To sum up the essence of robotic process automation (RPA) and the maximum benefit it ensures, at least from a purely "human" perspective, we may quote the definition provided by Professor Leslie Willcocks, one of the leading experts in this technology:
“RPA takes the robot out of the human.”
During an interview with McKinsey, Willcocks expanded on this concept, pointing out how employees engaged in typical back-office workflows have to face many repetitive and tedious routine tasks. Something that RPA software bots can perform faster and better, allowing humans to focus on much more motivating and satisfying activities involving emotional intelligence, critical thinking, decision-making, and social interactions.
In an ideal world, the well-being of workers would already be reason enough to promote RPA on a large scale. But obviously, this is not the case, and other merely economic factors must be taken into account too.
Fortunately, the benefits of robotic process automation are numerous and consistent in financial terms as well. Let's discover the main advantages that companies investing in this technology can reasonably expect to achieve and some use cases in which such benefits can be maximized.
A new industrial revolution
For some years now, RPA has been having an impact on the service sector that may be compared to that caused by industrial robots in the manufacturing system a century ago. Obviously, this new "industrial revolution" does not envisage the adoption of physical robots but of software robots, capable of imitating the typical actions of employees in the performance of their duties.
Specifically, we're talking about a huge amount of repetitive, time-consuming, high-volume tasks previously performed manually by human operators and now delegated to machines. In the long list of RPA use cases, we may include, for example:
- Entering customer information in corporate databases
- Moving data within and between applications
- Enabling automated reporting
- Recording transactions
- Sending emails and other notifications
- Compiling invoices
- Performing calculations
What does RPA mean for companies?
The benefits ensured by automating the aforementioned (and many other) business processes, according to Protiviti's 2019 Global RPA Survey Results, are primarily three, regardless of the industry and the implementation stage: increased productivity, better quality, and stronger competitive position.
However, some differences can be noted in the perceived importance of RPA's potential benefits, based on the role of the professionals surveyed. For example, HR executives tend to consider customer satisfaction and employee engagement more important, due to their focus on people.
In this regard, It’s also worth mentioning Pega's 2019 RPA and Digital Transformation study. According to their survey, the top three benefits of robotic process automation seem to be the greater efficiency, effectiveness, and accuracy of work (cited by 51% of respondents), the reduction in overall business costs (45%), and the improvement of employee experience (42%).
The same paper also highlighted that the majority of respondents managed to realize value from automating some of their business operations with bots. 66% of respondents even said that RPA adoption ended up being more effective than they hoped, while only 7% felt bots didn’t meet their expectations.
How to achieve these promising results? Let's delve a bit more into the benefits unlocked by RPA adoption, alongside some implementation examples.
1. Enhanced productivity
As we have previously mentioned, a significant increase in productivity is one of the main results experienced by companies investing in robotic process automation solutions. According to Protiviti's study, the share of the surveyed companies reporting moderate, large, or very large productivity growth ranged from 50% in the tech-media-telecommunications industries to 23% in energy utilities.
Similar achievements can be found in some of the case studies by UiPath, our partner and leader in RPA implementation. For example, a Swiss HR service provider automated 90% of customers' payroll change request processing and data entry into corporate systems via software robots. This initiative resulted in a reduction of processing times by 85%, while manual effort dropped to 25%.
In another case study of RPA in HR, a service provider from Germany automated the processing of sick leave certificates with an RPA solution capable of extracting data from transactions in SAP and feeding it into the customer's systems. This led to a 5% reduction in manual effort and an 80% decrease in processing time.
UiPath also reported that a global IT company speeded up the onboarding process by about 10 times: when handled manually, setting up new hires took half an hour, while RPA bots can do the same in 3 minutes.
2. Improved accuracy
The typical clerical activities can be quite repetitive and frustrating, especially when performed manually on a large scale. This also makes them particularly error-prone if managed by humans.
Bots, on the other hand, are accurate like machines (cause they actually are) and tireless, plus they don't have too much trouble doing the same task thousands of times over. We could consider them as extremely diligent and equally habitual assistants.
An example of RPA bots’s precision, which is particularly useful in delicate activities such as those related to accounting, can be found in the automation of P&L financial reporting. According to UiPath's experience, a 100% accuracy can be easily achieved by letting robots merge multiple individual reports into the final P&L financial statement that summarizes the revenues and expenses incurred by a company over a given period.
In another case study, this time involving one of the UK's largest betting and gambling companies, Ladbrokes Coral, RPA implementation resulted in a 100% accuracy for e-wallet balance reporting and reconciliation.
3. Better compliance
A significant consequence of bots' superior accuracy over humans is the improved capability to handle audit and regulatory compliance, especially in terms of data management and fiscal legislation. Therefore, it comes as no surprise that, among the benefits of robotic process automation, this one is probably the most invaluable in the financial, insurance, and banking spheres.
For example, RPA in finance and accounting minimizes the risk of errors occurring in tax reporting, invoicing, and payments, which could result in fines or even lawsuits from customers and public authorities. At the same time, RPA in logistics helps harmonize procedures and documentation, and thus streamline eSourcing. Other than that, the reduction of manual data processing and, in general, of human interactions can contribute to the prevention of fraud and other illegal actions.
That's why some of the top financial institutions already deployed robots to streamline their business processes. In this regard, the Ernst & Young branch in Shanghai developed an RPA solution for one of its customers, intending to automate VAT reporting activities. After seeing the results achieved via robots, which shortened VAT reporting times from 1,400 hours to 280 hours per year and substantially eliminated human errors, the customer opted for further automation involving many other fiscal functions.
4. Cost savings
A more efficient, accurate, and rapid management of corporate processes leads to cost-cutting. Based on the previously mentioned Protiviti study, the percentage of respondents who reported moderate, large, or very large cost decreases varied among different industries from 54% in the tech-media-telecom macro group and 40% in the financial services to 17% in retail.
The differences in performance are even more marked if we take into account the RPA maturity stage, with leaders reporting satisfactory savings in 56% of cases, while the beginners lag far behind.
Going into detail, Gartner estimates, for example, that the average amount of rework caused by human mistakes in accounting departments can take up to 30% of employees' overall working time. By deploying bots with zero-error rate, it's possible to save 25,000 hours per year, which results in an $878,000 cost cut for a company with 40 full-time accountants.
Another example of relevant cost reduction ensured by RPA comes, once again, from UiPath's case studies. A major global insurance provider deployed robots to enhance data extraction from customers' letters or emails and match the data with the proper claims forms. By automating this task and some other related processes, this company achieved savings of 18,000 working hours and £140,000 (about $199,000) within six months.
5. Customer satisfaction
Streamlining business workflows with RPA isn't just about cutting costs. As already mentioned, by delegating the most tedious and time-consuming tasks to robots, employees have the opportunity to devote more attention to customer care and human relations in general. Or they can offer much more timely support to customers in need while avoiding potential errors and delays that could compromise the customer experience.
Many applications of RPA proved to have a positive effect on customer satisfaction. For example, bots can gather sales data to offer the best promotions and products based on customer preferences. They can also speed up service desk ticket resolution by automating up to 40-80% of the entire workflow, based on McKinsey's findings. Not to mention call center times, which may be cut by 50% (from an average of six to three minutes), as in the case of PZU, Poland's major insurance company, as reported by UiPath in their case study.
6. Employee morale
Business owners and customers aren't the only ones enjoying the benefits of robotic process automation. As explained by Professor Willcocks, RPA solutions can automate a variety of dehumanizing tasks that previously made many workers feel more robot-like than robots themselves. This enables employees to develop and leverage their cognitive skills, including strategy, problem-solving, creativity, and so on.
According to Forrester Consulting's 2019 The Impact Of RPA On Employee Experience study, indeed, 66% of managers surveyed reported that RPA adoption allowed their employees to have more interactions with each other. Furthermore, 60% stated that robots helped workers focus on more meaningful and strategic tasks.
7. Digital transformation speed-up
Let's conclude our roundup with an indirect benefit of RPA, which can be seen as a potential first step on the road to corporate digitalization. Indeed, this technology has proved particularly useful in opening the doors of digital transformation to numerous companies, including those without large capital.
After all, RPA robots are highly scalable and easily interact with legacy systems on the front-end side, without altering or replacing previous settings. That's probably why, according to Pega's previously mentioned report, 63% of the 500 decision-makers surveyed said RPA is an important component of their company's digital transformation, while 23% of them even declared that it’s the most important one.
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Combining human and financial factors
One of the main strengths of RPA solutions is that of delivering substantial benefits both from a purely economic and a human point of view.
On the one hand, the greater productivity and accuracy achieved by integrating bots into business workflows also results in increased revenues. According to Deloitte's 2019 Automation with Intelligence survey, this growth can range from 2.9% when deploying "simple" RPA solutions involving rule-based robots, to 8.5% of the most modern forms of intelligent process automation (aka IPA) where RPA bots are enhanced with AI (read more about the IPA vs RPA).
On the other hand, automation is an essential tool to improve customer experience and make employees follow a more human and less "robotic" approach to work. However, considering only the benefits of robotic process automation for the workforce might sound vaguely naive and specious. Indeed, the opposite side of the coin, when it comes to implementing such technologies on a large scale, is a potential restructuring of the job market.
Before you start...
These reasonable concerns lead us to something that any manager should keep in mind when considering the adoption of RPA solutions: the importance of the human factor, especially in terms of retraining. Expanding employees’ skills not only allows to complete in the best way all those tasks and duties that cannot be fully automated (typically involving data-driven decision making, public relations, and planning), but it's also essential to better manage and integrate RPA software into the corporate workflow.
Considering the global shortage of specialist skills affecting the job market, especially in the IT field, this choice could prove to be a wise long-term investment.