RPA - Possible benefits OR possible problems?
In the run up to the 1st #iandishow, entitled "Is your Culture ready for Robots?", we've been looking at a few articles on the subject of 'Robotic Process Automation' (RPA) to see how the market is responding to the idea that 'Robots' (in any other language, that means 'Software'), will easily automate monotonous tasks and processes in office environments.
...In layman's terms, that means, no-more people doing transactional, repetitive and often rule-based processes, typically located in a shared service centre or other 'back-office' environment.
The RPA objective? To attain the cost savings promised (but rarely realised) from the application of ERP systems over the last 20 years.
It seems strange in some respects, that our proposed solution, to computers failing to deliver all that was promised during their original implementation, is to replace core programs or use more, 3rd party computing power, introduced by yet more programmers with little tacit and intuitive experience of our organisations.
Looking at the notion of RPA this way makes it sound like Einsteins definition of Madness ("Doing the same thing over and expecting a different result") ... but let's look at a few more details around the issue before we start drawing those kind of negative conclusions.
Let's see if we can establish if RPA, or at least the idea of it, is another global consultant led fad, or, the tipping point, at which we'll genuinely see computers performing tasks which have thus far required human intellect...
One thing certain about the Human Race ... is that it will keep progressing. Not always quickly, and not in a straight line (we often take a few steps back to take one forwards - especially where power & greed come into play), but when you think back 200 years, it's easy to see, those privileges historically associated to the rich are expected as a normal way of life today.
As Tim O'Reilly captured in his recent LinkedIn article, not so long ago, a personal driver was the privilege of those who could afford the first motor cars. Today, 90% of the global population has been in a taxi of some description, and many of us own motor cars which would have been deemed to perform witchcraft 100 years ago. A far broader section of society can afford to eat out at restaurants on a semi-regular basis and a special train trip across Europe, once the province of the aristocracy, can today be completed by soccer hooligans.
On the Graph above, it's easy to see that using the definition of extreme poverty as 'living on less than a $2 a day', the time between 1820 - 1980 saw percentages of people in such conditions drop from 94% to 55% and since the 80's, those existing with less than $1.90 a day has dropped from 44% to a projected 9.6% in 2015.
94 to 9 percent of people living in poverty is, in most minds, progress ... and importantly, progress that has been made in-line with advances in technology.
So there's definitely an argument to say the introduction of technology which takes humans beyond their own limits, although often disruptive, moves us forwards.
When highligting the disruption that can be caused by progress, a good friend has often said;
"The last horse-drawn taxi company to go out of business on the streets of London ... was the best one"
It may be the case that the use of software to carry out mundane tasks in back-offices and shared service centers is a bit like this, a technology shift, that allows a new paradigm to be experienced and life to improve for all. Even if that requires people change and adapt to a new world order, on the whole, it can be considered a positive step forwards.
There is always an opposite argument.
Leaning on the Horse Drawn Taxi analogy a little more, we might say that the manure in the streets of London provided natural checks and balances in the form of disease etc., to keep an ever-increasing human population at bay.
We can equally argue that replacing horses with advanced modes of transport has led to the on-going use of technology on a broader scale, which is now over-heating the planet and has damaged the ozone layer.
This 'progress' has seen many millions of people fit into a space, which wouldn't have been able to support them in the absence of technology (i.e. without a road and rail network to transport people and food / waste in and out of central London).
It could also be argued, having this concentration of people and skills has fuelled the finances behind those global technological developments that have seen factories pollute the planet while producing the weapons behind multiple wars, killing sprees and terrorist attacks.
Seeing such connections reminds us, that cause and effect is like gravity. We may not see it, or recognise the impact it has on our lives, but it effects every one of us (if we're aware of it or not). There is always a balance to consider, for every 'Silver Lining' there is often a dark cloud.
For every £ in our pocket and each shirt on our back, there is a potential connection to poverty, child labour and violence, reaching all the way back to the industrial revolution ... and in today's connected world, to every corner of the world.
Given that context, it's highly likely there will be positives and negatives to consider in respect to RPA.
In recent McKinsey and Deloitte reports on the subject, many issues, for and against the idea of RPA are considered and raised in a relatively fair and balanced manner. That said, aspects of each report demonstrate the tendency to accept cultural assumptions and the confirmation bias which accompanies them.
It was reported a decade or so ago, that it is said at Xerox;
“To change anything in a meaningful way, requires you understand;
For example, Global Business Services and Shared Service Centers are presented in these reports as environments which group functions together to achieve operational performance improvement and collaboration.
That sentence assumes centralisation automatically results in efficiency and better communications, which is of course, not always the case ... in some cases, such activity produces the opposite outcomes, seeing less collaboration due to issues surrounding cultural integration and other such 'human factors' we're unable to account for on a spreadsheet.
Anyone with any exposure to any centralisation initiative, in pursuit of efficiency, will know it can throw up all sorts of negatives, typically ignored by the accounting mechanisms used to determine such actions as 'Good' (Reported as a positive, within a narrow scope, for the benefit of the board looking at it as an agenda item and the shareholder confidence which follows a tick in a financial 'in-year' box).
e.g. a Government initiative we've had exposure to in the dim and distant past, demonstrated £80M savings in 24 months through consolidation and centralisation of various departments into a shared service center ... 'Savings' were reported in-line with the numerical judgement mechanism used to report benefits realisation. The numbers 'proved concept', through this pilot and approval to expand the initiative followed, with the objective to save a further £400Million in the subsequent 3 years.
