It is no secret that Malaysia needs to improve its economic productivity if it is to flourish in the years to come, with overall productivity declining by 3.60% in December 2017, according to recent studies. From additional skills training to investments in technology, the government is pushing to address this challenge. However, one solution has emerged that is almost tailor-made for Malaysia: Robotics Process Automation (RPA).
Alongside Malaysia’s prime minister Datuk Seri Najib Tun Razak launch of the Malaysia Productivity Blueprint last year, which targets to achieve an annual labour productivity growth of 3.7% by 2020, RPA is here to complement this initiative by automating many of the repetitive, rules-based tasks that are currently carried out by employees in many of Malaysia’s largest companies, many of whom are younger graduates embarking on their careers. Yet reading much of the opinion that has appeared in the local press, one could be forgiven for thinking RPA represents the end of the world, a dystopian future lurking around the corner, one of mass job losses, persistent unemployment, inequality and robots overtaking our daily lives. For an advanced country like Malaysia, with significant numbers of white-collar workers, this view is understandable, but misplaced.
Firstly, I want to clarify some of the main reasons why many firms are turning to RPA to automate some of their most inefficient processes. Much of the legacy IT infrastructure in many institutions that was built in the 80s or 90s, are now creaking under the weight of increased regulation, demand for transparency and growth of newer technology. These systems are not only slow and very difficult to automate but they also run on out-dated codes that few people understand anymore. This brings about the need to hire staff to carry out tasks that should be completed by a computer, thus injecting human error into an industry. In 2012, global financial giant JPMorgan Chase & Co lost $6.2 billion in a trading incident that came to be known as the ‘London Whale’. While subsequent reviews pointed to flaws in the bank’s oversight and review processes, a basic human error in an Excel spreadsheet led the bank to underestimate volatility, which in turn contributed to the debacle. Like many other Wall Street banks, JPMorgan Chase & Co depended on Excel for their VaR (Value at Risk) model, mainly due to the fact that their own IT system was not able to do it itself.
Minus the capital and will to initiate wholesale upgrades to their IT infrastructure, financial institutions are forced to rely on humans to do the basic, repetitive tasks that should easily be automated. This quite literally means an army of economics graduates copy and pasting data from a PDF, moving our mortgage applications from one folder to another folder, shifting our credit card information between spreadsheets. As well as creating huge costs and inefficiencies, which affect the quality of financial services we receive, the mundane, brainless nature of these tasks affect morale and turn highly capable graduates away from the industry. I have used finance as an example, but this can be replicated across multiple different industries, from insurance and finance, to telecoms and utilities.
As such, there are reasons for implementing RPA that go beyond cost savings and efficiency but a more compelling argument for RPA and automation in general, is the greater value that it brings from human employees. Malaysian graduates did not spend thousands of dollars and many years at universities and schools, to copy and paste data from one program to another. In fact, humans were simply not designed to do mundane, repetitive tasks as we tend to get bored easily and therefore are prone to errors. We are blessed with creative thinking, innovation, intuition and problem-solving abilities among other skills and research has shown that jobs that incorporate some or all of these skills results in higher job satisfaction.
With RPA freeing employees from these repetitive tasks, companies can repurpose them to be much more value added. Accountants will no longer be simply bean-counters, instead, they will need to acquire a much broader business outlook and, armed with better data, will become consultants who provide added value to clients, rather than just functionaries. By starting their careers higher up the value chain, employees’ productivity will grow exponentially and this will have knock-on effects throughout the institutions that they have joined. Their skill levels will also be superior to their counterparts in other companies or countries who started their careers doing these boring, simple tasks. For larger banks, the ability to automate straightforward processes will speed up mortgage applications, improve business services and generally make finance more accessible to more people, as the cost of doing business is lower. SMEs and start-ups, for example, will have access to cheaper financial services, allowing them to redirect investments towards hiring the talent that they need for innovation and growth.
Article by Raghunath Subramanian, President & CEO (India & APAC) of UiPath