29 Nov 2019

When it comes to the robotic invasion of capitalism, there are two schools of thought—one positive and one negative. Predicting job losses on a scale that would make any cost and efficiency gains meaningless, the naysayers fret about the coming of “robo-geddon.” Alastair Bathgate firmly sits in the other camp. He isn’t a disruption denier. But he doesn’t believe that corporate bots will go down in history as ruthless terminators of economic stability.

Some jobs are destined to disappear, Bathgate freely admits. But as a former efficiency expert known for a blog entitled “Confessions of a Wino,” he sees many of today’s jobs in the same way that he sees unappealing bottles of crushed grapes, meaning some are not worth keeping around. And when all is said and done, he argues the workplace robots being developed today will mostly be remembered as freedom fighters who unlocked human potential by liberating us from mind-numbing and time-consuming tasks.

To be fair to the Negative Nellies, Bathgate’s opinion on this topic isn’t exactly objective. After all, as co-founder and CEO of Blue Prism, a Warrington, U.K.-based Robotic Process Automation (RPA) firm, he runs a leading supplier of the world’s so-called digital workers. But that also means Bathgate’s perspective on the outlook for human jobs is based on actual experience in workplace automation.

The movies can be blamed for a lot of what society thinks about robots, not to mention anyone in charge of an organization that builds them to do things better than humans. For example, Seiuemon Inaba, former head of Japanese factory automation firm Fanuc Corp., garnered comparisons to Ian Fleming’s Dr. No. But as Fortune noted in 1987, the nickname actually fit because Fanuc’s army of yellow industrial robots was built in a secretive complex hidden in a forest at the foot of Mt. Fuji, where Inaba would issue orders from “a cavernous conference room with a huge electronic projection screen and a stunning view of the snow-capped peak, a yellow helicopter on a nearby landing pad, and pretty yellow-smocked young women who bow waist deep and trot off to execute their master’s soft-spoken commands.”

Bathgate, 55, doesn’t fit this robot overlord mold, and not just because his company doesn’t build physical robots that look like amputated limbs off Autobots like Bumblebee in the Transformers movie franchise. Blue Prism’s CEO comes across more like an accountant, which makes sense considering he once studied to be one at Manchester Polytechnic.

While training to be a number cruncher, Bathgate quickly realized that not all work is created equally enjoyable. Hoping to find something more exciting, he switched his major to management. Before getting an MBA at the University of Leeds, he worked in financial services, consumer goods, and manufacturing. During this period, he spent some time using a stopwatch to monitor productivity of factory workers in the printing industry while it was being disrupted, an experience that prepared him for being labelled a purveyor of workplace doom after founding Blue Prism. “It makes you fairly Teflon-coated,” he told The Evening Standard in 2018, recalling how plant workers would cheer with glee whenever he was fouled during after-work games of five-a-side soccer.

After upgrading his business education, Bathgate spent eight years in process improvement at Bradford & Bingley Building Society and four years delivering software solutions to enterprise customers like Barclays Bank at Lynx Financial Systems—where he noticed a lot of potential productivity gains being left on the table because overworked IT departments served as a bottleneck to digitalization. This awakened his entrepreneurial spirit. “I was sick of making money for other people,” Bathgate explained to Authority Magazine, adding, “I thought, ‘Why shouldn’t I change the world myself?’”

Being smart enough to know that having an idea is different from having what it takes to execute it alone, Bathgate joined forces with Dave Moss, a software design colleague from Lynx Financial Systems, and together they set out to create a British technology champion by developing an easy-to-deploy technology that would enable an enterprise’s various business units to automate themselves.

With Moss on board to lead product development, Blue Prism was born in 2001. Back then, the head office was a back bedroom in Bathgate’s house that was repainted to reflect the nascent venture’s name (or at least mostly repainted—according to company lore, the two partners ran out of paint and decided to move a server to save buying another can).

