RPA vs Digital Transformation

What do these terms mean?

Digital Transformation is the use of digital technology to solve problems to reduce the amount of resources (human & machine) needed.  Most effective digital transformation solutions utilize cloud computing and dynamic usage consumption models but smaller projects can substantial success even without the cloud model.

Robotic process automation (RPA) is the process of using software, typically powered with machine learning and/or artificial intelligence concepts, to handle high-volume tasks in a repeatable fashion.  These automated processes can be used to extend, or replace, processes that previously had required human intervention.  Examples of common uses of RPA include reconciliation, order processing, calculation, and record maintenance.

Boy, that escalated quickly.

The role of digital transformation has underwent radical change in the last 10 years.  A decade ago, early adopters and innovative companies used these initiatives to create distinct competitive advantage in their field .  GCS personally helped several companies during this time period experience rapid growth while simultaneously increasing bottom line margins.  In turn, the leadership at these companies were able to put all their energy into creating, and capitalizing on distinct advantages in the marketplace.

Fast-forward to today, and what used to be an advantage, is quickly becoming a requirement for many businesses to remain competitive.  With the cost of providing world-class technology solutions dropping, more and more startups are easily disrupting long-time industries.  Many times, these startups are using innovating technology to overcome deficiencies in other area.  Some win, some lose, but either way, things are never the same.

Typically the two most common areas most startups try to take market share is by focusing on providing premium customer service.  By starting with a technology focus, these companies are able to provide a user experience that in some cases is so dynamic and refreshing, they are able to quickly win business despite being the new kid on the block.

For the existing companies, this comes at a steep price – particularly in the area of customer expectation – which by my measurement is 1000 times higher than it was 10 years ago and growing quickly.  This causes organizations who have delayed investing in transformation projects for years, in a critical state.  Not only are they already behind, but the time/cost of starting today will give their competitors even more time.  Additionally, with so many technology startups and services available today, simply knowing where to start can lead to paralysis by analysis – which starts a negative feedback loop that is a death trap for many companies.

It has never been more important than today to find a partner you can trust.  

Vendors will throw all sorts of “get-in-the-door” prices/rates your way, but the bottom line is, and will always be, you sort of get with you pay for.  Often time, the cheapest vendor is simply the vendor who is the best at using low cost resources, which has nothing to do with the end result solution you will get in the short term, and can be catastrophic long term.  I mean, I would personally play MLB for much cheaper than Alex Bregman, but again, you get what you pay for.

Low cost solutions have their place, don’t get me wrong, and are great for scaling to solve simple tasks, but executing a digital transformation is not an area where implementation cost savings should be the primary goal.  A good transformation project should easily provide 10x return-on-investment in 3 years, which far outweighs any short term IT cost savings by going the cheap route.

Most importantly, a successful digital transformation will change the culture of the entire organization.  Instead of 80% of the workforce being so mired down in mundane, repeatable maintenance tasks, the key employees are able to be freed up both time wise, and creativity wise, to help the organization strategically.  This in turn can bring a different mindset across the entire company, particularly since employees spend so much time interacting with technology in today’s economy.  GCS has seen entire organizations of 5000+ people have their mindset shift in a large part due to digital transformation initiatives.

Now ask yourself…do you think going to the cheapest bidder is worth the risk – No!

Where does this leave RPA?

RPA, while a relatively new term in the marketing jargon, builds upon many of the individual solutions that came about as a result of digital transformation projects.  In my opinion, and the first-hand GCS experience, these came about because of the alignment of a few factors

  1. Once organizations starting using cloud based services, they were exposed to brand new technology and functionality thought to be unattainable before
  2. The culture shifted to more people working in the business, to working ON the business, which led to innovative ideas and high value proof of concept projects, which in turn led to more “Hey, what if we did this?”
  3. The ease of using machine learning and AI technologies (once reserved for universities or large enterprise customers) become readily available to organizations of all size with very little budgetary commitment.
  4. The cost/risk of maintaining a large workforce is starting skyrocket.  Between government regulations, employee demographic changes, and the shrinking global economy, maintaining a large workforce while on a budget has never been more difficult.

Businesses started to dabble.  Hundreds of projects around automation were put into MVP (Minimal Viable Product) mode to see if it truly was able to replicate human processes.  While many proved to be more marketing than output, the ones that truly did provide successful automated solutions that would scale created an entire new area to improve.  Out of these early successes came what we now term as RPA.

Most businesses #1 cost is labor and for many, their #1 risk factor is human error.  RPA enabled processes offer a glimpse of smaller workforces accomplishing more, with less error, that can scale both during bull and bear markets. If done correctly, it’s a game changer for a mid-large organization.

What can the lessons of digital transformation teach us about RPA?

As profit margins get tighter, and customers and employees demand more, organizations will have to use RPA technology to stay competitive.  Right now, RPA remains in the early adopter phase and those who do embark on this journey successfully, will take a step ahead of their competitors.  However, it’s still early and without proper guidance, organizations run the risk of wasting time and money automating the wrong things.  Likewise, much like digital transformation, early adoption should aim at small gains that can be built on long term.

What should I do if we are way behind on both?

Start today…. No seriously, waiting or lack of attention rarely will make the problem go ahead.  Given the speed of which technology changes, waiting until next quarter or year could be all your competition needs to start the process of jumping ahead. 

 Follow the simple steps below to start your journey

  1. Find a partner you can trust who knows both the business, industry, and how to create enterprise class solutions.  Anything less than that and you are wasting time and money.
  2. See number 1 – it’s that important.
  3. Start small, take easy wins – don’t worry about trying to come up with the 5 year plan before you start.  Find some easy wins you can do today.  “When momentum is the problem, only momentum can help you out.”
  4. Commit to a long term change – starting quick is great, but pulling the plug 90 days out causes a lack of trust in the whole organization.  This can be disastrous.  So start, commit,
  5. Don’t be afraid that you don’t know all the answers today -I’ll let you in on a little secret – no one does.  Make an informed decision, work with smart people you trust, and be ready to pivot & adapt when you need to.  It’s not that complicated, don’t make it rocket science if you don’t have to be. 

“Everyone has a plan until they get punched in the face”

Mike Tyson
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