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This article was first published in the June 2019 Africa edition of Accounting and Business magazine.

Often referred to as ‘digital labour’, robotic process automation (RPA) is being heralded as the future of finance, if not the workplace as a whole. Yet, as a joint study by ACCA, CA ANZ and KPMG, Embracing robotic automation during the evolution of finance, has pointed out, 50% of executives say their organisation has yet to implement or even trial RPA in their finance function.

So what is RPA? RPA is software that can be easily programmed or instructed by end users to perform high-volume, repeatable, rules-based tasks in a world where multiple, loosely integrated systems are commonplace. Sounds ideal for finance, then: so why the holdup?

Gartner, the technology research group, recently spelt out what was inhibiting finance from adopting RPA: a combination of poor understanding, limited resources, control concerns and a wait-and-see mentality.

Change mindsets

Despite this, Gartner predicts that RPA will be mainstream in finance functions by 2020, so is clearly expecting rapid and widespread adoption. And here’s why. According to Gartner’s head of finance research Johanna Robinson, ‘Unlike many new technologies, RPA has the potential to deliver significant business benefits on day one.’ Music to the finance director’s ears. But she warns that finance leaders will need to change mindsets if they want to avoid failed implementation programmes.

Understanding what RPA is, and what it isn’t, is a good starting point. Deloitte recently summed it up: RPA is computer-coded software, with programs that replace humans performing repetitive rules-based tasks. RPA isn’t walking, talking robots or physically existing machines processing paper, so banish thoughts of Robby from Forbidden Planet or the replicants in Blade Runner.

In Deloitte’s words: ‘RPA is cross-functional and cross-application. It isn’t artificial intelligence or voice recognition and reply software.’

So what can RPA do? Again, Deloitte has the answer. RPA will: open emails and attachments, log into web and enterprise applications, move files and folders, copy and paste, fill in forms, read and write to databases, scrape data from the web, connect to system APIs (application program interfaces), make calculations, extract structured data from documents, collect social media statistics, and follow ‘if/then’ decisions and rules.

But isn’t it all very expensive? Not so, says Deloitte, which claims that RPA can deliver real value; in its survey, payback on RPA implementations was reported at less than 12 months, with an average 20% of full-time equivalent capacity provided by robots. In fact, nine out of 10 respondents reported improved compliance, quality and accuracy, with six out of 10 confirming a cost reduction.

Barriers to implementation

And yet the same survey revealed only 3% of organisations have scaled their digital workforce – clearly RPA is proving more difficult to scale than anticipated. Gartner points to comments in its survey, leaving the reader to decide whether these are valid reasons or just excuses for why organisations are holding back:

  • They do not know where to start: ‘It is tough to know where to start, since RPA can be applied in so many places,’ admits a controller in a global bank.
  • They do not have the resources: ‘We don’t have all the internal capabilities required to implement RPA,’ says an assistant controller in an electronics company.
  • They are worried about controls: ‘What happens if the robot makes a mistake on a financial reporting process?’ asks a finance VP in manufacturing.
  • They will be a fast follower: ‘Another department in our company is evaluating RPA and will implement it soon. We are waiting for them to finish up so that we can learn from their experience,’ a retail chief accounting officer reported.

Clearly, there is a focus on the risk of implementing RPA, especially across a finance function. This is, however, ironic, given the reliance on spreadsheets that have often proved to be the root cause of mistakes and misstatements. However, that is not to dismiss the risks that can be associated with RPA implementations. In a report last year, EY summarised what RPA implementation teams need to think about, and it is quite a lot (see box).

The new role of people arguably needs the most focus. At a time when finance professionals are going through an existential debate over their roles, this needs to be handled carefully. But as numerous reports are keen to point out, new opportunities will be created by the rise of technology, and, from an FD’s point of view, RPA can free up resources to focus on the added value that finance functions can bring to the organisation.

As Robinson says: ‘The benefits of successful RPA deployments within finance include a reduction in errors from manual work and a redeployment of full-time employees to higher value activities.’

Philip Smith, journalist