5 RPA Myths Exposed

Nicole Sharon Schultz

With all of the buzz around robotic process automation (RPA), it can be hard to sift through fact and fiction. One thing is clear – changes are coming to finance and accounting, and it’s important to understand exactly what those changes mean. The meaning of RPA can be unclear, so let’s explore what RPA is and what it isn’t.

1. Myth: RPA will replace humans

There’s always the fear that humans will be replaced whenever technology makes an advancement, and RPA is no exception. The reality is that while finance and accounting are changing, they will continue to rely on humans.

According to the U.S. Department of Labor, the finance industry is one of the most overworked industries and one of the few industries that is continuing to increase hours worked per week. Finance departments are wasting valuable time and resources by forcing their employees to do manual, repetitive, and mindless work.

These tasks are better suited for RPA because robots can work tirelessly and continuously without making errors. RPA shifts the daily workload away from mundane, repetitive tasks to work that is managerial and communication-based, opening up new opportunities for highly skilled accountants to add value to the entire organization.

2. Myth: RPA is only about cost reduction

While cost reduction is definitely a benefit of RPA, it’s not in the top three reasons for why businesses choose to implement RPA. According to a recent HfS study, the top reasons businesses choose to implement RPA include:

  • Driving more predictability and higher process quality
  • Speeding up the time it takes to complete the processes
  • Freeing up staff to move to different projects

So, while businesses will experience the benefit of cost reduction, they will also gain many additional benefits, such as the ability to scale for growth.

Scalability is an invaluable benefit. Some industry experts like Leslie Willcocks, professor of technology, work, and globalization at the London School of Economics’ department of management, expect demands and workload to increase exponentially in the coming years.

3. Myth: RPA is expensive

Compared to traditional options such as business process remodeling or offshore/onshore manual processing, RPA is quickly becoming the preferred choice because of its relatively low cost and easy implementation.

RPA significantly reduces costs, increases efficiency, provides a superior customer experience, and dramatically reduces errors all within very short timeframes.

According to a PwC Global Operations Survey, RPA not only delivers benefits quickly, but ROIs of between 300% and 800% are common. While RPA does have initial implementation costs, it also provides rapid internal cost reduction and significant increases in ROI, making it a very appealing option for many companies.

4. Myth: All RPA platforms are created equal

Some RPA platforms are simply better than others. When searching for an RPA platform, it’s essential to ask two key things:

  • How does this RPA platform work with my ERP system?
  • Does this RPA platform enhance my record-to-report (R2R) processes?

As everyone knows, it can be tricky to add new software to ERP systems. Make sure that an RPA platform is not only compatible with your ERP system but can embed within that ERP system itself – this not only makes adopting the platform smooth but also significantly increases security.

Once you’ve found an RPA platform that will embed within your ERP system, make sure it also enhances your R2R processes. An RPA system should first optimize your processes in order for your company to realize the true value inherent in RPA.

5. Myth: RPA is a temporary trend

Don’t be fooled into thinking that the RPA trend will die. RPA is here to stay. Today, RPA is rules-based, and good RPA software will have exception management to minimize human intervention for issue resolution.

The future of RPA is intelligent automation with cognitive algorithms and machine learning. While strong RPA software available today can adapt to complex situations and independently correct errors, the intelligent automation of the future will be able to apply judgment and learning.

For more on this topic, read “The Hidden Value Of RPA For Finance.”

This article originally appeared in BlackLine Magazine and is republished by permission.

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Nicole Sharon Schultz

About Nicole Sharon Schultz

Nicole Sharon Schultz is a specialist in robotic process automation (RPA) at BlackLine. She has been immersed in RPA since moving from the Midwest to The Netherlands almost three years ago. She was responsible for creating and building the user resource platform for BlackLine Smart Close, which embeds RPA into record-to-report activities in SAP software. As an American working in Europe, Nicole sees RPA in action from a unique perspective: as a way for finance to work smarter, bridging the gap between the aspirations of the C-Suite and what can actually be accomplished, given the limitations placed on most finance departments. She is a graduate of the University of Wisconsin at Madison.

The Genesis Of Poor Planning Decisions

Pras Chatterjee

Part 11 in the Dynamic Planning Series

A question I get all the time when working with FP&A professionals around the world is, “Should we plan annually?” As a simple person, I have a simple answer: “No.” We live in a fast-changing world, and that pace of change is only going to increase. I have yet to meet anyone in business who believes that the rate and magnitude of change is going to decrease. At the same time, we need to be able to set realistic goals and targets for our organizations. These two forces can be at odds with each other. How can organizations plan effectively when their environment is constantly changing?

