On April 23, New York City-based automation developer UiPath closed its IPO after raising more than $1.3 billion, giving the company an initial market capitalization of $29.1 billion. UiPath originally filed for its IPO on March 26 with plans to raise up to $1 billion.
The IPO was the culmination of a series of financial moves over three months that reflect the growing interest in automation by businesses and organizations that have been looking to maintain and even increase productivity during the pandemic.
The excitement around robotic process automation, or RPA, is being fueled by a number of factors, said Mike McLaughlin, CIO and vice president of professional services at Irvine, Calif.-based Technologent in February. The most immediate is the pressure on organizations to move to digital as the pandemic continues. He also cited cost savings and the need for business enablement as significant factors.
In this respect, he cited the healthcare industry where 50% of companies are expected to invest in RPA over the next three years, as well as increasing their investment in AI five-fold, from 4% today to 20% by 2023. To survive and thrive in this changing environment, companies need to analyze what their current IT needs are, but they also need to address what those needs will be in the future, McLaughlin said.
“Companies need integrated solutions from an IT partner who can fill their strategic IT needs, including interim IT leadership and executive support. Especially important is overcoming obstacles created by the pandemic, such as in-person interviewing and hiring. The right partner will help meet a company’s business objectives, be in tune with their current staffing capabilities, limitations, needs and know their cultural impact,” he said.
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AI in Business Processes
The key to the success of the IPO is the growing role of AI in business processes. UiPath’s growth trajectory is evidence of the market need for AI-based technologies that help to augment business processes and the value those can deliver in operational efficiency, workforce productivity and in helping customer-facing teams drive revenue, said Jim Kaskade, CEO at Foster City, Calif.-based Conversica. The bulk of the value being created by RPA vendors like UiPath is being made in the back office.
With examples of automation from giants like Salesforce, further use of AI in the front office is positioned to deliver even more than the back office. B2B and B2C enterprises are using AI, specifically conversational AI (CAI) solutions, to help customer-facing teams increase their ability to attract, acquire and grow customers at scale.
“By achieving faster response times, persistent follow-up and personalized and contextual information CAI can provide 5x the engagement, 2x the pipeline, 50 percent shorter sales cycles, with 4x the win rates previously achieved, all without structurally changing the human workforce,” Kaskade said.
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Is RPA the New Off-Shoring?
There are other forces driving the growth of RPA too, said Vijay Tella, founder and CEO of Mountain View, Calif.-based Workato. It is benefitting from the same forces that fueled the off-shoring boom in years past, by allowing companies to reduce labor costs using bots instead of human workers to handle simple, repetitive tasks.
There are limits to what RPA can achieve, though. The pandemic has forced businesses to manage costs closely while increasing agility to address business disruption. That means they need to deliver new products and services more quickly and in more ways, including digital. For this, they need technology that can augment humans as they perform more complex tasks and that allows them to build new workflows more efficiently. That is more difficult than simply replacing humans who do repetitive work.
“We’re still in the early stages of automation, and to the extent that RPA can reduce costs by replacing repetitive manual work it has plenty of room to run, and we will likely see more RPA public offerings," Tella said. "But longer term, businesses need more powerful automation tools that can integrate apps and data to create workflows that augment and accelerate the work that humans do.”
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Speeding Up Processes
The result is an ongoing investment in RPA solutions and companies. At the beginning of this month, for example, Houston-based HighRadius, an AI-driven treasury management software company, raised $300 million in a Series C round giving the company a valuation of $3.1 billion. HighRadius is a SaaS company that uses AI autonomous systems to help companies automate account receivables and payments processes across credit, electronic billing and payment processing, cash application, deductions and collections.
The gain for organizations that deploy these kinds of platforms is speed. In fact, the lack of a solution for speeding up repetitive financial tasks explains why RPA has so much potential and why CIOs are turning to RPA to solve their pain points, said Swapnil Shinde, CEO and co-founder of Palo Alto, Calif.-based Zeni.
Businesses all over the world struggle with time-consuming processes, he said, and the pain is not exclusive to certain industries. Accounting and finance professionals need RPA because they spend so much of their time on basic routine tasks like updating financial reports. “RPA presents an opportunity for financial professionals to focus on the most compelling problems their businesses are facing," Shinde said. "The results are tangible: Salesforce reported that 70% of companies using workflow automation are seeing that the automation has saved them 4 hours per week per employee."
The RPA market was estimated to be $2 billion in 2020 and is projected to see growth of 31.5% between 2020 and 2026. However, Charlie Newark-French, COO at New York City-based Hyperscience said the RPA approach to automation technology — mimicking human tasks but never achieving high levels of accuracy or efficiency — is unsustainable for true end-to-end automation. On the contrary, RPA increases organizations' technical debt because it cannot quickly or effectively issue change. There needs to be a smarter way to make automation work for the enterprise, rather than rely on a technology that acts as a "Band-aid” to the problem.
Here Comes Hyperautomation
If that is the case, the solution may already be present in the form of hyperautomation. Gartner put hyperautomation, the application of advanced technologies, including AI and (ML) to increasingly automate processes and augment humans, on its Top 10 Technology Trends of 2020. Hyperautomation extends across a range of tools that can be automated, but also refers to the sophistication of the automation (i.e., discover, analyze, design, automate, measure, monitor, reassess.)
As no single tool can replace humans, hyperautomation involves a combination of tools, including robotic process automation (RPA), intelligent business management software (iBPMS) and AI, with a goal of increasing AI-driven decision making. Whether this becomes widespread or not remains to be seen, but with automation now a key element in the workplace, it would not be a surprise if it did.