In Digital Pulse’s ‘Uncovered’ series, we lift the lid on the digital industry’s most discussed terms and buzzwords, explaining what they really mean with clarity and real-world examples.
In this edition, we investigate Robotic Process Automation, an exciting new technology that can automate many of today’s most tedious manual tasks.
The first robot rebellion occurred over 200 years ago. The Luddites, a militia of craftspeople-turned-guerrillas, used extreme measures to sabotage the new textile machinery that they feared would make their livelihoods obsolete. Brandishing hammers and pistols, the Luddites brazenly attacked scores of newly installed stocking frames and power looms throughout the turn of the 19th century.
By rendering these machines inoperable, the Luddites hoped to preserve their economic standing as well-paid, highly skilled artisans.
Such efforts were ultimately in vain. Capable of producing higher volumes of textiles at a much lower cost, the revolutionary new textile machines were the new economic world order. But the story of the Luddites – and the term ‘Luddite’ itself – became the stuff of folklore. These days, to be branded a Luddite is to distrust almost all new technology.
The plight of the Luddites is one of the earliest examples of ‘technological unemployment’, a term popularised by famous economist John Maynard Keynes in the early 20th century. While the Luddites are not a perfect example of the phenomenon – these new looms and frames still needed human labour to operate – their plight set a fearful harbinger of things to come in the minds of the public.
Today, with automation a constant and constantly evolving force, the digital revolution has set the stage for robotic process automation (RPA), a new form of mechanisation that moves beyond manufacturing and into the knowledge and service industries. With the introduction of RPA, the question inevitably arises: is it time again to take up the hammers and pistols?
What is robotic
The core definition of RPA is the automation of manually repeatable tasks. For decades, this application has mostly been confined to physical robots in the manufacturing sector, where the mechanisation of assembly lines proved a boon for productivity. Not needing to eat or sleep, robots could work around the clock, performing the same few actions with identical speed and accuracy with minimal downtime.
In 1961, the first industrial robot was installed in a car manufacturing plant in the eastern United States, where it made a range of hardware such as doors and window handles.
RPA builds atop this history of robotics in manufacturing, but takes automation into the digital world. Like their stainless steel counterparts, RPA software platforms are capable of automating a wide range of repetitive actions. However, unlike more traditional robots, RPA utilises recent advances in artificial intelligence, and can integrate with other software programs or workflows.
In PwC Australia’s publication Robotic Process Automation: friend or foe for your risk profile?, RPA is defined as easily configurable ‘software robots’ that work at the user interface level, automating repetitive actions and pathways normally handled by a human user. A recognisable predecessor is the programmable macros available in spreadsheet and word processing software. But rather than executing a simple linear sequence of pre-recorded actions like these macros do, RPA can perform much more complex tasks, including report generation, cross-system data reconciliation, complaint management or higher-level decision making.
RPA’s entrance into the world of digital opens up whole new sectors of professional service roles to automation, including administration, customer service, sales and IT. Another recent PwC Australia publication, Robotic Process Automation – people, change and robots, noted that up to 25% of tasks within most jobs will be automated by 2019 – not enough to replace many of them outright, but certainly an agent of significant vocational upheaval.
If these forthcoming changes weren’t interesting enough, what’s even more amazing is how this digital RPA can be vertically integrated throughout an entire organisation to create end-to-end automation of many operations.
On a recent visit to Australia, Tom Torlone, PwC’s US Shared Services and Outsourcing Leader, cited Amazon as an effective example of this integration: from the moment an order is placed on the website, every back-end process throughout the transaction – supply chain, distribution, invoicing, shipping, etc – utilises some form of robotic process automation.
With its potential ability to one day replace entire departments within businesses, it is tempting to label RPA as a solely disruptive phenomenon. Certainly, the Luddites would have considered it so. But is ‘disruptive’ the most accurate description?
For Torlone, disruption begins with a technology or capability that redefines an established market but has not yet had its repercussions taken to the fullest conclusion. He points to the advent of the first iPhone as a prime example. Appearing in 2007, the iPhone disrupted the mobile market and began to change consumer expectations. However, it still lacked many of the features that would truly bring about the smartphone revolution, including GPS, 3G internet and a third-party app store.
Using this criteria, RPA could indeed be considered disruptive – particularly of labour-aligned business structures. But it also has the capability of preventing disruption of the business later down the line.
By replacing labour-intensive tasks with robotic processes and decision-making, an organisation can be bestowed with exponential efficiency in producing its core product or service. This frees up resources to better adapt to industry changes, redeploy its existing labour elsewhere, focus on value-adding, or reduce any ongoing reliance on third parties or outsourcing.
power of RPA
Against a background of rapid change and global megatrends, organisations need to be quick to respond to unforeseen circumstances. By enabling the capability to move from labour-centric to technology-enabled operations, RPA presents a key path forward for any business seeking to future-proof and innovate.
However, with RPA now capable of replacing both manual and cognitive tasks, tensions surrounding the concept have never been higher. For employees in particular, fear of obsolescence presents a potentially significant barrier to adoption of RPA.
To confront this issue, organisations will need to rethink the intersection between human operators and RPA, directly addressing the many fears and expectations surrounding the adoption of automation. In its place, they should seek to foster a culture of transformation where RPA is seen as providing new opportunities and facilitating new roles as the business continues to grow and evolve.
and unemployment concerns
With robotic process automation presenting unparalleled opportunities for many businesses and organisations, it is clear that the technology is here to stay. So will there be another Luddite uprising?
The answer is no, for three reasons. The first is that while RPA is advancing rapidly, it cannot yet replicate cognitive functions. The second reason is how – as the Luddites learned 200 years ago – the relentless march of technological innovation cannot be stopped, no matter how many machines are destroyed.
The final and more important reason is that fears surrounding displaced labour, whether through RPA or traditional robotic automation, have consistently been misguided. In addition to the term ‘Luddite’ entering popular parlance, the ‘Luddite Fallacy’ also became a known concept in economics. The fallacy, broadly supported by most economists, asserts that while fears surrounding the introduction of new technology and displaced labour persist throughout the ages, these new technologies have never been shown to increase structural unemployment.
Ultimately, while RPA continues to improve in capability, it remains but one potential avenue for process management and automation. It can complement other services such as straight-through processing, machine learning, artificial intelligence, and business process offshoring.
There also remains a significant need for human capital, especially when interacting with customers or other stakeholders. The key is knowing when to deploy people and the right technologies in line with business strategy and vision.
The robots may be coming, but we are not going anywhere.
The PwC Australia website has further insights on RPA, including delivery of a 300% return-on-investment and common implementation pitfalls. Click here to read more.