What comes to mind when you hear the word “robot?” Maybe an image from pop culture, such as R2-D2 or, at the other end of the spectrum, Arnold Schwarzenegger in The Terminator? Perhaps giant yellow arms pivoting on an auto assembly line?
In any event, you probably associate “robot” with some sort of physical entity, a substitute human made of metal, plastic, and plenty of electronic componentry: mobile, task-oriented, still somewhat exotic—and certainly expensive.
It may be time for CFOs to put aside such misperceptions, because the robots that are quickly and quietly becoming an integral part of the finance function bear no resemblance to those just described. Rather, they are arriving in the form of a technology termed “robotic process automation,” aka “RPA,” with the emphasis squarely on the “PA.”
Already some companies are combining RPA with other technologies to automate not only human actions but human judgment, and, eventually, intelligence
Robots as software
These robots exist as software and are designed to automate a wide range of processes that tend to be repetitive, labor-intensive, and rule-based. RPA has been described as “a spreadsheet macro on steroids,” but that’s like comparing the cruise control function in cars to fully automated, driverless vehicles.
Put simply, RPA replicates any mouse and/or keyboard actions a human would do across any applications on their PC. RPA can do everything from open email and attachments to collect social media statistics to follow if/then decisions and rules.
In finance, that translates into everything from recording journal entries to reconciling general ledger accounts to auditing expense reports, to cite just a few common applications (see chart below).
What RPA can do
Source: “Robotics & cognitive automation: General overview,” Deloitte Development LLC, 2017
While RPA is simply software code—and fairly simple, inexpensive code at that—it is analogous to those giant yellow-armed robots deployed across factory floors in that it changes the calculus of outsourcing/ insourcing decisions by automating labor-intensive tasks.
Companies that have turned to business process outsourcing as a way to economically tackle a variety of finance needs may find that an increasing number of them can be handled by RPA.
Many, in fact, already are. This year the market for RPA products and services will reach US$433 million, according to HFS Research, and may climb to US$1.2 billion by 2021, a compound annual growth rate of 36%. We will take a look at the process of implementing RPA and the potential it has to help finance automate its way to higher performance.
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