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The Hyper Intelligent Automation space is seeing a steep rise in platform companies who are going the depth route by building expertise in select use cases and verticals. One such platform leader that is carving a niche for itself in the Banking & Insurance sector is WorkFusion.
In this episode of the Zinnov Podcast, we have Alex Lyashok, CEO of WorkFusion talking to Nischay Mittal, Principal and Head of Automation and AI at Zinnov about WorkFusion’s remarkable journey to becoming an automation leader in this niche space. Alex talks about navigating through the pandemic and managing the spike in demand for automation over the past year. He also shares with us the future product roadmap of the company and the impending opportunities that lie ahead for WorkFusion and the overall automation industry.
This Interview took place in late February 2021
Nischay: Hello, everyone, and welcome to another exciting episode of the Zinnov Podcast Hyper Intelligent Automation series. I’m Nischay Mittal, Principal and Global Head for Automation and AI at Zinnov, and I’ll be your host today. 2020 was a power-packed year for automation and COVID propelled a never seen before enterprise demand for automation. We also saw multiple high-profile acquisitions and a continued inflow of VC investments. While 2020 was a great year for Hyper Intelligent Automation or HIA, we expect the momentum not only to continue but also to amplify manifolds as we enter 2021. To throw more light on some of the key defining trends within the automation space, I have with me today, Alex Lyashok, CEO of WorkFusion. Alex is an industry veteran with over 20 years of experience. And in his latest stint with WorkFusion, he is leading the charge to propel the platform as a major player within the Hyper Intelligent Automation space. We are thrilled to have you with us today. Alex, welcome to the show.
Alex: Hello, Nischay. Happy to be here.
Nischay: Thanks, Alex. So let’s dive right in and learn from you and your perspectives of the market. So, Alex, you have been at the helm of this innovative and fast-growing company for the last six years, and you have successfully been able to carve out a niche for WorkFusion during this period. What have been some of the key highlights or learnings for you over the six years?
Alex: It’s a great question, Nischay. I think the last six years capture almost the whole existence of hyper-automation or RPA as a concept. And so during these years, we have seen, I would say probably three stages. First is disbelief and denial. First reports from Gartner saying that RPA is a fad – that automation should only be done through APIs and coding, then gradual growth over the next couple of years of automation companies unlocking the value trapped in, people wanting to automate but not having access to the tools that help them do that. And then finally now coming out of COVID coming out of pandemic with pent up demand, automation is accelerating and is becoming truly one of the major lines of investment for every technology and every operations leader. And so through these three phases, I think we’ve learned a lot. WorkFusion, as you pointed out, has its focus on its own area – regulated service industries. We primarily target banking and insurance today. And we’ve learned that some ideas take longer to get accepted fully, but once they do, they explode. And I think that pretty much describes the journey of WorkFusion.
Nischay: Got it. And Alex, I think none of the conversations today are complete without a mention of the COVID scenario, which happened last year. We all know that COVID has added a transformational impact on the automation needs of enterprises. So what was your experience during the COVID times? And how do you think automation helped alleviate the challenges of some of your enterprise customers?
Alex: We focus, as I mentioned, on specific segments. Within banking and insurance, we saw dramatic disruption in document-intensive processes. And that was true for both undigitized channels of interaction with customers where we saw paper-intensive processes come apart because people were no longer able to come and submit documents in person and on digitized channels where the volumes of interaction spiked dramatically. So I think both undigitized and digitized side, COVID has accelerated the automation needs dramatically. People needing to move their customers towards digital channels of interaction, but then also becoming much more effective in how they handle customer interactions. And automation tools play an important part, I think in a sense they help understand the data that is submitted by the customers and they help process it much more effectively, thereby creating much more agile operation that helps organizations not just deal with a pandemic, but come out of this crisis stronger because that’s what we saw, that companies that have leaned into 2020, into that very difficult period with an investment mindset, they were able to capture market share and they were able to launch new products and make progress in their markets and I think in part that could be credited to automation.
Nischay: Got it. And the other big trend, Alex, which came out of the COVID pandemic was this massive uptake of cloud deployments, right? We saw huge enterprise demand for cloud, and being in the banking and financial services domain, do you think large enterprises today are more comfortable with hosting their mission-critical workloads on cloud, or is the cloud growth being propelled by the smaller or midsize market logos. So what’s been your overall experience with respect to cloud deployments since last year?
