At Virtual Operations we get the sense that in company meeting rooms across the world there is a conversation that starts like this:
“This robotic process automation thing seems to be taking off. Do you think we should get someone in, maybe pilot with an easy process, and see what comes of it? We wouldn’t want to get left behind in all this.”
In theory this is a reasonable approach, but it is not the most effective starting point if a company is going to realise the true potential of process automation; far from it, on two counts.
Firstly, the subject raised in the meeting is robotic process automation (RPA). This immediately limits the scope of what the company might want or be able to do because RPA is just a subset of a range of advanced process automation tools. As well as the RPA tools there are other tools such as cognitive or AI technologies, desktop automation, document management and analytics that need to be factored in. We prefer our clients to think of Intelligent Process Automation (IPA) where the right mix of tools are deployed to meet well defined strategic objectives.
And herein lies the second problem with our example of how a company might approach process automation. To realise the optimum potential of process automation it is essential to initiate an automation program based on a strategic objective, not to undertake it as an ad hoc piece of work around one or two processes.
“To realise the optimum potential of process automation it is essential to initiate an automation program based on a strategic objective, not to undertake it as an ad hoc piece of work around one or two processes.”
Our experience shows that there is more likelihood of achieving substantial automation benefits if a company can identify and determine the specific reasons for exploring and implementing an enterprise strategy for intelligent process automation. The company will avoid hitting the process automation glass ceiling ( http://virtual-operations.com/rpa-and-the-glass-ceiling/ ) and be on the road to optimising automation benefits.
Our experience also tells us that there are essentially two primary drivers for strategic IPA adoption: technology and workforce.
A wide range of technology challenges are impacting organisations everywhere. Legacy systems that are cumbersome to adapt for new services or rapid organic growth; a lack of agility for systems to support new products or markets; the challenges of integrating systems following M&A activity; the requirement to collate more and more data for operational, market and regulatory reasons; or the ability to participate in the “internet of things”.
Large organisations typically have core platforms with many smaller departmental or function-specific applications. Some of the data is shared, some processing exchanges data between systems, and in many cases, a “swivel-chair” integration is performed by people with spreadsheets, report writers, macros and so on; many unsupported and many dependent on the originating user. The CIO wants to create more resilience and less complexity, the Compliance Officer wants better audit data, the Marketing team want more analysis of customer interaction, and the CFO wants to reduce the annual IT spend.
To resolve these often conflicting objectives with a new enterprise platform will take a long time, it will have a long payback period, and there will still be a long tail of unrequited requirements.
IPA can be introduced into the IT architecture as the glue that can lightly integrate systems that were not originally designed to work together. Under the practiced governance and management of IT, but run by the business users, IPA supports a strategic technology direction that can release many of the constraints inherent in systems that were designed and implemented before the new wave of agility tools. IPA can be used as an enabler for rapid adoption and exploitation of such things as the internet of things, mobile devices, tech-savvy users, widely available wifi, open source development and so on.
The most tangible opportunity is in changing the way that people will work and achieving the twofold benefit of IPA – freeing up costly resources from automatable tasks, and harnessing the new capacity to focus on products, service and customers.
There are many ways in which an organisation can deploy its workforce, according to its requirements for control, cost, quality and service. Some organisations use local teams, some consolidate. Shared services, often in a lower cost location, is a prevalent component of service delivery. BPO has been an option since the 1990’s; and offshoring to either BPO providers or through a captive facility became more prevalent in the 2000’s. It is not unusual for large organisations to combine some element of all these service delivery options.
The advent of intelligent process automation adds another service delivery option.
With increasing pressures on cost and efficiency, and on addressing more rapid market developments, organisations are looking for ways to reduce, refocus or reskill their workforce. By identifying workforce rationalisation as a key driver for a process automation strategy, the end goal comes into sharper focus and is more likely to be realised, especially if automation is used as a means to transform the way work is actually performed.
The most frequent strategic requirement is the need to contain costs, either through redeploying or replacing people, or augmenting existing headcount so that more can be done without expensive recruiting and training. This often entails a redesign of the operational team structure, something that must not be taken lightly, and should be managed sensitively. The payback period might be a little longer but the total cost benefits will be more significant.
Another prevailing objective is to use IPA as a capacity management tool dealing with recurring peaks of activity, often linked to an inability to craft a sufficient business case for a permanent technology solution. IT resources are usually constrained by the number of change requests received annually, that fill up their book of work, but leave a number of business requirements unfulfilled. However, the business case might be achievable with IPA, deployed quickly, relatively cheaply and often through the business and not IT.
There are many other drivers for adopting process automation, but few are as strategic as the need to address major technology or workforce problems. Such other drivers might include a need for faster access to data, higher levels of regulatory compliance or improving process efficiency. These other drivers are not sufficient in themselves to drive towards a fully digital enterprise but the inclusion of IPA within the digital enterprise platform will, in addition to the strategic benefits, deliver the further direct and indirect benefits required of the more tactical drivers.
McKinsey, in their November 2015 report on the fundamentals of workplace automation, state:
“… leaders from the C-suite to the front line will need to redefine jobs and processes so that their organisations can take advantage of the automation potential that is distributed across them. And the opportunities extend far beyond labour savings. When we modelled the potential of automation to transform business processes across several industries, we found that the benefits (ranging from increased output to higher quality and improved reliability, as well as the potential to perform tasks to superhuman levels) typically are between three and ten times the cost. The magnitude of these benefits suggest that the ability to staff, manage, and lead increasingly automated organisations will become an important competitive differentiator.”
….and enable an organisation to realise the true potential of intelligent process automation.
Contact us on +44 2035 891 549 to find out more, or email firstname.lastname@example.org