Targeting Operating Models For Robotic Process Automation | MindFields Global

The key objective of establishing a well-defined Target Operating Model (TOM) is to create an opportunity for client organisations to maximise business value by harnessing the virtual workforce and other organisational resources to best effect, whilst maintaining control over future costs and with stronger risk mitigation strategies.

Client organisations and service providers would be well served by establishing a well-structured TOM before transitioning from the robot build and design phase to Business-As-Usual (BAU) / steady state. This is important as the operations team should be made aware of the prerequisites of Robotic process automation i.e. what needs to be completed in advance, well before processes are automated and transitioned from human operators to robot applications. This is possible when a stable IT environment exists and there are no issues with hardware or software systems either operating onpremise or in a cloud based environment.

Some of the key areas that clients should concentrate on while establishing a TOM from the current operating model are as follows:

Table 1 – Target Operating Model

Focus Areas

Target Operating Model (TOM) – Points to consider

Refining ownership structures

• Who will own the software – is this owned by and licensed from the Robotic process automation software provider or the service provider?
• Who will maintain the Robotic process automation tool on an ongoing basis?
• What obligations lie with the software provider vs. the service provider vs. the client organization to ensure the robots perform as required and with reliability?
• Key considerations to review may include:
• Licensing directly with the software provider might mitigate risks arising in case the software provider is acquired by competitor, which has high probability while this new space is still developing
• Avoiding in-house tools from a service provider might minimize risk of lock-in to a service provider
• Change Management
• Establishing a communications roadmap between robot operational teams and business / process owners (client) to prevent any misalignment between changes in service demands, operating procedures etc.
• Establish change management procedures to closely monitor and escalate issues to respective owners accountable for issue resolution
• Define clear guidelines for situations where robots raise red flags in exceptional areas – Establish a reporting and escalation resolution matrix clearly identifying who is responsible or accountable for what activities
• Periodic reporting of progress and issue areas to senior management – Establish real-time accessible dashboards providing a 360 degree view of robot KPIs and benefits realised

Performance Management

• Establishing revised SLA parameters in-terms of faster transaction processing speeds and accuracy levels
• Measuring, managing and reporting the performance levels to key stakeholders (operational leads of client and Robotic process automation implementation partner)
• Taking course corrective actions in exceptional cases requiring human intervention (involving process experts, software architects and application developers) whenever required – standby team to prevent any impact on business operations
• Continuously identify opportunities for improving robot operational performance

Defining roles and responsibilities in a virtual workforce environment

Focus on clearly establishing well defined roles and responsibilities in the following areas:

• Nominate key resources accountable for managing robot performance, uptime and compliance adherence
• Responsibility and accountability of dedicated resources on re-programming robots as a result of change in business rules
• Identifying key operational teams (implementation partner) responsible for coordinating together to deliver the required results to business
• Defining roles and responsibilities of business (e.g. query resolution, managing exceptions etc.) – Nomination of single point of contact (SPOC) from business to take appropriate action within set time frames

Clearly defining and communicating accountabilities among key parties involved in the Robotic process automation implementation phase (Robotic process automation software vendor, implementation partner and client organisation). 

Key areas may include:

• Keeping software patches updated on a real-time basis
• Implementation partner’s responsibility to maintain uptime, service levels, accuracy, reporting, issue resolution and regulatory compliance in close coordination with Robotic process automation software vendor
• Clearly documenting expectations, roles and responsibilities including achieving revised service levels from the implementation parties in the contract agreement

Robot workforce management

• Robotic process automation will not ensure 100% automation and elimination of all human operators/ managers
• Dedicated human resource ‘Robot Manager’ may be assigned responsibilities for managing and monitoring robot performance, issues, robotic resource allocation activities, exception handling and speed and accuracy levels
• Creating a robot trainer team may include a team of highly trained software developers and process experts to define development requirements, including testing and deploying robots in live environment

Governance

Having appropriate levels of governance are in place is an essential element of ensuring the Robotic process automation tools deliver on expected business outcomes. Key considerations include:

• Should governance be just within the client organisation or span across the service provider as well?
• Who takes the responsibility if a robot malfunctions? (e.g. if payment missed, who pays the penalty – Is it the implementation partner or the Robotic process automation software provider)
• Who is responsible for establishing robot change control procedures? Does it lie with the client organisation (as part of their change control policies) or should they be refined in close collaboration with the implementation partner?

Reverse Transition Plan

Buyers should develop Reverse Transition Plan to have flexibility to move or swap with another Robotic process automation tool or service provider

 Types of Process

Due Diligence Steps

Ownership and Pricing Strategy

Already outsourced

• Benchmark Incumbent service provider’s Robotic process automation tools and capabilities to the tools available in the market.
• Assess Business case of moving to other service provider if incumbent service provider Robotic process automation solution fails to meet requirements.
• Assess if they can acquire and develop in-house capabilities for reverse transition in medium to long term depending on the other non financial drivers (for automated component of process) and contractual obligations
• Buy side client organisation should own the tool after evaluating the different pricing options for the automated component of the process.
• If the Incumbent service provider is selected- the pricing of human interface should be negotiated depending on onshore/offshore location.
• Gain sharing: it should be define objectively depending on the quality of data available to ascertain the gains of a Robotic process automation initiative. It is generally subjective to estimate the exact efficiency gain in short to medium term.

Not yet outsourced

• Evaluate service providers along with Robotic process automation tools (in-house and third-party tools) depending on the process which has been considered.
• Develop in-house capabilities with training from Robotic process automation tool provider and its channel partners.
• Buy side client organisation should own the tool after evaluating the different pricing options for the automated component of the process.
• If any service provider is selected – the pricing of human interface should be negotiated depending on onshore/offshore location.
• Gain sharing: it should be defined objectively depending on the quality of data available to ascertain the gains of a Robotic process automation initiative.

Key Points for consideration for Service provider

• Ability to package a solution with value added services would be key factor.
• Need to move up the value chain beyond being reseller of Robotic process automation tools.
• Pricing of in-house tools should be competitive.
• M&A strategy to acquire Robotic process automation tool inorganically.
• Proactive to offer Robotic process automation solutions to existing clients and cannibalise the current revenue to grow for tomorrow otherwise client might be lost to competitors with strong Robotic process automation offerings.

Key Points for consideration for buy side organisations

• The ownership of niche Robotic process automation tool is critical as they are attractive acquisition targets by competing service provider.
• Reverse Transition strategies should be planned and tested on regular basis. This will provide flexibility to swap between different and better Robotic process automation tools (if need arises).
• Pricing contracts should be of terms no more than 12 to 18 months.
• Train and develop in-house capabilities (onshore/offshore) in Robotic process automation tools domain.
• Continuously evaluate existing and emerging Robotic process automation tools in the market.