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robotics process automation

5 Ways Robotics Process Automation Can Be a Nearshore Game Changer

As robots move from the shop floor to the back office, robotics process automation (RPA) is creating a paradigm shift in shared services.

The value proposition is compelling: software robots replicate simple, repeatable human tasks at a keystroke level to improve accuracy, and they are quicker and more cost effective to deploy than traditional IT solutions. RPA solutions offer nonintrusive, relatively easy integration with legacy IT applications, and this opens up automation possibilities for process efficiencies that previously were considered cost prohibitive due to the IT effort required.

That said, robotics process automation is not the remedy to all process problems. Any organization planning RPA deployments should consider five things before diving into this emerging area.

1. Robotics Process Automation Is Not a Replacement for Traditional IT Projects

Robotics process automation has emerged as a choice for process owners to automate what is difficult to optimize. It is a viable, near-term alternative to traditional IT optimization projects (such as core platform changes or complex business process management initiatives) that can be time-consuming and complex. While RPA offers the promise of quicker returns without large IT investments, there is a limit to the scenarios where RPA can be applied effectively.

RPA can be a good solution for automating a manual activity that is rules driven, data intensive, repetitive in nature and crosses multiple systems and decision points. Consider a situation where a customer service team requires verification of a new customer’s information from a third-party website. In the traditional IT world, automating this third-party interface with the CRM application is often cost prohibitive. So, customer service reps manually perform this verification, which ties them up in repetitive, mundane tasks.

RPA would work great here. An automated sequence can verify customer details with the third-party site without manual intervention, giving the rep time to handle more complex customer queries.

On the other hand, in transaction-intensive businesses, such as healthcare claims processing or financial trades processing, RPA may not work due to the scale and scope of optimization required. Core system transformation projects may continue to be the right answer to drive large-scale automation and straight-through processing capabilities.

RPA, therefore, is not likely to be an “either/or” alternative to complex IT projects based on BPM or ERP. While IT projects are designed to optimize end-to-end processes, RPA is geared toward automating discrete processes to improve predictability. It is a tool to achieve quick benefits in the short term and ensure improved process consistency and auditable controls, but can later be supplanted by IT-based optimization, provided the benefits can be obtained.

2. Business and IT Must Collaborate for Robotics Process Automation to Succeed

The idea that RPA can be implemented with minimal changes to existing applications can be enticing for process owners. RPA solutions integrate with existing systems with relatively minor IT development effort, typically at the user interface (UI) layer or via pre-existing APIs.

This fact may lead the process owners to underestimate IT involvement, which could be a costly mistake. RPA solutions work best in a stable IT environment, as changes to the IT applications can render the RPA solution ineffective or redundant. Also, a proper assessment of risk controls and data security may become essential while implementing automation. Such nuances, sometimes not obvious to the business owners at the onset, can be resolved by proactive IT involvement and ownership.

For the best long-term results (e.g., solution stability and fast response times) process owners and IT must closely collaborate to drive RPA. For example, it may be advisable to carefully assess the viability of RPA projects in a process area if an IT application upgrade is around the corner. By developing a two- to three-year roadmap for RPA implementations in collaboration with IT, organizations can avoid conflicts between RPA and IT initiatives, thereby increasing the longevity of RPA deployments.

3. Robotics Process Automation Has Benefits Beyond Direct Cost Savings

Robotics process automation is more than a cost-saving solution that replaces expensive labor with software-based automation. It also achieves quick hits, mitigates risk, improves quality, and redeploys the workforce to focus on processes that require judgment. For example, human errors such as “fat finger” mistakes in high-value transactions like a wire transfer approval can cause significant operational losses — sometimes billions of dollars — for a bank. RPA can automate the manual effort and eliminate the chance of human typing errors. In this scenario, risk avoidance and improved audit controls are the key benefits of RPA implementation, even though cost savings may be limited due to the marginal reduction in labor.

RPA can also create indirect benefits for a business. For example, by automating low-value tasks with RPA, organizations can redeploy staff to activities that generate higher value for the business. This can drastically improve work satisfaction for employees, resulting in cost savings driven by lower employee attrition.  Similarly, RPA makes it possible for process owners to change processes faster, reducing time to market and transaction cycle time. For example, invoice process automation can reduce sales cycle time, which then improves working capital performance.

As process owners scout for automation projects where RPA can create business value, they should cast a wide net for opportunities that provide more than cost savings. A clear definition of objectives at the outset, and quantifying benefits that go beyond cost, while challenging, is critical.

4. Robotics Process Automation Will Impact Outsourcing Strategies

While the immediate focus of robotics process automation is to automate high volume, repeatable tasks, RPA will eventually redefine process optimization and outsourcing strategies, just like squeezing a balloon from the bottom inflates the top. Developing a strategic plan for RPA is essential.

Organizations should develop a long-term roadmap that harnesses the true potential of robotics and “intelligent processes” that leverage data to develop business insights and continuously evolve through self-learning.

Process data collected by RPA, for example, can be used to develop valuable business insights when integrated with analytics solutions. RPA will soon be able to use analytics and machine learning to make business decisions that normally require human intervention. Cutting-edge software companies now offer machine learning and natural language processing solutions that can build “intelligence” within RPA. This intelligence can take RPA capability beyond automation of low-end tasks and replicate complex human behavior to execute data-based process decisions.

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5. Robotics Process Automation Is a Game Changer for BPO

Future BPO models will automate manual effort related to rule-based tasks using robotics process automation, and leverage skilled knowledge workers for tasks that require analytical thinking and experience-based decision making. Success for BPO providers will therefore depend on fundamentally changing their delivery model from labor arbitrage to value-based delivery.

RPA will impact buyers as increased automation will reduce the scope of outsourcing programs. This will allow organizations with multiple service providers to consolidate providers and move away from those that rely solely on labor arbitrage. Additionally, contract terms, pricing and SLAs will need to be modified to focus on outcomes vs. transactions. Outsourcing buyers should plan ahead for this disruptive evolution.

Overall, RPA is about more than hiring software robots to automate manual tasks. It is a new change lever that, when leveraged strategically, can be used by process owners to fundamentally transform how they manage business services in conjunction with technology and outsourcing.

Paul Singer, Siddhartha Sharad and Joe Ripple

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