- April 10, 2023
- Posted by: Gopal Krishna
- Categories:
A Business Case is required to invest on any new initiative, RPA is no exception. We all know, RPA has potential to fundamentally change the way processes are executed currently. However, it has to pass the litmus test of justifying the investment in terms of tangible ROI.
The objective of this article is two-fold. One is to sensitize Enterprises to have a Criteria for RPA and two, to provide a preview on Business benefits.
I would like to introduce TWO simple and effective models. I call them R3+ Model (Process Criteria) and C3 Model (Business Benefits).
What is an R3+ Model?
For a Process to be eligible for an RPA, it needs to be Rule-based, Routine and Repetitive (R3) i.e. this process does not involve any human intervention and/or decision-making. In addition, process criteria could include:
- Processes are well defined and matured
- Processes are executed in large volumes
- Process initiation, data exchange is done through technology/system, no manual intervention
- Processes are already integrated with core IT systems
Few industry agnostic process examples that fit R3+ Criteria; Contracts compliance, Invoice processing, Payroll processing, Travel & Expense claims, IT Administration and more…
What’s C3 Model (Business Benefits)?
Control:
- With RPA, Data resides within the Enterprise enabling businesses to swiftly respond to rapidly changing regulations
- As RPA is executed locally, Data security risks are minimized if not fully avoided. Also, results in better compliance as certain regulations required Data to be locally available i.e. Data cannot be shared beyond borders
- Since RPA is executed onshore, there is no time elapse and co-ordination issues unlike outsourcing/off-shoring scenario
- RPA is primarily driven and owned by the business and not by the IT function. Also, RPA is executed at the interface layer, requiring no/less integration with core IT systems. This would reduce the dependency on IT function, freeing the CIO organization to focus on strategic initiatives and large-scale programs.
Cost:
- RPA implementation costs much less than other IT initiatives such as ERP implementation, legacy modernization, enterprise systems integration
- Quantum of resources – human, software licenses, hardware, infrastructure, connectivity – required to run RPA programs are much lower than IT initiatives
- RPA can be scaled flexibly i.e. depending on the volume, batch-processing can be done in peak and non-peak time periods leveraging same IT infra to maximize the resources utilization
- According to industry estimates, RPA costs are 1/10 of an Onsite FTE and 1/4 of an Offshore FTE. In addition, RPA can be scaled non-linear i.e. no need to invest in resources corresponding to the increase in size, scale, and volumes.
Creation (of Value):
- As RPA is based on R3+ model, it frees up the human resources to focus on initiatives which require analysis, critical thinking and decision making. Thus, creating more Enterprise Value
- High Data Quality since the margin for human error is almost non-existent
- Generate Reports with deep insights by consolidating and orchestrating data from myriad systems much faster and better. This would help business teams to have holistic view of the data leading to more informed decisions
- Enterprises have to live with legacy systems, typically these systems have cumbersome and un-friendly users interfaces making human-computer interactions less productive. Since RPA does not require human intervention, it leverages the same legacy systems/interfaces to run these processes avoiding investments to re-build interfaces.
The emergence of RPA no doubt, helps Enterprises achieve efficiencies. However, it also poses threat to human resources especially low value-high volume skills which hitherto required to running business. How do we, as human beings respond to such innovations is a different topic altogether.
