Business process automation (BPA), where technologies like virtual agents or cognitive engines built into software take over routine tasks, makes companies more efficient and agile. In the past few years, in fact, BPA projects have taken off, driven by leaders whose organizations are on the fast track to digitization—or who just want to free their people up for more creative, high-value pursuits.
BPA is not a specific technology or finite project. Rather, it’s an ongoing process of using technology to automate manual workflows, removing humans from the picture partially or completely. Most companies start with simpler tasks, like first-line customer service or T&E (travel and expense) routing, and progress from there once employees gain comfort.
Increasingly sophisticated software workflow engines are enabling companies to automate almost any type of horizontal business process, including demand planning, revenue forecasting, marketing, ERP, CRM, customer service and HR. Likewise, more advanced AI and machine learning, big data and robotic process automation (RPA) capabilities are enabling exciting industry-specific vertical BPA projects.
Let’s look at some of the more promising areas.
Automation Market
- Key stat: 31% of businesses have fully automated at least one function. —McKinsey
A 2020 global survey of business leaders from a wide cross-section of industries conducted by McKinsey & Co. found that 66% were piloting solutions to automate at least one business process, up from 57% two years earlier.
The percentage of companies that have fully automated at least one function, however, has grown more modestly, from 29% in 2018 to 31% in 2020.
Among companies that have successfully completed BPA projects, McKinsey says common threads include involving employees in training the automation systems and erring toward over-communicating: “Respondents from companies with successful efforts are seven times more likely than others to say they formally involve the communications function while implementing automation efforts, and they are more than twice as likely to say the HR function is involved.”
That makes sense, because employees worried about automation making them redundant will at best have lower morale; at worst, they may attempt to subvert the effort.
Artificial intelligence (AI) and machine learning have provided further fuel for market advances in automation, enabling commercially viable products and services that can automate a growing number of routine business processes. For example, modern SaaS (software-as-a-service) solutions offer a simplified approach to automating manual processes and workflows throughout an organization and across businesses.
The tasks companies tend to automate first are routine processes that involve repetitive functions, such as routing customer queries and purchase orders, generating reports and automating routine steps in AP (accounts payable) processing. In fact, many companies start their BPA initiatives in finance, often with accounts payable automation.
AP teams first replaced recurring, manual, paper-based functions with digital records routed for approval electronically—managers authorized to approve requisitions in a workflow received email alerts or prompts to log in to a system and review forms. Now, advances in automation and machine learning make it even easier to fully automate the approval process based on predefined rules and policies.
Read more:
McKinsey & Co.: The imperatives for automation success(opens in new tab)
McKinsey & Co.: The automation imperative(opens in new
tab)
NetSuite: 10 Accounts Payable Automation Best
Practices
Business Process Management vs Business Process Automation
- Key stat: 62% of organizations have up to 25% of their business processes modeled, but just 2% of the organizations surveyed have all of their processes modeled. —Signavio
Business process automation (BPA) and business process management (BPM) are related but not the same. BPM is considered a business practice that involves a formalized, organizational methodology based on an established path for efficient and effective management of all processes.
The Association for Information and Image Management (AIIM) says that successfully employing BPM(opens in new tab) requires organizing around outcomes and standardizing processes. Before automating processes, BPM also improves them—a crucial step to avoid simply moving flawed routines from manual to automated executions.
Business process management was a $3.38 billion market in 2019, and Mordor Intelligence projects a CAGR of 6.26%, with sales reaching $4.78 by 2025. Mordor’s 2020 forecast also points to the impact of COVID-19, which has exposed weaknesses in many companies’ supply chains and business processes.
Although BPM is a business practice, those implementing it use specialized BPM tools(opens in new tab) to model their processes and then optimize, automate and measure them. In fact, “automation” is the operative term when it comes to recurring tasks that require some form of decision-making.
BPA is complementary to, and has interdependencies with, other forms of automation that are also taking off:
- Robotic process automation (RPA) uses bots to mimic routine cognitive human tasks. The RPA market, valued at $1.4 billion in 2019, is forecast to grow at a CAGR of 40.6% between 2020 and 2027, according to Grand View Research.
- Digital process automation (DPA) is a relatively new variant of BPM that is more lightweight and requires less coding. In 2019, DPA was a $7.8 billion market; it’s forecast by Mordor Research to grow at a CAGR of 13%, reaching $16.12 billion by 2025.
Read more:
Signavio: The State of Business Process Management 2020
Mordor Intelligence: Business Process Management Market - Growth, Trends, And Forecasts (2020
- 2025)(opens in new tab)
Grand View Research: Robotic Process Automation Market Size, Share & Trends Analysis
Report(opens in new tab)
Demand
- Key stat: The supply chain management (SCM) market is expected to grow from $15.85 billion in 2019 to $37.41 billion by 2027, a CAGR of 11.2%. —Allied Market Research
The key to effective supply chain management (SCM) is demand planning, the process of accurately predicting which goods customers will order, and at what volume. Overestimating demand results in excess inventory, while underestimating leads to lost sales and dissatisfied customers.
