Increasing overhead and declining margins can drive an organization to the realization that a turn towards cost take-out strategies such as outsourcing might be the answer to improve their bottom line. However, the traditional business process outsourcing
(BPO) to India or other lower cost locations is no longer the only possibility. Fast emerging technology, such as Robotic Process Automation (RPA), or otherwise called software robotics, is creating an alternative. The ability to reduce human headcount with
virtual headcount can reduce costs even further for an organization.
For some time, BPM based solutions have been looked at as a panacea for its ability to automate manual processes and provide governance. Organizations have achieved success in improving efficiency by implementing an integrated workflow and case management
solution providing a higher level of control to complex processes. However, despite the best efforts of these organizations to implement these solutions there are often gaps remaining. There are several reasons for this including when the integration to
a legacy system is not possible due to the prohibitive cost of developing a suitable API, the expected end of life of systems which makes an expensive integration a poor future investment or the source system is a closed third-party utility.
One example comes from a major global bank that was recently going live with a BPM based solution to automate their institutional client onboarding process. The system was designed to automate the process but was not complete. Since the customer due diligence
process required the KYC analyst to review customers, beneficial owners and senior management against third-party watch lists (i.e. OFAC) they decided the BPM based solution was not appropriate for integrating their system to these external data sources.
The system still required the analyst to copy and paste from one screen onto another to complete the customer due diligence before moving to the next step in the process. This repetitive chair turning exercise is fertile ground for a software bot. The opportunity
to further enhance the automation potential is not lost on BPM software vendors. PegaSystems, a leading BPM platform, recently acquired robotic automation software provider OpenSpan to provide a solution for this type of use case that it describes as “bridging
the last mile of integration.”
RPA includes various types of tools from desktop automation that could be used in the example above to more advanced automation incorporating technology like natural language processing that can be used in call centers, artificial intelligence or self-learning
where the robots can learn to adjust to changing inputs to complete tasks like humans use trial and error. These types of solutions are already being used to automate IT support in datacenters and other use cases. Besides cost another driver for the need
for these automated cognitive solutions is the vast amount of information that is generated by “big data” which would require armies of humans to consume and analyze. An RPA solution incorporating cognitive capabilities can be used to initially process this
information and generate cases which can be assigned to human investigators for further evaluation. This type of solution is perfect for anti-money laundering due diligence where the potential of false positives currently creates backlogs for banking organizations.
Banks have been leaders at implementing RPA to remove the human from many repetitive tasks that can be performed faster and more accurately by a software bot. However, when deciding to embark on an RPA initiative it is important to consider a complete automation
strategy that is supported by a business case and ROI analysis. The best practice I would recommend is to perform a viability and readiness assessment prior to commencing on an RPA initiative. This assessment should include several factors starting with
a value chain analysis that places improving the customer experience in the forefront, the current level of manual effort required, steps in the process, current state operational risk and the criticality of the process to the customer and the business. An
important aspect of any assessment would be the creation of a business case which would allow decision makers to understand where the implementation of software automation would provide the most effective return on investment.
An assessment should consider the following:
- Decide on the capabilities of the technology within the context of an organization, its customers and where it would be most appropriate i.e. value chain analysis
- Determine the feasibility of implementing the technology for those processes based on the benefits to be derived i.e. feasibility assessment
- A technology assessment to choose the correct tool for the specific set of requirements since there are differences in the various platforms and types of automated tools (i.e. desktop automation versus cognitive automation) and vendors
- Decide on a deployment roadmap that incorporates the considerations mentioned above
RPA technology continues to evolve and includes those cognitive aspects of Artificial Intelligence that has created concern in many circles on the impact it will have on future jobs. However, as the industrial revolution brought vast changes and disruption
to the agrarian economy during the turn of the previous century it is hoped that this revolution will deliver new opportunities as well. The IT outsourcing industry that is helping assist many organizations with current implementations may be among the first
to feel its effects. The offshoring of jobs has been a cost takeout strategy for several years based on simple economics. The average cost of an onshore FTE at $100k per year can be replaced by an offshore human for $40k. However, the average cost of a
software robot at less than $15k will create a similar paradigm shift. Additionally, when implemented successfully the software robots can bring greater productivity and reduced risk than either onshore staffing or traditional human outsourcing. Ultimately,
the future of employment in many industries, both onshore and offshore, will be determined by whether there truly is new demand and the ability of the collective workforce to be able to train and qualify for these new value-added jobs. It is this factor that
makes this revolution vastly different from the Industrial Revolution where assembly line work replaced farming.