Empowering the human element in automation

On a sunny, chilly autumn afternoon, in a mid-rise office building overlooking America's heartland, the future arrived at Blake Goforth's cubicle.

His manager wanted to speak privately; just a heads up before a meeting with the rest of Goforth's team at Flint Hills Resources (FHR).

At the time, Goforth supervised the accounts payable invoice processing group for the company based in Wichita, Kansas, which makes things such as gasoline, diesel, jet fuel, asphalt, and chemicals used in clothing and tyres. Armed with an accounting degree and several years of general business and accounting experience, he was in a good place in his career, overseeing a team charged with administering thousands of vendor contracts and invoices each year.

As his manager spoke, though, Goforth realised his days in that role were numbered. The company wanted to automate the transactional parts of what his team did in an effort to increase efficiency, reduce errors, and carve a technological path towards machine learning and artificial intelligence (AI).

If all went according to plan, Goforth and his team would spend less time doing traditional accounting and more time applying their analytical skills and knowledge of end-to-end processes to software that would ultimately conduct those manual processes. Was he on board?

He was, but not without some apprehension. "I don't have an IT background," he thought to himself in that moment. "I haven't written code. So what does this actually look like for me?"

As more companies adopt robotic process automation (RPA), accountants and other finance professionals are facing an inflection point: accept the change and learn the technology or risk losing professional relevance.

About 53% of companies were using some form of RPA in 2017, and the technology could be almost universal by 2022, according to a Deloitte survey. And around 40% of transactional accounting work is expected to be automated or eliminated by 2020, according to Accenture.

Goforth's situation, to this point in the story, isn't unusual. But the story of how his career has evolved since that conversation just might be.

It's the tale of how an employer successfully implemented automation in partnership with the people whose jobs at a more short-sighted company might have been replaced by the technology. And how people such as Goforth are actually thriving because of it.

Citizen developers

FHR has trained process-oriented finance staff and managers to use RPA software, saving tens of thousands of employee-hours on an annual basis across the enterprise. It has celebrated and promoted those who show an aptitude for automating once-manual tasks, producing automation evangelists who are spreading the gospel of automation throughout the organisation.

Along the way, FHR has embraced a culture of experimentation and fast failure and has developed more effective ways to communicate and manage change. The journey has helped build trust and dispel myths, misconceptions, and job-security fears amongst the rank and file. And it has given strength to a new species of accountant, one who understands the transactional side of the business but who also possesses a firm grasp of technology, data analysis, risk philosophy, and finance modelling.

All this has happened in the time it takes a baby to learn how to walk.

"The pace of change isn't slowing," said Rodney Suter, FHR's director of automation and a former controller at the company. "[Companies need] to figure this out quickly. Being a fast follower is not a winning strategy today. You need to be out front of shifts in technology and be a leader in that space. 'Fast follower' means you're done."

Ramping up RPA might seem like a daunting and expensive goal for many companies. EY estimates that between 30% and 50% of initial RPA projects fail, largely because of implementation issues, not the technology.

And therein lies the moral of FHR's story.

FHR could have afforded the best technology and the brightest consultants. The company, which has about 5,000 employees, has expanded through projects and acquisitions worth at least $15 billion since 2002. And it has the backing of a $120 billion parent, Koch Industries, one of the biggest privately held companies in the world, which wants innovation to be at the core of everything its employees do.

But FHR didn't want to just throw money at this problem.

Instead, a focus on internal implementation and culture — not fancy technology or loads of outside help — has been the bedrock of FHR's success. And for that reason, its approach could be applied at companies with smaller payrolls and far fewer resources.

"The technology is the easy part," said Josh Remacle, digital workforce leader at Koch Business Solutions, which helps manage digital transformation initiatives across Koch's subsidiaries. "But it's really the people." (See "Lessons From an RPA Software Implementation" for how FHR engaged its workforce to spur progress in RPA.)

From printouts to robots

To the uninitiated, the words "robotic process automation" might evoke images of jerky robots whirring and buzzing to a Kraftwerk soundtrack, piecing together widgets on an assembly line. In reality, it's much less cinematic.

RPA is the application of technology that allows users to configure computer software to capture and interpret existing applications, according to the Institute for Robotic Process Automation & Artificial Intelligence. It is used for processing transactions, manipulating data, triggering responses, and communicating with other digital systems.

The technology follows rules in a prescribed order to automate work. It is compatible with other software because it can manipulate the user interface that humans normally use. It can follow if/then logic as it does things such as open email messages and attachments, log in to applications, move files and folders, copy and paste, fill forms, read and write to databases, scrape data from the internet, make calculations, and extract structured data from documents.

