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Fővám tér 8., Budapest 1093, Hungary, Tel.: +36 1 4825263, +36 1 4825377
Internet: http://mgmt.uni-corvinus.hu
September 9, 2019
10th International Symposium on Intelligent Manufacturing and
Service Systems, Sakarya University
Intelligent Business Services Operation
Authors: R. Marciniak, P. Moricz (presenter), M. Baksa
This research was supported by project
No. EFOP-3.6.2-16-2017-00007, titled
Aspects on the development of
intelligent, sustainable and inclusive
society: social, technological, innovation
networks in employment and the digital
economy. The project has been
supported by the European Union, co-
financed by the European Social Fund
and the budget of Hungary.
Agenda – Executive summary
Introduction: Digital transformation as a broader concept of Industry 4.0
Theoretical
framework:
Areas of digital transformation, Service 4.0,
Digitalization levels of business service processes
Research aims
and methods:
Survey (64% coverage) and in-depth interviews (22) at
business service centers (BSCs) in Hungary
Results: Identification of the drivers, the technologies, and the
impacts of the digital transformation at Hungarian BSCs
Conclusions: Automation is a strategic tool, determined by technology
background and culture, while the shift to more creative
jobs suppresses resistance
September 9, 2019 2IMSS'19: Intelligent Business Services Operations
Introduction: Digital transformation as a broader
concept of Industry 4.0
■ „A business strategy, inspired by the capabilities
of powerful, readily accessible technologies
[Exhibit 1], intent on delivering unique, integrated
business capabilities in ways that are responsive
to constantly changing market conditions”
Source: Sebastian, Ina M., Jeanne W. Ross, Cynthia Beath, Martin Mocker, Kate
G. Moloney, Nils O. Fonstad (2017) „How Big Old Companies Navigate Digital
Transformation”, MIS Quarterly Executive 16:3, p. 198.
■ Terminology: digitalization, digital strategy
September 9, 2019 3IMSS'19: Intelligent Business Services Operations
Exhibit 1: Powerful, readily accessible
technologies that inspire the digital transformation
September 9, 2019 4IMSS'19: Intelligent Business Services Operations
SOCIAL
MEDIA
MOBILE
ANA-
LYTICS
CLOUD
INTERNET
OF
THINGS
WHITE-
COLLAR
ROBOTICS
AI &
MACHINE
LEARNING
MISC
Ubiquitous
computing,
wearables,
AR/VR
Big data,
smart data,
predictive
analytics etc.
Sensors,
M2M,
connected
things
Chatbot,
RPA
E-mobilIty,
3D / additive
manufacturing,
blockchain
MATURE / MAINSTREAM
BUSINESS INFORMATION
SYSTEMS
E.g. ERP, CRM, BPM/workflow,
document management,
collabotation tools etc.
Areas of digital transformation: business services
as support activities vs products/business models
September 9, 2019 5IMSS'19: Intelligent Business Services Operations
1. Business
model
2. Products/
services
3. Customer
relationship
5. Support/
management
activities
4. Primary
activities
Production and logistics –
industry 4.0, analytics,
digital twin etc.)
