The Robotics Auditors The Workforce of the Future. Giridhar LS CEO

Transcription

1 The Robotics Auditors The Workforce of the Future Giridhar LS CEO

2 Table of contents ` 1 IA fast forward RPA Key Concepts How does RPA fit into risk? Demo

3 IA Fast Forward: WHAT will be the areas of focus of IA in 2025? IA quick response through - dynamic risk assessment process, - enabled by technology, IA professionals to apply more judgment in their work and lesser on the existence of processes and controls IA will employ a variety of dynamic outputs, on a more real-time basis, to deliver its messages to different stakeholders

4 IA Fast Forward : HOW will internal audit tools & technologies change in 2025? Analytics based testing will shift the focus from traditional sample based audit procedures to the whole population IA will enhance their capabilities with bots and machine learning to handle the accelerating volume, speed and complexity of data The adoption of continuous monitoring, will shift IA s focus from detecting to predicting control failure and risk triggers

5 IA Fast Forward: WHO will be the future of internal audit in 2025? Changing workforce dynamics will require internal audit to develop more flexible, adaptive and collaborative work environment By 2025, the IA workforce will consist of an even-split between full-time employees, machines and technology staff Creative problem-solving, innovative mindset and social intelligence will become more valuable than technical knowledge

6 Skills of Tomorrow Creative problem-solving, innovative mindset and social intelligence will become more valuable than technical knowledge Skills of Today for current workforce Skills of Tomorrow? for workforce of the future Technical skills Internal Audit skills Talent Acquisition Campus Experienced Traditional, Center Based, Contingent Business Diplomats Data Analytics Excel Power User Process Automation Core skills Talent Development and Engagement Experiences, Learning, Coaching Feedback, Counseling, Career Progression Diversity, Inclusivity, Flexibility Artificial AI & Intelligence Blockchain & Blockchain Foundation: Domain Knowledge and Expertise

7 Future of the IA workforce By 2025, the IA workforce will consist of an even-split between full-time employees, machines and contract staff Benefits 1 4 Employee Engagement Efficiency 2 Employee Experience 3 5 Collaboration 6 Accuracy Productivity New ways of working and new workforce models, enabling internal audit to focus on purposeful, value add work Traditional Workforce Digital Workforce Virtual Workforce Contingent Workforce Embedding Robotic Process Automation (RPA) Taking the robot out of the human Robots do the what, freeing up humans to focus on the why Ranging from 20 60% of baseline FTE cost 1 in 3 Creating an anywhere, anytime jobs will be replaced by a smart machine by 2025, including knowledge jobs workforce

8 Robotic Process Automation (RPA) Key Concepts

9 What is Robotic Process Automation? What is RPA? RPA is the use of a software robot (a program) that replicates the actions of a human being interacting with the user interface of a computer system. The Institute for Robotic Process Automation (IRPA) defines RPA as the application of a technology. This technology allows employees in a company to configure computer software or a robot to capture and interpret the existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems. RPA is integrated in an existing IT infrastructure As a renewal of the existing IT landscape is not required, a high level of automation can be reached without major effort. RPA uses established control mechanisms and can communicate with all systems. Therefore, no interface has to be created. RPA is a software RPA is a computer software that runs repetitive, rule-based processes. The software is trained based on functional specifications and can be adjusted at any time. RPA simulates an employee The software robot has access to diverse applications with an ID or a password. The robot can gather information or change data. Consequently, business and administrative processes can be fully automated.

10 How does it work? Robotics process automation (RPA) can provide advanced solutions to eliminate manual work especially if used with other complementary technologies RPA integrates with other technology to significantly reduce manual work: Robotics process automation (RPA): A software solution that runs unattended, working like a virtual employee with legacy applications performing repetitive tasks reliably at the UI level Other automation technologies: A broad set of complementary technologies that can be brought together to automate a process Comparing data sets Composing and sending s Automation of clicks, data entry Completion of auditable activity logs Reading, copying, aggregating data Keyword-based character recognition Machine learning Adaptive behavior Optical character recognition (OCR) Variable format processing Mathematical validations Entering data into a system Rules-based processing and decision making Divide up a task into pieces to be solved by technology, low-cost resources, and high-skill resources

11 RPA transforming businesses Software Robotic Automation can dramatically reduce costs, while improving service levels, data quality and reducing risk 1/3 of the cost of offshore FTE Automated solution can work 24/7 Double-digit reduction in error rates Software Robotics Robots work with existing IT landscape Cuts data entry costs by up to 70% Robots can be trained by IA users Robots and People: a powerful combination Robots deliver repetitive, deterministic, high-volume tasks efficiently People build relationships, provide subjective judgement, deliver low-frequency and exception tasks, and manage change and improvement Why Software Robotics? Software Robotic Automation provides significant benefit for cost reduction and service improvement: Significant cost reduction for repetitive manual tasks Improved quality, consistency and reduced risk Tactical solution for automation and system integration where strategic programs have long lead-times Why agile, business-led approach? IA understand their processes in detail Operational processes change regularly with short leadtimes; this is generally why they have not been automated using traditional methods An agile approach allows rapid benefit delivery, incremental improvement, and rapid response to change How does it fit with Lean, or other initiatives? Efficiency - Significantly reduced cost and business impact from a single pass / assessment of operating model and existing processes Outcome - Better outcome as all options are considered during target operating model and process re-design

12 What are the RPA triggers? Need for more quality and predictability in controls execution, risk management Lack of agility in workforce to adopt to changing to systems landscape Desire for speed and precision in risk and security orchestration Workforce reduction creating strain on people and process execution Need to perform more knowledge work to add value to the business New ERP or major system changes including migration, upgrades Cost reduction program BPO contract renewals or renegotiations Large number of systems requiring data handling and system manipulation Increased regulation and changing processes and high administrative burden

