As we start a new year, we typically assess how the previous year went and look forward to what is ahead, often with aggressive goals both personally and in business. The business goals typically center on reduced costs, improved customer experience, revenue/margin growth and regulatory compliance. Many tools (or methodologies) throughout the years have enabled achievement of these goals including Shared Services, Lean Six Sigma, Global Business Services (GBS) and maybe the most impactful, Technology Automation. From eCommerce, personal computers, and enterprise resource planning (ERP) implementations, to mobility, big data analytics, and connectivity (Internet of Things), technology continues to evolve at a rapid pace….maybe at its most rapid pace in history! Currently, one of the technologies gaining tremendous attention is Robotic Process Automation (RPA).
What is RPA?
Robotic Process Automation (RPA) uses software that imitates the activity of a person in executing a task within a work process. It can do repetitive, predictable and rule-based tasks more efficiently and accurately than people, freeing them up to do more knowledge-based tasks that require skills like reason, judgement and customer interaction. Things not totally suitable for software (or a “robot”)…yet. What’s unique about RPA is that it replicates human tasks with no change to the existing IT infrastructure, which means it is “technology agnostic.” It can work across ERP instances, proprietary applications and any other platforms which is a huge plus.
Processes most suitable for RPA tend to reside in shared services or its more progressive partner Global Business Services, and other back office areas of companies. The key theme for all these areas is that the tasks are repetitive and rule-based in nature. One of the first service providers to focus on RPA, Sutherland Global, has estimated that 50-70% of work generally carried out in a shared services environment can be automated.
Benefit & Value
There is plenty of hype around RPA due to some of the numbers quoted for potential benefits and value. Sutherland Global stated that robotic FTEs (full-time equivalents) are at least 20 percent less expensive than people performing work in the lowest cost offshore locations, and can work 24/7 without breaks, meetings, training or holidays. That’s tough to beat! McKinsey in a December 2016 article said the return on a RPA investment can vary between 30 to as much as 200% in the first year. Specific to financial services, Accenture stated reduced time to perform tasks of 80-90% and reduced processing costs of 30-80%. So, as you would expect RPA has garnered a lot of attention and some early adopters.
As with any technology solution, the benefits of RPA go beyond reduced costs to include faster implementation (months vs. years), cycle time reduction, improved accuracy and quality (near 0% errors), capacity and agility expansion, and even improved employee morale. This may be a bit of a surprise but, feedback from some “early adopters” has indicated that as the repetitive and rules based portion of work was moved to the robot, leaving the more interesting work for the team, resulted in boosting team morale. On the flip side, let’s be clear, you WILL require fewer people going forward as RPA utilization increases…
Key Considerations & Future Outlook
So, it is early in the life cycle of RPA, but there are some lessons learned and key considerations as you explore the possibilities of RPA for your operation:
– Strategy – View RPA as a transformational tool/capability targeting impactful areas that drive business outcomes and not just tactical cost reductions.
– Change management – Significant effort is required to get key stakeholders on board due to this type of change. This transformation is more challenging than the “offshoring of work” dialogue with which many companies have recent experience.
– Partner selection – Early involvement of the IT function (as your internal partner) and selecting an experienced vendor that looks at the solution from the holistic perspective of process, people and then technology are critical.
The future appears bright for RPA. In Deloitte’s 2016 survey of shared services and GBS leaders, 22% reported that they have piloted or implemented RPA…in 2015 it was 0%! The use of technology in the workplace to do our jobs is inextricably linked, and it appears that RPA is another tool that will further drive that linkage. In Malaysia, where they have nearly 150,000 full-time employees in shared services and contact centers, the Multimedia Development Corporation (MDeC) which partners with companies investing in Malaysia, said in a recent SSON article, that they are already planning ahead for expected RPA utilization. Today a person is doing only one job, however they recognize that by leveraging RPA tools, one person could conceivably carry out two or even three jobs at the same time. Hopefully, you are thinking in a similar fashion. If not, you should be….
Art Anderson is a Senior Business Management Executive with 20+ years of experience in the industrial and specialty chemical industries. He has specific expertise in optimizing commercial operations, implementing shared business services, leveraging process excellence tools, and improving both internal and external customer focus. Previously, Art was a Director for a Fortune 300 company, and member of the executive team leading the transformation from SS to a GBS framework. Learn more at www.linkedin.com/in/artandersonjr. Art can be reached directly at email@example.com.