Innovative value proposition,
new value constellations
e.g. sharing models,
digitalization-enabled
revenue models
New and smart
combination of
product, service
and data
Enhanced customer
experience: customer
intelligence, simplified
interaction, omni-
channel, location-based,
co-creation
Procurement 4.0, financial
and controlling analytics,
data-driven management,
digital HR
„Digital
solutions”
„Customer
engagement”
Based on Daubner and Lips – Horváth & Partners (2017), extended with Sebastian et al. (2017)
Service 4.0: the potential of the digital
transformation in the business services
■ Paper documents still exist
■ Multiple IT systems across processes
with missing links and functions
■ Highly labor intensive and expensive,
high level of wastes [Exhibit 2]
■ High complexity and variety of
processes
■ Flaws, service issues, missing
transparency and predictability
■ Slow and cumbersome interactions,
siloes of channels
■ Limited customer experience, unmet
customer needs
■ Simple, intuitive, proactive, real-time,
and personalized interactions
■ Seamless switch between multiple
channels
■ Self-service, remote access, and
interactive tools support customers
■ Swift handling of complaints, or even
preventing the complaint by prediction
of potential issues or automated issue
detection and resolution
■ Enhanced, real-time, and/or
personalized offerings enabled by
advanced technologies and the
integration of internal and external
(big) data
Service 1.0-3.0 challenges Service 4.0 expectations*
September 9, 2019 6IMSS'19: Intelligent Business Services Operations
* Based on Marciniak (2019)
Exhibit 2: Service industries experience high
levels of waste
September 9, 2019 7IMSS'19: Intelligent Business Services Operations
Theoretical framework: Levels of the digitalization
of the processes in the business services sector
September 9, 2019 8IMSS'19: Intelligent Business Services Operations
4. Use of cognitive systems
• Continuous improvement and
data-driven decision making
3. Automation and robotization
of processes
• Replacement of human workforce:
efficiency, speed, accuracy
2. Digitalization of processes
and process management
• More simple and standard processes
1. Digitization of process contents
• Digital content management, access and search
100101
111010
101011
Research field: Business service centers in
Hungary
■ Central and Eastern Europe as
an important nearshoring location
globally has about 2000 BSCs
with 2 million employees
■ Hungary has 110 international
BSCs with about 55.000
employees (1,1% of employees in
Hungary)
■ 10-12% annual growth rate, 1,2%
of Hungarian GDP, 1,6% of the
entire Hungarian export
September 9, 2019 9IMSS'19: Intelligent Business Services Operations
Drótos et al. (2018)
Research questions
■ How digitalized is the business service sector today?
■ What are the typical new digital technologies that are
implemented in BSC? Is there BSC 4.0 framework?
■ What are the aims to use these technologies?
■ What are the impacts of automation technologies on the
human workforce and service delivery models in the sector?
■ What are the impacts of technologies on service location
selection?
September 9, 2019 10IMSS'19: Intelligent Business Services Operations
Research methodology
■ Aim of the research to explore the
operational characteristics of
business services centers (BSCs) in
Hungary
■ Online self-completed questionnaire
(1/3 of questions focused on the
technology)
■ 71 respondents (64% of all BSCs in
Hungary)
■ Between July and September of 2018
■ In cooperation with the Hungarian
Service and Outsourcing Association
(HOA) and Hungarian Investment
Promotion Agency (HIPA)
■ Aim of the research to understand the
implementation of digital technology
projects within the business service
centers and their impacts on the
operation
■ In-depth interview with managers of
sampled Hungarian BSCs
■ 15 interviews with 22 interviewees
from 4 companies [Exhibit 3]
■ Between November of 2018 and
February of 2019
Quant. research: Questionnaire Qualitative research: Interview
September 9, 2019 11IMSS'19: Intelligent Business Services Operations
Exhibit 3: In-depth interviews covered top
managers and automation leaders of 4 companies
September 9, 2019 12IMSS'19: Intelligent Business Services Operations
Code Corporate position
Company
code
Code Corporate position
Company
code
1 Managing Director A 9 Site executive B