Good news to the Tax payer you might think. However, what wasn't considered within the accounting / reporting mechanism, was the 6 week delay this centralised service imposed upon 1000's of scientists around the country, inhibiting the procurement of products required for experiments, subsequently slowing down the rate of innovation, reducing autonomy and negatively impacting the psychological position which accompanies such cultural conditions (Freedom to act, self-concept and thus intrinsic motivation, engagement etc.).
Central purchasing were able to consolidate products by type and do some great vendor rationalisation & outsourcing / off-shoring exercises, (making the numbers look good) but they didn't understand the fact that products purchased in minimum order quantities from China imposed extensive time-delays onto the process, (while stock was on-water) and subsequently had a negative impact on the quality of scientific equipment and thus, the quality of experiments once available (not to mention demoralising and demotivating those impacted remotely by the centralised changes).
Other factors, such as domestic jobs being lost due to off-shoring, negatively impacting the economy, or frustrated scientists, controlled by a logical system, who, suffering increased exposure to psychological conditions which provoke 'Learned helplessness', felt compelled to leave the service, potentially resulting in them never making their next big discovery and scientific breakthrough ... etc.
Such elements are all the hidden costs to the economy and the rate of progress attained by nations, that are never captured by those logical accounting practices, which often fly in the face of common sense (Obvious when you talk to those 'experts' who do the job @Gemba, but systematically missed by modern management methods which promote the idea you can group for efficiency, manage at a distance and lead from afar).
So, when it comes to the levels of confirmation bias that exists in the reports cited above, we can see that we often make assumptions about 'what good looks like', often pegged to the idea that accounting logic reports the whole picture and the assumptions which permeate our current culture don't need to be challenged... when they do.
The reality is that financial reports are inevitably structured and chosen to prove benefit and ignore any related negative issues, largely for the comfort of those who have a vested interest in that model working in their favour (WIIFM - Harsh but true, when you look at it through a psychological lens).
When it comes to RPA being the next popular kid on the block, what we have to be cautious of, is that such human judgement limitations and logic based errors are considered with a depth the market typically shies away from.
For example, the current 'trend' is for GBS (Global Business Services) and SSC's (Shared Service Center's) to have RPA (Robotic Process Automation) high on their strategic agenda, with a view to automate many HR and Finance activities, addressing the claim that "Over 56% of roles in a typical UK finance function could still be automated".
In the Deloitte report, it shows Executives indicate the decade 2015-2025 will continue to make their strategic priority "Continuous Process Improvement"
This strategic priority comes with a clear link between CPI and Automation in the minds of most!
That mindset might pose a problem!
In other sectors, e.g. automotive assembly, we have seen the inclusion of robotics and automation over many decades improve efficiency and reduce risk while improving profits. However, there is a key principle in the world of 'Lean' called Jidoka (Autonomation i.e. Automation with a Human Touch). This promotes the principle that 'Machines don't think' and if true CPI is to be realised, human brains and minds have to be present and engaged.
This then becomes an issue of leadership belief (assumption about what Good looks like) which sits behind the policies, which sit behind the rules, which sit behind the processes (Xerox), which the current drive toward RPA is focused on in service sectors.
If people are not part of the 'Automation solution', the solution remains largely stagnant from that point forwards. The other big issue is that of theory vs practice and the realisation, experience only comes through action.
In that sense, the findings from Deloitte in respect to 'Practical Experience' of RPA implementation 'should' be of major concern to anyone planning such an initiative. Lets face it, the reality is, many large scale ERP projects fall over from the start in terms of OCM (Organisational Change Management ) and the degree to which the 'Human Factors' involved with organisational change are understood by project managers and business leaders; and they have decades of global experience behind them in most part ... so the following chart is nothing short of a warning shot across the boughs of any executive thinking about pinning their career progression hopes to the introduction of RPA, purely because the interest in the principle isn't yet translating into broad application of the software.
All that said, we're conscious of our own confirmation bias and realise that the Duxinaroe default position is that the business of organisational change is fundamentally flawed, requiring leaders in all and every sector develop a greater knowledge surrounding the 'Human Factors' associated to OCM, if they're to lead successful change programmes, which reduce timelines, access greater ROI faster and deliver results sustainably ... but that's just an opinion formed by 30 years experience of change in industry around Europe and the rest of the world.
Our own bias accepted, we can also say it's understandable that RPA is on the global radar. The interest is driven by the realisation that there is a significant gap between the expected and realised benefits of ERP implementation & BPM. There is also the reality of people being a greater on-cost than a bit of software that can work faster and through the night when business activities peak and trough in response to seasonal demands.
'Robots' promise to provide execs a quick and cheap workaround to core system replacement and 'people'. No wonder it's gaining popularity!
With all that to go at, and probably a lot more, from those currently acting on the ideas that RPA presents (and gaining the knowledge required through experience), all we can be sure of, is that the first ever iandishow has picked a great topic with a multitude of different angles and issues to consider.
We're looking forward to Thursday!
If you'd like to listen in, please provide us a few details here and the rest will work as you expect these things to (so long as the software works!) See you there!