As a Sweden-based IT services firm, Cygate has faced the challenge of remaining competitive while not being permitted to develop the offshore labor model now common in its industry worldwide. Like many Swedish firms, Cygate has thus become an early user of technology to minimize their competitive disadvantage in labor costs, and their experience is instructive for enterprise IT shops looking to similarly leverage IT automation tools.
I spoke this week with Johan Toll, the CIO for Cygate, about their experience in implementing and adapting to IPsoft’s automation of infrastructure monitoring and service tools. Johan says Cygate has been growing at 20-30% a year, but able to keep its headcount growth nearly flat—an example of the ‘nonlinear growth’ that is something of the Holy Grail to the IT services industry. He attributes that feat primarily to their success in leveraging the IPsoft system.
Their initial implementation eliminated a department
Cygate customers tend to be highly visible and differentiated companies, such as airports and hospitals in Sweden, and so they are very much one-off implementations. Cygate also implements the automation tools one customer at a time. Johan says they first used the technology as part of their support services for a new customer and, as was their standard procedure, they initially added extra level-one support and operator staffing while they expected to learn the particular needs and issues for that customer.
However, upon checking in with the head of the service desk for the account after one month, he discovered that not one issue or problem ticket had actually reached the service desk—the IPsoft system had so well identified and handled directly any problems. This led to Cygate’s reorganizing their support for the customer—and for other customers for whom they have applied the IPsoft tools since. They no longer have service desk staff operators for those customers. Instead, those employees have been redeployed as level-two staff, and their level-two staff have been deployed to level three.
Not just simple, but also complex, repetitive tasks are prime targets for automation
Further, Cygate had found that the toughest 9-10% of their tickets traditionally had to be escalated to their expensive IT consultancy group for resolution. Upon automation, that has dropped to only about 1% of cases needing to go that more costly route.
These two sources of savings have confirmed for Johan not only the conventional wisdom that simple processes can be automated, but that complex processes can be automated as well—as long as they are repetitive in nature. This is because the automation tools can best ‘learn’ from and replace repetitive tasks, even if they are challenging and complex.
Quality management is another target for automation
Johan says much of this is analogous to the automation he sees with their manufacturing customers, such as a large automobile maker, have perfected over decades. A visit to the auto company’s factory floor inspired him to apply the tools in another area. Borrowing from the level of QM automation he saw on the factory floor of an auto manufacturer client, Johan looked to automate such processes as well. As part of the implementation, he actually went through hiring staff for six-sigma tracking. However, he quickly realized that there was no part of the process that the automation tools couldn’t handle without human intervention.
The human challenge
Johan says the greatest challenge with the automation, by far, has been the human adaptation. Previously support staff had been able to pick and choose which tickets to take personally and they chose when to close a ticket—sometimes before optimal completion. The system now assigns tickets on an optimized basis. The criteria considered in assigning a ticket include the agents’ level of experience with that client, the team (e.g., UNIX) required, and individual agent skills. Some issues, such as those outside of the service level agreement, can be closed by the system without human interaction. Also, the system can assure that an issue continues to be addressed until it reaches a proper conclusion.
Because agents have less control over what is assigned to them, Johan has found they take the initiative to sign up for more training in order to be prepared for what may come their way. This level of initiative has been very positive from a management standpoint. It makes for a more skilled and robust team that is less vulnerable to the loss of expertise if one team member leaves the company.
Because the system in some ways reduces the level of control that technical staff have, there may be initial discomfort and even some employees who, for the better, self-select out of the process. However, the advancement to handling higher-level issues with less repetition has ultimately led to not only more valuable, but also more satisfied, employees according to internal surveys. Johan is quite certain that this higher level of employee satisfaction in turn leads to more satisfied customers as well.
Cygate has been an engaged customer of IPsoft, nudging the firm into new areas of automation. With the expected new capabilities on IPsoft’s roadmap—including automating the process of identifying processes for automation (something now done bet network operating center staff), “cognitive automation” for interactive voice response (e.g. an automated agent providing highly customized interaction with a consumer-level insurance customer), anomaly detection, and big data predictive analytics anticipated by the year’s end—Cygate likewise expects to apply additional levels of automation to its processes.
Enterprise IT executives need to implement strategic labor—and systems—replacement
In short, Cygate has been able to eliminate both their front-line and much of their most expensive support labor. They also implemented an entirely new QM program that runs without any staffing at all. As Johan puts it, it took them six months to realize that what they had implemented wasn’t so much IPsoft operations—as it was labor replacement. Altogether, he has found 30-100% of human intervention in various applications can be replaced with automation.
Enterprise IT operations managers would do well to take note and scour their departments for potential labor replacement as well. But one more caveat applies for the enterprise environment. Rather than simply automating their current systems and processes, enterprise executives also need to take a rigorous inventory of their legacy systems to determine which can and should be contained in application—and which can and should be replaced with newer, lower-cost, more adaptable and less labor-intensive technology altogether. Either way, savings from automating IT operations should become a key element in freeing up talent and financial resources for new, strategic systems.