Factors that can influence demand forecasts include weather, economic climate, tariffs, currency fluctuations and a variety of other disruptions. Some can be factored in with solid product portfolio management and forecasting, but manual estimates are laborious.
Enter modern ERP systems, which include SCM automation capabilities that deliver real-time decision-making for demand planning. Advances in AI, machine learning and predictive analytics and the use of sensors also provide much better visibility.
For example, one large logistics company added a demand forecasting framework and was able to produce 35 million forecasts based on data from 2,000 locations. A case study(opens in new tab) conducted by consulting firm Elder Research found that forecasts during the four-week study delivered a median accuracy rate of 88%.
Read more:
Allied Market Research: Supply Chain Management Market Expected to Reach $37.41 Billion by
2027(opens in new tab)
Revenue Recognition
- Key stat: The global market for accounting software is forecast to grow at a CAGR of 8.02% from 2018 to 2026, increasing from $11 billion to $20.4 billion. —Fortune Business Insights
Revenue recognition automation capabilities in accounting software are designed to offload manual tasks involved in gathering and calculating when revenue is recognized. In addition to simplifying the process, automating revenue recognition cycles reduces the risk of errors and fraud, ensures compliance and speeds decision-making by providing data in near real time.
That’s about to become more important. While the Financial Accounting Standards Board (FASB) delayed the deadline for ASC 606(opens in new tab) compliance for non-public businesses until companies’ fiscal years beginning Dec. 15, 2021, new requirements are on the way. The purpose of the change, according to the FASB, is to make it easier to compare revenue recognition practices across entities, industries, jurisdictions and capital markets while bringing more useful information to financial statements by requiring improved disclosures.
Automation will make compliance easier and more accurate. No wonder the global market for accounting software is forecast to grow at a CAGR of 8.02% from 2018 to 2026, increasing from $11 billion to $20.4 billion. Companies that don’t automate will soon be at a disadvantage.
Read more:
Fortune Business Insights: Accounting Software Market Size, Share and Industry Analysis(opens in new tab)
Productivity and Time Management
- Key stat: In early May 2020, U.S. employee engagement advanced to a new high of 38%. —Gallup
Improving worker productivity is a top driver for technology investments, including automation. But results have been mixed.
Overall, U.S. productivity growth(opens in new tab) clocked in at a paltry 1.4% between 2007 and 2019, according to the Bureau of Labor Statistics. In the manufacturing sector, growth has increased only 0.5% since the financial crisis, falling sharply from 4.4%.
Clearly, there are fundamental issues holding back productivity. A few areas to consider:
- Gallup says that high-performing employees have three things in common: talent, high engagement and 10-plus years of longevity with their employers.
- Among Millennials, 43% envision leaving their jobs within two years, while only 28% see themselves staying beyond five years, according to Deloitte.
- By 2030, 85 million jobs could be unfilled globally because there aren’t enough skilled people, writes consultancy Korn Ferry. That could result in $8.5 trillion in unrealized annual revenues.
- The productivity software market, which includes office and collaboration applications, was forecast to reach nearly $62 billion in 2020, with revenue predicted to increase at a CAGR of 6.8%, reaching $85 billion by 2025, says Statista.
Automation projects can lead to increased engagement by shifting to technology the sort of rote tasks that keep people from picking up more interesting work or devoting time to skills development exercises that may boost productivity.
McKinsey estimates that, in about 60% of occupations, at least one-third of workday activities could be automated. When considering productivity and time management, not to mention payroll, tax compliance and reporting and AP, ensure automation is part of the conversation. Your employees will thank you—a recent survey of more than 6,000 knowledge workers by ServiceNow shows that that BPA boosts not only productivity but satisfaction.
And the smarter this technology gets, the higher up the work stack it’s moving.
Read more:Gallup: U.S. Employee Engagement Reverts Back to Pre-COVID-19 Levels(opens in new tab)
Deloitte: 2018 Deloitte Millennial Survey(opens in new tab)
Korn Ferry: The $8.5 Trillion Talent Shortage(opens in new tab)
Statista: Productivity Software Market Outlook(opens in new tab)
McKinsey & Co.: Jobs lost, jobs gained: What the future of work will mean for jobs, skills, and wages(opens in new tab)
ServiceNow: Productivity depends on people(opens in new tab)
AI & Machine Learning
- Key stat: 60% of retail respondents have implementation AI, up from 35% during the prior year, making it the industry with the sharpest increase. —McKinsey
Advances in AI and machine learning are key enablers of BPA. While people tend to use the terms interchangeably, that’s incorrect.(opens in new tab)
AI is the overarching science of creating intelligent software, bots and machines that can take on the decision-making and problem-solving functions performed by humans today.
