain their existing ERPs. However, HCL perceives that it can assist banks and insurers in adoption of best-in-class chart-of-accounts design and governance and best practices around data management and simplifying the various instances of ERPs.

In general, within its EFaaS offering, HCL is prepared to fund projects for banks and insurers that involve cost take-out and where HCL can take fees downstream based on criteria where HCL has control of the outcomes.

HCL perceives “speed of replication” to be a key differentiator of the EFaaS approach, and the EFaaS framework initially used has now been replicated for another banking institution in support of their finance operations and external reporting processes.

This service is a timely response to the needs of capital markets firms in particular, that have been seeking to take considerable costs out of their operations and to carve-out and commercialize non-core functions into separate third-party-owned utilities. It is likely that capital markets firms will carve-out a relatively large number of narrowly-focused utilities with some of these being successfully commercialized by third-parties. The retail banks are likely to follow this pattern subsequently, though probably to a lesser extent than capital markets firms.

In addition to Finance as an enterprise function, HCL’s EFaaS model will be subsequently developed to target other enterprise functions such as procurement, HR, risk & compliance, legal, and marketing functions.