SMEs to drive the automation rollout

Robotic process automation continues to revolutionize large corporations, but within the next decade, a greater number of small and mid-sized companies are poised to join the futuristic, bot-steered ride.

As many large companies around the globe revamp their business practices to become more efficient, speedy and precise, diligent employees working behind the scenes certainly aren’t the only ones to thank: in many cases, a wave of futuristic bots are also quietly fueling the success.

Indeed, robotic process automation (RPA)—the application of technology that allows employees in a company to configure software or a so-called robot to capture and interpret existing applications—is sweeping industries from insurance and financial services to healthcare and hospitality, unleashing small armies of bots that examine insurance claims, process transactions, manipulate data, trigger responses and more.

The current value of the RPA market is around $300 million and it is expected to grow rapidly to $8.7 billion by 2024, according to a recent Grand View Research report.

But while large corporations looking to update their existing business practices have demonstrated the majority of interest in RPA, small to medium-sized enterprises (SMEs) are predicted to be a key new driver of growth over the next decade.

“Automation increases productivity, eradicates errors and reduces employee attrition,” says Oded Karev, VP, Global General Manager, Advanced Process Automation division for software company NICE.

“It ensures flawless execution of many business processes, which means employees’ time is spent serving customers rather than performing routine tasks or correcting errors,” he adds.

For SMEs, this means “increased bandwidth for employees and greater efficiency across business units.”

Automation, while “it’s a sexy word that sounds like science fiction,” says Kevin Parikh, CEO of management consulting firm Avasant, is “really just about automating old processes.” 

A bot can help with mortgage application processing, for example, by putting parts of the manual activities involved on autopilot, like opening an email with the information inside, extracting information and entering it into a database.
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Over the past years, there has been a surge in RPA adoption, driven by robot orchestration, centralized robot dashboard management and enterprise level robot deployments — and bigger milestones await.

RPA is on the brink of an adoption growth spurt. “Robotics for automation will become much more commonplace within the next three to five years,’” explains Rod Dunlap, senior director, RPA for insurance, at Capgemini, adding that SMEs are just beginning to reap the benefits from RPA. 

Driven by Savings

Currently, SMEs control around a 40% share of the RPA market, although this is set to increase in the coming years as more small firms wake up to the potential savings.

In fact, it can drive 25-50% cost savings by automating data intensive, repetitive tasks, and by improving the accuracy and efficiency of process execution, according to Dunlap. And in some insurance companies, where it used to take humans 11 days to turn around a claim, bots are reducing the time to pay a claim to six days or less.

Low implementation costs also often accompany RPA software. It’s estimated that RPA is expected to cost as little as one-third of the least expensive offshore labor, for example. The reduction in workforce cost is expected to lead organizations to adopt the technology over the next eight years. SMEs utilize a process-based approach to gain contracts that contain lower cost to program and manage the robots. 

According to the National Association of Software and Services Companies, RPA can already reduce operations costs as much as 65%, with ROI within as little as half a year.

“Small and medium enterprises apply cost savings achieved by deploying the RPA software to strengthen their innovative programs and accelerate new service and product offerings,” says Nehal Punia, senior research analyst at Grand View Research.

“When it comes to operating a small organization, the main focus is to keep the operations as lean as possible,” Punia says. This has led to small businesses using RPA “for transitioning from human workers to automation.”

A Productivity Push 

SMEs are also increasingly recognizing that automation can lead to a significant increase in productivity. RPA presents minimal business disruption, while bolstering reliability and service level improvements. Typical gains in speed and volume of tasks processed have been in the range of two to five times faster. Because of the increase in speed, RPA facilitates an effective increase in the capacity of the finance and risk organizations to process more volume of activity in the same period of time.

Automating mundane tasks can free up staff, allowing them more time to concentrate on more complex problem solving.FotoliaAutomating mundane tasks can free up staff, allowing them more time to concentrate on more complex problem solving – Fotolia

Dunlap explains a scenario in which, as a director of RPA, he devises a series of if/then statements, and each decision turns into a business rule that’s executed by a bot.

Since these bots can work 24 hours a day, seven days a week and rarely make errors, companies can see a surge in productivity for certain tasks, such as examining claims or processing vendor invoices.

