Katherine Kostereva of bpm’online: 80 Percent of Businesses Don’t Automate Processes, But AI Will Change That

I recently attended the Boston stop of a global conference tour hosted by bpm’online, a leading process-driven cloud based software platform for marketing, sales and service automation. And of the many interesting thoughts and insights I heard throughout the event, a few things really stuck with me. One was that on average small businesses have approximately 100 processes that help them run their businesses, and that number can go up ten-fold for larger enterprises. And even with those kinds of numbers, upwards of 80 percent of companies have not automated these processes. The other thing that caught my attention was that most people know the vast majority of startups end up failing (upwards of 90 percent), a lesser known stat is around 70 percent of strategic initiatives end up failing in mid-size and larger businesses.

Business Process Automation Trends

Bpm’online CEO and Founder Katherine Kostereva shared a few thoughts with me on why she believes stats like the ones above are still happening in 2017. And why artificial intelligence will be a catalyst for more companies to begin automating important processes in their businesses in order to compete today and into the future.

Below is an edited transcript of our conversation. To see the full conversation, click on the embedded video/audio players below.

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Business Process Automation TrendsSmall Business Trends: Maybe you can give us a little bit of your personal background.

Katherine Kostereva: Sure, absolutely. I’ve been in enterprise software industry for more than 20 years already. First in Europe because originally we came from Europe. And then the last years here in the United States in Boston where our headquarters is right now. And we are developing business together with our partners.

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Actually, my life is all around the company, all around bpm’online. I’m a huge fan of this product on the company. We are trying to execute as the best we could. Our partner driven strategy and our good market strategy is all about the partners. We have 400 partners globally, worldwide. And we sign in like, every day, we sign in new partners somewhere in the world. And this is a great jump and I’m really happy to be in this great environment or very engaged people.

Small Business Trends: So tell us a little bit more about what bpm’online does.

Katherine Kostereva: bpm’online is a fully global company. We have seven offices worldwide. And we are truly passionate about accelerating time to strategy execution and helping our customers implement change, and execute their strategies as fast as possible.

We have our business process management (BPM) platform. On top of that platform, we have full fledge CRM suite, which consists of marketing, sales, and service. And our customers use this BPM platform with CRM on top of it to automate their front office processes, as well as all other processes within the organization. So that’s what bpm’online is about. That’s our product.

Small Business Trends: You mentioned a couple of things in your morning keynote that I thought were pretty interesting, some stats around the success and failure rates for, not only startups but strategic initiatives.

Katherine Kostereva: We all know that nine out of 10 startups fail. But not many people know how many strategic initiatives within mid-sized and large organizations fail. And the number is horrible actually. It’s seven out of 10 strategic initiatives in the organizations fail.

Moreover, out of those strategic initiatives that fail, 50 percent fail because people are not committed to change. People just don’t want to change. So they just don’t accept nothing new in the company and strategic initiatives fail.

Small Business Trends: You say that it’s not just about bad strategy. It’s also about bad strategic execution.

Katherine Kostereva: What I have observed during all these years in the enterprise software industry, talking to so many companies globally, from very small, tiny companies up to global organizations and talking about their plans and vision and challenges, is that the true sources of success for those organizations is in their operations. In their collaboration, how they execute tasks, how they complete the projects, how they collaborate within the team.

And it doesn’t matter that much what the strategy of the organization is. It could be very straight forward strategy. I gave this example of Starbucks, which has been doing the same thing for 50 years but still it’s a huge, phenomenal, very successful business with 24,000 coffee spots all over the world, $80-billion market cap. Or it could be an innovative company like Airbnb was with a very innovative strategy. But again, this company is growing like crazy, thirty one billion dollars in market cap today.

And those two companies, they are completely different in terms of the strategy. Starbucks, very traditional, very straightforward, sell an experience of enjoying coffee, confidence that you get the same experience in any of the 24,000 spots. And Airbnb was a completely new service, completely new offering to the market. And Airbnb literally changed this market. So both companies have very different strategies and both of them are very successful. And it’s not because of the strategy. It because those companies know how to execute value.

Small Business Trends: During the opening keynote, Matt Tharp (chief evangelist for bpm’online) talked about how the average small business has about 100 processes involved in their business. Larger, like global manufacturing organizations may have 1,000 or more processes. But the key here, 80 percent of all businesses don’t automate. Why do you think that is?

Katherine Kostereva: You know what? Everyone believes that CRM is a commodity. Would you agree? Buy we have so many customers that have never had CRM in their organizations. They still use spreadsheets and I’m not talking about small companies right now. I am talking about mid-size, large organizations that use Outlook or spreadsheets or Lotus Notes for managing their customer relations. And you’re asking me about the processes and about artificial intelligence. Look at the commodity thing, which is CRM, which is customer relations.

Small Business Trends: So you mentioned AI, artificial intelligence.

Katherine Kostereva: Yeah, again. Another great topic.

Small Business Trends: Where does AI help with some of the things that we just talked about; with process automation with helping folks be more successful with their strategic execution. Does AI play a role in that?

Katherine Kostereva: Absolutely, absolutely. And we all know that in 10 years, CRM and AI is going to be one thing. Even right now CRM does do many things instead of the users. For example, just very simple example, bpm’ online generates data. It creates contacts and accounts automatically in the system based on the emails that it receives from the signature. It processes information, it enriches data, it creates leads and opportunities and contacts without any human interactions. So this is just one of the examples, very simple one. But, obviously, more and more operations, human operations are going to be substituted with systems, no doubt about that.

Small Business Trends: Forget about AI for a moment. How do we get more of these businesses to actually start leveraging the benefits that process automation can bring them?

Katherine Kostereva: Let’s look at it this way. We all expect people will be doing more and more intellectual stuff; somethings that machines can’t do. And we all know where it is going. So, it’s all about the processes as well. For example, making the decision on what should be the next best action? Or what should be the next best offer for this customer? It could be done by a machine. While making this offer in a right and gentle way in the enterprise business, could be done by the person. While if you are in SMB business making the offer also could be done by a machine. So, more and more processes will be done by the machines instead of humans.

Small Business Trends: So, do you think AI will help accelerate the adoption of process automation?

Katherine Kostereva: No doubt, no doubt, absolutely. There is no way out of it.

This is part of the One-on-One Interview series with thought leaders. The transcript has been edited for publication. If it's an audio or video interview, click on the embedded player above, or subscribe via iTunes or via Stitcher.

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Brent Leary Brent Leary is the host of the Small Business Trends One-on-One interview series and co-founder of CRM Essentials LLC, an Atlanta-based CRM advisory firm covering tools and strategies for improving business relationships. Brent is a CRM industry analyst, advisor, author, speaker and award-winning blogger.

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