A strategy is an action plan for achieving long-term goals focused towards maximizing the value to meet the organizational objective. Strategy is not only about what to do but also what not to do.
The essence of strategy is choosing what not to doMichael Porter
Any strategy for delivering a change generally focuses on People, Process and Technology (commonly known as Golden or Business Triangle) to align the strategic initiative with it. The aforesaid elements of the Golden Triangle are key for a successful transformation initiative. It encompasses user needs, business goals and IT capabilities. Golden Triangle also helps in making right investment decisions by selecting right resources. There is a need to focus on business outcomes driven through enhanced user experience and operational efficiency, improved performance and capitalizing the investment. It is imperative to understand the different aspects of a successful Robotic Process Automation (RPA) initiative including the benefits delivered and realized from the customer perspective comprising of improved operational speed, quality, service, capacity, performance, ROI, user experience and employee engagement. Adopting RPA as a strategy for making the digital transformation initiative a reality requires the understanding that the long-term goals should not be only around automation but must include the following aspects: –
- Building a culture of value and impact-based delivery– Delivering incessant value not only means improved productivity, efficiency and achieving economies of scale but also improved accuracy, reliability, compliance, security, customer satisfaction, employee satisfaction, customer usage index and even the market share. These key performance indicators (KPIs) need to be identified and agreed upon jointly with the customers. The value delivery approach also includes measuring the business value from the standpoint of empirical evidence, logic and insight which involves Current Value, Time-to-Market, Ability to Innovate and Unrealized Value.
- Using technology for human enablement– The technology provides a way forward to achieve the strategic goals but in its own is not an outcome of a strategy. It is ultimately the degree of human enablement through technology which needs to be measured through its adoption and growth rate. For example, attended automations or bots require user event triggers for execution but the human intervention is minimal to utilize the valuable time in high valued and innovative tasks such as analytical reasoning, building relationship with customers, creating healthy and collaborative environment and building adaptable work culture to deal with disruptions. Building and adapting to low code or no code intelligent bots through COTS (commercial off-the-shelf) products should not be the sole objective for an enterprise but to build the human agility for achieving improved outcomes. It is very pertinent to mention “The Forrester Wave™: Robotic Process Automation, Q4 2019” report where it is highlighted that attended automations involving human-in-the-loop support still have larger scope as compared to unattended automations.
- Acquiring data and knowledge for improved customer insights– It is very crucial to have access to data and the knowledge derived therefrom for gaining better insights into customer behavior and market trends. Data driven approach helps in converting insights into actions for better customer experience and impact. As per one of the blogs from Forrester, RPA lets organizations mine broader and more reliable data sets to reveal new insights. These new insights are also aimed towards improving the overall value chain and the process efficiency. Nevertheless, it does not disregard the ethical use of data, data governance and explainable systems keeping customer centricity and continuous learning culture as top priority.
- Edifying growth and innovation– Intelligent automations go beyond the basic RPA capabilities of dealing with the application layer and repetitive IT rule-based tasks. Intelligent automations combine Business Process Management (BPM) aimed at optimizing business processes, RPA for reducing human intervention in repetitive and mundane tasks, Artificial Intelligence and cognitive capabilities for simulating human intelligence to classify patterns from structured and unstructured datasets (including image classification) and allowing prescriptive analytics (including Text Analytics, Natural Language Understanding and Language Translation) along with integration with various internal and external systems. An important aspect over here is to deliver new capabilities that might better meet customer needs. It can range from defect free to scalable and replicable automations. This ultimately improves the customer and employee experience for enhancing the human growth and innovation ability.
- Channelizing investments towards unrealized value– It is relevant to understand the ROIs in the ongoing initiatives vs the new initiatives pipelined in near future. A strong RPA strategy will promote the investments in profitable initiatives and not continuing investments in less profitable or unprofitable initiatives. Also, there could be invisible silos in the organization where ongoing processes could be good automation candidates for delivering the unrealized value. On the contrary, if the product cost ratio or the service cost ratio is low, there is a need to divert the investments towards new initiatives. This requires a courageous and mindful attitude for helping the customer as well as yourself to stop further actions where the growth is declining, or the marginal utility is unfavorable with increased consumption. The goal of looking at unrealized value is to maximize the value that a potential process could realize over time. The investment decision to invest in one area means not investing in other initiatives. Net Present Value (NPV), Future Value (FV) along with the opportunity cost together need to be analyzed for making judicious investment decisions. An important methodology known as Total Economic Impact (TEI) from Forrester Research Inc. provides a holistic view of IT decisions by including costs, benefits, flexibility and risk.
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As per the following report from Gartner, RPA software spending is on pace to total $2.4 billion in the year 2022.
But a proper evaluation is necessary before any RPA deployment is conducted so that desired benefits are realized. Cathy Tornbohm, Vice president at Gartner mentioned in the above press release- “Do not just focus on RPA to reduce labor costs. Set clear expectations of what the tools can do and how your organization can use them to support digital transformation as part of an automation strategy.”
In other words, an outcome-driven and empirical approach needs to be adopted for measuring business value and performance. Developing robust plans is virtuous but allowing for missteps is also necessary as it builds a culture of experimentation, learning, adaptability, improvement, innovation, psychological safety and accountability.
At the same time, we need to clearly distinguish between operational, IT and business strategies for building successful and pragmatic RPA strategy.
- Operational Strategy– Operational Strategy is aimed towards improving the operational or transactional efficiency by implementing effective and efficient systems. The measure of effectiveness and efficiency can vary from industry to industry, but ultimate objective is to deliver products or services to its customers in the most cost-effective manner possible while still ensuring the high quality of its products, service and support. For RPA strategy, the measure of operational efficiency needs to be carefully identified and reviewed for defining the clear success criteria. Measuring the bot velocity is analogous to speed which is a scalar quantity and only tells the rate at which an object covers a distance depending upon the internal and external conditions. The operational strategy needs to be analogous to effectiveness and impact based on the KPIs discussed above. Hence, the focus should not be on delivering the bots but the benefits which requires a mindset shift.
- IT Strategy– Every company is now a Tech company due to rapid growth of B2B and B2C Ecommerce space, trend moving from customer personalization to individualization and to protect their businesses from upheaval. Therefore, building a strong IT strategy does not only involve the use of hardware, software and technology but also building the technology capability even with the citizen developers, and agility for delivering sustainable value to the organization and to its shareholders. It requires alignment with the customer, business requirements, software selection, service contracts, system integrations, Business Impact Analysis for resiliency and support model. RPA toolset selection, infrastructure and InfoSec requirements and support contracts form a very important part of the RPA IT strategy. A robust RPA IT strategy will include a detailed view of probable IT risks including hardware and software failure, virus attacks and business continuity plans having alternate options of remote accesses, high availability and disaster recovery cloud-based deployment models.
- Business Strategy– A robust business strategy encompasses key differentiators, set of competitive moves and actions that a business uses to attract customers for achieving organizational goals. It also requires the prioritization of the RPA initiatives which depends upon the business needs and value envisioned from such initiatives. An effective RPA business strategy will also include the solution for business problems related to unstructured and disparate data sources for building intelligent automations and self-learning systems to not only support rule-based but decision-based processes also.
A successful RPA strategy is not limited to above factors only but requires thorough analysis on these points to attain meaningful results and thrive on the path of cultural and technological changes for gaining a competitive advantage. These factors will also help in making intelligent choices aligned with the overarching strategy of the organization towards making a machine-human collaborative environment.
Acknowledgements and References:
- https://www.brightline.org/principles/ (Principle 9)
Views expressed in this article are my own and may not necessarily be of my employer.