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Increased productivity not lower headcount is main benefit of process automation

Robotic process automation (RPA) is enabling companies to realise significant productivity gains, but it is not yet leading to broad job losses, according to a new study by global technology research and advisory firm Information Services Group (ISG).

The latest ISG Automation Index report claims that RPA offers businesses a rapid, low-cost way to automate basic, rules-based business processes without the need to re-engineer them. It enables enterprises to execute business processes five to ten times faster and reduce resource requirements by 37%.

ISG data show the average full-time equivalent (FTE) reduction from RPA ranges from 43% for order-to-cash processes (billing, cash application, credit, collections and pricing) to 32% for hire-to-retire HR processes (benefits, payroll, recruiting and talent management, and vendor management systems).

Stanton Jones, director and principal analyst at ISG Research and co-author of the report, says that instead of leading to job losses, the productivity gains have enabled businesses to redeploy employees to handle higher value tasks and/or a greater volume of work.

He said: “In nearly every scenario we analysed, increased productivity through task automation stands out as the most important change – not job loss. Humans are working alongside software robots, be they virtual agents or engineers, to increase their ability to take more customer calls, resolve more service desk tickets and process more invoices. This improved productivity is seeing important downstream effects: increasing operational speed and scalability, improving compliance and avoiding future costs.”

ISG predicts that by 2019, 72% of organisations will be piloting or using RPA to automate support functions. Because IT service providers are already introducing automation into their offerings, IT is currently the business function most impacted by automation.

Jones said: “Nearly every IT outsourcing vendor is introducing some form of automation into its services. Vendors are doing this most commonly with autonomics software, which automates standard operating procedures and correlates data to improve these procedures over time. Whereas, in the past, enterprise clients could expect a 5 to 10% productivity improvement in their outsourcing contracts after two years, we now see examples in which enterprises are realising a 40 to 140% improvement over the same time period.”

According to the report, productivity improvements range from 24% for user support to 143% for network voice devices. As productivity improves, costs are declining as fewer people are needed to manage a service, especially in areas where software is replacing hardware.

ISG says double-digit cost reductions are being seen across all major service towers, with network and email management services showing the sharpest cost reductions of 64% and 71% respectively.

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