Why should Small to Medium-Sized businesses use Robotic Process Automation?

Golden Age of Technology

We are now at the stage of the Information Age where fundamental shifts in society are being witnessed, with technology fuelling economic growth as opposed to traditional industries. The advancement of technology is sophisticated enough to replace routine processes.  Enter Robotic Process Automation (RPA) in the digital revolution.  RPA is best described as specifically-configured software designed to automate and complete tasks by replicating activities that would otherwise be completed by humans.  RPA usually replaces repetitive tasks, data entry, processing triaging of correspondences, amongst other types of processes.  According to McKinsey & Company, RPA is set to be the second most impactful disruptive technology, with mobile internet and wireless technology being the first.         

Impact of RPA 

Over the past 5 years, RPA has become game-changer with wide-reaching economic impact. The National Association of Software and Services Companies suggested that its implementation could see companies benefit from cost efficiency of 35%-65% for onshore process automation and 10%-30% for offshore. On a global scale, the compounded annual growth rate of RPA is predicted to be around 60.5% worldwide to 2020, with the additional labour productivity of new technology said to be the equivalent of the output of between 110 million to 140 million workers. This points towards a seismic boost to both productivity and profitability.  McKinsey & Company concluded that the overall economic impact of RPA could potentially be as high as $6.7 trillion by 2025.  

Early Adopters

Although RPA can be applied in almost all industries, the biggest and earliest adopters are banks, insurance providers, telecommunications and utility companies.  Such organisations traditionally have many legacy systems and select RPA solutions to ensure integration functionality.  Larger companies may be the amongst the first to take the RPA leap due to the following reasons: 

• Having mature core business processes as well as legacy systems, meaning that they know exactly what needs to happen at every step of processes and its outputs needs to be; 
• Strong competition from other organisations within their respective industries forces personnel to move away from repetitive tasks and into more value-driven work; 
• Larger organisations are more financially able to invest in the latest RPA solutions.   

However, the increasing number of RPA vendors in the market in the past 5 years and scalability in the solutions indicate that the initial barriers for small to medium businesses are considerably lifted.  

Why should Small to Medium-Sized Businesses use RPA? 

The benefits of RPA for small to medium sized businesses are now increasingly acknowledged, and half of the small to medium-sized businesses in a survey conducted by the RPA Solutions for Growth Company has stated that they have implemented RPA or are investigating how RPA could be used in their businesses.  Its flexibility and non-intrusive architecture naturally reduces the barrier to entry for small to medium-sized businesses.  

The advantages of small to medium-sized businesses using RPA are listed below.  

1. Reduced Human Errors and Customer Satisfaction Improvements

Most frequently perceived to be the most evident advantage of RPA implementation, machines do not get distracted and are therefore ideally placed for repetitive tasks such as data entry.  Maintaining accurate records in systems such as Customer Relationship Management (CRM) systems will help with reducing customer complaints. Automating tasks such as shipping rules to ensure that it is aligned to the company’s policy will be likely to improve customer satisfaction on servicing.  

2. Improved Business Outcomes

One of the key lessons observed from the earlier adopters of RPA is that focusing employees on value-driven activities will result in improved business metrics. For example, executives may be able to conduct more face to face sales meetings with customers which may generate higher revenue as opposed to cold calling, whilst the majority of data processing post-meeting could be left to be automated overnight. 

3. Productivity Gains and Improved Focus

Most of the robots made from RPA are fully focused on specific tasks. The robots could be instructed to execute business rules, calculate and navigate through screens in seconds.  There may be time savings in the automated processes, but even if it doesn’t, it does make the employee more productive as they can move towards more value-driven activities.   

4. Increase in Employee Satisfaction and Reduction in Hiring Costs

As individuals move away from repetitive tasks, they are more likely to enjoy a better appreciation of their roles and therefore increasing the potential for greater employee empowerment.  The indirect impact of introducing RPA is the reduction in additional headcount for performing repetitive tasks and therefore businesses also benefit from incurring lower overall costs of hiring new employees.  Furthermore, the drive to invest in automation makes the business and job descriptions more attractive to interested parties.  

5. Improved Analytics

With the improved data quality and accuracy, businesses will also be in an ideal position to analyse their performance in a more concise manner.  Combining RPA with complementary Business Intelligence reporting systems, businesses are able to slice and dice their performance metrics to provide meaningful insights on strengths, weaknesses, opportunities and threats.  