After building up an impressive roster of blue-chip customers and partners, the company went public on the London Stock Exchange’s AIM market in 2016, raising £21.1 million at a stock price that valued the company at £48.5 million. Stock options were granted to everyone on staff at the time, which transformed about 70 pre-IPO employees into paper millionaires as initial investor enthusiasm for the first pure-play RPA venture to go public pushed Blue Prism’s market value over £1.3 billion. The company’s market cap has since retreated to about £1 billion, but the all-for-one-and-one-for-all culture that the flotation created remains palpable. In fact, any journalist asking about red ink within earshot of Blue Prism people drinking beer risks being tarred and feathered.

Since going public, Blue Prism has continued to expand globally, increasing its customer base from 74 to about 1,670, while the employee count jumped from about 70 to over 1,000. In 2018, the company’s revenue increased 125 per cent to £55.2 million, but losses also widened to £26 million, up from £10.1 million in 2017, thanks to ongoing investment in growth. To maintain momentum, Britain’s emerging tech champion returned to public markets for additional funding in early 2019, raising another £100 million via a new stock issue. The company also made its first strategic acquisition in mid-2019, picking up U.K.-based Thoughtonomy for £80 million to better target mid-tier customers.

In the first six months of fiscal 2019, Blue Prism generated £41.6 million in revenue and increased its customer base by one third, while posting a loss of £34 million for the half-year period. At press time, the company had not yet reported annual results for its latest fiscal year ending Oct. 31. But in November, it reported expecting to enter 2020 with £74 million in cash, along with a record order book, after adding a total of 685 net new customers in fiscal 2019, when annual revenue was reportedly at least £98 million.

Across the pond, Blue Prism is already celebrated for being what Mail on Sunday columnist Ruth Sunderland calls a rare British beast, which she defines as a great business success story run by an “average bloke” worthy of respect. But the road to sustainable profitability includes challenging terrain, as Blue Prism faces ever-increasing competition from a slew of players hoping to lead the convergence of traditional RPA and AI components such as text analytics, conversational intelligence, and machine learning. And this competition includes New York-based UiPath and San Jose’s Automation Anywhere, which both have raised hundreds of millions of dollars (although money in the bank didn’t stop UiPath from cutting about 400 jobs in October).

The world’s leading software companies are also going to play a role in shaping the future of the market, which still has to prove that the convergence of AI and RPA can live up to its hype. That said, Blue Prism clearly stands out as an industry pioneer, not to mention one of the top players to watch, in a market projected to be worth about US$4 billion by 2025.

In this Ivey Business Journal interview, Bathgate talks to editor Thomas Watson about the convergence of AI and RPA, why digital workers come in peace, the history of Blue Prism, managing growth, and what red wine he thinks will go down best the day he toasts profitability.

“I grew up in Manchester, so the rumor is that I named Blue Prism after my football team’s colours, since Manchester City wears blue.”

Ivey Business Journal: What was your first job and what did it teach you?

Alastair Bathgate: My first real job was as a student accountant trainee. I got to the end of my first year of studies at Manchester Polytechnic, and training to be an accountant taught me that I didn’t want to be an accountant. I switched my studies to business management, and that ultimately led me to the enterprise software world, which led to the creation of Blue Prism.

IBJ: Can you briefly describe the history of Blue Prism?

AB: Sure. Blue Prism was founded in 2001 to augment existing human talent by democratizing workplace automation. I launched the company with David Moss, our chief technology officer, after our experience delivering enterprise software to financial clients in the 1990s. It opened our eyes to unmet automation needs. Back then, IT departments focused on big-ticket projects, leaving a lot of productivity improvements on the table. So, we set out to break that cycle with a business-led solution that enabled scalable automation of clerical back-office processes to be done directly and cost-effectively by business units—but in an IT-endorsed and controlled environment that maintained data security and transactional integrity while meeting regulatory compliance requirements. The result was the creation of Blue Prism’s digital workers that do exactly what they are programmed to do, exactly the same way every time, with the ability to report accurately why something was done the way it was done long after it was done. That kind of error-free worker is super, super helpful, especially in regulated industries such as financial services, insurance, healthcare, and the public sector.

IBJ: What’s the story behind the company’s name?