Machine learning is one of many subsets of AI but the most critical because it employs algorithms and neural networks to gather massive amounts of data, including telemetry from sensors and other endpoints, to make decisions and/or execute tasks.
Other fast-maturing forms of ML- and AI-driven automation include natural language processing (NLP), robotic process automation,(opens in new tab) virtual agents (conversational interfaces), autonomous vehicles and human-like robots. Industries that have emerged as aggressive adopters of AI include financial services, IT and cybersecurity, insurance and pharma.
Still, use of true AI in BPA is relatively low, though it has accelerated considerably in recent years, with enterprise AI adoption up 25%, according to McKinsey’s 2019 Global AI survey.
Among its key findings:
- 63% of those that have implemented AI say that it contributed to increased revenues.
- 58% embedded at least one AI element into a process or product, up from 47% in 2018.
- 30% incorporated AI across business units, an increase from 21%.
As the COVID-19 pandemic of 2020 unfolded, many organizations accelerated their AI implementations. Three months after the outbreak, McKinsey conducted a separate survey. Among 800 executives, half were from the United States, with the remainder hailing from seven other countries.
Since the outbreak, McKinsey found that 88% of finance and insurance executives and 76% of those in IT have accelerated their implementations of automation and artificial intelligence. These industries were already leaders in the shift to automation and digitization before the pandemic. Hence, companies in these sectors were well-positioned to accelerate their implementations.
A Deloitte survey of 1,900 companies confirms some trends around use of AI to improve operations and decision-making while reducing the time spent on mundane tasks.
Respondents ranked the Top 9 benefits AI has delivered:
- Enhance products and services: 43%
- Optimize internal business operations: 41%
- Make better decisions: 34%
- Automate tasks, enabling employees to become more creative: 31%
- Optimized external processes: 31%
- Create new products: 28%
- Pursue new markets: 27%
- Capture and apply knowledge that is hard to otherwise attain: 26%
- Apply automation to reduce headcount: 24%
Read more:
McKinsey & Co.: 2019 Global AI Survey
McKinsey & Co.: What 800 executives envision for the postpandemic workforce(opens in new tab)
Deloitte: Talent and workforce effects in the age of AI
Workflow & Automation
- Key stat: Digitization and a focus on streamlining business processes is accelerating demand for modern workflow automation management systems, a market forecast to increase from $4.8 billion in 2018 to more than $26 billion in 2025. —Grand View Research
Companies have used software to automate business workflows for decades, but AI allows rules engines to replace manual approvals by triggering events automatically.
Modern workflow management solutions use machine learning to improve on how companies automate such processes as approving sales discounts, authorizing employee T&E expenses and intelligently responding to customer queries. Digitization and a focus on streamlining business processes is accelerating demand for modern workflow automation management systems, which Grand View expects to show a CAGR of 27.7% through 2025.
One popular project: Bringing automation to the supply chain.
- In late 2019, a report forecast that the supply chain AI market was poised to grow at a CAGR of 39.4% through 2027. But months after the COVID-19 pandemic struck, Meticulous Research raised that forecast to an even more eye-opening 45.3%, with the market reaching $21.8 billion in less than seven years.
Read more:
Grand View Research: Workflow Management System Market Size, Share & Trends
Analysis(opens in new tab)
Meticulous Research: Artificial Intelligence (AI) in Supply Chain
Market(opens in new tab)
Big Data
- Key stat: 64.8% of businesses planned to invest more than $50 million in big data and AI initiatives in 2020, up from 39.7% in 2018. —New Vantage Partners
The key to successful BPA is the ability to capture all the data relevant to the entirety of a business process. Given he complexity of some processes, that requires the ability to parse massive amounts of structured and unstructured information—big data.
Fortunately, advances in big data processing are giving companies confidence in automated decision-making.
Big data is also the underlying engine that enables AI, which drives advanced BPA initiatives. A recent executive survey from New Vantage Partners shows that:
- 65% of businesses planned to invest more than $50 million in big data and AI initiatives in 2020, up from 40% in 2018
- While only 38% have created data-driven organizations, 27% have successfully created “data cultures” within their companies.
- 91% cited people and process challenges as the largest barriers to evolving into data-driven organizations.
We suspect that’s something CFOs can relate to.
Robotic Process Automation (RPA)
- Key stat: 88% of corporate controllers expect to implement RPA in 2021, though many are hesitant to use it for financial reporting. —Gartner
RPA is the automation of repeatable human tasks with software-based robots, commonly known as “bots.”
