What is RPA and How Does it Work?

16.08.2019
9 min read
What is RPA

Robotic process automation, or RPA, is one of the hottest tech terms, often listed in top trending technology of 2019 reports. It’s certainly an efficient way to save time and money. But of course there’s more to it than that, so we have created a brief automation glossary that will include some explanations of this term.

Read on and in less than 10 minutes you’ll feel confident the next time you’re discussing RPA and its benefits.

In this post, you will find answers to the following questions:

And if you’d like to learn more, check out our free comprehensive Automation Essentials course.

What is robotic process automation?

Generally speaking, robotic process automation (RPA) means using software robots that can emulate digital desktop work that people do — they are by no means anything like the shiny metal robots you might imagine! You can find a lot of RPA use cases daily in a wide range of routine operations. For instance, many "copy-paste" activities can be automated using robotic process automation, such as scraping data and entering it into Excel spreadsheets or filling out forms.

What is RPA in conventional automation terminology?

The IEEE Guide for Terms and Concepts in Intelligent Process Automation (June 2017) says:

RPA is a preconfigured software instance that uses business logic and predefined activity choreography to complete the autonomous execution of a combination of processes, activities, transactions, and tasks in one or more unrelated software systems to deliver a result or service with human exception management.

Yes, it’s quite complicated. So, let's explore this automation term and unscramble it. Later on, we'll give a more simple and concise definition for informal use.

Let’s break down that definition of RPA by its key phrases.

RPA definition

Preconfigured software

Configurable software comes out of the box with built-in functionality that doesn't require coding to enable but can customize to a degree. A common example is Microsoft Excel, where you don't write a spreadsheet application every time you build a new worksheet but can build custom macros using existing features or adjust defaults to better fit your needs.

Business logic

“Business logic” serves as a buzzword to refer to all the algorithms and codes needed to make a piece of software work with a company’s customers and servers. In other words, the algorithms involved in business logic perform behind-the-scenes data processing that is invisible to the user but critical to keep things running smoothly.

Predefined activity choreography

Sounds quite poetic, doesn't it? This term includes a sequence of steps taken to complete actions across systems and applications. This activity can cover simple tasks such as updating reports, or more complex ones — for example, balancing taxes on inaccurate invoices. Once the needed execution steps are specified, the activity is predefined.

Autonomous execution

Autonomous execution means the completion of tasks is done by software bot(s) independently. Once the rules are predefined, the processes are carried out automatically.

One or more unrelated software systems

Robotic process automation tools use front-end applications similar to the way that people do, so they can interact with everything a person would — for instance, SAP, Windows, Internet Explorer, Outlook, Oracle, etc.

Human exception management

Sometimes employees are involved in the processes automated with RPA tools and tasked with resolving unpredicted events or performing cognitive actions. This can include a wide range of actions, from a small request for input data to a full stepping-in where a person handles the whole process.

OK, that wasn't easy, but it's time well spent. Now you can revisit the official full RPA definition with better clarity. But for simplicity, you can think of RPA as a software robot that autonomously mimics manual, repetitive human tasks in different applications according to pre-defined business rules.

What are the applications of RPA in business?

Studies suggest that 70–80% of responsibilities (not necessarily jobs as a whole) can be described as rule-based and therefore can be potentially automated with RPA tools. One can find many opportunities for implementing robotic process automation in various businesses, but there are several major industries and business functions that have a proven track record with applications of RPA technology. Industries with the most automation opportunities include:

RPA in Banking and Financial Services

Banking was one of the first industries to embrace the adoption of automation. Nowadays, a lot of large banks use RPA to automate such processes as anti–money laundering, KYC (“know your customer”), account opening and customer inquiry processing. Other applications of RPA include reconciliations, report generation and various processes in regulatory compliance.

You can find more information about RPA use cases in banking in our free course “Intelligent Automation for Banking”.

RPA in Healthcare

For healthcare companies, the accuracy and compliance of all internal processes are fundamentally important, as customers’ health and well-being depend on them. That’s why the largest hospitals in the world use robotic process automation to streamline information management , insurance claim processing, payment cycles, prescription management, and other processes - which results in fewer errors and better patient experience.

