Robotic Process Automation (RPA) in Finance & Controlling
We held a mini-interview with Prof. Dr. Mike Schulze, Vice President for Research and Professor of Controlling, Accounting and Financial Management at CBS International Business School in Mainz, Germany, and Honorary Professor-in-Residence Europe of the Institute of Management Accountants (IMA), who will provide a presentation on the topic of "Robotic Process Automation (RPA) in Finance & Controlling" at :
1. What kind of technology is RPA?
RPA is a technology that enables a software program to mimic human actions while interacting with computer applications to accomplish required tasks. Some human interactions that can be automated are keyboard inputs, mouse movements and clicks, and reading the computer screen. RPA replicates actions performed by a user in the graphical user interface of an application. With automation, these tasks are taken over by software robots.
2. What are the main benefits of using RPA in business?
Implementing an RPA solution in any business is accompanied by several benefits. These benefits are interrelated, and the achievement of one also leads to others. Some important benefits are as follows:
- Increased execution speed of process execution: Robots are quicker and more efficient than a human operator. Deploying RPA can drastically increase the speed of repetitive or mundane tasks.
- Reduced process execution cost: The work capacity of robots is superior to that of human workers. By adopting an RPA solution, organizations can significantly reduce their operational costs. A robot can work 24/7 and there is no time constraint. This increases productivity and releases the human workforce capacity for performing creative and high-value tasks.
- Improved accuracy: RPA implementation leads to an increase in system accuracy. This is because RPA works on a predefined set of rules and instructions; minimizing omission and commission errors.
- Easier scaling: The amount of work involved in a process can vary, as unexpected changes are likely to occur in most business environments. An RPA solution is highly adaptable as it can be scaled up or down due to fluctuations in the business environment. For performing a particular task, the number of robots in the system can be easily increased or decreased without compromising the work quality.
- Improved compliance and governance: RPA solutions are adopted in accordance with regulatory requirements. This leads to improved regulatory compliance, which creates transparency and allows the user to identify any issue or defect easily.
3. What are in general challenges in corporate practice when using RPA?
Bots must be installed, regularly updated, maintained and continuously controlled. Errors and sudden system crashes must be adequately managed. Therefore, resources must be planned and kept available, often in the form of employees from the IT department or relevant functional areas. If neglected, this can result in significant productivity losses.
Sometimes it is also said that RPA would tempt decision-makers to avoid an extensive modernization of their legacy systems and to use the supposing faster route via RPA. It should therefore not be used as a substitute for necessary renewals of the underlying applications and systems. RPA is rather a tool which – cleverly implemented and deployed at the right places – offers agility and rapid change and complements a modern IT landscape.
Additionally, the following challenges might be of relevance:
- internal resistance (e.g. from the works council or specific functions),
- lack of support from the top and middle management level,
- key resources are actually heavily used for other purposes already and therefore have hardly any capacity for RPA projects,
- missing budgets even for smaller pilot projects,
- security concerns.
4. How to define processes that are suitable for RPA?
Processes that meet the following requirements are good candidates for automation:
- Rule-driven: The processes which are rule-based and consistent are a good choice for automation.
- Voluminous: Tasks which have high volumes of transactions are always a good choice.
- Data-Intensive: Tasks that require a lot of data manipulations and crunching are always a good choice.
- Repetitive in Nature: Processes that involve manual and repetitive tasks are the right processes.
- Driven by Electronic Inputs: Processes that receive digital inputs are required.
5. Where should companies look for automation potential in Finance & Accounting?
The most popular existing RPA use cases in Finance and Accounting comprise processes in accounts receivable management, accounts payable management, intercompany reconciliation (ICR), travel expenses management, tax accounting, and management reporting. Let’s have a look at invoice processing for example. Invoice processing is the administrative task of receiving, reviewing, verifying, and approving invoices for payment. It ensures vendors or suppliers are paid promptly and accurately. The process typically includes verifying that goods or services have been received, checking for any discrepancies or errors, and ensuring that the invoice has been approved for payment by the appropriate parties. This is typically a time-consuming business process involving manual data entry, logs, and excel spreadsheets and is subject to human error. A robot can easily handle this process by combining RPA and optical character recognition (OCR) and thereby automate tasks involved in processing invoices, such as data capture, validation, approval, payment, and record keeping.
6. How do you see the future of using RPA in companies?
The next step is to blend RPA with artificial intelligence (AI) and machine learning tools. Variously known as intelligent automation, intelligent process automation and cognitive RPA, this class of solutions enables enterprises to automate more complex, less rule-based tasks. Cognitive automations are able to handle exceptions and orchestrate decisions spanning entire processes. Whereas traditional RPA automates processes based on data in structured databases, intelligent automation can also work with unstructured data sources, including scanned documents, emails, letters and voice recordings. The technology is ‘cognitive’ in the sense that it mimics human cognitive processes like acquiring information and contextual rules for using the information, using context and rules to reach conclusions and learning from experience.
If you want to learn more about the Robotic Process Automation (RPA) in Finance & Controlling, join us at:
Process Management in the Controlling...
Process controlling as a basis for...