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The Dilemma of Robotic Process Automation

14 May 2019 | Laurent Doucet, Principal, Roland Berger Hong Kong

Technology is creating boundless opportunities to transform lives… one that is working to the advantage of the people” — Indian Prime Minister Narendra Modi

One technological movement that is quickly gaining momentum in various industries and across corporate functions is Robotisation, or the use of virtual bots that simulate employees. Often, it goes by the acronym RPA, which stands for Robotic Process Automation. It is best visualized as digital bots that can interact with existing computer applications, like a human being would. It is analogous to a software worker working in a virtual workstation, in an arguably faster, more efficient, and more transparent way than human.

Globally, firms are looking seriously into robotic process automation as a technology that can perform clerical tasks and functions such as data entry, processing, and transfer of data. Alongside advances in artificial intelligence (AI) and a slew of new technologies, RPA stands to become more sophisticated than ever. Indeed, the enterprise world is increasingly obsessed with digitisation and automation. The market has doubled in size between 2015 and 2016, reaching a value of USD 600 million, and forecasts show steady growth of 40 percent a year through 2021.

The story of technology displacing human itself is not new. Yet, in a climate of low business confidence and slow economic growth, the fear and anxiety among employees prone to displacement is reaching new heights. If technological displacement is inevitable, how should organisations learn to manage their human capital and redeploy employees affected by the technology?

The Potential in Bots

To fully leverage emerging technologies such as software bots and artificial intelligence, companies need to understand what it is, recognise its benefits, and then decide how and when best to implement it. Automation programs like RPA work resembling a patch on existing IT tools, which means it works without having to modify the entire body of system.

At its core, RPA and its robots (or bots) is a technology that can be configured to “observe” the way a trained user performs a particular task and the various decision points involved in accomplishing that task, and to replicate the process. RPA systems are generally based on artificial intelligence. An RPA system watches the user perform a task in the application’s graphical user interface (GUI), and then perform the automation by repeating those tasks directly. It is best deployed for tasks that are repeatable, rule-based and consist of structured data.

The most tangible effect of RPA came in the form of cost reduction. According to Roland Berger, a German consultancy, up to 40% of tasks in administrative departments and operational business functions have a significant RPA potential. The savings generated by RPA-related measures often means and their simplicity resulted in adoption globally. Many companies reportedly see return on investment in just three to six months.

Mobility Through Bots

It is important not to lose sight of what this also means to individuals. Technologies like RPA are aimed to substantially remove workers’ pain points, such as manual rework and unproductive hours. Yet, the success of RPA often entails re-designing group-wide organisation and redeploying of personnel.

To understand the impact of RPA on jobs, it is worthwhile to take a closer look at the types of bots. RPA solutions generally fall into two types: “attended RPA” and “unattended RPA”. The main difference between the two lies in the extent of dependency or interrelationship between the bots and the human operators.

In the case of attended RPA, the bots are installed on individual workstations and interact continuously with the human operators, performing actions at their request. Attended RPAs are perfectly suited to assist front-office human operators in processing customer requests, for example by simultaneously retrieving relevant data across all available databases on command.

In unattended RPA, the bots are installed on the server and they automatically execute the entirety of process when triggered. Unattended bots are mainly used for back-office functions with defined process flow and structured datasets, such as accounting. A human operator only intervenes when troubleshooting is needed.

In many cases, automation impacts a small portion of workload for a large sum of employees. This frees up time for these employees to perform higher-value tasks, enabling upward mobility. With upskilling, employees move from declining to growing occupations. For example, industrial program managers become innovation engineers, quants become data scientists, and so on.

However, when automated activities represent the bulk of the workload for a limited number of employees, mobility within the company is challenging. The case for automation or outsourcing is stronger, unless the employees transition between roles that are phased out and newer jobs that are appearing. Redeploying staff in this case is challenging from policy and economic standpoint, and the company should plan for it properly in advance.

Bots, People, and Organizations

Unlike past approaches that focused on automation at a local level, RPA is now seamlessly part of a global strategy. RPA has a continuous operability, with potential to run 24 hours a day, seven days a week. To employees, the time freed up by RPA can be redirected toward more challenging tasks within the firm, making RPA an enabler of value-creation and a valid alternative to outsourcing.

Reporting is a classic example. RPA makes it possible to cross-reference internal data with external data, for example between accounting figures and market pricing information. Bots extract, process and format the data, putting it in the form of tables. Human operators can then focus on analyzing the data and synthesizing recommendation for better risk and accounting governance.

However, to succeed in capturing RPA’s full potential, training and mobility programs should lie at the heart of the company’s IT and personnel transformation. HR is required to first analyze job supply and demand gaps, these exist between departments, levels, locations and years. HR should also facilitate professional redeployment paths, through measures such as employment on temporary or project-based activities, and re-insourcing activities. All these need to be accounted for prior to the introduction of RPA.

The implementation of Robotic Process Automation will play an important role in cost reduction effort across various industries, ranging from Financial Services to Logistics and Maritime. Every industry will undergo similar end-to-end digitisation and automation exercise. In that, one thing is clear. The question about RPA will be a challenge that every organisation need to resolve.

Join Laurent on his panel ‘Scaling up with Intelligent and Advanced Analytics – How to Better Understand Your Customer and Drive New Business Values’ at ConnecTechAsia 2019, Day 2, Marina Bay Sands. View the full summit programme here.

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