What is robotic process automation?

RPA is an application of technology, governed by business logic and structured inputs,

aimed at automating business processes. Using RPA tools, a company can configure
software, or a “robot,” to capture and interpret applications for processing a transaction,
manipulating data, triggering responses and communicating with other digital systems.
RPA scenarios range from something as simple as generating an automatic response to
an email to deploying thousands of bots, each programmed to automate jobs in an ERP
system.

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COOs working for financial services firms were at the vanguard of RPA adoption,
figuring out ways to use software to facilitate business processes without increasing
headcount or costs, says Regina Viadro, vice president at EPAM Systems and adviser
of the company’s IA practice. Viadro has worked on RPA engagements for clients in
financial services, healthcare, retail and human resources, showing the breadth of RPA
use today.

What are the benefits of RPA?

RPA provides organizations with the ability to reduce staffing costs and human error.
David Schatsky, a managing director at Deloitte LP, points to a bank’s experience with
implementing RPA, in which the bank redesigned its claims process by deploying 85
bots to run 13 processes, handling 1.5 million requests per year. The bank added
capacity equivalent to more than 200 full-time employees at approximately 30 percent of
the cost of recruiting more staff, Schatsky says.

Bots are typically low-cost and easy to implement, requiring no custom software or deep
systems integration. Schatsky says such characteristics are crucial as organizations
pursue growth without adding significant expenditures or friction among workers.
"Companies are trying to get some breathing room so they can serve their business
better by automating the low-value tasks," Schatsky says.

Enterprises can also supercharge their automation efforts by injecting RPA with
cognitive technologies such as ML, speech recognition, and natural language
processing, automating higher-order tasks that in the past required the perceptual and
judgment capabilities of humans.

Such RPA implementations, in which upwards of 15 to 20 steps may be automated, are

part of a value chain known as intelligent automation (IA), Viadro says. "If we were to
segment all of the major enterprises and ask them what's on their agenda for 2018,
close to 100 percent would say intelligent automation," Viadro says.
By 2020, automation and artificial intelligence will reduce employee requirements in
business shared-service centers by 65 percent, according to Gartner, which says the
RPA market will top $1 billion by 2020. By that time, 40 percent of large enterprises will
have adopted an RPA software tool, up from less than 10 percent today.

For a deeper look at the benefits of RPA, see “Why bots are poised to disrupt the
enterprise” and “Robotic process automation is a killer app for cognitive computing.”

What are the pitfalls of RPA?

RPA isn’t for every enterprise. As with any automation technology, RPA has the
potential to eliminate jobs, which presents CIOs with challenges managing talent. While
enterprises embracing RPA are attempting to transition many workers to new jobs,
Forrester Research estimates that RPA software will threaten the livelihood of 230
million or more knowledge workers, or approximately 9 percent of the global workforce.

Even if CIOs navigate the human capital conundrum, RPA implementations fail more
often than not. “Several robotics programs have been put on hold, or CIOs have flatly
refused to install new bots,” Alex Edlich and Vik Sohoni, senior partners at McKinsey &
Company, said in a May 2017 report.

Installing thousands of bots has taken a lot longer and is more complex and costly than
most organizations have hoped it would be, Edlich and Sohoni say. The platforms on
which bots interact often change, and the necessary flexibility isn’t always configured
into the bot. Moreover, a new regulation requiring minor changes to an application form
could throw off months of work in the back office on a bot that’s nearing completion.

A recent Deloitte UK study came to a similar conclusion. "Only three percent of

organizations have managed to scale RPA to a level of 50 or more robots," say Deloitte
UK authors Justin Watson, David Wright and Marina Gordeeva.

Moreover, the economic outcomes of RPA implementations are far from assured. While
it may be possible to automate 30 percent of tasks for the majority of occupations, it
doesn’t neatly translate into a 30 percent cost reduction, Edlich and Sohoni say.

To ensure a smooth shift to RPA, see "8 keys to a successful RPA implementation."

What companies are using RPA?

Walmart, Deutsche Bank, AT&T, Vanguard, Ernst & Young, Walgreens, Anthem and
American Express Global Business Travel are among the many enterprises adopting
RPA.

Walmart CIO Clay Johnson says the retail giant has deployed about 500 bots to
automate anything from answering employee questions to retrieving useful information
from audit documents. "A lot of those came from people who are tired of the work,"
Johnson says.

David Thompson, CIO of American Express Global Business Travel, uses RPA to
automate the process for canceling an airline ticket and issuing refunds. Thompson is
also looking to use RPA to facilitate automatic rebook recommendations in the event of
an airport shutdown, and to automate certain expense management tasks.

"We've taken RPA and trained it on how employees do those tasks," says Thompson,
who implemented a similar solution in his prior role as CIO at Western Union. "The list
of things we could automate is getting longer and longer."

