Optimizing labor-intensive and repetitive manual processes has been a challenge faced by companies across different industries for a long time. While manufacturing companies have already understood the benefits of optimizing through the use of robots for several decades now, service oriented companies have only recently begun to effectively incorporate robots into their operations.
Fortunately, given the technological advancements made since then, Robotics Process Automation (RPA) has enabled businesses to take a much more effective approach towards optimization. More and more businesses are beginning to employ RPA, marking the dawn of an entirely new era for process optimization and scaling up operations. RPA can reduce the costs of existing manual operations by 25% to 40% or more without changing existing systems, yet improve service and generate return on investment (ROI) in less than a year. Using RPA, companies are able to cut performance costs for certain activities by as much as 60% compared to outsourcing (this is equivalent to 90% in-house resource cost savings), allowing companies to avoid the aforementioned
As with outsourcing, significant cost savings are the key driver for most of the companies that decide to automate their activities using robots. As per EY analysis, an average robot-hour costs a company less than €2. In teams where people perform tasks with little subjective judgment, there is an immediate cost benefit from RPA, with the investment often being paid off in less than a year.
Besides the financial rewards, robots are also able to perform repetitive tasks faster and with more precision. The RPA processes can be set up to work 24/7 on several activities in parallel, while taking significantly less time to complete the task. Additionally, the robots work with the pre-defined business rules and decision options, meaning double-digit reduction in error rates.
Another core implication of switching to RPA is the ability for the companies to scale up and grow much easier. While implementing new business processes, entering new markets or simply expanding the operations, companies do not have the major need to employ and train new FTE’s anymore. With the robots, it takes little or even no time to increase the volume of already automated activities. This makes RPA a key innovation driver for many businesses.
As per EY best practices, companies using process automation tend to have significantly less barriers to scale up because the RPA processes not only help accelerate innovation due to real-time processing but also improve reliability. RPA enables employees to focus on more creative, intelligent and valuable activities
Being a simple piece of software, RPA runs on dedicated servers within the company, performing various back-office and administrative tasks. Requiring no software development or programming skills, robots can be set up, modified and operated by advanced users without any specific IT background. Keeping logs and track of every step performed, the robots are also fully auditable for compliance and troubleshooting purposes.
The software is based on pre-defined business rules that define various activities and tasks performed by the robots. These activities include working with different systems and software applications as well as databases, files, documents and other system components. The robots are able to operate within any existing IT landscape, not requiring any additional changes.
What are the challenges in implementation?
While RPA can transform the economics and service level of current manual operations, we have seen RPA projects fail due to improper governance. It isn’t a reflection of the technology; there are many successful deployments. But there are some common mistakes that will often prevent an organization from delivering on the promise of RPA.
Some business issues include:
1. Not considering RPA as business led, as opposed to IT led: A successful RPA is a business-led initiative or program with strong partnership from IT, cyber, security, risk, HR and other enterprise functions.
2. Not having an RPA business case and postponing planning until after proof-of-concepts (POCs) or pilots: A common route for most organizations is to perform an initial PoC or pilot to see that RPA delivers on its promise. However, this often creates an embarrassing gap between a successful proof of concept (PoC) and large-scale production automation.
3. Underestimating what happens after processes have been automated: A common mistake is neglecting to consider how to get processes live and who runs the robot workforce – both issues that will delay “going-live” and timely delivery of benefits.
4. Treating robotics as a series of automations vs. an end-to-end change program: Unless a structured reorganization and full-time-equivalent (FTE)-release happens as part of an RPA project, agents quickly “drift off” to perform other work
How can this technology progress in the future?
With the development of Machine Learning and Artificial Intelligence, the robots soon will be able to automatically track the users’ activities, mark patterns, identify decision points and learn to replicate such tasks. However, at this stage, the RPA technology has already gone far enough in order to be completely manageable by purely business users, not requiring any programming and development capabilities.
While RPA is adaptable to any IT landscape, many companies decide to take a step further and adjust their systems and operations to better accommodate robots. Seeing a big future in this technology, many EY clients have already initiated internal organizational, operational and IT reforms to adapt their businesses to the new reality by entrusting the robots to perform even more activities and build core business processes around them.
RPA is part of a greater intelligent automation journey. It starts with automation of repetitive high volume tasks (60–70%), followed by RPA cognitive (15-20%) where the focus is on managing unstructured data through machine learning. The next step is implementation of intelligent chat bots to interact with internal and external users. And finally, artificial intelligence prevails, which focuses on data analytics and decision making.
How should a company go about implementing Robotics Process Automation?
Having experience of delivering over 40 RPA projects globally, EY has established a unique implementation approach to easily automate processes for any type of client. The approach starts with the ideation stage, which identifies the activities to be automated. This process is followed by the creation of business cases. Certain processes are selected based on the business case, followed by development of the prototypes and proof of concepts. Afterwards, the roll-out phase is performed using agile methodology, with automation of processes being done in parallel to coaching of selected employees within the clients’ organization, enabling internal resources to further develop, maintain and modify the robots independently. EY delivers holistic transformation programs underpinned by RPA, which also include: Business process improvement, Business process management, Cost reduction, Digital Organizational, change management, People management, Risk and controls and Advanced analytics
By Ajay Bali, Director, Digital and Analytics Leader, EY Luxembourg