Automation with top priority in company growth strategies
Automation should be enshrined in the development strategies of all organizations with the understanding that its implementation is a process spread over time. The initial deployments of Robotic Process Automation (RPA) solutions provide the necessary knowledge and competencies to facilitate the achievement of long-term robotization goals.
Analysts cite RPA tools-based automation as one of the top priorities for the coming years. Increasing the speed and efficiency of processes is as essential to competitiveness as developing innovations. As many as 57% of CEOs surveyed by PWC for its “What’s important to CFOs in 2023” study believe that without implementing changes, their companies will cease to be profitable, so 64% of them plan to invest in automation. It’s no surprise that the RPA market is growing steadily. According to Strategic Market Research, its value will exceed $24 billion in 2030, with a CAGR of 27% over the forecast period.
Automating company processes is a way to eliminate unnecessary costs and make work easier without increasing headcount. Analysts estimate the savings obtained from process robotization could be as much as 30%. This is of great importance, especially now, in times of recession, tight budgets, and difficulties with recruiting specialists in many domains. Automation, by eliminating tedious, manual processes, improves employee satisfaction, thus reducing churn and providing better customer service quality. It also facilitates business scalability and regulatory compliance by fully tracking tasks in progress.
Picking the processes to automate
What is business process automation? It is a series of interrelated activities and tasks the software performs according to specific rules and structure. Once the decision is taken to deploy software bots, the first step in implementing them is the selection of activities to automate. Choose processes that are not complex, result in tangible savings, and can be automated to a minimum of 70%. There are exceptions to this rule, but then the organization must recognize that the return on investment will take longer to materialize. This selection is essential, as these will be the first pilot projects that will allow acquiring the necessary competencies. The future fate of automation in the enterprise may depend on its success. Candidates for automation will be the processes:
- that are repeatable;
- that are rule-based;
- with high volumes of data;
- with few exceptions;
- with low variability;
- mature and stable (documented, with known operating costs);
- providing the organization with tangible benefits.
Based on the above criteria, a list of about 20 potential candidates should be created, from which 2 or 3 processes with precisely calculated ROI will be selected for automation to begin with. These implementations should be done within no more than 12 months – in a one-year timeframe, it will be easier to control the budget and estimate the benefits of the investment. By this time, the help of the implementation should already be visible, and the team responsible for Robotic Process Automation will have developed competencies – which will reduce the implementation time in subsequent deployments.
This 12-month period is also the time to raise awareness among employees through workshops and training. This may result in grassroots initiatives and the identification of further activities to automate.
Planning the automation strategy
Automation should not be treated as a one-off effort but as a long-term program for the company’s development, assuming that this should be done wherever robots can be used. Therefore, it makes sense to create an automation plan, a roadmap that will guide change in the long term, not for just one year, but for example, for five years. This will require performing a business scan, i.e., taking a close look at all departments, such as sales, marketing, finance, debt collection, logistics, IT, customer service, and production, among others, and finding there the activities that lend themselves to automation. Usually, about 40 such processes are identified. This results in a long list of operations from which, based on the collected documentation and ROI calculations, other items are selected for implementing the robots. For instance, these may be such processes as:
- recruitment, payroll, and data entry – in HR;
- order to cash, procurement, “white lists,” commission programs – in finance and accounting;
- management of inventories, invoices and contracts, shipments, and returns – in the supply chain;
- software deployment, routine maintenance, monitoring, password management, email processing, and distribution – in IT.
Barriers that delay the robotization process
As with any change, there are all sorts of hurdles that delay the decision to implement RPA or even block the automation process entirely. These include:
- Employee resistance – people do not know what software robots are and are worried about their jobs. Unduly so, because while it is possible to automate most transactional processes, even the best RPA solution will not develop an improved product formula. Moreover, automation relieves employees from tedious, routine tasks, freeing them up to increase their creativity.
- The IT staff is afraid of losing influence and authority because the teams implementing robotization often come from the departments concerned.
- It is not exactly clear who inside the organization is supposed to take care of process analyses.
- The decision to implement RPA is subject to approval from the headquarters.
- Difficulties with identifying candidates for automation.
- Too many ideas for candidates.
- Initial cost. Automation projects, i.e., the deployment itself, are not very expensive, costing about PLN 30 thousand. The bigger problem is the license itself, which costs PLN 25 thousand per year. Implementing a more significant number of robots is recommended as it will maximize the utilization of the license cost.
CFO as the automation leader
Over the past decade, the roles of CFOs and the finance divisions, in general, have expanded as they increasingly oversee tasks that were traditionally not part of their responsibilities. Already in 2018, in a survey conducted by McKinsey, four out of ten CFOs said they created value for the organization through their strategic leadership and performance management. Automation allows CFOs to become even more empowered by reducing process costs while increasing efficiency. Robotization usually starts in the area of reporting to the CFO, as the finance and accounting functions are ideal candidates for automation, the processes here are structured and standardized, and the volume of data is significant. It is also easy to demonstrate tangible benefits here. For example, the processing of invoices converted into digital format, a mass process based on fixed rules, enables 60% savings. The second reason to embark on automation in finance is the shortage of relevant specialists that companies are starting to experience painfully. Demographic trends are inevitable; due to the aging population, there is no one to replace those retiring from the labor market, and this situation will not change. The second issue is qualifications. According to experts, 74% of people working in the accounting field are ill-prepared for the accounting profession, and those who are well-prepared tend not to be loyal to the company. In this situation, automation is a way out of this predicament, as it can replace the missing resources without incurring the cost of employing them.
Automation commencing in the finance department and demonstrating rapidly increasing benefits is an opportunity for the CFOs to become leaders in robotization and create competence centers within their companies. They are the ones who can become initiators of the following changes, perform a business scan of the entire organization looking for processes suitable for automation and, from the candidates for such projects scattered throughout the organization, select the most profitable ones for RPA implementations, using the experience already gained for their implementation. Thus, the competence center, which started its activities on a micro-scale, is beginning to work for the entire organization.
According to PwC, areas focused on looking ahead and competence centers using the latest technologies, including RPA, still make up a small percentage of the structure of the finance departments of Polish companies. It pays to be at the forefront of change.