Robotic Process Automation is a great technology and we have written extensively about its benefits, however it is not without alternatives. There are 4 major alternatives to RPA, and new developments that transform RPA. CxOs need to make smart trade-offs to find the optimal path for their companies.
Consider all alternatives to RPA before your RPA investment
The alternatives to RPA are:
- IT transformation: New system architectures can be built to increase automation. However such structural changes will inevitably trigger changes in tools and take significant time and budget to complete. System upgrades especially those involving legacy systems require complex migrations and can take years. A Mckinsey and Oxford joint study on software projects demonstrated that large IT projects run 45 percent over budget and 7 percent over time, while delivering 56 percent less value than predicted. Given such grim statistics, large companies have moved away from delivering comprehensive redesigns of their architectures to implementing quick fixes that solve their immediate problems.
- Business Process Management Platforms (BPMS): BPMSs integrate enterprise applications to increase the amount of “straight-through processing” possible within a process. BPMS can achieve similar results to IT transformations and can be achieved more rapidly. However, their benefits can be limited based on the variety of enterprise applications that are used in the process.
- Business Process Outsourcing: Popular in the 90s, many companies in the developed world outsourced their operations to the developing world. Companies benefited from outsourcing through labor arbitrage and economies of scale of outsourcing providers. However, with the increased convergence of developed and developing economies, labor arbitrage is decreasing in importance. And with most manual processes already outsourced, corporate leaders have seen that silos formed as a result of outsourcing have reduced innovation and created silos. More fundamental changes are required to improve processes today.
- Specialized Plug&Play Solutions: There are processes that are common across companies that rely on the same systems. New tools that easily integrate to those systems can provide powerful and easy-to-integrate solutions. Accounts payable for example is such a process as all companies need to process invoices, make payments and store the data in ERP systems such as SAP. Another example is T&E (travel & expense) cost optimization. All companies have these costs and specialized solutions like Appzen are using AI to help companies of different industries to tackle these challenges. These tools are easy to integrate to existing systems and they allow companies to access leading edge tools quickly.
Learn RPA’s advantages compared to the alternatives
Compared to these alternatives, RPA provides a very good quick fix thanks to its 4 advantages:
- Flexibility: You can program an RPA bot to complete almost any repetitive task.
- Ease of integration: Thanks to screen scraping and existing integrations, bots can input and evaluate the output of almost all Windows applications.
- Ease of implementation: Macro recorders and drag&drop programming tools make it easy to program RPA solutions.
- Cost: Robots are cheaper than humans! Business process outsourcing solutions are no longer economical when those processes can be automated yielding better results and requiring less cost than outsourcing.
Despite its advantages, RPA is not always the answer
In many cases, RPA can provide robust, automated solutions. However, it is not always the optimal choice. Any of the above 3 choices can be used to manage or eliminate manual processes. If the alternatives have better ROI than an RPA implementation, companies would be wise to follow that route.
These are also not mutually exclusive approaches. Companies can invest in transformational system upgrades that can take months while reaping the benefits of an RPA program that automates activities on the platform that is being upgraded.
Additionally, innovative RPA solutions are being developed that tackle the limitations of existing RPA solutions. While traditional RPA solutions relied on programming and produced programs that needed significant maintenance effort, RPA vendors are working to improve the state of RPA. We covered innovative RPA solutions such as no code RPA and self-learning RPA in our future of RPA article.
There are areas where RPA alternatives can be more preferable than RPA
Visionary CxOs will make the correct investment trade-offs between different solutions. There are 3 obvious areas where alternatives will be preferable to RPA:
- Specialized solutions would be better than generic tools like RPA bots for processes which are similar across organizations and which rely on a few software systems. This allows software vendors to learn from numerous companies’ data and build powerful and easy-to-integrate solutions
- IT transformation is required to reduce dependency on risky hardware and software.
- As RPA consultants like Day1 Tech highlight, RPA is built to operate on the end terminal or interfacing technology as a component in the overall system architecture. It does not change the underlying system architecture.
- Legacy architectural choices leave companies dependent on costly and hard-to-maintain hardware and software systems. These create vulnerabilities that can result in catastrophic failures. For example, a leading bank in EMEA had a day-long outage of all its systems (even ATMs did not function) because of an update that resulted in a catastrophic failure of a legacy central system.
- For temporary process or rapidly changing processes, BPO could be a cheaper alternative to RPA.
- For rapidly changing processes, maintaining bots can be costlier than maintaining a partially automated BPO operation.
- For temporary processes, cost of RPA can be higher than running those processes with a human team
Optimal choices will enable organizations to function effectively and out-compete their competitors both today and in the future. We can help you make these choices: