Robotics Process Automation
Powering the growth of Malaysia’s SMEs
Malaysia’s productivity has already started to slow, declining by 3.60 percent in December 2017, with the government at the time pushing to address this challenge by providing additional skills training and investing in technology. One solution has emerged that is almost tailor-made for Malaysia: RPA.
Approximately 80 percent of the ASEAN population is in favour of having technology in their everyday lives. This can be observed in initiatives from countries such as Malaysia setting up the world’s first Digital Free Trade Zone in 2017, Thailand having a multi-year blueprint to develop digital capabilities and Vietnam
being busy investing in digital infrastructure.
Alongside the launch of the Malaysia Productivity Blueprint last year, which targets an annual labour productivity growth of 3.7 percent by 2020, RPA comes into play to complement this initiative by automating many of the repetitive, rules-based tasks that are currently carried out by employees in Malaysia’s largest companies, many of whom are young graduates embarking on their careers.
"With RPA freeing employees from these repetitive tasks, companies can redeploy them to be much more value added. By embarking on their careers higher up the value chain, employee productivity will indeed grow exponentially, leading to knock-on effects throughout the organisations that they have joined."
Daniel Dines, General Manager of PDC
The Rise of RPA
There are a few of the primary reasons why many firms are turning to RPA to automate some of their most inefficient processes. Much of the legacy IT infrastructure in many institutions that was built decades ago is now creaking under pressure of demand for transparency, increased regulation and growth of newer technology. Due to being slow and very difficult to automate as they run on outdated codes that few people understand anymore, companies seek to hire human employees to carry out tasks that ought to be completed by a computer, thereby injecting human error into the industry.
In 2012, global financial giant JPMorgan Chase & Co lost US$6.2 billion in a trading incident that came to be known as the ‘London Whale’. Although subsequent reviews depicted faults in the bank’s oversight and review processes, in actuality, the main reason was a basic human error in an Excel spreadsheet, which led the bank to underestimate volatility, in turn resulting in the debacle. Like many other Wall Street banks, JPMorgan Chase & Co depended on Excel for their VaR (Value at Risk) model,as their own IT systems wereunable to do it.
Minus the capital and will to initiate wholesale upgrades to their IT infrastructure, financial institutions are forced to rely on staff to carry out basic, monotonous tasks that should easily be automated. For example, an entire cohort of economics graduates copying and pasting data from a PDF, shifting mortgage applications from one folder to another folder and even toggling credit card information between spreadsheets.
Besides incurring huge costs and inefficiencies, which affect the quality of financial services we receive, the repetitive and mundane nature of these tasks affect employee morale, therefore resulting in highly capable graduates boycotting the industry. Unfortunately, the finance industry serves only as a mere example as this predicament can be replicated across multiple industries, from insurance to telecoms and utilities.
Greater Savings and Efficiency
Therefore, implementing RPA goes beyond just cost savings and efficiency. A more compelling argument would be the greater value that it brings for staff. Malaysian graduates did not spend thousands of dollars and many years in their academic life, to copy and paste data from one program
In fact, people were simply not designed to carry out rules-based tasks as we get bored easily, increasing the probability of causing errors. We as humans, are blessed with creative thinking, innovation, intuition and problem-solving abilities among other skills. Research has also portrayed that jobs incorporating some or all of these skills will result in higher job satisfaction.
With RPA freeing employees from these repetitive tasks, companies can redeploy them to be much more value added. For example, accountants no longer need to serve as mere bean-counters. Instead, being armed with better data, they can look to acquire a much broader business outlook and become consultants who provide added value to clients.
By embarking on their careers higher up the value chain, employee productivity will indeed grow exponentially, leading to knock-on effects throughout the organisations that they have joined. Their skill levels will also be superior as compared to their counterparts who began their careers by doing these boring and simple tasks.
For larger banks,the automation ofstraightforward processes will not only speed up mortgage applications but will also enhance business services and generally make finance more accessible to more people, due to a lower cost of doing business. SMEs and start-ups, for example, will tend to have access to cheaper financial services, allowing them to redirect investments towards hiring the talent that they need for further growth and innovation.
A financial arm of a major global vehicle manufacturer, for example, employed UiPath’s RPA solutions to create scalability, facilitate 24/7 operations and eliminate manual errors, thus enabling employees to focus more on decision-oriented activities. The goal was to provide better data and insights and not to save costs.
The company’s accounts payable staff usually processed over 2,000 invoices a day. Upon implementing RPA, it was able to shave 65 percent – 75 percent off the time it took to process the same number of invoices. The staff were then able to spend more time to analyse and improve, instead of being forced to execute day-to-day transactional activities.
Automation technologies such as RPA do not come without a certain amount of disruption, yet current practices of employing qualified people to do repetitive and tedious duties is both wasteful and costly, especially when thereis a demand to leverage technology to improve productivity.