IPsoft Acquires ab1 Group Recognizing the Transformational Character of Process Automation

Having just joined HfS Research to enhance their leading coverage on process automation, IPsoft’s acquisition of ab1 Group, provides the platform to take stock of the market dynamics. While the market for autonomics and RPA is still nascent, the level of maturation is accelerating. The rapid build-out of autonomics and RPA centers of excellence (CoE) by large service providers and the increasing willingness to market these investments to enterprise clients are strong indicators of this maturation. IPsoft’s acquisition of ab1 Group adds to this as the company is referencing the necessity of integrating autonomics into broader transformation or process automation projects.

The acquisition rationale is two-fold: First, organizations in the Nordics continue to be early adopters of innovative products and services – and technologies such as IPsoft are no exception. Second, acquiring local transformational capabilities will be a platform to further accelerate adoption. IPsoft recognized that not only were sales cycles long but, more importantly, clients needed support to transform their IT processes by integrating diverse sets of tools and solutions. Thus pre-sales support will be closely linked with the broad set of transformational capabilities that ab1 Group brings. These capabilities cover a range of (more traditional) services including sourcing advisory, project management, requirements analysis, testing and quality assurance, software asset management, and technical capabilities such as enterprise architecture and systems development. And yes, the scale of the acquisition is on the smaller side, but then again all the leading players are just building their core capabilities at this point.

The notion of transformation highlights a shift in the market towards maturation. With the launch of its Amelia cognitive platform in 2014, IPsoft emphasized its collaboration with service providers such as Accenture, highlighting the transformational nature of its early use cases However, the main narrative in the market is still focused on the simple elimination of FTEs implying that RPA and autonomics are more or less turn-key solutions with a minimal risk of integration. This is misleading and rather than fueling that hype, the marketing of these capabilities should instead be answering the sort of questions we hear from enterprises such as Why should I bother, we have heard this all before? What are the specific use cases? How do I have to adapt my target-operating model?

HfS believes that the discussion of RPA and autonomics needs to recognize the transformational opportunities of and requirements for these technologies which will only become more pronounced as we see the arrival of more cognitive platforms into this market this year.

It’s not just IPsoft that sees the emerging transformational requirement of these technologies.  We see service providers building capabilities to respond to this as well.  There are new specialist consultancies such as GenFour, Virtual Operation, thoughtonomy and Symphony Ventures working on transformational projects in automation.  At the same time established service providers are including these technologies within broader change initiatives such as the Future of Work at Cognizant or by building sizable automation COEs like Wipro, HCL, Genpact, TCS and others have done all of the market participants are realizing that they need greater scale in this maturing market.