Why does RPA represent an irreversible trend?

RPA: Two stories and the battle for China

Author | Funeral Court 伶

Figure | Unsplash

RPA has caught the attention of the global venture capital industry, probably due to UiPath’s post-investment valuation of $7 billion in just two years.

In 2018, UiPath handed over a beautiful transcript of $200 million in annual revenue, according to Consultation company Gartner released data in July this year, the entire RPA market revenue in 2018 is only $850 million. Compared to its $7 billion valuation, investors have given UiPath’s PS multiple (marketing ratio) 35 times higher, which is almost unprecedented in the entire to B industry – even the market value of $100 billion in Salesforce, market value Workday, Shopify, and PS multiples of more than $100 million did not exceed 15.

Although UiPath is not yet available and cannot be fully peer-to-peer, this data still shows that the market is confident in UiPath. It is believed that in the long run, the RPA track is worthy of this imagination.

Why?RPA represents an irreversible trend?

In the long run, replacing inefficient labor with more efficient methods is an irreversible trend. The replacement of rickshaw drivers by robots, the replacement of manufacturing workers by mechanical arms, etc. are all examples.

The interesting point is that in the past, such high-efficiency and inefficient alternatives have occurred in areas that are more “physical labor”, and in the context of “brain workers”, such substitutions have not yet begun. Looking back a few years later, RPA is probably the starting point of this history.

We can actually think of RPA as a set of “methodology” for completing a workflow. Its purpose is to replace the high-frequency, fixed processes that the enterprise needs to be done on the computer side with virtual employees – as long as you Tell the robot how to do this process, “teach” it again, it will completely replace you in the following days to perform this repetitive action.

For example, the financial staff can use RPA to automatically complete the data identification of the reimbursement ticket, enter the computer, and complete the approval process. For example, the financial practitioner can automatically use the RPA to automatically capture the opening data of the stock and automatically organize it into an Excel spreadsheet. Analysis… Although the current RPA implementation scenario has limitations, in the long run, RPA can be used as long as there is a highly repetitive and automatable part of the work done on the computer side.

And, the next step in the company’s ability to replace or assist humans with RPA will be stronger – because both in Europe and America and China, the labor costs of companies are increasing.

Looking through the statistics from the National Bureau of Statistics from 2015 to 2018, the average annual growth rate of urban private sector employees is more than 8%, and the average GDP per capita is from 2015 to 2017. The rate is around 6%. In other words, the increase in the salary paid by the company to employees is likely to exceed the growth rate of some corporate profits.

Efficient alternatives are inefficient and have the potential to generate significant business value. Deloitte has calculated in the RPA report that if a Fortune 1000 company with $20 billion in revenue and 50,000 employees and 20% of its workflow can be automated with RPA, it can bring in more than $30 million annually. Profit.

So, from the above data, it is not difficult to see that, similar to the European and American countries, the era of strong demand for manpower (or auxiliary) manpower in China will soon come.

The ultimate story of the head players is different

Since the RPA trend is irreversible, what kind of thinking is going on in this track?? In this section, we will disassemble the ideas and styles of the head companies UiPath and Blue Prism, because they are almost a template for Chinese players.

Let’s start with a very interesting phenomenon: the story of UiPath and Blue Prism points to two very different directions. The two ideas have caused the differences between the two companies in terms of product strategy and customer acquisition strategy, and may even affect the ultimate success of the two in business.

UiPath: One Excel

UiPath, established in 2005, is a company that cannot be bypassed on the RPA track. In the past three years, UiPath has become the fastest growing AI and enterprise software service provider in the world due to its rapid development and high financing efficiency. It has received more than US$900 million financing in the two years from 2017 to 2018, with a valuation of 70%. One hundred million U.S. dollars.