At FHR, RPA lives in a mix of servers and normal-looking desktop and laptop computers, where programs, or "bots", complete tasks that were carried out by humans only months ago. The RPA software used by FHR enables employees to automate tasks by pulling commands from a software menu, or, in some cases, by using a record button-type function that logs a human's mouse and keyboard commands, writing code as it goes, available for playback in the future. It's a lot of drag-and-drop.

"It's not as complex as it seems," Goforth said.

The use of RPA to automate individual tasks has helped the company examine, reconfigure, and ultimately streamline entire processes, a practice commonly called business process automation. (See the sidebar "RPA v BPA," at bottom of page.)

By March 2018, less than two years after the company bought its first RPA software licence, FHR employees had programmed hundreds of bots, freeing up almost 50,000 employee-hours annually. By January, the company expects to have used RPA to automate processes by at least 30,000 hours more, allowing employees to focus on higher-value activities. (See the chart "Distribution of RPA at Flint Hills Resources".)

Distribution of RPA at Flint Hills Resources

High-transaction parts of the business, such as invoice processing — Goforth's team — have led the way.

FHR has customers and vendors in dozens of US states and parts of Canada. A year ago, about half of the company's invoice transactions required humans.

The process went like this: A vendor would send a PDF to a general email address managed by the accounts payable department. An FHR employee would then print the invoice and hand-file it into one of several trays. Each tray represented a different type of transaction. And, for each type of transaction, there was a unique accounting system into which hundreds of lines of information would be typed by other employees.

Printouts in the purchase order tray were typed into IBM Maximo and then uploaded to an Oracle product. Some freight invoice data would be keyed into a home-grown system and, in turn, uploaded to the company's main accounting system. Internal administrative transactions, such as software licence fees for the company's IT group, would go into a direct-to-Oracle tray. Meanwhile, another category of invoice would be printed and delivered to another team elsewhere in the building, outside of the accounts payable department.

Lather, rinse, repeat — hundreds, sometimes thousands, of times per day. Most transactions took less than a minute to process. But some could take up to four minutes if information was missing.

Today, FHR uses optical character recognition (OCR) software coupled with its RPA software and other applications to automate the process.

When a vendor sends an invoice, the OCR software reads it and exports the data to an Excel table. The bot then pulls the information from Excel and enters it into the appropriate accounting system. The bots know which data go to the home-grown system, which go directly into Oracle, which go into IBM Maximo, and so on. If necessary invoice information, such as a purchase order number, is missing, then an error message is sent to an FHR employee, who in turn investigates the discrepancy.

The processing time is about the same as before. But because the process is automated, employees have more time to focus on managing and reducing invoice discrepancies, forward-thinking financial analysis, or coming up with ways to make other processes more efficient through automation.

Headcount on the accounts payable team has been reduced by a few employees, the company said. Those who were no longer needed in that department weren't laid off. Some have been promoted to other roles in the organisation. Others are now building bots to automate other processes within the company.

And because the invoicing process is becoming more dependent on OCR software, FHR is being more aggressive in persuading counterparties to send typed or more-readable invoices. "We used to take whatever invoice data we got," Goforth said.

So fewer, if any, handwritten invoices pass through now. And, as a result, errors have been reduced. After all, said Scott Bender, CPA, CGMA, the director of automation and modernisation at FHR: "Sixes become zeros and zeros become sixes easily with poor penmanship."

The desktop of the future

Perhaps the most remarkable thing: Most of the bots at FHR were built by accountants who had little experience with RPA at the beginning of last year. As their understanding of the technology has increased, several of them have viewed the value of accounting through a different lens, often emerging more committed to the profession.

Goforth is amongst them. "I had no idea what bots were," he said. "My vision of it was like an automotive factory where you have robots putting cars together. I wasn't sure how exactly we'd leverage this stuff."

He soon learned. After the company acquired its first two RPA software licences in late 2016, it sent its first wave of employees to be trained. Goforth was one of them. Within a couple of months, he had built a bot that enabled the company to streamline a process that calculated third-party contract labour, automating about 2,000 hours of what previously had been manual processes on an annual basis (see the chart "Tracking Third-Party Labour" for a "before" and "after" comparison of the processes). He was also involved in streamlining vendor setup and those manual invoice processes.

Tracking third-party labour

Shortly thereafter, he was rewarded. Goforth was promoted to senior accountant within FHR's automation group, where he was to focus on helping other parts of the business embrace RPA.

"The people who are able to embrace technology and use it to work themselves out of a role, those are the people we need here to continue to do that," Suter said.

