With a projected market size of 2.9 billion USD in 2021, Robotic Process Automation(RPA) is a term that’s on the digital transformation radar of most enterprises. Put simply, RPA is a type of software application or bot that can imitate repetitive human tasks, and perform them continuously, faster, and without errors.
This delivers certain key benefits to enterprises:
- Cost Savings: One of the most upfront benefits of RPA is the reduction in expenditure on back office processes. This is a result of the lower number of resources required for these tasks, and also because of the economies of scale achieved by automation. By most estimates, RPA adoption can lead to anywhere between 40-75% cost saving, when adopted at scale.
- Zero-error Processes: Security and compliance are critical for enterprises, especially in regulated industries like banking and insurance. Lapses here can be disastrous, and also very expensive for organizations. But bots, when designed well, do not make mistakes that human are prone to, and hence automated processes can guarantee security and compliance.
- Re-deploy workforce to high-value tasks: Automating mundane tasks gives enterprises the freedom to re-skill the existing workforce and deploy them to more value-added tasks. Besides being less expensive than hiring new resources, this re-deployment also gives employees the opportunity to engage in more productive and innovative projects.
Despite the benefits, getting started with Robotic Process Automation is easier said than done. The resistance here is two-fold:
- There is resistance from the top of the organization who view RPA as an expensive exercise that will be displacing a system that has worked reasonably well for decades. While the cost saving aspect would be understood, they would want to see actual ROI before they are completely on board.
- The second challenge is the workforce assuming that RPA will lead to loss of jobs. And while this is true to the extent that certain jobs would become redundant, RPA does not immediately lead to a slew of layoffs in the organization.
Here, we will deal with the first challenge, and lay out the best course of action to demonstrate ROI from Robotic Process Automation.
Step 1: Find the Right Process to Automate
Selecting the right process for automation is critical to the success of your RPA project. The process you choose has to be balanced between simple enough to automate for a pilot project, while having enough business value or high volume, to showcase discernible ROI.
While identifying the suitable process to automate, here’s what you should be looking out for:
- Structured and Repetitive processes: The process should be a well structured one: a set of tasks that can be completed in a fixed series of steps, and then repeated over time.
- Rule-based processes: The process, when broken down to the basics, should present a series of if-when decisions, taken according to a set of rules, that can be automated.
- Stable and Optimized processes: The worst thing to do for an enterprise would be to invest good money in automating a broken process. So ensure that the process you choose is the most optimized version possible. However, there have been instances where organizations pick a sub-optimal process and attempt to fix it simultaneously with automating it. And that can be a recipe for disaster, as it increases the complexity of the process.
A key thing to remember at this stage is that not everything needs to be automated. Even within the process you choose for RPA, there might be parts that will need manual intervention, that is par for the course. Automating even sections of a process at the pilot can brings in significant time and cost savings.
Step 2: Do a Pilot Run
Once the process is chosen, the next step is to set up the automation and see how it performs. This stage is about building the base automation system, and testing and iterating till it achieves process efficiency.
You will also have to give some thought into evaluating the team and the tools to be used.
For this, you can have an:
- Internal team that evaluates your process, takes it apart, builds the automation application.
- Outsourced team that has expertise in building Robotic Process Automation solutions
While choosing between the two options, you should weigh in the fact that while internal teams might have better understanding of your processes, they would be new to the tools and technologies involved in RPA. An outsourced team would bring in a certain level of knowledge, experience, and speed into the project. So enabling them with a thorough understanding of the processes would be needed.
If you are bringing in an outsourced team for your RPA project, they will have their own set of tools and technologies that work best for your requirements. However, if you have an internal team working on this, then you have to choose between commercial or freely available RPA tools. These help you build your process map and based on that, the automation software or bot.
A few common mistakes that organizations make at this stage:
- Missed coordination with IT: Because RPA involves the adoption of new technology, enterprises often assume that the IT will lead the charge. However, enterprises teams have to realize that RPA solves for business problems, and hence should be business-led. At the other end of the spectrum, we also have teams that do not loop in IT at the right stage. While IT does not take the lead on RPA projects, they should be in sync with the team that’s building automation systems, so they can build the necessary environments at the right pace.
- Traditional Delivery Models: Delivery models like the waterfall would not be effective in an RPA project. Since the entire pilot is focussed on “build-test-iterate”, traditional delivery models would only be a roadblock in the process, and increase the time taken to get to the implementation stage.
Step 3: Change Management
RPA adoption will provoke a series of changes in job roles, processes, and policies and enterprises should be prepared to deal with that. A few aspects that need to be planned for:
- Re-assigning Workforce: As RPA automates back office processes, segments of the workforce are now free from some of the tedious time consuming tasks. Enterprise team have to plan ahead so these employees can smoothly transition to newer or value-added roles.
- Integration: While RPA will definitely mean new systems to work with, it should not be responsible for completely upending established processes. Once implemented, RPA bots should be integrated with existing systems to ensure continuity and ease of use.
Step 4: Measure ROI
The final step for a pilot Robotic Process Automation project would be to evaluate the ROI. For this, enterprises should start with three basic metrics:
- Speed: How much time does a process take, from start to finish, with the implementation of RPA?
- Scale: What is the increase in number of task completions within a set timeframe, with RPA?
- Quality: What is the percentage of error in a set number of task completions? If the bot has been designed correctly, this percentage should be zero.
When done right, RPA implementation should show clear gains across all these metrics. That, combined with the reduction in resources required to run the process at peak efficiency, should ideally outweigh the initial investment in RPA.
While the exact ROI calculation will be different for each enterprise, basis the complexity of their processes, these metrics are a good starting point to think about gains from RPA.
Once your pilot RPA project is shown to deliver tangible ROI, it’s time to scale it up. This would be both in terms increasing the volume of tasks handled by your pilot project, as well as expanding RPA to more enterprise processes. Large enterprises could also start developing Automation Centers of Excellence(CoE), which would be capable of evaluating business processes suitable for RPA, creating RPA solutions for diverse business processes, and towards standardizing bot governance and control within the enterprise.
Looking to get started with RPA at your organization? Explore our webinar session that takes you through the basic steps to setting up robotic process automation.
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