RPA: a revolution in business process automation
More CIOs are turning to an emerging technology practice called robotic process automation (RPA) to streamline enterprise operations and reduce costs. With RPA, businesses can automate mundane rules-based business processes, enabling business users to devote more time to serving customers or other higher-value work. Others see RPA as a stopgap en route to intelligent automation (IA) via machine learning (ML) and artificial intelligence (AI) tools, which can be trained to make judgments about future outputs.
“A bank redesigned its claims process by deploying 85 bots to run 13 processes, handling 1.5 million requests per year”
Here is a look at what robotic process automation really is, and how CIOs can make the most of RPA in alignment with business goals.
What is robotic process automation? RPA is an application of technology, governed by business logic and structured inputs, aimed at automating business processes. Using RPA tools, a company can configure software, or a “robot,” to capture and interpret applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. RPA scenarios range from something as simple as generating an automatic response to an email to deploying thousands of bots, each programmed to automate jobs in an ERP system.
COOs working for financial services firms were at the vanguard of RPA adoption, figuring out ways to use software to facilitate business processes without increasing headcount or costs, says Regina Viadro, vice president at EPAM Systems and adviser of the company’s IA practice. Viadro has worked on RPA engagements for clients in financial services, healthcare, retail and human resources, showing the breadth of RPA use today.
What are the benefits of RPA? RPA provides organisations with the ability to reduce staffing costs and human error. David Schatsky, a managing director at Deloitte LP, points to a bank’s experience with implementing RPA, in which the bank redesigned its claims process by deploying 85 bots to run 13 processes, handling 1.5 million requests per year. The bank added capacity equivalent to more than 200 full-time employees at approximately 30% of the cost of recruiting more staff, Schatsky says.
Bots are typically low-cost and easy to implement, requiring no custom software or deep systems integration. Schatsky says such characteristics are crucial as organisations pursue growth without adding significant expenditures or friction among workers. “Companies are trying to get some breathing room so they can serve their business better by automating the low-value tasks,” Schatsky says.
Enterprises can also supercharge their automation efforts by injecting RPA with cognitive technologies such as ML, speech recognition, and natural language processing, automating higher-order tasks that in the past required the perceptual and judgment capabilities of humans.
Such RPA implementations, in which upwards of 15 to 20 steps may be automated, are part of a value chain known as intelligent automation (IA), Viadro says. “If we were to segment all of the major enterprises and ask them what’s on their agenda for 2018, close to 100% would say intelligent automation,” Viadro says.
By 2020, automation and artificial intelligence will reduce employee requirements in business shared-service centres by 65%, according to Gartner, which says the RPA market will top $1 billion by 2020. By that time, 40% of large enterprises will have adopted an RPA software tool, up from less than 10% today.
For a deeper look at the benefits of RPA, see “Why bots are poised to disrupt the enterprise” and “Robotic process automation is a killer app for cognitive computing.”
What are the pitfalls of RPA? RPA is not for every enterprise. As with any automation technology, RPA has the potential to eliminate jobs, which presents CIOs with challenges managing talent. While enterprises embracing RPA are attempting to transition many workers to new jobs, Forrester Research estimates that RPA software will threaten the livelihood of 230 million or more knowledge workers, or approximately 9% of the global workforce.
Even if CIOs navigate the human capital conundrum, RPA implementations fail more often than not. “Several robotics programs have been put on hold, or CIOs have flatly refused to install new bots,” Alex Edlich and Vik Sohoni, senior partners at McKinsey & Company, said in a May 2017 report.
Installing thousands of bots has taken a lot longer and is more complex and costly than most organisations have hoped it would be, Edlich and Sohoni say. The platforms on which bots interact often change, and the necessary flexibility isn’t always configured into the bot. Moreover, a new regulation requiring minor changes to an application form could throw off months of work in the back office on a bot that’s nearing completion.
A recent Deloitte UK study came to a similar conclusion. “Only 3% of organisations have managed to scale RPA to a level of 50 or more robots,” say Deloitte UK authors Justin Watson, David Wright and Marina Gordeeva.
Moreover, the economic outcomes of RPA implementations are far from assured. While it may be possible to automate 30% of tasks for the majority of occupations, it doesn’t neatly translate into a 30% cost reduction, Edlich and Sohoni say.
To ensure a smooth shift to RPA, see “8 keys to a successful RPA implementation.”
What companies are using RPA? Walmart, Deutsche Bank, AT&T, Vanguard, Ernst & Young, Walgreens, Anthem and American Express Global Business Travel are among the many enterprises adopting RPA.
Walmart CIO Clay Johnson says the US retail giant has deployed about 500 bots to automate anything from answering employee questions to retrieving useful information from audit documents. “A lot of those came from people who are tired of the work,” Johnson says.
David Thompson, CIO of American Express Global Business Travel, uses RPA to automate the process for cancelling an airline ticket and issuing refunds. Thompson is also looking to use RPA to facilitate automatic rebook recommendations in the event of an airport shutdown, and to automate certain expense management tasks.
