"Getting Beyond the Hype": Where Are We With RPA in 2018?

4/13/18 12:32 PM / by Eric Liebross

Eric Liebross

AdobeStock_196785042You are hearing about it every day. According to HfS Research, there was a 63% growth in the global market for RPA software and services from 2016 to 2017. And there´s no sign of it slowing down.

Experts foresee that the market will continue to grow at a compounded annual growth rate (CAGR) of 36% through 2021.

Latest RPA in 2018 research

In 2018, robots will replace or augment more than 300,000 office and administrative positions and 260,000 sales and related positions based on Forrester’s research.

A recent Forrester survey of operations leaders in the US, Europe and Japan indicated that 45% of all organizations surveyed have implemented RPA solutions, and another 30% are planning to implement within the next 12 months.

So, according to these statistics, by the end of 2018, 75% of all companies will have implemented RPA.  Really?

The RPA battle

I am on the front lines of the RPA battle, spending nearly every day talking to business executives about optimizing their business operations, and how to leverage process automation to do it.

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What I am seeing and hearing is that most C-Level executives may have heard about RPA in 2018, but they are generally unfamiliar with its capabilities, benefits, cost and most importantly, unsure about how to get started.

Part of the problem is the over-hyped nature of the RPA world, with RPA vendors and advisors touting huge cost savings and ROI.  Recent skyrocketing valuations of RPA software providers adds to the hype and the noise.

RPA in 2018. Success or bot burns?

Adding to the confusion are some mixed messages on RPA success from key advisors. Consider that in December, 2016, McKinsey published an article entitled “The next acronym you need to know about”RPA”, with a tag line that read, “RPA is a promising development in business automation that offers potential ROI of 30-200% - in the first year.”

Then in May, 2017 (six months later!) came another McKinsey article entitled “Burned by the bots: Why robotic automation is stumbling.”

Which part of the roller coaster are we riding? What is the reality of RPA? Where are most companies on their RPA journeys? And do the results match the hype?

Bots in the back office: a work in progress

Surely, there have been huge success stories over the years where RPA has delivered significant efficiencies and cost savings to large enterprises, primarily in the financial services and insurance industries.

But in the world of what I like to call “mainstream RPA,” where companies are looking to automate processes and gain efficiencies in traditional back office operations (F&A, Human Resources, Supply Chain, IT, etc.), the progress is slower and the benefits less dramatic.  

Most back office operations do not have the thousands of employees that RPA vendors like to target.  And many back office processes are not standardized, with high degrees of exceptions and other operational complexities, requiring process redesign to enable a robot to effectively perform the tasks.  Back Office RPA is still a work in progress.

Struggling with RPA

From my experience, there's a lot of interest in RPA, but not a lot of results to highlight. Most companies that I speak to who have implemented RPA are very early in the RPA journey. There are proofs-of-concept and some key functions are being implemented. But, in most cases, it is too early to tell if the ROI matches the initial expectations. Others are learning more about RPA, but are still struggling with how to get started.

Implementing RPA in 2018: fast & easy?

Many are struggling with the implementation process.  Implementations are taking longer, and are more complicated than most companies expected (and were promised by vendors and advisors).  

Finding resources to design, develop, implement and support is a challenge, as experienced and qualified RPA talent are few and far between.  And change management is a major challenge, as companies implement the solutions but adoption does not necessarily follow.  

Implementing RPA into business operations requires a change in the roles of the people performing the work.  In most cases, RPA will automate certain tasks within a process, but not necessarily the entire process.

It should make the human workers more productive and efficient, but not necessarily replace them. Automating 30% of your tasks will not necessarily result in a 30% reduction in staff.

Unleashing the robots

And once implemented, RPA requires an effective support model. Operational and system changes, security protocols can all impact bot performance. Robots will need attention and focus, and once you “unleash the robot”, there likely is no turning back. You need to be able to quickly solve RPA issues or transactions will not be processed.

Engaging your employees

Effective RPA adoption requires a re-thinking of the role, restructuring and re-distributing tasks so that the bot handles the manual, rules-based activities and then hands them off to human workers for completion.  

Some former administrative workers should be designated as “Robot Operators,” overseeing the performance of the robot to ensure proper production, and identify issues as they occur that require support, building upon their knowledge of the business process, not the technology.  Engaging employees in the process is a key factor to successful RPA initiatives.

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Want to better understand the key roles and skills needed for building an effective RPA Center of Excellence? Download our guide.

That is a more realistic back office RPA model. You will gain efficiency and productivity, but there is not a one-to-one relationship between task automation and cost reduction.

So where are we with RPA in 2018?

It is clearly something that is coming to your back office operations, if not today, then soon. It will bring benefits in terms of efficiency, productivity, scalability and, yes, cost savings, but you need to be realistic about what it takes to implement RPA.

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RPA recommendations

If you are considering RPA, here are some recommendations. 

  • Having a well-defined RPA roadmap will help you accelerate your journey.
  • Identifying which processes are the best candidates, and quantifying what the expected benefits will be, in advance, will help to create the right expectations around RPA initiatives.
  • Testing the effectiveness of RPA through smaller scale proofs-of-concept will help demonstrate the value and provide valuable “lessons learned” for future initiatives.
  • Understanding the parts of a process that can (and should) be automated, while maintaining staff to handle the more complex, non-automated activities will provide improvements in efficiency, productivity and quality.

I do expect RPA to become a major tool in most back office operations over the next 4-5 years, but it will take time to find its place in operations, and to change the role of the people working there. Adoption is key, but so is proper planning and support. The effort is just really beginning.

Watch our RPA on-demand webinar series if you're considering "getting your feet wet" with RPA.

RPA in Shared Services survey

To truly answer the question of “where are we with RPA in 2018”, we need to cut through the hype and the noise and get to the facts.

Auxis is conducting a survey of shared services organizations to truly qualify where they are in their RPA journey, and help understand the challenges that they have encountered and the benefits that they have attained.

We will be sharing this over the next few months to provide a clearer picture on the current state of RPA.

If you would like to participate in the RPA survey, or receive the results, please contact our Marketing Manager, Fabiana Corredor at fabiana.corredor@auxis.com.

Eric Liebross

Written by

Eric Liebross

Eric Liebross leads Auxis’ Back Office Optimization practice, helping organizations design and implement innovative operating models, processes and technologies to achieve optimal performance within Finance, Customer Service and HR Operations. Eric’s areas of expertise include Shared Services Strategy, Nearshore Outsourcing and RPA.