Enterprises throughout many segments of the economy are increasingly incorporating Robotic Process Automation (RPA) into their business operations to improve efficiencies and free up employees for higher-level work. The commercial real estate (CRE) industry, not known for early adoption of new technologies, has been lagging on RPA implementation but is beginning to pick up the pace and hopefully will broadly deploy this new toolset because of its significant benefits and transformational potential.
What is RPA?
RPA is the automation of repetitive, system-based, time-consuming processes traditionally performed by humans, but which do not require a high degree of judgment. Software running on a virtual machine, such as a cloud-based server, is programmed to execute these tasks by working across multiple IT applications and websites. This “robot,” or “bot,” simulates a person – it logs into an organization’s system with a user name and password and then does the work according to criteria, or rules, programmed into the software. The tasks could be any number of things like (but by no means limited to) transaction processing, data manipulation and communications.
For example, many organizations need data to flow daily between applications to keep them in sync. However, if no application programming interface (API) exists to enable applications to communicate with one another, an employee must spend time each day manually moving the data. It’s typically a slow process consisting of work that is repetitive, boring and invariably below the employee’s capabilities. Alternatively, a robot can be scheduled to manage the flow every morning and do it much faster, more consistently and with greater accuracy, freeing the employee to focus more time on delivering value.
Another common scenario is a company that must perform the same task for each of hundreds of documents. A staff member will spend a few minutes on each item – similarly repetitive, mind-numbing and not the best and highest use of his/her skills. Instead, the enterprise can deploy robots – attended, if some part of the process needs human intervention, or unattended, if the task doesn’t require a person to get involved at any point. In both cases, the bots operate based on a schedule or trigger and handle the work in a fraction of the time it takes the employee.
Think of RPA as creating a tireless, virtual workforce that is on the job as needed – not just 9 to 5, Monday through Friday, but also overnight, during weekends and on holidays, scaling up or down as work flow fluctuates.
RPA is very different from artificial intelligence, or AI, which everyone is talking about nowadays. While RPA mimics a human performing routine, mindless tasks, AI imitates a human’s way of reasoning and deducing. RPA needs structured inputs and a clearly defined process to follow. When there is an error in that process, a person must interact with the robot and tell it what to do. AI, on the other hand, uses cognitive technologies to deduce and reason and therefore conduct tasks that normally would require human intelligence and intervention. Though RPA and AI are very different, the two technologies can work together. RPA providers are beginning to incorporate AI, natural language processing (NLP) and machine learning into emerging cognitive bot solutions.
RPA – A Natural Evolution
The advent of RPA is part of the evolution of humankind’s ongoing efforts to make work easier – to reduce mundane, repetitious, manual work through the use of tools. Business process improvement (BPI), a perennial priority in the well-run C-suite, arguably started with the invention of such rudimentary tools as the wheel, plow, lever and pulley. The industrial revolution millennia later was another BPI inflection point. Today, we are several generations into the information revolution, which has fundamentally transformed again how we work and run our businesses (as well as how we live and spend our leisure time).
RPA has evolved from the convergence of familiar technologies that have been around for decades, including:
Application-based macros (i.e., Excel macros)
Desktop-based system macros
Screen/web data scraping
Business process management tools
Optical character recognition
Automated software testing and system load testing tools
Visual programming tools
Over the past decade, RPA has taken root in the financial services and business process outsourcing (BPO) sectors. Early adopters have categorically included mortgage processing and insurance companies as well as outsourcing and consulting firms.
RPA has been a good fit in these cases because of the scale of the standard processes and the level of process analysis that had already been documented. The metrics are compelling – RPA markedly improves the execution of specific processes and returns many worker hours back to the enterprise. According to McKinsey & Company, the estimated return on investment, or ROI, ranges from 30 percent to more than 200 percent in the first year, depending on the targeted process.
Changing the Way Commercial Real Estate Works
RPA will have a disruptive impact on work comparable to the impact created by the personal computer, internet, email and smartphones. Although it is hard to imagine today’s workplace without these once cutting-edge but now ubiquitous tools, at the time of their introduction, they forced us to re-envision just about all aspects of how we staff, train, execute and manage work throughout the enterprise. RPA will be equally as disruptive. And soon, we undoubtedly will wonder how we ever managed without it.
Typical drivers for RPA solutions are reducing manual labor time, stabilizing the outcome of the process and/or reducing risk or manual error. An organization can assess if RPA may be a fit for improving a process by answering a few initial qualifying questions about the process being considered for automation:
Is the process system- or web-based?
Is the process high volume and repetitive in nature?
Is the process consistent, with limited variation or need for applied judgment?
Is there a simpler, more direct, or lower cost alternative approach to achieve the process improvement which should be considered?
Is the process prone to errors, risk or output variability? And if so, is the value in addressing the issues quantifiable?
Quantifying the value of automating a process helps to frame the ROI for the effort. The ROI of RPA is measured in “work hours returned” to the enterprise, so the value of hours returned should outweigh the cost of developing the automation. Once a process has been qualified for automation, eliminating non-value tasks followed by simplifying the steps (as best as possible) will help avoid creating automation that is unnecessarily complex.
Real estate operational tasks that lend themselves to RPA typically involve large amounts of data entry and movement and otherwise require a lot of human effort, for example:
Accounts Payable invoice entry and processing
Month-end close report generation
Lease abstract entry
Accounts Receivable processing
Cash reporting and bank reconciliation preparation
Tenant credit processing
Vendor data maintenance and compliance
Manual report creation
Developing an RPA capability requires having a sustained and managed investment in infrastructure, process analysis, development, process management and technology support. While some enterprises engaged in real estate have the volume and business case to support this type of investment, many do not. However, they can easily incorporate RPA into their operations by outsourcing it to a managed services firm, preferably one that specializes in real estate and therefore has substantial domain expertise. In fact, there is an emerging service offering sometimes referred to as Robotic Process as a Service, or RPaaS, which provides turn-key development, management and support of a hosted automation solution. Whether handled in-house or outsourced to a third-party, RPA is an increasingly important process for today’s real estate organizations that want to optimize efficiency and have a competitive edge\
Authored by: David Srour, Enterprise Managing Consultant, RealFoundations
About the Author David Srour brings over 25 years of industry leadership and experience to his work with Owner/Operators, REITs and Developers. Mr. Srour leads our global Managed Services practice. He has extensive experience in off-shore production, process automation, IT strategic planning, back office optimization and systems implementation projects. Prior to joining RealFoundations, Mr. Srour was a Manager with Ernst & Young Kenneth Leventhal Real Estate Group and Senior Manager with KPMG Consulting. In addition, David has served as a Chief Operating Officer in the technology industry and as Senior Director of IT for a public office/REIT.
About RealFoundations RealFoundations is a professional services firm focused on the real estate industry. With offices on four continents, 400+ client-serving professionals and off-shore delivery capabilities in India, RealFoundations provides Management Consulting, Managed Services and Energy Solutions to developers, builders, owners/operators, service providers, institutional investors and corporate occupiers. From the building itself to the way it is used, operated and financed, no firm understands the inner workings of the entire real estate ecosystem as well as RealFoundations.
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