2 HR Services (external) A 10 Head of Automation B
3 Procurement A 11 Service Quality Specialist B
4 Q2C (Sales Support) A 12 Automation Team Lead C
5 Chief Information Officer A 13 Global Compliance Lead C
6 Indirect Tax A 14 Security Lead D
7 Accounts Payable A 15 Expert Architect D
8 HR Transformation (internal) A 16 IoT Portfolio Unit Lead D
17 Managing Director D
Results
■ Drivers of digital transformation: cost
cutting targets, increasing customer
expectations, shift in shoring models
■ Technologies of digital transformation:
The use of cognitive technologies (level
4) penetrates all of current technologies
(level 1 to 3) [Exhibit 4 and 5]
■ Impacts of digital transformation: mainly
process optimization (operational
efficiency, value added services) but may
lead to shift in the business model
(service portfolio)
September 9, 2019 13IMSS'19: Intelligent Business Services Operations
Exhibit 4: Technologies toward intelligent
business services operations
September 9, 2019 14IMSS'19: Intelligent Business Services Operations
Level 1:
Digitization
Level 2:
Digitalization
Level 3:
Automation and robotization
Key
technologies
Cloud computing
Mainstream business
information systems
Smart/mobile devices
Optical character
recognition
Internet of Things (IoT)
Ticketing and
workflow systems
Self-service
workflows
Server virtualization
Process analytics
and dashboards
Macros, scripting, routing
Robotic process automation
Chatbot
Robotized software testing
Augmented reality
Level 4 Use
of cognitive/
intelligent
technologies
Intelligent character
recognition
Predictive analytics
Process and system
simulation (digital
twin)
Process mining
Intelligent application scripting and
debugging
NLP (speech recognition, machine
translation, summarization etc.)
Computer vision (face recognition,
image classification etc.)
Machine learning (cognitive
RPA/chatbot)
Artificial intelligence
Exhibit 5: Technology diffusion in intelligent
business services operations
September 9, 2019 15IMSS'19: Intelligent Business Services Operations
Innovators Early adopters Early majority Late majority Laggards
Machine learning
Cognitive RPA
and chatbot
Process and
system simulation
(digital twin)
Blockchain
Artificial
intelligence
Cybersecurity
Augmented reality
Intelligent
character
recognition
Natural language
processing
Computer vision
Predictive
analytics / big
data
Process mining
Self-service
workflows
Robotic process
automation
Chatbot
Process analytics
and dashboards
IoT
Cloud computing
Ticketing and
workflow systems
Automation tools
(macros, scripting,
routing)
Server
virtualization
Core business
applications (ERP,
CRM, document
management,
etc.)
Optical character
recognition
Smart/mobile
devices
Conclusions
■ Automation is the strategic tool for responding
to the changing environment
■ Technology background and culture drive the
business change
■ Resilience can be managed as more creative
jobs replace repetitive tasks
September 9, 2019 16IMSS'19: Intelligent Business Services Operations
Fővám tér 8., Budapest 1093, Hungary, Tel.: +36 1 4825263, +36 1 4825377
Internet: http://mgmt.uni-corvinus.hu
September 9, 2019
Contact: peter.moricz@uni-corvinus.hu
Thank you for your attention!
This research was supported by project
No. EFOP-3.6.2-16-2017-00007, titled
Aspects on the development of
intelligent, sustainable and inclusive
society: social, technological, innovation
networks in employment and the digital
economy. The project has been
supported by the European Union, co-
financed by the European Social Fund
and the budget of Hungary.
References
■ I. M. Sebastian, J. W. Ross, C. Beath, M. Mocker, K. G. Moloney and N.
O. Fonstad, "How Big Old Companies Navigate Digital Transformation,"
MIS Quarterly Executive, vol. 16, no. 3, pp. 197-214, 2017.
■ R. Daubner and T. Lips, "Customer Experience Management - Digitizing
Customer Interaction,” Horváth&Partners, Stuttgart, 2017.
■ R. Marciniak, "Impact of Industry 4.0 technologies for Business Services
in Hungary,” EDT Conference, University of Rijeka, June 3, 2019.
■ O. Rehse, S. Hoffmann, C. Kosanke, "Tapping into the Transformative
Power of Service 4.0,” BCG, - BCG, September 27, 2016, Downloaded
from: https://www.bcg.com/publications/2016/tapping-into-the-transformative-
power-of-service-4.aspx
■ G. Drótos, R. Marciniak, R. Ránki-Kovács, D. Jakab, N. Willbrandt, M.
