“The New Bookkeeper Is a Robot.”
The Wall Street Journal headline was striking. The article, published in May, was illustrated with a briefcase-toting robot stepping into the finance department – while fired employees dolefully file out the door.
The opening anecdote was about 80 clerks and salespeople who used to spend 3,200 hours a week tracking and paying for orders for thousands of goods at US firm Pilot Travel Centers. Today, there are only ten such employees working 400 hours a week. A computer “robot” has automated much of the processes.
What exactly is Robotic Process Automation? It is software that “simulates a ‘virtual person’ and drives existing application software in the same way as a human user”
In reality, there is no actual humanoid machine that walks and talks like an accountant taking over the finance department. But there might as well be.
Because in implementing Robotic Process Automation (RPA), the CFO in effect is letting a computer software operate and orchestrate other application software (such as AR/AP and T&E spreadsheets) – in the same way that a finance professional would.
RPA is apparently getting big in the US. “Robots are taking over corporate finance departments, performing work that often required whole teams of people,” reports the Journal. “Big companies such as Pilot Travel, New York-based Verizon Communications Inc. and GameStop Corp., of Grapevine, Texas, are among those using software to automate many corporate bookkeeping and accounting tasks.”
Verizon is said to have reduced finance-function costs by 21% over the past three years. “The automation is a big factor,” CFO Fran Shammo told the Journal. The number of entries manually entered into spreadsheets has been cut to 10,500 annually, from 14,500, and will further be trimmed to 9,100 by the end of the year.
That had contributed to job redundancies, with the savings falling nicely down to the bottom line. According to consulting firm Hackett Group, the median number of full-time finance employees in the US has fallen by 40% to 71 people for every US$1 billion of revenue, from 119 in 2004.
“Automation is threatening to replace swaths of white-collar workers, much as mechanical robots have displaced blue-collar workers on assembly lines,” says the Journal. The RPA-replaceable positions include accounts-payable clerks, accounts receivable clerks and inventory-control analysts.
What exactly is RPA? It is software that “simulates a ‘virtual person’ and drives existing application software in the same way as a human user,” explains technology company HP in a white paper, Go Beyond Cost Reduction, Use Robotic Process Automation.
“It orchestrates business application software through existing applications’ user interfaces, so it doesn’t require custom integrations. RPA ‘learns’ how to perform a task through a combination of screen captures (screen scraping) and scripting.”
The focus currently is on repetitive rules-based transactional processing, such as procure-to-pay and quote-to-cash. One such recurring activity involves opening an email, looking at the attachment, and validating the spreadsheet data in the attachment by checking that it conforms with certain rules. The employee then applies a subset of the data as transaction input in an ERP application.
RPA will replicate that entire process across all of the applications – email, spreadsheet and ERP – using the same user interfaces that the human employee uses. This means that RPA does not need to be integrated with those systems, nor will it require a change in those applications.
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