HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING Looking Beyond Cost Savings to Bring Value to the Business
2 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING INTRODUCTION: LEVERAGING ROBOTICS TO DRIVE BUSINESS GROWTH While automation is transforming much of the work of the finance team, many back-office operations such as Accounts Payable and Accounts Receivable continue to be manually executed. As a result, there are clearly opportunities to use robotic process automation (RPA) to free up the finance department to focus on more strategic initiatives.
3 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING As accounting involves many routine tasks, it makes sense for the finance team to be on the front lines of RPA. Processes that are most suited for RPA have a high transaction throughput of structured digitalized data, with relatively fixed processing paths and/or user interfaces, which do not change frequently, and are rule-based activities, according to a recent Gartner report, Robotic Process Automation: Eight Guidelines for Effective Results. There are a number of hard-dollar benefits associated with RPA, as the technology streamlines processes, improves accuracy, and increases employee productivity, which all contribute to cost savings. While there is a tendency to focus on the cost savings and efficiency benefits of RPA, it also has the potential to improve customer satisfaction because more transactions will be handled without errors or human intervention. In addition, RPA can also provide insight into performance data such as average time per transaction, number of exceptions, and the total number of completed transactions, to help identify areas for process improvement. This ebook will explore the rise of robotics in finance and how savvy finance chiefs are incorporating RPA into their processes. Topics include: Outlining the benefits of robotic process automation for the finance team and beyond; Determining how and where to incorporate robotic process automation to your financial systems; Best practices for implementation and benchmarking success; The role of integration, particularly inter-company accounting systems, in the success of robotic process automation; and How future progress in robotic process automation will impact finance.
4 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING WHERE CAN RPA HAVE THE BIGGEST IMPACT? About a third of the finance leaders say that RPA tools and applications are having a significant impact on their operations today, according to Finance in the Digital Age, a recent survey conducted by the Genpact Research Institute and analyst firm HfS Research. Indeed, 58% of companies expect RPA to have a significant impact on their FP&A processes over the next two years.
5 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING The payback for an RPA investment is typically less than 12 months, according to The Hackett Group, a finance and technology consultancy. Cost savings are certainly a factor in the decision to implement RPA. A software robot can cost as little as one-third the price of an offshore fulltime employee (FTE) and as little as one-fifth of the cost of an onshore FTE, according to the 2016 Robotic Process Automation report from Capgemini Consulting and Capgemini Business. This results in a potential cost savings of 20% to 50%. While RPA can reduce head count, staffing costs aren t the sole, or even primary, driver for many companies. In fact, many companies are using robotics as a catalyst to deploy workers to more meaningful tasks. They are also looking to increase the speed of the processes, improve accuracy, and ensure greater compliance. RPA also plays a large role in improving business continuity, as companies need to ensure that transactions are being processed securely and efficiently. In today s global business environment, the continuous productivity that RPA provides is essential to remain competitive, as there are always transactions that need to be processed, said Marios Stavropoulos, CEO of Softomotive, a leading provider of robotic process automation technology. IN TODAY S GLOBAL BUSINESS ENVIRONMENT, THE CONTINUOUS PRODUCTIVITY THAT RPA PROVIDES IS ESSENTIAL TO REMAIN COMPETITIVE, AS THERE ARE ALWAYS TRANSACTIONS THAT NEED TO BE PROCESSED. Marios Stavropoulos, CEO, Softomotive Security is an often-overlooked benefit of RPA, according to Stavropoulos. This is a very important feature of RPA, as it automatically generates an audit trail of who did what and why it was done.