In addition, virtual workers can be deployed 24/7, reducing latency and driving higher levels of productivity. As a virtual worker, RPA, with its software-based approach, replicates user actions to reduce or eliminate human intervention in mundane, repetitive, and manually intensive processes. Furthermore, with RPA, once you’ve built a robot that can do the work of a single employee, they’re instantly scalable to 100 or 1,000 employees.

In short, RPA is taking an inefficient process and making it faster. Frank Casale, founder of the Institute of Robotic Process Automation and Artificial Intelligence, explains that RPA can go an especially long way for managers who oversee departments. Without automation, he says a manager might spend just 20% of his time focusing on business priorities and 80% addressing distractions and putting out fires.

“RPA essentially flips that ratio, allowing managers to spend 80% of their time on what’s most important and just 20% of their time solving less significant problems,” he says.

RPA can also free up employees from mundane tasks and allow them to take on more challenging responsibilities within an organization and better serve customers. Dunlap says the movement is also carving out a niche for employees who have nearly perfected their routine tasks and now help design or build bots by determining the best business rules to make bots’ processes most efficient.

A More Sophisticated Future

RPA has become more intelligent over the years, enlisting artificial intelligence and advanced cognitive processing to understand content such as freeform text. “This opens up a whole new level of RPA, with remarkable applications that could help shape the future,” Dunlap says.

As the technology becomes more sophisticated, it also provides a window into market research for an organization, collecting massive amounts of data on things such as which parts of the population have to pay which types of insurance claims, or why travelers book specific seats on an airplane, Dunlap explains.

“With robots, you can log so many things and feed it into an artificial intelligence type of engine to gather insight,” he says.

While large corporations have up till now driven the rollout of the automation sector, SMEs will push automation growth in the coming decade. While large corporations have up till now driven the rollout of the automation sector, SMEs will push automation growth in the coming decade – Fotolia

Essentially, in a data-filled world, solutions like RPA truly take advantage of the treasure troves of collected customer data, and that information can be used to help make strategic business decisions and to leverage existing employee skillsets, identify consumer preferences and much more.

Jumping Over RPA Hurdles

As SMEs are expected to be increasingly drawn to RPA in the future, the process — though rewarding — will also come with challenges.

First, there’s the political concerns that accompany any indication of a robot in the workplace: Will humans lose their jobs? Once employees, and especially management, can get past these fears and recognize that the bots could free up employees for more challenging responsibilities, then apprehension is likely to subside.

Additionally, there are technical challenges that come with RPA. Dunlap reminds that managers must think of bots as humans.

“Sure, they don’t need time off and they won’t complain if they don’t have a window seat in their office, but you have to think of them as humans and remember to send them work,” he urges.

Then, you’ll have to factor in all the little things that would come with a real employee, which a bot will also need, such as giving them security access for certain websites or applications.

And then there’s the challenge of designing your bots effectively. “If you do your bots right, your bots can’t make a mistake,” Dunlap says. Often times, this involves limiting a bot from completing 100% of the business rules for a certain task. When uncommon or unique scenarios pop up, it might be better to route that question from bot to a human who can more effectively address the special situation.

Casale, from the Institute of Robotic Process Automation and Artificial Intelligence, says that many companies, on a quest to reduce some of the complexities of automation, such as reducing implementation costs and overcoming the lack of in-house RPA expertise, enlist a third party to help navigate the new terrain.

“Many companies are tapping into the goodness and power of advanced technologies like intelligent automation, but want to be sure not to get tripped up by the complexities,” he says, adding that third-party professionals can help build bots and often times, get them up and running more seamlessly and effectively.

While the RPA space is hot right now, the future is filled with even greater potential.

“Barely 10% of the marketplace has invested in automation, and this is just the beginning of the technology really taking off over the next 36 months,” Casale says.

As for the SMEs that will be drawn to automation over the next decade: It’s bound to be a worthwhile and rewarding ride.

RPA: You do the math

Rodney Dunlap - Senior director, RPA for insurance, Capgemini Rodney Dunlap
Senior director, RPA for insurance, Capgemini – © Capgemini

In insurance companies around the world, a claim examiner will sit at a desk, look up a claim and see if that claim matches the claim that came in over the last few weeks or months.

