One of the biggest buzz words in business right now is RPA — robotics process automation — and organizations everywhere are looking for ways to take advantage of this emerging technology. Indeed, a recent syndicated study found that the worldwide RPA market is set to exceed $5 billion by 2022. What is RPA? Simply put, it's software that works with your existing enterprise applications to automate business transactions, eliminating non-value add manual activities while increasing transaction and data accuracy.
While RPA may sound like the new frontier that only the biggest, most cutting-edge companies can deploy, in fact, small to mid-sized businesses are perfect candidates for process automation using robotics or “bots.” For business leaders who still aren’t convinced of whether and how bots belong in their organizations, here are few considerations to dispel four common misconceptions about RPA.
#1: My Business Is Too Small for RPA
RPA does not depend on size of company. In many cases, RPA can deliver a quicker ROI in small to mid-sized organizations.
Small to mid-sized businesses are not unique in their need to closely manage costs while driving efficiency and accuracy across the organization. While larger enterprises may be able to gain efficiency and lower costs by centralizing back-office support, capturing large purchasing discounts or moving their business onto a tier-1 enterprise resource planning (ERP) system, these same solutions sometimes just aren’t practical for small and mid-sized companies. Unlike these large initiatives that come with considerable up-front investments and all-or-nothing ongoing costs, RPA can be implemented quickly at a low cost and deployed incrementally as needed by the business, scaling as demand warrants.
Additionally, smaller organizations are more likely to lack a complex enterprise IT architecture with multiple ERPs and other integrated business systems and tools. Instead, small businesses often rely on fewer distinct systems, some of which may not even be managed internally, with business processes often “integrated” via manual data entry. With RPA, data transfer and integrations between systems is streamlined and focuses employees on data from one source. Deploying RPA for these types of processes also ensures a higher degree of quality, control and exception reporting.
#2: RPA Wouldn’t Be Cost Effective for My Business
RPA requires a relatively small investment but has high potential to increase worker productivity, reduce the need to hire additional personnel and improve overall quality of the work being done.
One of the biggest selling points of RPA is labor cost avoidance. The business case is fairly simple — by automating a portion of the tasks for which a given employee is responsible, time is freed up to handle other work, increasing productivity. More productive employees means the business can handle a greater volume of work, i.e., growth, without increasing headcount. Meanwhile, offloading mundane, repetitive tasks to a bot avoids the risk of costly typos and errors while allowing employees to focus on more meaningful, value-added tasks that further the success of the business.
Research has shown that up to 45% of employee tasks can be automated; because bots can run 24/7, an investment in even a single bot can go a long way. The institute of Robotic Process Automation claims bots cost one third as much as a full-time employee and can perform the activities of up to five workers. For employees who are responsible for wearing many hats in the organization (a truth that is especially real in growing companies), the opportunity to shift administrative, data entry or reporting tasks to a bot is often a welcomed change.
At the same time, RPA costs are relatively low. Unlike many other technology investments that have significant short-term implementation costs followed by a slow investment recovery period, RPA’s investment recovery period is typically only six to nine months. In addition to a quick return on investment, RPA sets up long-term savings that spread as the business grows. Studies by the National Association of Software and Services Companies found RPA has decreased costs for onshore process operations by 35 to 65% and offshore delivery costs by 10 to 30%. Indeed, RPA can “re-shore” or bring back some processes previously shipped overseas as RPA is often a less expensive alternative. These savings translate to increased profit margins that can greatly impact a company’s ability to scale and manage growth.
#3: My Business Just Isn’t That High Tech. Our Technology Infrastructure Simply Is Not Set Up to Take Advantage of Bots
Because of the potential ROI and rapidly increasing market for RPA, automation is not too “high tech” for any company, regardless of existing IT infrastructure. In fact, neglecting RPA’s growing role and importance could put companies at risk of falling behind competitors.
A company doesn’t need to have a sophisticated IT department or high-tech environment to benefit from RPA. In fact, less advanced technological systems can greatly benefit from RPA. Whereas large, leading-edge organizations may already have advanced workflow or business process automation solutions embedded into big ERP systems, RPA can bridge the gaps that exist in smaller, less comprehensive applications. This is because a bot interacts with systems the way a human would. A bot sits outside the system and uses OCR (optical character recognition) and point-and-click targets as humans would use their eyes and hands to identify fields, click buttons, input data, copy and paste, etc. As a result, RPA minimizes the need for big ERP solutions or code-based application programs interacting across multiple systems.
Furthermore, lower-tech companies that rely on a large percentage of staff doing transaction-processing or administrative work from the back office are perfect candidates for RPA in areas such as reporting, processing, data migration and data entry. RPA has a better potential ROI in these types of organizations as compared to their more high-tech peers.
Finally, whether high-tech or not, all organizations should be looking at how RPA can augment their business processes as the technology becomes increasingly unavoidable. RPA software and services is expected to grow at a compound annual growth rate of 36 percent as companies are able to streamline their business through automation, improve quality and achieve their operational cost savings. Better utilizing resources and time through RPA will give organizations a short-term competitive edge, and in the long-term, ensure they can simply keep up.
#4: Morale Will Suffer If Employees Think Their Jobs Are Being Replaced
Rather than fully replacing jobs, RPA actually changes the dynamics of certain jobs by taking over repetitive, daily actions and opening up time for workers to focus on more in-depth, valuable and creative tasks.
The misconception that robots are “coming for our jobs” is understandable given how automation has already affected industries like manufacturing, mining, distribution, retail and others. However, it’s important to remember that replacing tasks with RPA is not the same thing as replacing employees. In fact, RPA can empower employees by replacing time spent on repetitive, low value-added tasks with more meaningful work. Time saved on tedious or administrative work also can reduce stress by freeing up capacity to focus on other demands.
Bored, stressed or overworked employees rarely are a sign of positive morale. By shifting the right processes from human workers to bots, RPA can actually enhance employees’ sense of efficacy in their jobs and improve retention. One of the biggest reasons employees elect to leave for another job is because they aren’t engaged and are bored in roles with highly redundant tasks. RPA minimizes these tasks, allowing employees to perform more engaging work, which can result in higher job satisfaction.
RPA is one piece of the future business landscape and can be used to benefit both large and small organizations. RPA is more than just simple cost savings. It can better position companies to scale with more efficient and accurate processes, and it can help provide an overall better work environment for employees.
Read our related blog: “Robotic Process and Intelligent Automation: How They Are Changing the Workplace As We Know It”
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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.