Robotic Process Automation (RPA): The Microsoft channel adapts to market growth

August 28 2018

Robotic Process Automation (RPA) is technology in which the word robotic is somewhat misplaced. There are no automatons with lights and mechanical fingers; just smart software that can learn how to take over the innumerable tasks that humans conduct at the keyboard. If it is repetitive and can be defined by a set of rules - even if it involves multiple applications -- odds are good that RPA can automate it.

And vendors in the Microsoft channel, including Dynamics ERP solutions, are already acting on the RPA opportunity with investments in R&D, acquisitions, and partnerships.

According to a report by GrandView Research (Robotic Process Automation Market Size, Share & Trends Analysis Report by Services (Professional Services, Training Services), By Organization, By Application, By Region, And Segment Forecasts, 2018 - 2024) the RPA market was valued at less than $200 million in 2016, but it has been growing at a CAGR of 60.5 percent. Similarly, IDC is charting a 35.5 percent increase in RPA spending for claims processing automation within the insurance industry, from 2016 to 2021.

To date, many of the biggest customer investments and most dramatic projects have involved large organizations - major insurers, government agencies, etc.  But that is starting to change as RPA offerings grow more diverse and sophisticated and as smaller scale use cases begin to demonstrate their economic value.

RPA is an "interesting market," with about 15 companies dominating the space, said Dan Twing, an analyst at Enterprise Management Associates.  He said a few of those companies are very vertically focused by industry, specializing in areas such as healthcare and automotive claims processing. Some are horizontally focused, for example helping to automate support desks and chat box functions across many industries, in some cases infusing AI to provide more value.  The balance of the RPA vendors take an "automate anything" approach, he said.  "Most of them wouldn't like to be described this way but I feel they are still mostly focusing on screen scraping - using information like a human would -- in an effort to bring automation to the desktop,"  However, Twing said the long-term opportunity is in applying RPA at the server level, so you never have to even deal with the desktop level," said Twing. At the moment, few companies are focusing at that level.

In the ERP space, Twing said RPA is often used to pull data into spreadsheet, add data, make journal entries, and then add data to yet another part of the system. It is what he calls ‘'swivel chair integration," again, taking the place of a human doing much the same thing.

Vendors look from enterprise to mid-market opportunities

For ISVs with a legacy of business process automation capabilities, RPA has become a new model through which to expand or reshape their offerings, either through acquisition, partnership or new R&D investments. And as the concepts gain traction beyond of the large enterprise, vendors say they expect organizations to embrace the approach, though likely in ways that differ from the enterprise early adopters.

"RPA has a reputation for being the ideal solution for large, enterprise-level firms, but we've found that many small- and mid-sized businesses have also benefitted from automation," says Nick Sprau, vice president of marketing and sales at Metafile Information Systems, which provides RPA tools via its MetaViewer offering - an automation product it developed internally. "The pros for small businesses adopting RPA are the same as any large or enterprise-level organization - time and cost savings, increased efficiency, enhanced visibility and greater accuracy," he said. However, a barrier that small businesses may encounter that larger businesses may not is that a solution provider may not offer a sufficiently scalable solution. Often, he noted, small businesses don't need all of the capabilities that larger organizations do, but still want some of their processes automated for efficiency and accuracy.

Sprau believes the overall use of RPA will continue to expand over the next few years as companies begin to realize the benefits and ROI opportunities. That, in turn, means its use will likely expand to a wider variety of processes within those companies, he said. "More departments will realize the benefits of process automation and will likely look for ways to expand its use and streamline more parts of the enterprise," Sprau said. Additionally, Sprau believes there will be more integration between RPA and existing software solutions.

"Several things are converging to make now the right time for RPA," said Russ Gould, vice president of Kofax, a maker of automation software that got into the RPA market when it acquired Kapow.  On the demand side, he explained, many companies are already running very lean after the long years of the great recession. It's hard to take further costs out through reduced employment. On the other hand, even if you wanted to hire new people, with such low unemployment, "it isn't like there is going to be talent lining up at your door," Gould said. "That is what RPA is: it builds capacity without headcount," he added.

