What is Robotic Process Automation (RPA)?

Robotic process automation (RPA) is the practice of using software bots or pieces of code to automate, and therefore make more efficient, repetitive tasks that otherwise take up valuable human time.

As opposed to people-driven processes, robotic process automation achieves the unique feat of never making human mistakes, and being available 24/7. Businesses typically use robotic process automation for those tasks that are highly repetitive in nature, enabling their human employees to focus on challenges and aspects that require higher thinking.

Robotic Process Automation Diagram

For example, large companies use robotic process automation for human resource functions such as onboarding their new hires, giving their new employees a faster, smoother welcome experience. In retail, robotic process automation can be used to predict future sales, manage complex supply chains, and purchase order systems, and forecast demand.

Even in industries where the general perception is that highly qualified people always need to be involved to oversee a process, such as in healthcare, robotic process automation can improve quality of care by quickly processing large batches of patient data, that can support healthcare workers to make medical decisions faster.

But how is robotic process automation different from traditional automation otherwise known as business process automation? Can robotic process automation be implemented for all potential use cases, and where does it find maximum success?

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Why Is Robotic Process Automation So Important Today?

For enterprise businesses, rapid processes that deliver efficiency are a non-negotiable attribute. This ability to deliver efficiency at scale can help them deliver better experiences to their end-users.

An example of the need for efficiency in complex processes is one precipitated by the COVID-19 pandemic. As countries around the globe went into lockdown, tens of thousands of vacation plans were stymied, and several hundred thousand flight bookings were being canceled.

As flight operators and ticket aggregators scrambled to address growing panic among their patrons, some were able to powerfully implement robotic process automation to help cancel bookings, process refunds, and address consumer queries on a case-by-case basis quickly and efficiently. This automation led to happy customers in a potentially damaging environment.

Although it looked like the pandemic precipitated the move to robotic process automation, it only accelerated an already burgeoning industry. Across a variety of applications, automation holds great promise as a system that can help free up time and bring in cost efficiencies for businesses, allowing people to focus on business outcomes rather than mundane tasks.

However, not all business process automation is robotic process automation. In fact, robotic process automation is considered a tactic used under the wider umbrella term of Business Process Automation or Business Process Management. Business Process Management is usually found in standalone software solutions, both enterprise, and Software-as-a-Service (SaaS) based, and is used to find and optimize inefficiencies within the entire business. For instance, business process management can help make the Sales and Billing departments of a company work together more efficiently, whereas robotic process automation usually refers to a bot imitating human behavior on a single task. Robotic process automation is particularly useful in the context of automating routine human-computer interactions, and often serves as a gateway for many businesses that wish to explore automation as a solution before making the switch.

This very attribute is what makes robotic process automation a lucrative solution for business challenges today. Large enterprise businesses have long struggled with cost control. A recent survey showed that failed projects led to losses of up to $150 billion annually in the United States alone.

For businesses struggling under the weight of mounting costs, robotic process automation offers the means to reduce costs by:

  • Automating routine tasks and freeing up time for reallocating resources
  • Saving time and costs by bringing in process efficiencies. Robotic process automation systems can run at all hours of the day, and make no errors, which saves considerable time and costs.

For businesses looking to go leaner on their spends, robotic process automation can be a powerful efficiency-building tool, while also easing them into the use of more extensive business process automation solutions.

Industries That Benefit from Robotic Process Automation

Robotic process automation can be used where there are redundancies in the human-computer interaction process. In other words, robotic process automation can be used in every industry. Here are a few industries where robotic process automation is currently finding use globally:

Utility Providers

Large players in the utility space can use robotic process automation to study and address meter-reading exceptions, as well as handle the decidedly large volume of customer queries they receive. Robotic process automation can also automate billing and payments based on trends in consumption across geographies, seasons, and more.

Banking and Financial Services

The very nature of the sector, and the amount of data it processes every day, makes banking uniquely suited to the implementation of robotic process automation. Organizations and their customers also benefit from faster response times and query resolution. Robotic process automation can also be used to streamline compliance with local laws.

The Healthcare Industry

In what is perhaps the most heavily regulated industry, robotic process automation can more efficiently manage patient rescheduling and therefore reduce the number of canceled appointments, manage vendor data better and provide a better quality of patient care by reducing wait times and providing healthcare staff with the information they need at all times.

Supply Chain Automation

For companies that handle a large volume of purchase orders, transfer orders, invoices, and consignments every day, robotic process automation can streamline these processes. It can also help plan purchases based on the orders received, streamline inventory movement in large warehouses, and help businesses maintain control over their inventory management process.

Apart from these common applications, robotic process automation can also be used in manufacturing and research applications where large volumes of data need processing. Service providers are also implementing robotic process automation in the software testing space to help speed up the testing and debugging process, leading to shorter software development life cycles.

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How to Choose the Right Level of Automation

Robotic process automation is one element of a larger move towards automation. Businesses choosing to go the automation route can choose between using standalone robotic process automation or combining it with advanced business process automation capabilities that seek to optimize processes across the organization.