6 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING WHAT FINANCE CAN GAIN FROM ROBOTICS The finance function is a logical area to begin introducing RPA into an organization, as there are a number of finance-related areas where RPA can offer clear advantages. Among the top finance and accounting processes currently experiencing high levels of automation are account-to-report, order-to-cash and procure-to-pay, according to The Hackett Group. Automation is most beneficial for processes with a high degree of repetitive and predictable tasks, such as order management, invoicing and invoice reconciliation,
7 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING payment and cash management, fixed asset accounting, closing/closing policies, AP exception processing, COA maintenance, and tax reporting. The length of the project depends on the complexity of the process and if it s the organization s first deployment or its tenth, according to Vanessa Keating, Director, The Hackett Group. There s a learning curve and some of the upfront work of education, alignment, and opportunity identification will mean the initial implementations take a little longer. A first pilot can take six to ten weeks, including process ID and vendor selection. After that, RPA implementations can take anywhere from two to ten weeks. In AR and AP, for example, there are routine workflows involved in processing invoices and payments. Companies that have not adopted electronic payments have additional hurdles, requiring a great deal of manual effort to key data into different systems and route exceptions through workflows. In addition, a finance team is often tasked with matching contracts to incoming payments to make sure that they are applied correctly and according to the terms of the agreement. RPA can be used to gather the right information, compare it to existing account records, and assist in reconciling the outputs. In most cases, that task can be completed without human intervention, freeing up the staff to deal with the exceptions. Better yet, they can deal with why exceptions happen and improve the processes based on the exceptions. A KEY BENEFIT OF RPA IS THAT IT CAN BE DEPLOYED TO HANDLE HEAVY WORKLOADS, SUCH AS THE END OF THE MONTH OR YEARLY FINANCIAL CLOSE. UNLIKE PEOPLE, ROBOTS CAN WORK CONTINUOUSLY WHEN NEEDED. RPA can also help the finance team with closing and reconciling the books, which involves many routine and repetitive tasks. A key benefit of RPA, according to Stavropoulos, is that it can be deployed when needed, unlike a full-time staffer who may have lulls in activity throughout the month. You can deploy RPA for times of heavy workloads, such as the end of the month or yearly financial close. Unlike people, robots can work continuously when needed.
8 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING THE VALUE OF ROBOTICS BEYOND FINANCE The potential contributions of RPA go far beyond standard accounting and finance functions. As CFOs are charged with driving business performance across the organizations, there is a growing need for up-to-date insights that RPA can support. While finance is the primary area where companies typically use RPA, other areas are candidates for RPA implementation going forward, according to the Capgemini study. While 75% of respondents expect to implement RPA in finance and accounting in the next three to five years, human resources (43%) and procurement (27%) were also cited as areas where companies plan to use RPA. The study concludes: We re seeing more finance people be embedded in departments throughout the organization, and there is a greater focus on using analytics in areas such as R&D and product development for forecasting and tracking the impact of initiatives on overall financial performance. Using the example of a retailer, which has high customer acquisition costs, an RPA solution enables the company to develop innovative and tailored solutions for their customers, which open up new and profitable revenue channels. RPA empowers management, customers and partners to have transparency on updated statistics and performance curves at their fingertips.
9 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING PULLQUOTE FUGIT OPTATI OFFICIIS DUCILLAREM BOLD HIGHLIGHT SEQUE SUNT. SED UT PORRUM QUUNT OFFICKJNCC BEST PRACTICES FOR IMPLEMENTING RPA According to the Gartner RPA report cited earlier, there are a number of ways that companies are approaching RPA, including: As an integration tool, i.e., as the closest thing to building an API To supplement people s activities To replace people As a three- to five-year solution or a steppingstone to another IT deployment As a strategic step toward digital transformation
10 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING Whatever the organization s approach to RPA, it is important to carefully consider which processes are best suited to robotics. The best candidates for RPA are processes that are highly transactional but currently use significant human intervention to complete. Stable processes that are currently being handled manually or by legacy systems can greatly benefit from RPA. Choosing the right processes for an RPA implementation is by far the most critical step, and selecting the wrong process can derail not just the project but the company s overall plans to implement robotic process automation, according to The Hackett Group s Keating. Spending time upfront to determine how RPA will improve the current process is key to success. You don t want to invest in RPA to simply automate a bad or broken process just to make it easy, she added. It is important to understand the nuances of the process before considering it for RPA. There is sometimes shadow work being done offline to spreadsheets, and CFOs need to be aware of those activities and how they will impact the application of robotic process automation. RPA initiatives should be driven by top leaders in the organization with a vision to implement them across the organization, not just in finance, said Stavropoulos of Softomotive. The adoption of robotics shouldn t be limited to finance or to IT, but should be led by someone with a broad view of how it can help the organization. CHOOSING THE RIGHT PROCESSES FOR AN RPA IMPLEMENTATION IS BY FAR THE MOST CRITICAL STEP, AND SELECTING THE WRONG PROCESS CAN DERAIL NOT JUST THE PROJECT BUT THE COMPANY S OVERALL PLANS TO IMPLEMENT ROBOTIC PROCESS AUTOMATION. Vanessa Keating, Director, The Hackett Group Since an initial foray into robotics can spark greater innovation throughout the company, it is important to develop metrics to track how the process is currently performing to compare with future results. If your goal is to reduce your close and reconciliation process, for example, you should know how long the process currently takes, the post-automation goal, and metrics for tracking progress toward that goal.