AB: Well, I grew up in Manchester, so the rumor is that I named Blue Prism after my football team’s colours, since Manchester City wears blue. Perhaps that theory is not entirely without foundation. But blue is also a reassuring professional colour, which conveys integrity. And that’s one of our core values. The prism part was intended to convey the fact that we sell technology. Although we are a business-friendly technology company, at the end of the day, our customers are still buying software.

IBJ: Can you elaborate on what you mean by business-friendly technology?

AB: It’s a paradigm shift since we developed a coding-free form of software that allows automation projects to get done without ever sitting on the long list of tech projects that businesses want IT departments to complete. In other words, our technology empowers non-IT employees to train software robots to do things that make human workers more productive and frees them to focus on more meaningful work.

IBJ: So, Blue Prism was launched to provide an IT solution that helps business units automate themselves, maximizing organizational resources without straining the system. And this created what is known today as the RPA market, right?

AB: Yes. We coined the term Robotic Process Automation because we essentially started out providing companies with software robots that can be trained to do rules-based tasks. Over the years, the digital workforce we provide has allowed customers to return hundreds of millions of labour hours back into their businesses. But the pain point we address today isn’t limited to attacking back-office inefficiencies. Thanks to intelligent automation—the combination of RPA with AI and cognitive capabilities—the nature of the tasks that digital workers can execute has expanded exponentially. We now have what we call “connected-RPA,” which aims to help organizations digitally transform themselves, ensuring human employees and software robots work together effectively to enable productivity, improve service, and stimulate growth.

IBJ: What do you mean by connected-RPA?

AB: It is the unification of our intelligent RPA platform with advanced technologies and a community of users who empower each other to create remarkable automations. It’s all about unleashing the creativity of an organization’s digital-savvy employees by giving them the power to invent and swiftly develop new disruptive services using an advanced digital workforce.

IBJ: In big-picture terms, where is all this going?

AB: We’re moving from humans teaching digital workers to having digital workers learn by watching humans, or even digital workers that learn directly from an organization’s systems themselves.

IBJ: What’s the biggest misconception about your industry?

AB: That it’s going to kill human jobs. I think that’s completely wrong.

IBJ: Didn’t you predict call centres are going to go the way of the typing pool?

AB: You’ve done your research. But my point is that losing mundane jobs isn’t going to be the end of human employment. Today’s organizations are lean. That’s been done. What we do has implications for education, and for the way we organize and think about work. But it is still mostly about improving customer service and changing work for the better, not putting people out of work.

IBJ: Can you offer an example?

AB: Sure. Before we worked with Telefónica, the company had about 70 people working on initiating new phones out of an offshore centre in India. Back then, in order for the company to get a new phone up and running on its network, these workers had to receive a new phone notification and then go through a relatively simple process, entering basic information. But because of the processes involved with getting this information and accessing the network, the best promise the company could offer customers was that their new phones would be live sometime within 24 hours. After automating the process with Blue Prism, around 50 employees no longer needed to initiate phones. But that didn’t put them out of work because Telefónica had a backlog of other work waiting for resources that they didn’t have to spare. So, automation led to more work getting done, not a massive cut in human resources. Meanwhile, new customers were walking away from stores smiling with new phones that worked, rather than walking out with a sad face saying, “I bought this new phone, and I can’t even call my mum.” That improvement in service is as important as the labour savings. In fact, it is more important.

IBJ: So, you’re essentially saying that it is a gross misconception to think the growth of RPA is all about customers investing in automation in order to operate with slightly fewer people.

AB: Right. Our industry is driven by organizations asking: “What are we trying to achieve as an organization that we can’t do right now?” and then we enable them to do it by using digital workers where human workers have serious limitations. An airline customer, for example, uses our digital workers to monitor free cargo space in passenger aircraft so it can be used for moving revenue-generating freight. Instead of flying planes with empty space, digital workers help the airline keep an accurate account of available space and communicate it to cargo salespeople, even as people change flights and check their bags last minute. In this case, everybody wins. Revenue increases. Customer freight moves quicker. And the achieved efficiency has green implications as well.