Dooap has long had a focus on accounts payable automation for Microsoft Dynamics AX and D365 for Finance and Operations, with a SaaS-based web application delivered from the Microsoft Azure Cloud. According to CEO Antti Kosunen, the company has also added "RPA-as-a-service" (referred to as RaaS or RPAAS) to its lineup based on technology from UIPath, one of the largest RPA vendors. 

"For us, we see RaaS as an extension to Dooap; for example if someone has an old legacy system or web portal where it is tricky or expensive to build new capacity or integration," Kosunen said.

Kosunen agreed that RPA has been mostly an "enterprise story" until recently. But new ways of acquiring RPA capability, including his company's RaaS approach mean "you don't need to make a huge life investment because it's a service-based option," he said.

The RPA opportunity for the Dynamics ecosystem

"Integration [of an RPA solution] with Microsoft Dynamics is key, but companies are using so many software solutions to try to streamline their businesses that we're confident that they will find ways to merge as many of them as they can for maximum efficiency," Metafile's Sprau added.

In fact, Sprau said he believes RPA is essential for organizations that have implemented a Microsoft Dynamics ERP and want to further enhance functionality. Adding automation can improve the overall functionality of Microsoft Dynamics ERPs by updating the ERP database with invoice details and correct GL coding information, he noted.  His company's MetaViewer Paperless Automation performs two- and three-way matching between the RPA solution and the ERP to make sure data is not duplicated. It also assesses the accuracy of the POs according to the clients' thresholds and passes the information to the ERP with no human intervention if the criteria are met.

"A beauty of RPA is that it totally integrates with anything, and this is the premise with RPA technology for Dynamics customers," said Kofax's Gould.  Functions can be addressed "surgically," meaning "you don't have to go back and change Dynamics applications to achieve this automation. RPA technology enables them to work with the application as it is and build out robust automated processes," said Gould.

Still, adoption is low thus far, leading Gould to say he views the Dynamics market as virtually a "green field" - with tremendous growth opportunities for further adoption.

Meanwhile, UIPath itself is eyeing a more direct role in the Dynamics market. The company tells MSDW they just signed a co-sell agreement with Microsoft and "are in the process of defining a deeper partnership with Dynamics." They already have a few joint customers , including Navient and are "innovating based on their needs," according to Guy Kirkwood, chief evangelist at UiPath.

Kirkwood sees a major growth avenue for his company with large independent software vendors like Oracle and Microsoft. "They want to put RPA into their platform because we sell to the operating people more than to IT - operational leaders like CMOs and CFOS that are buying and implementing RPA," he says. "We are offering a new way to market and last year we did a deal with Oracle whereby UIpath is natively built into their Planning and Budgeting Cloud Service (PBCS) business," Kirkwood said.

That means, anyone buying Oracle cloud will find the "robots are already there" and just need to be switched on. Kirkwood said UIPath is "conversing with SAP and hopes to bake UIpath into the Microsoft Dynamics CRM platform, too," he added.  At this point, though, he said the talks with Microsoft have not resulted in a definitive agreement.

Looking ahead

Twing said research he is doing shows that the large enterprise market may have a lead in RPA now - thanks to "automation maturity" - but the lead is not great and in no way excludes mid-market and smaller firms. "We found that midsize companies, with 2,500 to 10,000 employees, were adopting RPA at a similar level to the largest firms," said Twing.  What's more, at the low end of the market, maturity is at about two-thirds of the level of large enterprises; a very respectable showing that bodes well for RPA adoption.

"We recommend finding a solution that can be customized to meet your unique business needs," advised Sprau. On the other hand, if you don't need all of the functionality and are willing to do some modest data entry, you may be able to eliminate some of the features of RPA in order to lower costs. Finding a provider that will work with you to provide a solution that can start more simply yet adapt to the needs of their growing organization "is essential to finding success with RPA and still experiencing substantial ROI over the entire lifecycle of the solution," he added.

So will RPA continue to grow within the Microsoft Dynamics segment? "Absolutely," said Twing.

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Image Copyright: ktsdesign / 123RF Stock Photo

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About Alan R. Earls

Alan R. Earls is a technology writer based near Boston. He has covered all facets of IT, including ERP and CRM for many years and wrote regularly on Dynamics for Microsoft's 'Momentum' midsize business website. He is the author of several books on tech and business history, including Digital Equipment Corporation and Route 128 and the Birth of the Age of High Tech.

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