CIO's Five-Point RPA Planning Success Formula
Touted as the technology that can eliminate or expedite mundane, IT-enabled tasks, robotic process automation (RPA) has been garnering tremendous CIO interest during the past few years. The advantages of speed, accuracy, and efficiency are seen as the key demand drivers for this technology. According to HfS Research, the worldwide RPA software and services market stood at $271 million in 2016 and is expected to reach $1.2 billion by 2021. As per the data released by Global Market Insights, Inc., RPA market will touch $5 billion in revenues by 2024.
In India, the banking sector can already be seen experimenting with RPA to improve operational efficiency at various levels. The massive financial inclusion drive, Pradhanmantri Jan-Dhan Yojana, although led to opening of nearly 30.56 crore bank accounts, has posed scalability and profitability challenges to banks. How do banks cope with this growth without undertaking massive recruitment? RPA can help boost operating profits and support the desired scalability in such challenging times.
Even as RPA assures several advantages, its business success depends on meticulous planning and execution. Let’s look at the best practices that may help CIOs to ensure that their RPA rollouts achieve business goals with minimal risks.
1. Identify the right process
First thing while considering RPA is to identify the right process. The process you select should have some level of standardisation, repetitiveness, high volumes, and least complexities. An example can be the invoicing process of an automobile or manufacturing company. It’s a standard process—an invoice arrives, the accounts payable (AP) team cross-verifies the vendor, checks the material delivered, and processes payment. But this manual process has its limitations. One person can probably handle only five or six invoices daily. Such processes can be automated through RPA to improve speed, accuracy, and efficiency.
‘High volumes’ is another useful evaluation criterion. For instance, an organisation may spend $100 on automation and employ it once vis-à-vis it spending the same amount but using it 10,000 times. Higher the volume, the better and faster the return on investment (ROI) is.
2. Scale up gradually
The secret to RPA’s project success lies in starting slow, doing small things first and scaling up gradually. Run a pilot. Identify a small process specific to one department to introduce RPA. The trick here is to locate a straightforward, high-volume process that does not have too many inter-departmental dependencies, and whose business outcomes are quantifiable.
A department, for example, has two persons manually entering 50 forms in the system per day. The company expects the workload to grow to 500 forms per day within the next six months. Such a process can be ideal for pilot. Implementing a pilot now can help the company be ready for the day when work-volume actually grows by 10 times.
A pilot followed by gradual scale-up helps a CIO not only to keep his risk under control but also win the CEO’s confidence with every success milestone.
3. Manage cultural issues through employee engagement and education
First the harsh reality—RPA is here to stay (and grow). If not you, your competitor will adopt it. Manual labour is error-prone and has limitations in terms of scalability and speed.
‘Workplace robots’ can be a controversial topic given its perceived impact on employment. Every new technology undergoes this friction—people feel uncomfortable till it is adopted. The same technology, however, opens up many new career avenues.
RPA is not about replacing people with technology. The mundane, repetitive tasks that are ideal for automation rarely promise any career growth. Rather, this technology should be viewed as an opportunity to re-skill your L1 support staff—helping them to upgrade their knowledge and skill sets. RPA offers another great opportunity to CIOs to work closely with HR and business teams. Engaging with cross-functional teams can help create an atmosphere of learning and re-skilling which is conducive to change.
4. Get the right partner
Multiple tools are available today and one single tool may not be adequate. Any organisation looking for RPA implementation should work with a partner who can guide it throughout the implementation.
No two organisations have the same process even if their expected business outcome is the same. For instance, one insurance carrier may be using Ebow and another may have Ingenium. The KYC processes of two banks are different. It’s recommended to find a partner who not only has strong expertise in your industry but also knows your organisation’s technology stack and business processes very well.
Once the IT organisation collects requirement details and suggestions from business teams, the partner should be equipped to take the lead in conducting feasibility analyses of the processes under evaluation. Lastly, CIOs must work with people they are comfortable with. The bonding between the organisation and partner is crucial for project collaboration and success.
5. Do an outcome based contract
The next step is signing a suitable contract. It’s best to avoid a time-and-material contract. Opt for an outcome-based contract, instead. In this type of contract, you pay the partner only upon the realisation of predefined business outcomes.
To illustrate, let’s consider a process that involves running 1,000 cycles of a task daily for two months with expected accuracy level of 95 percent. At the end of two-month period, assess whether the desired business outcome is achieved and pay the partner accordingly. This way, your project risk stands minimised and chances of success increase.
Lastly, it should be remembered that RPA is not just about automation but it delivers digital business assurance. It helps you accomplish stellar performance at speed without quality compromises—24×7! One must also understand that no technology is a magic wand. You may have to be pragmatic in your approach. So, if your vision is clear, expectations are realistic, due diligence is in place, and you have the right partner on board, your RPA project is bound to succeed.
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