Each bot, once programmed with machine learning and rules engines, performs a task that was once executed by a human. While most of us think of customer service chatbots here, a growing horizontal market for RPA is in automating financial reporting processes.
RPA could save finance teams 25,000 hours of avoidable rework from human errors, at a cost savings of $878,000, according to research firm Gartner. Still, a study found that only 29% of chief accounting officers (CAOs) surveyed are using RPA for financial reporting.
The analyst firm, which is forecasting that the worldwide RPA market will grow 19.5% from 2019 to 2020, to nearly $2 billion, also predicts that:
- 90% of large organizations throughout the world will have adopted RPA in some form by 2022.
- Organizations will triple the capacity of their existing RPA portfolios.
- Half of all new RPA clients will be purchased by business managers outside of IT.
- Prices for RPA software will decrease 10% to 15% by the end of 2020 and 5% to 10% in 2021 and 2022.
Worldwide RPA Software Revenue (Millions of U.S. Dollars)
2019 | 2020 | 2021 | |
Revenue ($M) | 1,411.1 | 1,579.5 | 1,888.1 |
Growth (%) | 62.93 | 11.94 | 19.53 |
Source: Gartner (September 2020)
That suggests that this is a great time to explore the technology. CFOs may want partner with the heads of marketing and HR for pilot tests.
Read more:
Gartner: Robotic Process Automation Can Save Finance Departments 25,000 Hours of
Avoidable Work Annually(opens in new tab)
Gartner: Worldwide Robotic Process Automation Software Revenue to Reach Nearly $2
Billion in 2021
HR Automation
- Key stat: 25% of companies are using AI to screen resumes or job applications. —Littler
The global market for human resources management software is on the upswing. Also known as human capital management (HCM), modern cloud-based HRMSes use analytics to model everything from compensation and benefits to employee performance and allocation of labor. Investments in HR technology will soar between 2020 and 2022, according to a report by Gallagher, an insurance brokerage, risk management and consulting firm.
More than two-thirds, 69%, of HR execs surveyed said they will expand or replace their HR systems by 2022. According to the findings:
- Just 15% have holistic HR technology strategies aligned with their corporate goals.
- Still, 35% have implemented new HR technology with success since 2018.
- 29% use more than 75% of the capabilities provided in their systems.
A survey of HR professionals and C-suite executives by Littler found that, while AI is in use to screen applications, companies are not getting full value. Most, 69%, say they are not using these systems in their recruiting or hiring processes, for example.
That’s a missed opportunity. Attracting and retaining top talent, developing employees to reach their potential and automating tasks to improve the work experience were the top HR technology concerns in PwC’s 2020 HR Technology Survey, and AI can help with all of these.
It appears that companies are listening: Among the 600 HR and IT executives PwC surveyed, 74% expect to increase HR technology spending. Likewise, 72% said their core HR applications will be cloud-based by the end of 2020.
Read more:
Gallagher: 2020 HR Technology Pulse Survey U.S. Report(opens in new tab)
Littler: Annual Employer Survey 2019(opens in new
tab)
PwC: HR Technology Survey 2020
Marketing Automation
- Key stat: At an expected CAGR of 19%, the market marketing automation software market is forecast to reach $16.87 billion by 2025. —Mordor Intelligence
Marketers are all about adding new customers and gaining more business from existing buyers, along with establishing and maintaining brand awareness.
How that happens depends on the company and its customers. Is spending most effective on traditional advertising though various media, or is direct outreach via mail, email, web and social media the way to go?
Automation and advances in omnichannel marketing technology have enabled personalized and interactive forms of engagement, such that companies don’t need to guess, or even choose. They can take an “all of the above” tack using marketing automation software that mechanizes repetitive tasks, helps marketers customize and automate entire campaigns and provides data and results analysis.
In its report on the marketing automation software market, Mordor Intelligence adds that adopters find value in gathering leads and presenting personalized offers.
Read more:
Mordor Intelligence: Marketing Automation Software Market - Growth, Trends, Forecasts (2020 -
2025)(opens in new tab)
Improve Expense
Management
Efficiency
Customer Service Automation
- Key stat: By 2022, 70% of customer interactions will use machine learning technology in virtual agents, up from 15% in 2018. —Gartner
Virtual agents, also called chatbots, have evolved from a novelty to a common feature in customer service platforms.
Virtual agents allow businesses to reduce their reliance on customer service representatives and still deliver expedited support for routine inquiries. But research firm Gartner says there are still gotchas and advises companies to screen chatbot vendors carefully, ask about plans for voice-enabled bots and budget for ongoing maintenance and improvements.
Read more:
Gartner: Chatbots Will Appeal to Modern Workers
Finally, don’t think that BPA is only, or even mainly, for large companies. Smaller businesses can leverage automation in a wide spectrum of functions, from employee scheduling and expense management to call centers and the supply chain.