Baksa, E. Mátrai, "Business Services Hungary: 360° view about the
Hungarian Business Services Market 2018,” Budapest.
September 9, 2019 18IMSS'19: Intelligent Business Services Operations

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Intelligent Business Services Operation

  • 1. Fővám tér 8., Budapest 1093, Hungary, Tel.: +36 1 4825263, +36 1 4825377 Internet: http://mgmt.uni-corvinus.hu September 9, 2019 10th International Symposium on Intelligent Manufacturing and Service Systems, Sakarya University Intelligent Business Services Operation Authors: R. Marciniak, P. Moricz (presenter), M. Baksa This research was supported by project No. EFOP-3.6.2-16-2017-00007, titled Aspects on the development of intelligent, sustainable and inclusive society: social, technological, innovation networks in employment and the digital economy. The project has been supported by the European Union, co- financed by the European Social Fund and the budget of Hungary.
  • 2. Agenda – Executive summary Introduction: Digital transformation as a broader concept of Industry 4.0 Theoretical framework: Areas of digital transformation, Service 4.0, Digitalization levels of business service processes Research aims and methods: Survey (64% coverage) and in-depth interviews (22) at business service centers (BSCs) in Hungary Results: Identification of the drivers, the technologies, and the impacts of the digital transformation at Hungarian BSCs Conclusions: Automation is a strategic tool, determined by technology background and culture, while the shift to more creative jobs suppresses resistance September 9, 2019 2IMSS'19: Intelligent Business Services Operations
  • 3. Introduction: Digital transformation as a broader concept of Industry 4.0 ■ „A business strategy, inspired by the capabilities of powerful, readily accessible technologies [Exhibit 1], intent on delivering unique, integrated business capabilities in ways that are responsive to constantly changing market conditions” Source: Sebastian, Ina M., Jeanne W. Ross, Cynthia Beath, Martin Mocker, Kate G. Moloney, Nils O. Fonstad (2017) „How Big Old Companies Navigate Digital Transformation”, MIS Quarterly Executive 16:3, p. 198. ■ Terminology: digitalization, digital strategy September 9, 2019 3IMSS'19: Intelligent Business Services Operations
  • 4. Exhibit 1: Powerful, readily accessible technologies that inspire the digital transformation September 9, 2019 4IMSS'19: Intelligent Business Services Operations SOCIAL MEDIA MOBILE ANA- LYTICS CLOUD INTERNET OF THINGS WHITE- COLLAR ROBOTICS AI & MACHINE LEARNING MISC Ubiquitous computing, wearables, AR/VR Big data, smart data, predictive analytics etc. Sensors, M2M, connected things Chatbot, RPA E-mobilIty, 3D / additive manufacturing, blockchain MATURE / MAINSTREAM BUSINESS INFORMATION SYSTEMS E.g. ERP, CRM, BPM/workflow, document management, collabotation tools etc.
