“An application of technology that allows employees in a company to configure computer software, or a 'robot', to capture and interpret existing applications for processing a transaction, manipulating data, triggering responses and communicating with other digital systems”. (The Institute for Robotic Process Automation (IRPA)

Basically, it is a software that operates as a virtual workforce and reduces or replaces the human intervention in repetitive and recurrent tasks. It can be applied to and interact with the existing applications, without having to change the current IT-landscape, and can be used in a wide range of industries, including finance, accounting, banking and insurance.

In today’s business environment, there is a growing need for cost efficiency, regulatory compliance, improving margins, high quality data and information that allows the businesses to focus on delivering value added insights. RPA provides a means to tackle these challenges in a cost and time-effective way. The software robots that are created through RPA, are ‘trained’ algorithms that can mimic and replicate the actions of a human worker interacting with the user interface, thereby reducing the labour costs and improving the speed, accuracy and quality of the task. The automation process can be set up and implemented in only a few months, without having to make changes to the existing IT systems or processes.

Companies are racing to unlock value from the next generation of digital technologies, including digital labour, which has moved far beyond using macros on a spreadsheet. Robotic Process Automation (RPA) – one form of digital labour involves the use of software robots to automate processes. These robots are easy to configure, require little IT expertise and can be quickly trained and deployed to automate manual tasks. They can perform activities such as copying and pasting data between applications, reconciling and cross referencing data between different systems and conducting high-level decision-making at key points in the business process. RPA is even being used in more dynamic settings, including activities that involve direct interactions with customers and employees, such as processing customer insurance claims or setting up new employees with the right level of IT access.

As per an estimate 45% of work activities can be automated, and this automation would save $2 trillion in global workforce costs.
Impact of RPA on company’s operations

The impact of RPA on a company’s operations and competitive positioning is significant on a number of fronts: economic value, workforce advantages, quality improvements, flexible execution, speed and agility. In addition, RPA projects that prove the value of automation technology and enable an organization’s people to get comfortable with digital labour, often serve as a stepping stone to more comprehensive initiatives that use machine learning or other forms of artificial intelligence.

“Technology is changing the way businesses are run. But if you look at most of the large companies, their internal financial systems are lagging the technology trend. It is important that internal financial processes adopt the latest technology like mobility, AI and digital experience, to ensure straight through processing, predictive controls and analytics for timely decision making. CFOs need to be aware of the technological changes that are happening and understand how they can leverage them for their own internal financial processes.” (Mavinakere Ranganath – CFO Infosys)

The value to Finance function:
• Reduce costs significantly by automating key processes
• Improve consistency, control and traceability
• Improve quality through reduction in error rates
• Overcome systems fragmentation by consolidating data from disparate systems
The shift to RPA can help improve organization performance in a number of ways by enabling CFOs to:
• Automate key finance processes, from data reporting to payments: For example, improving corporate reporting by using RPA to access and present data from multiple systems.
• Target system inefficiencies: RPA can bridge the gaps between different ERP systems in cases where organizations have not yet achieved a single integrated system. They can also act as an interface between an ERP and critical legacy systems.
• Improve the quality and speed of finance processes: RPA provides a clear audit trail record, which can make compliance with regulatory requirements easier to manage.

IS FUTURE OF FINANCE ROBOTIC?
“The best way to think about robots is as the ultimate companion to humans. Let robots do the grunt work, and free up people to do things they’re really good at, which is analyzing all the data that robots can pull together” (Chris Lamberton - Robotics and Process Automation Global Center of Excellence Leader EY).

Automation for Accounting Profession
AUTOMATION is threatening several jobs with obsolescence, and accountants are supposedly at the top of the hit list. According to research by Frey and Osborne cited in a 2014 article by The Economist, 47% of job categories are open to automation within two decades. Accountants and auditors are the second highest in terms of risk, just after telemarketers. If that’s not scary enough, the Financial Times (FT) reported that as automation evolves, it has already started affecting hiring practices in the Big 4 – the largest graduate employers around the world. The FT said that artificial intelligence tools are increasingly used to replace work conducted by fresh graduates, leading to predictions of a sizable decrease in graduate employment by these companies.

The bright side is that accountants should be skilling upwards to negate the risks of obsolescence. “As technology becomes increasingly sophisticated and present in all aspect of businesses, accounting professionals can expect a shift towards more strategic and analytical roles,” stated recruitment firm Randstad Singapore at the beginning of the year. Randstad wrote that transactional roles like general ledger, accounts receivable and payable may be endangered, but other higher-skill roles like financial planning and analysis or business controlling would still be in high demand.

Let’s not forget that the accountant’s role has evolved with time; they are no longer just number crunchers. Businesses rely on their finance team to provide strategic advice on top of compliance and cost saving guidance. (David Chin - Head of ACCA Malaysia)
Automation Good for Shared Services

Finance shared services (FSS) is positioned as an important source of jobs for the profession as businesses seek to streamline their finance functions. Deloitte’s report “The Robots are coming” suggests that automation can have immense strategic value to the profession, particularly in the finance shared services industry. But even in FSS, automation isn’t definite. In response to Deloitte, ACCA argued in its own paper “The Robots are coming” that there are significant challenges to the adoption of robotics and automation in the industry and financial services in general. Specifically, the risks of trusting software fully to do very customized, intricate work are still very real, while the benefits of automation are yet to be fully proven. Furthermore, cost is a barrier to adoption, and automation is more likely to happen in tedious, mind-numbing roles which employees would rather pass on to technology anyway.

Again, it must be reiterated that automation would produce new skilled jobs in the long run, and increase adaptability to change. The impact therefore, may not be as imminent and as severe as predicted, as long as accountants are willing to reinvent themselves and become smarter and stronger.

“From a skill-set perspective, we are constantly looking to slowly shift the organization to automate manual processes. Analytics are key, so we are growing our base of skills and positions that do more analytics for our business partners than we are spending time processing invoices or expense reports.” (Deborah Gibbins – CFO Mary Kay)

Source:
• The Institute for Robotic Process Automation (IRPA) journals.
• EY, PwC and Deloitte papers on RPA.