In Ownet’s paper, The Progressive Finance Function we touched on the opportunity of Robotic Process Automation (RPA) to an organisation in saving time, saving money and making money through the release of skilled knowledge workers to help further the objectives of the organisation. RPA is an example of the manifestation of digital transformation of the finance function, where pay-back on the investment can be counted in months with return on investment in excess of 100%, and examples of over 500% noted in academic studies.
WHAT IS RPA?
RPA is the use of software robots to interact with an organisation’s IT systems and Software-as-a-Service (SaaS) applications to automate and perform the manual tasks often associated with transactional and repetitive processes. The robot replicates the interactions of a worker with a computer system’s user interface. The robot sits “on the desktop” alongside the existing applications it will interact with. Similar to recording a macro in a spreadsheet, the “robot” watches and learns the process from the worker. As such RPA does not require a programmer to code the actions of the robot. The end user is able to teach the robot the actions and decisions it needs to take to complete a process.
In this way a robot can be quickly deployed within existing systems and processes minimising down time and impact on the business. Once in place a robot can be manually started, or wait in monitor mode for a trigger to perform the required tasks. For example:
- Capture the data from a file uploaded to a procurement system.
- Transfer data from one system to another.
- Read an email with an invoice attachment from a vendor and capture the information into Accounts Payable.
- Capture submitted expense reports received from the web services of a third party Travel and Expenses company, and transfer the payment information to payroll.
- Manage any straightforward, repetitive task within the desktop software and process it to completion.
- Read a contract, determine thresholds and request discounts.
RPA is suited to the Finance function where human capital and knowledge workers manually interact with IT systems to perform low value / non-value add, high volume transactional processes as part of the wider operating model of the organisation. RPA is not restricted to Finance and can also be translated across the wider organisation where rules based systematic processes are common, like Human Resources, Payroll, Procurement and Customer Services.
RPA -builds on basic automation and relies on the processes and data sets being standardised and consistent. Basic automation is often programmed or hard coded into IT systems and the knowledge worker uses macros in spreadsheets or batch programs to speed up their processes of transactions or activity. Robotic Process Automation takes this basic automation further, replacing the human worker for routine tasks and calling on human intervention for queries when the data does not fit the pre-defined rules.
Artificial Intelligence, including machine learning, is the next evolution of RPA and will enable a wider range of tasks to undergo the transformation to automation, further freeing up human resource to focus on value adding activities to the organisation.
BUSINESS BENEFITS
Implementing any new initiative, system or process is only worthwhile if it will save the organisation time, money or make it more money. Additionally, RPA will also enhance the quality of the work delivered inside the organisation alongside improved controls. As the RPA transactions are system generated, they are recorded and traceable for later analysis and review. The benefits of RPA include:
Saving Time
By automating processes, the organisation is able to take advantage of higher productivity and efficiency in the delivery of the process. Robots can be set to operate 24 hours a day, without the need for a coffee or lunch break. Robots work quicker than human workers, delivering results up to three times faster than when processing routine transactions.
Robots make fewer mistakes than humans. Research from providers of RPA software solutions indicate a robot can operate at 98% first time accuracy whereas a human operator operates at 60% first time accuracy (Everest Group research December 2015, YouTube: Gaining Productivity with RPA –The Latest Research). Once a robot has learned the process it will be able to consistently deliver error free output, with queries set aside for humans to investigate and action.
Saving Money
Robots reduce cost. The numbers quoted in academic and professional institute papers indicate cost savings of up to 66% on an offshore full time equivalent (FTE) worker and 75% for an onshore FTE. In the study above comparing robots to human workers, the robot was 3 times quicker than the human and cost 10% of the same worker, which ensured a payback on the investment within a 6 month period.
In another example, a UK telecoms company is quoted as using 160 robots to process up to 500,000 transactions per month generating a three year return on investment of over 650%.
Compliance and control checking requirements are reduced as error proofed processes are followed accurately, with built-in audit trails for traceability. This reduces cost for the both internal and external audit verification.
Making Money
The introduction of robots into the work environment releases skilled knowledge workers from the drudgery of data transfer and data entry to business partnering and collaborating with colleagues to develop and grow. Be it through insights from the data and analytics to forge innovative approaches to further streamlining process to improve efficiency and effectiveness of the operation to meeting and understanding customer needs. Or, the organisation increasing its overall capacity and ability to focus on customer service, product development and process improvement through knowledge workers increasing their individual productivity and capacity.
FUTURE
The future of RPA includes the wider introduction of artificial intelligence and cognitive computing technologies that are capable of thinking through problems, enhancing a process from past experience and knowledge from the data it has interacted with. This in turn leads to digital assistants (bots) that have human like conversational responses to questions, think next generation Siri/Cortana in the work place responding to spoken requests to deliver outcomes. This could be as simple as booking a meeting, to reserving a seat on a plane, to learning how to allocate expenses charged to a project.
How do I implement?
While it is a good idea to understand the vendor landscape in RPA, time well spent would be calling on the management consulting experts in operational delivery to implement process optimisation within a target operating model.
The management consultants have the experience of previous implementations. They will understand a simple roadmap will need to be in place first detailing the approach, framework and process steps required to deliver a successful implementation, before a well deployed Robot Process Automation implementation can take place.
One of the advantages of RPA is; the methodology can be implemented on one discrete process, say expense processing and payment, to prove the concept and gain buy-in within the department and the organisation.
Ownet colleagues will present additional insight papers on Robotic Process Automation in the coming months. Keep a look out for them and how RPA could be a one of a number of tools to benefit your organisation and free you up from non-value adding tasks to add value to your business.
