David Brain, Global Head of Process Robotics & Innovations Labs Product Lead, Sutherland Innovation Labs. Sutherland’s Innovation Labs amplify creativity across the firm and facilitate the design and execution of impactful new service offerings. David wrangles robots in the Sutherland Incubation Lab and has a background in complex solution design, process modeling and large-scale BPO transformations.
Topic: The cost savings that RPA can deliver, who has the most to gain, and if you are not considering this, why you should.
What are the typical cost savings that someone can expect?
For those clients who wish to realize the full cost savings, the financial benefits can be significant. For highly automatable tasks currently performed onshore the savings can be anywhere from 50% to 80%. For transactional work currently offshore, due to the lower starting cost base, automation can drive savings of 20% to 40%. Of course, these are just indicative ranges and vary depending on the scope of work. Before you set your business plan and budget on these savings there are few further considerations:
- Not every process is fully automatable. In fact, for most end to end processes we come across we find only around half to two-thirds of the work can be automated leaving business exceptions, phone calls and reviews of scanned documents and other judgment based work to be performed manually. You can of course use more advanced OCR and speech-to-text platforms to increase this percentage, but we find some firms understandably don’t wish to do this with their end customers, whereas for some internal users or suppliers such automation could be more acceptable.
- Not every robot is equal. There are a wide range of companies who over the past couple of decades have built automation solutions. Some are more advanced than others and some are better suited for different processes and purposes. Our estimated savings are based on the capabilities afforded by the leading robotic platforms available on the market today.
- Not every client is the same. We’ve found significant differences in our clients approaches to service delivery, IT integration and information security. For some clients we connect over Citrix where the savings are reduced slightly by the need to use the Citrix interfacing methods to drive the robots, but where the security benefits are seen by our clients as being worth the compromise. Other clients are prepared to open a VPN connection to us or even allow us to place our kit in their centers, this can have a significant impact on savings as, often with robotics, the number of robots needed is driven primarily by the speed at which they can interface with client systems.
- Due Diligence is required as projected savings presented by vendors at the sales stage may not be fully achieved in delivery. I’m sure it’s no surprise that some vendors will claim substantial savings predicated on a best case scenario. Like all solutions, the ratios change when faced with client system latencies, process exceptions, BC/DR considerations and other factors. That being said the benefits are still highly compelling
Finally, we have noticed a change in client behavior. Until now the great majority of BPO clients we have seen, have been solely focused on achieving the same service at a lower cost. What has surprised us in exploring the potential benefits of robotics with our clients is the interest in wanting to ‘do more’ rather than realizing all the savings. This is because the scale of savings available through automation provides an opportunity to reinvest in a way that other initiatives in recent years have not. In essence firms can ‘do a lot more for a lot less’. These auxiliary benefits have always been the goal of Transformation efforts, but are now more possible than ever before. It is these discussions that most encourage and intrigue us. We expect that most cost-benefit equations will need to adapt to highlight and articulate the impact that automation can have on top and bottom line growth, customer experience, customer satisfaction and overall business transformation.
What do you see as the biggest challenges for companies adopting this?
We approach robotics as a BPO provider, but in our experience whether you are a BPO provider or an end-user adopting robotics, you will face the following major challenges.
- Cautious Optimism or General Skepticism – Let’s face it, our mental model has been one of people, and the tools that enable people to be more efficient. When the discussion changes to where to host the virtual workforce, eyebrows go up. So, the champions of robotics deployments have their work cut out for them to articulate the solution, capability and proof points that validate the efficacy of a virtual back office. Moreover when automation is mentioned the perception is the need to invest heavily in a large system development / replacement project. A virtual workforce sounds, to many, as a treating the symptom instead of the problem. Educating stakeholders as to the benefits of robots can therefore take time but the business case proves the sense of the approach.
- Information Security Concerns – This is a universal constant. InfoSec teams are paid to be cautious. The benefit of presentation-layer automation is that the impact on back end systems and systems-of-record are minimized or non-existent. However, the introduction of a system that replaces people puts the risk considerations squarely in their camp. The logic of whether you would like 500 sets of eyes on your data or a number of robots run in secure data centers, with full audit trails and being accessed only by a few with much more stringent access controls and policies is indisputable. But this is a new technology and therefore requires a full assessment in each enterprise where it is implemented. This should not be underestimated both in terms of effort and time to complete.
