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“Automation vendors have understood the necessity of actually understanding processes before they automate them,” opines Ulf Persson, CEO, ABBYY, as he chats with Praveen Bhadada, Managing Partner, Zinnov, on the finer nuances of what it takes for successful enterprise Automation deployment, how ABBYY has carved a prominent place in the Hyper Intelligent Automation space, and why process understanding is critical before enterprises embark on their Automation journeys.
In this episode, Ulf also touches upon his own journey in the Automation world, why listening to customers is of paramount importance, and his observations on the developments in the Automation space. Additionally, Ulf shares his perspectives on sustainability in Automation – a concept that is gaining increasing traction across companies, across verticals.
Praveen: Welcome to an all-new Zinnov Podcast episode in our Hyper Intelligent Automation series. In the last one year, we’ve had the pleasure of hosting pioneers, visionaries, and powerful leaders from the Automation space. Our relentless pursuit to unravel the nuances of the ever-evolving Automation space has already become the guiding principle for many of our customers and platform companies, as they shape their growth strategies and take their Automation efforts to the next level.
In today’s episode, we have a very special guest, Ulf Persson, who’s the CEO of ABBYY, one of the most innovative companies in the Automation space. Ulf has been driving ABBYY’s growth, expansion, and key strategic initiatives for almost 20 years now – and in multiple different capacities. What we have in store today is a bit about ABBYY’s vision and market positioning, as it treads the highly competitive Automation landscape. And of course, a little bit about Ulf, the man himself.
Welcome, Ulf. It’s great to have you with us today.
Ulf: Thank you very much, Praveen. I am very happy to be here, and I really look forward to our conversation today.
Praveen: Awesome. Let’s just dive right in. I wanted to get started with my first question. You have roughly about 30 years of very deep, very rich experience across multiple domains. You have served as leader across multiple technology firms before joining ABBYY about 20 years ago. And now you’re obviously the Supreme Commander – the CEO of the company. Tell us a little bit about how you’ve navigated this whole technology industry, the complex nature of it, the dynamism, the transformations that you’ve seen over the last three decades of your career, Ulf.
Ulf: Yeah, it’s a very good question. I think that it’s important to bear in mind that when people talk about technology companies, the focus is almost always on the technology itself or the product or the product vision. Which in and of itself is good. But as we all know technology without application or without customer adoption is not that relevant, really.
So, let’s never forget that the technology is to solve a specific problem; or it should serve to create an improvement in the market, and one that is actually then adopted by a customer. Sometimes this clearly comes from customer market demand, and sometimes it’s just a vision that you develop yourself and you run ahead of the market to your customers.
I think either way, what is very important to successful navigation as you asked about, is really the understanding that technology and customer needs are constantly evolving. And success demands that you constantly evolve with it. I think to me, one of the guiding principles have always been to listen; have these constant customer and market interactions. And frankly, a lot of technology companies are so caught up with their own brilliance that they forget to listen to their customers. Listening is always good.
Praveen: That’s a great insight. I love the comment about listening to customers. It couldn’t be truer in the current situation than it ever was, with the way things are evolving everywhere around COVID and companies trying to find their own reset button.
As you talk about the industry that you represent – the Hyper Intelligent Automation space – of course this has become very, very competitive. And this itself has gone through a lot of evolution. A lot of customers are given inputs in terms of shaping up the industry itself, and clearly the massive amount of public and private funding that’s been infused in this market is quite telling as well. And in similar lines, I think ABBYY has secured new money from Marlin Equity, and I think they are your largest shareholder now. Obviously, it’s a moment of pride, and congratulations to you and your entire team for the success. We’d love to know a little bit more about how this investment validates the growth of the market and how is ABBYY putting together the growth plans and the vision for the next three to five years from here.
Ulf: Right. Well, first of all, thank you. We’re very happy with this and happy with Marlin joining us as a growth partner. They effectively bought into our vision of a very significant market opportunity and our ability to execute.
I think what makes ABBYY, in a way quite unique, is a combination of – on the one hand, a strong proven track record. And on the other hand, a market-leading innovation. If we break that up a little bit, I’d say that few, if any, companies know more about business documents than ABBYY does.
From an OCR point of view, we are the market leader and we’ve been taking market share in what used to be called a capture and now the IDP market for the past four or so years. And we’re not only growing, but we have solid profitability, and in effect, a very solid, well-run business with a strong track record.
Secondly, at the same time, we’re also investing very heavily in new innovative products that we acquired – as you know, TimelinePI in 2019 to add process intelligence to our already existing content intelligence.
We keep innovating for our customers because they’re on a digital transformation journey and they want to be on that journey with a partner that can grow with them. And not only serve their needs today and tomorrow, but also the day after that. So, we think that is very, very important. So, in summary, I think what Marlin also bought into was our plan to accelerate innovation and growth on top of a very strong, proven existing business.
In terms of the market opportunity itself, however we define our market, whether it’s as you call it Hyper Intelligent Automation, Intelligent Process Automation, or even subsets such as IDP, or process or task mining, we can safely conclude that these markets are so much bigger than the traditional OCR and Capture markets that ABBYY was active in for many, many years.
It became apparent to us early on in the past four years, since I became the CEO, that both OCR and broader document understanding would be key requirements for this nascent burgeoning market of Intelligent Automation, and subsequently, digital transformation. So, we decided early on to go after that opportunity, and this expanded both the total addressable market and also the growth rate of the market. So, massively compared to our traditional markets. However, to be successful in this, we had to effectively repurpose our technology and product know-how to better fit this new market. And that meaning, combining our AI technologies — whether it’s Machine Learning, or NLP with a modern, easy to use, easy to deploy, Low Code/No Code platform, great UI; and still keeping the best-in-class digitization and recognition accuracy. It was a tall order.
At the same time, we had to become Cloud-first, provide connectivity to the whole ecosystem, whether it’s RPA, ERP, ECM, or BPM or other ISVs. This was a major undertaking. And while doing this, we saw a hole in our portfolio. So, despite being an important part of document-centric processes, we frankly didn’t know that much about the processes themselves.
So, we were fortunate enough to be able to acquire the company, which was at the time, incredibly exciting as a start-up in the US, TimelinePI with Scott and Alex and their team. So that product became ABBYY Timeline, and the whole Timeline team is now integrated really well into ABBYY’s management.
And before I finish, I’d like to say a few other things. So, it’s not only about the technology and the product portfolio that we needed to change. It was really our vision to bring brain power or intelligence to digital workers, and this is what we call digital intelligence, to compliment and extend the capabilities of that digital workforce by enabling process understanding or awareness and content understanding or transformation.
But we also have to change our go-to-market. So, building out new partner relationships, for example, with global consultancies, global system integrators, but also with other ISVs, RPA vendors and others. And we had to move from primarily an on-prem business model or delivery model to a Cloud-all or Cloud-first delivery model.
On top of that, we had to change our business model from subscription or from perpetual license, selling to a subscription. Finally, to put the customer in the center, focus on customer excellence and make sure that everything we do around product, marketing, sales, support, any function inside the company, should have customer excellence at the beginning of their to-do list and top of their agenda.
So, my vision is really around that – that every interaction that a customer or a partner will have with ABBYY should be one of professionalism; it should be really solving the problem that they are contacting us to have solved. So constantly strengthening that relation.
Praveen: Amazing. I have so many follow-on questions based on what you said. And I really liked the way you segmented ABBYY’s positioning into process intelligent and content transmission. And our audience would love to know a little bit more in terms of how you’re thinking about those two spaces.
But, one thing that I wanted to quickly pick your brains on is, we’ve been talking to a lot of enterprises and you of course, have been working with a lot of enterprises on your side. It has become very clear that a lot of enterprises are making platform decisions based on specialization, based on very specific focus areas across the value chain of Hyper Intelligent Automation which starts from, maybe, process discovery, goes to data transmission, including IDP, and then RPA and workflow solutions and so on.
As a platform company, and as you think of the next three to five years, what’s the way forward for companies like yours? Is it more about expanding the breadth into Hyper Intelligent Automation or it’s all about going deeper into process intelligence and content transmission as two core focus areas?
Ulf: Well, that’s the $10 million question, isn’t it? As far as I’m concerned, focus is good and do what you are good at and do it better than anyone else. I think that’s the mantra that we’re living by. But I’d like to expand a little bit, though. First of all, as a provider of digital intelligence, we have both broad solutions and vertical focus solutions.