RPA in Retail

Retail companies are investing heavily in automation to enhance both customer and employee experiences. Popular applications of RPA in the retail industry include fraud detection, warehouse and order management, customer feedback processing, and customer relationship management. Similarly, dynamic systems with web-scraping and predictive impact analytics could automate pricing and promotions.

Cross-industry RPA Use Cases

Some processes that can be automated with RPA can be found in any industry. Here are just some of them:

  • Human resources. HR processes include a lot of information management and standardization across many systems and applications, which makes them a good fit for automation.
  • Finance and accounting. This area has many automation opportunities, as the processes are mainly rule-based and require a high degree of accuracy and speed. Some common RPA use cases in this area are order management, billing, accounting, and reconciliation.
  • Procurement. Due to the structured nature of documents and data used in the processes, procurement is a great choice for automation. Applications of RPA here include invoice processing, purchase order management, and contract management.

What are the benefits of RPA?

In our banks, we have people behaving like robots doing mechanical things. Tomorrow, we’re going to have robots behaving like people.

— John Cryan, Former CEO, Deutsche Bank

There are several main benefits a company can get from robotic process automation.

First, there is no need to waste human brains on tasks that can be performed much better, faster and without errors by software robots. That will leave people free to bring higher-value contributions to areas like customer satisfaction, innovations, and scalability.

Second, automation will improve the time and accuracy of the processes by eliminating human errors and the need to correct them. It will also result in better customer experiences, higher NPS (Net Promoter Score) and lower customer churn.

Other benefits of RPA include higher operational agility, better opportunities for auditing the automated processes, and insights into the company’s workforce that will allow to see and analyze existing issues in the processes and proactively improve them. Sounds like a pretty great deal, doesn’t it?

The landscape of robotic process automation has grown considerably in recent years. There are dozens of RPA tools available, each having different strengths and weaknesses. However, the abundance of tools creates a challenge. The more you dive into different RPA tools and their features, the more difficult it is to decide which one you need. So, our advice is: do not start your RPA journey by studying the tool’s features. Instead, focus on the problem you need to solve and see which tool offers a solution to it. Pay attention to these characteristics, though:

  • Single-platform architecture
  • AI capabilities
  • Built-in analytics
  • Availability of training
  • Customer support
  • Ease of use

RPA tools

Another important step in selecting the correct RPA tools: explore the latest research. Prestigious industry watchers create regular matrixes and overviews of the RPA market that define those companies that can be considered leaders and provide the best results. Examples of such research are The Zinnov Zones for RPA Platforms report and Gartner 2019 Magic Quadrant for RPA Software.

What is the future of RPA?

There is no shortage of opinions about how the future of RPA will look. Judging by the current state of robotic process automation and the latest trends in its development, we can predict several ways in which it will be developing. So, what is the future of RPA?

  1. Smarter RPA complemented by AI. We already see a surge of interest in the new technology combining RPA and artificial intelligence: Intelligent Automation (IA). This trend will continue in the future as IA offers much wider opportunities by automating judgment-based processes involving unstructured and non-digital data.
  2. Widespread adoption of automation. Despite fears of automation and its effects on jobs, the acceptance of RPA technology in business is likely to continue growing as more organizations reap the fruits of successful implementation of RPA and AI technologies.
  3. A convergence of digital and human workforces. Software robots will augment the work of people by taking on the most tedious repetitive tasks. It will lead to the creation of the digital workforce that will operate in conjunction with the human workforce.

Overall, the future of RPA will see wider use of technologies like artificial intelligence, business process management, optical character recognition and others in combination with RPA to provide for more effective and scalable automation.

How can you leverage RPA?

Getting onto the same page is one of the most critical places to start any automation journey. But being well aware of the terms used in process automation is not enough. That’s why we created the Automation Essentials course: to help any company achieve alignment. This course offers a comprehensive overview of the current state of business automation, discusses the future of RPA and RPA tools, teaches how to consider ways to include automation in your organization, and overviews the costs and benefits of implementing this technology. Sign up for two-hour intensive RPA training or try this 15-minute course demo and enroll later.

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