Although UiPath was founded in 2005, it was not until 2013 that it really became a dark horse on the RPA track. It can be said to be a rising star. According to Business Review , UiPath Formerly known as DeskOver, it was originally developed for IBM, Google, and Microsoft for library automation and software toolkit development. It also provides consulting and outsourcing services, and has planted the genes for RPA.

In 2012, the company decided to transform, abandon outsourcing and consulting, and launched the first desktop workflow automation product based on Microsoft Workflow Designer in 2013. Therefore, UiPath has transformed from being a service to a company that sells products and tools.

To understand UiPath, you need to start with its core positioning: UiPath wants to tell the story is “hands an Excel.”

In other words, the company will equip each employee with a robot assistant. The staff can make this “virtual assistant” help you to complete the complicated “click, input, identification” process in the computer according to your needs. .

High availability: Everyone can learn

To achieve the story of “hands an Excel”, UiPath The first thing to do is to lower the threshold of the product, so that ordinary people can quickly learn and be user-friendly.

The difficulty lies in the fact that RPA robots need to complete repetitive work based on strong rules, involving cross-system and cross-department business process collaboration. The form within the enterprise is horizontal and Unicom has various business modules. If you want to achieve the same function, IT staff used to write code in one line, but UiPath can be used by ordinary business people through function encapsulation and recognition of the UI. In other words, the user does not need to write code, and the robot can simulate the UI interaction through the screen recording.

UiPath currently only provides products and services to enterprises, providing both the general deployment of personal assistants and enterprise-level integrated management. UiPath products are mainly divided into front-end and back-end robots, that is, the difference between someone on duty (such as the robot is deployed on the computer, the person starts to shut down) and unattended (no front end, running in the background). The product architecture is divided into three layers: Robot, Development Platform (Studio) and Coordinator (Orchestrator). The development platform is used to design the workflow of the robot, and the scheduler is used for the integrated management of the robot. Some RPA vendors can only provide a packaged version, that is, all three parts must be purchased. However, these three items of UiPath can be purchased flexibly to suit different scales of enterprise deployment.

Enriching scalability: From RPA to AI

Almost all RPA vendors are talking about the story of RPA + AI, which is a key step for RPA to move toward a larger range of alternative (or secondary) human employees.

The original version of RPA can be traced back to macros in Excel, game plug-ins and other programs that automate computer operations. In order to improve the intelligence of RPA, AI is a very complementary approach:

  • On the one hand, technologies such as OCR and NLP in AI can give RPA robots the ability to recognize images and semantic analysis, so robots can handle complex tasks such as paper invoices and grabbing appropriate fields – greatly expanding Application dimensions of RPA;

  • On the other hand, because RPA is very close to the business, RPA has opened up a considerable commercial prospect for AI for AI technology that has been difficult to land in previous years.

In addition, to achieve a story of Excel, it is not enough to make the product low-code and user-friendly, just like the iPhone. If there is only enough hardware to use, there is no App Store &a.Mp; Developer ecology can’t be an epoch-making product. Therefore, UiPath spares no effort in ecological construction:

  • UiPath Academy: How can more people learn to use RPA faster after knowing the RPA concept? UiPath Academy offers a free UiPath online course that lets users learn about RPA concepts and learn about RPA development techniques. Users can also download a free community version for hands-on operation and become a developer, architect, etc. through UiPath qualification.

  • UiPath GO! : The App Store in the RPA world. UiPath, developers, etc. can develop components and modules for RPA and upload them to the store, which users can use as needed. Currently with approximately 600 components in UiPath Go!, it has been developed with partners and has been used by more than 15,000 users worldwide.

  • Developer Forum: From another perspective, RPA is like a packaged programming language, except that developers can generate the program they want without much programming base. However, the developer ecology is still important. According to the data provided by UiPath for 36 ,, the UiPath community currently has more than 250,000 global users, users encounter problems related to RPA bots, and 80% can find solutions in the forum.

