By Lachlan Colquhoun
Illustration James Hancock
Graphics from the Embracing Robotic Automation During the Evolution of Finance report

Until very recently, senior accountants for Swedish car manufacturer The Volvo Group spent four full days every month validating financial reports coming in from business units and operations around the world.

Today, robotic process automation (RPA) does this function in about two minutes, leaving the accountants to focus on reconciling exceptions and improving the quality of the reports they provide to the board and senior management.

Automation has been reshaping the nature of work since the industrial revolution, but the automation seen within the finance functions of some of the world’s biggest companies in this past decade has been truly transformational.

Replacing manual data entry with automated processes frees accounting and finance professionals to focus on more strategic tasks, that in turn deliver greater value to their employers and clients. And letting an algorithm do the drudge work means no mistakes creep in due to a mis-keyed digit.

Kishan Bhat, the site head for Volvo Group’s Bangalore-based accounting services, says the company has been automating several processes as part of its shared services and business process outsourcing strategy.

Volvo’s first venture into RPA was with its accounts payable team based in Chennai, which put through close to 2000 supplier invoices a day. Processing the invoices through the integrated systems took a lot of manual intervention, including reading, validating, registering and then posting the invoices.

Then an RPA robot took over the process. It logged into the systems, read the invoice images, registered the invoice into existing systems, did the required validations including cross-checking against other systems, and then decided whether to post, park or block the particular invoice.

The robot cut the team’s hours spent on manual work by 65%-75%, according to a KPMG report, and there were also reduced errors. That allowed the team to focus more on analysing and improving results, rather than be overloaded with day-to-day transactional activities.

When the new generation of RPA tools came on the market about two years ago, Volvo benchmarked its performance against global peers and decided it should embrace RPA to remain competitive.

“We took a centre of excellence approach and collaborated with Volvo IT to create a cross-functional team with people from finance to introduce robotic processes,” Bhat says. “We did some work with a vendor and started experimenting with RPA in some pilot processes.”

Volvo established its Centre of Excellence for RPA in Bangalore in 2016, and is now using RPA technologies from Blue Prism and Automation Anywhere. Measured by time taken to complete tasks, the 25 ‘robots’ (as Bhat and his team affectionately call them) used in Volvo’s finance function have already improved the business unit’s efficiency by up to 25%, with a goal of achieving a 70% improvement. Bhat notes that for this goal to be realised, a number of processes need to be standardised before automation can be introduced.

“Our focus with RPA is on creating value through faster turnaround times,” he says. “Already we have seen turnaround times on some processes dramatically reduced, all of which means that our experienced accountants are able to focus their times on qualitative tasks rather than the volume of work.”

Figure 1. Key characteristics of RPA (Click image to enlarge) 

The RPA haves and have nots

A report launched at the recent World Congress of Accountants 2018 in Sydney concluded that those organisations that fail to embrace RPA in finance will inevitably be left behind, creating a new digital divide.

Embracing Robotic Automation During the Evolution of Finance was produced by Chartered Accountants Australia and New Zealand (CA ANZ), the regional chapter Association of Chartered Certified Accountants (ACCA) and KPMG Australia.

After surveying 2700 accounting and corporate finance professionals across 11 countries, the report found that 46% of respondents’ finance teams were implementing RPA – either trialling it as a pilot or proof of concept.

For those organisations not already embracing RPA, the reasons why they hadn’t were varied, ranging from a lack of understanding of what RPA was to cultural issues around change.

Nikki McAllen, a financial management partner at KPMG Australia who worked on the report, says many organisations are taking advantage of the RPA opportunity as part of wider digitisation and transformation projects.

“RPA is part of the evolution into the next generation infrastructure,” McAllen says. “We see people moving their data into cloud platforms where they are much more nimble with it. They’re moving data streams from A to B, and it is easier to evolve with this technology rather than build your own or patch what you already have,” she says.

But a much bigger pay-off from investing in RPA will be seen in the coming years as advancements in machine learning and artificial intelligence create more powerful systems to integrate with it, she says.

“Already we see organisations leapfrogging RPA and moving in this direction.”

“Avoiding re-keying of data is not only going to save time, it will prevent errors.”