If it’s a duplicate, they deny the claim. If it’s not, they send it along for payment. About 11% of claims submitted to insurance companies are duplicates. On average, these claims are being processed by a human at 10 to 12 an hour, 70 a day and 250 a week.

Generally, the person completing these tasks makes $40,000 to $50,000 a year. Sometimes, there are errors. Maybe the examiner is tired, or bored, or busy thinking about the argument they had with their spouse that morning. Other times, the examiner is out sick or on paid vacation. The claim examiner, after all, is human.

Then, we bring in a robot to do the same activity faster without making any mistakes, because bots just don’t make errors. They work 24 hours a day, seven days a week, and we don’t have to worry about them leaving the job or asking for a day off.

They provide incredible throughput. A bot can process hundreds of claims per day instead of the 70 per day completed by a human. Let’s say it cost $50,000 to build the bot, and then $7,000 a year for licensing. Even for a small insurance company, the investment will be paid off in about nine months, and the company will see triple-digit ROI.

With improved quality, increased speed and impressive ROI, the bot is a welcome addition to the team—and the human whose task it replaced can now go on to address a larger priority, like helping with customer service or even designing and building future bots.

It’s a win-win for all, and likely the wave of the future for companies in many industries, such as insurance, hospitality, financial services and healthcare.

Making waves in water utilities

England’s water utility sector is undergoing its biggest shake-up in three decades with the introduction of competition for business customers, an £8.7 billion-a-year industry

England’s utilities sector took a momentous step forward in April with the liberalisation of the business water segment, a move that is driving existing providers to refocus their operations and integrate new technological solutions to create a more customer-centric business.

The shake-up is the largest change to the sector since privatisation nearly 30 years ago and has also triggered the launch of a series of entirely new operators seeking to disrupt the market, with several Scottish companies and new entrants being among the more than 20 firms awarded licences by the industry regulator.

The reforms, introduced in Scotland almost a decade earlier, have led established water utilities to spin off their business retail divisions in order to match the agility of new entrants, and sometimes join up with rival suppliers.

The split into separate wholesale and retail companies presents the incumbents with an opportunity to re-focus their strategy and shift into a competitive, more responsive mind-set.

With margins at just 2-4% – versus 8-10% in Scotland – operators will have little wriggle room to compete on price to woo England’s 1.2 million business water customers.

Instead, customer service will likely be the decisive battleground and digital technology the main weapon, as traditional suppliers transition from an era where the regulator pushed wholesalers to operate principally on maintaining a quality service to one where they must now also compete to retain clients and their market share.

Water suppliers who can offer customers a range of cutting-edge technological solutions such as new generation smart meters and big data water consumption analysis to help reduce consumers water bills could benefit most from the liberalisation.

“With wholesale now a separate entity, the retailers should ensure they provide a truly end-to-end customer experience that allows them to personalise the customer experience,” said Paul Haggerty, Vice President, Head of Operational Excellence Utilities at Capgemini Consulting.

“It’s essential they adapt at speed to the new market paradigm, because this market will consolidate.”

COMPETITION

Liberalisation allows businesses operating nationwide or regionally to source their water from a single retailer, rather than holding separate accounts with the wholesaler in each area, so there is a compelling reason to switch, and why 9,000 companies did so within the first week of deregulation.

Legacy companies face a tricky balancing act between retaining their customer base and devoting resources to recruit new business clients.

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“So far, we’ve found customers and potential customers, particularly multi-site customers, have been very proactive in approaching us about consolidating their water supply so that they can use a single provider,” said Lucy Darch, managing director of NWG Business (NWGB), the business water division of Northumbrian Water Group.

To help adapt to the newly competitive sector, her firm has installed Gentrack, a billing system used in Australasia where buying multiple utilities from a single provider is commonplace. In the UK, some utility providers sell bundled utility packages, which can be offered using white label partnerships.

“That’s what really attracted us, because we think that many SME businesses would like a bundled product, providing it is good value,” said Darch, whose firm NWGB is awaiting regulatory approval to merge with Anglian Water’s business retail division.

“Deregulating the business water segment is probably a prelude to competition in the residential sector – I think the demand is there from household customers for bundled utilities packages,” she added.

NWGB, which as of May had made a net gain of customers since the advent of competition, has also launched a new multi-channel customer service system, Genesis.

