Part 1 in the Finance Automation series
Robotics and RPA (robotic process automation) are hot topics in transaction processing these days. While they are not new topics, some things need to be clarified (such as knowing what a robot costs before you make the jump). Following are some things that will help you become clearer about the concept.
What is robotic process automation?
By definition, RPA is an automated workflow where you use a piece of software to carry out a specific task. As one vendor showed, thousands of standard robots could be plugged straight into an ERP system to perform a specific task. If you needed a process that the company hadn’t yet developed with one of its robots, the vendor would create it for you, enabling the robot to execute the task, without fail, at around 99.95% uptime.
You could run with fully automated tasks or build in manual checks, should you wish to confirm that a given part of the workflow had been performed before the robot moved on to the next part. Some of the tasks could be data pulls, sending e-mails, processing payments, and so on, but even some financial planning and analysis (FP&A) tasks and other more complex tasks could be automated.
What are some of the do’s and don’ts?
A robot can do repetitive tasks quickly and efficiently with no downtime and no breaks. (I’ll show you the economics later.) However, if you have a broken process, it doesn’t make sense to plug a robot into it. You need to first fix your processes, and then plug your robot in. The good news is that you don’t have to redesign your full process landscape, as you can plug robots into individual processes rather than fully automating an end-to-end process. Ideally, you would like to achieve full, end-to-end automation, but for many companies, this is not yet attainable.
Make sure you code the robot correctly from the beginning. While RPA can do a lot of tasks for you quickly and efficiently, it could be doing them wrong (although quickly and efficiently) if you haven’t covered all the necessary steps in your process. In addition, you should have a clear plan for using your newly freed resources. Do you let them go, retrain them, or assign them to different tasks, yet to be automated?
What do robots costs, then?
To build a business case for RPA, you need to know what to automate and the cost of that automation. The RPA price point in general use is 20¢ per task. If you consider a worker who works 40 hours a week for 48 weeks a year (without any breaks, which is unrealistic, of course, but for argument’s sake), depending on the worker’s complete full-time equivalent (FTE) cost, here are how many tasks the worker needs to perform per hour to compete with the robot:
That’s just above 50 tasks per hour per $20,000 annually for a fully loaded FTE cost. To see what this looks like, try a simple task, such as sending 50 emails to different people with slightly different content. How many can you do an hour? How many can you do a day? Compare that with your own fully loaded cost and see where you stack up against the robot. Seems like a simple business case, doesn’t it?
Where are you on the journey with robotic process automation in your company or specifically in the finance function? Is there any learning you can share from working with the robots? Finally, how far are you from being able to automate end-to-end processes such as order to cash, procure to pay, or accounts receivable? I’d be very curious to learn about it!
Learn more about the benefits of automating certain finance processes in the four-part series “CFO Intelligent Enterprise.”