We are now entering RPA 3.0 or the 3rd wave of automation, where Artificial Intelligence (AI), Machine Learning (ML), scale-based automation and customer experience (CX) are spoken about together/interchangeably. The 1st wave of automation (RPA 1.0) was more of a rule-based process automation; and RPA 2.0 or the 2nd wave of automation was about task and complexity automation. The concept of RPA 3.0 becomes all the more important if we look at the rate at which the RPA market is expanding today, i.e. a $1.1 billion market in 2017 is expected to reach $8.6 billion by 2023, growing at a CAGR of 36.2% during 2018-2023 .
The RPA market has witnessed a state of crescendo in the last 2-3 years with multiple leading technology vendors and IT/BPM providers. For Business Process Management (BPM) or IT service providers, a multitude of factors are crucial today while they deal with clients. They are required to deliver more than their SLAs and need to look beyond the traditional Customer Value Model (CVM), Customer Satisfaction (CSAT) or Net Promoter (NPS) scores for thriving amidst guarded competition.
Figure 1 is indicative of how client expectations from the IT/BPM vendors have changed with times. It is important that an organization ensures that it receives apt support and services for effective RPA implementation.
We propose a balanced 10-factor weighted linear equation for a holistic vendor evaluation approach in this rapidly changing RPA world.
Existing vendor valuation models
While topline (revenue) and bottom-line (margins) are being accounted by businesses, only a few of them today are able to quantify the value delivered scientifically, especially across shared services, and then map it to the overall strategic and operational blueprints for their businesses. Existing models try to study this in detail, for e.g. the CLV or VLV (cus-tomer/vendor lifetime value) and Net Present Value (NPV). These calculation processes use forecasts of revenues, estimated cost of delivering value, potential of future value etc. or vendor profitability that takes into account the profit a client makes over a sustained period of time, say 5 or 10 years. While all of these are vital and still valid, clients today are expected to go beyond these attempted models in the future.
Model for holistic vendor valuation
The model envisages itself from a client perspective and takes into consideration ten factors that are measurable and can yield to an all-inclusive model of valuation (See Figure 2).