Improving processes is a top priority for finance organizations, outside of data security and analytics, according to Protiviti’s 2018 Finance Trends Survey. Robotic process automation (RPA) offers one of the best ways to do that. And yet, judging from the results of the survey, many finance executives are either not aware of or are not ready to commit to this relatively low-cost, non-intrusive technology.
We explored the broader benefits, challenges and opportunities of RPA in a recent podcast. Here, we focus on the application of RPA to finance processes. The current trend toward task-based solutions is making it even easier to reap the benefits of automation in a way that aligns with budgets and process improvement opportunities.
From order to cash, record to report, treasury operations and purchase to pay, the back office is rife with the kind of high-volume, rules-based digital processes bots were designed to improve. Journal entries, reconciliation, vendor onboarding, supplier screening, three-way matching, and even the preparation of packages for physical inventory counts, are illustrative examples of tasks currently being performed effectively by bots.
But large-scale process changes can be daunting. Getting started is always a problem. And finance functions are naturally resistant to disruption, especially if processes are working, even at a suboptimal level.
RPA solution providers have recognized this and have recently begun building “bot banks” — task-based automation stores where users can select “mini-bots” or “objects” designed to perform specific process tasks. For example, a company interested in automating its procure-to-pay process might start by deploying a bot to collect unstructured data from vendor invoices and enter the data into the accounts payable system.
With that bot up and running, it becomes easier for the company to deploy another “mini-bot” to match that incoming invoice data with data from purchasing and receiving to confirm that the items on the invoice were both ordered and received. This process can be repeated until much of the process is automated end to end.
As implementation barriers fall, it is important that companies keep a few best practices in mind:
- Start small. With the proliferation of object-specific “bot banks,” companies can ease into process automation one task at a time.
- Ensure that RPA deployments are user-driven. Although bots are technically software, the work they perform is business-driven. RPA implementations should be scoped and implemented by the business unit, with technical support from IT.
- Practice responsible change management. As with any process improvement, it is critical to assess the potential risks and unintended consequences of automation, and take steps to mitigate any risks outside the organization’s risk appetite. Although there is a tendency for companies to think of RPA as a “technology” separate from humans, it will ultimately be the adoption rate and utilization by people that will determine long-term success or failure.
- Consider security and governance implications. In automating processes it is important to consider data privacy and other regulatory requirements, including segregation of duties. RPA governance should be considered as the impact to the organization can be far-reaching. Affected process owners within the organization need to understand the decision criteria when identifying bot opportunities and be involved in the approval of bot deployment as appropriate. Engaging internal audit in the early stages of the project and performing “health checks” can help avoid surprises down the road.
That can be a lot to think about, especially if an organization has no prior experience with RPA deployment. Third parties who specialize in business process improvement can help to alleviate some of the uncertainty.
Finally, it’s okay to be skeptical. When an RPA vendor says they have a solution that is 80 percent compatible with existing processes and that it will be easy to “lift and shift” a pre-existing bot, experience has shown that results will vary widely. We refer you again to the best practices above.
RPA is a powerful tool that promises to revolutionize finance as much as, or more than, the advent of the electronic spreadsheet. Early adopters are going to reap the benefits. If you are considering RPA or have experiences to share, add your voice in the comment section below. For more of our thought leadership on the subject, please visit the RPA page on our website.
