by Fabiano Rosa

Balancing the benefits of automation with third party risks

Jun 19, 2017
IDG EventsIT LeadershipIT Strategy

Current market pressures are demanding organizations to strike a balance between the value automation can bring and risks associated with it.rnrn

cloud automation job skills
Credit: Thinkstock

Over the recent months, many services providers have been deploying automation across their service delivery centers to ripe the benefits of a digital labor workforce. At the same time, organizations continue to face numerous third party regulatory requirements across many jurisdictions they must comply with.

The fact of the matter

Although well-implemented automation can drive greater benefits across the organization’s service delivery model, what is the right balance between value and risks in the marketplace?

At this point, the right answer is the one that does not create exposure to an organization’s reputation.

As we always look for alternative ways to enhance value, here are some ideas to consider prior to determining a course of action:

Define your digital strategy and where automation can be leveraged considering the organization’s risk appetite

Many organizations are developing digital strategies without having risk as one of the core foundational elements. In addition to it, automation is now a material factor being leveraged in order to generate and sustain competitive advantage in the marketplace. Significant challenges can arise in case risk is considered as an afterthought. For example, in case automation is being deployed through a series of service providers in multiple jurisdictions, it will be challenging to monitor the ongoing level of exposure an organization may face. Hence before implementing their digital strategies, companies should do their due diligence on their existing process, risk levels and procedures.

Understand the risks associated with automation across the different jurisdictions the organization operates from

The jurisdictional factor can be complex to manage depending on the type of activities automation is being used for. Many jurisdictions may have different perspectives on what type of controls shall exist/risks to be measured and by whom. A potential approach is the deployment of appropriate governance models taking into account the services contracted and levels of exposure/oversight required across different jurisdictions the organization does business. Without a clear roadmap of what is essential versus nice to have can lead the organization to incur on additional activities, processes and costs that otherwise could have been avoided in the first place.

Review your service provider’s agreements prior to adopting automation

Like other disruptors such as Cyber and Cloud, it is important for organizations to have appropriate commercial terms in place before considering automation services. That way, the organization’s interests and risks are aligned with the organization’s procurement, outsourcing, privacy and supplier-risk policies. The deployment of a Robotic Process Automation (RPA)-like environment should not create unnecessary exposure or challenges for the organizations that otherwise could have been prevented. Once a decision is made around the service provider(s), let the service providers work on the areas of expertise and collaborate as required. Evidence of performance and monitoring of service provider(s) is an activity organizations must continue to do regardless of technology disruptors such as Cloud, RPA and Artificial Intelligence (AI). 

Determine overlap between automation initiatives across the organization

It is common for different areas within an organization to work in silos. In order to determine its best course of action, a holistic approach aligned with the organization’s strategy should exist. This will enable the organization to identify overlaps and also promote collaboration from within. For example, many financial services organizations have similar projects being executed by different departments trying to achieve similar outcomes, (e.g. Cloud and RPA deployment). Also consider strategic sourcing principles around effective governance and economies of scale – as financial benefits and costs should be clearly stated.

Explore the idea of a RPA/AI proof of concept close to reality

Numerous proof of concepts are being run today by service providers in a very selected few cases and with certain constraints. This indeed helps to make the case for a RPA environment. Instead of taking this shortcut, a proof of concept should reflect “reality in real terms”. By investing more time upfront on a tangible proof of concept, organizations will be able to identify significant elements in order to effectively decide on how to make RPA work in their own environment. Failure to do so may lead in higher than expected capital costs – which can prevent the organization from obtaining of the financial benefits RPA can bring to its environment. 

Invest on change management from “day one”

In hyper-connected environment we live in, attention to detail and how customers embrace change can help the RPA initiative to achieve a higher level of success. Without understanding the significance of the change by the different “personas” involved, the organization will not be able to achieve its desirable outcomes. As such, investing in change management practices from the very beginning can the organization to reap the desirable benefits set on its strategy.

Do your homework in order to get the best solution to fit your needs

There are a great number of RPA service providers in the marketplace that are yet to become public. Understanding the service provider’s landscape and strategies can help the organization make an informative decision on how to partner either to an in-house, outsourced or software service delivery model. Compounded to that, assess the implications and risks leveraging the organization’s third party program, procurement policies and advisors as required. Losing the momentum due to lack of proper homework can have profound impact on the RPA initiative and its potential successes.

In conclusion

Leveraging technology where it makes sense has always been a mantra utilized by organizations globally over generations – this is no different with automation. The proper deployment of automated services can have a positive impact to an organization’s bottom line, as long as risks are effectively measured and assessed. Combined with it, look to determine the implications of a significant change like automation can create through a real proof of concept based on the organization’s existing environment and client needs. By taking a realistic approach the organization can establish a sustainable automation strategy across its enterprise while increasing the initiative levels of success internally and with clients.