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F i n a n c i a l S e r v i c e s

The value of robotic process


automation: An interview with
Professor Leslie Willcocks
Leslie Willcocks, professor of technology, work, and
globalization at the London School of Economics
Department of Management, talks about robotic process
automationits impact on work, the strategic and financial
benefits, and how to capture them.
McKinsey: Can you start by defining quickly how to configure and apply
robotic process automation (RPA)? the robots. Its lightweight also in that
it only addresses the presentation
Leslie Willcocks: RPA takes the layer of information systems. It doesnt
robot out of the human. The average have to address the business logic
knowledge worker employed on a back of the underlying system or the data
office process has a lot of repetitive, access layer.
routine tasks that are dreary and
uninteresting. RPA is a type of software
that mimics the activity of a human being
in carrying out a task within a process.
One major benefit of
It can do repetitive stuff more quickly,
accurately, and tirelessly than humans,
RPA is a return on
freeing them to do other tasks requiring investment that varies
human strengths such as emotional
intelligence, reasoning, judgment,
between 30 and as
and interaction with the customer. much as 200 percent
There are four streams of RPA. The first in the first year.
is a highly customized software that will
work only with certain types of process
in, say, accounting and finance. The McKinsey: How is RPA different from
more general streams I describe in terms cognitive intelligence?
of a three-lane motorway. The slow lane
is what we call screen scraping or web Leslie Willcocks: RPA deals with
scraping. A user might be collecting data, simpler types of task. It takes away mainly
synthesizing it, and putting it into some physical tasks that dont need knowledge,
sort of document on a desktop. You understanding, or insightthe tasks
automate as much of that as possible. that can be done by codifying rules and
The second lane in terms of power is a instructing the computer or the software
self-development kit where a template to act. With cognitive automation, you
is provided and specialist programmers impinge upon the knowledge base that
design the robot. Thats usually a human being has and other human
customized for a specific organization. attributes beyond the physical ability to
The fast lane is enterprise/enterprise- do something. Cognitive automation can
safe software that can be scaled deal with natural language, reasoning,
and is reusable. judgment, with establishing context,
possibly with establishing the meaning of
You can multiskill each piece of things and providing insights. So there is a
software. Its lightweight in the sense big difference between the two.
that you dont need a lot of IT involvement
to get it up and running. Business In addition, whereas RPA is pretty ripe as
operations people can learn quite a technology, cognitive automation isnt.

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Ive not seen a wave of powerful cognitive just to relieve the stress that creates
automation tools appear in the market and in organizations. One online retailer
not many companies are using them yet. measures the success of RPA in terms
of the number of hours given back to the
McKinsey: What are the business business. So its not just the shareholders,
benefits of RPA? the senior managers, and the customers
who benefit but also employees.
Leslie Willcocks: The major benefit we
found in the 16 case studies we undertook McKinsey: Can you describe a process
is a return on investment that varies where you have seen RPA in action?
between 30 and as much as 200 percent
in the first year. But its wrong to look just at
the short-term financial gainsparticularly To get started with
if those are simply a result of labor savings.
That approach does not do justice to the
RPA, you have to
power of the software because there are
multiple business benefits.
pick the right process.
It has to be stable,
For example, companies in highly
regulated industries such as insurance mature, optimized,
and banking are finding that automation is
a cheap and fast way of applying superior
rules-based,
capability to the problem of compliance.
You also get better customer service
repetitive, and usually
because youve got more power in high-volume.
the process. A company that receives
lots of customer inquiries, for example,
can free staff to deal with the more Leslie Willcocks: In an insurer we
complex questions. studied, there was a particular process
where it used to take two days to handle
There are benefits for employees, too. 500 premium advice notes. It now takes
In every case we looked at, people 30 minutes. It worked like this: a range of
welcomed the technology because brokers would write business for clients,
they hated the tasks that the machines and there was a central repository into
now do and it relieved them of the rising which the business written had to go, and
pressure of work. Every organization a process that someone had to manage
we have studied reports that it is dealing to get the premium advice note from the
with bigger workloads. I think there will broker into the repository. A number of
be an exponential amount of work to operations had to occur for that advice
match the exponential increase in data note to be fully populated by all the data,
50 percent more each year. There is also and the process operator might find that
a massive increase in audit regulation the data had not been completely filled
and bureaucracy. We need automation out, perhaps because the advice note