“Whether people are contacting us by phone, email or through our website, all their information will be available in a single place and the system will log their every interaction with us – whatever the medium, we’ll be able to see their full history with us,” said Darch.

“The system will recognise the customer and it will try to route the call through to the same member of staff that spoke to them previously. From a customer perspective, we’re trying to give an experience that is human and for the customer to feel they are known by us.”

This approach should avoid an all too regular frustration people feel when phoning a call centre of having to explain the same problem again and again as they’re passed from person to person in search of a solution.

“In a 24-7 world, people are looking for flexibility in how they connect with you,” said Capgemini’s Haggerty. “Can I go online? Can I use an app? If I call you, can I be presented with options that allow me to deal with my query without having to queue for a contact centre? How do you engage with me?”

The costs of enabling somebody to make an online payment, create a direct debit or make a website query, is negligible compared to speaking with a person in a call centre. Companies with a digital platform that enables them to expand and maintain customer service without recruiting significant numbers of extra staff will fare much better than those that must employ more people, whether that’s in a customer operations centre, credit and billing, finance, metering or elsewhere.

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Razor thin profit margins mean that companies are competing not on price, but on services to woo England’s 1.2 million business water customers. Credit: Fotolia

“Technology is a critical enabler for all retailers and it absolutely underpins our aim of delivering a right first time, accessible, seamless service for our customers,” said Sue Amies-King, Chief Executive of business water retailer Water Plus, a joint venture between United Utilities and Severn Trent Water.

“In a competitive market with low margins, retailers need to be operationally excellent, which requires flexible scalable systems to be able to respond to market developments, a digital first strategy so customers can self-serve and innovative use of data analytics to understand and predict customer behaviour.”

Water Plus has invested in various new systems to leverage Microsoft Cloud capabilities to create a dynamic, agile infrastructure that includes desktop, voice, network and collaborative tools using Office 365 and Microsoft Dynamics 365 CRM, she said.

“This means we can offer a wide range of flexible billing options and can respond quickly to changes in the new water market,” said Amies-King.

“Ultimately there will be a move to online personalisation. For example, using data to compare similar customers’ consumption in a ‘customers like you use less water’ kind of way flagging opportunities to reduce usage.”

SAVING WATER

Retail water companies also hope to win customers by helping them reduce their consumption and lower bills.

“There are a vast number of technologies that can be used and have been developed from atomising taps, aerated shower heads through to leak detection to automated meter reads,” said (Lord) Rupert Redesdale, chief executive of The Water Retail Company (TWRC), a new market entrant.

“Many of these technologies have been used for years although few have been rolled out to any scale by the water companies as water efficiency has not had the attention it should have.”

TWRC’s focus will be on analysing meter data to identify abnormal usages that could be a leak or water cisterns overflowing, for example.

“Understanding the data and installing automated meter readers (and) smart meters will allow The Water Retail Company to find leaks and address the problem rather than just charging for an increasing water bill,” said Redesdale. “The aim is to reduce the amount customers use year-on-year and although we will be paid less we will retain happy customers.”

Water retailers now have the technology to provide customers with detailed intelligence on their consumption patterns. For example, a hotel could be shown where its various demand points are located, such as the toilets, sinks or refrigeration units. Or a company operating from multiple premises could learn which part of a particular site uses the most water, and why.

“The retailer can show the customer where they can make significant savings, but if you’re just providing a bill that says the total monthly charge you don’t have any level of intelligence,” said Capgemini’s Haggerty.

Technology can also improve retailers’ efficiency, boosting margins.

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Water suppliers offering cutting-edge technological solutions, such as smart meters and big data consumption analysis, could benefit most.
Credit: VIA

“Data analytics are essential to ensure we have the most efficient approach to our processes from meter reading, to billing customers, to cash collection. This helps reduce the cost to service customers, which is essential for a retail business,” said Water Plus’s said Amies-King.

“Regular analysis of customer behaviour can help reduce bad debt by predicting payment behaviours, customer contacts and, ultimately, the potential for payment default.”

NEWCOMER ADVANTAGES

In the electricity market, new entrants had no reputational hangover from existing customers and positioned themselves as different to the old suppliers, providing a digital service to allow people to go online and swiftly and fairly seamlessly switch supplier.

