Robotics Process Automation – is it the Solution You've been Waiting For?

With costs at a third of traditional offshore FTEs – is robotics "next big thing"? There's a new guy in town who is making a lot of shared services and outsource provider folks nervous, and it's not because he's operating from a lower-cost location or because he's smarter than anyone else. It's because he's completely displaced from the normal internal organization and is focused only on one thing: doing the job right (that, and he never sleeps). [eventPDF] Robotics – previously the fantasy of sci-fi domains – have left an indelible mark on the manufacturing industry (check out any automotive factory, to see how) and even in the hospital operating room. Now, robotics are shifting into process workflows, and although so far the approach has been softly-softly, given developments at firms like Blue Prism and IP Soft, it’s a safe assumption that "robotic process automation" will soon become part of Shared Services’ modus operandi. The trend is being encouraged by Cloud computing, which has provided a big boost to a capability that has been in existence for years, but is now easy to deploy and not sitting on thousands of desktops. First: a brief introduction What we are talking about here is not quite the manufactured human you may be envisaging, reaching out to push buttons while its real human counterparts huddle at the water cooler, or head home at the end of their day. We are talking about software that interfaces with the desktop to pick up parts of processes and route them to fulfillment. In fact, the crucial differentiator, as David Brain, Global Head of Process Robotics at Sutherland Global Services explains, is that this software can interact at the user interface and therefore can interact with any application. As simple as this sounds, the implications are huge. It means that rather than spending money to integrate traditional application software, robotic software is a tool that orchestrates other applications through the existing user interface; so it is not strictly speaking "integrated." Brain, a process expert who has made process robotics his specialty and is currently working with several vendors and clients in piloting an innovative approach to optimizing back, middle and front office services, cites Blue Prism as one of the pioneers in robotic process automation (RPA). Blue Prism, recently recognized by Gartner Research as a "cool vendor" is a leading provider in this field, and defines RPA as "process automations involving computer software driving existing enterprise application software in the same way that a user does." Said differently, the Outsourcing Institute’s Frank Casale defines RPA as "the application of advanced software and algorithms to complete routine tasks and operations previously performed by humans … The technology can capture and interpret existing applications for processing transactions, manipulating data, triggering responses and communicating with other digital systems". So, instead of a living, breathing human at the desk, robotics can manage a desktop interface according to a prescribed routing framework and can do so incredibly quickly, at 100% accuracy, on the most complicated of business processes. What this means is that organizations can build virtual back offices based on robotic FTEs that can handle millions of tasks quicker, cheaper and more efficiently than any human can. This has enormous implications for organizations who can implement the technology themselves, or for BPOs, who can adopt this strategy for their operations. Finally, "lights out" may be a somewhat realistic scenario. "According to Gartner’s 2013 CEO survey, 60% of CEOs believe that the emergence of smart machines capable of absorbing millions of middle-class jobs within 15 years is a ‘futurist fantasy’." What is missing, of course, is judgment. Machine intelligence will never be able to replace the intelligence, judgment and communication skills of a human (or will it?). The likely role of humans in the service market workforces of the future, therefore, will be in high-level roles that require complex and subjective decision-making: value-added activities that require analysis by skilled and highly trained personnel. In other words, those Centers of Expertise that you have been investing in will pay off. While BPO providers have long been promoting low-cost employees and automated processes – with impressive impact on the cost base – the savvier sourcing consultants, like Deloitte’s Peter Moeller, have had their eyes on the distant horizon, wondering aloud where we go next. "Next" is an interesting proposition. For those who want to push the margins beyond what India or China can offer, and for others who can't muster the investment required for automation and need to make the best of existing legacy systems, "next" might just be a robot. [eventpdf] Robotics is not automation in human form Robotics is a tremendously misunderstood term. In its simplest definition it’s mistaken for pure automation (or shall we call it OCR?) and in its most complex, it assumes a sort of "tin-man" sitting at a desk. Neither is correct. What differentiates this trend from good old-fashioned "automation" is the ability to reach into the user interface. Today's version of robotics refers to "robot process automation" and is effectively about software that drives software. The software [the robot] sits on servers and connects via VPN with the client’s user application. The whole thing is driven by procedural or rules-based processes, of low to moderate risk. Getting to work that