Buyer's Handbook: Pinpoint the right RPA products to advance your organization Article 3 of 5

kentoh - Fotolia

Learn the benefits of RPA and the drawbacks by industry

RPA is a hot IT commodity. Discover more of the benefits (and drawbacks) these tools can usher into organizations and how they can enhance workflows in different industries.

Robotic process automation software and the potential benefits it can deliver for organizations are hot topics today. But does your company really need RPA technology, and more importantly, will it bring ROI?

To answer those questions, it makes sense to take a look at some of the potential benefits, as well as the ideal conditions for deploying the software, the possible drawbacks, and the types of businesses that seem most suited to robotic process automation (RPA) adoption.

Benefits of automation

The automation capabilities that RPA provides can be very beneficial for organizations, which in turn can generate improved overall business results.

For example, using RPA can result in more efficient management of labor and reduced wage costs. By having software-based bots handle a number of routine business tasks, such as data entry, companies might be able to reduce headcount in certain areas.

In many cases, companies can retrain the people who currently work on those mundane tasks to work in more dynamic and innovative areas, such as new product development or the enhancement of customer experience. That can add further value to the business.

RPA platforms can also reduce or eliminate the risk of human error that often occurs with manual data entry. That means time and labor savings from not having to correct manual errors, and avoiding the problems that can result from such efforts if they go unnoticed.

Furthermore, the reduction or elimination of errors leads to improved data quality, which can be a major success factor for initiatives such as big data analytics, business intelligence and artificial intelligence.

Given that RPA also increases the scope of data collection by increasing the rate at which data can be entered into applications -- another benefit of the technology -- the increase in data quality is even more vital.

Also beneficial for organizations is the faster service that RPA provides. Many back-office processes can be quite slow with manual processes running in the background and when they involve moving data among multiple applications. That in turn can slow down response times, which hurts all businesses, especially those in areas such as customer fulfillment and support.

Bots work much faster and don't need to take breaks, speeding up processing time considerably. For companies looking to become digital businesses, this increased speed is critical.

The automation capabilities that RPA provides can be very beneficial for organizations, which in turn can generate improved overall business results.

Some of the benefits of RPA relate to employees more so than their companies. For example, the technology can lead to reduced workloads for people because the bots are taking over at least some of the more mundane tasks that human workers had previously performed.

That in turn can lead to increases in employee satisfaction. If a technology worker can reduce or eliminate the time they must spend on tedious tasks like data entry or copying information from one system to another, in most cases they will be happier and more motivated at work.

A more satisfied technology workforce often means reduced churn. If people are happy in their work, they are more likely to stay in their jobs, and the company does not have to constantly recruit, hire and train new workers.

That, plus the fact that automation reduces the need for labor, can decrease the amount of hiring a company needs to do in order to support growth. It will spend less money on hiring as well. And when the company does need to hire, it might have increased brand appeal with prospects because of the use of automation to eliminate menial tasks.

Other potential benefits of RPA involve data security, privacy and regulatory compliance. For instance, if machines rather than people are handling processes such as data entry, there might be less likelihood of exposure of sensitive data, such as medical records or credit card information. That reduces the chances that companies will run into compliance issues.

And with RPA, organizations can more easily maintain detailed audit trails, in the event that issues arise related to fraud or other areas.

Optimal conditions for deployment

What are the ideal company conditions for deploying RPA software? In theory, any business looking to automate its processes could potentially gain from using these products. But certain circumstances and conditions render RPA more suitable for organizations.

Whereas humans can adapt relatively easily to changes in processes or formats, bots do better when things remain the same as much as possible.

Research firm Gartner has noted that the processes that are most suited for RPA "have a high transaction throughput of structured digitalized data, with relatively fixed processing paths and/or user interfaces, which do not change frequently and are rule-based activities."

RPA software works best when it has direct access to data and applications, the firm said. As a result, processes are more suitable for RPA if they have little or no need for remote access tools. Processes with unstructured data are not suitable for most RPA tools, the firm said. If possible, companies should turn data into standardized forms with no unstructured text.

"The ideal processes for RPA are definable, repeatable and rules-based," said Frank Casale, founder of the Institute for Robotic Process Automation & Artificial Intelligence, an independent professional association for the buyers, sellers, influencers and analysts of these technologies.

"Companies that do well with RPA typically have a culture and mindset of wanting to innovate, and a willingness to allow experimentation and tolerate failure," Casale said.

Drawbacks of RPA

Like any other technology, RPA comes with possible drawbacks. Decision-makers need to be aware of these before moving ahead with deployments, to help address potential problems.

For one thing, RPA can lead to the elimination of certain jobs. Even though vendors tout the benefit of moving people into more interesting and dynamic types of work and out of areas such as data entry, there is always the possibility that other functions won’t be available and people will lose their jobs. While most organizations look to save on labor expenses, enterprises can suffer reputational harm following widespread layoffs.

Editor's note: Using extensive research into robotic process automation technology, TechTarget editors focused this series of articles on vendors with product offerings that cover attended, unattended or hybrid RPA. Vendors also needed to possess considerable market share. Our research included Gartner and Forrester Research.

Another drawback is that RPA implementations can fail. This is still a relatively new technology, and it’s untested at many organizations. Whenever companies bring in an automation tool to change the way they conduct processes, things can go wrong. Manual processes might be labor-intensive and slow, but they have been the tried-and-true method in place -- sometimes for many years.

Something else to consider is that you cannot always configure flexibility into a bot. This gets back to the issue of applications and processes needing to be stable in order for RPA to work optimally. In fact, the technology might not work if there are changes to interfaces, data or other inputs.

Yet another possible downside of the technology is that the economic outcomes are uncertain. Even though there is the potential for cost savings, reduced errors and greater efficiencies with RPA, there are no guarantees that everything will work as planned and that companies will see a fast ROI.

Industries that use RPA

Despite the possible drawbacks, RPA tools are in use at many different types of companies today. Here are some possible use cases in different sectors.

Healthcare. Organizations can use RPA to improve how they manage claims, which take up a lot of health administrators’ time; to process appointment requests for new patients; to manage patient records; and to ensure regulatory compliance.

Retail. Retailers can deploy RPA to enhance processes such as workflow management, customer support, demand planning, managing returns, marketing, and accounting and finance.

Telecommunications. RPA can process sales orders, track competitor pricing, automate customer service applications, such as first call resolution, and perform a variety of call center functions.

Banking. Banks can deploy the technology for accounts payable, regulatory compliance, customer service, credit card and mortgage processing, and fraud detection.

Insurance. Insurers can implement RPA to improve underwriting processes, data entry, regulatory compliance efforts, claims processing and form registration.

Manufacturing. Companies in manufacturing can utilize RPA for administration and reporting, customer support, and logistics and enterprise resource planning automation.

Next Steps

Effective QA practices for RPA bot maintenance

Dig Deeper on Enterprise applications of AI

Business Analytics
Data Management