One of the problems with annual planning is that it’s often the genesis of poor decisions. Most organizations dedicate a significant portion of their fiscal fourth quarter to determining where they want to be at year’s end and how they are going to get there. The great flaw in this strategy is that it inherently discourages investments in time, money, and resources that have a payout greater than the next 12 months.

Short-term thinking at the expense of long-term goals

With this artificial constraint, organizations will shy away from activities that aren’t focused on “hitting the number” or that don’t help achieve it. Even when the business cycle of the organization is longer than one year, decisions can be made that aren’t in its best longer-term interest, just to satisfy the short-term result and return structure. It is simply human nature to behave in such a manner, and is often a consequence of compensation plans that reward short-term targets at the expense of long-term goals.

Another challenge with planning on an annual basis is that organizations often fail to anticipate disaster. Since you are managing to an artificial end date, the longer into the cycle you go, the less time you leave yourself to maneuver when change occurs (and it will occur). That’s pushing all the risk to the latter part of the year and hoping nothing goes wrong. The real conundrum here is that if you are wrong about anything in the annual plan, it’s probably too late to fix it – or fix it inexpensively. You can make adjustments, but at an unnecessarily high cost.

Missed opportunities to identify business drivers

Another weakness of the annual planning process (APP) is that it can make it harder for an organization to identify cause and effect. Again, given that many of the activities have return periods of greater than 12 months, organizations weaken the link between smart business activities and achieving long-term goals. By focusing on activities that will have payouts within the year, it makes it more difficult to understand the true drivers of the organization.

And an APP can weaken the value of your benchmarks. By definition, you need to finish the year first to understand performance against any past benchmarks. This approach makes it harder to understand how you are performing against your competitors in the first quarter, or whether the second and third quarters look the way you expect. End-of-year becomes your single data point.

This is truly the opposite of dynamic planning. When you limit the opportunity to understand what’s happening in the moment, you limit the opportunity to react to a changing environment – and that can be the genesis of poor decisions that put you at a strategic disadvantage.

I hope you will be able to join us to discuss forecasting, planning, and budgeting at one of the many upcoming FP&A events SAP will be hosting over the next several months, including the Financial Excellence Forum in New York City next week, Financials 2018 in Las Vegas in February 2018, and Centric Financials in Dallas/Ft. Worth in March 2018.

For more information about dynamic planning, click here.

Follow SAP Finance online: @SAPFinance (Twitter)  | LinkedIn | FacebookYouTube

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Pras Chatterjee

About Pras Chatterjee

Pras Chatterjee is a senior director of Product Marketing for Enterprise Performance Management at SAP, specializing in planning solutions. Prior to joining Product Marketing, Pras was a practice manager for SAP Business Analytics Services in North America as a leader in the EPM practice. He has also served as a solution architect for SAP Business Planning and Consolidation version for the Microsoft platform and SAP NetWeaver, focusing on planning and consolidations around the globe. Pras is a Chartered Professional Accountant and has worked with various software firms in the EPM space, and has had a career in finance with various Fortune 500 organizations.

Drones: Is That Buzzing In Your Ear An Opportunity Or Just A Pest?

David Cruickshank

Part 3 of the Co-Innovation Series.

Day-to-day adoption of drones for commercial purposes is increasing, and it’s leading to not-at-rest sensors going to work, sensing and sense-making the full spectrum of space between terra firma and outer space. The day may soon arrive where identified flying objects continuously pass you on your street, in the halls of your building, or on campus, dutifully and autonomously carrying out all sorts of assigned tasks. Or not. Sort of like when the first Blade Runner movie failed to reflect any notion of a mobile-enabled world in the year 2019. Instead they went for neon-light-handled umbrellas. A total miss? Sure. Yet prediction of future technology is never easy. There’s always the sequel.

While we may not yet be surrounded by swarms of drones buzzing about us in all directions (which of course does worry some), the technology is nonetheless sound enough and gaining real-world traction. The entire drone industry is now focused upon growth in commercial use, as the technology keeps advancing towards formation of artificial intelligence (AI)-enabled and completely autonomous drones. The U.S. Federal Aviation Administration (FAA) says it estimates the commercial drone fleet will grow from 42,000 at the end of 2016 to about 442,000 aircraft by 2021.The aviation safety agency has said there could be as many as 1.6 million commercial drones in use by 2021. A number of valid use cases for select industries like construction, mining, and insurance are emerging today.