13 How does RPA fit into risk?

14 How RPA fits into Risk? RPA uses and hotspots Applications Audit Evidence collation, issue isolation Controls evaluation Reporting Regulatory compliance RPA Implications Audit Effective challenge of RPA program and robots Process modifications Impact to existing audit strategy Controls baselining, testing, reporting Controls, Governance and Compliance Controls testing Enterprise GRC enablement Application security enforcement Controls, Governance and Compliance RACM, ITGC, policy & procedure maintenance Governance framework enablement, extension Security Digital Identity & access Data identification & protection Security operations Software product & security Risk Security IAM Secure development Threat & vulnerability management

15 How RPA fits into Risk? Most suitable Risk processes to implement RPA Robots provide flexibility and connectivity between applications, increase the effectiveness of applications, and complete routine activities that previously required manual effort, but they do not replace existing computing capabilities, and they do not generally replace entire roles. Start with looking at how your teams are deployed. Where are resources Preliminary ideas for consideration: manually accessing and gathering data from several different applications to complete their activities? manually moving data from one system to another? Control execution Controls testing manually checking the consistency of data between multiple systems? Compliance monitoring manually updating the same information in multiple systems? waiting for alerts/events to initiate their activities? Risk data aggregation manually remediating data across several accounts?

16 The 3 Lines of Defense Governing Body/Board/Audit Committee Senior Management Management Controls Level of Risk Risk Compliance Internal Audit External Audit Regulator How will this change with the advent of RPA, Data analytics and AI? 1 st Line of Defense Control Design & Implementation 2 nd Line of Defense Risk and Compliance Oversight 3 rd Line of Defense Independent Assurance

17 How RPA fits into Risk? Top Implementation Opportunities 3 rd Line of Defense 1 Data collection, through robotics authentication, for data aggregation of disparate technology assets where configured data feeds or analytics do not exist. 2 Automated testing of attributes against defined rules. (e.g., automated testing of application, OS, server access terminations against HR termination data feeds) 3 Configuration testing of application, OS, server against configuration standards. Such tests may also be applied to robot implementations/configuration 4 100% population testing. Robotics has the ability to move beyond sample or risk/analytics-based testing strategies, to test 100% of populations where appropriate based on process or control risk 5 Continuous auditing enablement. Robotics has the ability to audit processes more efficiently and at a higher throughput, to move closer to true continuous auditing

18 How RPA fits into Risk? Auditing Bots Top RPA Risks 1 A lack of robotics governance can lead to ineffective and inefficient process automation and an inability to support and meet business requirements. Illustrative Controls for Top Risks A Robotics Governance framework is defined and maintained, including leadership, processes, roles and responsibilities, information requirements and organizational structure required to ensure support is aligned to business objectives. 2 3 Robotics access management is ineffectively managed leading to the compromise of systems, applications and their associated data. Process automation requirements are not appropriately or accurately identified and documented leading to robotics developments that do not meet business needs or support the business/it strategy resulting in a negative impact on business processes and financials. Robotics access control is managed and proper authentication methods are implemented and consistently enforced to prevent unauthorized access. Robotics change and development requirements are clearly and concisely documented and mapped to business needs to ensure that the changes agree with the business strategy. 4 5 Robotics implementations are not appropriately designed and tested leading to requirements not being met or a negative impact on production systems resulting in a negative impact on the business and financial losses. Automation problems are not timely identified and managed leading to a delay in their resolution and resulting in a negative impact to business processes. Implementation, testing, and support requirements are developed and communicated to both business and IT stakeholders. Automation problems and errors are evaluated, corrected, tracked and communicated in a timely manner through resolution. 6 Risks are not effectively mitigated for robotics vendor relationship and outsourced services, leading to financial and reputation exposure. Due diligence is performed over robotics vendors to evaluate the risk of the vendor at the onset of the relationship and on a periodic basis

19 Demo

20 Generation of reports to

21 Internal Audit Program with Advanced Analytics Execution (Fieldwork) 5. Quality Actionable recommendations, mitigated risk and improved controls 4. Reporting A balanced view that helps stakeholders better understand the underlying business risks. Audit Planning 3. Fieldwork A consistent and repeatable approach that ensures no surprises 2. Planning 1. Foundation An Internal Audit Plan that are aligned with your stakeholder needs Comprised of risk-based planning, stakeholder feedback, proprietary tools and methods, and talent. Risk Assessment

22 Why is this so important today? Company expectations: Maximizing the use of technology to increase coverage, quality and business impact, while managing a finite audit budget Competitive landscape: Competitors continue to strengthen their capabilities and seek new talent Value/Relationship: Insights open the door for deeper discussion on issues and develop/strengthen relationships Talent development and appeal: Effective integration of analytics will strengthen the business skills of auditors Audit/Business Partnership: Innovation and resulting methods could be ultimately transitioned into the business Regulatory Expectations: Audit need to get stronger assurance and quantifiable results

23 What are the major benefits? What are the benefits? 1. Increase coverage, quality, and business impact 2. Establish competitive advantage in industry 3. Create deeper discussion on issues and develop/strengthenrelationships 4. Strengthen the business and technical skills of auditors 5. Cultivate an audit/business partnership Quantifiable: Not always Tracked to Amounts: Qualitative: Development saved compared to traditional BI Audit hours saved (fieldwork review) Expenses minimized Revenue found Development saved compared to traditional BI Audit hours saved (fieldwork review) Expenses minimized Revenue found Higher quality management conversations Risk focused testing Visual focus on trends and outliers Adoption by broader IA dept

24 Thank You CPE Collection Code 17395