Andrew Pery, Chief Marketing Officer, Top Image Systems, discusses robotics process automation with Ken Murphy of SAPinsider. Below is a transcript of the conversation.
Ken Murphy, SAPinsider: Hi, this is Ken Murphy with SAPinsider, and I am joined on today’s podcast by Andrew Pery, Chief Marketing Officer, Top Image Systems. Andrew is here to discuss robotic process automation, and what it means for the SAP customer. Andrew, thank you for joining me today.
Andrew Pery, Top Image Systems: Thank you so much, it’s a pleasure.
Ken: Andrew, I was hoping we could get started with a description on what robotics process automation is; my understanding is that it’s a new phenomenon and I’m wondering if you can separate the hype from what this means as a trend – is it something that SAP organizations need to be aware of?
Andrew: Indeed, and when you look at robotics process automation there are some misconceptions around it. Robotics process automation is about automating highly repetitive, labor-intensive, and high-volume business processes that span across transactional business processes such as accounts payable as well as human-centric business processes such as onboarding employees, and customer response management.
In the context of transactional business processes, many organizations already use some form of robotics process automation; that is, capturing for example vendor invoices from multiple channels, automating the invoice capture process to extract the invoice line-item information and header information from invoices, automating that process. Also to extract various other information from those invoices and feeding that information into a workflow for either workflow approval, exceptions handling, or straight-through payment of those invoices.
So robotics process automation is a relatively new buzz-word. It’s been around for the last couple of years, but when you drill down into it it’s really the automation of highly labor-intensive tasks that enable for example accounts payable professionals to focus on higher-value transactions, higher-value business processes, and eliminating errors in the process and as a result of that significantly reduce transaction costs associated with the capture of incoming vendor invoices and at the same time to accelerate the payment of those invoices.
Ken: And so how then does robotic process automation extend or enhance some existing business process automation in the organization?
Andrew: There are several steps and I’ll speak in the context of accounts payable automation where process efficiency movements can be realized. First, on the capture of vendor invoices it’s in many cases, invoices coming from multiple channels and often it’s coming in a paper format or it’s an email with a PDF attachment. In order to remove potential errors in the first stage of invoice processing – the capturing of those invoices – automating that process enables organizations to increase throughput of incoming invoices on the one hand. Secondly is to reduce the number of potential errors by applying more advanced automation of invoice capture. That information can be captured effectively and efficiently. Also then once that information is captured and digitized, then it can be matched against the vendor master file making sure that the AP organization can complete three-way matching of incoming invoices, reduce those errors, and accelerate the processing of those invoices for payment, so for example PO-based invoices typically organizations can implement straight-through touch-less processing of PO-based vendor invoices which then can reduce the invoice processing time. Typically, a manual-based invoice processing can take as long as 28-30 days to process and would cost $15-$25 per invoice. With automating the capture of those invoices, those transactions can be significantly reduced to two days to turn around an invoice, as well as to reduce the costs to $1-$2 per invoice. So that’s on the capture side.
The second step is really the workflow automation; and that is the ability to process those incoming invoices that have been captured, automate the workflow, escalate, for example, invoice exceptions to the right person within the accounts payable organization and being able to route that information for the appropriate person for approval and ultimately for payment.
Ken: Can you provide an example or two of how companies are implementing robotics today and maybe just go into what the quickest wins might be?
Andrew: There are several areas where organizations are implementing robotics process automation. One, is intelligent capture and classification of incoming invoices. And that means applying Optical Character Recognition technologies or what’s called OCR technology. Organizations can automate the capture of invoices from multiple channels and they can process these invoices in high volume. The second is the automated workflow process, so automating typically highly repetitive labor-intensive processes for escalation and for approval is the second area where robotics process automation has been implemented, so workflow automation. And then thirdly is analytics and reporting where organizations can effectively generate reports and insight into the status of those invoices, how long does it take to process an invoice, to look at invoice volumes, looking at the throughput, how long does it take to process an invoice from initial capture to payment, and so these are the three critical areas where organizations are implementing robotics process automation to support their accounts payable processes.
