Tag: RPA ROI

Expected Benefits of Process Automation

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Navigating the Automation Roadmap Blog Series

Are the expected benefits of process automation too high?

Are the expected benefits of process automation too high?

If you follow the RPA market, you will know advisory firms have provided guidance for Robotic Process Automation (RPA) service providers to shift from RPA into more product-based, “Hyperautomation”, to accelerate intelligent process automation deployment.  While this shift is expected to push outcomes, more than the journey of RPA, I cannot help asking if either approach is really achieving the desired benefits.  Otherwise asked, are the expected benefits of process automation too high?

Why the need for automation arises?

Before addressing the desired benefits, please allow me to set the context for why the need for automation arises (generally speaking).  When a company implements an enterprise application, the intent is to provide support for the business transaction.  Inherent to the software is automation to create an efficient and effective processing of the business transaction.  The result is that process teams can focus on higher value tasks because the lower value tasks are reduced because of the application.

Over time, the application’s ability to stay aligned with the business erodes, therefore business teams absorb the system deficiencies and support with manual work-arounds and stop-gaps.  Before anyone realizes, the business teams are largely supporting the work-arounds and manual work, only leaving minimal time to support the higher value tasks.  As the business continues to evolve, business leaders and IT engage in discussions to amend or add onto the enterprise system.  Typically, enhancements usually have a 6 to 9 month development cycle and a price tag into the hundreds of thousands of dollars, which becomes difficult to justify compared to the labor expense (especially if work was moved off-shore).  The result is that manual work becomes the status-quo and to be addressed in the future.

This is the segue where automation enters the picture, since automating the low-value, manual, repeatable tasks is the sweet spot for RPA, but more so, shifts the status quo back towards the business focusing on high value tasks.

Defining benefits

Every organization will have different approaches to tracking benefits, but savings often include: 1) Reduced Labor Costs, 2) Seasonal Coverage Costs, 3) Overtime Elimination, 4) Higher Value Time Replacement, 5) Improved Quality, Regulatory Compliance, 6) Employee Satisfaction, 7) Cost Avoidance – Future Salaries.  Some of these benefits can more easily be measured and tracked over time than others, but these benefits are reasons why processes should (or should not) be automated.  Assuming you can assign an annualized dollar amounts to these benefits, the cost savings calculation is simply:  {Development Costs}  +  {Attributed Operating Expenses}  –  {Business Process Savings}  =  Cost Savings.  Organizations will adjust this basic equation to suit their needs and ability to track, but it provides a basis for understanding the costs and benefits to automating a business process.

Clarity on your automation investment returns

Business leadership will typically make automation decisions based on the prospective ROI for an automation, based on the as-is state of the process.  Unfortunately, we often see automation decisions are made without consideration for the high value work that was being rushed and diminished because of the manual, low-value work that has overwhelmed the team.  Automating processes often just allows the staff to re-focus on the high-value work that lost focus over time, which is a significant benefit, but not necessarily the return on investment leadership was targeting.

My point is that we might not be placing enough value on restoring order to business processing for business teams to focus on high-impact priorities, while doing their jobs more comprehensively and completely, without sacrifice.  We include #4, “Higher Value Time Replacement,” in our benefits calculation, so we enable business leaders to understand and capture the benefits of refocusing team members on the more important work they are currently distracted from.  Without understanding of how work teams are refocused, business benefits can be over-estimated if only focused on the hours returned or the FTE cost savings.  Rather than RPA not delivering benefits, maybe we need to start being honest with ourselves and a bit more realistic that RPA is not a magic pill that will eliminate jobs overnight, but it can be used to create business agility (and cost savings) if used correctly.

Vigilant’s understanding of value and technology not only uniquely positions us to help address restoring of order to a process, but also finding additional benefits trapped in the low and high value manual work.
Thank you for reading.  Our future blog articles will focus on addressing the impact and root causes of bad data perpetuated by ineffective and inefficient business processing, and how solution architects can make or break your automation program.

Please reach out on automation@vigilant-inc.com for a spirited discussion on maximizing the benefits on RPA and how we have found the ‘secret sauce’ for achieving success with automating Oracle EBS Financials and accounting operations.