In my last post, I spoke to why I believe co-innovation is a reasonable approach to efficiently taking advantage of data extracted from your business operations using not-at-rest sensors. Such an initiative can take real advantage of what a co-innovated solution can be designed to do. Early adoption of any new technology is driven in part by the relentless belief in the return on investment – in this case from collecting important data from drones and automation, which is largely still nascent. That means you will likely be trying a few things before hitting on what works for your business.

Discovery through others

We are quickly advancing our understanding that this is not about just identifying and capturing more data. As we explore use cases in construction, we’ve already discovered the need to empathize with industries that have little interest in receiving more data than it has time or expertise to process. Co-innovation gets you focused on the solution and applying design thinking principles, which helps you recognize what concerns customers most.

While we may talk a lot about forming end-to-end solutions inside Silicon Valley (all in a day’s work), we also recognize that deciding to extract value from drone technology can be a big step for any given industry. Being able to leverage co-innovation, especially in cases involving nascent technologies and services, offers a chance for all participants to share knowledge and learn hands-on together. It can even spawn more discoveries with respect to the solutions possible. It’s usually the case that as we learn more (about anything), we also wind up finding out how much we still don’t know.

Fly solo or collaborate?

With the use of drones – or any not-at-rest sensor, for that matter – there will always be more to learn and discover. Even before the dust fully settles around final FAA regulations governing drones in industry, it is time well spent to examine what key dimensions of using drones in your business matter most and how they integrate with your business operational model. It’s important to gain a sense of the desired future state through understanding a day in the life of an end user trying to apply insights derived from data collected using drones.

Some early drone adopters, like in mining and construction, have elected to manage their own drone operations. They put their own product operations teams in charge of flying drones out of existing facilities, then transfer the drone’s images, captured on microSD cards, to someone else who identifies the images most useful to the requester. This is a serious undertaking, requiring flight control training and becoming familiar with federal aviation and other local regulations, among other complex tasks. It’s not that it can’t be done and done well. But the question to ask, given your business priorities, is whether it makes sense for your company to fly its own drones to get the data and then act upon it – or is it better to seek another way to consume and benefit from this data source?

In my next blog, we’ll look at how some companies are working to answer these questions.

For more on co-innovation opportunities, see The Future Will Be Co-Created.

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David Cruickshank

About David Cruickshank

David Cruickshank is senior director for strategy and operations for the SAP Co-Innovation Lab. He leads the lab's efforts in Silicon Valley to enable ecosystem-driven co-innovation between SAP, its partners, and customers. Additionally, he manages all operational aspects necessary to run a multimillion-dollar data center to provision private cloud infrastructures to deliver productive SAP landscapes consumed by co-innovation projects seeking a faster track to market for commercially successful innovations.

Diving Deep Into Digital Experiences

Kai Goerlich

 

Google Cardboard VR goggles cost US$8
By 2019, immersive solutions
will be adopted in 20% of enterprise businesses
By 2025, the market for immersive hardware and software technology could be $182 billion
In 2017, Lowe’s launched
Holoroom How To VR DIY clinics

Link to Sources


From Dipping a Toe to Fully Immersed

The first wave of virtual reality (VR) and augmented reality (AR) is here,

using smartphones, glasses, and goggles to place us in the middle of 360-degree digital environments or overlay digital artifacts on the physical world. Prototypes, pilot projects, and first movers have already emerged:

  • Guiding warehouse pickers, cargo loaders, and truck drivers with AR
  • Overlaying constantly updated blueprints, measurements, and other construction data on building sites in real time with AR
  • Building 3D machine prototypes in VR for virtual testing and maintenance planning
  • Exhibiting new appliances and fixtures in a VR mockup of the customer’s home
  • Teaching medicine with AR tools that overlay diagnostics and instructions on patients’ bodies

A Vast Sea of Possibilities

Immersive technologies leapt forward in spring 2017 with the introduction of three new products:

  • Nvidia’s Project Holodeck, which generates shared photorealistic VR environments
  • A cloud-based platform for industrial AR from Lenovo New Vision AR and Wikitude
  • A workspace and headset from Meta that lets users use their hands to interact with AR artifacts

The Truly Digital Workplace

New immersive experiences won’t simply be new tools for existing tasks. They promise to create entirely new ways of working.

