What is robotic process automation?

RPA is an application of technology, governed by business logic and structured inputs, aimed at automating business processes. Using RPA tools, a company can configure software, or a “robot,” to capture and interpret applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. RPA scenarios range from something as simple as generating an automatic response to an email to deploying thousands of bots, each programmed to automate jobs in an ERP system.

COOs working for financial services firms were at the vanguard of RPA adoption, figuring out ways to use software to facilitate business processes without increasing headcount or costs, says Regina Viadro, vice president at EPAM Systems and adviser of the company’s IA practice. Viadro has worked on RPA engagements for clients in financial services, healthcare, retail and human resources, showing the breadth of RPA use today.

What are the benefits of RPA?

RPA provides organizations with the ability to reduce staffing costs and human error. David Schatsky, a managing director at Deloitte LP, points to a bank’s experience with implementing RPA, in which the  bank redesigned its claims process  by deploying 85 bots to run 13 processes, handling 1.5 million requests per year. The bank added capacity equivalent to more than 200 full-time employees at approximately 30 percent of the cost of recruiting more staff, Schatsky says.

Bots are typically low-cost and easy to implement, requiring no custom software or deep systems integration. Schatsky says such characteristics are crucial as organizations pursue growth without adding significant expenditures or friction among workers. "Companies are trying to get some breathing room so they can serve their business better by automating the low-value tasks," Schatsky says.

Enterprises can also supercharge their automation efforts  by injecting RPA with cognitive technologies  such as ML, speech recognition, and  natural language processing, automating higher-order tasks that in the past required the perceptual and judgment capabilities of humans.

Such RPA implementations, in which upwards of 15 to 20 steps may be automated, are part of a value chain known as  intelligent automation  (IA), Viadro says. "If we were to segment all of the major enterprises and ask them what's on their agenda for 2018, close to 100 percent would say intelligent automation," Viadro says.

By 2020, automation and artificial intelligence will reduce employee requirements in business shared-service centers by 65 percent, according to Gartner, which says the RPA market will top $1 billion by 2020. By that time, 40 percent of large enterprises will have adopted an RPA software tool, up from less than 10 percent today.

Why bots are poised to disrupt the enterprise ,Robotic process automation is a killer app for cognitive computing ”

What are the pitfalls of RPA?

RPA isn’t for every enterprise. As with any automation technology, RPA has the potential to eliminate jobs, which presents CIOs with challenges managing talent. While enterprises embracing RPA are attempting to transition many workers to new jobs, Forrester Research estimates that RPA software will threaten the livelihood of 230 million or more knowledge workers, or approximately 9 percent of the global workforce. 

Even if CIOs navigate the human capital conundrum, RPA implementations  fail more often than not. “Several robotics programs have been put on hold, or CIOs have flatly refused to install new bots,” Alex Edlich and Vik Sohoni, senior partners at McKinsey & Company, said in a May 2017 report.

Installing thousands of bots has taken a lot longer and is more complex and costly than most organizations have hoped it would be, Edlich and Sohoni say. The platforms on which bots interact often change, and the necessary flexibility isn’t always configured into the bot. Moreover, a new regulation requiring minor changes to an application form could throw off months of work in the back office on a bot that’s nearing completion.

A recent Deloitte UK study similar conclusion. "Only three percent of organizations have managed to scale RPA to a level of 50 or more robots," say Deloitte UK authors Justin Watson, David Wright and Marina Gordeeva. 

Moreover, the economic outcomes of RPA implementations are far from assured. While it may be possible to automate 30 percent of tasks for the majority of occupations, it doesn’t neatly translate into a 30 percent cost reduction, Edlich and Sohoni say.