High availability and rich scalability reduce the barriers to use and expand the breadth of application scenarios. In the story that UiPath wants to say, RPA will eventually become a loosely coupled connector that connects to a separate business island, and depending on the business needs, customers can join the required “plugins” to improve the robotics staff. Smart level to complete more complex work.

With the combination of ecological colleges and forums, free courses and trial versions become natural traffic portals and popular science pathways, and the Forum and UiPath Go build a developer and user ecosystem that provides a steady stream of development for RPA.

Therefore, it is not difficult for us to understand why the market is willing to bet on this vision of “manpowering a robot”.

Blue Prism: Targeting Enterprise RPA

Unlike Uipath, which wants to say the story of “one person has an Excel”, Blue Prism has emphasized the “enterprise” perspective from the beginning, not just serving “individuals”.

Two founders of Blue Prism Alastair Bathgate and David Moss saw business opportunities when serving the first bank customer – they were personally a call center for a Manchester bank The integration of loan collection and collection, in the process, found that in fact a lot of work in the bank can be solved with automated processes, thus creating Blue Prism.

“Central governance” is more important to businesses

Because it serves the banking industry from the beginning, “central governance” is a requirement that cannot be ignored – for bank customers, the robots that operate in the line of business are “controllable” and “can be regulated”. Importantly, data security and integrity are key considerations for bank customer procurement services, so Blue Prism positions its product strategy at the “enterprise” RPA.

The idea of ​​”enterprise” has been continued to this day. Blue Prism’s products require enterprise managers to think about which internal processes need to be standardized, and then centrally deploy and robotize control at the company level, without individual decisions on which processes need to be automated and which are not.

Therefore, Blue Prism is equivalent to building an architecture platform between the business unit and the IT department, and managing the virtual workforce in a pyramid structure similar to the enterprise.

“Central Control” brings some functional advantages at the enterprise level. For example, the enterprise level can therefore flexibly “dynamically schedule” its virtual workforce. For example, if a company needs two departments on the same day to automate the process, 10 robots can be assigned to the A department to perform tasks during the day. When the labor of the A department is idle at night, they can be “transferred” to the B department. jobs. Not only that, but the Blue Prism-based platform also enables robot-to-robot management—that is, the appointment of a virtual “robot manager” that allows a robot to deploy other robots to prioritize workflows.

For enterprises, the advantage of having central management ability is that they can follow up the progress of the robotic workforce at any time, and data- and visually understand how each virtual labor resource is used.Achieve resource optimization.

Of course, at the level of stability, security, compliance, Blue Prism is a very different feature for businesses, so I won’t go into details here, Refer to the previous interview.

Road to IPA

Similar to UiPath, the ecological path of Blue Prism has begun.

The key milestone is the connected-RPA concept launched in January 2019 – After integrating the capabilities of each AI company, Blue Prism enables users to embed in automated processes with a simple drag and drop AI functions, and the ability to collaborate with robots, robots and machines, robots and robots through the connected-RPA platform.

This includes:

  • Blue Prism Digital Exchange (DX) 2.0: DX is equivalent to the App Store, which is integrated Its partners IBM, Microsoft, Google’s AI capabilities. According to data released by Blue Prism, since its release in 2018, the DX platform has more than 300 registered companies and 1,000 registered users;

  • Process Assessment Tool (Process Discovery Tool): Help Blue Prism customers use it to sort out and evaluate internals Process tools that can reduce the time to deploy a company’s RPA;

  • Blue Prism Community: Communicates the use case experience and the best practices community to its users.

Blue Prism believes that the application of AI in enterprises is very fragmented and fragmented. When a problem is encountered, a single AI solution is purchased to solve the problem. However, the enterprise level does not see the performance of use, and it is impossible to centrally manage it. And put the enterprise AI applicationIntegration into the RPA process allows companies to have a unified platform to manage their AI capabilities and to meet business-level requirements.

