Businesses the world over are looking at ways to improve their efficiency and make their operations more responsive and leaner. Yet, a majority of businesses still rely on time-consuming, labour intensive, error prone, repetitive and redundant functions like data entry and file access. On the other hand, enterprises that have embraced technology such as Robotic Process Automation (RPA) have seen significant cost, efficiency, and go-to-market benefits.
However, many organizations are still on the fence regarding the costs versus benefits of an RPA implementation. While RPA comes with a one-time investment, the technology is highly scalable and flexible to adapt to organizational needs. Let us look at how RPA reduces operational overheads by streamlining functions and reducing recurrent costs.
Optimizing your RPA ROI
RPA is applicable across industries and lines of businesses. One of the main arguments in favor of RPA is the reduced operational costs that can directly impact an organization’s pricing. RPA solutions can significantly reduce the expenses and address the cost objectives of a company. This means more available cashflow for innovation and high-value activities. A recent Deloitte survey showed that RPA leads to
- 92% improvement in compliance
- 86% increased productivity
- 90% improved quality
- 59% cost reduction
When implemented correctly, RPA can result in 25-80% of savings on existing operation costs. For instance, KPMG found that RPA can cut costs for financial service companies by 75%.
Here are some ways in which RPA reduces operational costs and improves turn around times, improving bottom-line profits.
1. Significant savings on labor
Since RPA is well suited for handling rules-based processes, it helps teams to skip manual, repetitive and error-prone tasks such as data entry. Not only does it improve the speed and volume of work delivered, but it also frees up employees to focus on high-value tasks.
For instance, using automation for accounts payable processes. Traditional accounting payable methods involve collection and assessment of invoices using OCR or optical character recognition, tallying and validating the data and then finally processing the invoices. RPA streamlines the entire flow with rule-based programs and credits the vendors automatically once validated. It also sends out notifications to stakeholders as a reminder to provide necessary documentation.
This leads to significant savings on human resources and enables companies to hire people for higher-value activities.
2. Alleviate costly data errors
To err is human. When employees are tasked with repetitive work they get fatigued. But there is a high opportunity cost of these mistakes. Harvard Business Review estimates that human errors costs businesses up to $3 trillion per year.
The benefit of Bots is their efficiency regardless of the volume or the repetitiveness of the task. With the addition of AI and intelligent automation, bots can perform complex processes with a remarkable accuracy rate.
3. End of offshoring
For a long time, a key strategy for firms to cut costs was to offshore work to locations where resources were available at a fraction of the costs compared to the money centre.
Those very routine back-office roles that your business had offshored can be carried out in-house using bots more efficiently and cost-effectively. “RPA has the potential to displace offshore clerical work in the same way machines displaced manual work in the 20th century,” says Michael Henry, principal advisory at KPMG.
4. Reduced IT overheads
RPA bots can operate through the UI for any or all software applications required in a business. Many new platforms offer a code-less RPA design so that you can start automating quickly without chalking out a huge IT budget for RPA.
RPA also helps in automating IT tasks including tedious system maintenance. For a very small investment, a single bot can defer the need for significant IT investments. Even processes based on legacy systems can be automated using RPA without system modification or redesign.
CIOs can address the crucial needs of IT transformation by taking up deprioritized IT changes using RPA.
5. Better, faster cheaper
Bots outperform humans in terms of accuracy and speed. This in turn translates into higher efficiency and productivity, providing better value for money. Bots eliminate the potential for errors, increasing accuracy manifold. This improved accuracy alone is worth a great deal both from the speed of operations and compliance standpoint.
For example, an automated process can be programmed to factor in thousands of validation and due diligence rules when analyzing a single tax compliance form more quickly with fewer mistakes.
When you apply analytics to evaluate big data, the value-add is even greater. You can clean, standardize, and analyze data across the enterprise. RPA use cases extend from determining P&L statements to meeting compliance and regulatory guidelines.
Imagine having to hire a workforce at short notice to accommodate a sudden spike in work. With a robotic workforce, you can handle these pleasant surprises in an efficient manner.
Consider the case of an organization that has witnessed steady growth over the past few months and anticipates a further spike. Instead of higher full time employees, the company invests in RPA services to accommodate the excess work. If the market conditions turn unfavourable, all the company needs to do is scale back the number of robots without having to ‘hire or fire’ anyone. Think of RPA as a pontoon bridge, one that can be erected on demand quickly and then taken down when it is no longer required.
Bots can operate 24/7. They don’t need to be paid overtime and they don’t get burnt out. They don’t need to take breaks or go on holidays. This is not a comment about the limitation of the human potential but a unique strength of RPA that enables businesses to maximize the value of their investment.
RPA has revolutionized the business landscape and it will be a critical success factor for businesses in the uncertain and hypercompetitive ecosystem. Businesses that want to stay competitive must leverage RPA with its obvious cost efficiency, accuracy, and speed benefits. The results of RPA implementation are tangible and can be seen across industries and verticals.
If you are interested to know more about RPA systems and how to get started, we can set up a discovery session for you.