Continual re-examination of the processes on which your business runs is central to the idea of digital transformation. If you’ve managed to achieve efficiency by eliminating paper and are paying closer attention to how you tap human capital, you may wonder what next step there is to take. Well, there’s a development that has bearing on both the technical and human elements of digital transformation: automation. Specifically, Robotic Process Automation, or RPA.
While we often think of robots in the workplace as bulky, mechanical arms on an assembly line, robotic process automation takes a form that’s far less obvious, in part because we interact with it every day—namely, applications. RPA applications are trained to perform the same actions a human would do over the interface of multiple line of business applications – an advantage over enterprise resource planning or business process management systems, because they don’t need to be retooled and they can work across multiple applications that might not otherwise communicate with each other. “By mimicking the way people use applications and following simple rules, software robots automate routine business processes, such as gathering and comparing data from different systems, adjusting insurance claims, or processing orders,” explains Peter Lowes, principal, Deloitte Consulting, in CIO Journal.
RPA technology by the numbers
Once the RPA is trained, it can go to town on automating routine business tasks. A software robot costs on the order of $5,000 to $10,000–less than onshore or even offshore staff– and some companies already have as many as 500. “The technology cut a medical insurer’s cost to process claim adjustments by 44 percent,” writes Lowes. “After applying robotic process automation to 14 core processes, a business process outsourcing provider achieved 30 percent cost savings per process, while improving service quality and accuracy.”
Similarly, Accenture predicts that RPA can reduce costs by 80 percent and reduce time by 80 to 90 percent. McKinsey & Co. also chimes in to say RPA can have a return on investment of 30 to 200 percent in the first year. For its part, PwC estimates that 45 percent of work activities can be automated, which would save $2 trillion in global workforce costs.
No wonder then, that RPA technology is already drawing substantial attention from executives. Analyst firms are predicting some pretty heady figures for the field, ranging from Forrester Research’s prediction of $2.9 billion by 2021, from a base of $250 million in 2016, to Deloitte’s prediction of $5 billion by 2020. Demand for RPA tools is growing at about 20 percent to 30 percent each quarter, according to Gartner. RPA also came in second in a KPMG poll of business priorities, writes Joe McKendrick in ZDnet – not surprisingly, starting with IT. In fact, thirty-six percent of enterprises are implementing or piloting RPA against their IT and network infrastructure support functions, while another 35 percent are deploying or piloting RPA against IT administrative functions, he writes.
RPA software robots offer several advantages:
- They can work 24 hours a day, without breaks or vacations
- Eliminate repetitive, manual data entry work
- Reduce costs and increase production
- Enable non-invasive integrations between multiple line of business applications
- Depending on workload, a company can assign a small army of RPAs to a high-intensity job – and then shut them down afterwards, instead of having to lay staffers off
- Because the tasks are all performed by software, they can more easily be recorded for auditing or big data purposes, revealing bottlenecks in business operations and helping create financial forecasts and budgets
- They don’t make mistakes
Perils and Promise of RPA
However, the last item is only partially true. Like any software, a software robot can do only what you tell it – and if you tell it the wrong thing, it can make a lot of mistakes awfully fast. “If an error creeps into the instructions provided to the software robots, they will then execute a flawed process and potentially replicate it hundreds or thousands of times until someone spots the problem,” Lowes warns. “Sound process design up front can prevent such a scenario.”
It’s important to remember that an RPA process doesn’t have judgment. If the process requires a human to make a decision, the human still needs to make the decision. But for run-of-the-mill processes, the RPA can do just fine, leaving the out-of-the-ordinary cases for humans to deal with. The result is better customer service overall, as staffers have more time to deal with these unusual cases, McKinsey & Co. writes.
What sort of processes can an RPA do? Here are some examples, according to Deloitte:
- Opening emails and attachments
- Logging into web/enterprise applications
- Moving files and folders
- Scraping data from the web
- Connecting to system APIs
- Following “if/then” decisions and rules
- Extracting and reformatting data into reports or dashboards
- Extracting structured data from documents
- Collecting social media statistics
- Merging data from multiple places
- Making calculations
- Copying and pasting data
- Filling in forms
- Reading and writing to databases
And that’s just the start. Artificial intelligence is also being added to the mix, meaning that RPA technology is starting to be able to make decisions using intelligent automation (IA). The difference between RPA and IA is that IA adds value, while RPA reduces cost, though IA is more expensive and takes longer to implement, write Lowes and Frank Cannata in Automate this: The business leader’s guide to robotic and intelligent automation.
For example, “Wealth Management firms are using IA to review and analyze portfolio data, determine meaningful metrics, and to generate natural-language reports for their customers on the performance of each of their funds,” Lowes and Cannata write. “Global banks are leveraging IA to improve the regulatory compliance processes by monitoring all electronic communications of employees for indicators of noncompliant activities. Insurers are using IA to answer the queries of potential customers in real time, and to increase sales conversion rates.”
If you’ve decided RPA is for you, here’s how to start:
- Look for automation opportunities– processes that are rule-based, not dependent on judgment, require transferring data between multiple line of business applications, supported by digital data, functioning and stable, and high-volume, Accenture writes
- Build your business case by estimating the benefits and performing pilots
- Figure out who’s going to be in charge and how the software robot will be designed, and develop your roadmap
Then you can figure out what high-priority projects you can now do with all your staff’s free time.
Simplicity 2.0 is where we examine the intricate and transitory world of technology—through a Laserfiche lens. By keeping an eye on larger trends, we aim to make software that’s relevant to modern day workers, rather than build technology for technology’s sake.
Subscribe to Simplicity 2.0 and follow us on Twitter. If what we’re saying piques your interest, head over to Laserfiche.com where you’ll see how we apply the lessons learned on Simplicity 2.0 to our own processes, products and industry.