Sam Duncan — HFS Research[00:04]
Hello everybody and welcome to the latest HFS Hot Vendor Fireside Chat. My name’s Sam Duncan, I’m one of the analysts here at HFS. Today, I’m joined by Kustaa Kivela, the co-founder and CEO of Workfellow. So for those of you that don’t know, Workfellow is one of the latest entrants into the ever-changing process intelligence market. It was founded back in December of 2019 out of Helsinki in Finland. Now, we think the process intelligence market’s really exciting, so there’s always going to be an interest from us in new vendors, but I can say that’s not the only reason we’ve decided to highlight Workfellow. So, just as background, we recently published a study into the state of the process intelligence market, and we found that — I’m trying to pull the numbers — I think it was over two-thirds of enterprises believed that process intelligence itself was too complex to use effectively in their organization, but on the flip side of that, the exact same sample set, 90% of executives agreed that it could be hugely significant in driving value throughout their business. So, naturally, we’re inquisitive people, and we asked why. So we went out and spoke to enterprise clients and we found that implementation challenges were the main thing holding them back. If you think about it, many traditional process intelligence solutions have to be layered and integrated around complex ERP systems, which takes time, it takes money, and it’s, to be frank, not easy. And that’s exactly the challenge that Kustaa and the team at Workfellow are trying to solve, and ultimately why we picked them as an HFS hot vendor. So their flagship product, Work API, rather than being caked around these ERP systems, collects desktop-level data, skipping the challenge entirely. But I can talk about it all day, and I think you’ve heard enough from me for now, so Kustaa, do you maybe want to introduce yourself and tell us in your own words how Workfellow is solving this problem?
Kustaa Kivela — Co-founder and CEO, Workfellow[01:54]
Thanks, Sam. It’s a pleasure to be here. My name is Kustaa Kivela, I’m the co-founder and CEO at Workfellow, and I have a long, long history working with the process side and understanding what really happens in business operations — from a BPO side, and then working as a consultant for leading enterprises in Europe. And one of the biggest problems, of course, was the access to the data and getting an understanding of really what happens in business operations. When I started in the outsourcing business, we had to play with the customer systems to execute those processes, and one of the big topics back in the days when I started was to implement robotic process automation. My job, with my team, was to really find those insights and define where to implement automation. So there I learned the problem of not having the data usage. You cannot use the data because you are playing with the customer systems and you cannot use the traditional way to access the data. Then I went to consulting, helping enterprises. I learned how costly it might be that, if you have access to data but the data quality is poor, you have to clean the data and then make the insights and build the dashboards, and it was so hard for the companies. And still, there were many systems where you simply don’t have the access. So we started to think, with my friend who I used to work a lot with on RPA and stuff like that: all the data, basically, before it’s entering the databases, people are doing the activities on the UI front. And we thought, it’s possible with robotics to pick information from the UI. So why wouldn’t we just pick that kind of information, what we need from the UI, like invoice numbers, and just create the event logs before they go as data into the databases? And that was the idea behind the Work API: really understanding what kind of information we fetch while people are working on the computers, and create the event logs to be used, and then drive process algorithms to visualize the data and get the insights in a really fast way, to get to the value. So, basically jumping over all the data integrations, the accessing-the-data issues, and data cleaning, because you define what kind of data should be created. So, as a simple way to understand it: if there is a location in the UI where there is an invoice number, every time there is a unique number going, we build event logs based on that. And then we visualize that, so the implementation part is hours and not many years or months to get to tangible results.
Sam Duncan — HFS Research[04:44]
Perfect, no, it makes perfect sense. I think it’s great — if you scrape the data before it gets into the complex environment, you’re saving half the job. So, looking back a little bit, 2019, I think you got to watch the process intelligence market for the first few years. How did that shape Workfellow? What inspired you to start Workfellow, and how have the last three years gone?
Kustaa Kivela — Co-founder and CEO, Workfellow[05:09]
Well, yeah, so we started — I think Henry started, my co-founder, in robotics in 2014, and I went, in 2016, to this intelligent automation space. We could solve all kinds of customer problems with technologies available in the market, but one of the biggest problems always — we felt the burden every single day — was: what is the reality? What is going on? To have this kind of really tangible data and insights about what is really going on in business operations. So we were suffering from that problem on a daily basis. That basically pushed us to start Workfellow, and we officially launched in July 2020 when we started to build our product, and we have been operative for about 2.5 years right now. So the first year was really about testing and fine-tuning: can we make it work, run in the background of the computers and create those event logs and then get valuable insights for our customers based on that? And that was pivoting a little bit, trying to figure out how we should be building the product and working with the very early customers. And then we found a way to do it so that it’s really unleashing lots of value for our customers. In the last 1, 1.5 years, we raised a little bit of funding and then we have been building the product. And now, our product is in a very good shape and it’s scalable, more of a tech platform, which we can use to help customers transform their operations. And just before summer, we launched our commercial operations. So we hired sales and marketing teams, and now we are seeing very good traction from the customer side, and we are really resonating with those large companies who are facing this implementation challenge on a large scale — who were the very first companies to adopt traditional process mining, the very first with the automation programs, intelligent automation. We are seeing lots of traction right now there. And, of course, a big thing for us is this HFS hot vendor status, because I have been reading your research from 2016 onwards, when I entered the intelligent automation space. So that has been our journey right now. Looking very much forward to helping these customers tackle these big problems.
