IoT might sound fancy but the technology is already all around us, even on your wrist. But how does it work and how will it change business? Let’s take a closer look.
Robotic Process Automation: What Business Leaders Need to Know
Robotic process automation or 'RPA' may sound futuristic, but the technology is not exactly what it says on the label. First of all, it doesn't involve robots. Second of all, it doesn't handle entire processes, but rather takes care of individual tasks within processes. In spite of this arguable mismatch between its name and its function, RPA plays an extraordinarily important role in modern business. Even better, it does so with technology that exists and is being widely used (with very successful results) right now, as we will see in the next section.
This overview will give you insights into the current and future potential of RPA, explaining why demand and use for RPA are growing faster than for any other type of enterprise software.
Success in numbers
Last year RPA software revenue market was worth US$846 million (RM3.5 billion), an increase of 63.1% over 2017. That trend is expected to continue with RPA spending surpassing US$1.3 billion (RM5.4 billion) in 2019. While one study estimates that the market will be worth US$3.1 billion (RM12.8 billion) by 2025, another is confident that it will take a shorter time to get twice that far, with the global RPA market reaching US$7.3 billion (RM 30 billion) by 2024.
The fastest growth will be in Asia Pacific, and the region is already buckling up for the ride. Malaysia, for one, is in the process of opening its first RPA Centre of Excellence right here in Kuala Lumpur.
What does it do?
While there are still many things computers can't do as well as humans, there are also things computers can do much better. RPA focuses on the types of tasks where computers excel and humans… not so much. Among these are the many dull, repetitive tasks (from data entry to fact-checking to product testing) that take up so much of your employees' time.
The human brain is not wired to spend hours on tedious tasks. It gets tired, bored or distracted, which increases the likelihood of careless mistakes. RPA, on the other hand, does not need a task to be interesting to hold its attention. Nor does it need breaks or even sleep. It carries out the work in the precise way and sequence it was programmed to do with much higher speed and accuracy than even the most dedicated human worker.
How this impacts business
It is expected that by 2020, 40% of banks and insurance companies in Asia and Asia Pacific will have implemented RPA. This is unsurprising, given the countless use cases that have arisen in the banking and insurance industries. For example:
- Bank of America uses RPA to service thousands of monthly mortgages and vehicle-servicing cases in real-time
- ICIC Bank has improved productivity and practically eliminated errors by handing over its millions of daily transactions to RPA software
- American Express is in the process of implementing RPA to expedite airline ticket cancellation and issuing refunds
- With RPA, the insurance company American Fidelity now classifies and routes thousands of email claims in seconds – a task that used to take 45 staff hours
Manual, labour-intensive tasks such as processing insurance claims can be significantly sped up with RPA.
Non-industry specific support
Virtually any company has certain functions (HR, finance, accounting, IT, customer service, legal, etc.) that can be vastly improved by outsourcing parts to automation. The thing to remember is that RPA doesn't just take over manual tasks, it also improves on them. Take internal auditing, for example. When done manually, it takes great amounts of time, effort, and coordination to conduct yearly audits on all business areas. To save time, companies resort to using only small data samples for the audit, resulting in an incomplete picture.
The right RPA solution uses its processing power to conduct audits on your entire data set. It can also work continuously, helping you uncover key risk indicators in real-time and enabling you to make the best business decisions based on up-to-the-minute information.
Replacing tasks, not people
There is always the lingering fear that any technology that improves efficiency will result in job losses and machines replace human workers. This is why it bears repeating that RPA is designed to do tasks that should be carried out by machines rather than by people. RPA takes over work that most employees hate – the day-to-day administrative tasks that eat into the time they would rather spend on what RPA cannot do – work that is challenging and requires human expertise and creativity. Harvard Business Review reports that for 47% of the RPA projects they reviewed, 'replacing administrative employees was neither the primary objective nor a common outcome.'
The wide use of RPA has provided ample evidence that it can nearly double your rates of compliance, accuracy and productivity. Generally, these and other improvements mean you can expect ROI in less than 12 months (though other studies put the number at 18 months). However, like any other initiative, RPA cases can fail, nearly always because the process was already broken or otherwise unsuitable for automation.
Do you need RPA?
RPA excels at certain tasks, and identifying these tasks within your company is the best way to ensure you get a fast and high return on your tech investment. Tasks that can be handed over to RPA are those that are:
- Prone to human error
However, RPA is not suitable for:
- One-off tasks
- Processes which, in themselves, have problems
- Tasks that humans still do better than machines, such as anything that requires visual confirmation
- Any tasks that a person can do quickly and easily without it causing undue tiredness or boredom
- Work that tends to be heavy on exception-to-the-rule cases
- Anything that requires creativity or ingenuity
When intelligently implemented, RPA can reduce your business costs, raise productivity and eliminate errors. It can also improve staff morale. By taking boring, repetitive work off your employees' plates, it leaves them to concentrate on the more rewarding aspects of their job. Now that is a win-win.
More in this series:
- 5G: What Business Leaders Need to Know
- Internet of Things: What Business Leaders Need to Know
- Artificial Intelligence: What Business Leaders Need to Know
- Cloud: What Business Leaders Need to Know
- Big Data: What Business Leaders Need to Know
- Robotic Process Automation: What Business Leaders Need to Know
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