Robotic process automation (RPA) is a hot topic in many treasuries and other finance functions in companies globally. The promise is that companies can eliminate the risk of human error on tasks that are repetitive and rules-based. This is for the most part true. But is the return on investment worth it?
That’s the question that arose during a recent NeuGroup Internal Auditors’ Peer Group. One member who presented acknowledged that RPA reduces the need for repetitive human effort, but said that there were distinct limitations to the types of work where it can be applied. Further, human effort is likely needed at the front of the process; that is, RPA can’t structure the data to be digested by the computer program.
The attraction of RPA is that the technology is more readily available, effective, and affordable than its higher-level cousin, artificial intelligence (AI). This means RPA can be a good low-tech starting point to replace repeatable processing that is traditionally performed by a human; tasks that are routine and simple but high volume. In several pre-meeting surveys across the NeuGroup universe, many members have said they are in some stage of RPA. Many in a more exploratory way and others more operationally.
But companies looking to embark on an RPA project should take a look at the tech feasibility as well as the ROI. “RPA is so hot that people want to implement it without thinking it through,” said one member of the IAPG. He added that if RPA was “just coming into being perhaps five years ago, I could see this really catching on,” he said. But right now, companies have solved for the cost issue by outsourcing to lower-cost countries. “Highly educated, low cost workers in some countries can still get these mundane financial tasks done quickly and more cheaply,” said another member of the group.
In addition, current RPA, according to some members, still requires the human touch. “We always have manual intervention in RPA software,” said one member. Added another, “There are other steps outside of the automated processes that still have to be done by a human for RPA software so what is the real value?”
With this in mind, experts suggest pinpointing exactly which processes are the best candidates for RPA and also understand that robotics should be seen as just one component of an end-to-end process improvement – not the end-all be-all solution. Also, start with very simple tasks. Deloitte, which recently presented on RPA before NeuGroup’s Asia CFO (ACFO), recommends testing RPA on a process that is small scale to gain familiarity and to score an easy win. After that, the consultant said, progress to increasingly large and complex environments, funding subsequent stages with savings from prior stages.
While RPA shouldn’t be considered the beginning of what has been coined as the “job-apocalypse” (AI maybe!) it still could mean some jobs lost. In fact, ROI can be determined through headcount reduction in whatever activities are suitable for RPA. Still, humans will be needed for organization at this stage, i.e., structuring the data. Individual robots also require a central controller for programming and coordinating groups of robots.
In the final analysis, the costs and effectiveness will, like many things, depend on the company. “I think the financial ROI depends on specific company situations,” said one IAPG member. That is, “where their functions are located and whether they have already streamlined the business processes.”