IBJ: When Blue Prism went public, one of your stated goals was to build a British tech champion. Is that still a major motivation?

AB: It matters less today than when we started. We are still very proud of our roots, especially since there aren’t a lot of British tech success stories out there, but where we started doesn’t define us. We are now a global company with something like 40 per cent of our revenue coming from North America and significant operations across Asia and other regions.

IBJ: You raised another US$100 million early this year, but you have some well-funded competitors. So, what is your firm doing to lead the convergence of RPA and AI?

AB: Rather than talking about putting a robot on every desktop, we focus on the enterprise space, and we are generating cash that we’re reinvesting every day, specifically to meet the needs of customers in this space, focusing on bringing them back to nimble. Last year, as part of our connected-RPA vision, we rolled out the Blue Prism Digital Exchange, which is an intelligent automation marketplace and online community that provides a “one-stop shop” for easily accessing and downloading the latest tools related to artificial intelligence, machine learning, intelligent document processing and cloud capabilities. We now have hundreds of applications and assets available with just a few clicks of a mouse from key partners like Appian, Google, Microsoft, and SAP. In addition to pooling the capabilities of multiple vendors to deliver a best-of-breed approach to automation, we are broadening and strengthening our portfolio with cloud offerings via our recent acquisition of Thoughtonomy. It gives us a turnkey SaaS offering, helping enable an on-demand digital workforce supporting more markets and mid-tier enterprises worldwide. Blue Prism also has its own AI lab based in London, where we’ve brought together PhD-level research scientists and engineers across multiple AI fields to create a world-class brain trust looking at the future of work and spearheading developments of the company’s intelligent automation capabilities. Building on our broader partnerships with leading universities, this lab also extends our collaboration with academia.

“I can envision executive-level robots. Why not? Think of all the time that typically goes into gathering, analyzing, and discussing the data required for some decision making, which often just ends up as just a gut call anyway.”

IBJ: You mentioned Blue Prism’s recent acquisition of Thoughtonomy. With the rapid growth of this market spawning dozens of RPA plays, is significant industry consolidation inevitable?

AB: Blue Prism’s growth strategy will always be based on what’s best for our stakeholders. So, we don’t rule anything out. Looking at the greater market, many people think some consolidation is probably inevitable with the number of players in the space. The big question is who will drive it. Will it be the Microsofts and IBMs of the world moving to acquire a pure play? Or will a pure play move to merge or acquire another pure play?

IBJ: Describe your management style.

AB: I try to empower people to act. Personally, I’m totally comfortable with trusting others, and as a CEO, I have little choice. I mean, if I got involved in every decision, then my head would explode. That said, with the level of growth that we’ve experienced, our house has to be ordered and so my management style has become more structured. When you’re under 100 people, you don’t need that. In fact, structure can be obstructive. When you haven’t quite proven your business model, you need a certain level of anarchy inside the organization to be able to react to events. So early on, everybody had their fingers in all pies and things happened super quickly. But growth requires bringing it all under more control. That’s the kind of change we’ve come through, but we still try to empower people to act. Part of that is through automation. Very simple things—like issuing a license key, for example—can create a complex process for some reason. So, we try to button that down using our own digital workers to help us with process. In other words, we’re eating our own dog food, or drinking our own champagne, to keep our people free.

IBJ: How much of your time goes into executive team building?

AB: A fair amount recently. In fact, over the past 18 months or so, pretty much everyone on my executive team aside from co-founder Dave Moss is new to their position. That’s also a result of our considerable growth. It’s important to recognize the need for different types of leaders as you move forward. And so, I’ve spent some time rebuilding the tier of leaders beneath me as I strive to focus less on day-to-day operations and more on being the organizational figurehead focused on the big picture and managing relationships with partners and investors, that kind of stuff.

IBJ: That leads directly to the next question. We’ve seen factory automation, and we’ve seen automation move from the back office to the front office. So, can you envision some future in which the C-suite has a digital executive?

