Energy and utilities businesses, like many companies, can benefit from using robotic process automation (RPA) to drive efficiencies, boost speed to market and bolster financial performance. However, many of these firms — and oil and gas companies, in particular — have been slow to invest in RPA projects. While they are applying new technology and automation in the field, doing the same in back-office operations has not been a priority.
This approach may be bottom line friendly today, but over time it could leave these businesses lagging behind the competition — stagnating their innovation and growth and leaving investors disappointed. Currently, about one-third (35%) of firms in the energy and utilities industry can be categorized as “RPA beginners” — meaning that they are already behindthe competition in their use of RPA, according to a recent survey conducted by Protiviti and ESI ThoughtLab.
The global survey also found that less than one-quarter (23%) of energy and utilities businesses can be classified as “RPA leaders”— or companies that are making this emerging technology an important component of sleek and agile operations that will fortify their market positions.
In a blog post last year, we encouraged oil and gas companies to examine RPA’s potential value as a tool in the back office as well as in the field. The findings from the RPA survey suggest that, more than a year later, many firms are still very much in the contemplation phase with software robots (or “bots”). They are not yet taking action to implement the technology and transform their operations. The data also indicates that this trend (i.e., moving slow) may be the status quo, at least in the near term. About two-thirds (68%) of the energy and utilities industry executives we surveyed said they expect their company will still be in the planning and implementing stages with RPA within the next two years.
RPA Benefits Are Becoming Increasingly Difficult to Dismiss
For oil and gas companies that have been playing a waiting game in deciding whether to initiate an RPA program and assess opportunities, it is time to consider kicking their RPA journey into higher gear. “RPA beginners” are missing out on many valuable benefits that RPA can deliver far beyond cost savings, including increased productivity, a stronger competitive market position, better quality, greater speed and higher customer satisfaction.
That said, most industry executives do appear to recognize RPA’s potential to boost productivity: 85% of respondents to the aforementioned survey said they expect to see RPA-driven productivity growth within the next two years. Most can also visualize a positive side effect of greater productivity: more revenue. Eighty-two percent of industry executives anticipate revenue growth due to RPA during the same period. These findings indicate that while movement toward RPA has been slow in the energy and utilities sector overall, executives at many firms understand that stepping up efforts could create benefits for their company relatively quickly.
Right now, the small number of firms already at advanced stages report that they are using bots in many areas across their business, from risk management to marketing and communication, to strategy and planning. And the survey findings suggest that companies in the advanced/maturing stages of RPA will soon increase their use of bots in these and other areas, but especially in IT management (from 14% to 35%) and product development/research and development (from 6% to 25%).
Oil and Gas Companies Are Well-Positioned to Overcome Common Obstacles to RPA Progress
One of the biggest stumbling blocks with RPA — like any new digital initiative — is identifying a viable use case and just getting the project underway. Back-office functions like finance and accounting and payroll are prime candidates for automation, of course. But oil and gas companies also have a number of other routine processes that RPA software can handle, as this video explains. Those processes include:
- Joint venture accounting
- Lease records
- Revenue and joint interest billing (JIB) netting
- Inventory management
- Transaction monitoring
- Data entry, such as state production reporting
- Data integration
In particular, we have seen several companies implement, or plan to implement, RPA solutions to automate most or at least portions of invoice processing. Simpler solutions focus on routing invoices for approval based on coding already captured in a system. More complex solutions leverage optical character recognition (OCR) technology in conjunction with RPA to identify key information on invoices to appropriately code and process invoices.
Lack of internal resources and relevant expertise is another common hurdle for companies that aim to launch an RPA program. This is where oil and gas companies’ common practice of operating with partners can create an advantage and accelerate an RPA journey. For example, the results of our global RPA survey show that companies in the energy and utilities industry are keener, compared to businesses in other sectors, on partnering and outsourcing with consulting companies or technology providers to move their RPA program forward. These firms are also more likely to outsource RPA work to companies and individuals.
For oil and gas companies still on the fence about accelerating their RPA journey — or maybe even just embarking on it — here’s another motivation for change: data accumulation. Like most businesses, oil and gas firms are accumulating more and more data, from sensors in the field to digitized business processes, and they are struggling to manage and get value from it. Bots can help: They can pull information from various systems and aggregate it, giving business decision-makers access to relevant, accurate and timely information. And RPA leaders are already well on their way to taking advantage of this capability.
For an overview of the industry-specific data discussed in this blog post, see our infographic, Optimizing RPA in Energy and Utilities Companies. Also, download a copy of our report, Taking RPA to the Next Level, for more findings and analysis from our global survey, along with tips for developing a successful RPA road map and lessons learned from companies that have implemented RPA software.