Looking to Improve Back-Office Efficiency? Maybe It’s Time to Send in the Robots

M&As are on the rise and retailers from grocery chains to high-end fashion outlets face pressure to maintain margins amidst a constantly fluctuating and highly uncertain marketplace. In this environment, the automation of critical back-office processes to increase efficiency and reduce costs has become a top priority of CIO, CFO and CEO alike. 
To address this objective, retailers are taking a long hard look at Robotic Process Automation (RPA) — software tools that use rules-based logic to execute repetitive, manual tasks traditionally performed by humans.  In retail, RPA solutions are being applied to automate typical back-office functions such as store auditing, month-end close, accounts receivable (AR) and other financial reporting activities. By linking multiple standalone systems without requiring duplicate data input or analysis, RPA also improves merchandising and in-store planning, order fulfillment to stores and supply chain efficiency. 
In retail, where multiple partners deliver products to multiple store locations, the ability to match up and reconcile information from these various partners (CPG manufacturers and distributors) is imperative. This loading, reconciling and researching activity is typically a very manual, repetitive and time-consuming task, one that involves many data files with thousands of products in each.   In some cases, loading these files can take hours.  Software robots can handle these manual, repetitive tasks so people don’t have to, accomplishing many hours of work in a matter of minutes.  Additionally, by freeing human data specialists from these tedious, rote activities, RPA enables humans to focus on managing exceptions and adding value.
RPA can also significantly improve IT-related processes. Many large retailers that still use Microsoft Excel spreadsheets to track IT assets can take advantage of RPA to easily extract data from any store or DB2 system, put it into Excel, and evaluate, scrub and feed it back into the system – often error-free and with minimal human intervention.
Given that retail by definition represents an ecosystem of partners, and those partners share a ton of data each week with retailers, processing that information quickly for month-end reporting is paramount. As a result, financial and operational departments within retail face constant pressure to conduct month-end reporting faster. In most cases, the cost of replacing antiquated home-grown legacy systems is prohibitive; here, RPA offers a cost-effective alternative to automating finance and auditing functions.
Outlined below are some considerations for retailers seeking to leverage RPA capabilities.
Ease of implementation and integration with IT.  A key advantage of RPA technology is speed and ease of integration. In contrast to traditional IT automation systems that can take 6 to 12 months to implement, RPA solutions can often be deployed in 3 to 4 months.  Moreover, since they reside on the application layer of IT systems, RPA tools – while requiring some level of IT support and integration – involve minimal disruption to IT infrastructure and have a negligible impact on IT resources. As such, CIOs would be well-advised to embrace RPA and partner with business advocates early and often in an automation initiative. This can benefit the business by easing the integration process. IT, meanwhile, can apply RPA tools to optimize its internal resources, and ensure that business units don’t circumvent IT when deploying RPA solutions.

A job changer for retail data processors. In addition to reducing the head count of human data entry specialists or processors, RPA dramatically changes the job description for the staffers who remain. Human processors can spend their time more strategically, addressing unusual cases that don’t follow prescribed rules – such as, for example, a distributor’s shipment that substantially exceeds historical volumes.  This situation would require industry experience and knowledge and a review of the retailer’s policies and guidelines against the distributor’s recent gross shipment reports to determine if an error occurred.

An alternative to offshoring. Many retailers have turned to offshoring to reduce costs and improve the efficiency of back-office processes. By undermining the fundamental competitive differentiator of labor arbitrage, RPA makes geographic location and low labor costs less relevant as sourcing strategy criteria, and expands the range of options available to retailers.
Since today’s retailers are constantly challenged by changing customer preferences, encroaching competition and empowered consumers who want greater user experiences in-store and online, the last thing they want to worry about is integrating and optimizing back-office processes.  By automating time-consuming repetitive processes and providing more accurate and faster financial reporting and improved analytics, RPA offers a strategically “disruptive” technology solution that requires a minimal level of operational disruption.

Mario Vollbracht, Managing Director, Information Services Group
This ad will auto-close in 10 seconds