What’s Best for Getting Process Efficiency in Finance?

robotic process automation

Here’s Something New You Should Be Considering

I am trying to start this article in a way that won’t put people off reading before I even start. And that means going against the SEO principles I’ve been taught, and not mentioning my keyword straight out. You see, I think that the very terminology being used about the new technology I’m thinking about can easily make people ignore it. It did for me initially. I saw the phrase, and immediately dismissed it in my mind as hype. And indeed, I still believe that, to an extent, the hype around this technology is hampering the take-up of something that could be genuinely helpful.

As I came across the terminology in internet articles, I gradually became intrigued and eventually tried to find out more. But at first all I could find were more articles that assumed I knew what it was all about. “Are you ready for the revolution,” they would say. “This could lead to mass redundancies among accountants,” they assert. All hype and no substance. What is this thing? And even when I found something of a definition, it was so general that I couldn’t relate it to the revolution being spoken of.

Recently, however, I’ve come to see that it is something worth considering, and can make Finance Transformation a whole lot easier and cheaper.

The technology I’m talking about is Robotic Process Automation (RPA).

And just as a caveat up front, let me say that I’m not coming at this as someone who has personally implemented this. It’s quite a recent invention. But wanting to know about things that can help the Finance function, I saw reference to it and decided to look into it. I’ve read several articles, and I’ve spoken to people who have implemented it, and I’ve seen it demonstrated. But I’m still a newcomer to the subject. What I’ve seen makes me want to get involved more.

So, what follows is my initial assessment. It’s partly an introduction to those who have never come across this before, to help show what RPA is and how it can help. It’s also partly to prompt those more knowledgeable in the area to educate me. So please use the comments to respond, correct, admonish, enquire and build, so that we can use technology in the best way to help the Finance function, and business in general, to do things better and more efficiently.

RPA like wall-e?Robotic Process Automation – Helpful Hype?

If you’re to believe some of the hype that’s out there, we’re rapidly heading towards a scenario where robots will have taken over swathes of activities in the Finance function. Thousands of people will have lost their jobs, and accountants will need to retrain and refocus.

It’s all very cool having sci-fi metaphors, and making a big fanfare about a new technology. But personally, I don’t find the hype all that helpful.

The reality is that Business and Finance Transformation programmes have been driving towards automation of processes for years. More than ten years ago I was in a large organisation whose Finance Transformation mantra was “standardisation, simplification, automation”. Automation has been around for years. We’ve been removing jobs steadily, and improving efficiency, through automating various processes and integrating systems. So, what’s new? It’s obvious that talk of the “robotic” is metaphorical. The term, Robotic Process Automation (RPA), does not mean having a physical android sat at a desk replacing a human.

The Simple Truth – What Is Robotic Process Automation?

For me, the beauty of this new technology, is not in thoughts of androids, artificial intelligence and robots. That overcomplicates it way too much. The beauty of RPA is its simplicity. And I guess therein lies the reason why it needs hyping so much. It is so simple that it is possible to miss the potential value.

And that’s why I didn’t start with the new terminology.

So, here’s how I’d describe Robotic Process Automation. Accountants have always been avid spreadsheet and database users. And the things that speed up spreadsheet and database use, are data imports, links and macros. Macros allow you to automate a repetitive process within your spreadsheet or database. Clever Visual Basic programmers can give you buttons in your spreadsheet that you can click to trigger macros that do things like update all your data, update your links, add new columns, copy and paste stuff, and refresh calculations. That’s within a spreadsheet application like Excel.

My take on RPA is that it’s just extending the concept of macros. Simple. The revolution is this – these new macros can be used across anything you do on a computer. It’s not limited to Excel or Access. It can automate any repetitive process you do on a computer using any of the multitude of applications you may need, including browsers, ERP systems, reporting suites, CRM systems, spreadsheets, databases, Payroll systems, etc.

The Simple Beauty of RPA

Robotic Process Automation simplicityAnd herein lies the revolutionary nature of RPA. In previous automation projects we would have to look for areas where things like rekeying of data could be eliminated, or complex processes could be simplified. So, we would look, on the one hand, to have new interface programs written to pass data from one system to another. And on the other hand, we’d look to have application add-ins written – code that takes multiple process steps and amalgamates them into one step. So, classically we look at automating things within each application, or writing new programs to pass data automatically between applications.