Another noticeable advantage of RPA for small to medium-sized businesses is that installation requires no change to the current set-up and can interact with the existing underlying systems, meaning that no costly investment will be required on their IT infrastructure for the RPA solution alone. RPA solutions can also be combined with other automation tools to get the most out of its existing capabilities.  

Potential Challenges of RPA

With the benefits of RPA, it also introduces some potential challenges. Some potential challenges are listed below.  

1. Would it be worth the Risk?

Despite the fact that there are more RPA vendors, meaning that the costs of RPA vendors may be lower now compared to when it was first introduced, the initial investment costs may still be a barrier to some companies.  For example, investing in RPA solutions for a low-value process will be likely to generate marginal returns.  For small to medium-sized businesses making their first foray into the world of RPA, would it be worth the risk? 

2. Security Concerns

Small to medium-sized businesses may also be more concerned about data security and service reliability when implementing RPA solution. Indeed, Softmotive found that a sizeable number of medium-sized businesses used RPA for finance, accounting, procurement and HR.  There are numerous cyber risks associated with RPA, such as potential abuse of privileged access, disclosing of sensitive and highly confidential data, and exposing the wider business ecosystem to security vulnerabilities due to the lack of encryption. Introducing a governance frameworks for selecting and validating RPA use, often managed by a Centre of Excellence, is therefore a critical part of enterprise RPA rollouts.  With the appropriate governance embedded, the use of sensitive data can be minimised and audit trail maintained, allowing detailed investigation should issues arise.  

3. Business Decision Making

For smaller businesses where processes may be less defined, there should also be consideration over business issues that may lead to RPA failures.  It is imperative that RPA is considered a business-led initiative with strong partnership with IT, Information Security, Risk, HR, amongst other key business support functions.  It could be tempting to target RPA at the highly complex processes, perceiving this to deliver the most benefit and therefore higher returns to investment. This is seen as a common pitfall if no thorough opportunity assessment was performed to find the optimum portfolio of processes for RPA.  Low to medium complexity processes are more often the ideal candidates for RPA as it has the best return and the simplest delivery.  Automating an overly complicated process without assessing other RPA opportunities could see organisations running into significant automation costs and potentially resulting in marginal benefits, in contrast to their initial perception of higher returns to investment.  

4. RPA Constraints in Processes

While RPA tools can automate large parts of a process, they often cannot perform entire end to end processes.  Processes for small to medium-sized business may often start with a piece of paper, telephone call, or a series of customer interactions.  Businesses may end up automating sub-processes of little value whilst missing out on opportunities to augment RPA with digital optical character recognition, integrated telephone systems or voice recognition systems which may take them years to ‘patch up’ depending on capacity or resource constraints.  

5. Applying Inappropriate Delivery Framework when Implementing RPA

Without engaging with experienced RPA implementation specialists, small to medium-sized businesses new to delivering RPA solutions may experience a greater risk of applying traditional IT delivery frameworks, using often over-engineered methods, excessive documentation and control gates which often serves to unnecessarily slow the progress and deployment. As small to medium-sized organisations may not always have a Centre of Excellence to govern RPA solution, there are some established frameworks such as the ‘Gather, Analyse, Design, Execute, Improvise’ that are focused on the core delivery requirements, resulting in swifter delivery of the desired solution.  

The challenges outlined above are often combined and create a ‘multiplier effect’.  For example, if small to medium-sized companies utilise incompatible deployment frameworks and end up automating too much of a process, it is common then to experience delays due to excessive documentation and unnecessarily stringent governance gateways to deliver processes which then be further delayed from investigating how to handle diversions off the ‘happy path’ of more complex processes.

Conclusion

The mass-market appeal of RPA solutions in recent times appeals to businesses of all sizes, especially ambitious small to medium-sized businesses who perceive such solutions to be the key to unlocking long-term success.  Whilst there is a strong case for this line of thinking, such businesses will also need to consider the future beyond RPA implementation to assess their internal capabilities and review their target operating models in order to identify what they need to optimise the benefits of RPA.  This could be anything from identifying supplementary digital products, introducing Artificial Intelligence, IT transformation initiatives to identifying the needs for employees with different skillsets.  For example, businesses may wish to consider hiring employees who may be able to ‘troubleshoot’ issues or discretions arising from RPA as opposed to data administrators.  As businesses continue to accelerate their digital transformation efforts through RPA, it is imperative that the initiatives remain in line with their visions, goals and objectives whilst considering instilling the appropriate levels of controls.