Podcast Part 2: How RPA Can Pay for your ERP

The Tech Pro Unicorn talks about RPA and ERP, as well as Python, integrations, and how they all come together around ERP automation.

Transcript

Speaker 1:

Welcome to the Tech Pro Unicorn podcast brought to you by RPI Consultants. A podcast about the magic of digital transformation through technology. Each week we’ll cover topics related to ERP, RPA, business transformation, leadership, healthcare, and unicorns.

Speaker 2:

Hey there, folks, welcome back to another episode of Tech Pro Unicorn. Today we’re continuing our series around ERP and RPA that I’ve affectionately called Free RPA. And I’m not talking like Free Willy free RPA, like get it back into the big ocean and set it free, more about offsetting the costs of your cloud ERP journey. So regardless of where you are, 90% of ERP customers are still on some form of on-premise or single-tenant cloud. So whether you’re on Oracle or PeopleSoft or some version of that or version 10 of Infor, most of you are still on-prem ERP.

Speaker 2:

So what we’re talking about here is folks are really looking to make that migration to cloud ERP and as they do so the costs are a little surprising, because we’ve been told all along that cloud is cheaper. Cloud is more secure. Cloud is faster. Cloud is easily accessible. Say that fast three times. So we’ve been told all these things that set our opinion on something. And then here we are in the age of cloud ERP when we’re all getting ready to do it, and sure enough, as you can guess it is more expensive than we planned for.

Speaker 2:

And honestly, when you look at cloud ERP, regardless again of what system you’re going to, or even if you’re transitioning from on-prem and you’re going to go to an Oracle Cloud or previously Oracle Fusion or Workday or Infor CloudSuite, or NetSuite, pick any other cloud-based application, you’re really looking at, with software licensing and services, in the millions of dollars. In that probably 2 on the small end to 10 on the large scale customer.

Speaker 2:

And yes, that’s going to get you lots of really cool functionality. It’s going to get you the latest and greatest. It’s going to help with your analytics. It’s going to secure your application. It’s going to do all those things that cloud promise to do. Absolutely. What it is not going to do is really eliminate all these bodies that you have around. And if you look at a GL department or a payroll department or an AP department or an HR department, or wherever you look, there’s all these people.

Speaker 2:

So when you look at those departments and you go, “Man, their costs are high.” It really isn’t because of the systems that they’re using, the IT systems cost isn’t high. And if it is, that’s a problem in and of itself because you should be monitoring that and making sure you’re getting the value from those systems. But generally it’s the people that are doing the processing, even on the low end, those 50, 60. On the higher end those $100,000, $110,000 people, when there’s a lot of them that adds up to a very large annual cost.

Speaker 2:

And when you look at what those folks are doing they’re doing data entry, they’re keying into this brand new cloud suite ERP that you just got so you can have transactions and you can pay people and you can pay invoices and you can do all the things that ERPs do. And you can make sure people get benefits and take care of your employees and have great talent acquisition, but all that remains people-based. And what are they doing? There’s nothing creative about that. They’re not painting pictures and creating works of art. They’re doing very repetitive rules-based tasks.

Speaker 2:

They’re going in and they’re getting this set of information, which they then interpret. And they key in an accrual. Or they’re taking something like a job application and they are getting it online and then keying it into the HR systems so that it can go for scheduling for interviews or such. Or they’re taking accounts payable invoices, and they’re OCRing them. Hopefully you’re there, with some optimization around that. But they’re taking that data and they’re keying it into your AP system, in your cloud ERP, and then you’re routing it for approval. And then once it’s approved, it goes through all these steps. And it goes into a check request system, print checks or develop ACH or wire transfers, and ultimately comes out the backend as some sort of payment to a vendor.

Speaker 2:

You could just go on and on and on and look at any one of these processes and realize that they can all be replaced by digital labor for the most part. And then your people, A, they can get less so that you have less people. And when you have less people, you have less costs and you can take that cost savings and you can pay for your ERP implementation, where you just spent millions of dollars. So that’s Michael’s pay for your ERP or free ERP idea here. As we’re implementing in the ERP, that is the best time to also look at it with an eye to RPA.

Speaker 2:

So if you just go out and you get an ERP vendor and you use the vendor, they’re going to try to sell you their form of process automation tool that’s inherent to their application, which is great, but hardly ever does a process begin and end within the ERP, it’s always reaching out to third party systems, applications, websites, it’s always reaching out for inputs.

Speaker 2:

So using an inherent tool that is baked into your ERP, I’m not necessarily a big fan. Now, for some of your smaller processes using their internal process automation tool might be easier and that’s fine. But when you’re going outside to automate, I find it’s probably better to use a third-party robotic process automation tool. It just handles that better. It’s designed for that. And it’s been there for 10 years.

