Autonomics Driving Down Pricing in IT Service Delivery, Alsbridge Data Shows, but Total Cost Impact and Benefits Remain Uncertain

Operational Data and Business Cases Limited as Early Adopters Drive Market

Alsbridge Inc., a benchmarking, sourcing and transformation advisory firm, today released a report showing that autonomics solutions are driving down costs of IT service delivery. The report also concluded, however, that the ultimate economic impact and long-term benefits of emerging intelligent tools remain difficult to gauge.

“Our ProBenchmark^® market pricing data shows that autonomics solutions are already having a sizable impact on costs across service towers,” said Howard Davies, Alsbridge Managing Director. “However, operational data is still in its infancy, and business cases and detailed benefits analyses are only recently beginning to emerge. This presents a challenge in terms of building precise benchmarking models and developing cost/benefit scenarios with confidence.”

Apart from a scarcity of data, developing a consistent formula to calculate autonomics is problematic. For one thing, the impact of autonomics varies by enterprise maturity. “The companies that stand to benefit most and fastest from autonomics are those that are either most advanced in the use of ITIL and process automation and, conversely, those that are least mature,” said Davies. “Advanced companies have laid the ground work and are well positioned to take the next step to autonomics, while the least advanced can leapfrog and replace inefficient processes with autonomics.”

Moreover, the impact of autonomics varies by tower, which therefore affects the long-term total cost savings projections of autonomics on any given enterprise.

“Depending on the labor contribution to service delivery the autonomics impact can range from modest to substantial,” added Davies.

Finally, the up-front costs of implementation, transition, training and support must be included in the total cost calculation.  Alsbridge data shows that autonomics requires higher costs in the early stages of an autonomics initiative that are offset by greater savings later in the contract.

“As with the early days of Remote Infrastructure Management, autonomics has the potential to provide substantial cost savings over multiple years,” said Davies. “However, an upfront investment is required to establish the tools and rules for automation.”

These challenges notwithstanding, Alsbridge anticipates that autonomics will gain significant traction in the coming year.

“As more deals come on line and as we continue to integrate autonomics metrics into our analytical toolset, we’ll be better positioned to benchmark and forecast the costs and benefits of autonomics,” said Davies. “And, as client interest grows and success stories emerge, we expect to see a virtuous cycle that builds confidence and momentum.” 

The new Alsbridge report, titled “Robots for Sale: Gauging the Impact of Autonomics on IT Services Pricing,” examines the state of autonomics and Robotics Process Automation (RPA) technology, potential applications for enterprises and providers and issues and challenges/ Authored by Alsbridge Director David Perara, the report includes data from the Alsbridge ProBenchmark^® database showing current and projected impacts of RPA solutions.

In addition, Alsbridge is a Supporting Sponsor of Automation Innovation 2014, a conference that will examine the emerging field of autonomics and focus on its implications for the outsourcing industry.  Organized by the Institute for Robotic Process Automation (IRPA), the one-day event will be held in New York City on December 10^th.

About Alsbridge Inc.

Alsbridge is a management consulting firm that helps companies reduce costs and enable their businesses by optimizing the way they work with their vendors. With over 200 consultants on four continents, Alsbridge has been a trusted advisor to over 40% of the Fortune 500 and currently advises over 200 clients a year on over $11B in spend. This gives us tremendous market insight and deep benchmarking databases that our experienced consultants use to help clients engage the optimal vendors for their situation, negotiate best practice terms at fair market prices, and improve the way they govern vendor relationships. Alsbridge clients utilize the most cost effective and value added sources globally for IT infrastructure services, network carrier services, hardware and software, application support and development, business processes and cloud services.

Media Contact:

Alex Kozlov, Alsbridge
alex.kozlov@alsbridge.com

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