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Is RPA really a driver for digital transformation?

Alex Robbio


March 14th, 2019

Introduction: The RPA market continues to see explosive growth

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 $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 journey – and they expect this to have increased to 72% in 2019, and will have achieved “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 – the majority having just built a pilot or proof 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 enterprise-wide 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, how it can re-align 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, 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, in reality, organizations use it to optimize their processes “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 are 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 enterprises’ 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 which 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 to achieve transformation, in many cases enterprises need to bring processes together, and get out of the siloed structure that they have been used to. For example, 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 which is often the case in large banks, where one part of the bank is unaware of what the other is doing. To create these new digital experiences which customers want, it 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.

As the Harvard Business Review points out, in many cases, it’s better to first work on improving the process, before trying to automate it. As the authors write, 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 pilot, with limited input from the CIO or IT department. Again, such initiatives will help drive efficiency initially, but with limited scope, and will lack the full potential which RPA can ultimately provide.

Conclusion

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.

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