While much of the hype has surrounded artificial intelligence (AI) and what it can do to transform the organizational finance function, AI’s less glamorous relative robotic process automation (RPA) has been gathering significant momentum.
RPA has nothing to do with industrial robots and is entirely different from AI, which is based on algorithms that enhance capabilities over time with repetition. It also differs from other automation processes that work through application program interfaces (APIs).
Rather, RPA is all about software that is configured by users to perform high volume, repeatable, rule-based tasks. In many cases, it is based around optical character recognition (OCR) software that extracts and converts data from existing documents.
RPA is system agnostic, which means that it can sit on the top of existing applications to replicate the tasks currently done by humans, using the same interfaces a human would use.
All this means that it is easier to roll out, right now, and while it might appear a “dumb” technology when compared with AI it is the one that is delivering clear wins in many implementing organizations, especially within the finance function.
The benefits span increased control, better speed, reduced cost, 24/7 operations, better data accuracy and increased volumes.
A recent global study conducted by KPMG alongside accountancy bodies ACCA and Chartered Accountants Australia New Zealand surveyed 2,700 accountants around the world to understand their views on RPA and understand how it has been implemented so far.
Unsurprisingly, it has much more traction in larger organizations and 75 percent of companies with USD 25 billion or more in turnover have either completed with a trial or implemented RPA.
Many of these organizations, such as carmaker Volvo, are developing RPA out of previously established business process outsourcing (BPO) functions, but with a key difference: they are taking their RPA in-house and establishing internal centers of excellence that may involve engaging former outsourcing partners in new ways.
At the same time, 50 percent of respondents across the entire sample said their organizations had done nothing about RPA, and 45 percent of this group said that this was because they didn’t yet understand what it meant and could for them.
Those who have implemented have started with low hanging fruits such as Purchase to Pay functions (implemented by 56 percent), and Record to Report (55 percent).
Building on Success
Already, there are some impressive case studies demonstrating the benefits of RPA.
At Volvo, it used to take four days every month for the finance team to validate reports coming in from business units.
Now, after the implementation of RPA, it takes about two minutes, leaving the accountants to focus on reconciling exceptions and improving the quality of the reports they give to the senior management.
This is a common theme. Instead of replacing people and destroying jobs, RPA implementations free people’s time to do work which is not only more interesting but also more valuable to the organization.
At Curtin University in Western Australia, for example, the RPA implementation has proved to be as much about people and culture.
Curtin has implemented RPA across 10 processes in the finance and human resource functions, and in student services and information management where an estimated total of 17,800 hours of manual effort has been saved.
“I think we’ve shown that it doesn’t mean that people will become redundant and lose their jobs,” said Thomas Griebel, the manager of finance business improvement at Curtin.
“It has actually improved staff motivation because people don’t have to do the repetitive tasks, and our staff get better service and the overall quality of the work has improved.”
Griebel gave the example of the onboarding process for enrolments. Previously, this was a big data entry job with details being copied across systems.
Now with RPA, the data migrates automatically and up to 80 to 90 percent of enrolments are processed without human intervention.
This has significantly reduced errors and saved time which staff is now able to focus on the 10 to 20 percent of enrolments which need the application of human judgment.
“Previously, staff would have had less time to think about these more difficult cases, but now they can focus on the more complex ones and give them the time they need to be resolved,” said Griebel.
The KPMG/CA report identified major “people challenges” with the implementation of RPA. There is often cultural resistance within organizations and a fear that the knowledge about core processes will be lost as they become automated.
But it is clear that, when done right, the benefits far outweigh the risks, and according to one accountant at a midsized Australian firm RPA is already making a difference.
“It used to be that we would meet with clients in September or October and review their accounts for the year, so whatever we were doing was around 18 months out of date,” he said.
“Now, instead of us being ‘financial historians’, as we used to be, we are using this information to look forward and help our clients with business planning and improvement discussions,” he added.
“I can see where automation is taking us (in finance). I think that eventually accounts will be happening in the background and they’ll be updated in real time, with most of the reporting automatic.”