Virtusa WP: What is Robotic Process Automation?

How enterprises should adopt enterprise-wide Robotic Process Automation

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INTRODUCTION

Large scale industrial automation has swept the world ever since Henry Ford introduced conveyor-belt assembly lines in 1913. The quest for automating routine mechanical tasks drove manufacturing evolution in the automobile industry.

As computers became affordable in the 1960s, Information Technology (IT) was introduced in enterprises primarily to improve ease of documentation, recording, and retrieval of data. This gradually led to augmenting human intellect and increase the speed of information processing. The banking industry, well-known for its process- driven setup, has implemented automation at various stages. IT was used for record-keeping, then was expanded to transaction processing systems and eventually to customer information management systems. The financial industry further evolved IT into offering self-service, using software solutions such as online money transfer, payment gateways, trading platforms, and performance analytics.

The customer support function, which started as an in-store face-to-face service, used IT to gradually evolve into centralized call center support, web-online support, mobile support and chat support. As a result, the customer support function has become highly capable to support a wide range of business activities such as providing information on demand, logging/escalating complaints, fulfilling product requests, administering emergency services and even resolving time sensitive critical business issues.

Copyright © 2016 Virtusa Corporation. All Rights Reserved.How enterprises should adopt enterprise-wide Robotic Process Automation

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Despite being evolutionary for most part, some automation technologies have proven to be revolutionary within specific industries. What Henry Ford’s conveyer belt did to a manufacturing plant, Interactive Voice Response (IVR) has done the same for the customer support industry; and similarly, introduction of online money transfer systems has led to worldwide e-commence growth.

Over the years, with IT becoming ubiquitous across enterprises, high-performance computation systems, federated data/knowledge centers, and sophisticated software solutions have become better accessible. As a result, routine tasks performed by individuals in large organizations, such as fetching business intelligence from multiple systems and responding to a commonly occurring customer situation, can now be automated. The implications of such capabilities are expected to drive revolutionary transformations in every industry.

Robotic Process Automation (RPA) is the implementation of a computer software that mimics human actions to complete rule-based tasks. A study by Transparency Market Research indicates that global RPA industry would grow at a CAGR of 60.5% and reach a market potential of over $5B by 2020.

Among a host of other business functions, the impact of RPA is likely be higher in back- office

processing and routine IT operations, primarily due to the predictive nature of repetitive tasks performed by human workforce and the ease of implementation of automation in those functions. In a recent survey conducted by HfS Research, 54% of the respondents believe implementing RPA could realize upto 40% cost savings, although the primary driver for RPA is still driving predictability and quality of services. For example, Virtusa, a mid-tier IT services provider, partnered with a leading global financial institute to automate their client account setup process that reduced transaction processing time by 57%, while dramatically increasing the number of such transactions executed on a daily basis by 650%. Combining with 100% regulatory compliance and 0% processing error, the results are simply outstanding.

Although, the concept of Artificial Intelligence (AI) has long existed since 1950s, for various reasons, it has not been capitalized by enterprises for mass adoption in the past. However, combined with Robotic Process Automation, the benefits are anticipated to rise exponentially. Acknowledging this tectonic shift, expected to emerge out of the RPA-AI combination, many leading global organizations are already setting up focused working committees led by senior executives to develop enterprise-wide automation strategies and to evaluate required organizational changes.

Evaluating Automation Opportunities


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Automation is well-suited for performing repetitive tasks that are structured, rule-based in handling business processes related to HR, F&A, Logistics, Procurement and Supply Chain, in the back-office shared services processing centers of large enterprises. Financial Institutions, Utilities, Healthcare, and Telco companies have been early adopters in automating customer-facing business processes as well. For instance, a large global insurance company has sought partnership with Virtusa to set up a Center of Excellence for RPA that will establish an enterprise-wide RPA framework to evaluate and automate business processes across the board (more later). When executed diligently, the RPA strategies could yield significant benefits to enterprises. A global bank automated processes and reduced their bad debt provision by over GBP175 million annually, while freeing up 120 employees. With the help of RPA, another insurance company is now able to process 3,000 claims a day with just 30% of the workforce.

Depending on the nature of business and the intended goals, most enterprises are evaluating their automation strategies along one of the three following themes.

When enterprises are seeking opportunities to automate specific activities that are repetitive, mundane, and have low intrinsic value, a scripted rule-based automation approach is a logical starting point. The focus here is to document the manual steps that are involved or currently performed by a human operator (typically a customer service agent) and develop scripts to automate them. For instance, if an invoice needs to be approved or rejected after validating data against multiple systems, a simple rule-based script could perform the pre-determined set of activities once an invoice is scanned and fed to it. After the data is validated, a human operator can then approve or reject the invoices for payment. This could save significant manual labor involved in “swivel chair operations” to validate data against multiple systems, while maximizing the value of human workforce. This form of automation is meant to deliver labor efficiencies by primarily enhancing seamless handshakes among existing systems. Desktop automation, data extraction, content management, application integrations are some of the examples.