Alex: I think cloud adoption is progressing across all segments, small, medium-sized companies, and also very large organizations. We are focusing on the larger part of the market. And we saw a lot of organizations embracing cloud and taking another look at what capabilities they own in-house, what capabilities they build, versus what capabilities they consume from their partners more generally, but more specifically from the cloud. And I think, on this cloud topic, there are also tools for the network type dynamic, where initial adoption of cloud is usually prompted by time to value – ‘Can we get the servers spun up for faster? Can we get access to service faster?’ But suppliers that are able to deliver value from the cloud, whereby each customer benefits from other customers being on the platform, they create additional dynamics, accelerating adoption. For example, in WorkFusion’s case, Intelligent Automation, cloud customers, customer support products, can benefit from machine learning and artificial intelligence-enabled bots that are being run by other customers on the platform. So if you’re training your bots, other customers can then benefit from your training, and you can benefit from the training done on their bots. And so initially, cloud adoption may be prompted by urgent needs in being able to reduce the cost and reduce time to value in just a rollout of this service. Organizations like ours that also create additional value through network components of the cloud, I think, create an additional imperative for companies big and small to move to cloud way of consuming things.
Nischay: Alex, you mentioned an important trend around this whole multi-platform or multi-vendor environment, which we’re in today, right? Even at Zinnov, we’ve been tracking more than 500 platforms, which are now targeting this whole automation space. Do you think enterprises today have really matured in going beyond a single automation vendor to working comfortably in a multi-vendor environment? And do you expect this trend to continue as we go on?
Alex: No, I don’t think the market has matured yet. I think we haven’t gotten to the point where automation is such a commodity, that it doesn’t matter which platform you use. So I think while there are many offerings, there are still those that differentiate pretty easily, either through their vertical focus on the types of personas and use cases that they target, or through their pricing or positioning mechanisms. We were focused on the needs of large organizations, primarily banks, that are north of $5 billion of assets under management or insurance companies that have a volume of underwriting documents and claims that merits automation. But there are companies that focus on other types of personas. There are open-source automation tools focused on IT users, there are companies out there focusing on the needs of small and medium-sized businesses. And I think those needs vary. I don’t think a big bank or an insurance company needs the same things that the two to three people accounting firm does. Neither do I think that somebody in the IT department has the same way of thinking or the same capabilities of developing automation as a person in the human resources department. And so through those very needs, inevitably, there is fragmentation and space where tools that focus on business needs can get market share. Not all segments are equal in the sense that some are much larger than others. But overall, I think we still are discovering the needs of the customers. I think we’re still developing capabilities to match those needs. I speak for the whole space, I think, and we’re in the very early days of capturing this opportunity.
Nischay: Got it, Alex. Building a bit upon the aspect that you touched upon earlier. I think there are two broad schools of thought when we look at the automation space. One is the kind of platforms that are going the breadth route and focusing on all the horizontal use cases for automation. The other kind of platforms you see are the ones going the depth route and focusing on two or three big use cases or focusing on a specific industry or verticalization. Which strategy do you think works the best with enterprises? Or do you think it’s a hybrid strategy of approach that’s working best?
Alex: I think, from the enterprise standpoint, hybrid strategy in the early days of the market makes sense, just because most organizations are still developing capabilities to deploy automation at scale. And so in that, they need to learn and they need to use multiple tools. Having said that, I think most organizations that have well thought out Enterprise Architecture will end up with a combination of tools for the business architecture that they have, where whereby some capabilities touch from many different areas, they will have a horizontal platform that handles that. And for areas of the business where they need some more agility, they will use more specialized tools. I think we see this in other areas of technology, such as analytics, or data management, and I think we’ll see similar trends emerge here. The question is, which strategy is better for technology vendors to embrace. And I think hybrid strategy, on the other hand, doesn’t bode well for the company, I think organizations need to decide whether they focus on these horizontal use cases, or whether they bring value through those that have needs that differ, and stick to that just because they can then become more effective and deliver more value for their customers. And clearly, I think we see some leaders emerge in a horizontal space. And I think we see some leaders emerging in more vertical spaces. I think, you know, when we talk about WorkFusion, you know, our leadership position doesn’t come from the fact that we are best at giving kind of good-enough tools to a broad set of users and personas for a variety of use cases. I think our positioning is clear, and that’s when you know, there is a lot of different ways to automate, but when things come to banking and insurance WorkFusion is by far the best choice. And so we’ve committed ourselves to this strategy. And I think it’s been recognized by the Enterprises. When we talk to buyers, head of customer operations or head of Treasury operations or head of home lending within banking or somebody who is responsible for the intake of underwriting forms of an insurance company – they in most cases, know that there are options for them in terms of automation tools that they rely on, but when they see that there is a solution that solves more of their problem, give them a whole product for an automation opportunity that they have, we see them increasingly committing to specialized vendor needs. And that’s, where WorkFusion shines.