So, if you look at, for example, a variety of horizontal business processes, such as AP processing or mobile onboarding enablement, these are really applicable across a number of different industries. So, we will continue to do that, in the realm of what we are focusing on or what ABBYY can bring to the table. That’s, I guess, the first thing.
The second thing is that we are in fact specializing in solving industry-specific problems. So, that could be KYC or anti money laundering for Financial Services, or processing of specialized tax or insurance forms or documents. It could be automating custom clearance for our logistics customers as well. So, we have deep expertise in all these areas, so we will keep getting deeper into those areas.
This is also reflected in the way that we have been reorganizing internally to focus more of our traditional product marketing activities now around solution marketing activities. So, with the hiring of specialists in Insurance and Financial Services, and Transport and Logistics, and in Healthcare. I think you’re absolutely right that the enterprises have now a multitude of different platforms and that will remain the case.
For ABBYY, this is good. It’s good because we can deliver content understanding and document understanding and process understanding and process awareness to each and every one of these platforms. Where, if an enterprise has five or six or 10 of them, they don’t necessarily want to have a document understanding capabilities in all 10 of them of varying quality. They’d rather have the best of breed provided by ABBYY. And we can then talk and work with all those platforms. I think the fact that we are good at what we’re doing and that we’re continuously innovating and becoming even better – that serves us well rather than to go overly boarded.
Praveen: Got it. And I think the fact that you’ve been very focused on document processing, and with Timeline, you’ve added process intelligence capabilities as well. Talk to our audience a little bit about how do you think of the future of IDP, right? What are the next sets of innovation that are going to come in this industry and what makes you excited about continuing on this journey and focused a lot more with investments and capabilities? What are you seeing in the future with respect to IDP?
Ulf: So, if we’re specifically talking about IDP, I think that, by far most interesting opportunity for us is that as we see more and more complex business processes being automated, they will inevitably run across more and more complex document dependencies. And it’s one thing to scrape data off of a computer screen; it’s a completely different thing to extract specific information from an unstructured document, like a contract or lease agreement or whatever. It may be a commercial invoice, even as difficult. So, you will require very strong, specific skills to do that.
So, I think that as the market evolves into more and more complex Automation scenarios, the demand for very advanced document understanding or IDP solutions will grow as fast. So that’s the area where we think we are really, really strong. And as I said before, I challenge a company to – anyone really – to find a company that knows more about business documents than we do that comes in different forms, whether it’s paper or digitally native.
Praveen: Sure. Similarly, on the process intelligence side, I think one of the constant feedback that we are hearing from our customers is the fact that the sophistication or maturity for enterprises to use technology for process discovery is still not there. There are obviously concerns around security and letting a third-party tool access enterprise apps data, log data, and so on.
And the other critical comment that we’ve always heard from customers – the fact that, platforms are not truly able to provide recommendations. They can discover the processes, but the recommendation with respect to the right path to Automation – will it be RPA, will it be a Low Code/No Code, will it be workflow automations? Those recommendations are still not – at least the enterprises don’t see them as effective. So, as you are investing in this area, as you made an acquisition in this area, what has been your thesis and where do you see process intelligence technology itself evolving?
Ulf: It’s a good question. And I think that we’ve seen a couple of things evolving here. One is that the Automation vendors have understood the necessity of actually understanding processes before they automate them.
If you think about it, RPA vendors started to automate before they actually started to mine and analyze the processes themselves. And having done so, automated the processes, they couldn’t really measure whether that was a good thing or a bad thing. So, which processes were right for Automation.
I think one of the first important things to bear in mind is that the understanding and the insight into the fact that we need to have a very proper and deep understanding of the processes themselves before you start automating them, is key. And that’s clearly getting into both enterprises and boundaries understanding very well.
The second part is that I was just looking at an old quote from a couple of years ago on the rule of five, which is kind fun. It sounds like, a UK lockdown rule, but it was a different time then. But we’ve evolved from then, and obviously we’re now looking at much more complex scenarios and we are still in the early stage of the Automation journey. So, what does that mean? It means that, tools to actually both understand the end-to-end processes and improve tools to understand and record the tasks, and the activities on the desktop are so incredibly important for your ability to then properly automate.
