After five years of buzz, there is now a lot of momentum in companies adopting Robotic Process Automation (RPA) technology. At Everest Group, our Pinnacle Model™ research assessed the impact of more than 200 leading companies on digital journeys implementing RPA. Our assessment identified companies achieving superior business outcomes (Pinnacle Enterprises™), including 4X the ROI as other enterprises. We found these enterprises invested in key enablers for speed to impact in digital transformation and took a more holistic, participatory approach to implementation rather than a top-down approach. My conversation with Peter Quinn, who led RPA implementation at a large wealth management firm, reveals several characteristics about the successful approach enabling RPA success and higher ROI.
Where Can RPA Technology Add The Most Value?
Companies that look at automation as a single-point solution – such as how to reduce the number of FTEs in a process – find the payback is modest. Those that achieve the greatest ROI rethink their business from a digital perspective. They take an end-to-end view of all organizational functions and how they can digitize their entire service chain. I can’t overstate the importance of taking this approach, as it gives a company a different lens and different framework to understand where and how to deploy automation.
As Quinn investigated automation and RPA tools in 2014, he recognized it as a technology that could transform his company. “I knew it could help us save money, but that was #7 on my list of seven beneficial outcomes we could achieve with RPA. Transforming the company culture by eliminating repetitive work that people didn’t want to do was #1. Our staff attrition rate in middle and back-office operations was 20-25% and 25-30% in our Indian BPO partner.”
Often, companies want to start by automating business processes offshore that frustrate them. But Quinn’s RPA orchestration started with understanding that the company should apply this powerful technology to its most pressing needs and pain points.
He established an “automation governance committee” composed of people from all business units and operational units, IT, an attorney, business manager and the account manager from the Indian BPO partner. Quinn says he didn’t call it the “robotics governance committee” or the “RPA governance committee” because he “didn’t want to put blinders on what automation could be at the firm” and he knew RPA potentially would be just one of several tools they would end up using. The committee met every two weeks and exchanged ideas on business problems they were trying to solve as well as ideas of what could be automated.
Our Pinnacle Enterprise research found that starting with a governance structure rather than technical decisions is a key enabler to RPA success. We found a significant capability maturity gap between RPA Pinnacle Enterprises and typical RPA adopters in the robustness of the governance dimension.
Quinn explained three significant outcomes of the governance committee:
- Senior leadership committed to the transformation.
- The most important decisions were made by the people who owned the business processes. They had the most appetite and interest in using RPA to create productivity efficiencies in their processes.
- The firm gained a broader understanding of what business problems could be addressed with automation on an enterprise-wide basis.
As Quinn experienced, RPA often opens people’s eyes to opportunities for further automation. A team can uncover those opportunities and bring them into the consciousness of the organization in a way that they can take action.
Our Pinnacle RPA research also found that empowerment at the grass-roots level is a key enabler to accelerate RPA adoption. Successful RPA requires both speed and scale of adoption, so quick decision-making and collaboration are key.
The committee members at Quinn’s company agreed staff turnover and cost were pain points. But the business process leaders decided, “It’s fine if automation can reduce operational cost in this area. But if it could eliminate mistakes that hurt us financially and hurt our client experience and our brand, that could be the number-one priority.”
In RPA adoption, improved operational effectiveness and enhanced employee and customer experience- not headcount reduction – are key drivers among the most successful RPA adopters.
Which Processes Are Best To Automate?
Quinn advises companies in the early stages of automation to think about its applicability in areas of high staff turnover or high error rates (they often go hand in hand). Correcting errors take from five to 10 times as long as it takes to do a process correctly in the first place, he points out. “But the more significant impact is how errors tarnish client experience. In today’s world, the client experience has just as much value to a company as dollars and cents.”
In segmenting their business processes for consideration for automation, Quinn recalled the processes fell into two groups:
- Very isolated standalone processes (bottom-up processes). They created value but limited impact.
- Processes that were much more complex that had developed over many years of operation. They often had gone through changes in response to new types of regulations, security, etc.
As Quinn explained to me, those process changes were often done in an expedient fashion (top-down processes where they wanted to look from a very high level across the entire string of processes that all constituted a business function). These processes consisted of a series of steps, with one feeding the other. They realized that automation provided an opportunity to “start over and do it right. We looked at what would be the really smart way to do it, and then automated that process. We decided not to replicate 30 years of Band-aids.”
Interestingly, his firm hit on a key enabler for RPA success we found among the Pinnacle Enterprises in Everest Group’s research. Those enterprises simplified and reengineered processes before implementing RPA. Rather than automating a sub-optimal or broken process, they streamlined the process by defining, redesigning and documenting the end-state to achieve maximum RPA benefit.
Another key journey accelerator shared by Pinnacle Enterprises adopting RPA is the speed of implementation. Quinn recalled that a key component of his implementation plan was to use the BPO service partner for extra capacity in BA, development and testing staff, to have their staff readily available based on a 90-day rolling inventory. The firm’s IT group played a critical oversight role before RPA was put into production. Where testing against the live system of a vendor was required, corporate policy required that testing had to be performed by its IT group, not a third-party partner, furthering the involvement of the company’s IT group.
They also developed a framework for making decisions on an ongoing basis about automating a business process. Quinn asked the governance committee to submit requests for the next wave of automation priorities. Within this framework, if someone wants to propose automating a process, he or she completes a document, which then provides a clear understanding of the process, what it does and which in-house and third-party systems it interfaces with. It helps the firm understand how many people are doing that process work and in which country. It not only sheds light on new candidates for automation but also which automation tools to use. Importantly, this planning vehicle achieves the following benefits:
- Gives people a way to assess and plan their own process automation opportunity, again capitalizing on a grass-roots adoption approach.
- Gives the IT team a framework for determining whether the process is a good candidate for automation, and which tool(s) to deploy.
- Avoids issues with the organization not have the bandwidth to absorb new work in parallel.
- Gives the ability to assess both the tangible and intangible benefits to be realized.
- Helps the process owners see how they can interact with a project if it were to be funded and go forward.
If your company is looking at how to implement RPA, follow the successful practices of Pinnacle Enterprises and Quinn’s firm. View automation as a powerful enabler of operational improvement that will result in enhancing employee and customer experience rather than focusing on costs. Also ensure a holistic, grass-roots, participatory approach to identifying opportunities to create value through automation. These practices will enable your company to start with higher chances of success and achieve higher ROI.
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