Sam Duncan — HFS Research[07:38]
No, that’s great, and I think from our perspective, when we were digging into Workfellow a little bit, the growth was really impressive. You talked about last summer launching the commercial arm and speaking to your clients, and they were super pleased with the product you’re providing. And I think that leads me on to my next point: what do you think is the secret sauce? Is it the data-capture approach? Is there a little bit more to it? Again, the theme I found with your customers — a lot of people praised the way you collect the data, which means you can have a good approach to employee data privacy, which we find is quite a big topic when we’re deploying these products. If your employees don’t like it, as an organization you’ve got to get buy-in from the stakeholders, so if they don’t like it, you’re going to get a little pushback, and then it might be a roadblock for something like this before it happens. And again, that was something your clients complimented. But is there anything else to it? Is there some secret sauce that you can tell us about?
Kustaa Kivela — Co-founder and CEO, Workfellow[08:31]
Yeah, I think it’s starting from the — we approached everything from the business perspective, starting by building a whole new product from scratch, thinking about what are the biggest problems in adoption, but also with the insights, and started building totally new products. So, one, adoption problems: implementation, getting data access. Also privacy is, I think, a very big one. We are a European company with Nordic values, and employee privacy and security is very, very important for us. So we designed it so that it’s really good for employees and we are not breaching anything, making sure the company who is buying from us can be sure that there are no problems. Then, of course, the insight. So one of the, I would say, secret sauces in that sense is that, in our approach, when we take the event logs from the UI and what is happening on the screen, of course it gives lots of flexibility to do a very deep analysis about which customers we are serving, how much time, which suppliers are causing the biggest manual problems and handling problems for us. But also having this kind of team view of how processes are going from the team perspective. So it’s bringing that very tangible for the companies, to understand where the problems are and how we can fix those. And that is really much about our core: that we can combine that process and task understanding in the same package. Most of our customers are educated enough to understand that we need to understand how the processes are going, we have to understand how work happens, but we also have to understand how our systems are supporting the work and processes. Because the majority of the productivity comes if the systems are working as properly as they should be, to empower those people to execute the work that is required. So I think those are the — on the adoption side, we have been tackling that a lot, but also our insights are very business-driven in that sense, helping the companies do the transformation.
Sam Duncan — HFS Research[10:46]
No, perfect. I think the true value of process intelligence is when you can look through the layers — a business process isn’t two-dimensional, right? So your approach gives the full 3D transparency, which organizations can then use to really drive process efficiency. So that makes a lot of sense. I guess, what about the market as a whole? I touched on it earlier — it’s ever-changing. We see acquisitions, we see investments. I think from my perspective I see two sides to this. You look at the last year, there were some huge acquisitions, and I think that’s good, because you’re putting these process intelligence tools into the hands of more organizations, and it’s not the easiest thing to adopt — we’ve touched on that. Workfellow’s going a good way to helping with that, and maybe this market consolidation is going to help there too. But on the flip side, if I’m an enterprise and I want a pure-play process intelligence vendor, how can I choose someone, because they might get acquired tomorrow, right? So what do you think about that? Is it good? Is it bad?
Kustaa Kivela — Co-founder and CEO, Workfellow[11:44]
Well, when things are happening in the space, it’s always interesting, and I think it’s always positive in that sense. If we see a lot of acquisitions of traditional process mining bought by big tech players, it makes total sense to integrate process mining visibility inside their own event logs, what the system generates. And I think the other side is that what drives this kind of task mining market is, of course, automation vendors, RPA vendors, to find more to automate — those kinds of workflows which can be substituted by robots. So I see a third wave in that sense: this kind of plug-and-play process intelligence solutions which are easy to take into use, and it gets faster to the insights. And I see lots happening in that space. And the total market is so huge, and I think it’s very untapped in that sense. When we think about how many global companies out there are suffering from process or system inefficiencies — I think the total addressable market is so huge that I’m sure there will be many, many different companies who will be very big in this space. And I think that will attract investments, because this kind of plug-and-play solution, which goes around the data-capturing problems or implementation problems or adoption problems, is basically making the pipe bigger. And of course, now these acquisitions are educating the market: when the big players are integrating process mining into their solutions, it’s basically building the market education and making the market bigger. But also these new vendors, new approaches, are growing the buyer market to be bigger in that sense, and will most likely attract a lot of investments in the future. So I think things are getting hotter and hotter all the time.
