RPA goes vertical
When robotic process automation (RPA) first burst on the scene 12 to 18 months ago, headlines focused on the technology’s startling impact on human labour requirements. Early adopters were finding that RPA solutions were executing routine and repetitive tasks and eliminating 40 per cent and more of the work traditionally performed by humans. The result was a dramatic opportunity to reduce costs and redeploy people for higher-value functions.
As the RPA market has matured, buyers and providers have increasingly recognised that the potential benefits of RPA extend far beyond cost reduction and workforce streamlining per se, and are ideally suited to addressing critical business challenges within specific industries. Indeed, executives in a variety of sectors are finding that RPA capabilities can be applied to tackle business imperatives related to competitive positioning, regulatory compliance, data management and analytics.
Consider pharmaceuticals. To bring a single drug to market, a pharmaceutical firm invests billions of dollars to rigorously screen and review thousands of compounds, and then spends years testing a compound prior to final approval. As it happens, many of the business processes involved in the screening, testing and reporting of “pharmacovigilance” are highly repeatable and consistent – in other words, a perfect fit for RPA.
Today, clinical operations at most pharmas are still people-intensive, with staff engaged in toggling between multiple systems and screens and transferring data from one application to another. By automating many of these “swivel chair” functions, pharmas can streamline these critical processes and increase speed and accuracy. The modular architecture of process automation, meanwhile, enhances scalability across an enterprise. Finally, the fact that every action performed by an RPA tool is traceable and auditable is critical in an industry where accurate and uncompromised record-keeping is a must.
Speaking of accuracy and auditability, banks face the challenge of complying with increasingly strict regulatory standards regarding oversight of third-party relationships. While many of the regulations are vague and open to different interpretations, the general assumption within the industry is that the responsibility for any breach in the service delivery chain will ultimately land on the desk of the bank.
In this environment, banks are finding that RPA can offer a significant boost to compliance strategies.
Unlike a human worker, an RPA solution performs a process function exactly the same way every time, and provides a more detailed, accurate and sustainable audit log of activity – all of which are essential to compliance readiness. The data captured and processed by the RPA tool, moreover, can be more easily analysed to identify potential problems and to drive continuous improvement. By reducing the competitive advantage of low-cost human labour, RPA also provides additional options in terms of sourcing locations. As such, banks operating in high-risk offshore locations because of cost considerations now have a new lower-risk alternative to consider.
Within the retail sector, RPA is having an impact on both strategic and operational imperatives. RPA has enormous potential for retailers seeking to personalize the customer experience through predicting and identifying a buyer’s preferences, and then matching those preferences to available products, prices and delivery options. Put differently, retailers who have struggled to gain insights from huge volumes of “Big Data” can now apply RPA tools to rapidly process those huge volumes and gain meaningful insights into customers. Relatedly, RPA is also being used throughout the supply chain to optimise inventory and logistics, and enable retailers to efficiently respond to peaks and valleys in product demand.
In terms of leading-edge solutions, insurance firms are seeking to integrate RPA with more advanced cognitive computing capabilities to tackle the Sisyphean task of managing legacy data. While RPA tools excel at performing strictly defined and repeatable tasks consistently and with precision, they require explicit instructions – if they encounter an exception to what they’ve been taught, they can’t figure out a way around the problem. Insurers, meanwhile, are struggling to manage mountains of backlogged data – documents such as claims, accounts and invoices stored in a variety of disparate formats and templates. A policy number, for example, might be in one box in one form and in a different box in another. The complexity of this data means that the narrow and proscribed scope of RPA capabilities can’t offer much help on their own. Cognitive computing, meanwhile, applies pattern recognition, learning algorithms and natural language processing to analyse variations, recognize context and in effect “think” about the data being processed. As such, a cognitive computing application could potentially scan different types of insurance documents, extract relevant data on the back end and feed it to an RPA application on the front end for processing into a digital platform. While still evolving, this area represents a huge potential opportunity.
By eliminating routine and repetitive tasks from the job description of human workers, RPA is rewriting the rules of sourcing and IT and business operations. As developments in a number of industries show, the implications and potential benefits go far beyond streamlining processes and reducing costs.
About the Authors
Alsbridge Managing Director Barry Mathews is recognised as one of the leading sourcing practitioners in the UK, having led a wide range of transformational sourcing transactions over the past 18 years. In 2010 Barry co-founded Source, which pioneered an relationship- and outcomes-based approach to sourcing advisory. Alsbridge acquired Source in 2015.
Alsbridge Managing Director Craig Nelson has worked for 25 years as an advisor, provider and buyer of outsourcing services. An acknowledged thought leader in operational governance, his expertise represents a unique blend of ITO and BPO insights, giving him a highly unique strategic perspective on outsourcing effectiveness across multiple functions.
Alsbridge Managing Director Jenn Stein’s experience managing complex engagements is complemented by her proven ability to help clients achieve the desired results from the sourcing process. She has developed sourcing strategies and governance processes for a number of Fortune 500 companies, resulting in cost reduction, increased customer satisfaction and risk mitigation.
Alsbridge Director Paul Donaldson is a global pioneer of Robotic Process Automation who helped define a new technology segment and operating model. His expertise in robotics and process automation addresses the growing demand from clients to seize the transformational opportunity of cognitive computing.