Over the past several years, robotic process automation (RPA) has burst onto the scene offering companies a way to improve accuracy, increase compliance and save costs in the back office. Because a bot can be as much as 65 percent less expensive than a full-time employee, industry experts are expecting it to radically alter the conventional business process outsourcing (BPO) model and even the global outsourcing industry as a whole. According to the latest ISG Index™, today’s worldwide RPA market is worth nearly $1 billion. Businesses in industries such as finance, healthcare, insurance and retail have embraced RPA and have started applying it to improve business performance.
Before the birth of RPA, companies embraced various automation methods – a simple macro, for example, or a marathon script requiring multiple human touchpoints – as a way to increase productivity. These methods are rapidly becoming obsolete, and organizations now face the challenge of modernizing them. Some have fallen prey to the misconception that RPA can only mimic or replace activities performed by humans, but RPA bots can do much more – such as replacing, standardizing and modularizing already existing automations. In fact, RPA can help an organization “rethink the routine,” performing tasks better, faster and cheaper so humans can focus on higher-level work.
Where to start?
To optimize their return, businesses must approach bots in a logical and organized manner. The first step is to arrange brainstorming sessions with process leaders, SMEs and six sigma teams to identify automation opportunities. Question to ask include:
- Is automation our last stop or the beginning of an improvement journey?
- Are we doing everything our competitors are doing but at a lower cost? Can we re-automate an existing automation?
- What are the benefits, costs and return on investment of replacing an existing automation?
- Can we replace existing band-aided “macros” or “scripts”? Do we have enough documentation and training to support them? How can we embed or leverage RPA to replace obsolete technology?
- Are our current automation solutions maintenance friendly and easy to debug?
- Are there enough resources in the market well-versed in our obsolete technology?
- Which process areas that have previously leveraged obsolete automation techniques can be reconsidered for RPA?
- What are the implementation costs of hardware and software?
Next, prioritize the identified opportunities using smart parameters that align with the organization’s goals. Create a business case to demonstrate the capabilities of RPA and determine how quickly it can replace already-automated solutions to provide additional benefits at a lower cost. Share it widely in your firm and educate employees on the benefits of RPA. With raised awareness, employees will start generating innovative ideas that will become the demand pipeline for RPA opportunities.
Then, compare old and new automation solutions using the following “total cost of automation” parameters:
- Support/licensing and service costs: Compare year-over-year savings of RPA to ongoing maintenance of the current setup.
- Monitoring costs: Factor in the human intervention hours involved into scheduling, controlling, monitoring and training required for automations.
- Upgrade costs: Assess how your business can take advantage of newly available features by applying quick patches or re-implementation.
- Governance costs: Consider how service-level agreements may be impacted by server/client reboot delays that cause operation outages.
- Program management and organizational change management costs: Estimate the cost of building a robust Center of Excellence (CoE) to manage the governance process.
If the business decides to embed RPA broadly across business units, consider these tips:
- Collaborate with IT sooner rather than later. As the RPA footprint expands across business units, IT support becomes increasingly important. Be sure to include infrastructure, service/support, security and compliance. Align expectations and segregation of duties between the security and audit teams, and clarify security requirements with the IT applications team.
- Draw a bright line on the business case scope. Define the scope of the RPA business case across the demand management pipeline. Will RPA just replace current automations or also improve them? Leverage RPA to replace current bots as-is (without improving); then consider how RPA can improve or eliminate human involvement. Improving and replacing current automations simultaneously is not the right approach for enterprise-wide implementations; a well-planned and phased approach will yield optimal results.
- Design an RPA operating model that fits well. Take into consideration the right stakeholders, processes and tools across the organization. Carefully design an RPA operating model before deployment to avoid the common hurdles of adopting emerging technologies.
ISG helps enterprises explore how RPA can help them achieve costs savings and improved quality and knowledge management. Contact us to learn more.