  • 5. Areas of digital transformation: business services as support activities vs products/business models September 9, 2019 5IMSS'19: Intelligent Business Services Operations 1. Business model 2. Products/ services 3. Customer relationship 5. Support/ management activities 4. Primary activities Production and logistics – industry 4.0, analytics, digital twin etc.) Innovative value proposition, new value constellations e.g. sharing models, digitalization-enabled revenue models New and smart combination of product, service and data Enhanced customer experience: customer intelligence, simplified interaction, omni- channel, location-based, co-creation Procurement 4.0, financial and controlling analytics, data-driven management, digital HR „Digital solutions” „Customer engagement” Based on Daubner and Lips – Horváth & Partners (2017), extended with Sebastian et al. (2017)
  • 6. Service 4.0: the potential of the digital transformation in the business services ■ Paper documents still exist ■ Multiple IT systems across processes with missing links and functions ■ Highly labor intensive and expensive, high level of wastes [Exhibit 2] ■ High complexity and variety of processes ■ Flaws, service issues, missing transparency and predictability ■ Slow and cumbersome interactions, siloes of channels ■ Limited customer experience, unmet customer needs ■ Simple, intuitive, proactive, real-time, and personalized interactions ■ Seamless switch between multiple channels ■ Self-service, remote access, and interactive tools support customers ■ Swift handling of complaints, or even preventing the complaint by prediction of potential issues or automated issue detection and resolution ■ Enhanced, real-time, and/or personalized offerings enabled by advanced technologies and the integration of internal and external (big) data Service 1.0-3.0 challenges Service 4.0 expectations* September 9, 2019 6IMSS'19: Intelligent Business Services Operations * Based on Marciniak (2019)
  • 7. Exhibit 2: Service industries experience high levels of waste September 9, 2019 7IMSS'19: Intelligent Business Services Operations
  • 8. Theoretical framework: Levels of the digitalization of the processes in the business services sector September 9, 2019 8IMSS'19: Intelligent Business Services Operations 4. Use of cognitive systems • Continuous improvement and data-driven decision making 3. Automation and robotization of processes • Replacement of human workforce: efficiency, speed, accuracy 2. Digitalization of processes and process management • More simple and standard processes 1. Digitization of process contents • Digital content management, access and search 100101 111010 101011
  • 9. Research field: Business service centers in Hungary ■ Central and Eastern Europe as an important nearshoring location globally has about 2000 BSCs with 2 million employees ■ Hungary has 110 international BSCs with about 55.000 employees (1,1% of employees in Hungary) ■ 10-12% annual growth rate, 1,2% of Hungarian GDP, 1,6% of the entire Hungarian export September 9, 2019 9IMSS'19: Intelligent Business Services Operations Drótos et al. (2018)
  • 10. Research questions ■ How digitalized is the business service sector today? ■ What are the typical new digital technologies that are implemented in BSC? Is there BSC 4.0 framework? ■ What are the aims to use these technologies? ■ What are the impacts of automation technologies on the human workforce and service delivery models in the sector? ■ What are the impacts of technologies on service location selection? September 9, 2019 10IMSS'19: Intelligent Business Services Operations
  • 11. Research methodology ■ Aim of the research to explore the operational characteristics of business services centers (BSCs) in Hungary ■ Online self-completed questionnaire (1/3 of questions focused on the technology) ■ 71 respondents (64% of all BSCs in Hungary) ■ Between July and September of 2018 ■ In cooperation with the Hungarian Service and Outsourcing Association (HOA) and Hungarian Investment Promotion Agency (HIPA) ■ Aim of the research to understand the implementation of digital technology projects within the business service centers and their impacts on the operation ■ In-depth interview with managers of sampled Hungarian BSCs ■ 15 interviews with 22 interviewees from 4 companies [Exhibit 3] ■ Between November of 2018 and February of 2019 Quant. research: Questionnaire Qualitative research: Interview September 9, 2019 11IMSS'19: Intelligent Business Services Operations