There are several tools available in the market place that provide scripting solutions, of which, some also provide advanced computation capabilities to automate complex activities that need exhaustive exception-handling capabilities. For instance, using one such script based automation in their call center operations, a leading telco service provider reduced repeat calls by 25% and reduced the number of escalations by 50%.

Process automation places focus squarely on end-to-end automation of a given business process. Not all business processes can be fully automated and hence careful provisions must be made to integrate human interventions as needed. There are several evolving RPA tool vendors in the market with varying levels of capabilities that offer platforms to design, build and deploy centrally controlled robots. Analysts predict that over the next three years, 50% of the global back office operations workforce will be replaced by RPA.

However, as enterprises evaluate the need to streamline and optimize back office operations and reduce associated labor costs, it is important to approach the task top-down by evaluating and re-engineering the underlying business processes first, before, and during automation. It is commonly found that companies implement inconsistent, but locally relevant, business processes when entering new geographies,

Automation in the Back Office

Scripted “Activity” Automation Robotic “Process” Automation


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primarily driven by faster time-to-market. For example, one of the leading Insurance companies in the world had their claims processing systems implemented across 60+ countries based on local market requirements, with minimum consideration for a standardized, global approach. Automating such an inconsistent, non-standard business process, is not only time consuming, but also a costly initiative. Therefore, as enterprises evaluate their Robotic Process Automation strategies, it is critical to develop a strong roadmap and an automation maturity model aligning with the overall goals and timelines.

The third area of intense interest and curiosity is in the use of Artificial Intelligence and Cognitive Computing for enterprise-wide business “system” automation. There is tremendous investment in building out industrial-grade capabilities that would not only automate business processes, but also incorporate abilities to continuously learn and predict business patterns. For instance, a doctor while performing a life-saving surgery, could seek real-time assistance from a Virtual Medical Assistant (VMA) without having to pause the procedure.

Since the VMA already has all the required details about the patient history and the specific medical situation, it is able to cognitively analyze the problem and provide specific, actionable and accurate recommendation real-time. While these systems are still evolving (e.g. IBM Watson), the impact of these systems on how business transactions will be processed in the future will surpass all past experiments combined.

There are RPA tool vendors in the market that offer limited capabilities of natural language processing and “contextual” computing to automate business processes. As automation is rightly credited as a function of Evolution of Trust, the cognitive automation platforms are likely going to take a few more years before presenting industry-specific solutions meant for mass adoption.

Business “System” Automation

Automating IT operations is another main area of priority for many CIOs. With wide- spread adoption of digitization and cloud computing, automated infrastructure management has become a crtical need for enterprises.

Automation in IT is typically carried out based on a maturity model with continuous evolution of capabilities, to deliver ongoing benefits. Automation can dramatically reduce the need to manually perform high-volume IT support, workflow management and routine infrastructure maintenance.

The eventual goal is to harness machine learning and AI technologies using algorithms to make behavioral predictions and make decisions on which actions will lead to optimal results.

Automation of IT Operations

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The success of automating IT lies in self-healing capabilities triggering basic runbook automation processes based on simple pre-established logics. There are several tool vendors that provide varying levels of capabilities to automate IT operations. The tools themselves may not be sufficient, however powerful they may be. Automating inefficient operational processes will still deliver suboptimal results. Hence, it is critical to define an automation roadmap that takes into account the enterprise IT architecture holistically to determine the most appropriate automation sequence.

One of the most exciting areas of IT automation is the integration of release and deployment processes with development lifecycle. An integrated and automated DevOps environment leads to business agility and reduces the operational frictions in deploying new business functionalities. For instance, Virtusa delivered up to 50% improvements in capacity utilization, service levels and provisioning times by simply automating DevOps for a large enterprise client.

Automation in quality assurance is another area of key focus for several enterprises. With hybrid-agile and agile gaining importance in building applications on a rapid timescale, automated quality assurance has become a de-facto need in reducing deployment timelines and improving production failure recovery times. Several enterprises have seen their cost of QA reduce by 40-50% through automation of processes across test environment setup, test-script generation, cross-channel test case execution (web, mobile, SOA) etc., combined with reuse of test automation investments for future deployments, testing costs per deployment could be brought down as much as 70%. Industry studies also show that in 2014, 70% of server provisioning were virtual leading to significant reductions in setup time and costs.

In a recent leading industry analyst survey, 85% of the respondents believe ITO-improved staff productivity renders businesses more competitive. Industry advisors forecast 30 to 45% cost reduction in IT services and up to 60% in managed services as a result of automation in IT operations.

As RPA tools mushroom the marketplace, most large corporations are setting up initiatives to develop their enterprise-wide automation strategies. As in the past with other such technologies, enterprises are cautiously treading a full-scale adoption as they investigate typical implementation timelines and the size of anticipated ROI. As industry standards for RPA implementation are still being developed, it is recommended that companies develop their own proof points prior to executing a full scale implementation roadmap.

