Robotic process automation (RPA) is currently the hot topic in outsourcing. Whether an organisation’s driver is the very significant cost reductions such automation brings, the in-year payback, the relatively discreet (and therefore low-risk) implementations, or the markedly improved quality, the impact of this exciting new generation of capability is already being felt by the first sectors adopting the new technology. To really appreciate the impact, it is worth looking at a real and current example: the utilities industry, where in the last two years the true potential of RPA is being unlocked.
Robotic automation is hugely attractive to the utilities industry for two key reasons: firstly the huge volume of transactions – one organisation receives well over 10 million meter readings a year from its agents and customers – and this volume of data sent between the suppliers, agents and distribution networks, combined with the complexity of the marketplace, inevitably requires large operations teams to manage exceptions; and secondly, a large number of processes are repetitive and prone to human error, and with the application of some simple business rules, can be efficiently completed utilising RPA.
Although the opportunity for automation within the utilities industry has traditionally been considered as limited to the back office (such as billing) the opportunities for automating a number of processes that are much closer to the customer are increasingly being appreciated. Here are some examples:
Meter-reading exceptions. As mentioned above the larger utilities companies each receive well over 10 million meter readings per year. Using RPA with the application of some straight-forward business rules you can expect to see a 60% reduction in certain exception cases. One company has recently automated some of the more complex replacement manual billing processes that the industry has to deal with. Within all utility companies the scope for managing back office exceptions through automation is massive. During the last 18 months just one company automated the equivalent of 200 FTEs – and over one million transactions.
Debt recovery. Reducing bad debt is clearly important for all organisations. Automation can help here too, utilising business rules to segment debt and utilise different collection paths to prioritise the accounts to invest time in, and it can even be used as part of the organisation’s contact strategy.
Customer service. Automation can be used to improve service offerings to customers. It can help an advisor to select information more quickly to avoid customers having unnecessary waiting times, to trigger letters, and to e-mail to customers.
Other advantages of automation include: that it allows operational processes to run for longer than their human counterparts, i.e. overnight; they can run uninterrupted; and any number of processes can be controlled centrally with a comparatively small team. For example, one team in a utilities company are currently running over 15 separate processes and centrally controlling this with only a couple of people (where one software licence can on average complete the same number of transactions as 1.5 – 2 FTEs).
These benefits are of course scalable. A significant number of the smaller utilities companies are now growing quickly. Keeping costs low while growing the customer base is clearly a good way of remaining competitive.
The cost savings of automation in the utilities industry, which is itself relatively cheap to implement, can be very significant. In one recent case, over the last two years there was an operational cost saving of £4million per annum – and that was from an already-low cost base.
The other large savings that can be made are those costs associated with IT: the development costs are surprisingly low, particularly where an experienced partner is used, and it is perfectly possible to deliver a new automated process from concept to implementation in less than eight weeks.
There is clearly then a tremendous opportunity here to identify relevant processes and build a pipeline for automation. Here are some tips for beginning your RPA journey:
- Engage with a partner. In the early stages you will not make swift progress without bringing in some relevant expertise. A qualified partner can help in a number of ways: identifying appropriate candidate processes for automation; knowledge of available software; efficient process mapping; technical expertise; they may bring re-useable objects; and will certainly provide learned efficiencies from multiple implementation experiences in similar sectors/organisations. They may start with a proof of concept, which is good for creating buy-in and building momentum in an organisation.
- Engage with your IT department. Early challenges often involve engaging the organisation’s IT department and getting it on board with the programme, and the right internal infrastructure to support the software is critical. Once IT departments appreciate that this is not a threat to them but rather another tool in their armoury, they usually quickly align with its objectives.
- Build a pipeline. In conjunction with your partner, you can build a pipeline of processes that can be automated and prioritised. This helps to quickly build on the momentum of your proof of concept. Once you have a prospective pipeline, you can use a scoring matrix to prioritise which processes you will select. You may wish to use criteria such as operational savings, business criticality, backlog reduction, quality improvement etc.
- Deliver some ‘quick wins’. From your pipeline identify some of the more straightforward processes and use your partner to implement your concepts. As previously mentioned you could get something live within eight weeks of concept. This will build the organisation’s confidence in the programme and reduce the influence of naysayers.
- Don’t just consider end-to-end processes. Automating any part of a process may well be cost-effective. In a high-volume environment like utilities, taking seconds off a process time will lead to significant savings.
- Build your capability. Over a period of time it may make sense to build your own in-house capability to improve on process automation. Experience suggests that utilising a partner in the early phases will help you build a skill set, but your reliance on them will reduce as you permeate the ability to identify and capture automation opportunities across your organisation. This approach will offer more flexibility and breadth to deliver multiple processes quickly. However, there are certain capabilities you might wish to source externally rather than build and maintain a new skill set, for example development.
- Keep going. Once you have a pipeline and people throughout your organisation see how successful automation can be, there will be a flood of requests. The early work creating a scoring matrix will now be invaluable – it is important to continue to deliver positive outcomes through proper prioritisation, rather than to spend too much time analysing every process that is thrown at you.
In summary, RPA has begun to play a major part within utility organisations of all sizes: it can drive tremendous efficiencies and so those organisations in the sector that are embracing this new approach will see their competitive positions massively enhanced in a crowded and demanding marketplace. This same phenomenon is also now manifesting itself across multiple sectors, and the pace of change in the competitive landscape shows no sign of slowing.