How RPA helps Zurich Insurance

Zurich Insurance Group has been exploring RPA since 2015, and established centres of excellence connected to its major offices around the world to drive its strategic application.

Zurich Australia has been using RPA for 12 months, leveraging the insights from Zurich’s global centres with applications such as Blue Prism and UiPath.

Wilson Varghese, the head of operations for general insurance for Zurich Australia and New Zealand, says the company has created an in-house RPA team within the region to review existing processes and understand how they might be improved.

“The focus of our RPA program in Australasia is to free up our people’s time so they can focus on the things that our customers and broker partners really value,” Varghese says.

“Zurich’s Australian RPA team has a strong pipeline of work and we’ve already assessed the suitability of RPA on more than 100 processes in our business, from manual data entry to monitoring and checking documents lodged by customers.”

Zurich already has a business case and a roadmap to deploy RPA as part of a wider digitisation and transformation strategy, says Varghese.

“Our people will benefit as well, as they spend more time with customers and on value-adding activity, and less time on administrative tasks,” he says. 

“We’ve already assessed the suitability of RPA on more than 100 processes in our business, from manual data entry to monitoring and checking documents lodged by customers.”

When IT automation makes work life better

Time, however, is just one of the advantages RPA can deliver, says KPMG’s McAllen. Data integrity is another significant win for businesses.

“Avoiding re-keying of data is not only going to save time, it will prevent errors,” McAllen explains. “This will not only help organisations operate more efficiently and make some processes faster, but free up people’s time to enable them to do their jobs better and to focus on the ‘white space’.”

‘White space’ describes the process where people have enough time and headspace to realise unarticulated needs, thereby spurring them on to genuine innovation.

This has been borne out at Curtin University in Western Australia, where the RPA implementation has proved to be as much about people and culture as it has about data.

The university has been progressively rolling out an RPA program, based around a solution from AssistEdge, since June 2017.

Thomas Griebel, the manager of finance business improvement at Curtin, says so far most of the benefits seen have been in improving the working lives of staff and the learning experience of students.

“I think we’ve shown that it doesn’t mean that people will become redundant and lose their jobs, because that is not the purpose of RPA,” he says. “It has actually improved staff motivation because people don’t have to do the repetitive tasks, and our staff get better service and the overall quality of the work has improved.”

Curtin began its RPA program with a proof of concept project in the finance department that has now enlarged to automating 10 processes across finance, human resources, student services and information management and archiving. RPA is also being used to disburse scholarship payments, a process that requires integrating both HR and finance functions.

The university estimates that, so far, process automation has saved 17,800 hours of manual effort.

But Griebel admits the past 18 months have been a steep learning curve.

“It has definitely been a journey and we are still going around to other departments and looking at automating processes where that makes sense, because now we understand where you can apply automation successfully, and also the areas where you can’t.”

One of the efficiencies RPA has delivered is in the onboarding process used by the enrolments department. Previously, staff had to input details for all students from one system to another, to ensure it was accurate. The data now migrates from one system to another automatically, with 80% to 90% of enrolments being processed without requiring human intervention.

“Now, staff don’t have to focus on the simple and standard cases as they previously did; now they can spend their time on the 10 to 20% where they actually need to apply some judgement,” Griebel says.

“Previously, staff would have had less time to think about these more difficult cases… but now they can really focus on the more complex ones and give them the time they need to be resolved.”

Like KPMG’s McAllen, Griebel sees RPA as one step along the journey to more advanced technologies around machine learning and artificial intelligence.

“Because when you implement RPA, you very quickly see that it is just one tool of many which can help, and from there you can start to imagine what else is out there and what is possible.” 

“It has improved staff motivation because people don’t have to do the repetitive tasks.”

Figure 2. Benefits of RPA 

RPA for smaller businesses

RPA and its associated technologies are not just for big organisations. They can also have a radical impact on the lives of small business owners.

When James Carey joined Prime Partners Chartered Accountants in North Sydney less than a decade ago, his first task was to write account codes with a pencil on bank statements. Although the firm, where he is now a director, had internet banking and an array of computer equipment, he was still required to code client transactions and then input them manually into the computer system.

