R&CA: Workforce replacement or Workforce evolution Core human capital considerations for your R&CA strategy November 17, PDF Free Download

R&CA: Workforce replacement or Workforce evolution Core human capital considerations for your R&CA strategy November 17, 2016

R&CA brings human capital issues to the forefront Since there is a perception that R&CA leads to workforce reduction, organizations often face workforce resistance; planning for the human impacts of R&CA is critical to a successful strategy 1 Where are the most likely job impacts of R&CA? 2 What are the benefits for the organization? 3 How should my organization prepare and support our workers to be successful? Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 2

Level of education (Bachelors or more) There is high potential for automation to augment workflows Almost half the roles in Back Office functions can be automated and yield significant savings Finance Processes 1 Low Probability of Automation, 40.33% Medium Probability of Automation, 3.59% High Probability of Automation, 56.08% 0.8 0.6 Business & Financial project management professional Purchasing managers and directors Financial & Acc, technician Finance manager Finance account manager 0.4 Financial administrator 0.2 Financial senior leaders Credit controller Payroll managers 0 Weighted probability of automation 0.3 0.7 1.0 Source: The Robots Are Coming, Deloitte Financial Services White Paper (2015) Deloitte analysis based on Frey and Osborne s As machines take on more human work, what s left for us? Oxford study (2014) Size of bubble represents # of employees Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 4

Traditional knowledge work will be interrupted Jobs may slowly evolve with roles being automated starting with rules-based tasks and then cognitive capabilities replacing judgement-based tasks Realm of Process Robotics (RPA) Realm of cognitive automation Structured Data Deterministic Outcomes Un-structured Data Variable Outcomes Mimics Human Actions RPA Realm: Rules-based tasks Sample Technology Firms: Automation Anywhere, Blue Prism, UiPath Potential Applications: Data reconciliation Claims processing Returns management Augments Human Intelligence Cognitive Realm: Judgement-based decision-making Sample Technology Firms: Cognitive Scale, Kira, IPSoft, IBM Watson Potential Applications: Inventory Management predictive analytics Hedge Fund Algorithmic Trading Computer vision systems for inspection & QA RPA is intended to improve the efficiency of humans through performing repetitive tasks, not replace human judgement Cognitive is intended to replicate human judgement through machine learning, natural language processing, advanced analytics, etc. but is still maturing Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 5

Roles will evolve based on type of automation R&CA can enable humans to focus on analysis while also driving accuracy and efficiency Intercompany Reconciliation Automation Impact Example Standard Process Robotic Process Automation Cognitive Automation Humans 1. Report Extraction 2. Formatting/ Stacking 3. Eyeball variances 1. Investigate variances on final reconciliation report 1. Provide oversight and facilitate knowledge transfer within firm to enrich human learning and improve automation Robots N/A 1. Report Extraction 2. Rules-based variance flagging 3. Create/Send final reconciliation report Report extraction and generation same as RPA 1. Pattern-based recognition of variances using historical data 2. Root cause analysis 3. Resolution communication Potential Results Cumbersome Resource intensive Lengthy processing Reduced processing Increased frequency Improved quality Minimal resources Fastest processing Almost zero manual intervention for variances Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 6

R&CA can provide benefits that extend beyond pure labor cost savings Organizations have the ability to focus on value creation in addition to cost reduction Characteristic Outcomes of Robotics and Cognitive Automation Transformative Change Decouple Profits & Labor Flexibility Re-engineer core processes while automating the function Revenue and profit generated becomes less dependent on the ability to scale labor; automation enhances the abilities of current resources Ability to rapidly scale up or down depending on the nature of the business issue New Competencies Cost Reduction Process owners elevated to process transformation leaders and robot designers as production becomes more automated 15 90% cost reduction opportunity depending upon the characteristics of the functions selected for automation Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 8

A typical process requires a worker to spend time performing redundant tasks There is significant human time spent on rules-based, operational tasks Example for nurse recruiters Current dynamics 1. High turnover of nurses 2. Capacity constrained function (Recruiters are busy and in high-demand) 3. Opportunity for automation of application processing and credential validation Workflow Receive Application Validate Credentials Engage Candidates Engage Business Department Managers Communicate decision to candidate Human interaction Automated process Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 9

R&CA can allow employees to re-allocate their time to value accretive tasks Humans are able to focus on engaging other humans and improving the process Example for nurse recruiters Current dynamics 1. High turnover of nurses 2. Capacity constrained function 3. Opportunity for automation Potential future state 1. Capacity created through automation, freeing up FTE s 2. Additional capacity allocated towards human-only tasks of engagement with candidate and department 3. Recruiters can improve job specs and get to know candidates better to reduce turnover Workflow Receive Application Validate Credentials Engage Candidates Engage Business Department Managers Communicate decision to candidate Human interaction Automated process Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 10

Group Discussion Organizations will capitalize on new capacity differently to optimize or expand the business Think about a process you might automate Imagine the implications of freeing up 20% FTE capacity from that process Describe the impact created by capacity in the function Concepts to Consider Think differently for how to use the workforce Brainstorm what is uniquely human that can provide value with additional capacity Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 11

Communicate firm-wide commitment via consistent, multi-level messaging You may encounter employee resistance so transparency, consistency of messaging on benefits, and leadership support is important for success Drive Transformation Common Employee Concerns Engaging and Enabling the Whole Organization Implementing and Sustaining Change 8. Make it Stick 7. Don t Let Up 6. Create Short-term Wins 5. Empower Action Skeptical of automation success Scared of automation once they see the results and potential Quick to give up once automation breaks Creating a Climate for Change 4. Communicate for Buy-in 3. Get the Right Vision 2. Build the Guiding Team 1. Increase Urgency Resistant to change and performs role status quo without invoking robot Focus: Elimination of primarily mundane work leads to increased job satisfaction and engagement for workers Don t forget to consider organizational dynamics! Identify Areas of Resistance and Areas of Support to tailor messaging and proactively assuage concerns Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 13

Humans will adjust to new job roles after automation Formal changes to job expectations can cause a natural evolution to the workforce, resulting in higher efficiency from some, a need to train for others 1 Well-adapted Humans easily adjust and are well-suited for the new job role Categories of workers Post-R&CA 2 Training needed High worker engagement but humans need additional training to excel in new role 3 Mis-aligned Strengths of the humans are mismatched with the new job role, resulting in natural attrition Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 14

The role of humans will continue to evolve as cognitive technologies mature RPA is focused on process efficiency while still developing cognitive capabilities will replicate human decision making and eventually unlock new insights enabling change Highly efficient autonomous car Computer routinely beats human in game Can only drive 600 miles without human intervention Lost one round due to basic error that is avoidable in human bot collaboration Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 16

Please reach out to continue the conversation or discuss opportunities specific to your organization Gina Schaefer Managing Director, Deloitte Consulting LLP gschaefer@deloitte.com Learn more Follow @Deloitte #robotics Copyright 2016 Deloitte Development LLC. All rights reserved. R&CA: Workforce replacement or Workforce evolution 17

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