Interest in Robots, Automation Rises, but Barriers Still Exist

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As automation, digitization and advanced technology permeates companies’ supply chains around the globe, some organizations are looking to robotic process automation (RPA) technology in the hopes of improving business processes. But concerns about job losses or a lack of understanding about the technology still act as barriers to adoption.

The majority of shared services professionals plan to use RPA in their organizations within the next year, according to a results of recent survey of 100 professionals carried out by Redwood Software, an RPA provider. At the moment, however, just 27% are using robotics. The survey found that 67% of professionals are planning to implement RPA in the next 12 months, while 35% are actively looking at the technology and 38% are curious or researching the technology.

Some Organizations Unsure of Benefits, ROI of RPA

Redwood Software pointed out in its report, titled “The Power of Robotics in Shared Services,” that there seems to be a lack of understanding of the benefits robotization can bring to an organization, in terms of increasing efficiency and ridding processes of error-prone manual tasks.

For example, the survey showed less than a third of respondents believe that RPA can automate more than 80% of finance processes in their organization, 52% believe robots could understand finance process and 51% believe they can replace human activity end-to-end in a business process.

Redwood’s report also acknowledged unfavorable opinions of using robots in the report, such as the idea robots will lead to job losses for people or that robots will completely replace humans in the workplace. About 30% of survey participants said they believed RPA would leave to job loss in general. Other barriers to adoption were that organizations are unsure on the return on investment (identified by 42%) and not having the “technical expertise to implement” (36%).

Some of these concerns are warranted, in part. As the report stated, “Yes, there can be no denying that there will be some job loses [sic], but there will also be a reappropriation of skill sets into other parts of the business.”

A recent McKinsey & Co. report also estimated 59% of manufacturing activities could be automated, with robots possibly taking the place of human workers doing those tasks. For welders, cutter and solderers, that figure rises to 90%. McKinsey analyzed more than 2,000 work tasks in more than 800 occupations and looked at federal labor data and determined the manufacturing, food service and retail industries were most susceptible to automation.

Other reports estimate about half of all jobs in the United States are at risk of being done by robots or computers within the next 20 years and roughly 80 million jobs faced the likelihood of being overtaken by robots.

Acknowledging the Possibilities

Ray Barratt, director of supply chain transformation at Redwood, told Spend Matters last month that implementing RPA isn’t so much about taking jobs away from people as it is about reimagining their roles and seeing if their tasks can be automated to improve efficiency and reduce errors within business processes. RPA or software robots can be implemented to do jobs at an organization that are not specialized but repetitive. It’s also about removing people from doing manual tasks and possibly getting them into better value-added positions at the company, Barratt said.

Barratt also sees a significant opportunity for both the finance community and the supply chain community to apply robotics to connect processes, remove redundancy and silos and drive transparency in business processes.

Some of the shared services professionals surveyed reported specific benefits from RPA technology: 56% reported RPA led to process efficiency improvements and 46% said it improved data accuracy.

As for the concern regarding ROI of RPA, Barratt said the majority of organizations can justify the cost of implementing the technology or robots. Additionally, 45% of the professionals surveyed by Redwood said RPA reduced costs for their organization.

Despite the concerns still surrounding RPA and other automation technology, Redwood believes smart robotics are “here to stay.”

"[T]hose that see the potential of what can be done versus the legacy of what has always been done, will enjoy continued growth in the Fourth Industrial Revolution,” wrote Neil Kinson, chief of staff at Redwood Software, in the report. “This is a revolution that’s been defined as one that will focus on how global businesses can harness big data and use automation software to streamline operations and grow.”

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