Today, FHR has about 200 RPA software licences. It has trained about 250 employees to use the software. Managers want the software to be as ubiquitous as Excel — just another tool in the toolkit. "Our vision is that this is on every desktop in the future," Suter said. "And it's not decades away."

How FHR achieves universality might be where it differs from other companies.

FHR's automation leaders decided that they needed existing employees — the people on the ground — to be heavily involved for a few key reasons: expertise, trust, and continuity.

The people who perform the tasks manually, on a daily basis, were best positioned to build and tweak the bots, which need regular maintenance as software is updated or as processes change. By entrusting staff to automate — and by retaining and rewarding those who do — the company is better positioned to retain knowledge and function at a higher level in the future.

Could FHR have hired a third-party contractor to do all this? Absolutely. And the company often hires outside help for various projects. But FHR's RPA implementation has been all about culture and approach; not about the value of consultants and outside resources.

Consider a morale-sapping scenario: A third-party contractor comes in and builds bots that eliminate employees. The remaining employees maintain the bot that sent their colleague packing.

"It's the reason we've applied this 'citizen developer' approach," said Bender, the modernisation director. "We've said, 'You need to understand how to use this tool. We want to know which of you shows an aptitude to really run with a tool like this.' And those people will help others learn.

"We didn't go out and hire a consulting firm to do all of our Excel spreadsheets and then, anytime we need some math done, call them up and say, 'Oh, we need some math.' We said, 'Here's the tool. Go figure out how to use it.' This is the same concept."

A good consultant can complement the right automation culture, but few consultants will succeed without the openness of the organisation to automation, Bender said.

And because of the trust built through the "citizen developer" approach, he added, the idea of bringing in a third party for automation work is now more palatable to existing staff.

"We've now created the culture," he said.

'What is boring about your role?'

Early on in this evolution, some FHR employees were apprehensive about RPA technology and the threat it presented to their existing roles. But employees say those fears largely subsided once they realised the benefits of RPA.

That realisation starts when Suter asks them a few simple questions: "When you come into work, what do you not want to do?" or "What is boring about your role?"

"Those things are ripe for automation in some way," Suter said. "It's really about talking candidly to employees."

Their answers are the trailhead to their RPA trek. Employees are asked to bring something they want to automate to their first training sessions, and they attempt to complete it before they leave. "Now we have a more automated process," Suter said. "And they can see it in real life." From there, they're encouraged to "partner with technology" elsewhere in their roles.

Indeed, as more processes are automated, there may be a need for fewer employees. FHR managers get that. Therefore, being careful stewards of human resources is critical at this point in the implementation, Suter said. "We are trying to be thoughtful about how we manage the workforce and not create a culture that is resistant to change," he said. "So managing this the right way — the redeployment of resources or managing through attrition — that's how we're trying to be thoughtful about that today."

After all, there's much left to do. RPA implementation in FHR and other Koch subsidiaries will be a critical bridge towards a complex digital transformation across the conglomerate parent, a process that involves consolidation of legacy systems (see "Making RPA a Unifying Force for a Vast, Diversified Conglomerate").

Every role will change

As Koch's bots and applications become more sophisticated, they'll be expected to incorporate machine learning and AI to produce pricing forecasts, predict machine failure, or simply pay a vendor. As that evolves, subsidiaries will need to maintain or update automated processes, because as enterprise systems and other software products change, the bots will have to change with them.

"Technology is going to change every role, and not just at Koch but across industries and across roles," Suter said. "We're here to not only ensure the company survives long term, but ensure our employees have good roles long term. And those good roles are the more complex roles."

And that's where Goforth is today: in a more complex role. Since automating his first process, he has been promoted twice. Today, he is an accounting supervisor in FHR's biofuels and ingredients group, where he is working with multiple automation tools, including RPA, to make manual processes more efficient and save several hundred more employee-hours.

When he graduated from college, he never imagined he would be doing what he is doing today. "Seeing that shift in accounting from more ledger-based stuff to working more heavily with software was a little intimidating at first," he said.

He now understands that his skills as an accountant provide the foundation he needs in his new role, and he believes his new skills will carry him forward, past the ledgers, into a future where financial analysis and technological know-how are critical career backbones.

"Accounting was always an analytical profession," Goforth said. "I don't think that's gone anywhere. It's just that the kinds of numbers you're analysing has changed from strict debits and credits to analysing your processes."

Jack Hagel is an FM magazine editorial director. To comment on this article or to suggest an idea for another article, contact him at Jack.Hagel@aicpa-cima.com. Ash Noah, CPA, FCMA, CGMA, vice-president of CGMA external relations at the Association of International Certified Professional Accountants, and Andrew Kenney, an FM contributing editor, contributed to this article.