But with many more CIOs mulling RPA, CIO.com asked some consultants for advice on
how IT leaders can tackle the technology.

10 tips for effective robotic process automation

1. Set and manage expectations
Quick wins are possible with RPA, but propelling RPA to run at scale is a different
animal. Dave Kuder, a principal with Deloitte Consulting LLP, says that many RPA
hiccups stem from poor expectations management. Bold claims about RPA from
vendors and implementation consultants haven't helped. That's why it's crucial for CIOs
to go in with a cautiously optimistic mindset. "If you go in with open eyes you'll be a lot
happier with the result," Kuder says.

2. Consider business impact

RPA is often propped up as a mechanism to bolster return on investment or reduce
costs. But Kris Fitzgerald, CTO of NTT Data Services, says more CIOs should use it to
improve customer experience. For example, enterprises such as airlines employ
thousands of customer service agents, yet customers are still waiting in the queue to
have their call fielded. A chatbot, could help alleviate some of that wait. “You put that
virtual agent in there and there is no downtime, no out sick and no bad attitude,”
Fitzgerald says. “The client experience is the flag to hit.”

3. Involve IT early and often

COOs initially bought RPA and hit a wall during implementation, prompting them to ask
IT’s help (and forgiveness), Viadro says. Now "citizen developers" without technical
expertise are using cloud software to implement RPA right in their business units, Kuder
says. Often, the CIO tends to step in and block them. Kuder and Viadro say that
business heads must involve IT from the outset to ensure they get the resources they
require.

4. Poor design, change management can wreak havoc

Many implementations fail because design and change are poorly managed, says
Sanjay Srivastava, chief digital officer of Genpact. In the rush to get something
deployed, some companies overlook communication exchanges, between the various
bots, which can break a business process. "Before you implement, you must think about
the operating model design," Srivastava says. "You need to map out how you expect
the various bots to work together." Alternatively, some CIOs will neglect to negotiate the
changes new operations will have on an organization's business processes. CIOs must
plan for this well in advance to avoid business disruption.

5. Don't fall down the data rabbit hole

A bank deploying thousands of bots to automate manual data entry or to monitor
software operations generates a ton of data. This can lure CIOs and their business
peers into an unfortunate scenario where they are looking to leverage the data.
Srivastava says it's not uncommon for companies to run ML on the data their bots
generate, then throw a chatbot on the front to enable users to more easily query the
data. Suddenly, the RPA project has become an ML project that hasn't been properly
scoped as an ML project. "The puck keeps moving," and CIOs struggle to catch up to it,
Srivastava says. He recommends CIOs consider RPA as a long-term arc, rather than as
piecemeal projects that evolve into something unwieldy.

6. Project governance is paramount

Another problem that pops up in RPA is the failure to plan for certain
roadblocks, Srivastava says. An employee at a Genpact client changed the company’s
password policy but no one programmed the bots to adjust, resulting in lost data. CIOs
must constantly check for chokepoints where their RPA solution can bog down, or at
least, install a monitoring and alert system to watch for hiccups impacting performance.
"You can't just set them free and let them run around; you need command and control,"
Srivastava says.

7. Control maintains compliance

There are lot of governance challenges related to instantiating a single bot in
environment let alone thousands. One Deloitte client spent several meetings trying to
determine whether their bot was male or female, a valid gender question but one that
must take into account human resources, ethics and other areas of compliance for the
business, Kuder says.

8. Build an RPA center of excellence

The most successful RPA implementations include a center of excellence staffed by
people who are responsible for making efficiency programs a success within the
organization, Viadro says. Not every enterprise, however, has the budget for this. The
RPA center of excellence develops business cases, calculating potential cost
optimization and ROI, and measures progress against those goals. "That group is
typically fairly small and nimble and it scales with the technology staff that are focused
on the actual implementation of automation,” Viadro says. “I’d encourage all IT leaders
across different industries to look for opportunities and understand whether [RPA] will
be transformative for their businesses.”
9. Don’t forget the impact on people
Wooed by shiny new solutions, some organizations are so focused on implementation
that they neglect to loop in HR, which can create some nightmare scenarios for
employees who find their daily processes and workflows disrupted. “We forget that it’s
people first,” Fitzgerald says.

10. Put RPA into your whole development lifecycle

CIOs must automate the entire development lifecycle or they may kill their bots during a
big launch. “It sounds easy to remember but people don’t make it a part of their process.”

Ultimately, there is no magic bullet for implementing RPA, but Srivastava says that it
requires an intelligent automation ethos that must be part of the long-term journey for
enterprises. "Automation needs to get to an answer — all of the ifs, thens and whats —
to complete business processes faster, with better quality and at scale," Srivastava says.