The challenge of optimizing labor-intensive and repetitive manual processes has been faced by companies across different industries for a long time. While manufacturing companies have already understood the benefits of optimizing through the use of robots for several decades now, the service oriented companies have not been able to benefit from the use of robots until very recently. – By Ajay Bali, Director, Digital and Analytics Leader, EY Luxembourg
With Luxembourg having a service-dominated economy, many local businesses temporarily solved the issue of process optimization in the 90s by outsourcing certain manual and back-office activities to other countries. According to an EY survey, this approach has helped companies to reduce costs, improve focus on the core business activities and increase operational efficiency. However, outsourcing has also created many serious challenges for businesses such as reduced output quality; data protection and confidentiality threats; as well as increased dependency on external service providers. As per EY research, for almost 25% of companies across core EU markets, such disadvantages meant bringing many outsourced services back in-house.
Fortunately, with technology advancements in the last couple of years, Robotics Process Automation (RPA) has enabled businesses to optimize and scale their processes in a very cost effective manner. More and more businesses are beginning to employ RPA, marking the dawn of an entirely new era for process optimization and scaling up operations. RPA is able to cut performance costs for certain activities by as much as 60% compared to outsourcing (equivalent to 90% cost savings for in-house resources), allowing companies to avoid all the potential disadvantages and threats described earlier. At the same time, there are numerous new benefits enabled by this technology. These include increased flexibility and scalability of businesses, enhanced quality of outputs, as well as higher employee satisfaction and engagement.
What are the main benefits of robotics?
As with outsourcing, significant cost savings are the key driver for most of the companies that decide to automate their activities using robots. As per EY analysis, an average robot-hour costs a company less than €2. In teams where people perform tasks with little subjective judgment, there is an immediate cost benefit from RPA, with the investment often being paid off in less than a year.
Besides the financial rewards, robots are also able to perform repetitive tasks faster and with more precision. The RPA processes can be set up to work 24/7 on several activities in parallel, while taking significantly less time to complete the task. Additionally, the robots work with the pre-defined business rules and decision options, meaning double-digit reduction in error rates.
Another core implication of switching to RPA is the ability for the companies to scale up and grow much easier. While implementing new business processes, entering new markets or simply expanding the operations, companies do not have the major need to employ and train new FTE’s anymore. With the robots, it takes little or even no time to increase the volume of already automated activities. This makes RPA a key innovation driver for many businesses.
As per EY best practices, companies using process automation tend to have significantly less barriers to scale up because the RPA processes not only help accelerate innovation due to real-time processing but also improve reliability.
While it may seem that people are scared to have their jobs automated, the robots actually help with the employee retention and satisfaction. In the companies where repetitive, routine tasks are being performed by robots, the workers do have enhanced engagement due to their increased ability to focus on more creative, intelligent and valuable activities.
How does robotics process automation work?
Being a simple piece of software, RPA runs on dedicated servers within the company, performing various back-office and administrative tasks. Requiring no software development or programming skills, robots can be set up, modified and operated by advanced users without any specific IT background. Keeping logs and track of every step performed, the robots are also fully auditable for compliance and troubleshooting purposes.
The software is based on pre-defined business rules that define various activities and tasks performed by the robots. These activities include working with different systems and software applications as well as databases, files, documents and other system components. The robots are able to operate within any existing IT landscape, not requiring any additional changes.
RPA works best with tasks that do not involve creative inputs or subjective decisions. Across different industries, such tasks may include:
- Customer onboarding and KYC
- Recoveries automation
- Data migration
- Claims reimbursements
- Invoice validation and processing
- Customer service
What is the future of this technology?
While RPA is being used by an increasing amount of companies worldwide, currently the tools are limited to pre-defined decision points and actions that are based on the business rules and established processes within the organization. However, being merely an emerging technology, RPA is evolving and constantly developing.
With the development of Machine Learning and Artificial Intelligence, the robots soon will be able to automatically track the users’ activities, mark patterns, identify decision points and learn to replicate such tasks. However, at this stage, the RPA technology has already gone far enough in order to be completely manageable by purely business users, not requiring any programming and development capabilities.
While RPA is adaptable to any IT landscape, many companies decide to take a step further and adjust their systems and operations to better accommodate robots. Seeing a big future in this technology, many EY clients have already initiated internal organizational, operational and IT reforms to adapt their businesses to the new reality by entrusting the robots to perform even more activities and build core business processes around them.
What are the steps for a company to employ the Robotics Process Automation?
Having experience of delivering over 40 RPA projects globally, EY has established a unique implementation approach to easily automate processes for any type of client. The approach starts with the ideation stage, which identifies the activities to be automated. This process is followed by the creation of business cases. Certain processes are selected based on the business case, followed by development of the prototypes and proof of concepts. Afterwards, the roll-out phase is performed using agile methodology, with automation of processes being done in parallel to coaching of selected employees within the clients’ organization, enabling internal resources to further develop, maintain and modify the robots independently.