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wasnt structured very well. So the data gradually you educate and configure
had to be structured to standardize it so the RPA to do more and more work.
that it could be a common document Eventually it can do 90 or 95 percent of
like all the other advice notes. And if any the work and very few exceptions have
data was missing, that person might to be dealt with by a human.
have had to go back to the broker, or add
things from the systems of record in the McKinsey: What are the most
back office. Then, once the note was important considerations for those
complete and signed off by the process wishing to adopt RPA?
operator, it went into the repository.
Leslie Willcocks: The most important
consideration is strategy. You can use
In an insurer we automation tactically for cost savings.

studied, there was But if you use RPA as a broader strategic


tool, you get a lot more out of it. Thats
a particular process number one. Number two concerns
the launch. You need to get the C-suite
where it used to take involved and appoint a really good
project champion, and you have to
two days to handle pick the right process. It has to be

500 premium advice stable, mature, optimized, rules-based,


repetitive, and usually high-volume. Start
notes. It now takes with a controlled experiment on a visible
bottleneck or pain point.
30 minutes.
The third consideration is change
managementpersuading the
Now a lot of that sort of work can be organization to change and adopt
automated. But some of it requires automation. It is a key issue from the
human intervention, human reasoning, outset. And the fourth is building a
judgment. So an RPA engineer would mature enterprise capability for RPA.
look at that type of process and say, Long-term users have built centers of
Which bit can we automate? The excellence over time, usually within
answer is not everythingit cant business operations, and developed
structure the data. There may at skills and capabilities within that center.
some stage be cognitive automation They have people who assess the
technology that could structure the data feasibility of a proposal from a business
but RPA cant, so the human being has unit. They have people who configure
to structure the data at the front end a robot, install it, and develop it, and
and create a pro forma ideal advice controllers who switch it on and off,
note. Clearly, the RPA cant deal with and plan its work and how it fits with
exceptions either. The engineer has to human work. They have some sort of
intervene and look at the exceptions and continuous improvement capability and
create a rule to deal with them, so that relationships with IT, governance, and

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security. Organizations signing up to RPA tool is usable, cheap, and doesnt require
now should probably think about building much IT skill to implement its a no-brainer
a center of excellence immediately. for the average operator in a business unit.
The reason IT gets worried is that they
McKinsey: How do companies choose know the disruptive, potentially disastrous
whether to implement an IT solution or effects of people playing around with IT in
RPA? And how do the two departments the organization and not understanding
work together? how its going to upset infrastructure,
governance, security, and all the important
Leslie Willcocks: When organizations touchpoints that IT is held responsible
consider proof of concept for RPA, they for. So its not surprising to find IT
look at the business case and compare functions in denial about RPA and what
it to an IT solution. Often thats pretty it can do. Its crucial therefore that IT is
unflattering for IT. In one organization we brought on board early.
looked at, the return on investment for
RPA was about 200 percent in the first McKinsey: What do you think will
year and they could implement it within be the long-term impact of robotic
three months. The IT solution did the process automation?
same thing but with a three-year payback
period and it was going to take nine Leslie Willcocks: In the longer term,
months to implement. RPA means people will have more
interesting work. For 130 years weve
been making jobs uninteresting and
In the longer term, deskilled. The evidence is that its not

RPA means people whole jobs that will be lost but parts of
jobs, and you can reassemble work
will have more into different types of jobs. It will be
disruptive but organizations should be
interesting work. able to absorb that level of change. The
relationship between technology and
For 130 years weve people has to change in the future for the

been making jobs better and I think RPA is one of the great
tools to enable that change.
uninteresting and
deskilled. Leslie Willcocks, professor of
technology, work, and globalization
at the London School of Economics
In addition, many business operations find Department of Management, was
going through IT frustrating because its so speaking to Xavier Lhuer, an associate
busy. Often the business wants something partner in McKinseys London office.
relatively small, but the IT function has
bigger fish to fry and the business has to Copyright 2017 McKinsey & Company.
go to the back of the queue. So if an RPA All rights reserved.