Speaker 2:

So lots of new applications in the space I want to talk about. There’s really RPA and people ask me all the time who were the RPA vendors to watch? And I challenge you to go out and look at the 2020 Gartner article on RPA. It lists the three that I’m going to talk about as the leaders. And then the one that I’m going to talk about, because it’s the one that we do, as a challenger, which is Kofax RPA.

Speaker 2:

And the reason I like Kofax RPA is because remember when I was just rattling off all those processes, a lot of those had documents, either documents that we wanted to bring in through OCR or documents as an output, like a ACH advice or a check, those are all really well handled by Kofax. Kofax is in an organization that used to be Hyland that used to be Perceptive. That used to be all these things at the end of the day, they’re all about document management.

Speaker 2:

So I like them from a challenger perspective because of that. They’re leaders in the space probably the biggest leader, the one that’s most established, most enterprise class, if you will, Blue Prism. And then the one that got all the attention recently, because it got huge investments by large financier’s Automation Anywhere, which is good, because they needed to play a little bit of catch up.

Speaker 2:

And then UiPath is really, really established and also really, really good. And you’re like, “How can they all be good? And aren’t they the same?” They are all really good. They all can do 90% of your automation that you’re probably going to start with anyway. And they can do it really well. They all have nuances that they perhaps do a little better or a little different. Some of that is human assisted AI, like UiPath might do that a little bit better than Blue Prism.

Speaker 2:

Some of the desktop automation, Automation Anywhere might do better initially right now. But they’re all pretty much on a race to a common playing field where they can all do everything and they can do it really well. So you can’t go wrong really with any of those. I usually say those are all arrows in the quiver and you really want to have many tools, or many arrows to shoot at your target. And your target is digital transformation, to do more with less. So more work, less costs, pay for your ERP.

Speaker 2:

These tools, these licenses, are relatively inexpensive, the implementation of a process. When you look at the savings and you look at the cost rate, you kind of do a quick ROI and go, well, you’re going to pick the things that are highly repetitive and that you do all the time and it’s going to cost you X to automate it. And you’re going to save Y over say you run it over a five-year ROI. Now there’s some ongoing costs around maintenance and such. And I’ll talk about that when I talk about governance. But for now it’s important to know that RPA is probably your best way to pay for your ERP.

Speaker 2:

Now, there are other things that are emerging that people are doing. For those of you with really strong IT departments, remember RPA is geared towards building subject matter experts in the business departments that are highly governed by our brethren in IT, but it allows them to be able to do a lot of simple integrations themselves. Now, some of the larger and more complex integrations, they’re still going to need either consulting or IT help with. And I’ll talk about how do you do that? Because I call it a 666 plan, which is an 18 month plan to independence in RPA.

Speaker 2:

I’ll talk a little bit about what that means in a future series. So come back, like, subscribe, do all that good stuff that keeps you here listening to the Unicorn tell you how to save money. And Black Friday ads, you should go save money on Black Friday ads. There’s lots of cool stuff out there. And they’re all going on now. Okay, I digress, back to RPA.

Speaker 2:

The other interesting trend that I want to talk about is Python. Some folks are, like I said, doing Python, they’re custom developing Python scripts. That is a very easy language to learn. If you think about all the programming languages out there, the C++, the COBOLs, the Pythons, there’s a million languages out there. Pythons relatively easy. It’s nothing that your end users in finance are going to be learning, nor should they, it is not that valuable for them to learn. But if you could develop some Python capabilities within your IT department, that’s not the worst thing.

Speaker 2:

The problem that I have with Python, it is not well controlled. You actually need people that know Python to be able to go find Python scripts, and look at them and understand them. Whereas RPA becomes kind of visual. If you haven’t seen what RPA looks like, then you won’t know what I mean, but it’s kind of like basically a Vizio diagram. So it’s relatively easy for people to look at and understand what RPA is doing. It’s less so in Python.

Speaker 2:

And then the third thing I want to talk about just to close us up, is a concept around integrations. We get asked all the time about integrations. And people build all these integrations and they write custom scripts and they write CQL and they write Python and they write all of these gyrations of code, again that you have to maintain. And anytime, anything related to that integration changes, you’re back maintaining the script and then you get to test it and then you get to migrate into the production environment.

Speaker 2:

And there’s usually companies, we’ve seen companies with over 1000 integrations to their ERP, data in, data out, data moving all over the place. And that’s because they’re not well-governed. You shouldn’t need that much. You should have data strategies and data repositories and warehouses and such that that information could actually be sourced from. A lot of it is just reports. A lot of those reports become canned in the latest version of cloud ERP. So you don’t really need all these integrations.

Speaker 2:

With all the increased functionality you should be able to reduce some of your third-party systems, which should also reduce your integrations. But a lot of people say, “Well, I can just create a little script for that.” Think about RPA as a way to also do some of your integrations. Because again, it becomes a central repository for you to maintain versus a bunch of people run off and they do HL7.