If the task that needs automation is repeated exactly the same way several times over and has very few variables (if any), standalone robotic process automation is the best choice. Apart from offering significant cost benefits, standalone robotic process automation can also be deployed faster.

However, for processes that are more abstract, require human intervention at the decision stage, involve more than one department, or depend on external conditions to follow a decision tree, advanced capabilities may be required. This is when standard robotic process automation may not be enough, and the best way to find a solution that works for each use case is to speak to business process management service providers.

How Does an Organization Know if Robotic Process Automation is the Right Choice?

If the task is consistent, repeatable, and has decision trees that always lead to a definite outcome, it can likely be automated via bots. Using traditional business process management, the system would find an error and need human intervention to remedy it. However, with robotic process automation, bots automatically identify the issue, find the missing data and fill it out, requiring no human intervention. These bots are able to interact with other applications and once trained, can continue to perform their programs. Again, robotic process automation should be limited to small tasks that generally are performed within one department.

The most effective way of finding a process perfect for automation is to look at:

  • Tasks that take up a major chunk of employee time that are easily programmable, or
  • The most common complaint that customers have

Benefits of Robotic Process Automation

Business process automation in general, and robotic process automation in particular, offer several benefits across business functions. Marketing managers find that faster complaint resolution leads to higher customer lifetime value or CLV. Those in operations roles experience the benefit of a solution that speeds up most regular tasks that are prone to delays.

Individual stakeholders also benefit immensely from the removal of the mundane from everyday jobs. It allows people to spend their time and energy thinking through more complex challenges. There are a range of other benefits when implementing robotic process automation.

  • Business processes that are automated see an 80-to-90 percent decrease in process costs within a few years of implementing robotic process automation. Implemented correctly, the automation can provide up to a 200 percent return on investment within the first year of implementation.
  • Allowing employees to focus on high-value tasks where the impact of their contribution is visible increases employee engagement and retention rates.
  • Robotic process automation significantly reduces the number and frequency of errors in performing repetitive tasks. It also enables 24X7 task completion without the need for human intervention.
  • In conversational settings, robotic process automation can improve output and increase conversion rates by engaging customers even outside of office hours.
  • Robotic process automation can be implemented without replacing existing information technology systems and architecture. As opposed to enterprise solutions that need to be integrated with each existing application, robotic process automation works with what is already available.
  • Perhaps one of the greatest benefits of robotic process automation is its ability to scale to match business needs at all times. For businesses that have seasonal variations, such as snow claims in winter in the insurance sector, the ability to scale to match needs ensures smoother process flow and faster ticket resolution.
  • Robotic process automation helps build a virtual workforce for any business- one that never switches job functions, is not prone to errors, and never leaves the company.

Challenges When Implementing Robotic Process Automation

While robotic process automation is a relatively new industry, its rapid adoption has brought some challenges to light. Challenges in implementation range from the gap between expectations and outcomes to the inability to automate a process end-to-end.

Due to the immense amount of knowledge and resources available today, it is easy to assume that robotic process automation can be a perfect replacement for business process outsourcing. However, this may not always be the case and human intervention may be needed to break decision paralysis.

Another challenge that companies have found themselves in is inconsistent and incompatible implementations of robotic process automation within the same company. Because robotic process automation is not an overall business process management tool, it can become very siloed. It’s important that IT gets involved in every robotic process automation implementation to ensure smooth functioning throughout the organization.

Although robotic process automation has a reputation for easy implementation, there are still technical hurdles that need to be sorted out before embarking on the journey. Again, it’s important that IT is involved and on-hand to ensure you work through any technical roadblocks you encounter.

There is also the challenge of addressing resistance to an admittedly new piece of technology. Many employees worry that automation could soon replace them and that they may lose their jobs. In such cases, they may not play an active role in ensuring that automation solves the problems it is expected to. Business stakeholders need to have an honest conversation and set the right expectations so that employees feel empowered by the automation and will therefore readily participate in its development. The benefits of automation, taking away repetitive processes and allowing staff to devote their time to other tasks, needs to be emphasized.

Getting Started with Robotic Process Automation

Robotic process automation ecosystems have become highly sophisticated and require proper planning, design and governance to be successful. Business stakeholders need to work with IT to decide how to implement robotic process automation in a phase-wise manner and ensure that all departments are on board. It’s best to consider starting a robotic process automation implementation for small tasks, ones that are not crucial to the success of the organization to avoid delays in delivering pivotal services. Then, look for tasks that cause human capital drain, or a combination of these and move progressively to more crucial tasks until you understand the long-term impacts.

It is also important to note that robotic process automation cannot exist in a silo. Teams dedicated to the success of automation are needed to ensure that technical and operational issues are resolved as they arise.

It is also worth having protocols for robotic process automation maintenance to ensure that outdated processes are restructured to take on newer, more relevant tasks. It also helps immensely to have in place workflow diagrams that highlight all automated elements, so teams working alongside their virtual counterparts know when to be involved, and when to step away.