What is RPA worth, can it really be valued at well over a trillion dollars?
For hundreds of years people have been working very hard, to do less work. The very word, 'work', brings to mind the drudgery of getting up very early to toil over a task that we need to do in order to feed ourselves and our families. While all this work has been happening we've thought long and hard about building machines to do the heavy lifting, not particularly because we cared about our fellow human beings but because the machines tend not to cost so much, not complain so much or get sick so much. We have focused on doing more, with less.
If we think back to a time prior to the creation of PCs, we may recall out-of-control inflation, three day working weeks and the determination of one's future at the age of 11.
This approach, has until recently, been affecting manual workers much more than knowledge, or white collar workers. Our concerns over people losing their livelihoods has been almost swept aside, due to technological developments and the creation of new types of jobs. Fair enough, not everyone will welcome the changes forced upon them but this is an inevitable truth of creative disruption, a key component in economic model that has gotten this far. As the great Garry Kasparov once said, "grave diggers didn't exactly go on strike when penicillin was discovered".
My software doesn't talk to your software
RPA is by far, the most practical use of a technology to replace white collar work since 1995, when Microsoft launched Windows and we all became nerds. The rise of the personal computer enabled the entire online world that we now find ourselves in. If we think back to a time prior to its creation, we may recall out-of-control inflation, three day working weeks and the determination of one's future at the age of 11.
The rise of the internet and computers did, however, create a big problem. My software doesn't talk to your software. Without 'standards', creativity runs rampant, - this is a good thing by the way - and creativity tends to move in the direction of the individual creators, not necessarily all in the same direction. This has not only left communication gaps in the software but it's created huge headaches for businesses trying to make sense of billions of data points, which are unconnected and are distributed across multiple platforms.
To solve this disconnect, we put humans on the job. Millions of back office workers, from customer service agents to accountants spend their days copying and pasting data across systems and reconciling information, to try and achieve a 'single source of truth'. We have people working for the computers.
RPA is not traditional software; it doesn't fit nicely into a business discipline, like an ERP system would. It fills the chasms between systems, irrespective of the software language, and operates at the user interface level just like a human user would. Of course today's intelligent automation software can be packaged to address specific functional tasks and goes much further than just data transfer. However, at its core and in the majority of implementations, RPA does just that, it fills the holes left by a lack of systems integration and builds a much stronger set of connected IT.
We could go as far to say that it is the missing ingredient with respect to the promise of computers and what the internet was supposed to deliver, 30 years ago. It creates efficiency and potentially effectiveness, at a fraction of the cost, just like the machines have done for us since the spinning Jenny. In principle, this frees people to do the people stuff, but it's not quite as simple as that.
There is very little evidence that any of the pioneers of RPA had anything other than 'getting rich very quickly' as their main drivers for developing the software. In fact one of the early sales pitch claims, coming from the vendors themselves, was that it could replace costly humans at a fraction of the cost. The story that RPA can act as a virtual assistant only emerged once user companies realised that there was a lot more work that needed to be done and people were redeployed to take on other work, in addition to their existing responsibilities. So it's not quite the time for the vendors to polishing their halos just yet.
RPA is the only AI type software being adopted across multiple businesses without the need for pre built modules. It fits in anywhere and everywhere.
While we see new role creation, in the form of RPA developers, programmers and consultants, there is still a lag in HR departments, as new business models and skills begin to emerge. This is an opportunity for leaders and a threat for managers. To retain and attract the best brains, company's need to develop their HR function substantially, from enforcement agents of company policy to one of lifelong learning groups, with an aim to constantly increase the capabilities of their workforce and offer more than just a salary.
Consider the potential for RPA to glue systems together, force the need for cleaner data, and act as a virtual assistant to everyone with a computer. It may even evolve into the engine behind Alexa, Siri and Cortana. It is a compelling 'piece of kit'. It is of course not as easy as Microsoft's brilliant Office suite, yet (which was the first commercial and widely available software of the automation age). No matter how many times the vendors bang on about its simplicity, it still needs trained people to use it properly, but it is the only AI type software being adopted across multiple businesses without the need for pre built modules. It fits in anywhere and everywhere.
A single 'bot' can do the work of up to 10 transactional roles within complex organisations and the average white collar worker in the US earns around $60k p/a.
Automation technology is being adopted rapidly and at the core of this lies RPA, enabling other technologies and creating new jobs, and new ways of working. Perhaps it's not quite there yet and the vendor landscape may yet change dramatically, as larger software vendors begin to compete for a slice of the pie.
In the US alone, there are over 200,000 companies with over 100 employees and each of these would be likely to spend around $50,000 on RPA. This is an extremely conservative amount, considering that some of the early adopters are spending well over $2 million on RPA already. We therefore, arrive at a figure of $10 billion in the US alone. Factor in the rest of the world and we can safely reach a figure of around 2 million companies at $50k spend each, and we hit $100 billion in spending and the magic number of one trillion dollars in valuation with relative ease.
Now this is a simple calculation and by no means an accurate number, but it seems that no matter how you calculate it, the potential is there. Logic dictates that $50k is undershooting the potential spend - considering that a single 'bot' can do the work of up to 10 transactional roles within complex organisations and the average white collar worker in the US earns around $60k p/a. The financial benefits alone win the argument. When we take into account a higher level of accuracy, twenty four hour productivity and zero threat from viruses it's a no brainer.
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