  • 12. Exhibit 3: In-depth interviews covered top managers and automation leaders of 4 companies September 9, 2019 12IMSS'19: Intelligent Business Services Operations Code Corporate position Company code Code Corporate position Company code 1 Managing Director A 9 Site executive B 2 HR Services (external) A 10 Head of Automation B 3 Procurement A 11 Service Quality Specialist B 4 Q2C (Sales Support) A 12 Automation Team Lead C 5 Chief Information Officer A 13 Global Compliance Lead C 6 Indirect Tax A 14 Security Lead D 7 Accounts Payable A 15 Expert Architect D 8 HR Transformation (internal) A 16 IoT Portfolio Unit Lead D 17 Managing Director D
  • 13. Results ■ Drivers of digital transformation: cost cutting targets, increasing customer expectations, shift in shoring models ■ Technologies of digital transformation: The use of cognitive technologies (level 4) penetrates all of current technologies (level 1 to 3) [Exhibit 4 and 5] ■ Impacts of digital transformation: mainly process optimization (operational efficiency, value added services) but may lead to shift in the business model (service portfolio) September 9, 2019 13IMSS'19: Intelligent Business Services Operations
  • 14. Exhibit 4: Technologies toward intelligent business services operations September 9, 2019 14IMSS'19: Intelligent Business Services Operations Level 1: Digitization Level 2: Digitalization Level 3: Automation and robotization Key technologies Cloud computing Mainstream business information systems Smart/mobile devices Optical character recognition Internet of Things (IoT) Ticketing and workflow systems Self-service workflows Server virtualization Process analytics and dashboards Macros, scripting, routing Robotic process automation Chatbot Robotized software testing Augmented reality Level 4 Use of cognitive/ intelligent technologies Intelligent character recognition Predictive analytics Process and system simulation (digital twin) Process mining Intelligent application scripting and debugging NLP (speech recognition, machine translation, summarization etc.) Computer vision (face recognition, image classification etc.) Machine learning (cognitive RPA/chatbot) Artificial intelligence
  • 15. Exhibit 5: Technology diffusion in intelligent business services operations September 9, 2019 15IMSS'19: Intelligent Business Services Operations Innovators Early adopters Early majority Late majority Laggards Machine learning Cognitive RPA and chatbot Process and system simulation (digital twin) Blockchain Artificial intelligence Cybersecurity Augmented reality Intelligent character recognition Natural language processing Computer vision Predictive analytics / big data Process mining Self-service workflows Robotic process automation Chatbot Process analytics and dashboards IoT Cloud computing Ticketing and workflow systems Automation tools (macros, scripting, routing) Server virtualization Core business applications (ERP, CRM, document management, etc.) Optical character recognition Smart/mobile devices
  • 16. Conclusions ■ Automation is the strategic tool for responding to the changing environment ■ Technology background and culture drive the business change ■ Resilience can be managed as more creative jobs replace repetitive tasks September 9, 2019 16IMSS'19: Intelligent Business Services Operations
  • 17. Fővám tér 8., Budapest 1093, Hungary, Tel.: +36 1 4825263, +36 1 4825377 Internet: http://mgmt.uni-corvinus.hu September 9, 2019 Contact: peter.moricz@uni-corvinus.hu Thank you for your attention! This research was supported by project No. EFOP-3.6.2-16-2017-00007, titled Aspects on the development of intelligent, sustainable and inclusive society: social, technological, innovation networks in employment and the digital economy. The project has been supported by the European Union, co- financed by the European Social Fund and the budget of Hungary.
  • 18. References ■ I. M. Sebastian, J. W. Ross, C. Beath, M. Mocker, K. G. Moloney and N. O. Fonstad, "How Big Old Companies Navigate Digital Transformation," MIS Quarterly Executive, vol. 16, no. 3, pp. 197-214, 2017. ■ R. Daubner and T. Lips, "Customer Experience Management - Digitizing Customer Interaction,” Horváth&Partners, Stuttgart, 2017. ■ R. Marciniak, "Impact of Industry 4.0 technologies for Business Services in Hungary,” EDT Conference, University of Rijeka, June 3, 2019. ■ O. Rehse, S. Hoffmann, C. Kosanke, "Tapping into the Transformative Power of Service 4.0,” BCG, - BCG, September 27, 2016, Downloaded from: https://www.bcg.com/publications/2016/tapping-into-the-transformative- power-of-service-4.aspx ■ G. Drótos, R. Marciniak, R. Ránki-Kovács, D. Jakab, N. Willbrandt, M. Baksa, E. Mátrai, "Business Services Hungary: 360° view about the Hungarian Business Services Market 2018,” Budapest. September 9, 2019 18IMSS'19: Intelligent Business Services Operations