Before Automating Your Company's Processes, Find Ways to Improve Them

One of the most recent automation technologies to emerge is robotic process automation, or RPA. RPA is a category of software tools that enable complex digital processes to be automated by performing them in the same way a human user might perform them, using the user interface and following a set of predefined rules. What sets RPA apart from other automation technologies is that its ability to imitate a human user of one or more information systems reduces development time and extends the range of functions that can be automated across a much wider range of business activities. It is frequently used to automate financial processes, such as comparing invoices with shipment notices, or transfering data from email and call center speech-to-text systems into transactional systems of record. Many organizations have adopted it for automating back- and middle-office processes, and many have achieved rapid returns on their investments.

To be clear, however, the match between RPA and business processes isn't a perfect one if the goal is to redesign or improve the process rather than to automate its current state. As Andrew Spanyi, the author of four books on process management, put it to us by email: "RPA does not redesign anything. It doesn't ask whether we need to do this activity at all. It operates at the task level and not the end-to-end process level."

But RPA can be combined with changes in the relevant business process. If the goal is to go beyond basic labor arbitrage savings to improve the process and it should be then companies need a good understanding of both their existing business processes and the new processes they want RPA to enable before implementing the technology.

However, many companies don't do that. Their RPA implementations support the "as-is" process, with no improvement or examination of the current process steps that are automated. As a result, they may achieve modest savings, but in many cases they will miss out on opportunities to dramatically improve process outcomes, quality, costs, and cycle times.

Why RPA Needs Process Analysis

We see several reasons why process mapping, analysis, and redesign work are essential to an effective RPA implementation. The existing business process is often overly complex, with unnecessary steps that could be eliminated before RPA is implemented. RPA involves the codification of business rules, but in many cases, business rules haven't been examined for many years and don't make sense in the current environment. In addition, existing business rules are sometimes described as requiring judgment, but in actuality they can be turned into more-accurate and more-consistent algorithms for better, more-consistent decision making. At a leading global logistics company, for example, the business rules in a claims process suggested that decisions on tolerances for refunds required the judgment of a manager. But when interviewed, the manager was able to clearly articulate rules of thumb he followed, which could be defined as rules for the RPA process to follow.

In many companies, the level of process knowledge and understanding is quite low. The company may have collections of standard operating procedures, but they are often poorly documented and out of date. Each employee typically follows their understanding of best practices. By working with high-performing employees to challenge and improve the process and embed this into RPA, we have seen not only significant improvements in the processes being automated but also reduced process problems across other parts of the business.

RPA can also simplify the information environment. The technology is sometimes described as supporting "swivel chair" processes involving a lot of back-and-forth access to multiple information systems. In many cases, however, the process could extract all the necessary information at once from a system that is, with less swiveling. Often, there are also built-in checkpoints for processes previously performed by human workers that are no longer needed with RPA because, at least after any initial kinks are resolved, RPA doesn't generally make mistakes and therefore doesn't require checking. For one recruitment-process-outsourcing client, consultants found that the existing process involved the same data being checked by several teams in different countries. The purpose was to address historic quality issues as work was offshored, but these steps became redundant with the certainty of accuracy that RPA brings.

RPA-based process design can restore some useful steps at little cost. Some organizations have cut out steps from existing processes that add customer value because the necessary resources to perform them weren't available. For example, in-process communications with customers about the state of their orders or applications may be time-consuming for human workers to send and receive, but they are very easy for robots. A U.S. health care firm, for example, had over the years stripped a process down to the minimal viable steps to achieve efficiencies. However, the process resulted in a lack of communication to the service users, and that in turn drove up costs in the contact centers.

With changes like these, a process enabled by RPA can become much more efficient and effective than a process that is automated but otherwise unchanged. Redesigning processes while implementing RPA can increase the time and cost of the overall initiative, but the return on investment can be as great or greater when compared with RPA implementations with no process change.

In many RPA implementations, there is also the question of whether RPA systems will eliminate some human workers' jobs. While it is likely that some human functions will be taken over by RPA, in most companies that have implemented the technology, job losses have been relatively minor. Redesigning the process while implementing RPA can help to ensure that human workers are performing tasks that are worthy of their capabilities.

In the past, new technologies such as enterprise resource planning systems and the internet have been the catalyst for many companies to reengineer their business processes. While RPA may not be as dramatic a technology advance as those other examples, it does have the potential to power new process designs. Smart companies will use this technology to enable new ways of performing important business activities.

Source:

https://hbr.org/2018/06/before-automating-your-companys-processes-find-ways-to-improve-them

Question:

The main idea of the article is to improve a process before automating it. If a company was considering improving its processes, should it consider BPI or BPR (10 marks), and which approach aligns better with RPA (10 marks)?