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Sourcing Decisions: The Race is on to Make Automation Work in Canada and Beyond

Improving outcomes in digital transformation, robotics process automation (RPA), and technology vendor management were some of the core themes at the first edition of Sourcing Decisions 2017, which kicked off this morning in Toronto, Canada.

david watt
David Watt, Chief Economist at HSBC Canada

Opening the proceedings was keynote speaker David Watt, Chief Economist at HSBC Canada, who delved deeply into the close relationship between Canada and the United States, sharing some insight into the strengths and vulnerabilities of the country’s economy.

Watt’s comprehensive analysis combined topics such as the local housing market, the valuation fluctuations of the Canadian dollar, and Canada’s need to focus on both R&D and the development of small companies, especially if the country intends to evolve more rapidly in the innovation space.

The AI and RPA Race

Following Watt was the first panel of the event, Dollars and Sense: Robotic Automation and Artificial Intelligence, in which the same topic of innovation strongly resonated.

During the talk, it became clear that some of the proposed barriers to trade being pitched today may create a state of lackluster growth, but will inadvertently open up new opportunities for local companies to innovate, as well as a necessity to develop more rapidly.

Moderated by Linda Tuck Chapman, President at Ontala & CPO Emeritus, panelists balanced the benefits and risks of implementing AI and RPA in this contemporary business environment.

Discussing the reality of AI, Fabiano Rosa, Consultant at PwC Canada, touched upon the importance of implementing it efficiently and effectively, stating that big banks like Goldman Sachs and JP Morgan are already pushing for it as they look to both enhance their services and make a substantial saving on low-value processes.

“I’ve seen crazy numbers,” he said. “Savings in the range of 10-20% is achievable, but you need volume to make it a reality. If you’re looking to save money, there is no point in implementing AI or RPA for a subset of activities that don’t have sufficient volume.”

linda tuck chapman sourcing decisions 2017
Linda Tuck Chapman moderating the RPA and AI panel at Sourcing Decisions 2017

Turning to panelists William Ramos, Vice President Finance and Regulatory at Enbridge, and Ryan De Borger, Head of Citi‘s Enterprise Supply Chain (ECS) Canada and Global Supplier Relationship Manager, Linda Tuck Chapman framed the discussion around starting in shallow water with RPA before attempting to jump in at the deep end.

“It’s common for the first RPA deployment for financial firms to be in sourced pay, so the procurement organization is getting a foot in the water before deploying this new tech across the entire business, which is a risk, because it’s not as easy to recover from possible negative impacts on the customer-facing side of the business,” she said.

Risks and Awareness

The reality today is that large organizations do things differently in their many different departments, so it’s hard to get people across the company to agree.

Fabiano Rosa, Consultant at PwC Canada

“We need these technologies as they provide the ability to consume and use information to its full potential, but if people don’t use the technology, there’s no point,” said Rosa. “This is why you need to find out exactly what people want from the tech before implementing it, so look at proofs of concept to help you measure the risks and implications before going company wide.”

Interestingly, while companies will still need accountants to help understand the rules, the panelists mentioned that internal audits will undergo a paradigm shift and become focused on the controls behind the RPA and AI technology, rather than the hard numbers and data.

But it’s not just internal factors impacting the decision to apply RPA and AI; there are regulatory and cost of compliance factors to consider.

“You need to understand RPA in order to answer the hard questions within your own organization,”said Tuck Chapman. “Governments will have to find a way to backstop the risk of innovation, particularity in the labor pool. Millennials cannot be chained to repetitive boring jobs, so organizations must consider this before they apply automation in order to protect themselves from high turnover.”

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The strongest takeaways from the morning sessions at Sourcing Decisions are that companies need to learn as they go. Large organisations commonly take a long time to move, so dipping a toe in the automation water is advised — but this should also be a bare minimum.

As the technologies develop, we will see a vast redeployment of people in low-value jobs to higher-value roles as people strive to better understand where the organisation is going.

The huge business benefits of AI and RPA are clear, in that it can speed up processes and tidy up some of the varied, menial processes, as well as drastically improve data quality and accuracy, producing better outcomes for customers and easier-to-run businesses.

Numbers are wildly divergent, but there’s a good possibility of the same 30% savings that outsourcing can produce, simply from the enhanced efficiency. However, a deep understanding of the risks is essential to a successful automation implementation, so look at proofs of concepts and measuring tools to visualize the results that everybody wants, not just the top-level bigwigs.

Matt Kendall

During his 2+ years as Chief Editor at Nearshore Americas, Matt Kendall operated at the heart of both the Nearshore BPO and IT services industries, reporting on the most impactful stories and trends in the sector.

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