China Market: Simple Copy Cannot Be Successful

China’s RPA market has just started, facing greater challenges than foreign countries. Simply copying foreign product models cannot be successful. Combining the perspectives of RPA vendors, customers and other related fields, we believe that the challenges in the Chinese market are as follows:

1, scene missing: enterprise digitization and process maturity are uneven

In an interview with a number of RPA clients and consultants on the 36th, they all mentioned the impact of the “digitalization” of the enterprise on RPA.

RPA relies on business processes, and there needs to be a mature IT environment behind it, and the processes within the enterprise are sufficiently standardized and digitized. A state-owned enterprise customer who purchased RPA products told 36 that his company’s purchase of RPA robots temporarily stayed in the single digit stage. The reason for not doing large-scale is that the scene is difficult to find:

  • On the one hand, RPA has certain requirements for the degree of dataization within large companies, and there are many processes within state-owned enterprises that still require manual participation, and the process is not standardized enough;

  • On the other hand, even if the stability and expansion of foreign RPA products are leading, the degree of localization needs to be improved. For example, foreign products will call OCR and NLP modules of companies such as Google and Microsoft, and support Chinese. The effect is not particularly ideal.

In addition, because the degree of electronicization is not high enough, digital transformation has taken place in China. New and old software coexist in enterprises, which will lead to faults between applications. And because there is no complete informationization, SaaS, ERP and other products are still in progress, the process of Chinese companies is generally not standard. Moreover, the reason why Chinese companies often do not accept RPA is that they think that automation can be done once, just like traditional software, and now RPA can only be partially implemented.

But there are different opinions on this issue. In 36 专Interview with DCM Managing Partner Zeng Zhenyu, he said that RPA deployment is more conducive to Chinese software. Or an IT environment. There are actually many legacy systems in the history of IT in Chinese enterprises. The degree of connectivity between various businesses is weaker, and the degree of fragmentation is stronger than that of foreign countries.Higher, there are few integrators in the middle. In other words, RPA can be better used as a patching and slipping agent in the enterprise IT environment.

2, players of different genes enter the market, homogenization, price war has already appeared

The current domestic market RPA market, according to the company’s genes can be divided into three categories: pure RPA companies, large company incubation business and other track players. 36 整理 Organize it as follows:

RPA: Two stories and the battle for China

These companies also represent different development directions. The general-purpose RPA will not go into details. The RPA team that large companies hatch focuses on vertical scenes. For players in other fields, we use two companies as examples:

Although the RPA China market has become hot since this year, the demand side is still in the early stage, and most of the domestic RPA products are against UiPath. The maturity is still different from that of foreign countries, resulting in product homogenization on the track. And the price war phenomenon.

When the product differentiation is small, whoever gets the first customer is the key to winning the homogenization competition.

A former RPA consultant told 36 that, from a channel perspective, about 90% of domestic RPA customers are served through consulting companies. As a major player in the introduction of the RPA concept into China, the consulting company currently uses foreign products such as UiPath, Blue Prism, and Automation Anywhere, and has formed a relatively close relationship, such as IBM and AA long-term cooperation, Deloitte, Ernst & Young, PricewaterhouseCoopers mainly promotes UiPath and BP. Therefore, how to get the partner of a consulting company or open up new channels is a problem that domestic manufacturers need to face.

Another consulting practitioner added that after the purchase of products by large customers, the replacement cost is also high, so the repurchase rate is high. Every year, new modules, license purchases, and new process development will bring hundreds of thousands to The follow-up income of millions is basically to see who is occupying the pit.

But when the market is seized, Chinese entrepreneurs are also welcoming more fierce competition from foreign manufacturers. In November 2018, UiPath has announced its full entry into China. Since the establishment of the China team last year, the UiPath China team has exceeded 70 people, and a local R&D team will be formed in the second half of this year. Blue Prism also announced recently that China is the five key markets in its global strategic plan. It will fully enter China this year and has completed the entire series of products.

