Last week, I attended the Automation Innovation Conference, hosted by the Institute of Robotic Process Automation (IRPA). It was a day crammed full of information, questions, opinions and experiences on how robotic process automation is poised to bring revolutionary changes to business. The session was both well-attended and well-received, and I anticipate that the event will grow to be the centerpiece of this explosive new business area.
The presence of nearly every major financial services company was particularly notable, as this industry is particularly hungry for what RPA has to offer. Financial Services is being squeezed at both ends; ever-increasing cost pressures at one, increasing oversight and regulation at the other. If this wasn’t enough, these companies are also dealing with customers who expect deeply-personalized, instantaneous services and investors who expect institutional transparency. Both of these expectations are growing ever-more expensive to deliver with traditional means. RPA promises to bring a whole new wave of automation to these firms, and they’re interest at the conference was barely contained.
Everything Old is New Again
In the sessions people were extolling the virtues of automation, while acknowledging the need for cultural, political and organizational change. People asked to see technology demos, then asked “where else have you done this?” They spoke of the promise of the new technology, then complained that the business case just wasn’t there. As these discussions evolved into talk of risk management, governance, KPI’s and compliance, I began to feel like Bill Murray in the movie “Groundhog Day”. I was sure I danced this polka before.
I spent several years in the 1990’s deploying ERP systems in financial services companies, and at the conference I had a strong sense of déjà vu all over again. Back then, companies deployed wide-scale process automation for the first time. These projects were massively complex, extremely disruptive, and extremely expensive. Today, many organizations forget just how disruptive that process was. The combination of offshoring, outsourcing, and Post-Traumatic Stress Disorder means that those who dealt with disruptive change were either downsized out of their job or lived in a psychic bubble of selective recall. Implementing ERP was extremely painful, and many organizations preferred to enjoy the destination and forget the rough road traveled in getting there.
Any manager can do well in an expanding market. – W. Edwards Deming
At the time, we faced the exact same issues that the RPA community struggles with today, with one big exception; it will be worse this time around by far. Why? For the simple reason that over the last twenty years, we’ve picked all of the low-hanging fruit from the automation tree. Back then, we spent hundreds, if not thousands, of hours mapping processes, identifying rules, roles and routines, and ferreting out exceptions wherever they hid. We held a zillion meetings with Compliance, Audit, Human Resources and Finance, trying to capture in code the knowledge, experience, skill and know-how of millions of workers.
We captured all of that complexity, and then we chipped away at the parts that were easiest to deal with. As a result, most organizations now suffer with an automation archipelago. They use dozens of different systems to manage their operations, and still rely on people to manually stitch those systems together. After twenty years of implementing process automation, tasks that are still manual are the bubblegum and bailing wire needed to tie together systems that automated what could be automated, rather than what should be automated. What organizations are left with today are process steps that remain stubbornly-manual after years of Darwinian culling. These roles remain in peoples’ hands after having undergone dozens of attempts to automate, re-engineer, outsource or offshore them out of existence. It turns out that few things may be more resilient than a signature field in a PDF document.
Twenty years ago, we discussed governance, risk management, worker dislocation, metrics-stagnation and the changing definition of ‘talent’, just as people at the conference brought up last week. But back then, automation was new, and we could make enormous productivity gains without addressing such thorny topics. Indeed, we largely ignored the really complex stuff in the 1990s because we could, and still meet our goals.
No sensible decision can be made any longer without taking into account not only the world as it is, but the world as it will be. – Isaac Asimov
But now, decades later, what remains to be automated is everything that was literally too difficult to automate the first, second or third time around. To continue to make incremental improvements we need to start addressing this remaining hard stuff that eluded automation thus far. Indeed, incremental improvements to our analog ways are likely over, and we must now take more dramatic steps to reinvigorate our operations. If you’re new to RPA, welcome to dealing with the problems that managers actively avoided for decades.
Our future is going to be even more complicated, even as we are forced to address these analog artifacts in our digital world. Regulations are becoming even more strident, the risks and costs growing with our exponential interconnectedness. The social acceptability of offshoring, outsourcing and right-sizing may be called into question, given the recent rise of populist and nationalistic feelings in many parts of the world. It would not be surprising if, over the last few weeks, many companies have set up committees, tiger teams, or working groups assigned to figure out if their existing staffing strategies will survive the next several years.
Technology Advancements are Changing People’s Expectations
Technology advancement is also changing the game. While technology is rarely ever the limiting factor in change management, recent advancements are dramatically increasing peoples’ expectations. Things that we wished we could have achieved 20 years ago are pedestrian today. Computers have become better at recognizing pictures, handwriting, and other unstructured data, approaching the degree of perfection that our processes require. The availability of massive amounts of data and computing power means that the artificial intelligence technologies developed in the ‘80’s and ‘90’s can finally deliver on their promise. Roles that were believed to be the exclusive domain of humans are now not only ripe for replacement with robots, it may soon be imperative that they are replaced.
Part of the inhumanity of the computer is that, once it is competently programmed and working smoothly, it is completely honest – Isaac Asimov
Many of the participants at #AIIRPA discussed the difficulty they were having in building strong business cases for RPA. They lament that the return on investment (ROI) simply isn’t there. This is likely true for those looking to replace headcount that has already been offshored, outsourced, rationalized, downsized, commoditized and otherwise pruned away over twenty years of ‘improvement.’ To achieve significant gains from robotics, companies must look in new directions, and seek to automate entirely new roles and processes.
Despite the focus on cost reduction, I predict some of the greatest advances from robotic process automation will come in the areas of compliance, risk management and oversight. Robots will effectively, thoroughly and accurately apply our rules, laws and regulations, and may ensure a level of operational transparency that few organizations are prepared for. Arguably, this is exactly why RPA will find some of its strongest proponents and best business cases in watching over manual processes, rather than replacing them.
The secret of getting ahead is getting started – Mark Twain
I’m excited by what I saw at last week’s conference. There was a palpable sense that both our old ways of operating are over and that we are on the verge of a whole new wave of innovation. Robotic process automation will challenge our concepts of what is acceptable, appropriate and achievable because evolution is forcing us to give up these long-held beliefs. Companies that hold on to these analog artifacts do so at their peril, whether they recognize it or not. As anyone with a smart phone can tell you, once you ‘go robot’ there’s no going back, no matter how much you like your old flip phone.
As we learned in the 1990’s with ERP, the key to success with RPA is to simply get started. Yes, you will be disrupting your existing businesses. No, you won’t likely have great ROI’s to start. And yes, there will be an army of people in your organization who will tell you ‘it can’t be done.’ To survive the coming wave of robotic process automation you need to ride the wave, rather than stand in its path. I anticipate future Automation Innovation conferences will be filled with stories of both digital surfers hanging ten, and analogs stacking sandbags full of corporate traditions, habits and rules in a futile attempt to stop the tidal wave of robots entering the global workplace. Managed with care, principle and values, this wave of RPA may actually enhance our humanity, rather than threaten it, leading to a brighter future for us all.