Is Robotic Process Automation Really A Driver For Digital Transformation?
Originally published in Forbes by Alex Robbio – Forbes Councils – March 1, 2019
One of the areas of greatest interest in the technology industry in 2019 is robotic process automation (RPA). This is an industry that is growing at lightning speed. Leading industry analysts believe the market will be worth at least $4.3 billion by 2022. Already in 2018, it was worth $1.7 billion. Companies offering RPA software, such as Blue Prism and UiPath, now have valuations in the billions of dollars. Meanwhile, major software vendors such as SAP have recently announced they will be building their own RPA capabilities and embedding them into their traditional software suites of products.
According to research conducted by Deloitte in 2017, 53% of organizations have already started their RPA journeys. The research firm expects this to increase to 72% next year and believes we will achieve “near-universal adoption” by 2022. However, despite this level of widespread adoption, the study highlights that few organizations have yet been able to scale their RPA initiatives, with the majority having just built pilots or proofs of concept. The vast majority of organizations have implemented less than 50 robots. This is today’s challenge for organizations — how to turn the clear potential of RPA into enterprisewide change.
RPA: Is It Really The Key To Digital Transformation?
This brings me into the heart of this article, which is to explore to what extent RPA is a driver for digital transformation. I see two sides to this debate:
1. RPA drives process digitalization, which forms the basis of an organization’s digital transformation. It provides the perfect opportunity to rethink how an organization has been conducting business and how it can realign to the digital world and deliver better results to customers. This approach is what we typically see in the case studies of RPA — how organizations first improve and then digitize core business processes.
2. RPA provides the basis for improving efficiency but doesn’t play a fundamental role in an organization’s digital transformation. The reason here is that all too often, organizations use it to optimize a particular process “as is,” and thus it becomes harder to transform and integrate processes in the long run. With automation, the business has the appearance of being a digital organization but is ultimately tied to legacy systems and approaches, thus its digital initiatives are built on an outdated and shaky foundation.
I want to take a look at both perspectives in more detail.
RPA As The Driver For Digitizing An Enterprise’s Processes
For proponents of RPA, the change it drives in an organization is not just about optimizing processes or becoming more efficient; rather, it is the driver of an organization’s digital transformation. While digital transformation is often considered to just be a buzzword, in reality, it gets to the fundamental transformation of an organization — and this can only be achieved by digitizing and integrating underlying processes. And it’s here that RPA becomes key. Digitizing these underlying processes using RPA is what can be truly transformational.
As HFS analyst Phil Fersht wrote in a widely cited blog post a couple of months ago, “Firms have the chance to make fundamental changes to how they design workflows, instead of persisting with doing things the same old way, but with lower cost people and more efficient delivery models.” It’s this potential to make transformative changes to business processes that is a core part of the value of RPA and what will be needed for companies to build on its full potential.
RPA As The Basis For Efficiency Gains
In a digital transformation, the core goal is to change what you are doing and how you are doing it. But in many cases, enterprises that seek to achieve transformation need to bring processes together and get out of the siloed structure that they have been used to.
For example, this might include integrating billing systems and processes with the front-end mobile application or creating a complete view of the customer and their interactions with the business — something that is often the case in large banks, where one part of the bank is unaware of what the other is doing. Creating these new digital experiences that customers want means generating a fundamental transformation. The challenge with RPA is that it is typically used to optimize processes as they are as opposed to improving the integration between different systems.
In many cases, as the Harvard Business Review points out, it’s better to first work on improving the process before trying to automate it. Authors Thomas H. Davenport and David Brain note that for many companies, “RPA implementations support the ‘as-is’ process, with no improvement or examination of the current process steps that are automated. As a result, they may achieve modest savings, but in many cases, they will miss out on opportunities to dramatically improve process outcomes, quality, costs, and cycle times.”
In addition, it’s worth highlighting that RPA can be set up quickly because it doesn’t require coding or complex integration. It doesn’t impact the underlying business logic. That doesn’t mean it’s easy. But it does mean it’s quite easy to test and pilot the technology, at least at a small scale. This can mean that organizations will find that various lines of business are all experimenting with their own RPA pilots, with limited input from the CIO or IT department. Again, such initiatives will help drive efficiency initially but have limited scope and lack the full potential that RPA can ultimately provide.
RPA is an incredibly powerful technology, and it’s only improving with the advances we’re currently seeing in artificial intelligence. That’s why there is so much focus on it. However, simply automating a process isn’t enough for organizations to achieve success in the digital world.