By Josh Ensign and Ming Zhang, Point B
Overinflated promises of ROI have businesses scrambling to implement an automation strategy. Here’s how your organization can reap realistic benefits from automation.
No matter your organization type, you’ve most likely encountered someone within your organization – or an external consultant – who has suggested using Robotic Process Automation (RPA) to help you reach your goals, create solutions for your business, or – and perhaps the most attractive factor – deliver major savings for your company. Organizations are being sold massive promises on automation and its results.
The data regarding the success of automation and its potential return on investment (ROI) is staggering. Popular statistics being bandied about include that it’s possible to automate half of all the work that humans are currently doing, and that there is a 2000 percent ROI to be gained through RPA development, with an 85 percent cost takeout of automated processes.
RPA is a relatively new technology, but with 80 percent of businesses either currently pursuing automation or having already pursued it, RPA is one of the most popular Future of Work initiatives for organizations to consider – and many are doing so because they are eager to see those savings.
The Realities Of Automation
These are huge numbers and impressive forecasts, but the truth is you need to learn how to apply automation and how to successfully implement it in order for RPA to actually give the best benefit to you and to your organization.
When it comes to actual execution, only 50 percent of attempts to deliver automation actually function. This means half of all attempts to automate fail. Even worse: experience shows that less than 3 percent of companies are able to realize true value from automation at any appreciable scale. These are frustrating numbers, especially when compared to all the hype surrounding the potential of automation.
The Real RPA Value: Free Your People
The real value in automation is when it frees your team from monotonous tasks, enabling them to perform the creative and innovative work that leads to strategic growth and business success. There are incredible numbers of highly trained professionals who could add meaningful contributions and value to their respective businesses, but are mired in repetitive, inefficient tasks and procedures they just aren’t inspired to do.
At its finest, RPA is a means of freeing up both your employees’ time and their imagination so they can do more of the things they were trained to do – and want to do. When judging the value or success of an RPA project, this should be your first consideration - freeing your high value team members is how you start the transformation of your business.
Where Businesses Get It Wrong
Traditionally, organizations have only valued the one-time cost savings associated with automation. But when talking about capturing value, this is a limited view.
There is certainly nothing wrong with one-time cost savings, but you create far more value if your automation helps solve your bigger business problems.
For instance, if you desire scalability, automation can increase your capacity to capture revenue or help grow your margin by transitioning variable costs to fixed costs. The resource productivity that is gained through iterative automation can be redeployed to improve higher value-added parts of your business.
A caution: RPA can be a tool in your organization’s strategic arsenal, but if you expect to use RPA as a strategy, you’re going to be disappointed. Automation is a tool to use on the journey you need to take to achieve your business goals and fulfill your vision.
Your RPA efforts need to fit into your larger business strategy. First, automate where it makes sense to automate. You don’t need to start with massive, global, end-to-end processes. Focus your initial efforts on quick wins – automate where it will quickly deliver value, and then reinvest that value.
Transformation is a gradual journey. Automation via RPA can only accelerate that journey. First focus on why you automate. Be thoughtful on what you automate, making sure it pushes you in the right direction. Then execute automation successfully.
About The Authors
Josh Ensign and Ming Zhang are consultants with Point B, an integrated management consulting, venture investment, and real estate development firm.
Ensign leads Point B's Robotics Process Automation (RPA) offering nationally and advises clients across multiple industries on RPA implementation and management including initial operating model, team structure, intake, delivery, monitoring, organization impacts, and managing vendors. He has a history of success in turning around trouble projects or strategic initiatives, including failed or stalled RPA implementations.
Zhang specializes in helping clients understand the metrics that drive the business and have delivered end-to-end transformation solutions that move finance groups from scorekeepers to strategic partners. He's worked with clients across multiple industries including SaaS/PaaS, biotech/life sciences, retail, insurance, financial services, and energy.