And then, of course, you touched upon a third area, which is, what is the result. And obviously if you look out into the future, you would prefer to have the analysis lead to an actual recommendation and beyond even a recommendation, maybe an automation spawning an automation itself that could take care of that problem. So, I guess that is, in a way, the holy grail. And when and whether the market will reach that, we will see. But that’s the direction where we’re going to really bridge the gap between the understanding and the Automation itself.
Praveen: Sure. You did talk about enterprise maturity, and of course, we’ve been tracking a lot of companies in terms of their initiatives in Automation.
Clearly, last 15 months have been very promising and a lot of companies who were on the fence, they started committing to Automation. But I don’t think it has still reached a point where we can say that automations are starting to scale or they’re becoming the number one priority in the organization. So, one, I wanted your commentary. Is that what you are seeing in your customer base as well. And what’s the recommendation for companies who are sold on the idea of Automation, but they are stuck with challenges with respect to scaling automations. How should they think about going forward?
Ulf: Well, I think that it touches back on what we discussed in the previous question. First, I think this needs to be a more strategic initiative from enterprises rather than that depends on departmental initiative. Because the more you go towards end-to-end process Automation, the more you go towards customer-facing activities or revenue generating opportunities, the more strategic importance this carries.
And it also means that it’s something that has a very significant impact on the business of that enterprise. So, I think we’re going to see a more holistic view around strategic digital transformation, initiatives and enterprises, rather than sort of dipping your toe, which we’ve been seeing in the last number of years. So, I think that’s one trend.
But I think what it will boil down to is what I said before, and I’m repeating myself here now – it is very important to understand what you are actually doing today before you can actually automate it. And it’s also very important to understand what impact that Automation has. And I think it’s also very important to be able to connect different processes that are being automated with each other, into a broader end-to-end scenario. So, we’re still some time away from this, but I think we’re definitely seeing an increased importance put on this strategicness, if there is such a word, on the Automation initiatives in the enterprise.
So, we see more and more of that. What has been very pleasing to us, is to say that the enterprise doesn’t really want to be locked into a single platform. They want to work with the best of breed. And we’ve been able to see that in multiple cases where we work with one or two of the different RPA vendors. It’s not one helping the other. It’s really alongside; and the importance of our ability to unlock the data and documents, as well as understanding the process has been very, very important.
Praveen: Sure. And one of the key trends that is being explored in the market is around Automation within sustainability. Obviously, sustainability is one of the big themes of investments worldwide. Is that also a sort of a positioning that you think Automation can get in this market, and what are the other ways one can think of Automation within the sustainability construct? Is that something that you’re thinking about as well, Ulf?
Ulf: I think we are thinking about it. I think everybody needs to think about that. What we’re seeing, I mean, our experience is that what’s happening in the COVID times, is that a lot of government organizations and enterprises and banks, or at least insurance companies are about to digitize processes that they didn’t perhaps think of doing that fast. It means less paper. Of course, it means that we all save a lot of time. But I think most importantly, if you look at a lot of cities around the world and not least in the emerging markets, you can find couriers and drivers driving around with one piece of paper that needs to be signed somewhere. And if you add all that up, it’s quite scary.
So, I think there in and of itself, you have, quite a lot of savings to be done. Just to give you an example, we have a relationship with the California Department of Motor Vehicles where we’re doing exactly that. We’re allowing drivers to apply for their new license by submitting all their documents online. So, then they can use a QR code to collect it. We are seeing more and more of that. And I think that a very important part of the broader digital transformation initiatives will be to actually drive sustainability as well.
Praveen: Great, perfect.
Thank you, Ulf, for those extremely valuable insights. I think the clarity and cohesiveness with which you laid out your vision, and the road to success is really a testament to how well-defined leadership can exponentially accelerate the growth of the company. I’m definitely certain that our listeners found this episode very valuable and rich with insights.
I really appreciate everyone who tuned into this episode of Zinnov’s Podcast – Hyper Intelligent Automation series, and we’ll of course be back with another episode and another leader very soon. But, Ulf, I really appreciate your time today and sharing all the insights that you did. Thank you so much. I hope you stay safe and please do take care.
Ulf: Thank you.