After years of commentary on the possibilities of AI-powered automation, we are finally starting to see applications that are genuinely useful and applicable to businesses.
This is particularly thanks to the rise of composable commerce architectures, in which data is readily exposed, and where the accelerating adoption of third-party solutions is increasing the number of touchpoints for AI-powered enhancements.
Automation vendors looking to capitalize on these trends might take inspiration from HuLoop, whose CEO, Todd Michaud, joined us for the latest episode of the Martalks podcast.
Described as a no-code, ‘over the top’ platform, HuLoop is available both to end-users, and as a white-label product which other solution vendors can use to build automation functionality into their own products.
In the podcast, we discuss HuLoop’s commercial strategy and market positioning, in the hope that we can shed useful insights for other vendors in the automation & AI realm.
Listen to the podcast here, or read an article based on it below:
In this article we’ll look at:
- the evolving commerce trends which are creating new opportunities for automation and AI solution vendors
- the value of an automation solution as the ‘connective tissue’ in a system architecture, how this benefits customers, and also how it benefits other composable vendors
- go-to-market (GTM) recommendations for AI & automation vendors, based on HuLoop’s success, and particularly in light of the interest in AI & automation that is building in the market.
The composable trend is laying the groundwork for automation software
As Todd describes, the appetites of technology buyers have recently shifted away from high-profile digital transformation projects, towards the acquisition of tactical solutions with a shorter time to value.
“Most retailers don’t have the appetite for these massive enterprise systems right now. They’re anticipating cutbacks, economic headwinds, etc.
If we think about the pandemic era, everything was focused on digital transformation, ecommerce, enablement to serve customers in new ways, new channels.
Post-pandemic, there’s this plethora of AI-powered capabilities. Some are in the automation vein; some are in the analytics vein. Really, every part of the enterprise is being touched by what I would call best-of-breed, advanced technologies that are smaller, quicker and easier to deploy, cloud-rendered, quick to stand up, quick ROIs. Those are the things that retailers are spending time in.”
Automation solutions, by their nature, are usually deployed tactically to drive efficiencies in other things the company is already doing – so they will fare well in the present market.
Furthermore: businesses – which may have always been interested in automation – can increasingly make practical use of the technology, as they adopt modern microservices for various components of their system architecture. Steadily more integrations are becoming possible, with more data more readily exposed.
The phenomenon of ‘tech begetting tech’ is widely acknowledged. In the previous episode of Martalks, Pivotree’s Josh Hudson described how, within a month of executing a master data management brief, the retailer quickly “announced big initiatives that were directly correlated to the work that we were doing.”
This flywheel will accelerate – which spells exciting opportunities for automation vendors, albeit with some obstacles to overcome.
Though AI is increasingly widely applicable, it is less widely understood. Whilst many professionals are excited by the news around ChatGPT and digital assistants, the most immediate enterprise value will actually be derived from enhancements to back-office processes and across the retail supply chain.
HuLoop provides a useful reference point for other automation vendors seeking to capitalize on the growing appetite for such solutions, taking three different routes to market that reflect the different types of value derived by different stakeholders in this retail ecosystem.
Automation as the ‘connective tissue’ in composable architecture
HuLoop’s three routes to market are:
- partnering with systems integrators (SIs)
- selling direct to brands, as an ‘over-the-top solution’ whereby digital assistants carry out executional, software administration services
- …and an ‘OEM’ model, whereby other software providers can use HuLoop to build automation into their solutions.
The use of SIs as commercial partners applies similarly to many different types of software vendor – so we won’t dwell on that here (but you can learn more about this topic in our earlier piece on how to collaborate with system integrators).
But in the automation category specifically, the dual-positioning: as an OEM supplier, and as a no-code solution for direct customers, lends some key commercial advantages.
For the customer: HuLoop’s ‘over-the-top’ capability allows companies to resolve technical inefficiencies which would otherwise incur ongoing administration costs.
“I talked about the ability to create digital workers, digital assistants, that essentially support our human workers.
This over-the-top capability means that our digital workers essentially will log into SAP or Salesforce.com, in the same way that a human would do. Imagine a bot logging into SAP, picking a menu option, processing a transaction, exiting the application, and then waiting for the next transaction that needs to be processed.
This gives us the versatility and flexibility to integrate without having to write an interface and without having to depend on APIs. This over-the-top capability is part of the secret sauce that we’re bringing to the table, that’s truly differentiating.