“It was quite a traditional business-servicing accounting firm back then, and it still hadn’t quite made the leap into the 21st century,” says Carey.

“It made me start thinking about why was I doing all this manual data entry. That led to us investigating how we could do things better, which led us to implementing Xero, and later the real benefits that have flowed from adopting bank feed automation.”

Prime Partners uses the Xero accounting package, which includes a wide range of automation around invoicing, notifications, payables and receivables. While not all of the firm’s clients are on the same system, an increasing number are moving to implement it and enjoy the benefits both of automation and collaboration.

The practice has a number of other cloud-based RPA systems bolted on to Xero, notably automated bookkeeping and data entry solution Receipt Bank and the ‘online automatic filing cabinet’ Hubdoc.

It’s an incredible timesaver. For example, Carey can pay for a taxi on a work credit card, then upload a photo of the receipt to Receipt Bank, which scans the invoice with its OCR (optical character recognition).

“That is then pushed into Xero as an accounts payable transaction, so that when the transaction comes in from my credit card it is automatically matched to the bill, and the original source document is attached in the accounting system,” Carey explains.

Hubdoc is set to automatically log into accounts with providers such as telcos, download and retrieve the bill and, again through OCR, push that into the accounting system as an accounts payable bill.

“Our bank has also announced it will soon do two-way banking integration, so we’ll be able to send payment instructions directly out of the accounting system to the bank, so it becomes one click to pay a bill,” says Carey.

Embracing RPA has been revolutionary not just for his firm, but for the small businesses that are Prime’s client base. “It used to be that we would meet with clients in September or October and review their accounts for the period to the end of July that year, so whatever we were doing was around 18 months out of date,” Carey says.

“Now, instead of us being financial historians, as we used to be, we are using this information to look forward and help our clients with business planning and improvement discussions.”

He is excited about what the future holds. “I can see where automation is taking us. I think that eventually accounts will be happening in the background and they’ll be updated in real time, with most of the reporting automatic. That is going to free up so much time for accountants.”

Figure 3. Continuum of automation technologies (Click image to enlarge)

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RPA in 60 seconds

The term robotic process automation (RPA) may evoke images of machines assembling computers or cars, but the reality is quite different. RPA is software that can be easily instructed by end users to perform high-volume, repeatable, rules-based tasks. It automates the logical transfer of data across different systems quickly and accurately, freeing up valuable resources from mundane tasks.

RPA scripts are ‘system agnostic’, which means they can sit on top of existing applications to replicate the actions of a human user. Its user-interface technology uses the same application interfaces that a human would – that is, user IDs – for integrity and audit trail purposes.

As a result, often there is no need to change or replace existing enterprise solutions when implementing RPA.

This differs from other automation processes that work with APIs (application program interfaces) to enable the transfer of automation between applications.

RPA systems are often integrated with optical character recognition (OCR) software to extract and convert data from documents, reducing the need for manual data entry and indexing.

Simpler RPA solutions that require users to deploy the software to a desktop or localised virtualised environment are referred to as ‘Attended RPA’.

‘Unattended RPA’ is not installed locally in the user desktop, but is instead deployed and executed centrally via virtual machines hosted on servers within a data centre. This is sometimes referred to as “RPA in background mode”.

Edited extract from Embracing Robotic Process Automation During the Evolution of Finance.

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What do accountants think of RPA?

In early 2018, ACCA and CA ANZ conducted a survey of more than 2700 of its members globally to seek their views on robotics process automation (RPA) and its implications on the finance function. The resulting report, Embracing Robotic Automation During the Evolution of Finance, produced in partnership with KPMG, shares the results of the global survey and draws insights from leading organisations around the world. It includes case studies of RPA implementation at Royal Dutch Shell, AMP Ltd, Australia Post, and GSK China. Download the full report here.

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Read more

Embracing Robotic Process Automation During the Evolution of Finance (PDF) 

Robotics in finance – new report terminates the myths 

From the CA library

Available from CA Library: What to do when machines do everything: how to get ahead in a world of AI, algorithms, bots and big data

Discusses what businesses can do to adapt and survive the significant changes AI and robots are bringing to every industry. Offers insights into how AI can enhance human performance and describes the four most common pitfalls to avoid. Read more here.