I’ve always loved watching movies about robots, from the RoboCop series to more recent flicks like Bicentennial Man, A.I. Artificial Intelligence, and WALL-E. I am especially fascinated with the social and philosophical implications of the presence of robots in human lives. When robots do all the work, what is left for humans to do? What does it mean to fall in love with a robot? At what point do we classify a robot as a sentient being?
While we may not have to deal with all those questions just yet, Robotics is already a hot topic in the business world. For a couple of decades now, Robotics has been a key enabler in manufacturing in developed markets. But now, a different class of robots has emerged. Software-based, virtual robots are now being used to automate business processes including finance, HR, and even front-end, customer facing processes. Known as “Robotic Process Automation” (RPA), this new technology is helping businesses perform manual, time-consuming, rules-based office tasks more quickly and cheaply. And it isn’t just happening in the US or Europe; companies in the Philippines have started to experiment with the technology, and are already seeing productivity gains.
Until now, most cost optimization and efficiency improvement initiatives have reduced costs through centralization and standardization of processes. The downside to this, however, is that standardizing processes too much makes it more difficult for a business to react nimbly to changes and market opportunities. This tradeoff between cost, efficiency, and agility presents a difficult choice for businesses.
RPA allows individual departments or business units within a company to rapidly digitize processes, delivering tangible savings and improvements quickly. The robots sit on top of existing software applications and operate those applications as if they were humans. Many computer-based operational tasks like searching, matching, comparing, and filing can be automated, with no complex programming required. By deploying these robots at the business unit or local level, managers can transform their operations without conforming to centralized standards. This means a quicker return on investment, and greater flexibility. The types of processes that lend themselves to automation are especially common in finance and accounting, HR administration, and claims processing, but can also be found embedded in different functional parts of the organization.
A large US bank had used outsourcing and offshoring to lower costs. However, it started to realize that the benefits from this strategy was tapering off. The bank therefore decided to investigate RPA, by trailing the digitization of its loan processing functions. The results were dramatic: an opportunity to compress activities by 60 percent and reduce headcount by 30 percent.
PwC estimates that up to 45 percent of all work activities can be automated. Because of this, commentators see RPA as a threat as much as it is an opportunity. A major pillar of the Philippine economy is the information technology and business process management sector, with over a million jobs in contact centers, business process outsourcing, and offshore service delivery. The question now is, will RPA eliminate all these jobs? Will people be completely replaced by programs that can work 24×7, without the need for coffee breaks and team outings?
Outsourcing companies and in-house centers aren’t waiting for RPA to become a clear and present danger. Instead, many are already experimenting with automation themselves to improve their own operations and provide better value for their clients overseas in terms of reduced cycle times, lower transaction costs, and reduced headcount requirements. And since many processes still need an element of human judgment, people and robots work side by side to complete transactions. The roles and responsibilities of the human workforce inevitably need to change, but they are freed up from the monotony of repetitive activities, in order to focus on what humans do best: engage in higher-order thinking and make judgment calls that robots can’t do. This, at least in theory, makes for more interesting and more fulfilling jobs, requiring higher levels of skill.
Local firms seeking to scale up operations would do well to follow the lead of outsourcers and in-house centers, and consider what RPA can do to help position their business for growth without increasing headcount significantly. They can start with a “Proof of Concept” to see whether RPA is right for them. This small-scale trial typically takes just two weeks. Once the business case is proven, full-scale deployment can start.
I expect RPA to take Philippine industry by storm within the next 18 to 24 months. Early adoption by companies overseas has shown that RPA can take companies to the next level of productivity optimization. RPA can help Philippine companies organize themselves for the future, and prepare for an even more competitive marketplace.
Once Philippine businesses have embraced Robotic Process Automation, we can then pause to think about the philosophical and ethical questions that will inevitably arise. Until such time, companies need to get ready for the robotic revolution.
Benjamin Azada is a Principal from PricewaterhouseCoopers Consulting Services Philippines Co.Ltd. Email your comments and questions to firstname.lastname@example.org. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors.