The use of robotics process automation (RPA) services is gaining momentum in the market, though not fast enough to keep pace with market hype. While some dimensions of RPA are far from new, advancements in cognitive capabilities and related technology capabilities expands the scope of RPA applicability.
Robotics process automation (RPA) is a hot topic generating immense anticipation as it gains momentum and promises a new ecosystem of intelligence that reshapes business and society in the 21st century. The integration of basic automated business processes with artificial intelligence and cognitive processes that think and learn like humans heralds a paradigm shift in how work is performed. But robots providing sound financial advice or acting as personal assistants are not fully here just yet as this new class of digital labor continues to mature. In the meantime, firms face imposing challenges: separating reality from hype, mapping out plans to position vastly diverse IT and business processes for the coming transition, and managing changes in how workers are deployed. Firms failing to prepare now for the robotic revolution risk being left behind.
These are among the key findings from KPMG's Q2015 Global Sourcing Advisory Pulse Survey of leading business and IT service providers and sourcing advisory professionals from KPMG member firms worldwide.
KPMG research shows that labor automation using RPA promises significant benefits to business in terms of reshaping workforce needs and reducing costs.
Advisors say RPA will free workers doing routine tasks to assume more strategic roles. While the cognitive revolution is indeed underway, the immaturity of these advanced technologies poses limits in the short term and businesses will be wise to avoid false expectations amid hype. KPMG’s survey reveals that advisors and service providers are at odds on timelines:
“People get excited about RPA and how robots will change the world. The possibilities are certainly unprecedented. But we’re seeing an evolution in RPA automation that will be longer term than the market hype suggests. The key right now for smart businesses is to understand the various classes of RPA solutions – what’s here now, what’s on the horizon. Then you can have a realistic, intelligent conversation about the reality of what RPA can truly deliver and how to get there.”
- David Brown, KPMG’s Global Lead, Shared Services and Outsourcing Advisory practice.
RPA solutions that automate business processes and operations are categorized within one of three classes:
KPMG advisors say that while commonly applying Class 3 RPA’s cognitive functions and AI solutions to everyday business operations remains at least three to five years, it is imperative today for businesses to recognize and understand its long term potential, the roadblocks ahead and to focus resources on mapping out a practical, profitable transition to game-changing RPA.
For most organizations, taking advantage of higher-end RPA opportunities will be easier said than done, KPMG advisors say. The survey highlights an array of factors, beyond the immaturity of next-generation RPA, posing deployment challenges in the shorter term, including:
Other key factors include a lack of desire, budgets and skills for business-process standardization ahead of RPA adoption, the inability to build a compelling business case, and a reluctance to reduce employee headcount.
The KPMG survey reveals that while demand for RPA is considered ‘low to non-existent’ among many business functions today – including one-third of all IT processes and nearly two-thirds of sourcing and procurement, finance and accounting, and supply chain and logistics – the demand picture three years out shows stunning increases across these and other functions.
Emerging RPA applications will forge dramatic changes to the demand for labor and related costs. Debate is already raging over the intertwining of humanity and technology that’s underway and its impact on white-collar work. While long-established Class 1 RPA advances in business replaced manual work in the order of 60% to 80% of activities previously performed by people, advisors say, Class 3 RPA is expected to eliminate another 40% to 75% of remaining manual labor.
The survey shows that on the issue of how RPA will impact jobs by delivery model, advisors and service providers generally concur that IT outsourcing operations and business process outsourcing operations will experience the greatest impact.
But as the new technology frees workers from routine tasks, there will be immense potential for firms to reinvest capital and help workers enhance skillsets to fill more strategic and creative roles. Where RPA does drive job losses, it will help organizations better manage and solve skilled labor shortages and the ongoing war for talent amid aging workforces.
Although we believe that a gap does exist between the hype and reality, there is no ignoring the direction in which the innovation wave is headed. Progressive organizations are already developing an RPA plan that identifies functional areas that have low barriers to change but will provide potential opportunities for cost savings and strategic advantages. They understand that RPA is not a small IT implementation, but a change across the entire organization that requires executive leadership to both implement and communicate.
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