Ken: I also wanted to ask you specifically about SAP organizations and what an SAP organization stands to gain from implementing robotics process automation?
Andrew: And that’s essentially the ability to integrate with the SAP back-end environment so when you implement accounts payable automation it’s an added-value if the applications sits inside SAP. So the accounts payable professional who lives within a familiar SAP-user environment can within the SAP environment capture incoming vendor invoices, can initiate a workflow within SAP to route the incoming invoices for review and approval, and directly integrate the capture and workflow process into the SAP environment for three-way matching, master data management, master data lookup, reporting and analytics. So it’s really a way for organizations to fully leverage the SAP implementation for specific applications such as accounts payable automation, and the other end for purchase order management, requisition management, and also from the payment side to accelerate invoice payment.
Ken: You touched on misconceptions as far as a definition for what robotics process automation is. To expand on that, are there other misconceptions?
Andrew: One of the fundamental misconceptions about robotics process automation is the misconception that it actually replaces human labor. And nothing could be further from the truth. What it does is to enable and empower people to be more efficient and more effective in the way that they deliver services to their constituency of customers and suppliers and partners. On the one hand, it frees for example accounts payable and staff from having to deal with highly labor-intensive, error-prone processes to manage large volumes of incoming invoices that can be effectively automated, which then means that the accounts payable organization can be repurposed to focus on higher-value exceptions, for example, to improve supplier relations, to be able to have better visibility into the status of suppliers; who are the most effective, preferred valued suppliers that they can extend early payment discounts to? So robotics process automation is really an invaluable tool to make accounts payable professionals more effective, more productive. Secondly, there is a misconception that robotics process automation is really putting in robots into organizations, but the reference to robotics process automation is a software application, software tool, specifically designed to address business process automation specifically for these high-volume, highly repetitive error-prone tasks that can be easily automated with rules-based business processes such as intelligent capture of incoming invoices, or implementing automated workflows to help the accounts payable professional to manage the volume of invoices in an automated fashion, to be able to route that information to the appropriate person in the organization for review and approval. And then lastly is to provide the analytics and reporting to empower the CFO and treasurer to gain better and more ti
mely access to this information so that they can make more informed, business decisions.
Ken: Andrew how does a company then go about building a business case, or proving out an ROI?
Andrew: It depends on their maturity in terms of how they apply and utilize technology. If the organization is predominantly manual for example in their accounts payable business processes, the first area where they can realize substantial benefits and return on investment is on the invoice capture side, and that is to automate the incoming invoice capturing process and reduce the level of paper-based processing of incoming invoices. That directly impacts transaction costs, and it directly impacts efficiency. The second area is workflow automation, and that is to look at how you can improve and accelerate business processes within an organization by implementing automated workflows so that the end result is touchless, straight-through processing of PO-based invoices which obviously has significant impact on productivity and efficiency and reduced transaction costs. Lastly, is look at the ROI associated with insight and reporting and analytics. To what extent by having more efficient and timely access to accounts payable information, how does that empower the organization to extend early-payment discounts? And by doing so and extending early-payment discounts, organizations can establish metrics for determining a return on invested capital because if you can extend early-payment discounts it means that your cost of goods are lower and therefore you become more profitable that way.
Ken: And lastly Andrew, where can a listener go to get more information or learn more about robotics process automation?
Andrew: Any interested person can come to our website, topimagesystems.com, and they can directly go to either the resources page on the website or to our blog page and there’s a lot of useful material that I think the audience will find helpful.
Ken: Andrew, thank you for joining us today.
Andrew: My pleasure, thank you so much for the opportunity.
Ken: Again, this is Ken Murphy with SAPinsider and we’ve been chatting with Andrew Pery, the Chief Marketing Officer of Top Image Systems.