Incumbents, be it in water or electricity, may have established a separate retail division, but customers will not see these as fundamentally different from the wholesale arm.

“Many of the new retail arms of incumbent wholesalers are having problems servicing the needs of the customers in their area, which is only to be expected with the creation of a new market,” said TWRC’s Redesdale.

“(We) will seek larger customers, many of which operate multi-site operations, and work to audit sites, change infrastructure such as taps, shower heads and urinals, detect leaks and look to more capital intensive systems such as water recycling or rainwater harvesting.”

The highest performing companies for customer satisfaction put customer engagement at the core of their operations, engaging through various channels that are both service channels and a means to build the brand, using tools such as social media and online.

This creates a brand perception of being new, modern and able to provide a different level of service to what customers previously experienced.

“There will be companies that lose market share and will exit,” added Capgemini’s Haggerty. “Netflix didn’t cause Blockbuster’s demise. Kodak did not get put out of business by Apple.

“These companies failed to adapt to a different level of service. It’s a different, disruptive market and the common denominator is that digital changed the game to engage, acquire and service customers while also lowering costs.”

Customer is king in new water era

paul_haggerty.jpg Paul Haggerty, Vice President, Head of Operational Excellence Utilities at Capgemini Consulting

The liberalisation of England’s water utilities sector represents the biggest change to the industry since privatisation nearly 30 years ago.

Wholesale providers will continue to own and maintain the pipes, treatement works and other infrastructure that deliver and treat water and waste water, but their business retail divisions have been spun off and will compete against new entrants.

Margins are already tight at 2-4%, so price alone is an unlikely differentiator. Instead, technology-enabled customer experience will determine which retailers prosper and which fail. Paul Haggerty, Vice President, Head of Operational Excellence Utilities at Capgemini Consulting

The focus for retail divisions of the incumbent suppliers will first be on retaining customers, while new entrants should prioritise speed and responsiveness to win market share.

Consider if you will, the electricity market – some providers might take weeks to provide a potential new customer with a contract, whereas others could do so in a matter of hours. What sort of impression does that give? It’s perception as well as the price and quality that matter. Simply put, the majority of the incumbent suppliers aren’t geared up for that level of responsiveness.

If you have a digital platform that enables you to expand your customer base and maintain customer service without recruiting significant numbers of extra staff, you’ll fare better than a company that must service demand thorugh increased headcount, whether that’s in a customer operations center, credit and billing, finance, metering or elsewhere.

Incumbents may have established a separate retail arm, but customers aren’t going to see these as fundamentally different to the parent company. New entrants dont suffer the “baggage” of such an inherent reputation. They haven’t operated like a wholesaler. They’ve not had a captive audience and are fully geared towards responsive customer service.

The highest performing companies for customer satisfaction put customer engagement at the core of their operations. They engage through a host of channels, using such channels both for service and a means to build the brand, using tools like social media and online self service.

Who wouldn’t want to go to an organisation that could provide you with choice, lower costs and a higher level of service?

In the Driver’s Seat: Steering Business Agility in the Enterprise through a Sophisticated Digital Ecosystem

The enterprise market is undergoing a sea change in the current digital climate. Organizations are actively adopting digital technologies such SMACT (Social, Mobile, Analytics, Cloud and Internet of Things) while addressing concerns around cyber security. Meanwhile, a new demographic of customers is demanding next-generation experiences that push the envelope in terms of customer engagement. The evolved enterprise environment calls for sophisticated business platforms that deliver on agility and speed-to-value. But current business platforms just don’t scale up.

The enterprise clients that I interact with are typically invested in first (mainframe platform) and second (client – server and internet) platforms. These clients are now looking to find new digital solutions to accelerate market expansion and cater to customer demands in a mobile-cloud world. All this, while driving new products and experiences that differentiate themselves in the marketplace. While most sectors have been active in their adoption of digital, certain sectors such as manufacturing, consumer goods, retail, financial services, telecom and media have been more aggressive in their adoption strategy, using digital to advance their business models and establish next-generation user experiences, to stay ahead in the competition.

The challenges are of gargantuan proportions, especially given the complex business issues that surface in the course of adopting digital. This is where Capgemini’s cohesive partnerships around Digital Transformation (DT) thought leadership, startup and boutique aggregators, DT leading research institutes, sector and industry forums along with key technology partners, provide best-in-class digital solutions that drive business agility.