RPA technology does both out of the box, without having to write any new code. No new application add-ins, no new interface programs.

The reason RPA can do this, and what makes it different, is that it focuses at the user interface. Classic automation operates either at the application level or the database level.

And this is why it’s called robotic, because it takes exactly what a person needs to do repetitively on the computer with the screen, the keyboard and the mouse, and triggers it without needing human intervention. No business data is held anywhere or passed anywhere in an RPA application. The processes don’t change. They just get done by a computer.

So, for example, if you haven’t got an interface between a payment system and the ERP system, and you can’t afford to build one, you currently have to have someone keying in data twice. RPA says, “get a robot to do that job instead”. You configure the process into the RPA software, click start, and off it goes, as if the person were doing the job. If you want to, you can watch it happening on the screen.

The Compelling Business Case for RPA

What makes the business case for the RPA type of automation more attractive than other types of automation is the cost of it. From what I understand so far in my investigations, the cost of implementing and configuring RPA software is cheap compared to other automation solutions.

You’ll hear RPA exponents talking about the high automation rates – 30% to 70%. For me, that’s not the point. You can get those automation rates from application coding and interface building. The point is that Robotic Process Automation can be much cheaper. That’s because instead of building new software, including automated checks and balances to ensure IT security is maintained, etc, you’re configuring a drag and drop workflow that you can test and can tweak in minutes.

So, I believe that anyone seriously wanting to automate processes should take a look at this. There is a good chance that it will present a better business case than most other automation options.

Downsides to Overcome or Consider

On the other hand, I still feel the need to sound a note of caution. I have some reservations that mean I can’t go along with all the hype. I’m positive enough to say it should be considered every time when looking into automation. But it’s not a panacea, and never will be, no matter what the cost/benefit analysis shows. I’ll come to that in a minute.RPA uncertainties

So, what are some things that I haven’t seen mentioned in the hype?

  1. RPA is sensitive to software upgrades, patches and changes. If your standard browser gets upgraded and all the buttons shift from the left of the menu bar to the right of the menu bar, RPA processes need to be reprogrammed. If you implement Oracle or SAP patches regularly, and they change menu options and screens, you’ll need to adjust the robot process. To an extent, you could throw a “machine learning” (a.k.a. “artificial intelligence”) element into the mix, and that might be clever enough for some things. But the more applications involved in the process being automated, the more likely it is that tweaks to the process will be needed on a regular basis.
  2. Contrary to the hype that you see, computers do make mistakes. They follow their logic, but, for example, OCR will still randomly read 2016 as 2018, or a ‘5’ as an ‘S’. To reduce their mistakes sometimes you can have them check themselves, or program all the different scenarios. But then you’re back to square one with a mega-expensive, complex, system.
  3. The process mapping required to implement Robotic Process Automation needs to be incredibly detailed and precise, much like a car production line. The robot needs to know where your mouse should point on the screen, every keystroke, every click. It needs to know what scenarios it may face where it will have to make decisions based on what is shown in a window or dialogue box, and have an action for every single one.

That all adds up to two things:

  1. Well-documented processes;
  2. A maintenance and admin function.

The latter is something you have to build into the costings in your business case, so you need to assess it in advance of a roll out. I’ve seen Accounts Payable invoice automation where the AP team has been reduced, but the cost savings have been (to a greater or lesser extent) nullified by the need for a new system maintenance and admin function. It will be similar with RPA.

You Don’t Need IT for RPA… Or Do You?

One of the things you may hear as an advantage of RPA is that it doesn’t need IT. It can be done in the business without the IT department. I see this as naïve. The truth is that, as I’ve already pointed out, with RPA or any other business application, a system admin and maintenance function will be needed. And that requires technical application experts. You can’t just give the job to anyone in Finance or in any other business function.

Nowadays there is a division of ownership, with the IT function owning infrastructure, operating systems and in-house development, and the business owning their applications. What that classically means with ERP systems, for example, is that IT manage the backend database, the servers, the backups, the interface processes, etc. And then we have “Systems Accountants” working in the Finance Systems team, doing the systems admin. And you may also have a HR Systems team and a Procurement Systems team and CRM Systems team.

