Robotic Process Automation: Are You Ready to Pivot to Digital Labor?
An interview with Frank Casale: The first in a series of thought-provoking interviews, with big thinkers, authors, scholars and visionaries on all things digital transformation.
Frank Casale is founder and CEO of the Institute for Robotic Process Automation and Artificial Intelligence (IRPA AI). Before launching IRPA AI, Casale founded The Outsourcing Institute, a global network of over 70,000 outsourcing professionals.
He has been featured on CNN and CNBC and has served as a commentator for The Financial Times, The Wall Street Journal, Businessweek, FORTUNE magazine and The New York Times.
In this Digital Trailblazer interview, Casale shares his insights on the explosion of Robotic Process Automation (RPA), how and why the pivot to digital labor will impact your industry, your company, and your career, and why companies that don’t embrace RPA will lose out to companies that do. Read the full Q&A below:
Appian: So, Frank, tell us about IRPA AI. What’s it all about?
Casale: We established IRPA AI to help sellers and buyers navigate the jungle of process automation solutions, to help them make a fast pivot to digital labor…. which is where the action is right now. We cover the gamut from RPA to full cognitive systems and machine learning to help organizations drive innovation and growth.
Appian: You’ve said that RPA has the potential to have the most disruptive impact on business in terms of new revenue streams and cost savings. What is this “disruptive impact”? What did you mean by that?
Casale: Think about it. After 50 years of software being used to help knowledge workers get their work done. Suddenly, we have software that replaces the knowledge worker. This is digital labor. So, if you think of RPA, not as a technology play, or a software play, but as the notion that how work gets done has been reinvented—that’s huge.
From a cost savings perspective, it’s huge. Because there’s only one thing better than having someone in some distant country doing work for you—and that’s having no one in a distant country doing work for you.
”…But when you start talking about automation, you can define it, you can quantify it…you can get an ROI, you can start today. And you can get cost savings within a year, and even within a quarter, depending on the use case. So that’s a big deal.”
We’ve gone from offshore to onshore to “noshore”—which is software. After 25 years of labor arbitrage, we’ve now shifted to digital labor. So, for those looking for a silver bullet from a cost saving standpoint, RPA is it. And for those looking for an on ramp to digital transformation, RPA puts more fuel behind that as well.
If I ask you what the Internet of Things (IoT) is, do you know? It’s a big, vague thing. All we know is that somebody says blah, blah, blah, and then they use the refrigerator as an example of IoT. So that’s not doing it for a lot of companies.
People just can’t get their minds around IoT and what it is. But when you start talking about automation, you can define it, you can quantify it…you can get an ROI, you can start today. And you can get cost savings within a year, and even within a quarter, depending on the use case. So that’s a big deal.
Appian: So, we’ve talked a lot about the cost-save aspects of RPA. But talk to me about the top line benefits of RPA… A lot has been written around the efficiencies and cost savings of RPA, but what are the top line impacts?
Casale: Yes…Think about speed. Digital labor (AKA software) operates at machine speed, which is many times faster than human labor. So, speed is not only beneficial from a productivity standpoint, but some companies will be able to charge a premium for that.
“I’d say that the biggest misconception about RPA is that it’s easy—It’s not easy. That’s why barely 10% of the buyer population in Global 2000 companies have embraced it.”
For example, people will pay more to have something shipped same day versus five days. So, consumers are already willing to pay for speed.
And I’d say that Intellectual Property and data are the biggest things on the radar of most large organizations. Data is becoming increasingly valuable. Digital labor creates data and analytics.
So, companies will suddenly have telemetry on company and client processes. And this data is an asset which has value. And that’s revenue related.
Appian: Which brings us to the hype out there about RPA…What is the biggest misconception about RPA?
Casale: That’s a good question. I’d say that the biggest misconception about RPA is that it’s easy—It’s not easy. That’s why barely 10% of the buyer population in Global 2000 companies have embraced it. Initially, it was an awareness factor.
When we started over 4 years ago, nobody knew what RPA was. Now, more and more organizations have a sense of what RPA is. But the question is, how do you get it done?