VR avatars that look and sound like their owners will soon be able to meet in realistic virtual meeting spaces without requiring users to leave their desks or even their homes. With enough computing power and a smart-enough AI, we could soon let VR avatars act as our proxies while we’re doing other things—and (theoretically) do it well enough that no one can tell the difference.

We’ll need a way to signal when an avatar is being human driven in real time, when it’s on autopilot, and when it’s owned by a bot.


What Is Immersion?

A completely immersive experience that’s indistinguishable from real life is impossible given the current constraints on power, throughput, and battery life.

To make current digital experiences more convincing, we’ll need interactive sensors in objects and materials, more powerful infrastructure to create realistic images, and smarter interfaces to interpret and interact with data.

When everything around us is intelligent and interactive, every environment could have an AR overlay or VR presence, with use cases ranging from gaming to firefighting.

We could see a backlash touting the superiority of the unmediated physical world—but multisensory immersive experiences that we can navigate in 360-degree space will change what we consider “real.”


Download the executive brief Diving Deep Into Digital Experiences.


Read the full article Swimming in the Immersive Digital Experience.

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Kai Goerlich

About Kai Goerlich

Kai Goerlich is the Chief Futurist at SAP Innovation Center network His specialties include Competitive Intelligence, Market Intelligence, Corporate Foresight, Trends, Futuring and ideation. Share your thoughts with Kai on Twitter @KaiGoe.heif Futu

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Blockchain: Much Ado About Nothing? How Very Wrong!

Juergen Roehricht

Let me start with a quote from McKinsey, that in my view hits the nail right on the head:

“No matter what the context, there’s a strong possibility that blockchain will affect your business. The very big question is when.”

Now, in the industries that I cover in my role as general manager and innovation lead for travel and transportation/cargo, engineering, construction and operations, professional services, and media, I engage with many different digital leaders on a regular basis. We are having visionary conversations about the impact of digital technologies and digital transformation on business models and business processes and the way companies address them. Many topics are at different stages of the hype cycle, but the one that definitely stands out is blockchain as a new enabling technology in the enterprise space.

Just a few weeks ago, a customer said to me: “My board is all about blockchain, but I don’t get what the excitement is about – isn’t this just about Bitcoin and a cryptocurrency?”

I can totally understand his confusion. I’ve been talking to many blockchain experts who know that it will have a big impact on many industries and the related business communities. But even they are uncertain about the where, how, and when, and about the strategy on how to deal with it. The reason is that we often look at it from a technology point of view. This is a common mistake, as the starting point should be the business problem and the business issue or process that you want to solve or create.

In my many interactions with Torsten Zube, vice president and blockchain lead at the SAP Innovation Center Network (ICN) in Potsdam, Germany, he has made it very clear that it’s mandatory to “start by identifying the real business problem and then … figure out how blockchain can add value.” This is the right approach.

What we really need to do is provide guidance for our customers to enable them to bring this into the context of their business in order to understand and define valuable use cases for blockchain. We need to use design thinking or other creative strategies to identify the relevant fields for a particular company. We must work with our customers and review their processes and business models to determine which key blockchain aspects, such as provenance and trust, are crucial elements in their industry. This way, we can identify use cases in which blockchain will benefit their business and make their company more successful.

My highly regarded colleague Ulrich Scholl, who is responsible for externalizing the latest industry innovations, especially blockchain, in our SAP Industries organization, recently said: “These kinds of use cases are often not evident, as blockchain capabilities sometimes provide minor but crucial elements when used in combination with other enabling technologies such as IoT and machine learning.” In one recent and very interesting customer case from the autonomous province of South Tyrol, Italy, blockchain was one of various cloud platform services required to make this scenario happen.

How to identify “blockchainable” processes and business topics (value drivers)

To understand the true value and impact of blockchain, we need to keep in mind that a verified transaction can involve any kind of digital asset such as cryptocurrency, contracts, and records (for instance, assets can be tangible equipment or digital media). While blockchain can be used for many different scenarios, some don’t need blockchain technology because they could be handled by a simple ledger, managed and owned by the company, or have such a large volume of data that a distributed ledger cannot support it. Blockchain would not the right solution for these scenarios.

