The forward-looking benefits of RPA

It is probably time to look at the benefits of RPA from a different perspective

The way organisations have approached RPA has been quite fascinating: driven by a reactive approach and mainly looking at the past in order to show any form of added value.

• It all starts with reviewing your legacy or poorly (newly) redesigned processes and determine good candidates for RPA based on a set of predefined selection criteria (the generally accepted ones: rule-based, structured data, repetitive, high-volume, etc.). Without any doubt, the substitution of existing manual tasks, naturally leading to cost savings, has been the key driver.
• Don’t change anything (or very little) and apply RPA to targeted process steps. Don’t you dare optimising (or re-designing) your processes to enable better automation as this will go against all the principles of RPA (cheap implementation and fast return). I am being a bit sarcastic here.
• And here you go: you now have some silos of automation bringing some sort of value. At this stage, no one really knows how to prove that RPA has delivered immediate tangible benefits (measuring qualitative benefits is even more challenging and requires some metaphysical reflection). You actually start wondering if the total cost of ownership is beyond your affordability levels.

Stop (only) looking at the past (and try hard to justify your initial investment): it is probably time to use RPA in a much more forward-looking and proactive way. It is all about looking at the future in order to ensure that your staff are well-equipped to do more with less and your cost structure (mainly variable) remains competitive.

Augmentation

Augmentation means starting with what humans do today and figuring out how that work could be deepened rather than diminished by the introduction of RPA. Bots should be perceived as an additional member of your team that are here to help you achieve your objectives (bots should be given a specific identity in the form or “virtual complementary worker” in your active directory!).

A key principle when deploying automation is that activities executed by bots should somehow bring more value than activities previously performed by human operators only. In other words, human augmentation via RPA should enhance productivity or capability.

So how RPA bots can actually augment humans?

• By expanding and increasing frequency of compliance routines with the objective of gradually reaching an optimal level of assurance. A bot can execute additional control activities and act as an early warning system when important thresholds are about to be crossed.
• By enforcing process adherence via ongoing process monitoring activities. A bot can ensure that humans operating certain process steps are actually doing it in line with existing standard operating procedures. A bot can flag deviations, enforce corrective actions and escalate issues. Believe me, a bot can really drive discipline (my real story: almost 100% compliance with a critical security policy has been achieved thanks to a bot).
• By increasing the speed of execution of current activities and ultimately providing a faster service. Take a bot for example that has been enabled to provision user access requests across multiple disperse systems. You might have a backlog of hundreds of requests and some of them will take days to be actioned. Bots will increase the processing capability of humans and will ultimately ensure that SLAs are met. You will have happy customers.
• By generating continuous insights via extended data analysis. Bots can help you gather information from a wide range of data sources and apply some deterministic rules to ultimately produce actionable insights (I am not talking here about cognitive capabilities but just complex rules). Humans can systematically integrate this information into the decision making process.

Bots should be seen as an instrument to augment the current workforce in order to deliver even more value and positive impact.

Cost avoidance

Cost avoidance can simply be defined as avoided spending...and not necessarily decrease spending. Cost avoidance is the calculated value of the difference between what we actually spend and what we would have spent had we maintained our old methods and tools of running our processes.

Organisations will continue to spend money on human workforce but will also invest more and more in virtual workforce. Why? To be ready to react to contextual changes...

So what is cost avoidance in the context of RPA? I believe that a simple illustrative example speaks a thousand words.

Say a given process requires 10 FTEs to operate (a mix of onshore and offshore resources). The scope of this process is currently location specific (Asia Pac). Now, RPA has been introduced to support the execution of a wide range of repetitive and time consuming process steps. However, no direct cost savings have been reported during the first year given that the same resource structure has been maintained. What actually happened is the opposite: more costs due to RPA enablement...Your boss is not happy !

The overall cost of running this process is now $550 K. This includes cost of human labour (onshore salary: $210 K/ offshore salary: $270 K) and virtual labour (bot initial development, licenses and operation: $70 K).

A year later, the scope of the process is extended to another region (EMEA). A few rule-based activities have been added to this process but it remains unchanged in essence. The only thing that has definitely changed is the volume of transactions that need to be processed. Unfortunately the cost of offshore human labour has also increased by 5% this same year. So, had the organisation maintained the old methods and tools, the process would have required an additional 8 FTEs (1 onshore and 7 offshore) and the total cost for running it would have reached $920 K.

But the organisation has actually leveraged RPA to manage the increase in workload, by reusing/ tweaking the existing automation task and adding additional firepower (5 Bot runners). The total cost in that case is $620 K.

The organisation avoided spending the difference between $920 K and $620 K (32% less costs). The “cost avoidance” enabled by the application of RPA is $300 K.

What am I trying to say with that example? Apply RPA to processes with a high potential of expansion in order to avoid future costs. The question regarding the likelihood of "bot scalability" (based on future investments) should be in your mind when assessing a process candidate.

Closing note

I am tempting to say that the more you augment, the more you avoid costs (this statement is not supported by any empirical study !)...And RPA is one of the tool that allow you to achieve this virtuous circle.

I am just focusing on RPA in this post but just imagine if you actually apply the spectrum of intelligent automation solutions...keeping always in mind the 2 overarching principles of augmentation and cost avoidance. The exponential effect will just be massive.

I would be very interested in hearing your thoughts. If you would like to receive my future posts then please follow me.

Opinions expressed are solely my own and do not necessarily express the views or opinions of my employer.