3. Ecological ability is the core competitive barrier

While improving the basic capabilities of the robot, the degree of intelligence determines how far the robot can go and how deep it can enter. Therefore, RPA companies need more capabilities, as well as more user stories and industry solutions.

In fact, RPA is a Unicom business, locatedThe application tool of the front-end is advantageous in that it can be deployed flexibly and quickly. However, at the implementation level, the implementer still needs to write a certain amount of code and access other functional modules to apply to more complex scenarios.

Therefore, how many third-party capabilities are accessed determines how deep the RPA company’s own barriers are. Gartner’s research report shows, UiPath’s partner The ecosystem has access to more than 100 technology partners providing complementary technologies and tools, covering functional modules such as BPM and AI.

And, the direction of RPA’s final development is also largely determined by its ability to integrate. With reference to the foreign RPA market, we can also expect different development paths. For example, WorkFusion in the United States integrates more AI technology into RPA, and its own patented Process AutoML technology can help business customers do more in-depth data cleaning, mining and training.

In addition, the three people in the first echelon are mainly serving large customers, while foreign countries have already appeared RPA companies for SMEs, such as Softomotive. The Softomotive RPA platform consists of two parts, ProcessRobot and WinAutomation. ProcessRobot is enterprise-oriented and re-integrated, while WinAutomation is fast-deployed and cost-effective.

Summary, as mentioned earlier, RPA technology development is based on two major trends: increasing human costs , and technology continues to growMature, has been able to gradually evolve from alternative physical labor to alternative mental work. But the current Chinese market is facing a problem of lack of scenes, product homogeneity, and price wars that Chinese entrepreneurs cannot simply copy foreign mature models. The RPA industry still has a long way to go. Going.

The good news is that some local trends are still good for Chinese manufacturers:

1. For state-owned enterprises, governments and other institutions, there are some signs of de-Americanization of IT procurement. In other words, whether the interfaces and services that the products are open to is sufficiently localized will affect the user’s purchase decision–this also provides an opportunity for domestic RPA vendors to develop.

2. Although the market has just begun, digital transformation is a constant trend. The McKinsey report pointed out that the average growth rate of IT budgets for Chinese companies in 2016 was set at 12%, while the global innovators expected only 2%. The gap between the various industries in China and the United States is rapidly shrinking. In 2013, the digitalization level of the US industry was 4.9 times that of China; by 2016, it has shrunk to 3.7 times. This also shows that the Chinese market welcomes service providers that provide digital transformation services, and there is still room for development.

3, order volume is breaking the upper limit. A consulting practitioner told 36 that in 2018, domestic RPA orders are usually in the hundreds of thousands of dollars, and many of this year have exceeded one million yuan. These RPAs are not necessarily all entered into the enterprise under the name of “Process Automation Robots”, but they are usually placed in orders such as digital transformation and middle-office, and the acceptance of customers is getting higher and higher.

Long-term attention to RPA and Enterprise Service Tracks, a series of articles can be found here:

Industry article:

New trends | Three-month valuations have tripled, and your future RPA robot colleagues are on the road

Where are the opportunities and challenges of China’s RPA in 2019? | 2019 WISE Super Evolution Conference

DCM Managing Partner Zeng Zhenyu: Why are we optimistic about China RPA?

Venture Watch | Where are Chinese local RPAs?

Venture Watching | How do RPAs build core barriers before the market heats up?

Project Report:Cloud Expansion Technology, Art Flags, Cyclone Hongda, Uibot, Viewing RPA, Jin Zhiwei

If you are interested in the topic of RPA, please feel free to communicate with us: Puyi (WeChat ID: twiddly0309), Chen Shaoyuan (WeChat ID: 963757163), Shi Yaqiong (WeChat ID: 15300063873), Yuan Wei (WeChat ID: 369727385).

In addition, we can also submit projects to us for BP to seek project reporting, financing and investment and financing services.

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RPA: Two stories and battle for China< /p>

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RPA: Two stories and battle for China