RPA is disruptive technology. Nobody wants to be disrupted. It’s still new and it’s still complex. Evaluating it. Doing Proof of Concept, integrating it, governing it…and that’s just related to the technology and the logistics.
And then you’ve got the human nature and organizational politics of RPA. You need to get people to accept doing things differently.
“…I’ll tell you, your biggest risk is the one you’re not thinking of. The one where you sit back while your competition is doing RPA.”
I was in a meeting with a company about three years ago. And they did an analysis, and they discovered that the head of this division could get the same amount of work done with 500 less people.
The software could do it. The analysis proved it out. And then his colleague looked across the table at him and said now the question is “are you willing to make that move”?
Appian: So, what’s your recommendation to skeptical CXOs who haven’t dived into the RPA pool?
Casale: Here’s the challenge every skeptic has right now. Skeptics tend to be risk averse. I get that and I respect it. They also tend to be cynical. And in some cases, for good reason. They’ve been sold voodoo for many years.
If you’re the CXO for a company that’s doing fine… you have no issues with cost, speed, market share, top line or bottom line…Then, wait a year. Everybody else, get rolling…
Because I’ll tell you, your biggest risk is the one you’re not thinking of. The one where you sit back while your competition is doing RPA. Or your board or shareholders are wondering why you haven’t made any significant changes, or moved the needle, while others in the industry are.
So, is there risk in getting involved in RPA now? Sure. Is there greater risk in sitting it out and waiting? For many companies, this is the case.
“If you’re in banking, Oil & Gas, Healthcare, …The biggest risk is to sit around reading the newspaper, waiting for the technology to mature.”
Appian: What about companies that have jumped on the RPA bus? what are some of the biggest mistakes you’re seeing companies make in implementing an RPA strategy?
Casale: Avoid DIY automation…We can help educate you. But the way I see it, there are two dimensions to RPA…education and execution.
On the education side, there are lots of places you can go to get good information. You’ve got whitepapers, you can go to webinars and events.
This doesn’t require much of a budget. But when you get to execution mode, find someone who can help you navigate the RPA jungle. Not doing this is mistake number one.
The other mistake is not realizing that politics, people and egos and human nature will play a role in your success. So, there are three components that make RPA strategies work.
And you’ve got to get all three to be successful: Science, math and politics… The science is that the technology has to work. The next thing, is that the math has to work. Finally, there’s the politics. Do you have the backing of senior management? Do you have the support and willingness of the people that need to be around the table to get it done?
Most of the deals that start and get hung up or killed, are the ones where they don’t have the politics squared away. They get the science to work, they get the math right, but they get stuck in the people place.
That’s how I see the state of the RPA adventure, from a global network where I can see more than most. That’s how I see the state of the adventure.
“The challenge with digital transformation is that it takes years… If you’re looking for something that fits into that category as a subset, that can have in-year tactical and strategic impact, then RPA is a good place to start.”
Appian: So…as you think about digital transformation, how does RPA fit into the big picture?
Casale: RPA is a subset of digital transformation. And it’s a great place to start. The benefits are not limited to tactical. But it’s a great place to prove out small wins. You don’t need to make big investments.
And it can pay for itself as you go, on the cost savings alone.
Digital transformation is like IoT—it means different things to different people. It can involve lots of people, strategy and management. And it’s very much top down, which it should be.
The challenge with digital transformation is that it takes years… If you’re looking for something that fits into that category as a subset, that can have in-year tactical and strategic impact, then RPA is a good place to start.
Appian: In wrapping up our conversation, look into your crystal ball and tell us where you see RPA going in 2017 and beyond…Where do we go from here?
Casale: Prediction number one…the bulk of business’ anxiety shifts from technology to talent. There’s a tremendous talent gap, and it’s growing.
Software scales, people don’t. So, we’re starting to see a lot of deals close. Then when it’s time to install and integrate, there’s a scramble to find the people to get it done.
Prediction number two…As we get into the back end of 2017 and into 2018, I expect that 50% of RPA deals will not be software acquisition, but automation as a service…
My third prediction? We’ll likely see one major announcement of a known logo—a major outsourcing service provider—in trouble, or end up as roadkill.