11 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING HOW RPA BRINGS DISPARATE SYSTEMS TOGETHER RPA is attractive to many organizations because integration isn t typically disruptive to the company s overall IT infrastructure, and the tools require very limited (or no) IT integration. RPA s capability in enabling ERP and accounting systems communicate without any changes or API integrations, has quickly and effortlessly removed major hurdles to integration. Robotics reduces the need for systems integration in some instances, Stavropoulos noted. Some companies don t have the resources to integrate multiple systems using API, but robotics can handle the repetitive process of moving data from one system to another without errors. It is critical that business leaders and IT work together to structure information, design workflows, automate processes, track and assess performance. Various departments often use disparate systems for accounting, budgeting, accounts payable and accounts receivable, and other functions, so it is important that the system be able to handle data from multiple sources. In the case of Softomotive s client, a multi-billion dollar Fortune 500 company in the IT and Services sector, RPA was applied to pull data from one ERP to record trade liabilities in second ERP system and reconcile intercompany accounting to balance accounts at the end of the month. As a result, 50% to 60% of the process was automated, freeing up the staff to perform more detailed analysis and develop a greater understanding of business performance. A MULTI- BILLION DOLLAR FORTUNE 500 COMPANY APPLIED RPA TO PULL DATA FROM ONE ERP TO RECORD TRADE LIABILITIES IN SECOND ERP SYSTEM AND RECONCILE INTERCOMPANY ACCOUNTING TO BALANCE ACCOUNTS AT THE END OF THE MONTH, AUTOMATING 50% TO 60% OF THE PROCESS.
12 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING CONCLUSION: A LOOK TO THE FUTURE OF ROBOTICS IN BUSINESS TRANSFORMATION Robotic process automation holds a great deal of promise when it comes to taking the pain out of many of the routine processes that keep organizations running. The cost savings can be particularly enticing, as the cost of automation is often less than having a human perform mundane tasks.
13 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING The finance function is an ideal place to start when it comes to RPA, as there are many repetitive tasks that do not require the skills of a human to perform, such as matching invoices and contracts with payments. This leaves the finance staff free to apply their knowledge of the business to value-added activities. While the finance team can greatly benefit from robotics, there are wider implications of robotics across the organization. HR, procurement, operations, and other business functions can benefit from automated workflows, error reduction, improved efficiency, and other benefits of RPA. Robotic tools provide insight into performance for better decision-making. Lastly, looking to the future, more value also can be realized by aligning RPA automation plans with future strategies for emerging technologies such as artificial intelligence. AI systems can learn, over time and no longer strictly rely on rules-based workflows, opening up the doors to disrupting the status quo.
14 I HOW FINANCE CAN TRANSFORM THE BUSINESS BY HARNESSING ABOUT THE SPONSOR Softomotive is a world-class Robotic Process Automation (RPA) technology provider, trusted by more than 7,000 companies worldwide. Operating in the software automation market since 2005, Softomotive offers the most reliable and scalable automation solutions, bridging the gap between best-of-breed technology and continuous innovation to deliver true business transformation. The company provides a powerful automation platform that enables organizations to develop, manage and track their own digital workforce. Learn more at www.softomotive.com UK USA GREECE INDIA