There’s
a growing volume of chatter in the outsourcing industry circles about the
breakthrough potential of Robotic Process Automation, or RPA. I’ve recently seen RPA in action for a few major
corporations and I’ve developed a concern over this trend. It’s a concern based on successful adoption.
For
those who haven’t had the pleasure of a first-hand exposure to RPA in action, I
can tell you that it’s quite impressive.
Software-based “robots” (personally, I am not a fan of the term, but it’s
increasingly being used) run on servers and essentially perform the identical
tasks that humans otherwise would perform.
They login to various systems, review lists of tasks, lookup and correlate
information from varied sources, and execute well-defined procedures.
The
benefits include 24x7 operations (no coffee breaks or absenteeism), predictable
quality of performance, speed of execution, and … obviously … lower labor
costs. Other benefits include the
ability to audit and measure the performance of tasks that might not otherwise
lend themselves to 100% verification.
These
virtues have great appeal to companies that use people today to execute rather
standardized processes. Lower cost,
higher quality, assured outcomes. Sounds
great, right?
Many
observers are worried that the rise of robots to perform transactional business
processes, such as accounts payable reconciliations, invoice verification,
account change processing, and the like, has the potential to displace
thousands of “knowledge workers”, leading to a greater level of social issues
around employment rates.
Some
of the more prominent corporate advocates among the outsourcing industry, many of
which operate with thousands of employees domiciled in lower-cost delivery
locations, are the most prominent adopters.
They argue that today’s labor arbitrage outsourcing models need the
ability to drive greater sources of benefits to their customers. The ability pull the lever of lower labor
cost is diminished, so we must shift to automation from these delivery centers
as the next wave of benefits for outsourcing.
Well,
what I’ve seen of RPA in practice introduces, to me, a concern that dwarfs that
of displacing workers.
I
am old enough to recall the rise of Business Process Reengineering in the early
1990s. BPR was the brainchild, arguably,
of two consulting luminaries, James Champy and Michael Hammer.
The
central thesis of BPR was that “the usual methods for boosting corporate performance—process
rationalization and automation—haven’t yielded the dramatic improvements
companies need. In particular, heavy investments in information technology have
delivered disappointing results—largely because companies tend to use
technology to mechanize old ways of doing business. They leave the existing
processes intact and use computers simply to speed them up.” That was twenty-five years ago!
Back
then, the BPR advocates argued that speeding up those processes does address fundamental
performance deficiencies. “Many of our job designs, work flows, control
mechanisms, and organizational structures came of age in a different
competitive environment and before the advent of the computer. They are geared
toward efficiency and control. Yet the watchwords of the new decade are
innovation and speed, service and quality.”
Those are the words of Michael Hammer printed in a prominent 1990 HBR
article.
Many
of the RPA examples I’ve seen are simply a repaving of the cow paths defined by
current systems, processes, and policies.
The RPA robots memorialize the existing procedures in ways that mimic
today’s human-based operations.
While
today’s RPA initiatives are designed, largely, to be proof-of-concept and pilot
in nature, I think that great care should be taken to define the innovation
roadmap for the underlying business processes prior to shedding the people who
are the most knowledgeable about the processes being robot-enabled. We need to know that we can redesign,
replace, or retire those existing systems and processes – not be held hostage
to a robot’s execution of legacy procedures.
Perhaps
this assignment is a worthy repurposing of the displaced knowledge workers?
I’ll
never argue against automation and the use of technology to drive efficiency, accuracy,
and cost effectiveness. Those are sacred
principles in an “As A Service” economy.
Yet, we need to be sure that we don’t lock ourselves into legacy ways of
running businesses as the ultimate price for near-term efficiencies.
The
robots will execute; they will not redesign.
Not yet.
Peter Allen applies many years of operating experience as a top executive and strategic advisor
for companies of all shapes and sizes, with focus on technology-enabled
business services. He is now Chief Evangelist at Peter Allen & Partners and
Senior Advisor for Alvarez & Marsal.
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