Implementing RPA strategy

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Virtusa has recently collaborated with a large insurance company to develop an RPA framework that establishes a center of excellence (CoE) for Robotic Process Automation. The CoE will define an enterprise-wide standardized approach for deploying automated business processes. The CoE will also establish performance metrics that measure the ROI at individual transaction level. As seen below in the diagram, the framework provides a step-by-step strategy for embracing automation. The first step in the process is to develop an automation strategy. Like any other significant corporate-wide initiative, executive sponsorship is critical to success. A recent study shows that 40% of enterprises believe that RPA initiatives must be owned and managed by business units (not by IT). Hence, identifying the business leaders responsible for implementing RPA strategies will be a key requirement. Establishing automation goals, timelines, anticipated ROIs, and identifying skill gaps must be discussed and agreed upon. Developing a roadmap is an important aspect of establishing a long-term automation strategy. The roadmap must define the evolutionary adoption of automation through prioritization of

business processes, resolution of organizational dependencies, and identifying a strong governance structure. Evaluation of RPA tools, building proofs-of-concept, identifying a strong implementation partner are all part of setting up a successful CoE. Involving required HR organizations and establishing an appropriate organizational change management to effectively embrace automation is another key step in the process. The skills required for designing, testing and deploying automation must be identified and plans to hire/train resources should be developed in parallel. The above processes to set up the CoE typically take between 2-3 months.Once the CoE is established and staffed adequately, the robots can then be designed, tested and deployed. Involving the RPA tool vendor in the early deployment stages is a must. With strong governance and automated DevOps structure already in place, deployment issues could be handled expeditiously. It is also important to note that setting up of required performance metrics, measurement tools/methodologies must be given sufficient focus for continuous improvement purposes.


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While the primary objective of automation is to eliminate the routine no-brainer tasks and improve employee productivity, enterprises will also continue to leverage automation technologies to improve corporate financial performance, simultaneously accelerating business growth. As automation becomes a key agenda for the top leadership in every enterprise, it is important to consider the organizational impact it would have on the workforce. As digitization and automation conquer the world, there will be a significant need for a new breed of workforce – “the digital labor” – that combines automation knowhow with business domain. As enterprises define, hire, train, and depute this new breed of digital labor, care must be taken to ensure ensure enterprise-wide adoption of automation doesn’t disrupt business continuity, by properly planning and executing the necessary organization-wide changes.

Enterprises that have embarked on the automation journey successfully have put in place strong HR best practices that focus on:

Workforce motivation: Use automation to relieve employees to perform higher value activities. This enables the key employees to stay motivated - in turn increase their productivity and retention.

Reduction in Training: Use of RPA minimizes training needs to enable new employees to be quickly productive.

Skill development: As business understanding becomes more important than operational know-how, employees are motivated to learn business skills.

Flexibility: With the reduction of labor intensive, non-value add manual tasks, employees get to better flexibility and work life balance.

Mobility: With integration of automation in day-to-day activities, work location of employees will become increasingly less important, increasing the mobility of workforce.

Additionally, as automation becomes widely adopted inside an enterprise, there will be an increased need for crisis management skills. With increasing expectations on business performance driven by automation, tolerance for failures will be virtually non-existent.

Lastly, enterprise security considerations will become increasingly critical as automation takes center stage. With billions of security incidents occurring on a daily basis, automation could be vulnerable to cyber threats and attacks. Building capabilities to provide threat protection will be critical for institutional adoption of automation technologies.

Embracing Automation

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Automation technologies are entering prime time. As been forecast by leading industry analysts, Robot Process Automation (RPA) is the next big thing in the BPO and ITO outsourcing industries. However, it is important that enterprises draw up their automation strategies and build a detailed roadmap before embarking on a full-scale deployment. Automation could be implemented for trivial mundane activities using desktop automation to improve employee productivity. Also, specific business processes can be automated end-to-end to deliver higher transaction volumes and processing accuracy. Automation can also be employed to mimic human behavior to solve complex business situations by incorporating Artificial Intelligence and Cognitive thinking. As can be seen below, the technology is evolving on a continuous basis. While there are several proof points available to justify the ROI, it is critical that enterprises choose the right RPA tool and a competent implementation partner to ensure long haul value delivery.

Compliance, security, reliability and scale will be key challenges for the adoption of automation. Organizational change management will be another key consideration for large scale deployment of automation capabilities. Based on a number of client engagements, Virtusa has established a methodology for institutionalizing RPA within an enterprise through a Center of Excellence framework that clearly defines the necessary steps to help enterprises initiate their automation journeys in the right direction.

Virtusa Corporation (referred to as “VirtusaPolaris”) provides end to end information technology (IT) services to Global 2000 companies. These services, which include IT consulting, application maintenance, development, systems integration and managed services, leverage a unique Platforming methodology that transforms clients’ businesses through IT rationalization. VirtusaPolaris helps customers accelerate business outcomes by consolidating, rationalizing, and modernizing their core customer-facing processes into one or more core systems. VirtusaPolaris delivers cost-effective solutions through a global delivery model, applying advanced methods such as Agile and Accelerated Solution Design to ensure that its solutions meet the clients’ requirements. As a result, its clients simultaneously reduce their IT operations cost while increasing their ability to meet changing business needs. Founded in 1996 and headquartered in Massachusetts, VirtusaPolaris has operations in North America, Europe and Asia.

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