Here are some common factors that can help identify potential blockchain use cases:

  • Multiparty collaboration: Are many different parties, and not just one, involved in the process or scenario, but one party dominates everything? For example, a company with many parties in the ecosystem that are all connected to it but not in a network or more decentralized structure.
  • Process optimization: Will blockchain massively improve a process that today is performed manually, involves multiple parties, needs to be digitized, and is very cumbersome to manage or be part of?
  • Transparency and auditability: Is it important to offer each party transparency (e.g., on the origin, delivery, geolocation, and hand-overs) and auditable steps? (e.g., How can I be sure that the wine in my bottle really is from Bordeaux?)
  • Risk and fraud minimization: Does it help (or is there a need) to minimize risk and fraud for each party, or at least for most of them in the chain? (e.g., A company might want to know if its goods have suffered any shocks in transit or whether the predefined route was not followed.)

Connecting blockchain with the Internet of Things

This is where blockchain’s value can be increased and automated. Just think about a blockchain that is not just maintained or simply added by a human, but automatically acquires different signals from sensors, such as geolocation, temperature, shock, usage hours, alerts, etc. One that knows when a payment or any kind of money transfer has been made, a delivery has been received or arrived at its destination, or a digital asset has been downloaded from the Internet. The relevant automated actions or signals are then recorded in the distributed ledger/blockchain.

Of course, given the massive amount of data that is created by those sensors, automated signals, and data streams, it is imperative that only the very few pieces of data coming from a signal that are relevant for a specific business process or transaction be stored in a blockchain. By recording non-relevant data in a blockchain, we would soon hit data size and performance issues.

Ideas to ignite thinking in specific industries

  • The digital, “blockchained” physical asset (asset lifecycle management): No matter whether you build, use, or maintain an asset, such as a machine, a piece of equipment, a turbine, or a whole aircraft, a blockchain transaction (genesis block) can be created when the asset is created. The blockchain will contain all the contracts and information for the asset as a whole and its parts. In this scenario, an entry is made in the blockchain every time an asset is: sold; maintained by the producer or owner’s maintenance team; audited by a third-party auditor; has malfunctioning parts; sends or receives information from sensors; meets specific thresholds; has spare parts built in; requires a change to the purpose or the capability of the assets due to age or usage duration; receives (or doesn’t receive) payments; etc.
  • The delivery chain, bill of lading: In today’s world, shipping freight from A to B involves lots of manual steps. For example, a carrier receives a booking from a shipper or forwarder, confirms it, and, before the document cut-off time, receives the shipping instructions describing the content and how the master bill of lading should be created. The carrier creates the original bill of lading and hands it over to the ordering party (the current owner of the cargo). Today, that original paper-based bill of lading is required for the freight (the container) to be picked up at the destination (the port of discharge). Imagine if we could do this as a blockchain transaction and by forwarding a PDF by email. There would be one transaction at the beginning, when the shipping carrier creates the bill of lading. Then there would be look-ups, e.g., by the import and release processing clerk of the shipper at the port of discharge and the new owner of the cargo at the destination. Then another transaction could document that the container had been handed over.

The future

I personally believe in the massive transformative power of blockchain, even though we are just at the very beginning. This transformation will be achieved by looking at larger networks with many participants that all have a nearly equal part in a process. Today, many blockchain ideas still have a more centralistic approach, in which one company has a more prominent role than the (many) others and often is “managing” this blockchain/distributed ledger-supported process/approach.

But think about the delivery scenario today, where goods are shipped from one door or company to another door or company, across many parties in the delivery chain: from the shipper/producer via the third-party logistics service provider and/or freight forwarder; to the companies doing the actual transport, like vessels, trucks, aircraft, trains, cars, ferries, and so on; to the final destination/receiver. And all of this happens across many countries, many borders, many handovers, customs, etc., and involves a lot of paperwork, across all constituents.

“Blockchaining” this will be truly transformational. But it will need all constituents in the process or network to participate, even if they have different interests, and to agree on basic principles and an approach.

As Torsten Zube put it, I am not a “blockchain extremist” nor a denier that believes this is just a hype, but a realist open to embracing a new technology in order to change our processes for our collective benefit.

Turn insight into action, make better decisions, and transform your business. Learn how.

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Juergen Roehricht

About Juergen Roehricht

Juergen Roehricht is General Manager of Services Industries and Innovation Lead of the Middle and Eastern Europe region for SAP. The industries he covers include travel and transportation; professional services; media; and engineering, construction and operations. Besides managing the business in those segments, Juergen is focused on supporting innovation and digital transformation strategies of SAP customers. With more than 20 years of experience in IT, he stays up to date on the leading edge of innovation, pioneering and bringing new technologies to market and providing thought leadership. He has published several articles and books, including Collaborative Business and The Multi-Channel Company.