It just means that we can deploy a lot faster. And what that really means in digital transformation is that today, non-technical businesspeople have the capacity to work with a solution like ours without writing any code, without having an over-dependency on IT.”
Beyond resolving dependency on IT: such enhancements can even alleviate dependency on digital transformation efforts, allowing the brand to drive greater efficiency from its existing architecture.
As an ‘OEM’ supplier, meanwhile, HuLoop is adopted by vendors who wish to position their own tools as AI-enabled.
A case study on the HuLoop website tells the story of a SaaS platform startup that sells into enterprise retailers, which integrated HuLoop’s automation capability in its web app. Among other functionality improvements, HuLoop says that it…
- enabled the business to speed up its DevOps cycle
- brought a 63% reduction in regression cycles
- and resulted in a 36% increase in customer satisfaction.
The startup reported that increased automation, in these processes, won them new and repeating business.
This OEM model allows HuLoop to position itself as an answer to customer challenge faced by most composable vendors: the difficulty for the end-user, in managing increasingly complex system architectures.
“We’ll essentially build automation capabilities that are branded and represented as part of our retail partners’ capabilities… the client doesn’t need to know that there are some HuLoop automation digital assistants or digital workers in the software provider’s ecosystem. They essentially sell them, support them, etc., and we are a behind-the-scenes player…
We work with some amazing companies in this space that have advanced decisioning capabilities or supply chain execution capabilities, merchandising, enterprise software capabilities, and we don’t want to do what they’re great at, we want to fill in some of the gaps that they have…
There’s no software provider, even the biggest the big – we think of SAP, we think of Oracle – that can provide a holistic solution to a retail enterprise. And so every retailer has this portfolio of solution providers that they’ve invested in: some are best of breed, some they build themselves.
HuLoop has the capacity to be the glue that stitches this complex landscape together through our automation infrastructure. And that’s how some of the software companies are working with us: not so much inside their application, but in-between their application and perhaps other things that the client may be doing.”
Personally, I’m not sure whether ‘glue’ is the right metaphor; the natural adhesive of architected systems is probably the API connections. Automation may be better understood as a “vehicle” that travels between connected systems, executing (often dreary) processes that would otherwise have fallen to human labour.
Semantics aside, this is an astute piece of product strategy on the part of Todd’s business. As companies increasingly seek out tech solutions to business problems – ranging from cybersecurity and fraud, to supply chain inefficiencies, to returns and product management – the workload associated with managing more complex system architectures will grow.
An ‘over-the-top’ OEM strategy such as HuLoop’s should make other companies’ solutions faster and easier to adopt, and reduce total cost of ownership for the customer.
Positioning automation for evolving technical challenges
We may be at the peak of the hype cycle for AI & automation. Buoyed by splashy mass market product launches such as ChatGPT and Bing’s new search engine, there are now use cases of varying utility flooding the market.
This may be distracting for some customers. The major strategic opportunities around generative AI – which captures the headlines – are different from the significant, immediate advantages which business can harness by automating parts of their system architecture and supply chain.
Todd mentions the prospect of reduced costs…
“When I talk to clients about the benefits of automation, it’s really rare that I can’t show that for every $1 I charge the customer there’s a $20 return on investment.”
….and whilst it’s true that efficiency savings are usually a company’s most direct route to increased profitability, typically, more nuanced claims are needed to win trust with prospective customers.
Partner marketing probably plays a greater role in automation, compared to other software categories. As a ‘solution to a solution’, the technology is more likely to be acquired via a partnered vendor. Brand recognition (i.e., “powered by HuLoop”) may be desirable in some cases, but the more productive work may take place around sales enablement materials that support partnered vendors in their own business development.
That implies maintaining education and content programmes that can be repurposed as needed, for various different stakeholders at partnered companies, and for the software end-user’s business.
This will depend significantly on building out case studies. Few things spur a business into action like competitor activity, and more broadly, genuine outcomes achieved by businesses in your space are highly valuable in building awareness around alternative technology approaches. Claiming you can deliver 20:1 ROI (even if it’s true) is far less enticing than telling them that your customer learning that their nearest competitor has increased profitability by 20% simply by eliminating operational costs – particularly if, as many are forecasting, we do enter a recession in the next 24 months.
Whether or not that happens, companies are likely to continue to show interest in tactical solutions which deliver genuine efficiencies to the bottom line, at relatively little capital risk.
In this climate, helping customers differentiate the snake oil, from the directly applicable use-cases, is one the most valuable investments that AI & automation vendors can make in their go-to-market over the next few years.
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