- Governance Requirements – Like any service delivery transformation, deploying process automation requires a strict service management and governance structure that identifies process ownership and dictates appropriate actions in the event of system, process or rule changes. Governance will need to adapt to capture the interdependencies a virtual workforce will have on even the slightest system upgrades and alterations on the client side.
- Design Rigor – Solution design rigor must evolve rapidly or else assumptions and commitments will be made on imperfect information. Margins for error in traditional outsourcing solution design could be costly but controllable. When discussing full-scale staff automation, forecasts must be accurate or else business cases impact could be catastrophic. Robots do not question the work they are performing, if you don’t design the controls to ensure the same invoice isn’t paid multiple times then there is a risk there will be. Robots work much faster than people and do exactly what they are told regardless of whether what they have been told is the right thing or not.
- Deployment and Support Rigor – Similar to cautionary tales of ERP deployments gone wrong, the possibility to inflict operational despair via poorly deployed and supported automation is very high. This is particularly true in solutions that call for high scale of single processes – magnifying any impacts inadvertently deployed in the first few virtual agents brought online.
Ultimately, the challenges faced are not particularly new – they just have unique elements specific to the nature of a wide-scale task automation. As a result, the recommended means of addressing these challenges is also not particularly new – firms considering process automation and robotics should work with experts familiar with the complexities of solution design, due diligence, automation development, robot deployment and ongoing maintenance and enhancement. If the right approach is followed, and risks are managed effectively then the deployment will be a success.
What is your advice to the organizations not considering this?
From our experiences and background in developing BPO solutions of deals and innovation, we see significant opportunities for Robotic Process Automation pretty much everywhere we look. If you have considered outsourcing or setting up your own low cost location delivery centers then you should consider robotics. This is because many of the same qualifiers for outsourcing or off-shoring factor in the decision to use robotics – Do you have computer based work which is highly rules based and time consuming to perform? If you answer ‘yes’, then you likely have a suitable process for robotic process automation.
In the front office it can assist your agent, making them more productive and improving your customer experience with shorter transaction times, reducing manual errors and avoiding the highly irritating repeat questions for the same information. It can also open up new channels of communication on your existing systems such as responding to customer’s balance enquiries by text. In the middle and back office it can run fully automated, only passing out work where the business rules require escalation or manual verification and can remove the complexity of using multiple systems.
The potential use of robotics does not end there. As an example, a year ago I worked with a client to address a supply chain problem where they couldn’t recruit and retain enough resources to perform the highly paper driven work of dealing with faxes and multiple mainframe applications. Given the sensitivities in their sector, off-shoring the work was not an option. Despite these challenges and the high costs associated with the current ways of working, the business case wasn’t there to change the back end systems due to the implications this would have across the entire manufacturing process. This is a perfect example of where robotic process automation can address a challenge that outsourcing could not. Work would stay onshore, the agents would no longer need to use multiple mainframe systems and the company would not have to invest and take the risk of swapping out or even making a single change to their core mainframe systems. In fact unlike any other type of automation, implementing the solution would be quick, easy and low risk. By using the user interface of the mainframe systems all the application logic remains intact so the lengthy unraveling of business rules within the system or taking the risk of integrating at the data level are avoided.
If you are part way into a long term outsourcing contract, talk to your service provider, find out if they are willing and able to deploy robotics and prepared to share the benefits. If not then consider termination for convenience. This is never a popular route, but bear in mind that your service provider will have assessed and accepted the risk of early termination in their commercial model. The cost savings of robotics should more than pay the penalty payment and will provide other benefits. This approach wont be appropriate for every firm but it is worthy of consideration.
Lastly, when considering Robotics our advice is to ensure you are doing so with an experienced partner, there are a few in the industry now. As with all new technologies, robotics has its teething pains as those designing and implementing the solutions learn the new approaches and skills required for this next generation of operating model, but firms have and are implementing this with great success using proven methodology and experienced teams.