AB: That’s an interesting question. I do wonder whether the future will have a totally digital organization, maybe with one human for regulatory purposes. I can remember a funny guy I was working with years ago speculating about the future of data-centre staffing. The ideal model, he suggested, was a totally automated operation overseen by a human and a dog. The human was there to feed the dog. The dog’s job was to keep the human away from the computer equipment. But that joke isn’t just funny anymore. I don’t think we are ready to have dogs keep humans away from decision making. But I can envision executive-level robots. Why not? Think of all the time that typically goes into gathering, analyzing, and discussing the data required for some decision making, which often ends up as just a gut call anyway. Obviously, there are limitations. But in some areas of decision making, I can envision a digital executive authorized to analyze all the available accurate information that exists inside and outside an organization and then issue execution commands to the appropriate workers—human or robotic. As opposed to winging it, or wasting time on briefings or discussion meetings, the digital executive would make a purely data-based decision. That would be a great application of AI, wouldn’t it?

IBJ: After reading about your blog “Confessions of a Wino,” I had a look and saw the last post was in 2014. Is that because of the workload that comes with running an international public company?

AB: Well, I still taste a lot of wines and find time to post on Vivino, the world’s largest online wine community. That said, following our IPO, Blue Prism went from about 70 people to more than 1,000, and it takes focus and time to address the challenge of building the structure and processes required to support that kind of international growth. Thanks to our expansion, I’m on a plane most days. But workload isn’t the only thing that has changed in my life since founding Blue Prism. My daughter was born in 2012.

IBJ: How do we prepare your daughter’s generation for the future of work?

AB: Education is behind, but while that’s a challenge, it isn’t a new one. As the French say, “The more things change, the more they stay the same.” That said, things are changing faster than ever before, so education policy needs to adapt faster. We’re trying to play a part in that with programs that provide opportunities for people to experience emerging technology while they’re still in school.

IBJ: So, what should educators focus on when adapting?

AB: I like the quote that says, “Education is not the filling of a pail but the lighting of a fire.” So, when I think about my daughter’s education, I don’t want it to be about trying to guide her in any particular direction. To prepare her generation for the future, education needs to focus on inspiring imaginations and teaching people to think for themselves while providing people with tools that offer career flexibility.

IBJ: In the early days of Blue Prism, you moved a server to save the cost of buying a can of paint. When entertaining neighbours who didn’t necessarily share your passion for wine before your company’s IPO made you wealthy, you were careful not to spoil them with pricey wine when a decent Sauvignon Blanc under 12 pounds a bottle would do. So, I am wondering whether your spending habits have evolved with success?

AB: Well, to be honest, I opened a bottle of Cristal to toast Manchester City’s success this year. And I admit it is nice to celebrate that way after building a company made me a few quid, but my tastes and values have remained relatively the same as before our IPO. I’m not a Ferrari kind of guy.

IBJ: After you made headlines by providing every Blue Prism employee at the time of your IPO with stock options, you noted the move was (a) only fair, because your employees created the value in question and (b) good management because it encourages employees to think and act like owners. In other interviews, you have advised other founders to stay true to their original vision, see impatience as a virtue, avoid investors until after a market opportunity has been identified and you are ready for expansion, and hire people based more on cultural compatibility than talent. What other advice do you have for entrepreneurs hoping to build global companies?

AB: Remember what’s important. Earlier this year, I was back in the United Kingdom, visiting London when Manchester City and Watford were playing at Wembley in the FA Cup Final. I am a football fan who grew up in Manchester, and I could have gone to the game. But I travel a lot, and I had one free day with my wife and daughter before flying out early Sunday for Blue Prism World in Orlando. So, I could’ve said, “Hey, we’ve got one day together. Let’s spend half of it at Wembley watching Manchester City.” But I stayed married instead.

IBJ: What wine will you open to toast the day Blue Prism celebrates a full year of profitability?

AB: Something Bordeaux, really old, an ’82 or 1970. Maybe even a ’61.


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This content was originally published by Ivey Business Journal. Original publishers retain all rights. It appears here for a limited time before automated archiving. By Ivey Business Journal

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