Robotic Process Automation: A more efficient back office
Robotic Process Automation (RPA) has been continuously expanding for years. Last year, the global volume was at 1.3 million USD, in 2020 it is projected to reach five billion USD. This corresponds to an average annual growth rate of 56 percent. A. T. Kearney and Arvato have studied how companies can benefit from the new type of automation.
Robotic Process Automation (RPA) will have a profound impact on most organizations: Over the course of five years, RPA will take over 41 percent of the financial back office processes; in ten years, it will be 53 percent. This is one of the results of a current study by A.T. Kearney and Arvato called “The impact of RPA on finance back-office processes.” The authors of the study have researched how current progress in the area of artificial intelligence (AI) and data analysis will lead to increasingly powerful and suitable RPA solutions for the optimization of processes in the financial sector. More than 20 experts were interviewed for this study.
Currently, RPA is primarily used in the financial and health sectors, with 69 percent of users being large companies. In North America, 54 percent of all companies already use RPA solutions, while only 34 percent do so in Western Europe. Many providers are working on adding artificial intelligence to their solutions, and the study’s authors expect that AI will also play an increasingly important role in this area. After all, cognitive skills enable smarter and more efficient solutions.
According to the authors, RPA will likely automate all high-volume, repetitive rule-based activities both on the front- and back-end. RPA solutions will routinely pull information from or store it in various sources, and it will be enhanced with analytics skills. By 2023, RPA will be using cognitive skills to select the next action step from a fixed list of possible options (Next Best Action).
In ten years, the RPA applications will be using AI to independently learn and enhance themselves. They will process most back-office processes from beginning to end without requiring any human input.
An inhibiting factor for this technological success story, however, is the lack of experts able to design, develop and implement large scale RPA solutions. Especially when dealing with the integration of AI. Furthermore, additional barriers exist such as the distrust of innovations.
Impact on back-office processes
When companies plan to introduce RPA solutions, the focus should be on the question which activities should be automated – and not which professional roles should be automated. Automation can enormously increase efficiency which enables team members to focus on more challenging and more interesting aspects of their job.
The authors of the study are convinced that in reality, there will be drastic changes in many areas of an organization. In accounting departments, for example, RPA will reduce personnel requirements by 28 percent to 41 percent in the next five years freeing the respective team members for activities that generate more added value.
Naturally, not every process is equally well-suited for automation. In accounting departments, for example, the obvious focus should be on monitoring receivables due as well as the collection of receivables; in order processing it should focus on data entry and review.
The benefits of RPA
The benefits of RPA solutions are much more extensive than the potential efficiency increases. The authors of the study list seven additional factors that make RPA very compelling:
- The implementation of an RPA solution usually pays for itself within less than one year, the ROI over a term of three years is between 300 and 1,000 percent.
- The tasks are always processed in the same way. This prevents, for example, the occurrence of inconsistent data in different applications.
- Processes can be performed 20 times faster when the processing is carried out by RPA instead of humans. This reduces wait times in customer service and improves the customer experience.
- A comprehensive log can be created for each process.
- An individual RPA solution can be scaled up or down as required or used for different independent processes.
- Fewer errors. If RPA is used in a supporting functions for team members, it can reduce the error rate by quickly providing relevant information.
- Thanks to RPA, certain processes that were previously outsourced to external partners can now be profitably processed in-house again, which gives the company more control over quality and ultimately the customer experience.
Implementation of an RPA solution
Six factors contribute to the successful implementation of an RPA project:
- Process optimization. Before a process is automated, it should be optimized. Moreover, the RPA project should focus on processes with the highest added value instead of attempting to automate everything.
- Early integration. The dialog between the stakeholders in the organization should start as early as possible. This helps to evaluate willingness for change and dispel any reservations with regard to RPA solutions.
- Proof of concept. Initially, the effectiveness of RPA should be proven. This helps to build trust in the technology.
- Holistic design. An RPA implementation also has to take the company’s existing operating model into account as it will potentially be necessary to redesign the organizational structure or professional roles as part of the implementation of the RPA.
- Implement and learn. The implementation should preferably occur in combination with the use of agile development techniques: The rollout takes place in a series of runs during which the software is tested and optimized. This will at the same time ensure that the respectively required expertise is developed in the company.
- Prepared scaling. As soon as the RPA has proven its merit, the solution should be quickly scaled up. For this, it would be prudent to prepare a detailed rollout plan early on.
The authors of the study conclude that companies with a significant number of financial processes should consider introducing RPA solutions in the back-office. Otherwise, the company may face competitive disadvantages. The implementation should be planned carefully, potentially as part of a larger reorganization or transformation program.
In the coming ten years, the use of RPA will also increase in the service sector. Software bots will take over many routine tasks which are still being performed by human team members today. The team will thus be able to focus on more strategically important tasks. Aside from the increase in efficiency, RPA may also lead to higher sales revenue as a result of the positive impact on the customer experience.
The study “The impact of RPA on finance back-office processes” can be found here.
Author: Editorial team Future. Customer.
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