It’s not hard to develop a business case for digital labor and robotic process automation (RPA) that shows attractive returns. But will it be accurate? Often, many financial institutions don’t see the results they expect. Without knowing their true pain points or support requirements, companies will miss out on ways to scale the benefits, and they’ll leave money on the table. With a realistic roadmap, you won’t be surprised by hidden costs, and you’ll apply digital labor where it can have the greatest effect.
While financial institutions are attracted to appeals of digital labor from software providers and business process outsourcers, many financial institutions are facing an unpleasant reality: the savings they’re seeing are nowhere near the savings they’ve budgeted for.
There are two complementary factors at work here:
- Budgets were unrealistic, because financial institutions didn’t adequately address digital labor’s cost drivers
- The value from digital labor inevitably comes from applying it strategically and consistently, rather than rushing into a narrowly defined technology implementation
Know your costs
Digital labor projects are likely to face a variety of contingencies. They’re all solvable, but they all involve additional cost and overhead. Digital labor projects include a mixture of costs whether you own the tools or you outsource the operation. By setting appropriate expectations at the start of your digital labor projects and having a clear-eyed assessment of what your costs will be, you are in the best position to make better decisions as the project proceeds.
Getting the most value from digital labor
Based on our experience, you can use a general ratio of 2-2.5 full-time equivalent (FTE) per robot, depending on scale. This being said, you won’t see an adequate return on investment if you merely free up a few hours in a person’s week. If you can restack some activities across roles so they can be automated more consistently, you’ll be more likely to free up the FTEs you budgeted for. Furthermore, to scale a digital labor program you need to look at it in the context of your overall operational strategy. Otherwise, you can get stuck with antiquated processes or systems that you’ve intended to phase out, which can kill your ROI.
Developing the business case
Most large financial institutions we know have implemented one or more small proof-of-concept projects, but they typically haven’t made the jump to broader adoption. So how do you develop a realistic business case? By understanding the reasons why companies don’t see full savings from digital labor and implementing a realistic roadmap, you’ll be able to apply the technology where it can have the greatest effect.