was previously "out of scope" Robotics offers attractive leverage for work that has, until now, not been automated – for whatever reasons. It’s made cheaper by deploying software instead of FTEs, and the risk is negligible because you carefully route the actions around your process framework. Anything outside the norm is escalated to a human. Robotics software application can read what's on the screen, and works with any application. This is especially interesting for customers laboring under old mainframe applications, who have until now faced substantial hurdles. Robotics removes the obstacles by reaching into the PC and controlling the work. An added benefit is that deployment can be managed by the operation directly, which means more agility and saves time by not requiring the full regressive testing of a back end implementation. Who controls the robot? As with any BPO agreement, a client can opt to hand everything to a provider or maintain control themselves, depending on their drivers and objectives. Again, similar to BPO, the advantage of leveraging a provider is that they build up capability and expertise, which can drive improvements across different clients. Sutherland Global Services currently runs a team of 25 robotics experts who provide support to ongoing operations, driving improvements all the time. "Blue Prism claims that business processes can be safely automated 3-5 times faster than traditional approaches" Where is the impact greatest? For now, Finance and Accounting is seeing the most interest within Fortune 100-type of customers, but as confidence grows we can expect to see robotics moving into new areas. Paralegal for example, is a costly resource for many organizations, and cannot easily be shifted offshore for confidentiality reasons. Robotics would be a good fit for this role. "A robot does not have to understand the data," explains Brain, "they just need to understand the process and where the process differs based on the input. So robotics presents a perfect opportunity." Similarly, the mortgage industry offers amazing opportunities, according to Brain. The beauty of the robotics solution, to its supporters, is that it allows you to deal with the symptom [of inefficiency], without having to deal with the underlying cause. Whilst this may sound like a short falling in robotics, it means that you can achieve the same benefits in applying robotics, with minimal risk, cost and operational impact as opposed to replacing the underlying systems. The bottom line Robotics offer savings of roughly 20-30% over offshore, according to Brain, whereby cost is not the sole valuation here; it’s only part of it, he emphasizes. Quality and speed may have the bigger impact in the long run. An additional factor that weighs in on cost is the fact that customers increasingly prefer a near-shore service, which would be an expensive proposition under traditional models. "Given the right process, robotics can effectively transfer a 1000-person operation into something that fits into the space of a cupboard," says David Brain. "And the fact that you can site the system closer to your end-clients, at low cost, is an immediate advantage." Who or what is behind the trend to robotics? The widely acknowledged pioneer in this field is Blue Prism, named a "Cool Vendor in Business Process Services" within Gartner's 2013 report. The company’s work is based on a data entry robot that can be trained to process rule-based activity in an organization's information processes, thereby improving accuracy and efficiency. Robotic automation software enables business operations and BPOs to automate business processes quickly and cost effectively – without the need for complex software engineering. In fact, Blue Prism claims that business processes can be safely automated 3-5 times faster than traditional approaches. Companies that have leveraged Blue Prism’s robotics software to date include The Co-operative Banking Group, Shop Direct, Fidelity Investments and the NHS. So, who is on board? Sadly, not enough of the people that count. According to Gartner’s 2013 CEO survey, 60% of CEOs believe that the emergence of smart machines capable of absorbing millions of middle-class jobs within 15 years is a "futurist fantasy". Gartner predicts, however, that smart machines will have widespread business impact by 2020. It might be wise to listen to the analysts, in this particular case. According to Kenneth Brant, research director at Gartner, "Most business and thought leaders underestimate the potential of smart machines. Job destruction," he says, "will happen at a faster pace, with machine-driven job elimination overwhelming the market's ability to create valuable new ones." With the ongoing weak revenue growth in the global economy likely spurring demand for continued cost reduction and productivity improvement. Robotics will almost certainly be part of the solution. Benefits of Robotic Process Automation: · improve quality by removing human error · higher speed and lower cost (even compared to offshore FTEs) · immediate automation of hundreds of small to medium procedures · greatly reduced processing and lead times · spare capacity can be transferred as needed · no need for costly integration or process redesign · ability to run transactional processes onshore, thus meeting compliance requirements, or cultural hesitancy to moving processes offshore · virtualized environment can be scaled up or down as needed. Source: Operational Agility Forum

Robotics Process Automation – is it the Solution You've been Waiting For?

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