“We’ve taken RPA and trained it on how employees do those tasks,” says Thompson, who implemented a similar solution in his prior role as CIO at Western Union. “The list of things we could automate is getting longer and longer.”
But with many more CIOs mulling RPA, CIO.com asked some consultants for advice on how IT leaders can tackle the technology.
Tips for effective robotic process automation
- Set and manage expectations: Quick wins are possible with RPA, but propelling RPA to run at scale is a different animal. Dave Kuder, a principal with Deloitte Consulting LLP, says that many RPA hiccups stem from poor expectations management. Bold claims about RPA from vendors and implementation consultants haven’t helped. That is why it is crucial for CIOs to go in with a cautiously optimistic mindset. “If you go in with open eyes you’ll be a lot happier with the result,” Kuder says.
- Consider business impact: RPA is often propped up as a mechanism to bolster return on investment or reduce costs. But Kris Fitzgerald, CTO of NTT Data Services, says more CIOs should use it to improve customer experience. For example, enterprises such as airlines employ thousands of customer service agents, yet customers are still waiting in the queue to have their call fielded. A chatbot, could help alleviate some of that wait. “You put that virtual agent in there and there is no downtime, no out sick and no bad attitude,” Fitzgerald says. “The client experience is the flag to hit.”
- Involve IT early and often: COOs initially bought RPA and hit a wall during implementation, prompting them to ask IT’s help (and forgiveness), Viadro says. Now “citizen developers” without technical expertise are using cloud software to implement RPA right in their business units, Kuder says. Often, the CIO tends to step in and block them. Kuder and Viadro say that business heads must involve IT from the outset to ensure they get the resources they require.
- Poor design, change management can wreak havoc: Many implementations fail because design and change are poorly managed, says Sanjay Srivastava, chief digital officer of Genpact. In the rush to get something deployed, some companies overlook communication exchanges, between the various bots, which can break a business process. “Before you implement, you must think about the operating model design,” Srivastava says. “You need to map out how you expect the various bots to work together.” Alternatively, some CIOs will neglect to negotiate the changes new operations will have on an organisation’s business processes. CIOs must plan for this well in advance to avoid business disruption.
- Don’t fall down the data rabbit hole: A bank deploying thousands of bots to automate manual data entry or to monitor software operations generates a ton of data. This can lure CIOs and their business peers into an unfortunate scenario where they are looking to leverage the data. Srivastava says it’s not uncommon for companies to run ML on the data their bots generate, then throw a chatbot on the front to enable users to more easily query the data. Suddenly, the RPA project has become an ML project that hasn’t been properly scoped as an ML project. “The puck keeps moving,” and CIOs struggle to catch up to it, Srivastava says. He recommends CIOs consider RPA as a long-term arc, rather than as piecemeal projects that evolve into something unwieldy.
- Project governance is paramount: Another problem that pops up in RPA is the failure to plan for certain roadblocks, Srivastava says. An employee at a Genpact client changed the company’s password policy but no one programmed the bots to adjust, resulting in lost data. CIOs must constantly check for chokepoints where their RPA solution can bog down, or at least, install a monitoring and alert system to watch for hiccups impacting performance. “You can’t just set them free and let them run around; you need command and control,” Srivastava says.
- Control maintains compliance: There are lot of governance challenges related to instantiating a single bot in environment let alone thousands. One Deloitte client spent several meetings trying to determine whether their bot was male or female, a valid gender question but one that must take into account human resources, ethics and other areas of compliance for the business, Kuder says.
- Build an RPA centre of excellence: The most successful RPA implementations include a centre of excellence staffed by people who are responsible for making efficiency programs a success within the organisation, Viadro says. Not every enterprise, however, has the budget for this. The RPA centre of excellence develops business cases, calculating potential cost optimisation and ROI, and measures progress against those goals. “That group is typically fairly small and nimble and it scales with the technology staff that are focused on the actual implementation of automation,” Viadro says. “I’d encourage all IT leaders across different industries to look for opportunities and understand whether [RPA] will be transformative for their businesses.”
- Don’t forget the impact on people: Wooed by shiny new solutions, some organisations are so focused on implementation that they neglect to loop in HR, which can create some nightmare scenarios for employees who find their daily processes and workflows disrupted. “We forget that it’s people first,” Fitzgerald says.
- Put RPA into your whole development lifecycle: CIOs must automate the entire development lifecycle or they may kill their bots during a big launch. “It sounds easy to remember but people don’t make it a part of their process.”
Ultimately, there is no magic bullet for implementing RPA, but Srivastava says that it requires an intelligent automation ethos that must be part of the long-term journey for enterprises. “Automation needs to get to an answer — all of the ‘ifs’, ‘thens’ and ‘whats’ — to complete business processes faster, with better quality and at scale,” says Srivastava.
IDG News Service