Which Enterprises are on ACID?

Published April 26, 2018 | 2 min read

For the better part of this decade, Social, Mobile, Analytics and Cloud, popularly referred to as “SMAC” dominated innovation and digital transformation discussions - everyone talked SMAC!

In this four-part feature, Shailesh Murali, Managing Director in Technology Investment Banking, explores the ACID trend.

For the better part of this decade, Social, Mobile, Analytics and Cloud – popularly referred to as “SMAC” – dominated innovation and digital transformation discussions. Everyone talked SMAC!

SMAC has a distinct consumer tilt, especially as it relates to social and mobile parts. SMAC is table stakes at this point. Adoption is well into the sixth or seventh innings with an established playbook on where, how and why SMAC works. But SMAC will not define the future, particularly in an enterprise context.

Enter ACID : Automation, Compliance, Internet of Things (IoT) and Data. We believe these are tomorrow’s mega-trends that will create unicorns of the future and enhance the value chain. There are a number of businesses that are already checking off one or several of these ACID boxes, either knowingly or unknowingly, including Pegasystems, nCino, Nintex and even Uber.

Part 1 – Automation

 

While automation has typically been associated with robots, a more nuanced ethos of automation is the elimination of manual tasks that have long limited and taxed humans due to slow, inefficient and ineffective processes. The essence of automation is making humans more productive and allowing them to perform higher-ROI functions by eliminating low-return, commoditized and repetitive tasks.

Enterprise automation comes in a variety of flavors. One could argue that the very purpose of software is to fundamentally automate. Enterprise resource planning, enterprise content management and business intelligence have each automated some part of an enterprise function that was previously human-driven.

Two favorite enterprise automation noms-de-plume are Business Process Management (BPM) and workflow management, as they truly capture the essence of automation. Why? Because process and workflow are two of the most repetitive, human-driven and ubiquitous tasks in any company. The number of people-hours that go into ensuring processes are followed and flow of work doesn’t get disrupted are practically unquantifiable.

There is an increasing demand for automation, evidenced by the recent operating and financial performance of Pegasystems (PEGA). PEGA’s stock is currently at all-time highs after trading range bound for the first half of this decade. This is evidence that investors have taken note of the importance of fixing inefficiencies in business processes. New players have also emerged on the scene, including Appian, which was the single best-performing technology IPO of 2017.

Source: Capital IQ, Wall Street research and Company filings.

nCino and Fenergo are two other examples of companies seeking to solve workflow inefficiency problems in mortgage loan origination and client onboarding, respectively – problems that have enervated financial institutions for eons.

The downside of automation is that it may be expensive to deploy. Enterprise automation in an enterprise involves integration between existing applications, databases and processes – costly and time-consuming endeavors. Consequently, the ROI needs to be substantial for enterprises to adopt an automation product or solution.

Like everything else before it, automation will get less expensive over time. Case in point: low code workflow platforms and robotic process automation, both of which are very much in the limelight. It is inevitable and only a matter of time before the benefits of automating processes will outweigh the costs of ‎antiquated manual workflow.

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