Why Southeast Asia is Primed for an RPA Revolution
Robotic process automation (RPA) is growing at a rapid rate worldwide. The same applies to Southeast Asia, with several RPA software vendors experiencing triple-digit revenue growth rates according to a recent Gartner paper. Companies across the Southeast Asian region can leverage RPA to leapfrog several technological developmental steps and streamline business processes to futureproof their operations, as competition looks set to intensify.
By removing many of the most repetitive, time-consuming tasks, employees are freed up to create more value and innovate. A McKinsey study estimated that 50% of work activities performed in SEA could be automated. No wonder then, that Gartner identifies RPA as one of the fastest-growing technology sub-industries. Initial potential savings of 20% to 35% provide a sound argument for implementing RPA technology as soon as possible. The same applies to the technology’s positive impact on long-term productivity and proven track record of increasing job satisfaction.
However, some challenges stand in the way of reaping RPA’s great rewards. They include ensuring effective integration with existing legacy systems and developing in-house skills and expertise to maintain and support RPA. As enterprises across the region have realised, the full value of RPA is unlocked by integrated deployment at scale. Deployments that require understanding RPA’s current potential, as well as where the rapidly evolving technology is headed.
Unleashing the Bots
Robotic process automation is an emerging form of technology based on the notion of automating business processes using software robots or artificial intelligence (AI) systems. In its most basic form, RPA can be viewed as a system that observes how a worker performs a specific task and learns how to perform it by itself. Once the training is complete, the robot then handles the task on its own, while the worker supervises to ensure that it continues to handle it correctly.
One example would be when an order email is received. The robot can view the email, send a return email to confirm receipt of the order, read the attached order form and transfer the relevant data from it to other, related systems. The robot will also be able to track the order as it moves through bookkeeping or enterprise resource planning software (ERP) systems such as SAP. RPA can also function as an automated link between legacy systems, thereby eliminating the often tiresome process of updating several systems; something that is often fraught with risks of mistakes and errors.
Other popular use cases for RPA include, but are not limited to:
- Onboarding new customers and employees
- Processing payroll
- Price monitoring
- Customer due diligence
- Shipment scheduling
- Periodic report preparation
By automating the process, a company saves time, reduces the risk of errors and can streamline its operations, thereby lowering costs. Other advantages include improved compliance and better scalability, as the robots can handle increased workloads much more reliably and accurately than a human worker.
RPA and Southeast Asia – A Perfect Match
A McKinsey study outlines countries in the Asian region where the potential for automation is highest, highlighting Thailand, Malaysia and Indonesia. Other recent surveys indicate that companies throughout the region are looking to invest in digital technologies, which is seen as a prime driver of new business opportunities and expanding market shares.
At the same time, productivity in many organisations is stagnating or in decline as a result of operating legacy processes or reaching the end of possible manufacturing upgrades. Digitisation of existing systems and back-end procedures offer an effective solution to streamline operations and reduce cost.
The many benefits of RPA fit well with the evolving and fast-growing business environment surrounding many companies in Southeast Asia, ranging from start-ups, small and medium-sized enterprises (SMEs) to large-scale corporations. However, many companies in the region face challenges in implementing such changes due to limited digital maturity and lack of the necessary in-house digital talent to undertake all changes on their own.
Legacy IT architectures, often fragmented and incorporating a wide array of sub-systems, are a stumbling block for many companies. This is one of the areas where RPA can shine by tying together the systems. At the same time, they offer the opportunity to incorporate another layer of automation in the enterprise resource planning systems currently being deployed.
One example comes from Malaysia, where a company deployed an RPA system to handle accounts payable. Existing staff processed over 2,000 such invoices a day. After full implementation, RPA successfully lowered the time it took to process said invoices by between 65% and 75%. The staff could instead spend more time on analysis and finding ways of further improving business operations.
Fear of the Unknown
Recently, one of the world’s leading RPA companies, UiPath, wanted to find out how CEOs and other decision-makers viewed their product. So they asked 100 senior members of companies across a wide range of industries about their experiences.
86% said that RPA systems were creating efficiencies across their company. Two-thirds of the respondents said that RPA helped them restructure their existing workflow, giving employees’ time for more human interactions. Over half (57%) reported that RPA systems helped reduce manual errors.
However, a whopping 93% of respondents said that they struggled to work out the different available RPA deployments. Many also reported challenges in relation to scaling RPA due to the lack of trained personnel and resources.
The results are in line with what we at BDO Malaysia have experienced when helping companies set up, roll out and maintain RPA systems. It is a testament to some of the inherent risks that can arise through inadequate implementation of RPA. As with any new technology, improper use can lead to increased risks instead of rewards. These risks can generally be split into three categories, as reflected in the diagram below:
Furthermore, RPA projects should be implemented based on a thorough analysis of existing business processes, along with an evaluation of how they may change as other, new technologies are introduced. Due to the novel nature of implementing such systems, companies’ analysis and proposed governance may not fit with the chosen RPA system’s capabilities, or they may lack the ability to scale in the future.
In short, companies need to be aware that RPA is not a one-size-fits-all technology and that vendors’ solutions can differ. In some cases implementing alternative automation solutions may achieve better results.
How to Integrate RPA
BDO Malaysia has extensive experience in assisting companies with implementing RPA systems. We have developed a set of guidelines or rules of thumb that companies should abide by to ensure success with RPA implementation. Broadly, the process involves four steps:
When considering the four steps in implementing RPA, companies should also try to incorporate plans on utilising the freed-up resources that appear as a result of successful RPA implementations.
Furthermore, while many current implementations of RPA systems are based around individual bots or single programs, there are opportunities for bots working in concordance with each other to provide wider automation of related tasks.
From a technical standpoint, individual bots or whole RPA systems can often be accessed and controlled through desktops or web-based application. Some providers may offer RPA as a subscription-based Software-as-a-Service (SaaS) model while others may give companies the option of implementing them on a server capable of controlling sets of bots across the organization. The latter is often regarded as a more robust approach for a larger number of bots but may lead to future scaling issues.
When trying to develop an analysis of investment versus potential Return on Investment (ROI), the cost of RPA solutions will often depend on factors such as complexity of bots plus existing systems, the number of bots to be deployed, development and implementation costs, customization needs and need for developing in-house technical abilities.
A final thought is that most companies do not need to go straight for a full-on RPA rollout but can implement a pilot program instead. Through such a trial, companies can identify gaps in the current setup, where too much time and effort is being expended on manual tasks and identify potential bottlenecks. Focusing the pilot on one or more high-value discrete tasks that can bring immediate benefit to companies will not only help promote RPA as a valuable solution internally but also further develop the related skills and expertise of its employees.