Robotic Process Automation: the questions that aren’t being asked - Part 1

Impacts of Robotic Process Automation on COO Strategy

Forward-thinking leaders in Financial Services have not ignored the inevitability of RPA nor the many opportunities its adoption presents. However, at this point, the focus of most literature has focused on immediate impacts of RPA implementation. Though we are also considering impacts in the short-term, we believe it is worth taking the time to consider the larger strategic impact and the transformation required at the organizational level that will be driven by RPA adoption.

COOs have an opportunity before the frenzy of RPA adoption begins in earnest to ask strategic questions about the larger impacts it will have on the organization and to plan accordingly.

What operating model should be adopted?

Following successful RPA implementation, banks will have to decide how to manage RPA as a workforce. Will there need to be a manager who manages the robots, and, if so, exactly what sort of skills should be sought in a manager responsible for both robots and humans? In scaling their implementation, will banks need to develop an RPA ‘Center of Excellence?’ Will teams have a mix of IT and operations resources, or will specialists be imbedded in operations teams to implement RPA where appropriate?

How do we properly account for RPA costs?

RPA will change not just how banks are organized, but also how they are measured. COOs must decide where to allocate the budget and how to account for profitability. Will the budget be held by IT, Operations, or split between both in some fashion? How do we account for the charge to automate processes when trying to calculate profitability?

How do we re-invent metrics to measure performance?

Additionally, traditional measures of work and efficiency, such as FTE, will have to be replaced or updated, as a single measure may no longer be sufficient to define the amount of work being done. How, then, to measure the work being automated? A reasonable argument could be made to measure it by run-time, by process, by task, or by some other measure that helps banks to understand the amount of work they are doing and the resources they require to do it.

Who is responsible for oversight?

Hanging above all these questions is the issue of governance and compliance. The process for governing a machine may be fundamentally similar to governing a human, involving checks at different levels of authority and in different divisions throughout the bank. However, what happens if compliance violations result from an action taken by the machine? Who will be held responsible – compliance, the business, or the programmer who programmed the process? Any fraud connected to RPA would have to be the result of an action outside the robot rather than an action emanating from within the robot. In that case, are anti-fraud controls still applicable if they are being applied to robotic behavior rather than human behavior? And if control processes like fraud detection are key targets for RPA, would it be acceptable to have a robotic process monitoring another robotic process?

The short term success of RPA will hinge on technical questions, but in the long term, success will be determined by organizational change. Strategic thinking will provide a more seamless transition for banks by anticipating pitfalls rather than plunging headlong into them. In this series, we will provide an in-depth look at some of the questions COOs should be focused on as they embark on the RPA revolution.