Robotic Process Automation (RPA) and Artificial Intelligence (AI) are holding center stage in many boardroom discussions around disruptive technologies. The impact of these two technologies is percolating far beyond mere margin and productivity improvements and standardization of tasks to generating topline efficiencies and even enhancing end customer experiences.
An internal Wipro research reveals that RPA & AI are going to grow at a CAGR of ~44% from 2018-2024 respectively.
Let us now examine the penetration of these two technologies across industry horizontals, such as Finance & Accounting (F&A), Human Resources (HR), Technology Platform Services (TPS), back office contact centers, Supply Chain Management (SCM), Procurement, Order Management (OM), Industry Specific domain businesses (ISDB) etc. to understand the relative adoption rates. As per a Wipro internal research and Everest group research 1 (Figure 1: Penetration of RPA & AI across horizontals), it is observed that F&A remains the most penetrated industry horizontal currently, followed by ISDB and TPS, while SCM, Procure-ment & OM remain the most underpenetrated horizontals.
Considering that the market for RPA & AI in Supply chain management, procurement & order management are still relatively underpenetrated, it appears to be a bright spot in the AI & RPA roadmap.
RPA & AI evolution
The fact that there is low penetration within these segments can also be examined based on the different phases of growth that we are seeing for RPA & AI today.
Currently, the market is in a zone somewhere between basic RPA service and cognitive RPA (Figure 2: RPA & AI progression roadmap).
Yet, it is expected that the industry will soon tend to move towards Intelligent RPA. Basic RPA is applicable to businesses with a relatively low Business
Automation Maturity (BAM), typically characterized by businesses that are figuring how to venture into automation considering the breadth of processes. While Cognitive RPA can be correlated with a medium automation maturity, where organizations think about being task driven and envisage the need for
reconfiguring applications, the subsequent wave of RPA & AI is known as Intelligent RPA. This stage of RPA & AI is characterized with high automation maturity - where organizations are driven by business conclusions and actions, and think of reconfiguring complete IT and business landscape.
Figure 1: Penetration of RPA & AI across horizontals
Figure 2: RPA and AI progression roadmap
Potential of RPA & AI in SCM, Procurement, and Order Management
Let’s test a couple of hypothesis that can be tested to further examine the potential for AI and RPA adoption within the three horizontals defined, i.e. SCM, procurement & order management.
Hypothesis (b), more or less stands validated, apparently from the fact that the penetration levels are very high in these set of areas. In regards to the hypothesis (a), a recent study by ISG2 shows that automation technologies can allow up to a 43% reduction in resources for order-to-cash processes, 34% for invoicing, and 32% for vendor and talent management.
Further insights by ISG3 shows that the greatest impact is envisaged on customer services and order-processing functions (43 percent), followed by procurement, logistics and supply chain (40 percent), and sales-marketing func-tions (38 percent). Transforming SCM, Order Management & Procurement becomes para-mount when there are value creation points4 such as improved cycle time by 25-50% and processing time by 15-45%, and elimination of 40-60% of manual effort, possible because of automation and streamlining processes with envisaged benefits leading to 20-40% improve-ments in the data collation and administration effort involved in supply and demand planning.
For validating hypothesis (a), consider some*5 of the following use cases in SCM, procurement & Order Management, where RPA & AI could make a further difference:
While the above are only indicative use cases, consider the following heat map (Figure 3: use cases heat map) to understand the gamut of offerings RPA & AI could further encompass. The heat map below covers an indicative area of offerings within the SCM, OM & Procurement domain and it is only indicative but not exhaustive.
Based on the indicative use cases and the heat map, it is evident that the segments of SCM, Procurement & Order Management have enough potential that can be tapped by RPA & AI together.
Figure 3: Use cases heat map
Figure 4: Use cases & adoption heat map
The way ahead
Procurement & Order Management seem to be in the curve of growth marked by a breadth of use cases and a low adoption, while SCM could be currently categorized by the curve of infancy marked by a relatively lower breadth of use cases and lower envisaged industry adoption and the current state is only aimed for the subsequent state, i.e. the curve of maturity. This is only indicative of the immense growth potential that lies ahead for the SCM, Procurement & Order Management domains and sooner the adoption, the greater is the possibility of additional use cases emerging in the industry. The SCM, Procurement and Order Management areas are potential goldmines in terms of the opportunities they provide to derive benefits from disruptive technologies like RPA and AI, and organizations that proactively start investing in these areas will be better-positioned than their competitors in their transformation journey.
1. https://www2.everestgrp.com/Files/previews/Everest%20Group%20%20RPA%20%20Technology%20Vendor%20Profile%20Compendium%202018%20-%20Complimentary%20Abstract.pdf & Wipro internal research on automation whitespaces,October 2018
5. Only indicative of a larger potential and not exhaustive
Senior Manager,Enterprise Operations Transformation
Mehul brings in 11 years of rich experience dealing with CXO level client executives in Fortune 100 organizations across domains such as Digital transformation, Corporate & Business strategy, B2B/B2C Consulting, Marketing, Pre-sales & Operations.