There is immense value in the digital ecosystem, which accelerates the client’s journey toward innovation and market differentiation. An increasing number of our clients want a full outcome-based pricing model while participating in the risk and rewards associated with it. This has been an impetus for Capgemini, in terms of playing to our strengths in key sectors where we have the assets and market credibility coupled with deep process expertise while owning the use cases we want to be known for in the market place. The combination of Capgemini Group assets and IP, together with the digital ecosystems of partnership powers the digital solutions for creating a business agile enterprise.

One of Capgemini’s digital end-to-end solutions comprises a partnership between Capgemini Group and the SAP Customer Engagement and Commerce (CEC) division. The partnership aims to address the critical business imperatives of simplicity and speed-to-value that clients demand today in areas such as experience design, marketing and engagement activation.

The SAPPHIRE NOW event showcases some of our innovative solutions as a result of this partnership. Meet with us at SAPPHIRE to accelerate your initiatives in capturing the customer journey. Click here to read more about Capgemini’s offerings and presence at SAPPHIRE.


Big Data & Analytics – Your Practical Yoke

More and more organizations are taking advantage of tools and services that bundle different types of data. Very pragmatically, Big Data is about the profitable analysis of information sources that an organization wasn’t previously tracking.

DATA first: Doing All Things Analytically
Never juggle with Big Data and Analytics just because it feels fashionable to do so. Big Data Analytics definitely is an amazing discipline, however the techniques are instrumental. Your Data Science Office should always focus on DATA first: on “Doing All Things Analytically.” The Science part just isn’t the Big Science or rocket science that business executives might fear it is. Probably, you could not even afford such a money-squandering approach!

Anything Science just means Smart
In 1911, Frederick Winslow Taylor published his historic Principles of Scientific Management. Originally Taylor used some profane terms like “shop management” and “process management.” This serves to show the sloppy use of “Science” as a catch phrase. Today, we speak of “Smart Whatsoever” instead, and indeed, “Smart Data Office” would be a more appropriate name. Always bear in mind that businesswise, anything so-called Scientific just means Smart: clever, new perhaps, but in any case completely common-sense.

Beware of Big Science
Of course Big Science is an ancestor to Big Data but Big Data is not its heir! That’s what I tell executives all the time while stressing to beware of intriguing but false analogies. For instance in their December 2012 wrapup of top articles, CIO.com presented the following shining Big Data examples: the U.S. National Weather Service; DNA Sequence Analysis; the U.S. National Archive and Records Administration; Optimal Wind Energy Turbine Placement and Maintenance; the U.S. IRS Compliance Data Warehouse; Project Artemis Medical Monitoring by IBM and the University of Ontario; Perimeter Intrusion Detection by TerraEchos e.g. for the U.S. Department of Energy; and NASA’s Human Spaceflight Imagery Collection, Archival and Hosting.

For sure these qualify as what CIO.com calls “eight real-world big data deployments in a variety of industries” but all are expensive Big Science related innovations and shouldn’t be mistaken for practical business role models. In a business environment, as a rule of thumb one should always be able to reduce expensive to efficient and innovative to effective, in accordance with the laws of business economics.

Your Practical Yoke
That’s what I tell customers: DATA first, meaning “Doing All Things Analytically,” plus sure, by all means go leverage new data sources. Subsequently, Big Data may come soon enough. Or perhaps it never will – lucky you! And yes, you may need new tools, skills, vizualizations, extra cloud functionality, et cetera. Just let your Smart Data Office and IT department figure that out together, while you, as a responsible business executive, should do your utmost to grasp the relevance. With such an approach you’ll be able to explain to anyone why data-driven analytics serves as your practical yoke: a simple tool – perhaps a little heavy at first – but certainly worth the burden.

Improve your odds with Big Data & Analytics solutions
No surprise that many organizations have not yet properly embedded Big Data in their operations. Only 13% have achieved full-scale production and a mere 27% and 8% told us their initiatives were “successful” or “very successful”. That’s what we found.

Go prepare yourself for the next DATA step and download our free report Cracking the Data Conundrum. How Successful Companies Make Big Data Operational (Capgemini Consulting, January 2015)

 

Originally published on SogetiLabs.