Nischay: Got it. Alex, being heavily focused on the banking and financial services industry, you know, which is your forte, what are some of your learnings in dealing with the highly legacy-driven banks, or enterprises within the BFS space? What do you think are the best practices that you can maybe provide to some new and upcoming automation startups who are looking to enter the BFS industry?
Alex: So it’s a great question Nischay. I think the learning for us is in many ways, a kind of deeper understanding of how disruption works. And for us, as I think it did for many other technologies, disruption happens by starting in pockets of unlocking value where the users are underserved. For automation, underserved users were operational associates, operational leaders who didn’t have access to technology that they could consume that they could deploy. And so by giving them technology kind of in a bottom-up way, where they can easily start, easily get going, don’t need specialized skills, and then can over time tackle bigger and bigger problems – automation unlocks the value that exists for enterprises in getting that human capital to do more for an organization, for the customers. So, I think this is the case with any new areas in that. It is not probably a good idea to go and try to convince a bank to replace their payment platform, as a startup. Neither do I think it is a good idea to create a startup that goes and says look, you need to have a new banking system, these are very long decision cycles. And so I think, you know, startups would probably run out of money before they get, you know, a handful of customers. I think, for young organizations, it is extremely important to understand where both slices of value are trapped within an organization because the users are underserved by technology, and then understand why these big legacy systems are unable to do that, and package technology in a way that makes it usable, and through that unlock that value. And that value will translate to value for customers and organization and some of that value can be captured by a startup and gradually organization can become stronger and stronger, and start tackling bigger and bigger problems, and then eventually become a big building block in a bank or an insurance company in terms of their technology stack. But I think it is a lot easier to start by being focused and focus on where the value is trapped. And that’s, I think is a great departure point for any younger organization serving a bank or an insurance company.
Nischay: Sure, very astute observations, Alex, thanks for sharing these learnings. And looking ahead, Alex, what’s in store for WorkFusion in 2021, any key announcements or product features that you personally excited about?
Alex: Yes, happy to talk about that. We are most excited at this point, I’m certainly feeling most optimistic in terms of thinking about the opportunities for WorkFusion and automation space. More broadly, that excitement comes from the fact that as we’ve talked about, customers are leaning into the cloud way of delivering automation. Customers are accelerating digitization of their undigitized channels and want to become more effective in their digitized channels, and use automation for that. And that translates to what we can do for them and future opportunities, and I think they are vast. I think there is so much more, that remains to be done relative to what has been accomplished in the first six years. Companies that have ingredients for success, will be successful. And certainly, WorkFusion, being in this very active, perhaps the most active segment of business to business software, focusing on the segment of banking and insurance, which is the largest segment of that industry. Certainly, we are very excited. I also want to mention, we haven’t announced it publicly, quite yet. (Please note that the podcast was recorded in late February, 2021) But are starting to talk about that investors are also very eager to deploy resources against this opportunity. And so WorkFusion in the past few weeks has worked with investors to secure another round of financing. We raised $220 million to go after this opportunity. I think this speaks to the fact that the first wave of automation, focus on a broad set of use cases across multiple industries is very active and still unfolding. But also the time for Industry Focus specialist companies to become big is now. We now have resources to go into 2021 aggressively, bring our capabilities to customers in North America, which is our core geography, in Europe, where we also focus, and globally. And we’re also very excited about building new technology and packaging it in a way that solves some of the problems that we talked about. Ultimately, our focus is on making this technology as easy to use as possible, because we think, as I mentioned, it is very important to enable users that do not have access to technology with the tools that they can easily use. We at WorkFusion do not believe that billions of people at work will all learn to code. We think that coding is great. But we think that there is no need to code to create helpful software systems. We think artificial intelligence and machine learning technology can mimic a person and through that make it easier to create software bots that do useful things. And so ease of use is another axis, where we’re planning to deploy a lot of this capital. So to summarize, I think in the last six years that we have seen at WorkFusion, I think we haven’t seen as good a year as we will see in the next 12 months.
Nischay: Wow. That’s wonderful news. Alex, thanks for sharing your product roadmap, and congratulations to you and the entire WorkFusion team for the new funding round.
Alex: Thank you.
Nischay: Well, Alex, it’s been an absolute pleasure talking to you today. We truly look forward to witnessing how your story unfolds in 2021. I’m sure this session will prove to be the guiding light for several automation leaders on how to reimagine their approach and strategy towards this fast-paced industry. Thanks once again for tuning in. We will be back soon with more action-packed podcasts to help simplify the complexities within the automation space and help you redefine your automation journeys. Have a great day everyone and thanks again Alex for joining us.