Businesses of today are constantly on the lookout for ways to radically transform their operational efficiencies. Digitization of business processes, technologies and products has enabled them to integrate methods to not only lower their costs, but to meet customer expectations in novel and customized ways. The one driver that many enterprises are wholeheartedly adopting now is Robotic Process Automation (RPA). With the help of robotics, enterprises can improve the physically measurable outcomes of manufacturing facilities, and also enhance their virtual operations to deliver the best results.
In the simplest terms, RPA is the application of software robots that can interpret the functioning of existing applications and then imitate them with higher precision and fewer errors. As clients demand faster delivery of software solutions at a reduced cost, IT firms are increasingly turning to automation processes that can boost accuracy and efficiency. By automating repetitive tasks in order to improve productivity, RPA not only achieves greater accuracy, but reduces man hours as well.
A definition of RPA, as provided by HfS Research, a services research company based in Cambridge, Massachusetts, calls it the use of a computer, rather than a person, to create a ‘virtualized robot’. The definition further states that RPA does not intend to replace existing client or service provider applications, it simply works in partnership to fulfil the specific task that the ‘virtual robot’ has been assigned.
Software robots, or ‘virtual robots’, can be used in a similar manner as real robots especially in industries such as manufacturing where the key focus area is to improve processes, production capabilities and speed. RPA in turn enables employees to concentrate on more valuable tasks by giving them more time and resources to divert towards repetitive tasks that can easily be automated using software robotics.
A recent case study of Volvo is the perfect example of how RPA can provide competitive advantages in a dynamic business world. The iconic Swedish automaker recently observed that the processing of supplier invoices through its integrated systems required a large number of manual interactions and interventions. Some of these tasks involved reading, validating, registering and then posting these invoices; all tasks that could easily be automated for better results.
In order to streamline this process, Volvo decided to implement RPA in its Accounts Payable function which was responsible for processing close to 2,000 invoices a day. The results of this were significant. Due to this implementation, an RPA robot now logs into the necessary systems, reads the invoice images, registers the invoice into existing systems, performs the required validations including cross-checking against other systems, and then decides whether to post, park or block the particular invoice.
Leveraging RPA to drive down costs
Understandably for most organizations, the key driver of implementing RPA is to reduce the costs borne by the company. A research report by Mindfields Consulting titled “Robotic Process Automation: Driving the next wave of cost rationalization” found that 64% of participants agreed that RPA could drastically reduce staff costs and make operations more efficient. Interestingly, close to 43% of respondents had previously seen a reduction of more than 20% in staff time spent towards repetitive tasks thanks to successful RPA capabilities. For several of these respondents, the cost of software robots was about one-third the cost of an offshore operator, so the cost savings were significant.
Other critical benefits of RPA beyond cost reduction include:
Accuracy: When it comes to RPA implementations, the possibility of errors does not exist as robots very rarely malfunction once they are programmed to perform a specific task. In case an RPA robot does not understand a transaction, or if a transaction does not conform to its pre-programmed data, the robot sets it aside for a human being.
Scalability: Virtual robots can be deployed quickly and en masse so as to complete large-scale projects with near perfect accuracy.
Analytics: RPA software is specifically designed to report high volumes of performance data that can be analysed to achieve various organizational goals and improve complicated processes.
Strong governance: RPA enables enterprises to also provide a strong governance framework particularly for companies operating in the finance, insurance or healthcare sectors. This is because it enables the detailed and real-time traceability of all processes and stages.
Minimum programming required: RPA-enabled tools can also be easily updated by non-technical staff. As a result, staff members who have rich domain expertise can easily create or modify automation processes in order to develop new features or build greater efficiencies.
Non-disruptive: RPA tools can be implemented seamlessly without altering existing computer systems. So the level of disruption is low, and there is seldom any need to upgrade or modify the entire IT department in order to implement a RPA software solution.
Which functions and industries can benefit from using RPA?
When enterprises are assessing whether or not they can benefit from RPA implementation, they need to look internally at the nature of tasks that are regularly performed. By definition, any task that requires repetitive manual steps is fit for RPA. Some areas where such tasks become commonplace are manufacturing, back office processes across finance and accounting, order management and CRM functions.
Mindfields’ research also states that in the next 3-5 years business enterprises that adopt RPA processes can expect to see cost savings to the tune of 30% across key function areas such as finance, accounting, HR, order management and CRM in particular.
With regards to the finance and banking industry, a virtual robot can be relied upon to process repetitive requests such as loan applications, validation of new accounts, filling and filing of forms, and the management of database updated.
The robots are coming: RPA is the future of business processes
In the near and distant future, analysts strongly expect RPA tools to go beyond just basic labour arbitrage and instead perform far more complex tasks as well. Thanks to advantages such as reduced staff costs, improved accuracy levels and speeding up of processing times, more workplaces around the globe are expected to adopt RPA implementations. As more enterprises recognize the value of RPA, they will also be able to divert key resources and human capital towards other beneficial business processes.
Deepak Khosla is President Asia/ANZ, NIIT Technologies