3 tips for introducing RPA
Preparation is the key to unlocking the benefits of automation in the finance function.
Robotic process automation (RPA) could save an estimated 25,000 hours per year for an organisation with 40 full-time accounting staff, according to a 2019 Gartner study that involved more than 150 controllers, CFOs, and other senior accounting executives. But RPA needs to be carefully planned and measured, say finance professionals knowledgeable about implementing automated processes.
They recommend businesses consider these three basic tips before introducing RPA:
Selecting a process. Rohail Khan is president of the digital exchange practice at the Institute for Robotic Process Automation and Artificial Intelligence (IRPA AI), an association for buyers, vendors, and analysts. He said the institute sees two schools of thought for introducing RPA. First, there are the companies that buy software and deploy it to get a quick “proof of concept” to overcome internal resistance to new technology. Be warned that these “science experiments” may succeed in one instance, he said, but are unlikely to yield meaningful return on investment.
“A poorly selected process that produces defective results will produce the same percentage of defects when automated through RPA — they will just happen much faster,” Khan said.
The second school of thought is based on clearly documenting and measuring existing processes, time-consuming work many companies are reluctant to do, he said. “With a ready-aim-fire approach, you embark on prioritising and planning the building of bots, from foundational bots to transactional bots and everything in-between. Given that processes were already measured with [key performance indicators] assigned, it will help you measure results.”
Clearly defining the scope. Rand Low, Ph.D., an honorary senior fellow at the University of Queensland’s Business School in Australia, points to adoption and trust as typical challenges for RPA implementation.
“Humans are reluctant to trust an automated system and will focus on the rare moments where the RPA fails rather than on when it succeeds,” he said. “RPA needs a well-defined scope of works with reasonable expectations.”
Processes most suited for automation include payments, billing, and travel expense reports, Low suggested. Travel claims, for example, are frequently entered into the system and require approvals, he said. “RPA can be used to detect where a travel expense is most likely to be true and accurate and immediately approve it, as opposed to waiting for a human to check and verify its veracity.”
Also, it’s important to remember that automation is not always the answer, Low added. “RPA can be a poor solution where insufficient data exists or if the data is highly unbalanced.”
Getting staff on board. Eline Oh, ACMA, CGMA, CPA (Australia), is a Singapore-based senior finance manager at toy manufacturer LEGO. In a previous executive role at an investment management firm, Oh and her team turned to RPA for cash management. The firm engaged contractors, who worked in-house to support and customise the RPA implementation.
After automating cash management, employees no longer needed to manually raise transactions to fund investing bank accounts or to move funds between those accounts and a parent company’s accounts. “It also reduced the number of erroneous transactions,” said Oh.
“The key challenge in the implementation was to redesign our existing processes to standardise them as much as possible and remove any need for human judgement or intervention in the processes,” she said. “It also required a mindset change in the employees to embrace the technology, as well as thinking of creative ways to re-engineer processes.”
Employees were hesitant to embrace RPA at first, because it seemed like a management initiative to automate tasks to reduce headcount, said Oh. People were worried about job security. They were reassured RPA would upskill them and help them keep up to speed with industry developments. Oh said the company invested in teaching staff how RPA works, earning their buy-in for the changes.
To shift perceptions, managers and employees need to talk about how responsibilities and processes will change, what training will be available, and if professional development can be pursued in place of manual tasks that will be removed from a team’s workweek.
— Luke O’Neill is a freelance writer based in Australia. To comment on this article or to suggest an idea for another article, contact Sabine Vollmer, an FM magazine senior editor, at Sabine.Vollmer@aicpa-cima.com.