The point is that, whether or not the activities sit in IT, systems related support and maintenance will increase. And it does increase the complexity of what IT must manage.

RPA projectsIs This Fundamentally the Right Way to Do Automation?

But my final point is probably the most fundamental. If you use Robotic Process Automation to automate a process, you’re effectively stuck with all the systems you currently use in that process. The process may also be pretty convoluted, but since a robot is now doing it, it doesn’t matter. It’s cheap. The killer then is that it’s become so cheap that you never stand a chance of making a business case for proper integration/automation.

OK, so it just doesn’t feel right to me! Rekeying is still rekeying, even if it’s a robot doing it! And there must be some benefits from better integration between systems. RPA would leave IT hamstrung, wouldn’t it, if they wanted to help simplify and standardise the application landscape? So, by using one cost saving method we’re effectively hampering another angle on cost savings.

Does it matter that we might bake in bad processes, and then have no incentive to reengineer them because they’re cheap? Is the most important thing having cheap processes? This must be similar to IT questions like, does it matter that my CPU is inefficient if I can make it go fast enough to not notice?

The Way Forward?

I don’t know the answer to those last questions, and so I wonder what your thoughts are.

Is RPA the way forward in making the Finance function more efficient?

Here are a few links to help you find out more:

The Institute for Robotic Process Automation and Artificial Intelligence (IRPAAI) http://irpaai.com/what-is-robotic-process-automation/

Three of the leaders in Robotic Process Automation:

https://www.blueprism.com/

https://www.uipath.com/

https://www.automationanywhere.com/

A good presentation from Accenture: https://www.accenture.com/no-en/insight-financial-services-robotic-process-automation

 

2 Comments

  • Francis Carden

    Reply Reply May 8, 2017

    Andy for a newbie, pretty good stuff. Some facts;

    1. Certain types of RPA (those that do assisted or attended RPA as well as unattended you describe) do not have to worry so much if the UI moves around because they automate the underlying objects of the windows applications. This reduces robot re-work but upto 90% in many cases.

    2. The same object approach also makes these robots really fast since they are not waiting (sleeps / pauses like the only macro days). This can be 4-10 times faster so less robots for unattended.

    3. The same object approach also means you never “click” the screen but rather just tell the application that object has been clicked. This event driven architecture removes the “click/scroll/wait/pray” methods.

    4. You analogy of robust automation of excel with Macros is exactly right. The object approach turns any app into a robust automatable app at the object level.

    5. Mmm, RPA is not new. The “R” Robots that is being applied to screen scrapers is new and really, that’s what RPA is. It’s UI automation with nice controls but UI automation just the same. Add the word “Robotics” to the a “Robotic Cheese Sandwich” and someone will get excited, right? 🙂

    6. The RPA vendors started pretending it was business only and so easy anyone can do it. That’s true with all RPA vendors for simple stuff but once a process gets a little complex, you must have the skills as you say for change control, governance, security, scale etc.,

    7. And you are spot on. RPA maintains the legacy debt. The biggest threat to Robots (whom are now just as fast being made redundant themselves), is the rapid app development technologies that have too leap-frogged what used to be painful re-engineering prospect. 90 days to build apps on-prem and in-cloud are here…

    As someone that has built RPA, twice from the ground app (originally just to automate Green screens and then to automate “any” windows application, I am excited by what RPA can bring to market but I am 10x more excited how Digital Transformation and RPA together bring a tactically strategic solution – that has real legs.

    • Andy Burrows

      Reply Reply May 9, 2017

      Hi Francis. Thank you so much for commenting.

      I’m glad I didn’t go too far wrong! And it’s great to have an RPA expert confirm some of the pros and cons.

      I’m quite intrigued by what you were saying about rapid app development. Are you able to give some examples? And are there restrictions like having to use particular ERP versions etc? And is this generic or are there multiple app development platforms? Are they available to small developers, internal IT teams, or just the cloud providers like Oracle and SAP and Microsoft?

      (And by the way, I love the phrase, “tactically strategic solution”!)

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