RPA in ERP modernizes legacy system with automation
The adoption of RPA in companies continues to grow, and companies are now investing in the technology to make targeted use of processes associated with ERP systems.
Experts say the combination of RPA and ERP can achieve a return on investment through greater speed and efficiency, as well as fewer errors. However, they warn that this is not a panacea for already ailing ERP implementations.
Stefan Maurer, Vice President of Enterprise Effectiveness, and his team of 100 drive the continuous improvement of the entire operation at Avnet, a distributor for electronic components. With a focus on innovation, digitization and automation, they have particularly campaigned for the optimization of the back-end processes within the company’s ERP system and identified numerous tasks in the areas of purchasing, sales, customer service and other administrative functions that are performed by RPA bots be taken over.
“There were a lot of non-value services that software could do,” said Maurer. “I can program something that a person does and it can bridge the inflexibility and slow behavior of the ERP.”
Using the Kofax RPA software, his team has automated around 70 business processes, with around 85% of the robotized processes interacting with the ERP system.
Implementing RPA in ERP has resulted in ROI within two years, Maurer said, as the bots complete the manual, repetitive tasks faster and with no human error, so the team can focus on the higher-value tasks.
Expansion of the use of RPA in ERP
According to experts, the amount of tasks that can be automated in an ERP system is a strong reason for CIOs and their colleagues in the business world to adopt RPA.
“There are little value jobs that you can create bots for [handle and] Extract Hours, “said Craig Le Clair, vice president and analyst at Forrester Research and author of Invisible Robots in the Quiet of the Night: How AI and Automation Will Restructure the Workforce.
Billing, accounting, and order processing tasks are good candidates for automation, he said, because it can free people from hours of mundane, repetitive work.
“It’s a massive overhaul in terms of capital investment and resources – so once an ERP is implemented, it is not easy to swap out,” said Kapil Kalokhe, senior director of business advisory services at Saggezza, a global IT consultancy.
It also helps companies advance their agility and digitization efforts while grappling with the legacy elements that come with ERP. The modernization of the processes increases the agility, which either would hardly be achieved without RPA or would require a comprehensive overhaul of the ERP itself.
“RPA can be a bridge to a future state,” said Kalokhe. “[It] can help to be a more cost-effective interim solution that can be addressed in the short term [enterprise leaders] decide whether and when to upgrade or change their ERP. RPA is a very effective and efficient solution to this scenario. “
However, as these systems age, IT teams cannot simply integrate all new applications into ERPs, which can lead to everyday work shifts for human workers. For example, employees may need to manually combine data from the latest apps and ERPs to generate reports, slowing down teams, adding inefficiencies, and diverting resources away from the higher-value thinking and innovation tasks that employees excel at
“It’s that kind of repetitive, tedious work that workers are hired to do, but it’s very inefficient where RPA is very useful,” Kalokhe said. “RPA can easily switch from application to application or from system to system, replicating the data entry and thinking of the two systems.
No replacement for required upgrade
Although RPA can improve processes that affect the ERP system and speed up the enterprise architecture, experts cautioned against using automation technology to extend a legacy system that no longer serves the enterprise.
“RPA is a way for companies to achieve their digital transformation goals and do so in a cost-effective manner, but it can create strategic issues when upgrading and moving to a cloud-based solution is a better idea, because you We will get a more modern system, “said Le Clair.
Maurer had a similar view as himself and did not see RPA as a way to fill gaps in an old ERP or to extend its lifespan beyond what was advantageous for the company. He sees RPA as a valuable tool for generating business value, but not as a tool for IT to support outdated technologies.
According to Le Clair, companies should continually review whether their ERP system is still meeting business needs or whether it is holding them back before proceeding with an RPA implementation to ensure they are making the best decisions for their short- and medium-term and long-term decisions Aims.
“You don’t want to institutionalize a legacy system with RPA when it’s better to update it. That is what the CIO should do, evaluate this ERP and ask if it is worth using this tactical efficiency now if there is no roadmap for modernization, ”said Le Clair. “But if the ERP and back office processes don’t need to be updated because it doesn’t make the company more competitive, then RPA is a very useful tool there.”