Speaker 2:

And I’m not suggesting that you use RPA for clinical integrations, but it could do that to some extent. It lacks some of the fire standardizations and I’m not taking F-I-R-E but anyway, I digress again on a clinical tangent. But integrations are another opportunity where people have really been making themselves heroes because they’re creating all this movement of data and such, but then they don’t govern it. And nobody knows where the heck the data is going. There’s a lot of high trust data security type of stuff that’s happening. And when they auditors come in and they say, “Okay, where is your data going?” And they’re met oftentimes with blank stares. People are like, “Well, I think we have an integration to this. And I think we have an integration to that.” And then they get written up because they have no idea where the heck their data’s going.

Speaker 2:

So integrations can actually benefit you obviously, but they can also be a nightmare. So when we look at the wave of new applications in the space and what people are doing, people are doing integrations. And I’m not suggesting they shouldn’t, I’m suggesting they’re doing integrations without appropriate governance. And that creates a bit of a problem. And I like to solve that by having a strong governance structure. Many companies don’t. They have all these things that super users are writing. They have all these things that IT is doing that usually is somewhat governed depending on the maturity of your IT department.

Speaker 2:

And then people start this RPA stuff and they’ve got all these things that all equate to movement of data in and out of the organization. And they lose track of it very quickly. And it’s very easy to do. So governance, a whole separate topic we’ll cover. So those are the things that I wanted to talk about. You can most easily pay for your ERP with RPA.

Speaker 2:

The next series that we’re going to cover is called, How to ERP and RPA. And what I mean by this is do them together. Do them together. Make sure that your provider, your professional services firm that you employ, understands what RPA is. Not a big GSI where you hire the Oracle practice and they know everything about Oracle, and you go, “Okay, well, talk to me about robotic process automation.” And they go, “Yeah, we have a separate practice that does that.” That’s not integrated.

Speaker 2:

Those people on the ground tweaking your screws on your ERP, they aren’t going to care. They don’t care. They won’t care. All they care about is collecting the millions of dollars in service revenue, tweaking Oracle so that it works for you and getting the heck out of there. They’re not really trying to optimize their processes for your organization, leveraging a myriad of technologies. They aren’t. They’ll tell you, they are. I guarantee you, they aren’t because all they know is Oracle.

Speaker 2:

And they’re not going to have some RPA practice just coming in there. Because it was RPA practice guys are like, “Well, tell me what you want to automate.” And they’re like, “Well, I don’t know what you can automate.” It doesn’t work. So make sure that you get a firm that has an integrated RPA practice. And do them both together so when you design a process and you go, “Okay, here’s how this is going to work in your cloud ERP system.” And then here’s where we need humans to do it. And here’s where digital workers, robots, RPA, here’s where they’re going to actually do this step.

Speaker 2:

And now a step that might’ve taken somebody an hour to do is only going to take somebody five minutes because the rest of that time is going to be done by a robot. Oh, and they’re going to leverage the cloud ERP functionality so that’s not going to take an hour. And now it’s only going to take 30 minutes, but 25 minutes of that are going to be done by a robot in still only 5 minutes. So you’ve now saved 55 minutes of work. And that person’s just going to be checking it and going, “Yep, I concur. This is great.” And then off they go.

Speaker 2:

They’re no longer consolidating Excel spreadsheets and logging onto websites and downloading stuff. And all that goes away. All that silliness goes away. And when you compile a whole bunch of processes saving 55 minutes, guess what? It equates to FTEs. And then guess what? You can redeploy those FTEs, or you can use them and you can do more work. Because in this current economy, we’re all being asked to do more work with less people.

Speaker 2:

It’s hard to get additional positions approved, even though maybe you’re merging, you’re expanding, there’s all this additional work. And how do you get more people? And these robots don’t take very long to bring online. A couple of weeks to a couple of months for a robot to come online, doing a process or two or three or five or 10 or a 100 or it just becomes exponential. And with good governance, you know where the humans are and where the digital workers are.

Speaker 2:

And we’ll talk more about that. So next time we will talk about how to ERP and RPA together. There you have it, straight from the horns of a unicorn, how to pay for your ERP with RPA. Yeah, you know me. And I will see you guys next time. Stay safe. Be good. And thank you.

Speaker 1:

Thanks for joining us this week on the Tech Pro Unicorn podcast. Make sure to visit our website @www.techprounicorn.com, where you can subscribe to the show and catch our latest blog articles. While you’re at it if you found value in this show, we’d appreciate a rating on iTunes. Be sure to tune in next week for our next episode. Remember, unicorns represent the magic of digital transformation that occurs when business process is enabled with technology.

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