This week I hosted a conversation with Göran Martinsson of PwC and EBG Network to get a clearer picture of RPA’s capabilities for procurement and finance. In case you missed the webinar, here is the recap of our discussion.
Robotic process automation (RPA) is one of the most-talked-about developments in automation today. But while a few companies have created a proof of concept and some have even implemented RPA into their processes, most organisations don’t yet understand what RPA can be used for or how to evaluate its potential for their own use. Here are some questions that Göran helped answer for those seeking to better understand RPA.
What is RPA?
Those who aren’t familiar might be wondering exactly what RPA is. Göran shared this chart to offer a quick overview.
RPA isn’t like CP30 from Star Wars. And it’s not something that can fully replicate humans. It’s helpful to think about RPA as virtual robots that integrate with existing software to replicate desktop actions that typically would be performed by a human. RPA is driven by simple rules and business logic — you have to tell the robots what to do.
Where Can I Use RPA?
Organisations can apply RPA to a multitude of processes across multiple functions and realise value quickly. From HR services to the supply chain, RPA can make an impact.
To use RPA in procure to pay, look for activities that are labor-intensive, require accessing multiple systems, are repetitive, or that are audited for compliance periodically.
Maintaining a vendor database
Acknowledging receipt of goods
Resolving price or quantity discrepancies
Establishing a date for payment
Updating the general ledger
Could My Organisation Benefit From RPA?
While RPA is an established technology, its application to procure to pay is fairly new. Some companies see the value, but they’re unclear whether their specific processes could benefit from RPA. If your process meets any of the following criteria or requires the following actions in high volumes as shown on the slide below that Göran shared, it’s likely that RPA could help you.
High-Volume Process Actions:
How should I approach RPA?
First, Göran emphasised the importance of an end-to-end perspective when considering automation and RPA. McKinney estimates that 110-140 million full time employees could be replaced by automation software by 2025.
An organisation’s goal should be to put the following in place:
Standardised processes using automation technologies wherever possible
Consolidation into shared services and/or outsourcing
An integrated system used for purchase order creation, invoice processing and electronic workflow for approvals
Compliance, fraud prevention and detection measures
When companies are considering automation, it’s important to realise that RPA is one of many automation tools that they can use to fulfill functions that aren’t currently able to be handled by other solutions. RPA can be expensive. But if no other lower-cost automation solution is available, RPA can be a valuable tool.
And it’s a tool that companies are increasingly utilising. An Everest Group survey showed that 28% of respondents had already deployed RPA, while 40% said that RPA is the most enabling technology today.
How Should I Implement RPA?
First, know your processes. Having a clear picture and documentation of your manual processes is crucial for the success of the automation journey. Look at each of your processes for automation potential.
Next, start small. Don’t immediately jump into a large-scale automation project. Instead, aim for quick wins that will allow you to get a feel for implementation and simultaneously demonstrate value. At the same time, think wide. Your ultimate goal should be to standardise and automate end-to-end, and you’ll want to have the end goal in mind from the beginning.
Finally, prepare your team. You need buy-in from each team member who will be involved. The more comfortable you can make them, the easier your implementation will be.
Why does RPA Adoption Fail?
Knowing the most common reasons why adoption fails will help you avoid the pitfalls. Here are the most typical causes of failure that Göran discussed:
Focusing on “Should I use digital labor?” rather than “How can I use digital labor most effectively?”
Choosing the wrong processes with a weak first business case
Forgetting to think standardisation before automation
Not establishing the appropriate governance from the start, with clear division of roles and responsibilities
Not incorporating the initiative into the current operating model
Operating in silos instead of cross-functionally with an end-to-end approach
Neglecting change management and the people aspect
Not finding the right competence profiles (business analysts, developers, SMEs)
These causes of failure don’t apply just to RPA. They can derail the adoption of any automation solution. You’ll need to look at all of your processes and the improvements you want to make with these cautions in mind.
Learn more about robotic process automation in our article, “Robotic Process Automation and Machine Learning– the New Outsourcing."