We look forward to your feedback.

Author:

Joshua Gotlieb

Intelligent Automation Practice Director, Vigilant Technologies

RPA Implementation Pitfalls

Posted on by admin
Navigating the Automation Roadmap Blog Series

Not another “Pitfalls” of RPA

While industry trends are shifting towards ‘Hyperautomation’ to accelerate the automation journey, there are many considerations and reasons to use RPA, but there are also cautionary tales about RPA done wrong, which is not always talked about.  With so many people and service providers posturing about “doing RPA right” and “pitfalls of RPA”, we wanted to present a series of our no-nonsense view of RPA lessons learned from hardened industry veterans.

In our hands-on experience, and after correcting the trajectory of many poorly implemented RPA programs, we offer our top 5 list of considerations.  (We had more to share, but our marketing team forced a limit of 5 points.)

1.    Stop listening to the RPA tool vendor hype and get your RPA teams aligned with the transformation strategy.

Business teams looking for automated solutions are often working around IT, which can work against achieving the desired business outcomes.  Business leaders cannot shy away from IT because IT is feared to be some scary function in the back rooms of the organization.  Business leaders need to embrace IT as a business enabler and help IT better understand their role in supporting business objectives.  Our experience finds that organizations achieve greater results from transformation when the Executive, Business, and IT are all aligned on priorities and objectives.  To be clear, the transformation strategy should set the priorities for the organization, so everyone is aligned on how resources, projects, and obligations are being focused to achieve timely results.

2.    Managing RPA benefit expectations (Learn more)

RPA has been the ‘flavor of the month’ because it holds the promise of creating process efficiencies for business teams to focus on higher-value work.  Many executives hear ‘automation’ and believe it will reduce head count.  The reality is that many legacy business processes have evolved over time, but the business systems have not remained aligned.  Therefore, business teams are manually maintaining lower-value work to support the execution of the business function.  RPA restores balance between diminished system capabilities and (re)focusing business teams on higher-value tasks.  Business benefits are still significant, but not necessarily only for the reduction in headcount executives might be looking for.

3.    Yes, another consideration about selecting the right process candidate for automation.

There are many articles written about how important selecting the right process is for automation.  For an effective automation strategy, additional consideration must be placed on using a building blocks in your automation roadmap to map out reusable components for reducing future development complexity and expense.  This might mean you do not start with the biggest ROI or impact, but foundational building blocks are critical for a successful automation program.  For additional information, give us a call and we can work with you to map out a practical automation program that achieves the transformational benefits you are looking for.

4.    Solution architects will make or break the success of your automation program.  

Quality solution architects know how to better leverage technical capabilities of the robot and maximize the value and benefits of the automation. Skilled solution architects will also know how to incorporate available technology to re-imagine and enhance the automated solution.  Lastly, solution architects will ensure automations are cost-effective when considering reusability, available robot capacity, and capabilities of the automation team.  Underestimating the value of qualified and capable solution architects (and having the right strategy) can be the difference between success and failure of your automation program.

5.    Automating bad data practices is adding to your data debt! (Learn more)

There is a good chance you are creating data debt through the hardening and accommodating bad data practices with automation.  The typical automation approach is to identify a perceived benefit (i.e. ROI) then automate the process (if qualified).  What often gets overlooked is examining the standardization of data inputs into a process to ensure data best practices are being adhered to upstream.  Automating these upstream processes might not be sexy or produce immediate ROI, but they are part of the building blocks to maximizing the benefits of automation and creating business agility.  Be warned, bad data accommodations increase project scope, create technical (data) debt, and increase the cost of support since the automation is built on bad data.

In the coming blog articles, we will drill down into each of the 5 topics and also expand on important points not addressed in this blog, so keep an eye out over the coming weeks and months.
Thank you for reading.  Please reach out on automation@vigilant-inc.com for a spirited discussion on maximizing the benefits on RPA and how we have found the ‘secret sauce’ for achieving success with automating Oracle EBS Financials and accounting operations.  We look forward to your feedback.

Author: Joshua Gotlieb

Intelligent Automation Practice Director, Vigilant Technologies