Robotic process automation - the use of technology to make your business more efficient - is providing a number of opportunities to innovative business - not least new revenue streams
Ubiquitous, mobile supercomputing. Intelligent robots. Self-driving cars. Neuro-technological brain enhancements. Genetic editing. The evidence of dramatic change is all around us and it’s happening at exponential speed.’ So says professor Klaus Schwab, founder of the World Economic Forum, in his book The fourth industrial revolution.
CFOs will need a set of tools to excel in this new era. These tools are the Internet of Things (I), cloud (C), robotic process automation (R), analytics (A), mobile (M) and social (S) - or the ‘ICRAMS model’. ‘ICR’ acts as the enabler and sensors; ‘AMS’ is the feedback and decision-making engine.
Of main interest to the finance function is the robotic process automation (RPA) component. How can this in particular be leveraged for maximum benefit?
RPA is a solution (usually comprising software) that automates rules-based, high-volume and repetitive elements of human labour. For example, in the supplier statement reconciliation process, individual invoices, credits, re-bills, etc, need to be matched to suppliers, and unmatched or unreconciled payments or credits need to be found. Software can do this quickly and accurately, and automate the resulting actions, such as emailing a supplier for further information.
RPA has significant benefits. As the software takes on the rules-based tasks (for example, the financial period-end close, order-to-cash, procure-to-pay and other end-to-end operational finance areas), members of the finance team are freed up and can be redeployed to tasks requiring strategic judgment. Shared service environments.
In addition, by allowing the technology to follow pre-determined rules, human judgment and potential error are removed, increasing the level of accuracy and compliance. This is a huge boon for regulated industries and/or clients with high audit fees or resource requirements.
If a process is highly repetitive, rules-based and follows a pre-determined set of rules, it is usually a suitable candidate for RPA. However, it may not always be the only solution. You may also want to consider process standardisation, excel simplification and process simplification as a complement to the benefits RPA provides.
RPA is a growing trend, with some analysts quoting 30-60% combined annual growth rates (CAGR) to 2022 and beyond. Companies should consider RPA in the context of:
- a wider strategic agenda, such as a finance transformation project
- change management in process, people and technology
- the implications on the wider business, eg, IT, finance, HR, operations etc
- the entire end-to-end process, eg, in procure to pay, think about supplier set-up, purchase order process, goods receipt, invoice receipt, matching, managing queries, etc
- RPA is only one tool; there are also other options
Finance functions can use the RPA market to monetise their RPA programme in a number of ways:
- partnering with vendors/solution providers that are keen to reference client case studies
- generating income from the intellectual property in the process post-robotisation
- partnering with established consultancies trying to move into the RPA space
- taking the wider benefit of RPA - eg, reduced audit fees, higher compliance/regulatory comfort, higher retention rates of finance staff as roles move from data crunching to analysis and decision making.
Technological advances are coming thick and fast. This provides a host of opportunities, but there are also challenges for businesses, which need to ensure they innovate to remain relevant and cost effective. Time to plan how RPA investment can be monetised to benefit your business.
Paresh Mistry FCCA, managing director, ROLABOTIC