29 September 2016

5 Factors in Choosing Which Processes to Automate

29 September 2016

5 Factors in Choosing Which Processes to Automate

A recent survey by Redwood Software 300 corporate decision makers from the US and the UK founds “79% of enterprises said automation delivered time savings, 69% cited 'improved business productivity' as the key benefit of automation, [and] 61% said automation regularly provides cost savings.”

 

From these statistics, it’s obvious that robotic process automation (RPA) is capable of significantly driving operational improvements. But even though RPA has a wide range of automation abilities, some business operations are more suitable for automation than others. For example, it can be argued simpler processes should be considered first and more complex activities should only be automated once companies are more familiar with RPA. At the same time, companies are more likely to attain success when automating rules-based activities as compared to non-standardized, variable ones which are often difficult, if not impossible, to define within the limits of RPA software.

 

But what does this mean for companies considering automation? What kinds of processes should be automated in order to drive the most meaningful outcomes? In order to gain a clearer picture of what business activities are ideal for automation, let’s investigate five of the most relevant factors that can help organizations determine if a business process is well-suited for automation and how it will benefit from RPA.

 

Employee Involvement

 

Many operational processes are suitable candidates for automation if they are: time-consuming; impacted by changes in transactional demand: and, most importantly, highly dependent on employee attention and involvement. Relevant activities in this area can include order and claims processing, data migration, or entering customer information into a database.

 

The same survey by Redwood Software suggests that “99% of organizations still spend considerable personnel time doing repetitive manual tasks, with almost three quarters (74%) spending over a quarter of their time doing so.”

Automation of these manual activities means their execution will become quicker and less error prone. At the same time, employees who previously dedicated large amounts of time making sure that these activities were properly executed are now able to focus on more meaningful and innovative tasks like customer interaction.

 

Complexity

 

RPA is capable of automating processes as simple as a copy-paste or typing activity to those as complex as fraud detection or accounts payable. Complexity of a process can be defined by the number of applications/systems, the frequency of human intervention, or the number of steps required in order to execute the task.

 

While automation of complex activities is likely to have more greater impact on a company’s business operations, these processes are also more difficult to automate and will typically require a greater time and financial investment on behalf of the company. By initially automating the most simple processes, businesses will be able to first learn the ins and outs of their RPA software. After initial small automation successes are achieved, transitioning to automate higher-level tasks will allow companies to maximize the impact their RPA software can have on streamlining and optimizing operations.

 

Volume

 

Most online businesses, service providers, and organizations do not have a defined set of opening hours, meaning a high volume of orders, requests, and complaints are received around the clock, regardless of weekends and holidays. When a company is entirely reliant on human employees, this workload can only be addressed when employees are present in the office. In comparison, RPA is the most efficient and productive tool to address these high volume tasks because the software robots are able to work 24/7/365. Instead of being limited to working at a certain time of day or week, RPA software robots are able to tackle activities quickly and accurately even when employees are out of the office.

 

Standardization and Stability

 

RPA is best most suited for automating tasks that are highly definable and occur the same way every time. These activities are be rules-based, consistent, and data driven. On the other hand, RPA is not meant for automating tasks that are constantly changing, non-standardized, and unstable because they cannot be easily defined.

 

Considerations in this area should address whether the task takes places in the front office or in the back office. Back office tasks include, for example, claims processing, transaction duplication, or account opening automation. While front office automation is possible, back office tasks tend to be more transactional and repetitive, making them more suitable for automation.  Activities that occur in the front office, on the other hand, tend to revolve around complex thinking, judgement, and decision-making skills. Front office tasks, such as marketing, tend to be more variable and inconsistent, so they are more challenging to define within RPA software.

 

Difficulty of Outsourcing

 

Many business activities, especially in financial services, require a high level of regulatory compliance. This kind of security is often difficult to achieve and maintain with offshoring because companies have a lesser degree of oversight and direct control when processes are managed by a BPO provider. As an alternative to outsourcing, RPA allows businesses to be in control of executing their own transactions internally and can enable organizations to develop more robust compliance strategies.

 

Many RPA software robots are able to save their actions into an activity log that can later be monitored and reviewed. This log file can help employees identify the root cause of exceptions, offers the ability to produce detailed analytics, enables compliance with industry/governmental regulations, and provides the critical information that is needed in case of an audit.

 

Differences and Similarities in RPA Utilization

 

Even though RPA can be implemented in any company or industry, the technology will be applied differently in every automation scenario. Businesses that are just beginning the RPA journey will have different automation and operational goals than RPA veterans looking to expand the scope and complexity of their already existing automation. Similarly, regional companies who might be using RPA for scaling purposes will leverage the technology differently than global enterprises looking to enhance their regulatory compliance.

 

At the same time, automated processes all have fundamental characteristics in common, which we’ve discussed here, that are able to serve as a baseline for organizations wanting to achieve operational improvements and automation success with RPA. Regardless of the specific process automated, leveraging RPA to deliver high business value, drive significant cost benefits, and align with business goals will allow the technology to have a maximum impact on operational activities.

 

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by Nick Ostdick

TOPICS: RPA, RPA Impact, RPA Benefits

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