Sam Duncan — HFS Research[13:52]
Hotter and hotter in Finland with the old hot vendor — I liked that, I like that. That was good. I agree entirely. I think 90% agreeing that it could be hugely significant, but 60% saying it’s too complex to use — I think that just proves that it’s completely untapped, and there’s still so much potential. Organizations — some of these are decades old, and the processes are decades old, built on technology, built on technology, built on technology. So we’re almost at a legacy-squared point, right? So there’s huge potential there. But coming back to Workfellow: you’re young, you’re new, you’re growing quite aggressively. 12 to 18 months, what does it look like?
Kustaa Kivela — Co-founder and CEO, Workfellow[14:32]
Well, now our full focus is on this Work API. So, more data collection, better data collection, and building these logos so more people can more easily determine what kind of data they want to consume and collect. And then also the other side: we are betting a lot on this kind of object-based data visualization in our platform, and building self-serve capabilities. So, whatever data you collect, you can then build your own dashboard very fast — what kind of data you want to visualize and digest or monitor in real time. Those are our full focus right now. Of course, I’m really excited about when I’m getting to publish big news about these very large enterprises we are working with right now, who are adopting our technologies, because the use cases they’re solving are not so typical. They are really good in that sense that they are very different from traditional process mining, very business-driven. So, very excited to share those when they are coming public.
Sam Duncan — HFS Research[15:46]
No, that’s exciting, we’ll look out for those. And I think, after we’re done filming this, you’re flying out to Zurich, right, for a process lab? Is that something we’re going to see a little bit more of? Because educating clients and enterprises is so important when the technology is so complex. I think you did one in Helsinki recently, and you’re doing one later today or tomorrow. Are we going to see a few more of those?
Kustaa Kivela — Co-founder and CEO, Workfellow[16:07]
I think we are doing those — they have been very good events. Tomorrow, we are running one in Zurich, and it has been very exciting, because there are those who know and are looking to solve those implementation challenges, but we are seeing tremendous growth in the interest in process intelligence as a whole. So, lots of those. We are running one in Vilnius as well — I think there are 60, 70 people already coming to our event in Vilnius. So, really, really exciting times in this process intelligence space.
Sam Duncan — HFS Research[16:43]
That’s awesome, really, really exciting. And I think finally, if we look forward five years, having touched on the fast-moving market — 2028, a bit of a sneak peek — are we looking for investment? Are we looking for acquisition? What do we think?
Kustaa Kivela — Co-founder and CEO, Workfellow[17:00]
Well, I think our mission has always been to fix enterprise process and system problems, so people wouldn’t have to do lousy work. That has been our mission as a company — really focused on solving these kinds of big problems from the processes and systems, but also so that smart people would focus on really doing their work better. And if we are successful — I think our success criteria is that, of course, we have targets which we have to hit and grow our company, and then we’ll look at what makes sense for the company. But we are really focused on this journey, on becoming this kind of modern company and modern process intelligence software provider for these modern knowledge-work enterprises, where more people are spending time on meaningful stuff while they’re executing those business processes. So that is where we are going ahead, and let’s see what comes out of it. That story is one to be told.
Sam Duncan — HFS Research[18:09]
No, smart people doing their work better, I think, is the key. Especially — we’re hearing a lot about talent wars and employees hopping around in the new hybrid environment. If you can really leverage a tool like Workfellow to improve their productivity and their job satisfaction through that, you’re going to get two birds, one stone, I think.
Kustaa Kivela — Co-founder and CEO, Workfellow[18:28]
Yeah, definitely. And I think it’s not a trade-off in that sense, where we’re developing processes and not the work circumstances and practices. So we look at everything very holistically, and it’s very important for us that we also improve this work side of things.
Sam Duncan — HFS Research[18:46]
No, perfect. Well, look, Kustaa, I’ve really enjoyed speaking to you today. I think we’re just about running out of time, so thank you so much for joining me, and thank you to everybody that’s listening. I hope you all have a great morning, afternoon, or evening. All right, thank you.
Kustaa Kivela — Co-founder and CEO, Workfellow[18:46]
Pleasure to be here. Bye-bye.
